<PAGE>
 
                      SECURITIES AND EXCHANGE COMMISSION
                             Washington D.C. 20549

                               FORM 10-K/A No. 1

(Mark One)
      [X]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934
 
                  For the fiscal year ended December 31, 1998
                                      OR

[  ]          TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934
 
                       Commission File Number:  0-18858
 
                             KAISER VENTURES INC.
            (Exact name of registrant as specified in its charter)
 
         DELAWARE                                          94-0594733
-------------------------------                  -----------------------------
  (State or other jurisdiction                          (I.R.S. Employer
       of incorporation or                              Identification No.)
         organization)
  
  3633 E. Inland Empire Blvd. Suite 850                  
           Ontario, Ca  91764
------------------------------------------      
(Address of principal executive offices and    
              zip code)
 
      Registrant's telephone number, including area code: (909) 483-8500
 
 
          Securities registered pursuant to Section 12(b) of the Act:
 
                                                     Name of Each Exchange on 
      Title of Each Class                                which Registered
-------------------------------                  -------------------------------
  Common Stock ($.03 par value)                       Nasdaq Stock Market(SM)
 
                        ______________________________

       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 (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.   Yes X   No 
                                        ---     ---
 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K ((S)229.405 of this chapter) is not contained herein, and will
not be contained to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. Yes X   No
                                       ---    ---
 
The aggregate market value of the registrant's Common Stock, $.03 par value,
held by non-affiliates of the registrant was approximately $48,400,535 based
upon the average of the bid and ask prices of registrant's Common Stock on the
Nasdaq Stock Market(SM) at March 23, 1999, or $9.50 per share.
 
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes X   No 
                         ---     ---

At March 23, 1999, 10,699,354 shares of the registrant's Common Stock, $.03 par
value, were outstanding, including 136,919 shares deemed outstanding but
reserved for issuance to the general unsecured creditors of Kaiser Steel
Corporation.
 
Documents Incorporated By Reference:  None.
<PAGE>
 
         Part III of the 10-K Report previously anticipated to be incorporated
by reference from the Company's Proxy for its 1999 Annual meeting is set forth
herein.  Accordingly, the Company's 10-K Report for the year ended December 31,
1998, is hereby amended by the inclusion of the following information:

                                   PART III
                                        

Item 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Directors

The following information pertains to the current members of the Board of
Directors.


    Name and Age                   Principal Occupation and Other Directorships
===============================   ==============================================
E. Stoddard (48)                   Mr. Stoddard was appointed Chief Executive
                                   Officer of the Company in June 1988, and has
                                   held such position and/or the position of
                                   Chairman of the Board since such date. Prior
                                   to joining the Company in 1988, he was an
                                   attorney in private practice in Denver,
                                   Colorado. Mr. Stoddard is Chairman of the
                                   Board of Directors of Mine Reclamation
                                   Corporation and also serves on the Board of
                                   Directors of Penske Motorsports, Inc.
                                   ("PMI"). The Company currently owns
                                   approximately 11.73% of the issued and
                                   outstanding shares of PMI's common stock (see
                                   "Related Transactions" below).
 
Ronald E. Bitonti (66)             Mr. Bitonti is Chairman of the Benefits
                                   Committee for the VEBA and was Chairman of
                                   the Reorganized Creditors' Committee formed
                                   during the Kaiser Steel Corporation ("KSC")
                                   bankruptcy until dissolution of this
                                   committee in 1991. From 1985 to 1991, Mr.
                                   Bitonti served as International
                                   Representative for the United Steelworkers of
                                   America. Mr. Bitonti retired from KSC in 1981
                                   and has been a director since November 1991.
 
Todd G. Cole (78)                  Mr. Cole was Chief Executive Officer of CIT
                                   Financial Corporation before starting his
                                   present career as a consultant and corporate
                                   director. From 1992 to 1996 he was managing
                                   director of SH&E, Inc., the oldest consulting
                                   firm specializing in aviation, in charge of
                                   its Miami office. In his consulting role he
                                   served as president and chief financial
                                   officer of Frontier Airlines, Inc., D.I.P.
                                   (1986-1989) and vice-chairman of Eastern Air
                                   Lines, Inc., D.I.P. (1989-1991). He serves on
                                   the Board of Directors of Arrow Air, Inc.
                                   (certificated scheduled and charter air cargo
                                   carrier), Avborne, Inc. (aircraft and
                                   component overhaul), Hawaiian Airlines, Inc.
                                   (certificated passenger and cargo carrier),
                                   International Business Network for World
                                   Commerce and Industry, Ltd. (Bermuda-based
                                   internet service), and NAC Re Corporation
                                   (international property and casualty
                                   reinsurance). Mr. Cole has been a director
                                   since November 1989.

