<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION
14(d)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
OHM CORPORATION
(Name of Subject Company)
INTERNATIONAL TECHNOLOGY CORPORATION
IT-OHIO, INC.
(Bidder)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(Title of Class of Securities)
670839 10 9
-------------
(CUSIP Number of Class of Securities)
ANTHONY J. DELUCA
PRESIDENT AND CHIEF EXECUTIVE OFFICER
INTERNATIONAL TECHNOLOGY CORPORATION
2790 Mosside Boulevard
Monroeville, Pennsylvania 15416-2792
(412) 372-7701
ANTHONY J. DELUCA
PRESIDENT AND CHIEF EXECUTIVE OFFICER
IT-OHIO, INC.
11499 Chester Road
Cincinnati, Ohio 45246
(513) 782-4700
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of Bidder)
COPIES TO:
PETER F. ZIEGLER JOSEPH B. FRUMKIN
KAREN E. BERTERO SULLIVAN & CROMWELL
GIBSON, DUNN & CRUTCHER LLP 125 BROAD STREET
333 S. GRAND AVENUE NEW YORK, NEW YORK 10004
LOS ANGELES, CALIFORNIA 90071 (212) 558-4000
(213) 229-7000
Calculation of Filing Fee
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TRANSACTION VALUATION AMOUNT OF FILING FEE
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$160,229,500* $32,045.90**
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* For purposes of fee calculation only. The total transaction value is based
on 13,933,000 Shares, the number of shares for which the Offer (as defined
herein) is made, multiplied by the offer price of $11.50 per Share.
** The amount of the filing fee calculated in accordance with Regulation
240.0-11 of the Securities Exchange Act of 1934 equals 1/50 of 1% of the
value of the Shares to be purchased.
[_] CHECK BOX IF ANY PART OF THE FEE IS OFFSET AS PROVIDED BY RULES 0-11(a)(2)
AND IDENTIFY THE FILING WITH WHICH THE OFFSETTING FEE WAS PREVIOUSLY PAID.
IDENTIFY THE PREVIOUS FILING BY REGISTRATION STATEMENT NUMBER, OR THE FORM
OR SCHEDULE AND THE DATE OF ITS FILING.
Amount previously paid: Not Applicable Filing party: Not Applicable
Form or registration no.: Not Applicable Date filed: Not Applicable
<PAGE>
SCHEDULE 14D-1
CUSIP No. 670839 10 9
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
Parent: I.R.S. No.: 33-0001212
Parent Acquisition Sub: I.R.S. No.: 52-2073665
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [_]
(b) [X]
- --------------------------------------------------------------------------------
3. SEC USE ONLY
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4. SOURCE OF FUNDS*
BK and/or WC
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(e) or 2(f) [_]
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Parent - Incorporated in the State of Delaware
Parent Acquisition Sub - Incorporated in the State of Ohio
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7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
NONE
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
N/A [_]
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
N/A
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON*
Parent - CO
Parent Acquisition Sub - CO
- --------------------------------------------------------------------------------
<PAGE>
INTRODUCTION
This Tender Offer Statement on Schedule 14D-1 (this "Statement") relates to
the offer by IT-Ohio, Inc., an Ohio corporation ("Purchaser"), and a wholly-
owned subsidiary of International Technology Corporation, a Delaware corporation
("Parent"), to purchase 13,933,000 shares of common stock, par value $0.10 per
share (the "Common Stock" or the "Shares"), of OHM Corporation, an Ohio
corporation (the "Company"), (the "Offer Share Number") at a price of $11.50 per
Share, net to each tendering shareholder in cash, upon the terms and subject to
the conditions set forth in the Offer to Purchase, dated as of January 16, 1998
(the "Offer to Purchase"), and the related Letter of Transmittal (which together
constitute the "Offer"), copies of which are attached hereto as Exhibits (a)(1)
and (a)(2), respectively.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of January 15, 1998 (the "Merger Agreement"), by and among Parent, Purchaser
and the Company. The Merger Agreement provides, among other things, for the
commencement of the Offer by Purchaser and further provides that, regardless of
whether Shares are purchased pursuant to the Offer and promptly after the
satisfaction or, if permissible, waiver of certain other conditions, Purchaser
will be merged with and into the Company (the "Merger"). The Company will
continue as the surviving corporation after the Merger (the "Surviving
Corporation") and will be a wholly-owned subsidiary of Parent.
At the effective time of the Merger (the "Effective Time"), each issued and
outstanding Share (other than Shares purchased in the Offer or otherwise owned
by Parent, Purchaser or any other direct or indirect subsidiary of Parent or
Shares that are owned by the Company or any direct or indirect subsidiary of the
Company and in each case not held on behalf of third parties, or Shares (the
"Dissenting Shares") with respect to which the holder properly exercises such
holder's appraisal rights under all of the relevant provisions of Sections
1701.84 et seq. ("Section 1701.84") of the Ohio General Corporation Law
-- ---
("OGCL") (collectively, the "Excluded Shares")), will be cancelled and converted
automatically into the right to receive (i) 1.394 (the "Exchange Ratio") fully
paid and nonassessable shares of common stock, par value $0.01 per share, of
Parent (the "Parent Common Stock"); provided, however, that if the aggregate
-------- -------
number of Shares accepted for payment and paid for pursuant to the Offer and
purchased from Waste Management, Inc., a Delaware corporation ("WMX"), which
holds of record 9,668,000 Shares or approximately 35% of the outstanding Shares,
pursuant to the Repurchase Agreement (as defined in the Offer to Purchase) is
less than 19,168,381 Shares (the "Cash Share Number") (the number of Shares so
paid for and purchased being referred to herein as the "Purchased Share Number")
then the Exchange Ratio shall be adjusted (the "Adjusted Exchange Ratio") and
shall be equal to the product obtained by multiplying the Exchange Ratio by a
fraction, (A) the numerator of which is equal to (x) the number of Shares issued
and outstanding immediately prior to the Effective Time (excluding Excluded
Shares other than Dissenting Shares) (the "Final Outstanding Number") plus (y)
the Purchased Share Number minus (z) the Cash Share Number and (B) the
denominator of which is the Final Outstanding Number and (ii) if the Exchange
Ratio has been adjusted pursuant to the immediately preceding proviso, an amount
in cash equal to a fraction, (A) the numerator of which is the product of $11.50
and the amount by which the Cash Share Number exceeds the Purchased Share Number
and (B) the denominator of which is the Final Outstanding Number. The foregoing
shall be referred to collectively as the "Merger Consideration."
