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 0-18095

                          THE RANDERS KILLAM GROUP INC.
            (Exact name of Registrant as specified in its character)

Delaware                                                         38-2788025
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                             Identification No.)

27 Bleeker Street
Millburn, New Jersey                                              07041
(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, $.0001 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  non-affiliates  of the
Registrant as of April 30, 1999, was approximately $2,411,412.

As of April 30,  1999,  the  Registrant  had  25,429,344  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 The Randers  Killam Group Inc.  ("Randers" 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
TerraTech  Inc.  ("Thermo  TerraTech"),  a provider  of  industrial  outsourcing
services and manufacturing  support encompassing a broad range of specialization
including environmental-liability management, engineering and design, laboratory
testing  and metal  treating,  and Thermo  TerraTech's  parent  company,  Thermo
Electron Corporation ("Thermo Electron"), a provider of products and services in
measurement instrumentation,  biomedical devices, energy, resource recovery, and
emerging  technologies,  is reported in Item 12 - Security  Ownership of Certain
Beneficial Owners and Management.


--------------------------------------------------------------------------------
John P. Appleton    Dr.  Appleton,  64, has been the chairman of the board and a
                    director of the Company since November  1997.  Dr.  Appleton
                    has been  president  and chief  executive  officer of Thermo
                    TerraTech  since  September  1993,  and has served as a vice
                    president   of  Thermo   Electron   since  1975  in  various
                    managerial capacities. He was the chief executive officer of
                    ThermoRetec  Corporation  ("ThermoRetec"),  a majority-owned
                    subsidiary of Thermo  TerraTech,  from September 1993 to May
                    1997. Dr.  Appleton also serves as a director of ThermoRetec
                    and Thermo TerraTech.

--------------------------------------------------------------------------------
Thomas R. Eurich    Mr. Eurich, 53, has been a director of the Company since its
                    inception in 1976. He has also been a vice  president of the
                    Company since November 1997.  Prior to the  acquisition of a
                    majority  interest in the Company by Thermo  TerraTech,  Mr.
                    Eurich served as its president and chief  executive  officer
                    from its inception in 1976 until November 1997 and May 1997,
                    respectively.


--------------------------------------------------------------------------------
Emil C. Herkert     Mr.  Herkert,  61, has been a director of the Company  since
                    November  1997.  He has also served as  president  and chief
                    executive officer of the Company since November 1997 and May
                    1997,  respectively.  In  addition,  he has served as a vice
                    president of Thermo  TerraTech  since May 1996, as president
                    of the Randers group of companies  from its  acquisition  by
                    Thermo  TerraTech in February 1995 until its merger into the
                    Company in May 1997, and as president of Killam  Associates,
                    a wholly  owned  subsidiary  of Thermo  TerraTech  from 1997
                    through May 1998.

--------------------------------------------------------------------------------
Brian D. Holt       Mr.  Holt,  50, has been a  director  of the  Company  since
                    November  1998.  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.,  Thermo Ecotek  Corporation,  Thermo
                    Power   Corporation,   Thermo   TerraTech  and  ThermoRetec.
--------------------------------------------------------------------------------

<PAGE>




--------------------------------------------------------------------------------
Susan F. Tierney    Dr.  Tierney,  48, has been a director of the Company  since
                    November  1997.  Dr. Tierney is a partner with the Economics
                    Resource Group, an  economics/policy  consulting  firm. From
                    March 1993 to May 1993, Dr. Tierney was a consultant for the
                    U.S.  Department of Energy,  and from May 1993 to July 1995,
                    she served as  Assistant  Secretary  for Policy for the U.S.
                    Department of Energy. Prior to that appointment, Dr. Tierney
                    served  as  Secretary  of  Environmental   Affairs  for  the
                    Commonwealth  of  Massachusetts  from  January 1991 to March
                    1993  and  as  Commissioner  of  the  Department  of  Public
                    Utilities for the Commonwealth of Massachusetts from 1988 to
                    January  1991.  Dr.  Tierney  is also a  director  of Thermo
                    Ecotek                                          Corporation.
--------------------------------------------------------------------------------

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 sole member of
the audit committee is Dr. Tierney. 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 sole  member of the human  resources  committee  is Dr.  Tierney.  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 three 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.

      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 Dr. Tierney.

Compensation of Directors

      Cash Compensation

     Outside  directors receive an annual retainer of $2,000 and a fee of $1,000
per day for  attending  regular  meetings of the board of directors and $500 per
day for  participating  in meetings of the board of  directors  held by means of
conference  telephone and for participating in certain meetings of committees of
the board of  directors.  Payment  of  directors'  fees is made  quarterly.  Dr.
Appleton,  Mr.  Eurich,  Mr.  Herkert and Mr. Holt are all  employees  of Thermo
Electron or its subsidiaries and do not receive any cash  compensation  from the
Company for their  services as  directors.  Directors  are also  reimbursed  for
out-of-pocket expenses incurred in attending such meetings.