                                       2


<PAGE>
 
<TABLE>
<CAPTION>
        Name and Age               Principal Occupation and Other Directorships
===============================    ==========================================================================
 
<S>                                     <C>
Gerald A. Fawcett (66)             Mr. Fawcett was President and Chief Operating
                                   Officer of the Company from January 1996
                                   until his retirement from full time duties on
                                   January 15, 1998. He was appointed to the
                                   Company's Board on January 15, 1998, and
                                   currently serves as Vice Chairman of the
                                   Board. Mr. Fawcett started his employment
                                   with the former Kaiser Steel Corporation in
                                   1951 holding various positions in the steel
                                   company, ultimately becoming Division
                                   Superintendent of the Cold Rolled and Coated
                                   Products Division. After a five year
                                   consulting business working with domestic and
                                   overseas steel industry clients, Mr. Fawcett
                                   joined the Company in 1988 as Senior Vice
                                   President and became Executive Vice President
                                   in October 1989. He is also Vice Chairman of
                                   the Board of Mine Reclamation Corporation,
                                   and of the Board of the Inland Valley Federal
                                   Credit Union.
 
Gary Gibbons (50)                  Mr. Gibbons has been the principal and owner
                                   of the Coleridge Group, a registered
                                   investment advisor, since 1987. In such
                                   capacity he represents a variety of clients
                                   by providing financial and investment advice,
                                   including the management of investment
                                   portfolios. Mr. Gibbons is the financial and
                                   investment advisor for VEBA. In addition,
                                   from 1989 to 1991 Mr. Gibbons held various
                                   positions with Houlihan Lokey Howard and
                                   Zukin Investment Management, Inc., with his
                                   final position being that of Managing
                                   Director. Mr. Gibbons is currently a director
                                   of The Industrial Development Authority of
                                   the County of Maricopa, the State of
                                   Arizona's largest industrial development
                                   authority. Mr. Gibbons has been a director of
                                   the Company since April 1998.
 
Reynold C. MacDonald (80)          Mr. MacDonald served as Chairman of the Board
                                   for Acme Metals Company from 1986 until 1992
                                   and continues with Acme as a member of the
                                   board. Acme is currently in a Chapter 11
                                   bankruptcy proceeding. From 1983 to 1986, Mr.
                                   MacDonald was director of and consultant to
                                   Interlake, Inc., a metals fabrication and
                                   materials handling company. He retired as
                                   Chairman and Chief Executive Officer of
                                   Interlake in 1983. He also served as a
                                   director of ARAMARK Group, Inc. from November
                                   1988 to February 1999.

William J. Morgan (44)             Mr. Morgan is the President, a Director, and
                                   a major shareholder of Pacholder Associates,
                                   Inc. ("PAI"), a registered investment
                                   advisor. Mr. Morgan has been with PAI since
                                   1984. Mr. Morgan also serves on the Board of
                                   Directors of the following public companies:
                                   ICO, Inc. (an oil field service company),
                                   USF&G Pacholder Fund, Inc. (a closed end
                                   mutual fund), Duckwall-ALCO Stores, Inc. (a
                                   discount retail chain), Smith Corona Corp.
                                   (office products manufacturer), and
                                   Premiumware, Inc. (apparel manufacturer). Mr.
                                   Morgan is also the Vice President and a
                                   Director of Winton Associates, Inc., a
                                   broker/dealer that is a subsidiary of PAI.
                                   Mr. Morgan has been a director of the Company
                                   since September 1994.
</TABLE>

                                       3
<PAGE>
 
         Name and Age              Principal Occupation and Other Directorships
===============================    =============================================

Charles E. Packard (55)            Mr. Packard has served since 1986 as a member
                                   of the Board of Directors, Executive Vice
                                   President, and Chief Financial Officer for
                                   the Arnel Development Company, a real estate
                                   investment, development, and management
                                   company in Costa Mesa, California. Since
                                   1977, Mr. Packard has also served as Vice
                                   President and Chief Financial Officer of
                                   Arnel Financial, where he supervises the
                                   financial and administrative areas of 20
                                   corporate entities, collectively referred to
                                   as "Arnel & Affiliates." Mr. Packard also
                                   serves on the board of directors of several
                                   non-profit organizations. Mr. Packard has
                                   been a director since November 1991.
 
Thomas S. Rabone (68)              Mr. Rabone was engaged in public relations
                                   with Barclay and Associates from 1987 to
                                   1993. He is a KSC retiree and a Benefits
                                   Committee member of the VEBA. Mr. Rabone was
                                   a member of the Retiree Subcommittee of the
                                   KSC Creditors' Committee. Currently he is a
                                   member of the San Bernardino County Board of
                                   Education. He has been a director since
                                   November 1988.
 
Lyle B. Stevenson (71)             Mr. Stevenson is Co-Chairman of the Benefits
                                   Committee for the VEBA. He was also a member
                                   of the KSC Reorganized Creditor's Committee
                                   and the Retiree Subcommittee of the KSC
                                   Creditors' Committee. Mr. Stevenson retired
                                   from KSC in 1981 after holding several
                                   management positions. He has been a director
                                   since November 1991.
 
Marshall F. Wallach (56)           Mr. Wallach has served as President of The
                                   Wallach Company, a Denver, Colorado based
                                   investment banking firm, since 1984. Prior to
                                   forming The Wallach Company, Mr. Wallach
                                   managed the corporate finance department and
                                   established the mergers and acquisitions
                                   department of Boettcher & Company, a regional
                                   investment bank in Denver, Colorado. Mr.
                                   Wallach serves on the boards of several non-
                                   profit organizations and privately-owned
                                   corporations. He has been a director since
                                   November 1991

Board and Committee Meetings

     The Board of Directors has established an Audit Committee, a Human
Relations Committee (formerly called the Compensation and Benefits Committee),
and a Finance Committee.  Ad hoc committees are established from time-to-time by
the Board.  Mr. Stoddard serves as an ex-officio member of all committees.