At the Effective Time, Shares shall no longer be outstanding and shall be
cancelled and retired and shall cease to exist (in the case of Excluded Shares
other than Dissenting Shares, without the payment of consideration therefor) and
each certificate (a "Certificate") formerly representing any of such Shares,
other than any Excluded Shares, shall thereafter represent only the right to
receive the Merger Consideration and the right, if any, to receive cash in lieu
of fractional shares and any distribution or dividends pursuant to the Merger
Agreement.
<PAGE>
The Offer is conditioned on there being tendered prior to the Expiration
Date and not withdrawn at least 13,933,000 Shares. If more than 13,933,000
Shares are validly tendered and not withdrawn prior to the Expiration Date,
Purchaser will accept for payment (and thereby purchase) 13,933,00 Shares are on
a pro rata basis, with adjustments to avoid purchases of fractional Shares,
based upon the number of Shares validly tendered prior to the Expiration Date
and not withdrawn by each tendering shareholder.
The information contained in this Statement concerning the Company,
including, without limitation, information concerning the deliberations,
approvals and recommendations of the Board of Directors of the Company in
connection with the transaction, the opinion of the financial advisor to such
Board of Directors, and the Company's capital structure and historical and
projected financial information, was supplied by the Company. Purchaser takes
no responsibility for the accuracy of such information. The information
contained in the Offer to Purchase concerning the Offer, the Merger, Parent and
Purchaser was supplied by Purchaser.
ITEM 1. SECURITY AND SUBJECT COMPANY
(a) The name of the subject company is OHM Corporation, an Ohio
corporation, which has its principal executive offices at 16406 U.S. Route 224
East, Findlay, Ohio 45840.
(b) The class of equity securities being sought is the Common Stock.
The information set forth in the Offer to Purchase under the caption
"INTRODUCTION" is incorporated herein by reference.
(c) The information concerning the principal market in which the
Shares are traded and certain high and low sales prices for the Shares in such
principal market set forth in the Offer to Purchase under the caption "THE
TENDER OFFER--6. Price Range of the Shares" is incorporated herein by
reference.
ITEM 2. IDENTITY AND BACKGROUND
(a) - (d), (g) This Statement is filed by Purchaser and Parent. The
information concerning the name, state or other place of organization, principal
business and address of the principal office of Purchaser and Parent, and the
name, business address, present principal occupation employment and the name,
principal business and address of any corporation or other organization in which
such employment or occupation is conducted, material occupations, positions,
offices or employment during the last five years and citizenship of each of the
executive officers and directors of Purchaser and Parent are set forth in the
Offer to Purchase under the captions "INTRODUCTION," and "THE TENDER OFFER--8.
Certain Information Concerning Purchaser and Parent," and in Schedule II to the
Offer to Purchase, and are incorporated herein by reference.
(e) - (f) During the last five years, neither Purchaser, Parent, nor, to
the knowledge of Purchaser or Parent, any of the persons listed in Schedule II
to the Offer to Purchase has been (i) convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and
2
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as a result of such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting activities subject to,
federal or state securities laws or finding any violations of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a) The information set forth in the Offer to Purchase under the captions
"INTRODUCTION," "THE TENDER OFFER--8. Certain Information Concerning Purchaser
and Parent," and "THE TENDER OFFER--10. Certain Transactions between Purchaser
and the Company" is incorporated herein by reference.
(b) The information set forth in the Offer to Purchase under the captions
"INTRODUCTION," "THE TENDER OFFER--8. Certain Information Concerning Purchaser
and Parent," "THE TENDER OFFER--10. Certain Transactions between Purchaser and
the Company," and "THE TENDER OFFER--11. Contacts with the Company; Background
of the Offer and the Merger" is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The information set forth in the Offer to Purchase under the caption
"THE TENDER OFFER--9. Source and Amount of Funds" is incorporated herein by
reference.
(b) The information set forth in the Offer to Purchase under the caption
"THE TENDER OFFER--9. Source and Amount of Funds" is incorporated herein by
reference.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a) - (e) The information set forth in the Offer to Purchase under the
caption "INTRODUCTION" is incorporated herein by reference.
(f) - (g) The information set forth in the Offer to Purchase under the
caption "THE TENDER OFFER--14. Effects of the Offer on the Market for Shares;
New York Stock Exchange and Exchange Act Registration" is incorporated herein by
reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) - (b) The information set forth in the Offer to Purchase under the
caption "TENDER OFFER--10. Certain Transactions Between Purchaser and the
Company" is incorporated herein by reference.
3
<PAGE>
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Offer to Purchase under the captions
"TENDER OFFER--10. Certain Transactions Between Purchaser and the Company" and
"TENDER OFFER--12 Purpose of the Offer and the Merger; Plans for the Company;
The Merger Agreement; The Voting Agreements; Appraisal Rights" is incorporated
herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Offer to Purchase under the caption
"TENDER OFFER--17. Fees and Expenses" is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in the Offer to Purchase under the caption
"TENDER OFFER--8. Certain Information Concerning Purchaser and Parent" is
incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in the Offer to Purchase under the captions
"TENDER OFFER--12. Purpose of the Offer and the Merger; Plans for the Company;
The Merger Agreement; The Voting Agreements; Appraisal Rights" is incorporated
herein by reference.
(b), (c) and (d) The information set forth in the Offer to Purchase under
the caption "TENDER OFFER--16. Certain Legal Matters; Regulatory Approvals" is
incorporated herein by reference.
(e) Not applicable.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal, to the extent not otherwise incorporated by reference, is
incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase, dated January 16, 1998.
(a)(2) Letter of Transmittal, dated January 16, 1998.
(a)(3) Notice of Guaranteed Delivery, dated January 16, 1998.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees, dated January 16, 1998.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees, dated January 16, 1998.
4
<PAGE>
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Summary Advertisement, dated January 16, 1998.
(a)(8) Press Release, dated January 15, 1998, issued by Parent.
(b)(1) Commitment Letter, dated January 15, 1998.
(c)(1) Agreement and Plan of Merger, dated as of January 15, 1998, among
the Company, Parent and Purchaser.
(c)(2) Parent Voting Agreement dated January 15, 1998 among the Company,
Parent and the stockholders of Parent named therein.
(c)(3) Company Voting Agreement dated January 15, 1998 among the Company,
Parent and the shareholders of the Company named therein.
(c)(4) Option Termination Agreement dated January 15, 1998 between James
L. Kirk and the Company.
(c)(5) Share Repurchase Agreement dated January 15, 1998 among the
Company, Parent, Rust International, Inc. and Waste Management, Inc.
(c)(6) Confidentiality Agreement, dated September 25, 1997, between the
Company and Parent.
