The Randers Group Incorporated
570 W. Seminole Road
Muskegon, Michigan 49444
To: All Holders of Common Stock of The Randers Group
Incorporated
This information is being furnished to all holders of the
Common Stock, par value $.0001 per share (the "Common Stock"), of
The Randers Group Incorporated (the "Company") in accordance with
the federal securities laws. Section 14(f) of the Securities
Exchange Act of 1934 (the "Exchange Act") and Rule 14f-1
thereunder require that specified information be transmitted to
holders of a company's securities when, pursuant to any
arrangement or understanding involving a change of control of the
company, a majority of the company's directors are to be elected
or designated otherwise than at a meeting of the company's
shareholders.
Election of New Directors
In May 1997, certain members of the Company's management
consummated the sale (the "Sale") of a controlling interest in
the Company's Common Stock to Thermo TerraTech Inc., a Delaware
corporation ("Thermo TerraTech"). As a result of the Sale, Thermo
TerraTech now owns a majority of the outstanding shares of the
Company's Common Stock. Effective on the eleventh day following
the transmittal of this statement, (i) Michael J. Krivitzky,
Thomas J. McEnhill and Bruce M. Bourdon will each resign from the
Board of Directors of the Company, (ii) Thomas R. Eurich, the
sole remaining director, will increase the number of members of
the Board of Directors from four to five, and (iii) Mr. Eurich
will elect four new members who will fill the vacancies created
by such resignations and increase. Under the Company's By-Laws,
as amended, the number of directors may be determined by the
Board and vacancies on the Board may be filled by vote of a
majority of the remaining directors. No vote of the shareholders
is required with respect to any of the foregoing actions.
The Company's By-Laws provide that each new director will
hold office until the next annual meeting of the Company's
shareholders and until his successor is duly elected and
qualified. Accordingly, under the Company's By-Laws as currently
in effect, shareholders will be asked at the 1998 annual meeting
to elect directors for complete terms expiring in 1999.
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Voting Securities and Security Ownership
of Certain Beneficial Owners and Management
As of September 30, 1997, the Company had outstanding
14,115,682 shares of Common Stock. The holders of Common Stock
are entitled to vote on all matters, including the election of
directors, submitted to a vote of the Company's shareholders.
Each share of Common Stock is entitled to one vote.
The following table sets forth the beneficial ownership of
Common Stock as of September 30, 1997, with respect to (i) each
person who was known by the Company to own beneficially more than
5% of the outstanding shares of Common Stock, (ii) each director
of the Company, (iii) the chief executive officer of the Company
and other executive officers of the Company who, during the last
completed fiscal year of the Company, met the definition of
"highly compensated" within the meaning of the Securities and
Exchange Commission's executive compensation disclosure rules,
and (iv) all directors and current executive officers as a group.
Number of Percentage
Name (1) Shares(2) of Class
-------- --------- --------
Thermo TerraTech Inc. 7,520,000 53.30%
Thermo Electron Corporation 1,260,000 8.90%
Thomas J. McEnhill 801,745 5.78%
Michael J. Krivitzky 752,916 5.33%
Thomas R. Eurich 747,506 5.30%
Bruce M. Bourdon 462,333 3.20%
David A. Wiegerink 84,100 0.59%
Emil C. Herkert (3) 0 0%
All directors and current
executive officers together
as a group (7 persons) 2,848,600 19.66%
________________________
(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 Mr. Bourdon,
Mr. Wiegerink and all directors and executive officers as a
group include 300,000, 74,000 and 374,000 shares,
respectively, that such person or group had the right to
acquire within 60 days after September 30, 1997, through the
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exercise of stock options.
(3) Mr. Herkert was appointed chief executive officer of the
Company on May 12, 1997.
Change of Control
On May 12, 1997, Thermo TerraTech purchased an aggregate of
7,100,000 shares of Common Stock from Thomas R. Eurich, Michael
J. Krivitzky, Thomas J. McEnhill and Bruce M. Bourdon for $.625
per share, for aggregate consideration equal to $4,437,500.