     The Audit Committee, currently composed of Messrs. Packard (Chairman),
MacDonald, and Rabone, generally reviews the activities of the Company's
independent accountants and the results of the examination made by these
professionals in connection with the Company's financial statements and a review
of internal accounting controls.  The Audit Committee held two meetings in 1998.

     The Human Relations Committee, which currently is composed of Messrs.
Stevenson (Chairman), Bitonti, Cole, Fawcett, and Gibbons, has general
responsibility for all 

                                       4
<PAGE>
 
employee compensation and benefit matters, including recommendations to the full
Board on compensation arrangements of officers and directors, benefit plans,
stock options and other stock related grants. The Human Relations Committee held
five meetings in 1998.

     The Finance Committee, which is currently composed of Messrs. Wallach
(Chairman), Gibbons, MacDonald, and Morgan, has general responsibility for the
Corporation's annual operating budget and capital plan, changes in the Company's
capital structure, and the Company's credit facilities such as lines of credit,
loans, and other forms of indebtedness.  The Finance Committee held one meeting
in 1998.

     The Board does not have a standing committee to nominate candidates to the
Board of Directors.  The Board designated the Human Relations Committee as the
ad hoc nominating committee for 1998 and for 1999.

     The Board of Directors held eight meetings in 1998.  All directors of the
Company attended at least 75% of the meetings of the Board and 75% of the
meetings of the committees on which they served during 1998.

Executive Officers

     The current executive officers of the Company are:

      Name              Age              Position with the Company
      ----              ---              -------------------------  
Richard E. Stoddard     48  President, Chairman of the Board and Chief Executive
                            Officer
 
James F. Verhey         51  Executive Vice President - Finance and Chief
                            Financial Officer
 
Lee R. Redmond, III     46  Sr. Vice President - Real Estate
 
Terry L. Cook           43  Sr. Vice President, General Counsel and Corporate
                            Secretary
 
Pamela M. Catlett       33  Vice President - Corporate Relations
 
Anthony Silva           36  Vice President Resource Development and
                            Environmental Services

     Richard E. Stoddard was appointed Chief Executive Officer of the Company in
June 1988, and has held such position and/or the position of Chairman of the
Board since such date.  With the retirement of Gerald A. Fawcett as President
and Chief Operating Officer of the Corporation effective January 15, 1998, Mr.
Stoddard also became President of the Company.  In addition, he serves as
Chairman of the Board of Directors and Executive Committee of Mine Reclamation
Corporation.  Prior to joining the Company in 1988, he was an attorney in
private practice in Denver, Colorado.  Mr. Stoddard also serves on the Board of
Directors of Penske Motorsports, Inc. ("PMI").  The Company currently owns
approximately 11.73% of the issued and outstanding shares of PMI's common stock
(see "Related Transactions" below).

     James F. Verhey joined the Company and was appointed Vice President-Finance
and Chief Financial Officer in August 1993, appointed Senior Vice President-
Finance in January 1996, and appointed Executive Vice President of the Company
in January 1998.  In addition to his duties with the Company, Mr. Verhey was
appointed Vice President of Finance and Chief Financial Officer of Mine

                                       5
<PAGE>
 
Reclamation Corporation in February 1995.  From July 1992 to joining the
Company, Mr. Verhey was the Chief Financial Officer of OESI Power Corp., a
Portland, Oregon based geothermal company.  From June 1991 to July 1992, Mr.
Verhey served as President of Mithryn Energy, Inc.  From August 1987 to June
1991, Mr. Verhey was President of two subsidiaries of Luz International, Ltd.
("Luz"), a developer of large-scale solar electric generating stations.  Both
Luz and the two subsidiaries filed voluntary petitions in bankruptcy under
Chapter 11 after Mr. Verhey left the companies.  Both filings were ultimately
converted to Chapter 7 liquidations.  Luz and its subsidiaries have no
relationship with the Company.  Mr. Verhey is a certified public accountant and
spent several years with Price Waterhouse in Los Angeles, California.

     Lee R. Redmond III joined the Company and was appointed Vice President -
Real Estate for the Company in June 1994, and was appointed Senior Vice
President-Real Estate in January 1996.  Prior to joining the Company, Mr.
Redmond was in charge of Birtcher Real Estate, Ltd's Riverside office as a
principal.  Birtcher is a major U.S. real estate development, construction and
investment firm.  In that position Mr. Redmond developed and managed substantial
industrial and office space.  Before joining Birtcher in 1989, Mr. Redmond was
regional director of the Inland Empire for O'Donnell, Armstrong & Partners of
Irvine, California, a regional real estate developer.  At O'Donnell he was
responsible for all land acquisitions and development in the California counties
of Riverside and San Bernardino.  He is also a member of several national and
local professional and economic development organizations.