(d) None.
(e) Not Applicable.
(f) None.
5
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: January 16, 1998
IT-Ohio, Inc.
By /s/ Anthony J. DeLuca
--------------------------------------
Anthony J. DeLuca
President
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and
correct.
Dated: January 16, 1998
International Technology Corporation
By /s/ Anthony J. DeLuca
--------------------------------------
Anthony J. DeLuca
President and Chief Executive Officer
6
<PAGE>
OFFER TO PURCHASE FOR CASH
13,933,000 SHARES OF COMMON STOCK
OF
OHM CORPORATION
AT
$11.50 NET PER SHARE
BY
IT-OHIO, INC.
A WHOLLY-OWNED SUBSIDIARY
OF
INTERNATIONAL TECHNOLOGY CORPORATION
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 9:00 A.M.,
NEW YORK CITY TIME, ON TUESDAY, FEBRUARY 17, 1998, UNLESS THE OFFER IS
EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED BY THE EXPIRATION DATE AND NOT WITHDRAWN AT LEAST 13,933,000 SHARES
OF COMMON STOCK, $0.10 PAR VALUE, OF OHM CORPORATION (THE "COMPANY") (THE
"SHARE NUMBER CONDITION"). THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER
CONDITIONS SET FORTH IN THIS OFFER TO PURCHASE. SEE "THE TENDER OFFER--15.
CERTAIN CONDITIONS OF THE OFFER."
THE BOARD OF DIRECTORS (THE "BOARD") OF THE COMPANY HAS UNANIMOUSLY APPROVED
THE OFFER AND THE MERGER AND DETERMINED THAT THE TRANSACTIONS CONTEMPLATED BY
THE MERGER AGREEMENT (AS DEFINED HEREIN), INCLUDING WITHOUT LIMITATION THE
OFFER AND THE MERGER, ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY
AND ITS SHAREHOLDERS. ACCORDINGLY, THE COMPANY'S BOARD UNANIMOUSLY RECOMMENDS
THAT THE COMPANY'S SHAREHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES
HEREUNDER.
-----------
IMPORTANT
Any shareholder desiring to tender all or any portion of such shareholder's
Shares (as defined herein) should either (1) complete and sign the Letter of
Transmittal, or a facsimile copy thereof, in accordance with the instructions
in the Letter of Transmittal including the required signature guarantees and
mail or deliver the Letter of Transmittal or a facsimile thereof and any other
required documents to the Depositary and either deliver the certificates for
such Shares to the Depositary along with the Letter of Transmittal or tender
such Shares pursuant to the procedure for book-entry transfer set forth in
this Offer to Purchase under the caption "THE TENDER OFFER--2. Procedure for
Accepting the Offer and Tendering Shares" or (2) request such shareholder's
broker, dealer, commercial bank, trust company or other nominee to effect the
transaction for the shareholder. Shareholders having Shares registered in the
name of a broker, dealer, commercial bank, trust company or other nominee must
contact such broker, dealer, commercial bank, trust company or other nominee
if they desire to tender Shares so registered.
A shareholder who desires to tender Shares and whose certificates for Shares
are not immediately available, or who cannot comply with the procedures for
book-entry transfer described in this Offer to Purchase on a timely basis, may
tender such Shares by following the procedure for guaranteed delivery set
forth in this Offer to Purchase under the caption "THE TENDER OFFER--2.
Procedure for Accepting the Offer and Tendering Shares."
Questions and requests for assistance, or for additional copies of this
Offer to Purchase, the Letter of Transmittal or other tender offer materials,
may be directed to the Information Agent at its address and telephone number
set forth on the back cover of this Offer to Purchase. Holders of Shares may
also contact brokers, dealers, commercial banks or trust companies for
assistance concerning the Offer or for additional copies of this Offer to
Purchase and this Letter of Transmittal.
-----------
The Information Agent for the Offer is:
MACKENZIE PARTNERS, INC.
The date of this Offer to Purchase is January 16, 1998
<PAGE>
TABLE OF CONTENTS
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PAGE
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INTRODUCTION.............................................................. 1
THE TENDER OFFER.......................................................... 4
1. Terms of the Offer; Expiration Date............................... 4
2. Procedure for Accepting the Offer and Tendering Shares............ 6
3. Withdrawal Rights................................................. 9
4. Acceptance for Payment and Payment for Shares..................... 10
5. Certain Federal Income Tax Consequences........................... 11
6. Price Range of the Shares......................................... 13
7. Certain Information Concerning the Company........................ 13
8. Certain Information Concerning Purchaser and Parent............... 16
9. Source and Amount of Funds........................................ 17
10. Certain Transactions between Parent and the Company............... 20
11. Contacts with the Company; Background of the Offer and the
Merger........................................................... 20
12. Purpose of the Offer and the Merger; Plans for the Company; The
Merger Agreement; The Company Voting Agreement; The Parent Voting
Agreement; The Option Termination Agreement; Appraisal Rights.... 22
13. Dividends and Distributions....................................... 38
14. Effects of the Offer on the Market for Shares; New York Stock
Exchange and Exchange Act Registration........................... 38
15. Certain Conditions of the Offer................................... 39
16. Certain Legal Matters; Regulatory Approvals....................... 40
17. Fees and Expenses................................................. 43
18. Miscellaneous..................................................... 44
SCHEDULE I................................................................ S-1
SCHEDULE II............................................................... S-6
ANNEX A................................................................... A-1
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i
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To the Holders of Common Stock of OHM Corporation:
INTRODUCTION
IT-Ohio, Inc., an Ohio corporation ("Purchaser"), which is a wholly-owned
subsidiary of International Technology Corporation, a Delaware corporation
("Parent"), hereby offers to purchase 13,933,000 shares of common stock, par
value $0.10 per share (the "Common Stock" or the "Shares"), of OHM
Corporation, an Ohio corporation (the "Company"), upon the terms and subject
to the conditions set forth in this Offer to Purchase (the "Offer to
Purchase") and in the related Letter of Transmittal (which, together with the
Offer to Purchase, constitute the "Offer"), at the purchase price of $11.50
per Share (the "Offer Price"), net to each tendering shareholder in cash.
THE COMPANY'S BOARD HAS UNANIMOUSLY APPROVED THE OFFER AND THE MERGER AND
DETERMINED THAT THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT (AS
DEFINED HEREIN), INCLUDING WITHOUT LIMITATION THE OFFER AND THE MERGER, ARE
FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY AND ITS SHAREHOLDERS.