      In addition,  members of the Special Committee receive 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

<PAGE>

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 the outstanding common stock of Thermo TerraTech 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  TerraTech or 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 25,000
shares of Common  Stock  have been  reserved  for  issuance  under the  Deferred
Compensation  Plan. As of April 3, 1999,  deferred units equal to  approximately
7,862 shares of Common Stock were  accumulated  under the Deferred  Compensation
Plan.

      Stock-based Compensation

      Directors of the Company are also  eligible for the grant of stock options
under  the  Company's  equity  incentive  plan.  The  equity  incentive  plan is
administered by the human resources  committee of the board of directors,  which
determines the form and terms of stock-based awards to be granted. To date, only
nonqualified  stock options have been granted under this plan. These options may
be  exercised at any time prior to the  expiration  of the option on the seventh
anniversary of the grant date.  Shares acquired upon exercise of the options are
subject to  restrictions on transfer and right of the Company to repurchase such
shares at the exercise  price if the  director  ceases to serve as a director of
the  Company  or  any  other  Thermo  Electron  company.  The  restrictions  and
repurchase rights lapse or are deemed to have lapsed 20% per year, starting with
the first anniversary of the grant date,  provided the director has continuously
served as a director of the Company or any other Thermo  Electron  company since
the grant date.  No options to purchase  shares of the Common Stock were granted
to the outside directors of the Company under this plan in fiscal 1999.

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  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  Company's  Common Stock has been adjusted to
reflect a one-for-five reverse stock split effected in February 1999.

      The following table summarizes compensation 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 (i) for the
fiscal year from April 5, 1998 through  April 3, 1999  ("fiscal  1999") (ii) for
the fiscal year from March 30, 1997 through April 4, 1998 ("fiscal 1998"), (iii)
for the three-month  period from January 1, 1997 through March 29, 1997 ("fiscal
1997"),  reflecting  a change in the  Company's  fiscal  year-end  to the 52- or
53-week period ending on the Saturday  nearest March 30, and (iv) for the fiscal
year from  January 1, 1996 to December  31, 1996  ("fiscal  "1996").  The listed
executive  officers are collectively  referred to herein 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)
----------          -------         ------     -----     ------------   ----------     ----------          ----------------
Emil C. Herkert(5)   1999          $214,000   $65,000      $37,391 (6)    $109,125     10,000 (RGI)             $26,202 (8)
President & Chief                                                                      6,100 (TMO)
Executive Officer                                                                      8,000 (TTT)
                     1998          $207,000        $0 (7)  $48,188 (6)      --        240,000 (RGI)             #18,325 (8)
                                                                                         300 (TMO)
                                                                                       2,000 (MKA)
                                                                                       2,000 (ONX)
                                                                                       2,000 (TDX)
                                                                                       1,000 (TISI)
                                                                                       2,000 (TRIL)
                                                                                       1,500 (VIZ)
                                                                                       2,000 (TRCC)
--------------------------------------------------------------------------------------------------------------------------
Thomas R. Eurich (9)  1999         $145,000   $10,000            --        --          4,000 (RGI)                  $500
Vice President        1998         $145,000        $0 (7)        --        --         54,000 (RGI)                  $500
                      1997          $33,000 (1)    --  (1)       --        --             --                         --
                      1996         $132,000        --            --        --             --                         --
-------------------------------------------------------------------------------------------------------------------------
Nicholas M. DeNichilo 1999         $144,851   $22,500            --        --          8,800 (RGI)               $11,514 (8)
Vice President (10)                                                                    5,000 (TTT)
                      1998         $142,000   $45,000            --        --         60,000 (RGI)               $11,152 (8)
-------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)   The Company  changed its fiscal  year-end to March from  December in 1997,
      and as a consequence, the salary data for fiscal 1997 reflects salary paid
      during the  three-month  period  from  January 1, 1997 to March 29,  1997.
      Salary data for the subsequent fiscal year reflects salary paid during the
      Company's full fiscal year.
<PAGE>

(2)   In fiscal 1999, Mr. Herkert was awarded 19,400 shares of restricted  stock
      of  Thermo  TerraTech  with a value of  $109,125  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 held 19,400 shares of restricted stock of Thermo TerraTech with an
      aggregate value of $97,000.

