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

                         AMENDMENT NO. 1 ON FORM 10-K/A
                                  TO FORM 10-K

(mark one)


  X            Annual Report  Pursuant to Section 13 or 15(d) of the  Securities
------         Exchange Act of 1934

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

                          Commission file number 1-9549

                              THERMO TERRATECH INC.
            (Exact name of Registrant as specified in its character)

Delaware                                                    04-2925807
(State or other jurisdiction of                          (I.R.S. Employer
incorporation or organization)                            Identification No.)

81 Wyman Street, P.O. Box 9046
Waltham, Massachusetts                                         02454-9046
(Address of principal executive offices)                        (zip code)

       Registrant's telephone number, including area code: (781) 622-1000

           Securities registered pursuant to Section 12(b) of the Act:

                                                        Name of each exchange
Title of each class                                     on which registered
-------------------                                     ---------------------
Common Stock, $.10 par value                           American Stock Exchange

           Securities registered pursuant to section 12(g) of the Act:
                                      None

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to the filing requirements for
at least the past 90 days. X No _____.

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best  of  the  Registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  into  Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]

The  aggregate  market  value of the voting stock held by  nonaffiliates  of the
Registrant as of April 30, 1999, was approximately $9,493,354.

As of April 30,  1999,  the  Registrant  had  19,049,354  shares of Common Stock
outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the  Registrant's  Annual Report to Shareholders for the fiscal year
ended April 3, 1999, are incorporated by reference into Parts I and II.
<PAGE>


Items 10, 11, 12 & 13 of Part III of the Registrant's Annual Report on Form 10-K
for the fiscal year ended April 3, 1999 are hereby amended and restated in their
entirety as follows:

                                    Part III

Item 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Directors

      Set forth below are the names of the directors,  their ages, their offices
in Thermo TerraTech Inc.  ("Thermo  TerraTech" or the "Company"),  if any, their
principal  occupation or employment for the past five years, the length of their
tenure  as  directors  and the names of other  public  companies  in which  such
persons hold directorships.  Information regarding their beneficial ownership of
the Company's Common Stock and of the common stock of its parent company, Thermo
Electron Corporation ("Thermo Electron"), a provider of products and services in
measurement instrumentation,  biomedical devices, energy, resource recovery, and
emerging  technologies,  and of  its  majority-owned  subsidiaries,  ThermoRetec
Corporation  ("ThermoRetec") and The Randers Killam Group Inc.  ("Randers"),  is
reported  in Item 12 -  Security  Ownership  of  Certain  Beneficial  Owners and
Management.

-------------------------------------------------------------------------------
John P. Appleton    Dr.  Appleton,  64,  has  been  president,  chief  executive
                    officer and a director of the Company since  September 1993.
                    Dr.  Appleton  has  served  as a vice  president  of  Thermo
                    Electron since 1975 in various managerial capacities. He was
                    the chief  executive  officer of ThermoRetec  from September
                    1993  until  May  1997.  Dr.  Appleton  also  serves  as the
                    chairman  of  the  board  and  a  director  of  Randers  and
                    ThermoRetec.


-------------------------------------------------------------------------------
John N. Hatsopoulos Mr.  Hatsopoulos,  65,  has been a director  of the  Company
                    since 1986. He served as a vice president of the Company and
                    its chief  financial  officer from 1988 until  December 1997
                    and December 1998,  respectively.  Mr.  Hatsopoulos  was the
                    senior vice  president  of the Company  from  December  1997
                    until his retirement in December 1998. Mr.  Hatsopoulos  was
                    the  president of Thermo  Electron from 1997 to 1998 and its
                    chief  financial  officer  from  1988 to 1998.  Prior to his
                    appointment as president of Thermo Electron, he served as an
                    executive   vice   president   from  1986  until  1998.  Mr.
                    Hatsopoulos is also a director of LOIS/USA Inc.,  Thermedics
                    Inc.,   Thermo  Electron,   Thermo  Fibertek  Inc.,   Thermo
                    Instrument  Systems Inc.,  Thermo Power  Corporation  and US
                    Liquids                                                 Inc.

-------------------------------------------------------------------------------
Brian D. Holt       Mr. Holt, 50, has been a director of the Company since 1997.
                    Mr. Holt has been the president and chief executive  officer
                    of Thermo Ecotek Corporation, a majority-owned subsidiary of
                    Thermo  Electron that is involved in clean-power  resources,
                    clean fuels,  and naturally  derived products for protecting
                    crops since February  1994. He has been the chief  operating
                    officer,  environmental and energy, of Thermo Electron since
                    September  1998. From March 1996 to September 1998, he was a
                    vice president of Thermo Electron.  For more than five years
                    prior to his  appointment  as an  officer  of Thermo  Ecotek
                    Corporation, he was president and chief executive officer of
                    Pacific Generation Company, a financier,  builder, owner and
                    operator of independent power facilities. Mr. Holt is also a
                    director of KFx, Inc.,  Randers,  Thermo Ecotek Corporation,
                    Thermo     Power      Corporation      and      ThermoRetec.

-------------------------------------------------------------------------------
Donald E. Noble     Mr. Noble, 84, has been a director of the Company since 1986
                    and served as  chairman  of the board from 1992 to  November
                    1994.  For more than 20 years,  from 1959 to 1980, Mr. Noble
                    served  as  the  chief   executive   officer  of  Rubbermaid
                    Incorporated,  first with the title of president and then as
                    the  chairman of the board.  Mr. Noble is also a director of
                    Thermo   Electron,   Thermo  Fibertek  Inc.,   Thermo  Power
                    Corporation        and       Thermo       Sentron       Inc.
-------------------------------------------------------------------------------


<PAGE>


-------------------------------------------------------------------------------
William A.
Rainville           Mr. Rainville,  57, has been a director of the Company since
                    February  1993 and was  chairman of the board from  November
                    1994 through February 1997. Mr. Rainville has been president
                    and chief  executive  officer  of Thermo  Fibertek  Inc.,  a
                    majority-owned  subsidiary of Thermo  Electron that develops
                    and manufactures  equipment and products for the papermaking
                    and paper-recycling industries,  since its inception in 1991
                    and has been the  chief  operating  officer,  recycling  and
                    recovery,  of Thermo Electron since September 1998. Prior to
                    that time,  Mr.  Rainville  was a senior vice  president  of
                    Thermo  Electron  from March 1993 to September  1998;  and a
                    vice  president of Thermo  Electron  from 1986 to 1993.  Mr.
                    Rainville is also a director of Thermo  Ecotek  Corporation,
                    Thermo Fibergen Inc.,  Thermo Fibertek Inc. and ThermoRetec.


-------------------------------------------------------------------------------
Polyvios C.
Vintiadis           Mr. Vintiadis,  63, has been a director of the Company since
                    September  1992 and  chairman  of the board  since  February
                    1997.  Mr.   Vintiadis  has  been  the  chairman  and  chief
                    executive  officer of Towermarc  Corporation,  a real estate
                    development company, since 1984. Prior to joining Towermarc,
                    Mr.  Vintiadis  was a  principal  of  Morgens,  Waterfall  &
                    Vintiadis,  Inc., a financial  services  firm,  with whom he
                    remains  associated.  For more  than 20 years  prior to that
                    time,  Mr.  Vintiadis  was  employed  by Arthur D.  Little &
                    Company,   Inc.   Mr.   Vintiadis  is  also  a  director  of
                    Spectra-Physics  Lasers,  Inc. and Thermo Instrument Systems
                    Inc.
-------------------------------------------------------------------------------

Committees of the Board of Directors and Meetings

      The board of directors  has  established  an audit  committee  and a human
resources  committee,  each consisting solely of directors who are not employees
of the Company,  of Thermo  Electron or of any other  companies  affiliated with
Thermo Electron (also referred to as "outside  directors").  The present members
of the audit  committee are Mr.  Vintiadis  (Chairman) and Mr. Noble.  The audit
committee reviews the scope of the audit with the Company's  independent  public
accountants  and meets with them for the purpose of reviewing the results of the
audit  subsequent to its completion.  The present members of the human resources
committee  are Mr.  Noble  (Chairman)  and Mr.  Vintiadis.  The human  resources
committee  reviews the  performance of senior members of management,  recommends
executive  compensation  and  administers  the Company's  stock option and other
stock-based compensation plans. The Company does not have a nominating committee
of the board of  directors.  The board of  directors  met four times,  the audit
committee  met twice and the human  resources  committee  met four times  during
fiscal 1999. Each director attended at least 75% of all meetings of the board of
directors and committees on which he served held during fiscal 1999,  except for
Mr.  Rainville,  who attended 50% of such  meetings.  Mr.  Rainville is also the
president  and  chief  executive  officer  of  Thermo  Fibertek  Inc.,   another
majority-owned  subsidiary  of  Thermo  Electron,  and  is  required  to  travel
extensively in his position.  Mr. Rainville missed two meetings due to travel on
company business.