     Terry L. Cook joined the Company and was appointed General Counsel and
Corporate Secretary in August 1993 and became a Senior Vice President in January
1996.  Mr. Cook was appointed General Counsel and Corporation Secretary of Mine
Reclamation Corporation in February 1995.  Prior to joining the Company, Mr.
Cook was a partner in the Denver office of the national law firm McKenna & Cuneo
specializing in business, corporate, and securities matters.  Prior to his
joining McKenna & Cuneo in July 1988, Mr. Cook was an attorney in private
practice as a partner in a Denver, Colorado law firm.

     Pamela M. Catlett became Vice President-Corporate Relations for the Company
in January, 1996.  Prior to such position, since December 1992 she was the
Company's Director of Investor and Community Relations.  Prior to joining the
Company from 1987 to 1992 she was the manager of corporate communications for
Willdan Associates, a California-based municipal engineering and planning firm.

     Anthony Silva was appointed Vice President Resource Development and
Environmental Services in January 1998.  In this position, Mr. Silva is
responsible for the oversight of the remediation of the site of the former
Kaiser Steel Corporation steel mill.  Prior to this position, from December 1993
to October 1996, Mr. Silva was Vice President and Managing Principal with the
Park Corporation, an environmental consulting and water resources firm providing
technical expertise and long-term strategic environmental planning to industrial
and oil and gas companies.  Prior to 1993, he was also the National Oil & Gas
Exploration & Production Business Development Director for Delta Environmental
Consultants and the Exploration & Production Manager for an independent oil and
gas company.  Mr. Silva serves on the Board of Directors for the non-profit
Environmental Professionals Organization (EPO).  Mr. Silva recently served as a
chairperson of the California Department of Toxic Substances Control's Site
Mitigation Update Advisory Group (Remedy Selection/Standards Planning Subgroup),
which was updating and improving the California Health and Safety Code.

                                       6
<PAGE>
 
Item 11.  EXECUTIVE COMPENSATION

Summary of Cash and Certain Other Compensation

     The following table shows, for the fiscal years ending December 31, 1998,
1997, and 1996, the cash compensation paid by the Company, as well as certain
other compensation paid or accrued in those years, to the Company's President
and Chief Executive Officer, and the four other most highly compensated
executive officers of the Company in office at the end of fiscal year 1998,
whose total cash compensation exceeded $100,000 during fiscal year 1998 (the
"Named Executive Officers") in all capacities in which they served:

                           Summary Compensation Table


<TABLE>
<CAPTION>
                                                                                      Long Term Compensation
                                                                            --------------------------------------
                                              Annual Compensation                        Awards            Payouts
                                ----------------------------------------------------------------------------------
                                                                      Other
                                                                     Annual     Restricted    Securities             All Other
            Name and                                                 Compen-       Stock      Underlying    LTIP      Compen-
       Principal Position          Year   Salary(1)     Bonus(2)    sation(3)    Awards(4)     Options     Payouts   sation(5)
--------------------------------   ----   ----------   ----------   ---------   -----------   ----------   -------   ----------

<S>                                <C>    <C>          <C>          <C>         <C>           <C>          <C>       <C>
Richard E. Stoddard                1998    $302,120     $ 45,318          $0       $     0             0        $0     $49,314
Chairman of the Board,             1997    $291,200     $131,040          $0       $40,000             0        $0     $46,848
President and CEO                  1996    $280,000     $123,200          $0       $81,067       200,000        $0     $42,759

Gerald A. Fawcett (6)              1998    $ 66,167     $      0          $0       $     0             0               $18,615
Vice Chairman                      1997    $208,000     $ 93,600          $0       $40,000             0        $0     $30,324
                                   1996    $200,000     $ 88,000          $0       $69,333        40,000        $0     $20,174

James F. Verhey                    1998    $193,592     $ 29,250          $0       $     0             0        $0     $29,664
Executive Vice President-Finance   1997    $161,200     $ 72,540          $0       $20,000             0        $0     $23,320
& CFO                              1996    $155,000     $ 68,200          $0       $42,733       100,000        $0     $18,772

Lee R. Redmond, III                1998    $167,245     $ 16,725          $0       $     0             0        $0     $26,765
Sr. Vice President-Real            1997    $161,200     $ 72,540          $0       $20,000             0        $0     $23,320
Estate                             1996    $155,000     $ 68,200          $0       $42,733       100,000        $0     $ 8,294

Terry L. Cook                      1998    $167,245     $ 25,087          $0       $     0             0        $0     $26,765
Sr. Vice President, General        1997    $161,200     $ 72,540          $0       $20,000             0        $0     $23,320
Counsel and Secretary              1996    $155,000     $ 68,200          $0       $42,733       100,000        $0     $18,772

Anthony Silva(7)                   1998    $110,000     $ 22,000          $0       $     0        25,000        $0     $11,470
Vice President Resource
Development & Envir. Services
</TABLE>

(1) A portion of the salary for each executive officer for 1996 and 1997 was in
    the form of restricted stock subject to vesting requirements imposed by the
    Board of Directors.  The restricted stock portion of an officer's salary is
    also included in the "Restricted Stock Awards" column above, together with
    the portion of each officer's bonus received as restricted stock for any
    applicable year.

(2) Bonuses are paid in January for the preceding calendar year.  No restricted
    stock was awarded as a part of the executive officer bonuses for 1998.