Simultaneously, Thermo TerraTech purchased 420,000 shares of
Common Stock from Thermo Power Corporation, a majority-owned
subsidiary of Thermo Electron Corporation ("Thermo Electron"), at
a price of $.625 per share, for aggregate consideration equal to
$262,500. After giving effect to the Sale, Thermo TerraTech
owned (and had sole power to vote and dispose of) 7,520,000
shares of Common Stock, or approximately 53.3% of the Company's
outstanding Common Stock. As of May 12, 1997, Thermo Electron
owned and had sole power to vote and dispose of) another
1,260,000 shares of Common Stock, or approximately 8.9% of the
Company's outstanding Common Stock. Thermo Electron disclaims
beneficial ownership of the shares of the Company's Common Stock
owned by Thermo TerraTech. As a result of the Sale, Thermo
TerraTech has the power to elect all of the members of the
Company's Board of Directors and effectively controls the Company
and its business. Thermo TerraTech provides industrial services
and manufacturing support encompassing a broad range of
specializations, including infrastructure engineering, design and
construction, environmental compliance, laboratory testing, and
metal treating.
Board of Directors
The Board of Directors of the Company currently consists of
four members. Each director is elected for a term of one year and
until his successor is duly elected and qualified.
The Board held four regular meetings during the fiscal year
ended December 31, 1996. Each of the incumbent directors attended
all such meetings. The Board does not have any standing audit,
nominating or compensation committees.
No incumbent directors of the Company receive any
compensation for their services as directors. It is expected
that in the future, 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")
will 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 conference telephone and for participating in
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certain meetings of any committees of the Board of Directors.
Directors will be reimbursed for out-of-pocket expenses incurred
in attending such meetings.
Compensation of Directors and Executive Officer
Summary Compensation Table
The following table sets forth the compensation of the chief
executive officer and the three most highly compensated executive
officers of the Company for services rendered in all capacities
to the Company and its subsidiaries for the last three years:
Other Securities
Annual Underlying
Name/ Compen- Options/
Capacity Served Year Salary Bonus sation SARs
--------------- ---- ------ ----- ------ ----
Thomas R. Eurich 1996 132,000 -- 3,510 --
Director and 1995 129,500 -- 2,589 --
President 1994 120,000 -- 1,997 --
Michael J. 1996 132,000 -- 1,886 --
Krivitzky 1995 129,500 -- 940 --
Director, 1994 120,000 -- 908 --
Senior Vice
President and
Treasurer
Thomas J. 1996 132,000 -- 3,636 --
McEnhill 1995 129,500 -- 2,550 --
Director, Vice 1994 120,000 -- 2,245 --
President
and Secretary
Bruce M. Bourdon 1996 132,000 -- 3,195 --
Director and 1995 129,500 -- 2,342 150,000
Vice 1994 120,000 -- 4,691 --
President
401(k) Profit Sharing Plan
The Company has a 401(k) profit sharing plan covering all
employees who are 21 years of age and have one or more years of
service with the Company. Eligible employees may contribute a
portion of their compensation to the plan with a partial matching
contribution by the Company as determined annually by the Board
of Directors. Currently the Company matches 50% of an employee's
contribution up to a maximum of $500. The plan also provides that
the Company may make a profit sharing contribution if approved by
the Board of Directors. Amounts contributed by the employees and
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the Company's contributions are included in the preceding summary
compensation table. A profit sharing contribution of $25,000 was
approved for 1996. No profit sharing contribution was approved
for 1995 or 1994.
Flexible Compensation Plan
The Company has a flexible compensation plan which covers
full time employees who have completed 90 days of service.
Eligible employees may elect to reduce their compensation in
exchange for which the Company will pay for certain health and/or
dependent care benefits. Amounts by which employees have reduced
their compensation in exchange for the benefit received are
included as salary in the preceding summary compensation table.