      The board of  directors  has also  established  a special  committee  (the
"Special  Committee")  consisting solely of one outside director for the purpose
of evaluating the merits and negotiating  the terms of the proposed  transaction
with  Thermo  Electron  pursuant to which the  Company  would be taken  private,
considering  such  alternatives as the Special  Committee deems  appropriate and
making a  recommendation  to the full  board of  directors  on whether or not to
approve any such proposed  transaction.  See Item 13 - Certain Relationships and
Related Transactions. The sole member of the Special Committee is Mr. Vintiadis.
<PAGE>

Compensation of Directors

       Cash Compensation

      Outside directors receive an annual retainer of $4,000 and a fee of $1,000
per day for  attending  regular  meetings of the board of directors and $500 per
day for  participating  in meetings of the board of  directors  held by means of
conference  telephone and for participating in certain meetings of committees of
the board of directors.  The non-employee  chairman of the board, Mr. Vintiadis,
receives an additional  meeting fee for his services equal to $1,000 per day for
attending  regular  meetings  of the  board  of  directors  and $500 per day for
participating  in meetings of the board of directors held by means of conference
telephone.  Payment of directors' fees is made quarterly. Dr. Appleton, Mr. Holt
and Mr.  Rainville are all employees of Thermo Electron or its  subsidiaries and
do not receive  any cash  compensation  from the  Company for their  services as
directors.  Mr.  Hatsopoulos,  who is a consultant to Thermo Electron,  does not
receive any cash  compensation  from the Company for his  services as a director
during the term of his consulting  agreement,  which  terminates  December 2003.
Directors are also reimbursed for  out-of-pocket  expenses incurred in attending
such meetings.

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

      Deferred Compensation Plan for Directors

      Under  the  Company's  deferred   compensation  plan  for  directors  (the
"Deferred  Compensation Plan"), a director has the right to defer receipt of his
cash fees  until he  ceases to serve as a  director,  dies or  retires  from his
principal occupation.  In the event of a change in control or proposed change in
control of the Company that is not approved by the board of directors,  deferred
amounts  become payable  immediately.  Either of the following is deemed to be a
change of control: (a) the acquisition,  without the prior approval of the board
of  directors,  directly  or  indirectly,  by any  person  of 50% or more of the
outstanding  Common  Stock  or 25% or more of the  outstanding  common  stock of
Thermo  Electron;  or (b) the  failure  of the  persons  serving on the board of
directors  immediately  prior to any  contested  election  of  directors  or any
exchange  offer or tender  offer for the  Common  Stock or the  common  stock of
Thermo  Electron to  constitute a majority of the board of directors at any time
within two years  following  any such event.  Amounts  deferred  pursuant to the
Deferred Compensation Plan are valued at the end of each quarter as units of the
Company's Common Stock.  When payable,  amounts deferred may be disbursed solely
in shares of Common Stock  accumulated under the Deferred  Compensation  Plan. A
total of 41,416 shares of Common Stock have been reserved for issuance under the
Deferred  Compensation  Plan.  As of  April 3,  1999,  deferred  units  equal to
approximately  32,352 full shares of Common Stock were  accumulated  for current
directors under the Deferred Compensation Plan.

      Directors Stock Option Plan

      The Company's  directors stock option plan (the "Directors Plan") provides
for the grant of stock options to purchase shares of Common Stock of the Company
and  its   majority-owned   subsidiaries  to  outside  directors  as  additional
compensation for their service as directors.  Under the Directors Plan,  outside
directors are  automatically  granted options to purchase 1,000 shares of Common
Stock  annually and are also  automatically  granted every five years options to
purchase 1,500 shares of the common stock of a majority-owned  subsidiary of the
Company that is "spun out" to outside investors.

      Pursuant to the Directors Plan,  outside directors receive an annual grant
of options to purchase  1,000 shares of Common Stock  pursuant to the  Directors
Plan  at the  close  of  business  on the  date of each  Annual  Meeting  of the
Stockholders of the Company.  Options  evidencing annual grants may be exercised
at any time from and after the  six-month  anniversary  of the grant date of the
option and prior to the  expiration  of the option.  Options  granted under this
provision  before 1995 expire after seven years;  commencing in 1995, the option
term was shortened to three years.  Shares acquired upon exercise of the options
are subject to repurchase by the Company at the exercise  price if the recipient
ceases  to serve as a  director  of the  Company  or any other  Thermo  Electron
company prior to the first anniversary of the grant date.
<PAGE>

      In addition, under the Directors Plan, outside directors are automatically
granted  every five years  options to purchase  1,500  shares of common stock of
each  majority-owned  subsidiary  of the  Company  that is "spun out" to outside
investors.  The grant  occurs on the close of  business on the date of the first
Annual  Meeting of the  Stockholders  next following the  subsidiary's  spinout,
which is the  first to  occur  of  either  an  initial  public  offering  of the
subsidiary's  common  stock  or a sale of such  stock  to  third  parties  in an
arms-length  transaction,  and also as of the close of  business  on the date of
every  fifth  Annual  Meeting of the  Stockholders  of the  Company  that occurs
thereafter  during the duration of the Plan. The options granted vest and become
exercisable on the fourth anniversary of the date of grant, unless prior to such
date  the  subsidiary's  common  stock is  registered  under  Section  12 of the
Securities Exchange Act of 1934, as amended ("Section 12 Registration").  In the
event  that the  effective  date of Section 12  Registration  occurs  before the
fourth  anniversary  of the grant  date,  the  option  will  become  immediately
exercisable   and  the  shares   acquired  upon  exercise  will  be  subject  to
restrictions  on transfer and the right of the Company to repurchase such shares
at the exercise price in the event the director ceases to serve as a director of
the Company or any other  Thermo  Electron  company.  In the event of Section 12
Registration, the restrictions and repurchase rights shall lapse or be deemed to
lapse at the rate of 25% per year,  starting with the first  anniversary  of the
grant date. These options expire after five years.

      The exercise  price for options  granted under the  Directors  Plan is the
average of the closing  prices of the Common  Stock as reported on the  American
Stock  Exchange  (or other  principal  market on which the Common  Stock is then
traded) for the five trading days  immediately  preceding and including the date
of grant,  or, if the  shares are not then  traded,  at the last price per share
paid by third parties in an arms-length  transaction  prior to the option grant.
As of May 31, 1999,  options to purchase  27,700 shares of Common Stock had been
granted under the Director's Plan, of which 16,900 were  outstanding,  5,000 had
lapsed,  5,800 had been  exercised;  and  options to purchase  52,300  shares of
Common Stock were reserved and available for future grant.

      Discretionary Grants of Stock Options to Directors

      In addition to stock options  granted  pursuant to the Directors Plan, the
Company  may also make  discretionary  grants  of stock  options  to  directors.
Beginning in fiscal 1997,  the  non-employee  chairman of the board has received
annually a discretionary grant of options to purchase an additional 1,000 shares
of Common Stock of the  Company.  The exercise  price for  discretionary  option
grants is calculated in the same manner as for options  granted  pursuant to the
Director's  Plan,  and the grant is awarded at the first regular  meeting of the
board  of  directors  following  the  Annual  Meeting  of  the  Stockholders  in
conjunction with the chairman's annual appointment as chairman of the board.