(3)   Options to purchase  Common Stock granted by the Company are designated in
      the table as "RGI". 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),  Thermedics Detection
      Inc.  (designated in the table as TDX), Thermo Information  Solutions Inc.
      (designated  in the Table as TISI),  Thermo  TerraTech  (designated in the
      Table as TTT),  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).

(4)   Represents the amount of matching  contributions  made by the individual's
      employer on behalf of named executive officers  participating in the Elson
      T. Killam Savings and Investment Plan, in the case of Messrs.  Herkert and
      DeNichilo,  and in The Randers  Killam Group Inc.  401(k)  Profit  Sharing
      Plan, in the case of Mr. Eurich.

(5)   The Company became a majority-owned  subsidiary of Thermo TerraTech on May
      12, 1997. Mr. Herkert was appointed chief executive officer of the Company
      on May 12, 1997 and was appointed to the additional  position of president
      of the Company on November 19, 1997. The annual cash compensation  (salary
      and bonus)  reported in the table for Mr.  Herkert  represents  the amount
      paid by the Company and Thermo TerraTech for his services to such entities
      during fiscal 1998 and 1999.

(6)   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 made to Mr. Herkert in fiscal 1999
      and  1998  pursuant  to  the  terms  of a  certain  Deferred  Compensation
      Agreement with Elson T. Killam Associates.

(7)   Mr. Herkert and Mr. Eurich elected to forego their bonuses for fiscal 1998
      in light of the Company's  operating and stock price performance in fiscal
      1998.

(8)   For Messrs. Herkert and DeNichilo,  these figures also include $16,178 and
      $6,493,  respectively for fiscal 1998 and $24,000 and $6,400, respectively
      for fiscal  1999,  of  contributions  to the Elson T.  Killam  Savings and
      Investment Plan in lieu of contributions to the Killam Associates  Defined
      Benefit Retirement Plan,  benefits under which were frozen as of March 31,
      1995.

(9)   Mr.  Eurich was  appointed  vice  president of the Company on November 19,
      1997. Prior to that time, Mr. Eurich served as chief executive  officer of
      the Company  until May 12, 1997,  and as  president  of the Company  until
      November 19, 1997.

(10)  Mr.  DeNichilo was appointed vice president of the Company on November 19,
      1997. The annual compensation (salary and bonus) reported in the table for
      Mr.  DeNichilo  represents  the  amount  paid by the  Company  and  Thermo
      TerraTech for his services to such entities during fiscal 1998 and 1999.

Stock Options Granted During Fiscal 1999

       The following table sets forth information  concerning  individual grants
of stock options made during fiscal 1999 to the 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.

<PAGE>


                          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
      Name            Options     Employees    Price             Appreciation
                   Granted and    in Fiscal    Per     Expiration  for   Option
                    Company (1)     Year       Share      Date      Term (2)
                    -----------   -------     -------   -------  ---------------
                                                                 5%      10%
Emil C. Herkert    10,000 (RGI)    2.85%       $2.50 2/24/04   $6,900  $15,300
                      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
                    8,000 (TTT)    0.67% (3)   $5.03 2/24/04  $11,120  $24,560
-------------------------------------------------------------------------------
Thomas R. Eurich    4,000 (RGI)    1.14% (3)   $2.50 2/24/04   $2,760   $6,120
-------------------------------------------------------------------------------
Nicholas M.         8,800 (RGI)    2.51%       $2.50 2/24/04   $6,072  $13,464
DeNichilo
                    5,000 (TTT)    0.42% (3)   $5.03 2/24/04   $6,950  $15,350
-------------------------------------------------------------------------------


(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
      corporation  may permit the holders 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.

(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.



<PAGE>



                 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)
Emil C. Herkert (3)  RGI       --         --      250,000  /0      3,310  /--
                     TMO       --         --       43,900  /0         $0  /--
                     MKA       --         --        2,000  /0         $0  /--
                     ONX       --         --        2,000  /0         $0  /--
                     TDX       --         --        2,000  /0         $0  /--
                    TISI       --         --            0/1,000       -- /$0 (4)
                     TTT       --         --        8,000  /0         $0  /--
                    TRIL       --         --            0 /2,000      -- /$0 (4)
                    VIZ       --         --        1,500  /0           $0  /--
                    TRCC       --         --            0/2,000       -- /$0 (4)
--------------------------------------------------------------------------------
Thomas R. Eurich     RGI       --         --       58,000  /0       $1,324  /--
--------------------------------------------------------------------------------
Nicholas M.          RGI       --         --       68,800  /0       $2,913  /--
DeNichilo
                     TMO     1,500     $28,295      9,750  /0           $0  /--
                     TTT       --         --       38,000  /0           $0  /--
--------------------------------------------------------------------------------

(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.,  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 and (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 five- to ten-year  period,  depending on the option term, which may
      vary from seven to twelve years,  provided that the optionee  continues to
      be employed  by the  Company or any other  Thermo  Electron  company.  For
      companies  whose shares 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. Certain
      options have  three-year  terms and the  repurchase  rights lapse in their
      entirety on the second  anniversary of the grant date. Please see footnote
      (2) under Summary  Compensation Table above for the company  abbreviations
      used in this table.