ACCORDINGLY, THE COMPANY'S BOARD UNANIMOUSLY RECOMMENDS THAT THE COMPANY'S
SHAREHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES HEREUNDER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED BY THE EXPIRATION DATE AND NOT WITHDRAWN AT LEAST 13,933,000 SHARES.
THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER CONDITIONS. SEE "THE TENDER OFFER--
15. CERTAIN CONDITIONS OF THE OFFER."
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 9:00 A.M.,
NEW YORK CITY TIME, ON TUESDAY, FEBRUARY 17, 1998, UNLESS EXTENDED. SEE "THE
TENDER OFFER--1. TERMS OF THE OFFER; EXPIRATION DATE."
The Offer is being made pursuant to the terms of an Agreement and Plan of
Merger, dated as of January 15, 1998 (the "Merger Agreement"), by and among
the Company, Parent and Purchaser. The Merger Agreement provides, among other
things, for the commencement of the Offer by Purchaser, and further provides
that, regardless of whether Shares are purchased pursuant to the Offer and
promptly after the satisfaction or, if permissible, waiver of certain other
conditions, Purchaser will be merged with and into the Company (the "Merger").
The Company will continue as the surviving corporation after the Merger (the
"Surviving Corporation") and will be a wholly-owned subsidiary of Parent.
At the effective time of the Merger (the "Effective Time"), each issued and
outstanding Share (other than Shares purchased in the Offer or otherwise owned
by Parent, Purchaser or any other direct or indirect subsidiary of Parent or
Shares that are owned by the Company or any direct or indirect subsidiary of
the Company and in each case not held on behalf of third parties, or Shares
(the "Dissenting Shares") with respect to which the holder properly exercises
such holder's appraisal rights under all of the relevant provisions of
Sections 1701.84 et seq. ("Section 1701.84") of the Ohio General Corporation
Law ("OGCL") (collectively, the "Excluded Shares")), will be cancelled and
converted automatically into the right to receive (i) 1.394 (the "Exchange
Ratio") fully paid and nonassessable shares of common stock, par value $0.01
per share, of Parent (the "Parent Common Stock"); provided, however, that if
the aggregate number of Shares accepted for payment and paid for pursuant to
the Offer and purchased from Waste Management, Inc., a Delaware corporation
("WMX"), which beneficially owns 9,668,000 Shares or approximately 35% of the
outstanding Shares, pursuant to the Repurchase Agreement (as defined below) is
less than 19,168,381 Shares (the "Cash Share Number") (the number of Shares so
paid for and purchased being referred to herein as the "Purchased Share
Number"), then the Exchange Ratio shall be adjusted (the "Adjusted Exchange
Ratio") and shall be equal to the product obtained by multiplying the Exchange
Ratio by a fraction, (A) the numerator of which is equal to (x) the number of
Shares issued and outstanding immediately prior to the Effective Time
(excluding Excluded Shares other than Dissenting Shares)
1
<PAGE>
(the "Final Outstanding Number") plus (y) the Purchased Share Number minus (z)
the Cash Share Number and (B) the denominator of which is the Final Outstanding
Number and (ii) if the Exchange Ratio has been adjusted pursuant to the
immediately preceding proviso, an amount in cash equal to a fraction, (A) the
numerator of which is the product of $11.50 and the amount by which the Cash
Share Number exceeds the Purchased Share Number and (B) the denominator of
which is the Final Outstanding Number. The foregoing shall be referred to
collectively as the "Merger Consideration."
At the Effective Time, Shares shall no longer be outstanding and shall be
cancelled and retired and shall cease to exist (in the case of Excluded Shares
other than Dissenting Shares, without the payment of consideration therefor),
and each certificate (a "Certificate") formerly representing any of such
Shares, other than Excluded Shares, shall thereafter represent only the right
to receive the Merger Consideration and the right, if any, to receive cash in
lieu of fractional shares and any distribution or dividends pursuant to the
Merger Agreement.
As the market price of the shares of the Parent Common Stock will fluctuate,
the value of the Exchange Ratio at the Effective Time of the Merger may be
greater or less than the $11.50 in cash per Share payable pursuant to the
Offer. Accordingly, the value of the Merger Consideration may be less or
greater than the $11.50 per Share received by holders of Shares that are
purchased pursuant to the Offer. Based on the closing price of Parent Common
Stock on the New York Stock Exchange, Inc. ("NYSE") on January 15, 1998, the
value of shares of Parent Common Stock to be received in the Merger for each
Share pursuant to the Exchange Ratio would have been $11.15.
BT ALEX. BROWN INCORPORATED ("BT ALEX. BROWN"), FINANCIAL ADVISOR TO THE
COMPANY, HAS DELIVERED A WRITTEN OPINION TO THE COMPANY'S BOARD, DATED JANUARY
14, 1998 (THE "OPINION"), TO THE EFFECT THAT, AS OF THE DATE OF SUCH OPINION,
THE AGGREGATE CONSIDERATION TO BE RECEIVED BY THE SHAREHOLDERS OF THE COMPANY
IN THE OFFER, THE MERGER AND THE NSC DISTRIBUTION (AS DEFINED HEREIN), TAKEN
TOGETHER, IS FAIR FROM A FINANCIAL POINT OF VIEW TO SUCH HOLDERS. THE FULL TEXT
OF THE OPINION, WHICH SETS FORTH THE ASSUMPTIONS MADE, MATTERS CONSIDERED AND
LIMITATIONS ON THE REVIEW UNDERTAKEN IN CONNECTION WITH SUCH OPINION, IS
ATTACHED AS ANNEX A TO THE COMPANY'S SOLICITATION/RECOMMENDATION STATEMENT ON
SCHEDULE 14D-9 (THE "SCHEDULE 14D-9") FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION (THE "COMMISSION") IN CONNECTION WITH THE OFFER, A COPY OF WHICH IS
BEING PROVIDED TO SHAREHOLDERS CONCURRENTLY WITH THIS OFFER TO PURCHASE.
SHAREHOLDERS ARE URGED TO READ SUCH OPINION CAREFULLY AND IN ITS ENTIRETY.
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 9:00 A.M.,
NEW YORK CITY TIME, ON TUESDAY FEBRUARY 17, 1998, UNLESS EXTENDED. SEE "THE
TENDER OFFER--1. TERMS OF THE OFFER; EXPIRATION DATE."