Stock Ownership Policies for Directors

      The human resources  committee of the board of directors (the "Committee")
has  established a stock holding policy for directors.  The stock holding policy
requires  each  director  to hold a minimum  of 1,000  shares  of Common  Stock.
Directors  are  requested  to achieve this  ownership  level within a three-year
period.  The chief executive officer of the Company is required to comply with a
separate stock holding policy  established by the Committee,  which is described
in Item 11 - Executive Compensation - Stock Ownership Policies.

      In addition,  the  Committee has adopted a policy  requiring  directors to
hold shares of the Company's  Common Stock equal to one-half of their net option
exercises over a period of five years.  The net option exercise is determined by
calculating the number of shares acquired upon exercise of a stock option, after
deducting  the  number of shares  that could have been  traded to  exercise  the
option and the number of shares that could have been  surrendered to satisfy tax
withholding obligations  attributable to the exercise of the option. This policy
is also applicable to executive officers and is described in Item 11 - Executive
Compensation - Stock Ownership Policies.

Executive Officers

      Reference  is made to Item 1(e) of this Report for  information  regarding
the Executive Officers of the Registrant.
<PAGE>

Item 11 - EXECUTIVE COMPENSATION

Summary Compensation Table

NOTE:  All share data for the common stock of Randers has been adjusted to
reflect a one-for-five reverse stock split effected in February 1999.

      The following table summarizes  compensation  during the last three fiscal
years for  services to the Company in all  capacities  awarded to,  earned by or
paid to the  Company's  chief  executive  officer  and its two other most highly
compensated  executive officers.  These executive officers are together referred
to as the "named executive  officers." No other executive officer of the Company
met the definition of "highly  compensated" within the meaning of the Securities
and Exchange Commission's executive compensation disclosure rules.

      The  Company  is  required  to  appoint  certain  executive  officers  and
full-time  employees of Thermo Electron as executive officers of the Company, in
accordance with the Thermo Electron  Corporate  Charter.  The  compensation  for
these executive officers is determined and paid entirely by Thermo Electron. The
time and  effort  devoted  by these  individuals  to the  Company's  affairs  is
provided to the  Company  under the  Corporate  Services  Agreement  between the
Company and Thermo  Electron.  See Item 13 - Certain  Relationships  and Related
Transactions.  Accordingly,  the  compensation  for  these  individuals  is  not
reported in the following table.

<TABLE>
<CAPTION>
<S>                 <C>            <C>          <C>         <C>       <C>            <C>                 <C>
                          Summary Compensation Table
--------------------------------------------------------------------------------------------------------------------------

                                   Annual Compensation (1)                Long Term Compensation
                                   ----------------------                 ----------------------
Name and                                                              Restricted     Securities
Principal            Fiscal                             Other Annual      Stock       Underlying          All Other
Position              Year          Salary     Bonus     Compensation    Award (2)     Options (3)         Compensation (4)
----------          -------         ------     -----     ------------   ----------     ----------        ----------------
John P. Appleton (4)  1999         $189,000    $103,500           --       --             --                  $17,455 (6)
President and Chief   1998         $175,500          $0 (5)       --       --           60,000(TTT)            $5,762 (6)
Executive Officer                                                                      120,000 (RGI)
                      1997         $165,375     $90,000           --       --             --                   $6,919
----------------------------------------------------------------------------------------------------------------------------
Emil C. Herkert       1999         $214,000     $65,000      $37,391(7)  $109,125         8,000 (TTT)         $26,202
Vice President                                                                           6,100 (TMO)
                                                                                        10,000 (RGI)
                      1998         $207,000          $0 (5)  $48,188(7)    --              300 (TMO)          $18,325
                                                                                         2,000 (MKA)
                                                                                         2,000 (ONX)
                                                                                        240,00 (RGI)
                                                                                         2,000 (TDX)
                                                                                         1,000 (TISI)
                                                                                         2,000  (TRIL)
                                                                                         1,500 (VIZ)
                                                                                         2,000 (TRCC)
                     1997          $200,000    $100,000      $37,186 (7)   --              300 (TMO)           $4,189
----------------------------------------------------------------------------------------------------------------------------
Jeffrey L. Powell    1999          $145,000     $44,000          --      $49,500         5,000 (TTT)           $8,237 (8)
Vice President                                                                           1,000 (TMO)
                     1998          $145,000          $0 (5)      --        --              700 (TMO)          $60,304 (8)
                                                                                         2,000 (MKA)
                                                                                         2,000 (ONX)
                                                                                        24,000 (RGI)
                                                                                         2,000 (TDX)
                                                                                         1,000 (TISI)
                                                                                         2,000 (TRIL)
                                                                                         1,500 (VIZ)
                                                                                         2,000 (TRCC)
                    1997           $122,000     $40,000          --        --              600 (TMO)           $7,023
                                                                                         2,000 (TFG)
                                                                                         6,000 (TOC)
----------------------------------------------------------------------------------------------------------------------------
</TABLE>


<PAGE>



(1)   In fiscal 1999,  Mr.  Herkert and Mr. Powell were awarded 19,400 and 8,800
      shares,  respectively,  of restricted stock of the Company with a value of
      $109,125  and $49,500,  respectively,  on the grant date.  The  restricted
      stock  awards  vest in their  entirety on January 2, 2002.  Dividends  are
      payable on restricted  stock.  At the end of fiscal 1999,  Mr. Herkert and
      Mr. Powell held 19,400 and 8,800 shares, respectively, of restricted stock
      with an aggregate value of $97,000 and $44,000, respectively.

(2)   Options to purchase  Common Stock granted by the Company are designated in
      the table as "TTT". In addition,  the named  executive  officers have also
      been granted options to purchase the common stock of the following  Thermo
      Electron  companies  during the last three  fiscal years as part of Thermo
      Electron's stock option program:  Thermo Electron (designated in the table
      as TMO),  Metrika  Systems  Corporation  (designated in the table as MKA),
      ONIX Systems Inc. (designated in the table as ONX), Randers (designated in
      the table as RGI),  Thermedics  Detection Inc. (designated in the table as
      TDX),  Thermo  Fibergen  Inc.  (designated  in the  table as TFG),  Thermo
      Information Solutions Inc. (designated in the table as TISI), Thermo Optek
      Corporation  (designated in the table as TOC), Thermo Trilogy  Corporation
      (designated in the table as TRIL),  Thermo Vision Corporation  (designated
      in the table as VIZ) and Trex  Communications  Corporation  (designated in
      the table as TRCC).

(3)   Represents the amount of matching  contributions  made by the individual's
      employer on behalf of the named executive officers participating in Thermo
      Electron's 401(k) plan or, in the case of Mr. Herkert, the Elson T. Killam
      Savings and Investment Plan.

(4)   Dr. Appleton has served in various  management  capacities for the Company
      and its  subsidiaries  and has  served as an  officer  of Thermo  Electron
      during the past three fiscal  years.  A portion of Dr.  Appleton's  annual
      cash  compensation  (salary and bonus) has been  allocated  to and paid by
      Thermo  Electron over each of the past three fiscal years as  compensation
      for the services provided to Thermo Electron. The annual cash compensation
      reported in the table for Dr. Appleton  represents the amounts paid by the
      Company  and its  subsidiaries  solely for Dr.  Appleton's  services as an
      officer  of the  Company  or its  subsidiaries.  Approximately  90% of Dr.
      Appleton's  annual  cash  compensation  (salary  and bonus)  earned in all
      capacities  throughout the Thermo  Electron  organization  was paid by the
      Company  and its  subsidiaries  for his  services  to the  Company and its
      subsidiaries  in each of fiscal  1999,  1998 and 1997.  These  percentages
      include the allocation to ThermoRetec of 20% of Dr. Appleton's annual cash
      compensation  (salary  and bonus) in each of fiscal  1998 and 1997 for Dr.
      Appleton's services as ThermoRetec's  chief executive officer.  Salary and
      bonus paid to Dr. Appleton in 1997 reflect compensation decisions based on
      calendar  year   performance,   in  accordance   with  Thermo   Electron's
      compensation  practices for its  officers.  The salary and bonuses paid to
      Dr. Appleton for periods after 1998 reflect  compensation  decisions based
      on fiscal year  performance.  From time to time in the past, Dr.  Appleton
      has been,  and in the future may be,  granted  options to purchase  common
      stock of Thermo  Electron and certain of its  subsidiaries  other than the
      Company. These options are not reported in this table as they were granted
      as  compensation  for  services  to other  Thermo  Electron  companies  in
      capacities other than in his capacity as the president and chief executive
      officer of the Company.