(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.
<PAGE>

(3)   Mr. Herkert has served as a vice president of Thermo  TerraTech since 1996
      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 Thermo  Electron  companies  in  capacities  other than in his
      capacity as the chief executive officer of the Company.
(4)   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.

Defined Benefit Retirement Plan

      The Company's  Killam  Associates  subsidiary  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 and Mr.  DeNichilo  are
both  participants  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) and for
Mr.  DeNichilo  is  $32,638.  The Plan  benefits  shown are  payable  during the
employee's  lifetime  unless the  employee  elects  another form of benefit that
provides death protection.

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
Mr. Herkert.  This agreement provides that in the event Mr. Herkert's employment
is terminated under the circumstances described above, he would be entitled to a
lump sum  payment  equal to the sum of (a) one times  his  highest  annual  base
salary in any 12 month period during the prior  five-year  period,  plus (b) one
times his highest annual bonus in any 12 month period during the prior five-year
period.  In  addition,  he would be provided  benefits  for a period of one year
after such termination substantially equivalent to the benefits package he would

<PAGE>

have been otherwise entitled to receive if he was not terminated.  Further,  all
repurchase  rights of Thermo Electron and its subsidiaries  shall lapse in their
entirety  with respect to all options  that he holds in Thermo  Electron and its
subsidiaries,  including  the Company,  as of the date of the change in control.
Finally, Mr. Herkert would be entitled to a cash payment equal to $15,000, to be
used toward outplacement services.

      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 Mr.
Herkert would have been approximately $343,000. 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"),  Mr. Herkert 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.

      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  TerraTech,  the Company's parent company,
and of Thermo Electron,  Thermo TerraTech's parent 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 or executive officers of Thermo Electron or Thermo TerraTech, all such
persons  disclaim  beneficial  ownership  of the shares of Common Stock owned by
Thermo TerraTech or Thermo Electron.



<PAGE>






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

Thermo Electron             24,361,210            N/A              N/A
Corporation (5)
John P. Appleton               120,000        305,939            154,363
Nicholas M. DeNichilo           68,800         38,000             10,175
Thomas R. Eurich               207,501              0                  0
Emil C. Herkert                252,000         89,900             46,400
Brian D. Holt                    4,000        250,000            286,943
Susan F. Tierney                51,653          1,000                  0
All directors and current
executive officers as a        715,954        749,654          1,010,829
group (8 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.

(2)   Shares of Common Stock beneficially owned by Dr. Appleton,  Mr. DeNichilo,
      Mr.  Eurich,  Mr.  Herkert,  Mr. Holt,  Dr.  Tierney and all directors and
      current  executive  officers as a group include 120,000,  68,800,  58,000,
      250,000, 4,000, 48,300, and 561,100 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. Tierney
      and all directors and current  executive  officers as a group each include
      3,353  shares  that had been  allocated  through  April  3,  1999,  to Dr.
      Tierney's  account  maintained  under the Deferred  Compensation  Plan. No
      director or named executive officer beneficially owned more than 1% of the
      Common Stock  outstanding  as of May 31, 1999;  all  directors and current
      executive  officers as a group beneficially owned 2.8% of the Common Stock
      outstanding as of such date.

(3)   Shares of the common stock of Thermo TerraTech  beneficially  owned by Dr.
      Appleton,  Mr.  DeNichilo,  Mr.  Herkert,  Mr. Holt,  Dr.  Tierney and all
      directors  and  current  executive  officers as a group  include  275,000,
      38,000, 8,000, 250,000, 1,000 and 630,000 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  and all  directors  and  current  executive  officers as a group
      include 305 and 907 shares, respectively,  allocated through May 31, 1999,
      to accounts  maintained pursuant to the ESOP, as defined below. 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 of Thermo  TerraTech  outstanding as of such date; all directors and
      current  executive  officers  as a group  beneficially  owned 3.89% of the
      common stock of Thermo TerraTech as of May 31, 1999.