If more than 13,933,000 Shares are validly tendered prior to the Expiration
Date and not withdrawn, Purchaser will, upon the terms and subject to the
conditions of the Offer, accept for payment (and thereby purchase) the Shares
purchased in the Offer on a pro rata basis, with adjustments to avoid purchases
of fractional Shares, based upon the number of Shares validly tendered prior to
the Expiration Date and not withdrawn by each tendering shareholder. Because of
the difficulty of determining precisely the number of Shares validly tendered
and not withdrawn, if proration is required, Purchaser would not expect to
announce the final results of the proration until at least seven NYSE trading
days after the Expiration Date. Preliminary results of proration will be
announced by press release as promptly as practicable after the Expiration
Date. Holders of Shares may obtain such preliminary information from the
Depositary, and may also be able to obtain such preliminary information from
their brokers. Tendering shareholders will not receive payment for Shares
accepted for payment pursuant to the Offer until the final proration factor is
known.
Pursuant to the Merger Agreement and the Share Repurchase Agreement, dated as
of January 15, 1998 (the "Repurchase Agreement"), among the Company, Parent,
WMX, and Rust International Inc., a Delaware corporation and wholly owned
subsidiary of WMX ("Rust"), the Company will repurchase from WMX 5,235,381
Shares for $11.50 per Share concurrently with the payment for Shares pursuant
to the Offer (the
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"Repurchase"). In addition, pursuant to the Repurchase Agreement, WMX has
agreed to tender only 2,142,141 Shares in the Offer. The effect of the
Repurchase will be to increase the aggregate number of Shares acquired for
cash in connection with the transactions contemplated by the Merger Agreement,
make it possible for the consideration paid in the Merger to consist solely of
shares of Parent Common Stock and result in WMX receiving cash and Parent
Common Stock in the same proportion as other shareholders of the Company,
assuming all outstanding shares (other than 7,525,859 shares held by WMX) are
tendered in the Offer. Pursuant to the Repurchase Agreement, WMX has also
agreed, among other things, to vote all Shares held by it in favor of the
adoption of the Merger Agreement and the consummation of the Offer, the Merger
and the other transactions contemplated by the Merger Agreement not to take
certain actions, or encourage or assist any other party in taking any action,
which would compete with, impede, interfere with or attempt to discourage such
transactions or inhibit the timely consummation of such transactions and to
deliver to Parent an irrevocable proxy to vote all Shares held by it and any
other shares of capital stock of the Company acquired by it prior to the
Effective Time.
Pursuant to the Company Voting Agreement, dated as of January 15, 1998 (the
"Company Voting Agreement"), among the Company, Parent, James L. Kirk (the
Company's Chairman, President and Chief Executive Officer), Joseph R. Kirk (a
director and Executive Vice President of the Company) and H. Wayne Huizenga
(an individual not affiliated with the Company and referred to collectively
with Messrs. James and Joseph Kirk as the "Company Shareholders"), the Company
Shareholders (who collectively hold approximately 20% of the outstanding
Shares) have agreed, among other things, to vote all Shares held by them in
favor of the adoption of the Merger Agreement and the consummation of the
transactions contemplated by the Merger Agreement, not to take certain
actions, or encourage or assist any other party in taking any action, which
would compete with, impede, interfere with or attempt to discourage such
transactions or inhibit the timely consummation of such transactions and to
deliver to Parent an irrevocable proxy to vote all Shares held by the Company
Shareholders and any other Shares acquired by them prior to the Effective Time
in a manner consistent with the provisions of the Company Voting Agreement.
Pursuant to the Parent Voting Agreement, dated as of January 15, 1998 (the
"Parent Voting Agreement"), among Parent, the Company and certain stockholders
of Parent affiliated with The Carlyle Group, L.P. ("Carlyle") (the "Parent
Stockholders") which are entitled to cast approximately 38% of the votes
entitled to be cast at the meeting of stockholders of Parent contemplated by
the Merger Agreement, the Parent Stockholders have agreed, among other things,
to vote all shares of Cumulative Convertible Participating Preferred Stock
("Parent Preferred Stock") held by them in favor of the issuance of shares of
Parent Common Stock in connection with the Merger, not to take certain
actions, or encourage or assist any other party in taking any action, which
would compete with, impede, interfere with or attempt to discourage such
transactions or inhibit the timely consummation of such transactions and to
deliver to the Company an irrevocable proxy to vote all shares of Parent
Preferred Stock held by the Parent Stockholders and any other shares of
capital stock of Parent acquired by the Parent Stockholders prior to the
Effective Time in a manner consistent with the provisions of the Parent Voting
Agreement.
Pursuant to the Merger Agreement, concurrently with the acceptance for
payment of Shares in the Offer by Purchaser, the Company will pay a pro rata
taxable distribution to holders of record of the Shares as of the close of
business on the date immediately prior to the date Purchaser accepts Shares
for payment in the Offer, all of the shares of Common Stock, par value $0.01
per share, of NSC Corporation held by the Company (the "NSC Distribution").
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THE OFFER DOES NOT CONSTITUTE A SOLICITATION OF PROXIES FOR ANY MEETING OF
THE COMPANY'S SHAREHOLDERS OR AN OFFER TO SELL OR SOLICITATION OF OFFERS TO
BUY PARENT COMMON STOCK OR OTHER SECURITIES. ANY SUCH SOLICITATION WILL BE
MADE ONLY PURSUANT TO SEPARATE PROXY MATERIALS COMPLYING WITH THE REQUIREMENTS
OF SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE
"EXCHANGE ACT"), AND ANY SUCH OFFER WILL BE MADE ONLY THROUGH A PROSPECTUS
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED ("THE
SECURITIES ACT") WHICH PROSPECTUS WILL ALSO CONSTITUTE A JOINT PROXY STATEMENT
FOR THE MEETINGS OF SHAREHOLDERS OF THE COMPANY AND STOCKHOLDERS OF PARENT
RELATING TO THE MERGER (THE "JOINT PROXY STATEMENT/PROSPECTUS").
Tendering shareholders will not be obligated to pay brokerage commissions,
solicitation fees or, subject to Instruction 6 of the Letter of Transmittal,
stock transfer taxes on the purchase of Shares by Purchaser pursuant to the
Offer. However, any tendering shareholder or other payee who fails to complete
and sign the Substitute Form W-9 that is included in the Letter of Transmittal
may be subject to a required backup federal income tax withholding of 31% of
the gross proceeds payable to such shareholder or other payee pursuant to the
Offer. See "THE TENDER OFFER--5. Certain Federal Income Tax Consequences."
Purchaser will pay all charges and expenses of BankBoston, N.A., as Depositary
(in such capacity, the "Depositary"), and MacKenzie Partners, Inc., as
Information Agent (in such capacity, the "Information Agent"), incurred in
connection with the Offer. For a description of the fees and expenses to be
paid by Purchaser, see "THE TENDER OFFER--17. Fees and Expenses."