(5)   Dr. Appleton, Mr. Herkert and Mr. Powell  elected to forego their bonuses
      for  fiscal  1998  in  light  of the Company's operating and  stock  price
      performance in fiscal 1998.

(6)   In addition to the matching contribution referred to in footnote (3), such
      amount  includes  $10,086  and  $2,262,  which  represents  the  amount of
      compensation  in  fiscal  1999 and  1998,  respectively,  attributable  to
      interest-free loans provided to Dr. Appleton pursuant to the stock holding
      assistance  plans of the  Company and  ThermoRetec.  See Item 13 - Certain
      Relationships and Related Transactions - Stock Holding Assistance Plans.

(7)   This amount  includes  payments  of $20,000  plus an  additional  gross-up
      amount of $17,186  to  compensate  for the  federal  and state  income tax
      liability attributable to such payments in fiscal 1999, 1998 and 1997 made
      to Mr. Herkert  pursuant to the terms of a certain  Deferred  Compensation
      Agreement with Elson T. Killam Associates.
<PAGE>

(8)   In addition to the matching contribution referred to in footnote (3), such
      amount  includes the  reimbursement  by the Company of $50,000 in expenses
      associated  with Mr.  Powell's  relocation  to Concord,  Massachusetts  in
      fiscal  1998  and  $3,218  and  $932,   which  represents  the  amount  of
      compensation  in  fiscal  1999 and  1998,  respectively,  attributable  to
      interest-free  loans provided to Mr. Powell  pursuant to the stock holding
      assistance plan of ThermoRetec.  See Item 13 - Certain  Relationships  and
      Related Transactions Stock Holding Assistance Plans.

Stock Options Granted During Fiscal 1999

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

      Dr.  Appleton has served as a vice president of Thermo Electron since 1975
and from time to time has been  granted  options  to  purchase  common  stock of
Thermo Electron and certain of its  subsidiaries  other than the Company and its
majority-owned  subsidiaries.  These  options are not  reported in this table as
they  were  granted  as  compensation  for  services  to other  Thermo  Electron
companies  in  capacities  other  than in his  capacity  as the chief  executive
officer of the Company.


                          Option Grants in Fiscal 1999
-------------------------------------------------------------------------------
                                                                  Potential
                                  Percent of                      Realizable
                     Number of      Total                       Value at Assumed
                    Securities     Options                      Annual Rates of
                    Underlying    Granted to  Exercise            Stock Price
                    Options       Employees    Price              Appreciation
                   Granted and    in Fiscal    Per     Expiration  for   Option
    Name            Company (1)     Year       Share      Date      Term (2)
    -----           -----------   -------     -------   -------  ---------------
                                                                 5%      10%
John P.        --              --           --       --      --      --
Appleton
----------------------------------------------------------------------------
Emil C.        8,000 (TTT)    1.02%         $5.03  2/24/04 $11,120  $24,560
Herkert
                 300 (TMO)    0.01% (3)    $34.50   6/2/03 $2,859    $6,318
               5,800 (TMO)    0.14% (3)    $16.20  9/23/03 $25,984  $57,362
              10,000 (RGI)    2.33% (3)     $2.50  2/24/04 $6,900   $15,300
----------------------------------------------------------------------------
Jeffrey L.     5,000 (TTT)    0.64%         $5.03  2/24/04 $6,950   $15,350
Powell
               1,000 (TMO)    0.02% (3)    $34.50   6/2/03 $9,530   $21,060
----------------------------------------------------------------------------

(1)   All  of the  options  granted  during  the  fiscal  year  are  immediately
      exercisable at the date of grant.  In all cases,  the shares acquired upon
      exercise are subject to repurchase by the granting company at the exercise
      price if the  optionee  ceases to be employed by such company or any other
      Thermo Electron company.  The granting company may exercise its repurchase
      rights  within  six  months  after  the   termination  of  the  optionee's
      employment.  The repurchase  rights generally lapse ratably over a one- to
      five-year  period,  depending on the option term, which may vary from five
      to ten years,  provided  the  optionee  continues  to be  employed  by the
      granting  company  or any other  Thermo  Electron  company.  The  granting
      company  may  permit the holder of  options  to  exercise  options  and to
      satisfy tax withholding  obligations by surrendering  shares equal in fair
      market value to the exercise price or withholding  obligation.  Please see
      footnote  (2) under  Summary  Compensation  Table  above  for the  company
      abbreviations used in this table.

(2)   The amounts shown on this table represent hypothetical gains that could be
      achieved for the respective  options if exercised at the end of the option
      term.  These gains are based on assumed rates of stock  appreciation of 5%
      and 10%  compounded  annually  from the date the  respective  options were
      granted to their  expiration  date.  The gains shown are net of the option
      exercise price, but do not include  deductions for taxes or other expenses
      associated  with the  exercise.  Actual  gains,  if any,  on stock  option
      exercises will depend on the future performance of the common stock of the
      applicable  corporation,  the optionee's  continued employment through the
      option period and the date on which the options are exercised.
<PAGE>

(3)   These options were granted  under stock option plans  maintained by Thermo
      Electron  or its  subsidiaries  other  than the  Company as part of Thermo
      Electron's   compensation  program  and  accordingly  are  reported  as  a
      percentage  of total options  granted to employees of Thermo  Electron and
      its subsidiaries.

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

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

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

John P. Appleton (3)TTT         --          --       275,000  /0(4)     $0  /--
                    RGI         --          --       120,000  /0        $0  /--
                    THN         --          --        63,000  /0        $0  /--
--------------------------------------------------------------------------------
Emil C. Herkert     TTT         --          --         8,000  /0        $0  /--
                    TMO         --          --        43,900  /0(5)     $0  /--
                    MKA         --          --         2,000  /0        $0  /--
                    ONX         --          --         2,000  /0        $0  /--
                    RGI         --          --       250,000  /0    $3,310  /--
                    TDX         --          --         2,000  /0        $0  /--
                   TISI         --          --             0 /1,000   --  /$0(7)
                   TRIL         --          --             0 /2,000   --  /$0(7)
                    VIZ         --          --         1,500 /0         $0  /--
                   TRCC         --          --             0 /2,000   --  /$0(7)
--------------------------------------------------------------------------------
Jeffrey L. Powell   TTT         --          --        28,000  /0        $0  /--
                    TMO         300       $3,101      35,112  /0(6) $4,860  /--
                    MKA         --          --         2,000  /0        $0  /--
                    ONX         --          --         2,000  /0        $0  /--
                    RGI         --          --        24,000  /0        $0  /--
                    TDX         --          --         2,000  /0-       $0  /--
                    TBA         --          --         2,000  /0   $17,500  /--
                    TFG         --          --         2,000  /0        $0  /--
                    TFT        4,500     $34,875           0  /0        $0  /--
                   TISI         --          --             0  /1,000  --  /$0(7)
                    TLZ         --          --         5,000  /0        $0  /--
                    TLT         --          --             0  /2,000  --  /$0(7)
                    TOC         --          --         6,000  /0        $0  /--
                    TMQ         --          --         6,000  /0        $0  /--
                    THN         --          --       111,000  /0        $0  /--
                    TSR         --          --         2,000  /0        $0  /--
                   TRIL         --          --             0 /2,000   --  /$0(7)
                    VIZ         --          --         1,500  /0        $0  /--
                   TRCC         --          --             0 /2,000   --  /$0(7)
                    TXM         --          --         4,000  /0        $0  /--
--------------------------------------------------------------------------------
<PAGE>