(4)   Shares of the common stock of Thermo  Electron  beneficially  owned by Dr.
      Appleton,  Mr.  DeNichilo,  Mr.  Herkert,  Mr. Holt and all  directors and
      current  executive  officers as a group include  116,902,  9,750,  43,900,
      283,950, and 898,300 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  and all
      directors  and current  executive  officers as a group  include  1,615 and
      4,112  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.  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 did not beneficially own more than
      1% of the common stock of Thermo Electron outstanding as of such date.

(5)   As of May 31, 1999, Thermo Electron beneficially owned approximately 95.8%
      of the  outstanding  Common Stock,  primarily  through its  majority-owned
      subsidiary Thermo TerraTech. 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>

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
and  Thermo  TerraTech,  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 one Form 4 late
reporting a total of two  transactions  associated  with the grant of options to
purchase Common Stock granted to employees under its stock option program. Also,
Thermo  Electron  filed a Form 5 containing a total of nine  transactions  which
should  have   previously  been  reported  on  a  Form  4,  consisting  of  nine
transactions  associated  with the grant 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. The Company and such other majority-owned Thermo
Electron subsidiaries are hereinafter referred to as the "Thermo Subsidiaries."

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

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

      The Charter currently provides that it shall continue in effect so long as
Thermo Electron and at least one Thermo Subsidiary participate.  The Charter may
be amended at any time by agreement of the participants.  Any Thermo Subsidiary,
including the Company,  can withdraw from  participation  in the Charter upon 30
days' prior notice.  In addition,  Thermo  Electron may terminate a subsidiary's
participation in the Charter in the event the subsidiary ceases to be controlled
by Thermo  Electron  or ceases to comply with the  Charter or the  policies  and
procedures  applicable  to the  Thermo  Group.  A  withdrawal  from the  Charter
automatically  terminates  the corporate  services  agreement and tax allocation

<PAGE>

agreement  (if  any) in  effect  between  the  withdrawing  company  and  Thermo
Electron.  The  withdrawal  from  participation  does not terminate  outstanding
commitments  to third  parties  made by the  withdrawing  company,  or by Thermo
Electron  or other  members of the Thermo  Group,  prior to the  withdrawal.  In
addition,  a  withdrawing  company is  required  to  continue to comply with all
policies and  procedures  applicable to the Thermo Group and to provide  certain
administrative  functions mandated by Thermo Electron so long as the withdrawing
company is controlled by or affiliated with Thermo Electron.

      As provided in the Charter,  the Company and Thermo  Electron have entered
into a Corporate  Services  Agreement  (the  "Services  Agreement")  under which
Thermo  Electron's  corporate staff provides  certain  administrative  services,
including certain legal advice and services,  risk management,  employee benefit
administration,  tax advice and  preparation  of tax returns,  centralized  cash
management  and  financial  and other  services to the Company.  The Company was
assessed  an  annual  fee  equal to 0.8% of the  Company's  revenues  for  these
services in fiscal  1999.  The annual fee will  remain at 0.8% of the  Company's
revenues  for fiscal  2000.  The fee is reviewed  annually and may be changed by
mutual agreement of the Company and Thermo Electron.  During fiscal 1999, Thermo
Electron  assessed the Company  $646,000 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  $61,000 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 and Thermo TerraTech are parties to a Tax Allocation Agreement
under  which  both the  Company  and Thermo  TerraTech  are  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 TerraTech and
Thermo Electron  together own at least 80% of the Company's  outstanding  Common
Stock.  The  agreement  provides  that 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  TerraTech's  and Thermo  Electron's  combined  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  $700,000 under the Tax Allocation
Agreement.

      Thermo Electron has announced a proposed reorganization  involving certain
of Thermo Electron's  subsidiaries,  including the Company. Under this plan, the
Company, and its sister subsidiary,  ThermoRetec  Corporation,  as well as their
parent company,  Thermo TerraTech Inc., 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 Thermo  TerraTech  and  ThermoRetec;  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 Thermo TerraTech 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  purchases  products and  services in the  ordinary  course of
business from other companies affiliated with Thermo TerraTech.  In fiscal 1999,
the Company  purchased a total of $425,000 of products and  services  from other
companies affiliated with Thermo TerraTech.
<PAGE>

      At  April  3,  1999,  the  Company  owed  Thermo  Electron  and its  other
subsidiaries  an  aggregate  of  $94,000  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
$1,190,000.  These  amounts do not bear  interest and are expected to be paid in
the normal course of business.

      As of April 3,  1999,  approximately  $15,015,000  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.  The loans are repayable upon the earlier of demand or
the tenth  anniversary of the date of the loan,  unless otherwise  determined by
the Committee. No such loans are currently outstanding under the plan.

                                   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.

                                             THE RANDERS KILLAM GROUP INC.


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