Consummation of the Merger is subject to a number of conditions, including
approval of the Merger Agreement and the transactions contemplated thereby by
the shareholders of the Company and, as required under the rules of the NYSE,
approval by the shareholders of Parent of the issuance of Parent Common Stock
pursuant to the Merger Agreement. See "THE TENDER OFFER--16. Certain Legal
Matters; Regulatory Approvals." The Company's Board has unanimously
recommended that the Company's shareholders approve the Merger and the Company
has agreed in the Merger Agreement to take all lawful action to solicit such
approval. If the Cash Share Number is acquired in the Offer and the
Repurchase, Purchaser will have sufficient voting power to approve and adopt
the Merger Agreement and the Merger without the vote of any other shareholder
of the Company. Additionally, as described above, WMX and the Company
Shareholders, who hold in the aggregate approximately 55% of the outstanding
Common Stock, have entered into the Repurchase Agreement and the Company
Voting Agreement pursuant to which they have agreed, among other things, to
vote all Shares beneficially owned by them in favor of the Merger Agreement
and the transactions contemplated thereby.
The information contained in this Offer to Purchase concerning the Company,
including, without limitation, information concerning the deliberations,
approvals and recommendations of the Board of Directors of the Company in
connection with the transaction, the opinion of BT Alex. Brown, and the
Company's capital structure and historical and projected financial
information, was supplied by the Company. Purchaser takes no responsibility
for the accuracy of such information. The information contained in this Offer
to Purchase concerning the Offer, the Merger, Parent and Purchaser was
supplied by Purchaser.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS
MADE WITH RESPECT TO THE OFFER. SEE ALSO "THE TENDER OFFER--18. MISCELLANEOUS"
FOR INFORMATION REGARDING CERTAIN ADDITIONAL DOCUMENTS FILED WITH THE
COMMISSION IN CONNECTION WITH THE OFFER.
THE TENDER OFFER
1. TERMS OF THE OFFER; EXPIRATION DATE.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension
or amendment), Purchaser will accept for payment and pay for
4
<PAGE>
up to 13,933,000 Shares validly tendered pursuant to the Offer on or prior to
the Expiration Date (as defined below) and not withdrawn in accordance with
the provisions set forth in this Offer to Purchase under the caption "THE
TENDER OFFER--3. Withdrawal Rights." The term "Expiration Date" shall mean
9:00 a.m., New York City time, on Tuesday, February 17, 1998, unless and until
Purchaser, in its sole discretion (but subject to restrictions contained in
the Merger Agreement), shall from time to time have extended the period of
time during which the Offer is open, in which event the term "Expiration Date"
shall mean the latest time and date at which the Offer, as so extended by
Purchaser, shall expire. If more than the 13,933,000 Shares are validly
tendered prior to the Expiration Date and not withdrawn, Purchaser will accept
for payment (and thereby purchase) 13,933,000 Shares, on a pro rata basis,
with adjustments to avoid purchases of fractional shares, based upon the
number of Shares validly tendered prior to the Expiration Date and not
withdrawn by each tendering shareholder. In the event that proration of
tendered Shares is required, because of the difficulty of determining the
precise number of Shares properly tendered and not withdrawn (due in part to
the guaranteed delivery procedure described under "THE TENDER OFFER--2.
Procedure for Accepting the Offer and Tendering Shares"), Purchaser does not
expect that it will be able to announce the final results of such proration or
pay for any Shares until at least seven NYSE trading days after the Expiration
Date. Preliminary results of proration will be announced by press release as
promptly as practicable after the Expiration Date. Shareholders may obtain
such preliminary information from the Information Agent and may be able to
obtain such information from their brokers.
Subject to the terms of the Merger Agreement, Purchaser reserves the right
(but shall not be obligated) to accept for payment more than 13,933,000 Shares
pursuant to the Offer, although Purchaser has no present intention of doing
so. If a number of additional Shares in excess of 2% of the outstanding Shares
is to be accepted for payment, and, at the time notice of Purchaser's decision
to accept for payment such additional Shares is first published, sent or given
to holders of Shares, the Offer is scheduled to expire at any time earlier
than the tenth business day from the date that such notice is so published,
sent or given, the Offer will be extended until the expiration of such period
of ten business days.
Pursuant to the Merger Agreement, Purchaser may make any changes in the
terms and conditions of the Offer, provided that, unless previously approved
by the Company's Board in writing, Purchaser may not (i) decrease the Offer
Price, (ii) change the form of consideration payable in the Offer, (iii)
decrease the number of Shares sought pursuant to the Offer, (iv) change the
conditions to the Offer set forth in "THE TENDER OFFER--15. Certain Conditions
of The Offer", (v) impose additional conditions to the Offer or amend any
other term of the Offer in any manner adverse to holders of Shares or extend
the Offer if all of the conditions to the Offer are satisfied or waived, or
(vi) waive the condition set forth in paragraph (f) of "THE TENDER OFFER--15.
Certain Conditions of the Offer."
If at any scheduled Expiration Date any of the conditions to the Offer have
not been satisfied or waived, at the request of the Company from time to time,
Purchaser shall extend the Offer for a period not to exceed ten business days
after the previously scheduled Expiration Date of the Offer; provided,
however, in no event shall Purchaser be obligated to extend the Offer beyond
March 31, 1998. As used in this Offer to Purchase, "business day" means any
day other than a Saturday, Sunday or federal holiday and consists of the time
period from 12:01 a.m. through 12:00 Midnight, New York City time. Purchaser
expressly reserves the right, in its sole discretion (but subject to the terms
and conditions of the Merger Agreement), including the occurrence of any of
the conditions specified in Section 15, at any time and from time to time, to
extend for any reason the period of time during which the Offer is open, by
giving oral or written notice of such extension to the Depositary. During any
such extension, all Shares previously tendered and not withdrawn will remain
subject to the Offer, subject to the rights of a tendering shareholder to
withdraw such shareholder's Shares. See "WITHDRAWAL RIGHTS".
Subject to the applicable regulations of the Commission, Purchaser also
expressly reserves the right, in its sole discretion (but subject to the terms
and conditions of the Merger Agreement), at any time and from time to time,
(i) to delay acceptance for payment of any Shares pending receipt of any
regulatory or governmental approval specified in Section 16, (ii) to terminate
the Offer and not accept for payment any Shares upon the occurrence of any of
the conditions specified in Section 15 and (iii) to waive any condition or
otherwise amend
5
<PAGE>
the Offer in any respect, by giving oral or written notice of such delay,
termination, waiver or amendment to the Depositary and by making a public
announcement thereof. Purchaser acknowledges that (i) Rule 14e-1(c) under the
Exchange Act requires Purchaser to pay the consideration offered or return the
Shares tendered promptly after the termination or withdrawal of the Offer and
(ii) Purchaser may not delay acceptance for payment of, or payment for (except
as provided in clause (i) of the first sentence of this paragraph), any Shares
upon the occurrence of any of the conditions specified in Section 15 without
extending the period of time during which the Offer is open.