(1)   All of the options reported  outstanding at the end of the fiscal year are
      immediately exercisable as of fiscal year-end,  except options to purchase
      the  common  stock  of  Thermo  Information   Solutions  Inc.,  ThermoLyte
      Corporation,   Thermo   Trilogy   Corporation   and  Trex   Communications
      Corporation,  which are not  exercisable  until the earlier of (i) 90 days
      after the effective  date of the  registration  of that  company's  common
      stock  under  Section 12 of the  Exchange  Act or (ii) nine years from the
      grant date. In all cases, the shares acquired upon exercise of the options
      reported in the table are subject to repurchase by the granting company at
      the exercise  price if the optionee  ceases to be employed by such company
      or any other Thermo Electron  company.  The granting  company may exercise
      its  repurchase  rights  within six months  after the  termination  of the
      optionee's  employment.  For  publicly-traded  companies,  the  repurchase
      rights generally lapse ratably over a one- to ten-year  period,  depending
      on the option  term,  which may vary from five to twelve  years,  provided
      that the  optionee  continues  to be employed by the  granting  company or
      another   Thermo   Electron   company.   For   companies   that   are  not
      publicly-traded,  the  repurchase  rights  lapse in their  entirety on the
      ninth  anniversary of the grant date. The granting  company may permit the
      holder of options to  exercise  options  and to  satisfy  tax  withholding
      obligations  by  surrendering  shares  equal in fair  market  value to the
      exercise  price or  withholding  obligation  Please see footnote (2) under
      Summary  Compensation  Table above for the company  abbreviations  used in
      this table. In addition,  company abbreviations used in this table and not
      defined  in  footnote  (2) are  defined  as  follows:  Thermo  BioAnalysis
      Corporation  (designated  in the  table  as  TBA),  Thermo  Fibertek  Inc.
      (designated in the table as TFT),  ThermoLase  Corporation  (designated in
      the  table as TLZ),  ThermoLyte  Corporation  (designated  in the table as
      TLT),  ThermoQuest  Corporation  (designated in the table as TMQ),  Thermo
      Sentron Inc. (designated in the table as TSR) and Trex Medical Corporation
      (designated in the table as TXM)

(2)   Amounts  shown in this column do not  necessarily  represent  actual value
      realized from the sale of the shares  acquired upon exercise of the option
      because in many cases the shares are not sold on exercise  but continue to
      be held by the executive officer  exercising the option. The amounts shown
      represent the difference  between the option exercise price and the market
      price on the date of  exercise,  which is the amount  that would have been
      realized if the shares had been sold immediately upon exercise.

(3)   Dr.  Appleton has served as a vice president of Thermo Electron since 1975
      and has been  granted  options to purchase  shares of the common  stock of
      Thermo  Electron  and certain of its  subsidiaries  other than the Company
      from time to time by Thermo  Electron  or such other  subsidiaries.  These
      options are not  reported  here as they were granted as  compensation  for
      service to other Thermo Electron companies in capacities other than in his
      capacity as the chief executive officer of the Company.

(4)   In addition to the terms  described in footnote  (2) above,  60,000 of the
      shares  subject to option are, if acquired  through  exercise,  restricted
      from resale until Dr. Appleton's retirement.

(5)   Options to purchase  22,500 shares of the common stock of Thermo  Electron
      granted to Mr.  Herkert  are  subject to the same  terms as  described  in
      footnote  (1),   except  that  the  repurchase   rights  of  the  granting
      corporation  generally  do not lapse  until the tenth  anniversary  of the
      grant date. In fiscal 1997 and 1998, the human resources  committee of the
      board of directors  of Thermo  Electron  accelerated  the vesting of 1,800
      shares and 1,350 shares, respectively.

(6)   Options to purchase  22,500 shares of the common stock of Thermo  Electron
      granted to Mr.  Powell  are  subject  to the same  terms as  described  in
      footnote  (1),   except  that  the  repurchase   rights  of  the  granting
      corporation  generally  do not lapse  until the tenth  anniversary  of the
      grant  date.  In  the  event  of  the  employee's   death  or  involuntary
      termination  prior  to the  tenth  anniversary  of  the  grant  date,  the
      repurchase  rights of the  granting  corporation  shall be deemed to lapse
      ratably over a five-year period  commencing with the fifth  anniversary of
      the grant date.

(7)   No public  market  existed for the shares  underlying  these options as of
      April 3, 1999. Accordingly,  no value in excess of exercise price has been
      attributed to these options.
<PAGE>

Defined Benefit Retirement Plan

      Killam  Associates,  a subsidiary of Randers,  maintains a Defined Benefit
Retirement Plan (the "Plan") for eligible U.S. employees. Accrued benefits under
the Plan were frozen as of March 31, 1995.  Mr.  Herkert is a participant in the
Plan. The following table sets forth the estimated annual benefits payable under
the  Plan  upon  retirement  in  specified   compensation  and  years-of-service
classifications.   The  estimated  benefits  reflect  the  statutory  limits  on
compensation  that can be recognized for Plan  purposes.  The limit at March 31,
1995 was $150,000 per year.

   Annual                  Years of Service
Compensation
                15       20       25        30       35
                --       --       --        --       --
  $100,000   $20,064  $26,752   $33,440  $40,128  $46,817
  125,000     25,427   33,902   42,378    50,853   59,329
  150,000     20,789   41,052   51,315    61,578   71,842

      Each eligible employee receives a monthly retirement benefit, beginning at
normal  retirement  age (65,  although  benefits are not reduced if the employee
retires after reaching 62). Before the benefit was frozen,  it provided 1.05% of
an employee's  Average Final  Compensation  (as defined  below) in excess of the
average of the Social  Security  wage bases,  multiplied by his years of service
(up to a maximum of 35 years).  Benefits are reduced for  retirement  before age
62.  Average  Final  Compensation  is the average total  compensation  for the 5
consecutive  years  out of the last 15 years  prior to 1995  which  produce  the
highest  average.  The frozen annual accrued  benefit for Mr. Herkert is $93,332
(based on the  compensation  limit of $235,840 that was in effect in 1993).  The
Plan  benefits  shown are  payable  during the  employee's  lifetime  unless the
employee elects another form of benefit that provides death protection.
<PAGE>

Executive Retention Agreements

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

      In 1998, Thermo Electron  authorized an executive retention agreement with
Dr.  Appleton and Mr.  Herkert.  This  agreement  provides that in the event the
individual's  employment is terminated under the circumstances  described above,
the  individual  would be entitled to a lump sum payment equal to the sum of (a)
in the case of Dr.  Appleton,  two times,  and in the case of Mr.  Herkert,  one
times his highest  annual base  salary in any 12 month  period  during the prior
five-year period,  plus (b) in the case of Dr. Appleton,  two times , and in the
case of Mr.  Herkert,  one times his highest annual bonus in any 12 month period
during the prior five-year period. In addition, the individual would be provided
benefits  for a period of, in the case of Dr.  Appleton,  two years,  and in the
case of Mr. Herkert, one year after such termination substantially equivalent to
the  benefits  package  the  individual  would have been  otherwise  entitled to
receive if the individual was not terminated.  Further, all repurchase rights of
Thermo Electron and its subsidiaries  shall lapse in their entirety with respect
to  all  options  that  the  individual   holds  in  Thermo   Electron  and  its
subsidiaries,  including  the Company,  as of the date of the change in control.
Finally,  the  individual  would be entitled to a cash payment  equal to, in the
case of Dr. Appleton,  $20,000,  and in the case of Mr. Herkert,  $15,000, to be
used  toward  outplacement   services.   These  executive  retention  agreements
supercede  and  replace  any and all prior  severance  arrangements  which these
individuals had with Thermo Electron.
<PAGE>

      Assuming that the severance  benefits  would have been payable as of April
5, 1999,  the lump sum  salary and bonus  payment  under such  agreement  to Dr.
Appleton and Mr.  Herkert would have been  approximately  $680,000 and $343,000,
respectively. In the event that payments under these agreements are deemed to be
so called "excess  parachute  payments"  under the applicable  provisions of the
Internal  Revenue Code of 1986, as amended (the "Internal  Revenue  Code"),  the
individual  would be entitled to receive a gross-up  payment equal to the amount
of any excise tax payable by him with respect to such  payment,  plus the amount
of all other additional taxes imposed on him attributable to the receipt of such
gross-up payment.