Stock Option Plan
The Company has a Stock Option Plan which provides for the
grant of options to employees of the Company and its
subsidiaries. The Plan, which is administered by a committee
appointed by the Board of Directors, provides that options to
purchase a total of 1,000,000 shares of the Company's Common
Stock may be granted to eligible employees. Each option agreement
must specify the number of shares to which it applies, the option
price, the time within which the option shares may be acquired,
the manner of payment and the conditions that shall terminate the
rights of the optionee. The terms of any option granted under the
Plan must specify whether such option shall qualify as an
incentive stock option under Section 422A of the Internal Revenue
Code or shall be treated as non-statutory, non-tax qualified
stock options. The Plan provides that the Board of Directors, at
its sole discretion, may modify, revise or terminate the Plan at
any time, provided that it may not materially increase the
benefits of participants or change the number of shares which may
be issued under the Plan without the approval of a majority of
the shareholders.
There were no additional options granted during 1996 to any
of the executive officers named in the summary compensation
table. However, during 1995, options covering 174,000 shares were
rewritten changing the exercise price to $.625 per share. The
options were previously exercisable at $1.00 (150,000 shares) and
$.75 (24,000 shares).
The following table sets forth information concerning the
year end value of unexercised stock options for all executive
officers named in the summary compensation table who have
unexercised stock options under the Company's plan.
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Value of
Unexercised
Number of In-the-Money
Shares Unexercisable Options at
Acquired Options Year End
on Value Exercisable/ Exercisable/
Name Exercise RealizedUnexercisable Unexercisable
---- -------- --------------------- -------------
Bruce M. Bourdon -- -- (A) 300,000 $ -0-
David A. Wiegerink -- -- (A) 74,000 $ -0-
__________________
(A) Number of shares under option which could be exercised as of
December 31, 1996.
Relationships and Transactions Between
the Company and Its Incumbent Directors
As of May 12, 1997, the Company terminated a certain
development agreement with First Venture Associates Limited
Partnership ("FVALP"), an entity owned by four of the Company's
officers/directors. Under the terms of that agreement, the
Company (1) provided its services to complete all engineering,
architectural and project management work for all improvements to
be erected on a parcel of land owned by FVALP, (2) assisted in
the management, financing and marketing of the development and
(3) led, directed and managed the legal, real estate, financing,
accounting and administration of the project on behalf of the
developer. In exchange for its services, the Company received
design and project management fees not-to-exceed 10% of the total
cost of the project and to share in 30% of the net development
profits.
Other than interest earned on the notes receivable from
FVALP, the Company had deferred recognizing revenues, costs and
profits associated with FVALP until the Company had been
reimbursed for all costs incurred. Amounts collected from FVALP
were treated as a reduction of the accounts and notes receivable
from FVALP.
Transactions with the affiliate over the last three years
have been as follows:
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1996 1995 1994
---- ---- ----
Services provided ..... $ - $ 69,178 $ 327,095
Advances made ......... 195,168 37,000 23,144
Interest earned ....... 90,534 19,534 18,206
Amounts collected ..... 30,800 (161,528) (100,000)
In addition, the Company had $829,094 in accounts receivable
and $393,111 in notes receivable from FVALP which bore interest
at the prime rate (8.25% at December 31, 1996). The accrued
interest receivable was $93,730 at December 31, 1996. The notes
were collateralized by 1,422,000 shares of common stock of The
Randers Group Incorporated owned by the partners of FVALP.
On May 12, 1997, $1,315,935 representing the full amount of
the FVALP accounts receivable and the FVALP notes, and all
accrued interest thereon, was paid to the Company.
Ownership of FVALP is composed of the following individuals:
Director Percent of
and/or Office Ownership
Name with the Company in FVALP (1)
---- ---------------- ------------
Thomas R. Eurich .......Director and 25%
President
Michael J. Krivitzky ...Director, Senior 25%
Vice President
and Treasurer
Thomas J. McEnhill .....Director, Vice 25%
President and
Secretary
Bruce M. Bourdon .......Director and Vice 25%
President
____________
(1) Though ownership as a limited partner and as a shareholder
in Nelson Harbor, Inc., a Michigan corporation, which is the
general partner of FVALP.