(3) Does not include the dollar value of perquisites and other personal
    benefits.  The aggregate amount of perquisites and other personal benefits
    received by each executive officer did not exceed the lesser of $50,000 or
    10% of the total annual salary and bonus reported for such executive
    officer.

(4) Restricted stock, subject to vesting, was granted to Messrs. Stoddard,
    Fawcett, Verhey, Redmond and Cook in January 1997, as part of their
    respective bonuses for the preceding calendar year.  These stock awards are
    being reported in 1996, as it was a reflection of the Board's determination
    of the executive's compensation for the calendar year preceding the grant.
    This column also includes the value of restricted stock received as a part
    of an officer's salary for 1996 and 1997.

(5) Officers of the Company are eligible to participate in the Company's 401(k)
    Savings Plan, Money Purchase Plan and Supplemental Executive Retirement Plan
    (collectively "Plans").  During 1998, the Company made contributions of
    $49,314 to the Plans for the account of Mr. Stoddard, $29,664 for the
    account of Mr. Verhey, $26,765 for the account of Messrs. Cook and Redmond,
    and $8,615 for the account of Mr. Fawcett.

(6) Mr. Fawcett retired as President and Chief Operating Officer of the Company
    as of January 15, 1998, and was appointed as Vice Chairman of the Board.
    Mr. Stoddard assumed the duties of President of the Company as of such date.

(7) Mr. Silva did not become an executive officer of the Company until January
    1998.

                                       7
<PAGE>
 
                             Option Grants in 1998

     The following table sets forth information concerning individual grants of
stock options made during the fiscal year ended December 31, 1998 to each of the
named Executive Officers:

<TABLE>
<CAPTION>
                                                          Percent of Total
                                                           Options Granted
                                      Shares Underlying    to Employees in    Exercise   Expiration
         Name                           Option Granted        Fiscal Year       Price        Date
<S>                                   <C>                 <C>                 <C>        <C>
Richard E. Stoddard                         0                    0%            N/A           N/A

James F. Verhey                             0                    0%            N/A           N/A

Lee R. Redmond                              0                    0%            N/A           N/A

Terry L. Cook                               0                    0%            N/A           N/A

Anthony Silva                          25,000                   61%         $10.34    01/13/2008
</TABLE>


                      Aggregated Option Exercises in 1998
                     and Option Values at December 31, 1998

     The following table summarizes options exercised during the fiscal year
ended December 31, 1998, by the executive officers named in the Summary
Compensation Table, and the value of their unexercised options as of December
31, 1998:

<TABLE>
<CAPTION>
                                                                                                           Value of Unexercised
                                                                             Number of Unexercised         In-the-Money Options
                                   Shares Acquired on                        Options at  12/31/98              at 12/31/98
Name                                    Exercise          Value Realized   Exercisable/Unexercisable   Exercisable/Unexercisable(1)
----                                    --------          --------------   -------------------------   ----------------------------
<S>                               <C>                     <C>              <C>                         <C>
Richard E. Stoddard                       0                    $0             126,037/169,563                    $358,000/$0

James F. Verhey                           0                    $0               86,250/83,750                    $ 74,000/$0

Lee R. Redmond, III                       0                    $0               67,501/87,499                    $ 74,000/$0

Terry L. Cook                             0                    $0               85,625/84,375                    $ 74,000/$0

Anthony Silva                             0                    $0                3,000/34,000                    $      0/$0
</TABLE>

 (1) Stock price as of December 31, 1998 was $8.78 per share (average of bid and
 ask prices).

Employment Contracts and Termination of Employment and Change-in-Control
Arrangements

     Mr. Stoddard is employed pursuant to a contract which was amended effective
January 15, 1998. The agreement provides for an annual base salary (which is
currently $302,120) adjusted annually by the annual increase in the consumer
price index.  Mr. Stoddard has agreed to accept up to $40,000 of his annual base
salary in restricted common stock vesting over the period of time established by
the Board of Directors.  The contract provides that Mr. Stoddard's employment
may be terminated at anytime upon twelve (12) months prior written notice,
together with payment of severance. In accordance with his past and current
employment contracts, and based upon the attainment of certain criteria, Mr.
Stoddard may be awarded annual bonuses based upon his then-existing salary. His
base salary and bonuses may be a combination of cash and restricted stock
shares.

     Effective as of June 17, 1996, Messrs. Cook, Verhey and Redmond entered
into employment contracts with the Company.  Effective as of January 15, 1998,
Mr. Verhey's employment contract was amended to reflect his additional
responsibilities and duties in becoming Executive Vice President of the 

                                       8
<PAGE>
 
Company. His annual base salary was increased to $193,592. Annual base salaries
of $167,245, were paid to each of Messrs. Cook and Redmond in 1998. Effective as
of January 15, 1998, Mr. Silva entered into an employment contract with the
Company. Mr. Silva's annual base salary was $110,000 for 1998. Subject to the
payment of severance compensation, the employment of Messrs. Cook, Silva,
Redmond and Verhey can be terminated at any time without cause. In accordance
with their employment contract they each may be awarded annual bonuses based on
their then existing salaries.