Stock Ownership Policies

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

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

      The Committee also has a policy  requiring its executive  officers to hold
shares of Common  Stock equal to one-half of their net option  exercises  over a
period of five years.  The net option  exercise is determined by calculating the
number of shares  acquired upon exercise of a stock option,  after deducting the
number of shares  that could  have been  traded to  exercise  the option and the
number of shares that could have been  surrendered  to satisfy  tax  withholding
obligations attributable to the exercise of the option.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The following  table sets forth the beneficial  ownership of Common Stock,
as  well  as the  common  stock  of  Thermo  Electron  and  each  majority-owned
subsidiary  of the  Company,  as of May  31,  1999,  with  respect  to (i)  each
director,  (ii) each executive officer named in the summary  compensation  table
set forth in Item 11 Executive Compensation (the "named executive officers") and
(iii) all directors and current executive officers as a group. In addition,  the
following  table sets forth the beneficial  ownership of Common Stock, as of May
31,  1999,  with  respect  to each  person  who was known by the  Company to own
beneficially more than 5% of the outstanding shares of Common Stock.

      While  certain  directors  or  executive  officers of the Company are also
directors and executive  officers of ThermoRetec,  Randers,  or Thermo Electron,
all such  persons  disclaim  beneficial  ownership of the shares of Common Stock
owned by Thermo  Electron and of the shares of the common  stock of  ThermoRetec
and Randers owned by the Company.



<PAGE>



                                       Thermo                        The Randers
                     Thermo           Electron         ThermoRetec  Killam Group
  Name (1)      TerraTech Inc.(2)  Corporation (3)   Corporation (4)  Inc. (5)
----------      ----------------   --------------    --------------  ---------

Thermo Electron       16,638,220         N/A               N/A          N/A
Corporation (6)
Loomis, Sayles &       2,738,581         N/A               N/A          N/A
Company L.P. (7)
John P. Appleton         305,939       154,363          73,000       120,000
John N. Hatsopoulos       60,357       851,454          61,282        48,000
Emil C. Herkert           89,900        46,400               0       252,000
Brian D. Holt            250,000       286,943               0         4,000
Donald E. Noble           53,377        59,117          10,500           300
Jeffrey L. Powell         56,635        36,831         121,000        24,000
William A. Rainville      60,000       352,959          24,000        24,000
Polyvios C. Vintiadis     16,593         2,500           3,000        52,809
All directors and
current executive
officers as a            957,616     2,303,515         338,282      537,109
group (10 persons)

(1)   Except as reflected in the  footnotes to this table,  shares  beneficially
      owned  consist of shares owned by the  indicated  person or by that person
      for the benefit of minor  children and all share  ownership  includes sole
      voting and investment power.
<PAGE>

(2)   Shares  of  Common  Stock   beneficially   owned  by  Dr.  Appleton,   Mr.
      Hatsopoulos,  Mr. Herkert, Mr. Holt, Mr. Noble, Mr. Powell, Mr. Rainville,
      Mr. Vintiadis and all directors and current executive  officers as a group
      include 275,000,  40,000, 8,000, 250,000, 8,300, 28,000, 60,000, 7,300 and
      734,600 shares,  respectively,  that such person or group has the right to
      acquire  within 60 days of May 31,  1999,  through  the  exercise of stock
      options.  Shares  beneficially owned by Dr. Appleton,  Mr. Hatsopoulos and
      all directors and current  executive  officers as a group include 305, 315
      and 1,222 shares,  respectively,  allocated through May 31, 1999, to their
      respective  accounts  maintained  pursuant to Thermo  Electron's  employee
      stock ownership plan ("ESOP"), of which the trustees,  who have investment
      power over its assets are officers of Thermo Electron. Shares beneficially
      owned by Mr. Noble, Mr. Vintiadis and all directors and current  executive
      officers  as a  group  include  22,037,  9,293  and  31,330  full  shares,
      respectively,  allocated  through  April  3,  1999,  to  their  respective
      accounts   maintained  under  the  Deferred   Compensation   Plan.  Shares
      beneficially  owned  by Mr.  Hatsopoulos  and all  directors  and  current
      executive  officers as a group include 12,500 shares that Mr.  Hatsopoulos
      has the right to acquire  within 60 days after May 31,  1999,  through the
      exercise  of a  stock  purchase  warrant.  Except  for Dr.  Appleton,  who
      beneficially  owned 1.58% and Mr. Holt who beneficially  owned 1.3% of the
      Common  Stock  outstanding  as of May  31,  1999,  no  director  or  named
      executive  officer  beneficially  owned more than 1% of the  Common  Stock
      outstanding as of such date; all directors and current executive  officers
      as a group  beneficially owned 4.98% of the Common Stock outstanding as of
      May 31, 1999.

(3)   Shares of the common stock of Thermo  Electron  beneficially  owned by Dr.
      Appleton,  Mr. Hatsopoulos,  Mr. Herkert, Mr. Holt, Mr. Noble, Mr. Powell,
      Mr. Rainville and all directors and current executive  officers as a group
      include 116,902,  805,535,  43,900,  283,950,  7,625, 30,050, 286,837, and
      2,018,597 shares,  respectively,  that such person or members of the group
      have the right to  acquire  within 60 days of May 31,  1999,  through  the
      exercise of stock options.  Shares beneficially owned by Dr. Appleton, Mr.
      Hatsopoulos  and all directors and current  executive  officers as a group
      include 1,615, 2,036 and 6,148 shares, respectively, allocated through May
      31, 1999, to their respective  accounts  maintained  pursuant to the ESOP.
      Shares  beneficially  owned by Mr.  Noble and all  directors  and  current
      executive officers as a group each include 45,827 shares allocated through
      April 3,  1999,  to Mr.  Noble's  account  maintained  pursuant  to Thermo
      Electron's deferred compensation plan for directors.  No director or named
      executive officer  beneficially  owned more than 1% of the common stock of
      Thermo Electron  outstanding as of May 31, 1999; all directors and current
      executive officers as a group beneficially owned 1.45% of the common stock
      of Thermo Electron outstanding as of such date.
<PAGE>

(4)   Shares  of the  common  stock  of  ThermoRetec  beneficially  owned by Dr.
      Appleton,  Mr.  Hatsopoulos,  Mr. Noble, Mr. Powell,  Mr.  Rainville,  Mr.
      Vintiadis  and all  directors  and current  executive  officers as a group
      include 63,000, 22,500, 6,000, 111,000,  22,500, 1,500 and 264,000 shares,
      respectively, that such person or group has the right to acquire within 60
      days  after May 31,  1999,  through  the  exercise  of stock  options.  No
      director or named executive officer beneficially owned more than 1% of the
      common stock of ThermoRetec  outstanding as of May 31, 1999; all directors
      and current executive  officers as a group beneficially owned 2.48% of the
      common stock of ThermoRetec outstanding as of such date.

(5)   Shares of the common stock of Randers  beneficially owned by Dr. Appleton,
      Mr.  Hatsopoulos,  Mr.  Herkert,  Mr. Holt,  Mr. Noble,  Mr.  Powell,  Mr.
      Rainville,  Mr. Vintiadis and all directors and current executive officers
      as a group include 120,000,  48,000,  250,000, 4,000, 300, 24,000, 24,000,
      48,300 and 530,600 shares, respectively, that such person or group has the
      right to acquire  within 60 days after May 31, 1999,  through the exercise
      of stock  options.  Shares  beneficially  owned by Mr.  Vintiadis  and all
      directors  and current  executive  officers as a group each include  4,509
      shares  allocated  through  April  3,  1999  to  Mr.  Vintiadis'   account
      maintained pursuant to Randers' deferred  compensation plan for directors.
      No director or named executive officer  beneficially owned more than 1% of
      the common stock of Randers  outstanding as of May 31, 1999; all directors
      and current executive  officers as a group beneficially owned 2.10% of the
      common stock of Randers outstanding as of such date.