If Purchaser extends the Offer, or if Purchaser (whether before or after its
acceptance for payment of Shares) is delayed in its payment for Shares or is
unable to pay for Shares pursuant to the Offer for any reason, then, without
prejudice to Purchaser's rights under the Offer, the Depositary may retain
tendered Shares on behalf of Purchaser, and such Shares may not be withdrawn
except to the extent tendering shareholders are entitled to withdrawal rights
as described in this Offer to Purchase under the caption "THE TENDER OFFER--
3. Withdrawal Rights." However, the ability of Purchaser to delay payment for
Shares that Purchaser has accepted for payment is limited by Rule 14e-1(c)
under the Exchange Act as described in the previous paragraph.
Any extension, amendment or termination of the Offer will be followed as
promptly as practicable by public announcement in accordance with the public
announcement requirements of Rule 14e-1(d) under the Exchange Act. Subject to
applicable law (including Rules 14d-4(c) and 14d-6(d) under the Exchange Act,
which require that any material change in the information published, sent or
given to shareholders in connection with the Offer be promptly disseminated to
shareholders in a manner reasonably designed to inform shareholders of such
change) and without limiting the manner in which Purchaser may choose to make
any public announcement, Purchaser shall have no obligation to publish,
advertise or otherwise communicate any such public announcement other than by
making a release to the Dow Jones News Service.
The Company has provided Purchaser with the Company shareholder list, a
nonobjecting beneficial owners list, and security position listings for the
purpose of disseminating the Offer to holders of Shares. This Offer to
Purchase and the Letter of Transmittal and other relevant materials will be
mailed to record holders of Shares and furnished to brokers, dealers,
commercial banks, trust companies and similar persons whose names, or the
names of whose nominees, appear on the shareholder list or, if applicable, who
are listed as participants in a clearing agency's security position listing,
for subsequent transmittal to beneficial owners of Shares.
2. PROCEDURE FOR ACCEPTING THE OFFER AND TENDERING SHARES.
VALID TENDER OF SHARES
For a shareholder to validly tender Shares pursuant to the Offer, either (i)
a properly completed and duly executed Letter of Transmittal (or facsimile
thereof), together with any required signature guarantees, or an Agent's
Message (as defined herein), in connection with a book-entry delivery of
Shares, and any other required documents, must be received by the Depositary
at one of its addresses set forth on the back cover of this Offer to Purchase,
and either Certificates for tendered Shares must be received by the Depositary
at one of such addresses or such Shares must be delivered pursuant to the
procedure for book-entry transfer set forth below (and a Book-Entry
Confirmation (as defined herein) received by the Depositary), in each case
prior to the Expiration Date, or (ii) the tendering shareholder must comply
with the guaranteed delivery procedures set forth below.
BOOK-ENTRY TRANSFERS
The Depositary will establish an account with respect to the Shares at The
Depositary Trust Company (the "Book-Entry Transfer Facility") for purposes of
the Offer within two business days after the date of this Offer to Purchase.
Any financial institution that is a participant in the Book-Entry Transfer
Facility may make book-entry delivery of the Shares by causing the book-entry
transfer system to transfer such Shares into the Depositary's account at the
Book-Entry Transfer Facility in accordance with such Book-Entry Transfer
Facility's procedure for such transfer. Although delivery of Shares may be
effected through book-entry transfer at the Book-Entry Transfer Facility, a
properly completed and duly executed Letter of Transmittal (or facsimile
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<PAGE>
thereof), with any required signature guarantees, or an Agent's Message (as
defined herein), in connection with a book-entry transfer, and any other
required documents, must, in any case, be transmitted to, and received by, the
Depositary at one of its addresses set forth on the back cover of this Offer
to Purchase prior to the Expiration Date, or the tendering shareholder must
comply with the guaranteed delivery procedures described below. The
confirmation of a book-entry transfer of Shares into the Depositary's account
at the Book-Entry Transfer Facility as described above is referred to herein
as a "Book-Entry Confirmation." DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY
TRANSFER FACILITY IN ACCORDANCE WITH ITS BOOK-ENTRY PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE DEPOSITARY.
The term "Agent's Message" means a message, transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of
the Book-Entry Confirmation, which states that the Book-Entry Transfer
Facility has received an express acknowledgment from the participant in the
Book-Entry Transfer Facility tendering the Shares that such participant has
received the Letter of Transmittal and agrees to be bound by the terms of the
Letter of Transmittal and that Purchaser may enforce such agreement against
such participant.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS IS AT THE ELECTION AND SOLE RISK OF THE TENDERING
SHAREHOLDER AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED AT
THE DEPOSITARY. IF DELIVERY IS BY MAIL, THEN INSURED OR REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD
BE ALLOWED TO ENSURE TIMELY DELIVERY.
SIGNATURE GUARANTEES
No signature guarantee on the Letter of Transmittal is required if (i) the
Letter of Transmittal is signed by the registered holder of the Shares (which
term, for purposes of this Section, includes any participant in the Book-Entry
Transfer Facility system whose name appears on a security position listing as
the owner of the Shares) tendered therewith and such registered holder has not
completed either the box entitled "Special Delivery Instructions" or the box
entitled "Special Payment Instructions" on such Letter of Transmittal, or
(ii) such Shares are tendered for the account of a bank, broker, dealer,
credit union, savings association or other entity that is a member in good
standing of the Securities Transfer Agents Medallion Program, the New York
Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange
Medallion Program (each, an "Eligible Institution"). In all other cases, all
signatures on the Letter of Transmittal must be guaranteed by an Eligible
Institution. See Instructions 1 and 5 to the Letter of Transmittal. If the
Share Certificates are registered in the name of a person other than the
signer of the Letter of Transmittal, or if payment is to be made to, or Share
Certificates not validly tendered or not accepted for payment or not purchased
are to be issued or returned to, a person other than the registered holder of
the Share Certificates, the tendered Share Certificates must be endorsed in
blank or accompanied by appropriate stock powers, signed exactly as the name
of the registered holder appears on the Share Certificates with the signature
on such Share Certificates or stock powers guaranteed by an Eligible
Institution. See Instructions 1 and 5 to the Letter of Transmittal.