     In summary, under the terms of their respective past and current employment
contracts, each executive officer (including those not identified herein as
Named Executive Officers), in the event of a "material change", including a
change of control, pursuant to or in anticipation of which the executive officer
is terminated, is eligible to have the Company pay him or her an amount equal to
one year's then-current salary plus his average annual bonus, payable in one
lump sum or, at his or her option, over such period as he or she may determine.
In addition, the Company will continue to pay his or her benefits for one year.
Should the Company terminate his or her employment without cause, and a material
change has not occurred, the Company will pay to the terminated executive an
amount equal to one year's then-current salary.  Should an executive officer
voluntarily terminate his or her employment, the Company will not be obligated
to pay him or her any additional compensation, other than the compensation due
and owing up to the date of termination.

     A "material change" involving the Company is defined in each executive
employment contract.  A "material change" is typically defined as the following:
(a) any sale, merger, or other acquisition of all or substantially all of the
Company with or by another entity where the shareholders of the Company at the
time of the sale, merger or other acquisition do not own or control at least 51%
of the voting power of such entity immediately after the time of the sale,
merger, or other acquisition; (b) any acquisition of common stock by a person or
"group" (as defined in Section 13(d) of the Securities Exchange Act of 1934),
resulting in the "beneficial ownership" (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934) by that person or group of more than (i) 25% of
the capital stock of the Company accompanied by a change of more than 50% of the
directors of the Company within one year after such event; or (ii) 35% of the
capital stock of the Company with or without such change; or (c) a distribution
to any one or more shareholders of the Company of an aggregate of net assets
with a cumulative value that exceeds the greater of (i) $20,000,000 or (ii) 20%
of the net equity of the Company at the time of the distribution (whether by
dividend or repurchase of stock).

     Under the terms of the employment contract with each executive officer, the
Company may grant stock options and other stock-related incentives from time-to-
time to an executive officer.

Director Compensation

     Directors who are also employees of the Company receive no fees for serving
as directors.  All non-employee directors receive a fee of $750 for each Board
or Committee meeting attended as well as a $10,000 per year retainer/i/.  A non-
employee director serving as a Committee Chairman receives an additional $2,000
per year retainer.  In accordance with the Bylaws of the Company, director
compensation is established periodically by resolution of the Board of
Directors.

     The Kaiser Ventures Inc. 1995 Stock Plan, as amended, ("Plan") provides for
the grant of options to directors of the Company.  Any non-employee individual
first elected or appointed to the Board during the Plan term received a non-
qualified stock option to purchase 5,000 shares of the Company's common stock at
the fair market value at the time of becoming a director and an annual grant of
a non-qualified stock option to 

__________________________

/i/  Gary E. Gibbons has currently waived all rights as a director to receive
cash compensation and stock options.

                                       9
<PAGE>
 
purchase 1,500 shares at fair market value. Thus, each non-employee director
completing at least six months in office after the 1999 Annual Meeting will vest
in a non-qualified stock option to purchase 1,500 shares of the Company's common
stock at the fair market value as of the date of the Annual Meeting.

     The following table summarizes the annual director stock option grants
since January 1, 1996:

<TABLE>
<CAPTION>
                    Grant Date                                    Fair Market Value Per Share
                 <S>                                              <C>
                  June 17, 1996                                         $10.50
                  June 23, 1997                                         $10.05
                  June 30, 1998                                         $11.80
</TABLE>

     The Company does not have a retirement compensation plan for non-employee
directors.

Compliance with Section 16(A) of the Securities Exchange Act of 1934

     Section 16(a) of the Securities Act of 1934, as amended, requires the
Company's directors and executive officers, and persons who own more than 10% of
the Common Stock, to file with the Securities and Exchange Commission initial
reports of ownership and reports of changes in ownership of the Company.

     To the Company's knowledge, based solely on a review of copies of reports
provided by such individuals to the Company and written representations of such
individuals that no other reports were required, during the fiscal year ended
December 31, 1998, all Section 16(a) filing requirements applicable to its
directors, officers, and greater that 10% beneficial owners were complied with.


               (REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK)

                                      10
<PAGE>
 
Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT

     The following table sets forth, as of April 29, 1999, unless otherwise
noted, the number of shares of the Company's common stock the Company believes
to be owned by (i) each person known by the Company to own of record or
beneficially five percent (5%) or more of such stock; (ii) each director; (iii)
each executive officer; and (iv) all officers and directors as a group.  The
table does not include the 136,919 shares reserved but not yet distributed to
the Class 4A unsecured creditors of KSC, since such shares are not yet deemed
outstanding or eligible to vote for purposes of the Annual Meeting.