(6)   Shares  beneficially  owned by Thermo  Electron  include  32,389 shares of
      Common  Stock  issuable  upon  the  conversion  of  a 4  5/8%  convertible
      debenture due in 2003. As of May 31, 1999,  Thermo  Electron  beneficially
      owned   approximately  87.2%  of  the  outstanding  Common  Stock.  Thermo
      Electron's address is 81 Wyman Street, Waltham,  Massachusetts 02454-9046.
      As of May 31,  1999,  Thermo  Electron  had the  power to elect all of the
      members of the Company's board of directors.
<PAGE>

(7)   Information  regarding  the number of shares of Common Stock  beneficially
      owned by  Loomis,  Sayles & Company  L.P.  is based  upon the most  recent
      Schedule  13G of Loomis,  Sayles & Company  L.P.  received by the Company,
      which reported such ownership as of March 10, 1999. The address of Loomis,
      Sayles & Company  L.P.  is One  Financial  Center,  Boston,  Massachusetts
      02111. As of March 10, 1999,  Loomis,  Sayles & Company L.P.  beneficially
      owned approximately 12.39% of the outstanding Common Stock.

Section 16(a) Beneficial Ownership Reporting Compliance

      Section 16(a) of the  Securities  Exchange Act of 1934,  as amended,  (the
"Exchange  Act") requires the Company's  directors and executive  officers,  and
beneficial owners of more than 10% of the Common Stock, such as Thermo Electron,
to file with the Securities and Exchange Commission initial reports of ownership
and periodic reports of changes in ownership of the Company's securities.  Based
upon a review of such filings, all Section 16(a) filing requirements  applicable
to such persons were complied  with during fiscal 1999,  except in the following
instances.  Thermo  Electron  filed five Form 4s late,  reporting  a total of 33
transactions,  including 11 open market  purchases of shares of Common Stock and
22  transactions  associated  with the grant,  exercise  and lapse of options to
purchase Common Stock granted to employees under its stock option program.

Item 13 -  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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


<PAGE>

      Thermo  Electron and each of the Thermo  Subsidiaries  recognize  that the
benefits and support that derive from their  affiliation are essential  elements
of their individual  performance.  Accordingly,  Thermo Electron and each of the
Thermo  Subsidiaries,  including the Company,  have adopted the Thermo  Electron
Corporate  Charter (the "Charter") to define the relationships and delineate the
nature of such cooperation  among  themselves.  The purpose of the Charter is to
ensure  that  (1)  all of the  companies  and  their  stockholders  are  treated
consistently and fairly,  (2) the scope and nature of the cooperation  among the
companies, and each company's responsibilities, are adequately defined, (3) each
company has access to the  combined  resources  and  financial,  managerial  and
technological  strengths of the others,  and (4) Thermo  Electron and the Thermo
Subsidiaries, in the aggregate, are able to obtain the most favorable terms from
outside parties.

      To achieve these ends, the Charter identifies the general principles to be
followed  by the  companies,  addresses  the  role and  responsibilities  of the
management of each company,  provides for the sharing of group  resources by the
companies  and  provides  for  centralized  administrative,  banking  and credit
services to be performed  by Thermo  Electron.  The services  provided by Thermo
Electron include collecting and managing cash generated by members, coordinating
the access of Thermo Electron and the Thermo  Subsidiaries  (the "Thermo Group")
to external  financing  sources,  ensuring  compliance  with external  financial
covenants  and internal  financial  policies,  assisting in the  formulation  of
long-range planning and providing other banking and credit services. Pursuant to
the  Charter,  Thermo  Electron  may also  provide  guarantees  of debt or other
obligations of the Thermo  Subsidiaries or may obtain external  financing at the
parent level for the benefit of the Thermo  Subsidiaries.  In certain instances,
the Thermo  Subsidiaries  may  provide  credit  support to, or on behalf of, the
consolidated  entity or may obtain  financing  directly from external  financing
sources. Under the Charter,  Thermo Electron is responsible for determining that
the Thermo Group  remains in compliance  with all covenants  imposed by external
financing sources,  including covenants related to borrowings of Thermo Electron
or other  members of the Thermo Group,  and for  apportioning  such  constraints
within the Thermo  Group.  In  addition,  Thermo  Electron  establishes  certain
internal policies and procedures  applicable to members of the Thermo Group. The
cost of the services  provided by Thermo Electron to the Thermo  Subsidiaries is
covered under existing corporate services agreements between Thermo Electron and
the Thermo Subsidiaries.
<PAGE>

      The Charter currently provides that it shall continue in effect so long as
Thermo Electron and at least one Thermo Subsidiary participate.  The Charter may
be amended at any time by agreement of the participants.  Any Thermo Subsidiary,
including the Company,  can withdraw from  participation  in the Charter upon 30
days' prior notice.  In addition,  Thermo  Electron may terminate a subsidiary's
participation in the Charter in the event the subsidiary ceases to be controlled
by Thermo  Electron  or ceases to comply with the  Charter or the  policies  and
procedures  applicable  to the  Thermo  Group.  A  withdrawal  from the  Charter
automatically  terminates  the corporate  services  agreement and tax allocation
agreement  (if  any) in  effect  between  the  withdrawing  company  and  Thermo
Electron.  The  withdrawal  from  participation  does not terminate  outstanding
commitments  to third  parties  made by the  withdrawing  company,  or by Thermo
Electron  or other  members of the Thermo  Group,  prior to the  withdrawal.  In
addition,  a  withdrawing  company is  required  to  continue to comply with all
policies and  procedures  applicable to the Thermo Group and to provide  certain
administrative  functions mandated by Thermo Electron so long as the withdrawing
company is controlled by or affiliated with Thermo Electron.
<PAGE>

      As provided in the Charter,  the Company and Thermo  Electron have entered
into a Corporate  Services  Agreement  (the  "Services  Agreement")  under which
Thermo  Electron's  corporate staff provides  certain  administrative  services,
including certain legal advice and services,  risk management,  employee benefit
administration,  tax advice and  preparation  of tax returns,  centralized  cash
management  and  financial  and other  services to the Company.  The Company was
assessed  an  annual  fee  equal to 0.8% of the  Company's  revenues  for  these
services in fiscal  1999.  The annual fee will  remain at 0.8% of the  Company's
revenues  for fiscal  2000.  The fee is reviewed  annually and may be changed by
mutual agreement of the Company and Thermo Electron.  During fiscal 1999, Thermo
Electron assessed the Company  $2,480,000 in fees under the Services  Agreement.
Management believes that the charges under the Services Agreement are reasonable
and that the terms of the Services Agreement are fair to the Company.  In fiscal
1999,  the Company was billed an  additional  $157,000  by Thermo  Electron  for
certain administrative services required by the Company that were not covered by
the  Services  Agreement.   The  Services  Agreement  automatically  renews  for
successive  one-year  terms,  unless canceled by the Company upon 30 days' prior
notice.  In addition,  the Services  Agreement  terminates  automatically in the
event the  Company  ceases to be a member of the Thermo  Group or ceases to be a
participant  in the  Charter.  In the  event of a  termination  of the  Services
Agreement,  the Company will be required to pay a  termination  fee equal to the
fee that was paid by the Company for services  under the Services  Agreement for
the  nine-month  period  prior to  termination.  Following  termination,  Thermo
Electron may provide certain administrative services on an as-requested basis by
the  Company or as  required in order to meet the  Company's  obligations  under
Thermo  Electron's  policies and  procedures.  Thermo  Electron  will charge the
Company a fee equal to the market rate for comparable  services if such services
are provided to the Company following termination.

      The  Company  has  entered  into a Tax  Allocation  Agreement  with Thermo
Electron  that  outlines  the terms under which the Company  will be included in
Thermo  Electron's  consolidated  Federal and state  income tax  returns.  Under
current  law, the Company will be included in such tax returns so long as Thermo
Electron owns at least 80% of the Company's  outstanding  Common Stock. In years
in which the Company has taxable income,  it will pay to Thermo Electron amounts
comparable  to the taxes  the  Company  would  have paid if it had filed its own
separate  company tax  returns.  If Thermo  Electron's  equity  ownership of the
Company were to drop below 80%, the Company  would file its own tax returns.  In
fiscal  1999,  the  Company  paid  Thermo  Electron  $1,217,000  under  the  Tax
Allocation Agreement.
<PAGE>

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

      From time to time the Company may transact  business with other  companies
in the Thermo Group.