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New Directors
Set forth below are the names of the persons proposed to
serve as directors of the Company. All of such proposed
directors are either employees, executive officers or directors
of Thermo TerraTech, Thermo Electron or other subsidiaries of
Thermo Electron. Each proposed director disclaims beneficial
ownership of the shares of the Company's Common Stock owned by
Thermo TerraTech and Thermo Electron.
John P. Appleton Dr. Appleton, 62, has been president, chief
executive officer and a director of Thermo
TerraTech since September 1993. Dr. Appleton
has been chairman, chief executive officer
and a director of Thermo Remediation Inc., a
majority owned subsidiary of Thermo
TerraTech, since September 1993, and has
served as a vice president of Thermo Electron
since 1975 in various managerial capacities.
Emil C. Herkert Mr. Herkert, 59, was appointed chief
executive officer of the Company on May 12,
1997. Mr. Herkert has been president of
Thermo TerraTech's Killam Group since 1977,
and has been a vice president of Thermo
TerraTech since 1996.
Polyvios C. Mr. Vintiadis, 61, has been a director of
Vintiadis Thermo TerraTech since September 1992. Mr.
Vintiadis has been the chairman and chief
executive officer of Towermarc Corporation, a
real estate development company, since 1984.
Prior to joining Towermarc Corporation, Mr.
Vintiadis was a principal of Morgens,
Waterfall & Vintiadis, Inc., a financial
services firm, with which he remains
associated. For more than 20 years prior to
that time, Mr. Vintiadis was employed by
Arthur D. Little & Company, Inc. Mr.
Vintiadis is also a director of Thermo
Instrument Systems Inc., a majority owned
subsidiary of Thermo Electron.
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Susan F. Tierney Dr. Tierney, 45, is a Managing Consultant
with the Economics Research Group. 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 1988 to January 1991.
Dr. Tierney is a director of Thermo Ecotek
Corporation, a majority owned subsidiary of
Thermo Electron.
None of the proposed directors beneficially owned any equity
securities of the Company as of September 30, 1997. The
following table sets forth information regarding the beneficial
ownership of the common stock of Thermo TerraTech and Thermo
Electron as of September 30, 1997 by the persons who have been
designated by Thermo TerraTech to be elected to the Board,
effective on the eleventh day following the transmittal of this
statement to the Company's shareholders.
Thermo Thermo Electron
TerraTech Inc. (2) Corporation (3)
------------------ ---------------
Number Number
of Percentage of Percentage
Name (1) Shares of Class Shares of Class
-------- ------ -------- ------ --------
John P. Appleton .....276,989 1.46% 164,749 *
Emil C. Herkert ......187,500 * 39,600 *
Polyvios C.
Vintiadis ............ 6,300 * 2,500 *
Susan F. Tierney ..... 0 * 0 *
* Reflects ownership of less than one percent (1%) of the
outstanding common stock.
(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 the common stock of Thermo TerraTech beneficially
owned by Dr. Appleton, Mr. Herkert, Mr. Vintiadis and all
proposed directors as a group include 275,000, 187,500,
6,300 and 468,800 shares, respectively, that such person or
group had the right to acquire within 60 days after
September 30, 1997, through the exercise of stock options.
Shares of the common stock of Thermo TerraTech beneficially
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owned by Dr. Appleton and all proposed directors as a group
include 255 shares allocated through July 31, 1997, to Dr.
Appleton's account maintained pursuant to Thermo Electron's
employee stock ownership plan, of which the trustees, who
have investment power over its assets, are executive
officers of Thermo Electron.
(3) The shares of the common stock of Thermo Electron shown in
the table reflect a three-for-two split of such stock
distributed in June 1996 in the form of a 50% stock
dividend. Shares of the common stock of Thermo Electron
beneficially owned by Dr. Appleton, Mr. Herkert and all
proposed directors as a group include 127,257, 38,100 and
165,357 shares, respectively, that such person or group has
the right to acquire within 60 days of September 30, 1997,
through the exercise of stock options.
AA973020056