<TABLE>
<CAPTION>
                                                                            Number of                     Percent of
                                                                          Common Shares                   Issued and
Name and Address of                                                        Beneficially                   Outstanding
Beneficial Owner                                                             Owned(1)                      Shares(2)
-----------------------------------------------------------------------------------------------------------------------------

<S>                                                                          <C>                              <C>
New Kaiser Voluntary Employees                                           3,387,937                            30.0%
Beneficiary Association Trust (3), (7)
(VEBA)
9810 Sierra Avenue, Suite A
Fontana, CA  92335

Pension Benefit Guaranty Corporation(4)                                  2,100,966                            18.6%
(PBGC)
2020 K Street, N.W.
Washington, DC  20006

Dimensional Fund Advisors, Inc.(5)                                         740,500                             6.5%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA  90401

Richard E. Stoddard, CEO, President & Chairman                             188,534                             1.7%

Gerald A. Fawcett, Vice Chairman                                           176,368                             1.6%

James F. Verhey, Executive Vice President & CFO                            113,530                             1.0%

Terry L. Cook, Sr. Vice President & General Counsel                        112,530                             1.0%

Lee R. Redmond III, Sr. Vice President - Real Estate                        88,880                               *

Pamela M. Catlett, Vice President - Corporate Relations                     48,227                               *

Anthony Silva, VP Development & Environmental Services                       9,250                               *

Ronald E. Bitonti, Director(3)                                              14,348                               *

Todd G. Cole, Director                                                      19,000                               *

Gary E Gibbons, Director(6)                                                      0                             N/A

Reynold C. MacDonald, Director                                              19,000                               *

William J. Morgan, Director(4)                                              11,000                               *

Charles E. Packard, Director                                                14,000                               *

Thomas S. Rabone, Director(3)                                               14,286                               *

Lyle B. Stevenson, Director(3)                                              14,000                               *

Marshall F. Wallach, Director                                               20,000                               * 

All officers and directors as a group                                      863,053                             7.6%
  (15 persons) (1):
------------------------------
 *  Indicates ownership of less than one percent.
</TABLE>

                                      11
<PAGE>
 
(1) The table above contains options exercisable within 60 days of April 29,
    1999 in the following amounts:  Richard E. Stoddard  161,475 shares; Gerald
    A. Fawcett  122,083 shares; James F. Verhey  107,500 shares; Terry L. Cook
    107,500 shares; Lee R. Redmond  85,001 shares; Pamela Catlett  46,800
    shares; Anthony Silva  9,250 shares; Ronald E. Bitonti - 14,000 shares; Todd
    G. Cole  15,668 shares; Reynold C. MacDonald  7,500 shares; William J.
    Morgan - 11,000 shares; Charles E. Packard - 14,000 shares; Thomas S. Rabone
    - 14,000 shares; Lyle B. Stevenson - 14,000 shares; Marshall F. Wallach
    14,000 shares; all officers and directors as a group (15 persons) - 743,777
    shares.

(2) Does not include 136,919 shares deemed outstanding for financial reporting
    purposes, but not yet distributed to the Class 4A unsecured creditors of the
    KSC bankruptcy estate.  Percentages were determined as if all the options
    specified in Note (1) above have been exercised.

(3) Messrs. Bitonti, Rabone, and Stevenson are administrative committee members
    of the VEBA.  The shares held by all officers and directors as a group
    exclude shares held by the VEBA.

(4) William J. Morgan is the president, a director, and a major shareholder of
    Pacholder Associates, Inc., a registered investment advisor.  Pacholder
    Associates, Inc. has a contract with the PBGC pursuant to which it has full
    and complete investment discretion with respect to the 2,100,966 shares of
    the Company's stock owned by the PBGC, including the power to vote such
    shares.  Such shares are excluded from the ownership of Mr. Morgan.
    Similarly, the shares held by Mr. Morgan are excluded from the number of
    shares owned by the PBGC.

(5) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
    advisor, is deemed to have beneficial ownership of 740,500 shares of Kaiser
    Ventures Inc. stock as of December 31, 1998, all of which shares are held in
    portfolios of DFA Investment Dimensions Group Inc., a registered open-end
    investment company, or in series of the DFA Investment Trust company, a
    Delaware business trust, or the DFA Group Trust and DFA Participation Group
    Trust, investment vehicles for qualified employee benefit plans, all of
    which Dimensional Fund Advisors Inc. serves as investment manager.
    Dimensional disclaims beneficial ownership of all such shares.

(6) Gary E. Gibbons is the principal and owner of the Coleridge Group Financial
    Group, a registered investment advisor.  Pursuant to a contract between Mr.
    Gibbons and the VEBA, Mr. Gibbons has full and complete investment
    discretion over the 3,387,937 shares owned by the VEBA, including the power
    to vote such shares and thus such shares are excluded from the ownership of
    Mr. Gibbons.  Mr. Gibbons disclaims any ownership interest in such shares.
    Mr. Gibbons owns no shares or stock options in the Company.


Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The Company, as a result of the Organization Agreement dated November 22,
1995, among Penske Motorsports, Inc. ("PMI"), PSH Corp., and the Company, as
amended (the "Organization Agreement"), entered into various agreements, in
connection with the transfer of property for the California Speedway, a
motorsports facility.  The Company currently owns approximately 11.73% of the
issued and outstanding shares of PMI's common stock.  Pursuant to such
agreements:  (i) the Company and PMI agreed to cause certain services to be
provided to each other, including the Company providing sewer treatment services
for the California Speedway; (ii) PMI agreed to reimburse the Company for
certain costs incurred in the preparation of the site of the California
Speedway; (iii) the Company agreed to indemnify Michigan International Speedway,
Inc. and The California Speedway Corporation, subsidiaries of PMI, against
certain environmental liabilities; (iv) the Company, PSH Corp., and PMI entered
into a Shareholders Agreement; and (v) PMI agreed to reimburse the Company,
among others, 

                                      12
<PAGE>
 
for certain pre-development expenses incurred by the Company and others in
connection with the California Speedway.