      The Company leases an office and operating  facility from Thermo Electron.
The total rental  payments made to Thermo Electron during fiscal year 1999 under
this agreement were $166,000.

      The Company and Thermo Electron entered into a development agreement under
which Thermo Electron agreed to fund up to $4,000,000 of the direct and indirect
costs of the Company's development of soil-remediation  centers. In exchange for
this  funding,   the  Company   granted  Thermo  Electron  a  royalty  equal  to
approximately 3% of net revenues from soil-remediation services performed at the
centers  developed under this agreement.  The royalty  payments may cease if the
amounts paid by the Company  yield a certain  internal  rate of return to Thermo
Electron on the funds advanced to the Company under this agreement.  The Company
paid Thermo Electron royalties of $186,000 in fiscal 1999.
<PAGE>

      The Company  purchases  and sells  products  and  services in the ordinary
course of business to Thermo Electron and Thermo Electron's other  subsidiaries.
In fiscal  1999,  the  Company  sold a total of  $379,000  of products to Thermo
Electron  and its  other  subsidiaries  and  purchased  a total of  $231,000  of
products and/or services from such companies.

      Until  mid-December  1998, the Company's Thermo EuroTech N.V.  subsidiary,
along with certain other Thermo  Subsidiaries,  participated  in a notional pool
arrangement  with ABN AMRO, which included a $29,719,000  credit  facility.  The
Company had access to $9,553,000 under this credit facility. Only European-based
Thermo Subsidiaries participated in this arrangement. Under this arrangement the
Bank  notionally  combined the positive and negative  cash  balances held by the
participants  to calculate  the net interest  yield/expense  for the group.  The
benefit  derived  from this  arrangement  was then  allocated  based on balances
attributable to the respective  participants.  Thermo Electron guaranteed all of
the obligations of each participant in this  arrangement.  For 1998, the average
annual  interest  rate  earned on NLG  deposits by  participants  in this credit
arrangement was approximately 5.00% and the average annual interest rate paid on
overdrafts was approximately 5.00%.

      As of mid-December  1998, the Company's  Thermo EuroTech N.V.  subsidiary,
along with certain other Thermo Subsidiaries, has entered into a modification of
the  above-described  arrangement  with ABN  AMRO.  Only  European-based  Thermo
Subsidiaries participate in this arrangement.  The new arrangement with ABN AMRO
consists of a zero balance  arrangement,  which  includes a  $22,780,000  credit
facility. The Company has access to $8,818,000 under this credit facility. Funds
borrowed by the Company  under this  arrangement  pay  interest at a rate set by
Thermo  Finance  B.V., a  wholly-owned  subsidiary  of Thermo  Electron,  at the
beginning of each month,  based on Netherlands  market rates.  Funds invested by
the Company under the arrangement  earn a rate set by Thermo Finance B.V. at the
beginning of each month,  based on Netherlands market rates. Such invested funds
are collateralized with investments  principally  consisting of corporate notes,
U.S.  government-agency  securities,  commercial paper,  money market funds, and
other marketable securities,  in the amount of at least 103% of such obligation.
Thermo Electron  guarantees all of the  obligations of each  participant in this
arrangement.  As of April 3, 1999,  the Company had a negative  cash  balance of
approximately  $8,186,000  based on an exchange rate of $0.4899/NLG  1.00. As of
April 3, 1999,  the  average  annual  interest  rate  earned on NLG  deposits by
participants in this credit  arrangement was approximately  3.6% and the average
annual interest rate paid on overdrafts was approximately 4.2%.

      At  April  3,  1999,  the  Company  owed  Thermo  Electron  and its  other
subsidiaries  an  aggregate  of  $2,522,000  for amounts due under the  Services
Agreement and related  administrative  charges, for other products and services,
and for  miscellaneous  items,  net of  amounts  owed to the  Company  by Thermo
Electron  and  its  other   subsidiaries   for  products,   services  and  other
miscellaneous  items.  The largest amount of such net  indebtedness  owed by the
Company to Thermo  Electron and its other  subsidiaries  since April 4, 1998 was
$3,128,000.  These  amounts do not bear  interest and are expected to be paid in
the normal course of business.
<PAGE>

      As of April 3,  1999,  approximately  $40,625,000  of the  Company's  cash
equivalents was invested in a repurchase  agreement with Thermo Electron.  Under
this  agreement,  the Company in effect  lends  excess cash to Thermo  Electron,
which Thermo Electron  collateralizes with investments principally consisting of
corporate  notes,  U.S.  government  agency  securities,   money  market  funds,
commercial paper and other marketable securities, in the amount of at least 103%
of such obligation.  The Company's funds subject to the repurchase agreement are
readily convertible into cash by the Company.  The repurchase  agreement earns a
rate based on the 90-day  Commercial  Paper Composite Rate plus 25 basis points,
set at the beginning of each quarter.  This agreement was  terminated  effective
June 1, 1999 in connection  with the adoption of a new domestic cash  management
agreement.

      Effective June 1, 1999, the Company and Thermo Electron commenced use of a
new domestic cash management  arrangement.  Under the new  arrangement,  amounts
advanced to Thermo Electron by the Company for domestic cash management purposes
bear interest at the 30-day Dealer  Commercial  Paper Rate plus 50 basis points,
set at the beginning of each month. Thermo Electron is contractually required to
maintain cash,  cash  equivalents,  and/or  immediately  available bank lines of
credit equal to at least 50% of all funds  invested  under this cash  management
arrangement  by  all  Thermo  Electron  subsidiaries  other  than  wholly  owned
subsidiaries.  The  Company  has the  contractual  right to  withdraw  its funds
invested in the cash management arrangement upon 30 days' prior notice.

Stock Holding Assistance Plan

      The human resources committee of the board of directors (the "Committee"),
established a stock holding policy that requires the chief executive  officer to
acquire and hold a minimum number of shares of Common Stock.  In order to assist
the chief  executive  officer in complying  with the policy,  the Committee also
adopted  a stock  holding  assistance  plan  under  which the  Company  may make
interest-free  loans to the chief executive  officer,  to enable him to purchase
the Common  Stock in the open  market.  The stock  holding  policy and the stock
holding  assistance  plan were both  subsequently  amended  to apply only to the
chief executive officer. In fiscal 1998 and 1999, Dr. Appleton received loans in
the principal amount of $137,607 under this plan to purchase 20,000 shares,  the
entire amount of which was outstanding as of May 31, 1999. The loan is repayable
upon the  earlier  of demand or the tenth  anniversary  of the date of the loan,
unless otherwise determined by the Committee.
<PAGE>

      Each of the Company's  publicly-traded,  majority owned  subsidiaries have
adopted similar stock holding policies and stock holding assistance plans, which
were  applicable to their  executive  officers prior to their  amendment to make
them  applicable  only to their  chief  executive  officers.  Certain  executive
officers  of the  Company  are  also  the  chief  executive  officers  of  these
subsidiaries  and are  required to comply with the  subsidiary's  stock  holding
policies. Dr. Appleton, the Company's president and chief executive officer, was
also the chief executive  officer of ThermoRetec until May 14, 1997. Mr. Powell,
a vice  president  of the  Company,  was also the  chief  executive  officer  of
ThermoRetec until April 30, 1998. In fiscal 1998, Dr. Appleton received loans in
the principal  amount of $61,867.50  under the plan to purchase 10,000 shares of
the  common  stock  of  ThermoRetec,   of  which  the  entire  amount  is  still
outstanding.  In fiscal 1998, Mr. Powell received loans in the principal  amount
of  $59,940.50  under the plan to purchase  10,000 shares of the common stock of
ThermoRetec,  of which the  entire  amount is still  outstanding.  Each of these
loans is repayable  upon the earlier of demand or the fifth  anniversary  of the
date of the loan, unless otherwise  determined by the human resources  committee
of the board of directors of ThermoRetec.

                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the Registrant has duly caused this Amendment No. 1 on form 10-K/A
to be signed by the undersigned, duly authorized.

                                             THERMO TERRATECH INC.


                                             By:  / s /  Sandra L. Lambert
                                                  ----------------------------
                                                  Sandra L. Lambert
                                                  Secretary