     Pursuant to the Shareholders Agreement, as amended, should PSH Corp. desire
to transfer any shares of capital stock of PMI for consideration to an unrelated
third party, PSH Corp. must first offer such shares to the Company on the same
terms and conditions as in the proposed transfer.  The Shareholders Agreement
also provides that if the Company desires to transfer any shares of capital
stock of PMI for consideration to an unrelated third party, the Company must
first offer such shares to PSH Corp., at a price equal to the average closing
price of PMI's shares on Nasdaq's Stock MarketSM for the previous thirty trading
days.  However, PSH Corp. has effectively assigned any right of first refusal to
International Speedway Corporation ("ISC"), a major shareholder in PSH Corp.  If
ISC elects not to purchase such shares, then PSH Corp. has the right to purchase
such shares on the same terms and conditions as the proposed transfer.  In
either case, if the non-transferring party elects not to purchase such shares,
then the transferring party may transfer its shares to the unrelated third
party. Under certain circumstances, the Company may distribute a portion of the
shares of PMI's common stock that it owns to its shareholders, free from the
right of first refusal.

     In addition, pursuant to a Registration Rights Agreement between the
Company and PMI, PMI has granted incidental registration rights to the Company,
subject to certain limitations, each time PMI files a registration statement in
connection with the sale of its common stock.

     The Organization Agreement also grants to PMI a right of first refusal to
participate in any transaction or opportunity that directly relates to the
conduct or ownership of a motorsports complex that may come to PSH Corp., the
Company, or an affiliate of either, excluding ISC and its affiliates.

     Pursuant to a Sewer Services Agreement between the California Speedway and
the Company, the Company has agreed to provide sanitary sewer treatment services
for the wastewater generated by the property owned by the California Speedway at
Kaiser's wastewater treatment facility located on a parcel owned by Kaiser.  In
consideration for such services, the California Speedway has agreed to pay the
Company an annual fee for $88,800 adjusted annually by increases in the Consumer
Price Index.  PMI has the option to purchase the facility.  After the fifth
anniversary of the Sewer Service Agreement, Kaiser may terminate the agreement
upon one year's prior written notice to the California Speedway for a good and
valid business reason exercised in good faith.  The Sewer Services Agreement may
be terminated earlier for various other reasons.  PMI paid the Company $92,000
under the Sewer Services Agreement during the fiscal year ended December 31,
1998.

                                      13
<PAGE>
 
                                  SIGNATURES


     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Amendment No. 1 to
Registrant's 1996 Form 10-K Report to be signed on its behalf by the
undersigned, thereunto duly authorized.

   Date:  April 29, 1999

                              KAISER VENTURES INC.


                              By:   /s/ Richard E. Stoddard
                              __________________________________________
                              Name: Richard E. Stoddard
                              __________________________________________
                              Title:  President, Chief Executive Officer
                              __________________________________________
                                      and Chairman of the Board
                              __________________________________________


     Pursuant to the requirements of the Securities Exchange Act of 1934, this
Amendment No. 1 to the Registrant's 1998 Form 10-K Report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.

<TABLE>
<CAPTION>
         Signature                               Title                              Date
         ---------                               -----                              ----
<S>                                       <C>                                 <C>
1.  Principal Executive Officer

   /s/ Richard E. Stoddard                President, Chief Executive              April 29, 1999
---------------------------------         Officer and Chairman of the
   Richard E. Stoddard                    Board


2.  Principal Financial and
    Accounting Officer

   /s/ James F. Verhey                    Executive Vice President                April 29, 1999
---------------------------------         Finance and Chief Finance
   James F. Verhey                        Officer

</TABLE>

                                      14
<PAGE>
 
         Signature                  Title                     Date
         ---------                  -----                     ----

3. Directors

   /s/ Ronald E. Bitonti           Director               April 27, 1999
   ----------------------- 
   Ronald E. Bitonti


   /s/ Todd G. Cole                Director               April 27, 1999
   -------------------------
   Todd G. Cole


   /s/ Gerald A. Fawcett           Vice Chairman          April 27, 1999
   -------------------------
   Gerald A. Fawcett


   /s/ Gary E. Gibbons             Director               April 27, 1999
   -------------------------
   Gary E. Gibbons


   /s/ Reynold C. MacDonald        Director               April 27, 1999
   -------------------------
   Reynold C. MacDonald


   /s/ William J. Morgan           Director               April 27, 1999
   -------------------------
   William J. Morgan



   /s/ Charles E. Packard          Director               April 27, 1999
   -------------------------
   Charles E. Packard

 
   /s/ Thomas S. Rabone            Director               April 27, 1999
   -------------------------
   Thomas S. Rabone


   /s/ Lyle B. Stevenson           Director               April 27, 1999
   ------------------------- 
   Lyle B. Stevenson


   /s/ Marshall F. Wallach         Director               April 27, 1999
   -------------------------
   Marshall F. Wallach

                                      15