GUARANTEED DELIVERY
If a shareholder desires to tender Shares pursuant to the Offer and such
shareholder's Share Certificates are not immediately available or the
procedures for book-entry transfer cannot be completed on a timely basis or
time will not permit all required documents to reach the Depositary prior to
the Expiration Date, such Shares may nevertheless be tendered provided that
all of the following guaranteed delivery procedures are duly complied with:
(a) such tender is made by or through an Eligible Institution;
(b) the Depositary receives (by hand, mail, telegram or facsimile
transmission) on or prior to the Expiration Date, a properly completed and
duly executed Notice of Guaranteed Delivery, substantially in the form
provided by Purchaser; and
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(c) the Share Certificates representing all tendered Shares, in proper
form for transfer (or Book-Entry Confirmation with respect to such Shares),
together with a properly completed and duly executed Letter of Transmittal
(or facsimile thereof) and any other documents required by the Letter of
Transmittal, are received by the Depositary within three NYSE trading days
after the date of such Notice of Guaranteed Delivery. A "NYSE trading day"
is any day on which securities are traded on the NYSE.
The Notice of Guaranteed Delivery may be delivered by hand, or may be
transmitted by telegram, facsimile transmission or mail, to the Depositary and
must include a guarantee by an Eligible Institution in the form set forth in
such Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) Share Certificates for (or a timely Book-
Entry Confirmation with respect to) such Shares, (ii) a properly completed and
duly executed Letter of Transmittal (or facsimile thereof), or, in the case of
book-entry transfer, an Agent's Message, and (iii) any other documents
required by the Letter of Transmittal. Accordingly, tendering shareholders may
be paid at different times depending upon when Share Certificates, Book-Entry
Confirmations and such other documents are actually received by the
Depositary. Under no circumstances will interest be paid by Purchaser on the
purchase price of the Shares to any tendering shareholders, regardless of any
extension of the Offer or any delay in making such payment.
DETERMINATION OF VALIDITY
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance for payment of any tender of Shares will be determined
by Purchaser in its sole discretion, which determination will be final and
binding. Purchaser reserves the absolute right to reject any or all tenders of
any Shares that it determines are not in proper form or the acceptance for
payment of or payment for which may be unlawful. Purchaser also reserves the
absolute right to waive any of the conditions of the Offer or any defect or
irregularity in the tender of any Shares with respect to any particular
shareholder, whether or not similar defects or irregularities are waived in
the case of other shareholders. None of Purchaser, Parent, the Depositary, the
Information Agent or any other person will be under any duty to give notice of
any defects or irregularities in tenders or incur any liability for failure to
give any such notice. Purchaser's interpretation of the terms and conditions
of the Offer (including the Letter of Transmittal and the instructions
thereto) will be final and binding.
OTHER REQUIREMENTS
By executing the Letter of Transmittal as set forth herein, a tendering
shareholder irrevocably appoints designees of Purchaser as such shareholder's
proxies, each with full power of substitution, in the manner set forth in the
Letter of Transmittal, to the full extent of such shareholder's rights with
respect to the Shares tendered by such shareholder and accepted for payment by
Purchaser (and with respect to any and all other Shares or other securities or
rights issued or issuable in respect of such Shares on or after the Expiration
Date), effective when, if and to the extent that Purchaser accepts such Shares
for payment pursuant to the Offer. All such proxies shall be considered
coupled with an interest in the tendered Shares. Upon such acceptance for
payment, all prior proxies given by such shareholder with respect to such
Shares accepted for payment or other securities or rights will, without
further action, be revoked, and no subsequent proxies may be given. Such
designees of Purchaser will, with respect to such Shares for which the
appointment is effective, be empowered to exercise all voting and other rights
of such shareholder as they in their sole discretion may deem proper in
respect of any annual or special meeting of the Company's shareholders or any
adjournment or postponement thereof, by written consent in lieu of any such
meeting or otherwise. Purchaser reserves the right to require that, in order
for Shares to be deemed validly tendered, immediately upon Purchaser's payment
for such Shares, Purchaser must be able to exercise full voting rights with
respect to such Shares.
Purchaser's acceptance for payment of Shares tendered pursuant to any of the
procedures described herein will constitute a binding agreement between the
tendering shareholder and Purchaser upon the terms and subject to the
conditions of the Offer.
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BACKUP FEDERAL INCOME TAX WITHHOLDING
To prevent backup federal income tax withholding on payments of cash
pursuant to the Offer, a shareholder tendering Shares in the offer must
provide the Depositary with such shareholder's correct taxpayer identification
number ("TIN") on a Substitute Form W-9 and certify under penalties of perjury
that such TIN is correct and that such shareholder is not subject to backup
withholding. If a shareholder does not provide its correct TIN or fails to
provide the certification described herein, under federal income tax laws, the
Depositary will be required to withhold 31% of the amount of any payment made
to such shareholder pursuant to the Offer. All shareholders tendering Shares
pursuant to the Offer should complete and sign the Substitute Form W-9
included as a part of the Letter of Transmittal to provide the information and
certification necessary to avoid backup withholding. Noncorporate foreign
shareholders should complete and sign a Form W-8, Certificate of Foreign
Status, a copy of which may be obtained from the Depositary, in order to avoid
backup withholding. See Instruction 10 to the Letter of Transmittal. See "THE
TENDER OFFER--5. Certain Federal Income Tax Consequences."
3. WITHDRAWAL RIGHTS.
Tenders of Shares made pursuant to the Offer will be irrevocable, except
that Shares tendered may be withdrawn at any time prior to the Expiration
Date, and, unless theretofore accepted for payment and paid for as provided
herein, may also be withdrawn at any time on or after March 17, 1998. If
Purchaser extends the Offer, is delayed in its acceptance for payment of
Shares or is unable to accept Shares for payment pursuant to the Offer for any
reason, then, without prejudice to Purchaser's rights under the Offer, the
Depositary may, nevertheless, on behalf of Purchaser, retain tendered Shares,
and such Shares may not be withdrawn except to the extent that tendering
Shareholders are entitled to withdrawal rights as described in this Section.
Any such delay will be by an extension of the Offer to the extent required by
law. The reservation by Purchaser of the right to delay the acceptance or
purchase of or payment for Shares is subject to the provisions of Rule 14e-
1(c) under the Exchange Act, which requires Purchaser to pay the consideration
offered or to return Shares deposited by or on behalf of Shareholders promptly
after the termination or withdrawal of the Offer.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase.
Any notice of withdrawal must specify the name of the person who tendered the
Shares to be withdrawn, the number of Shares to be withdrawn and the name of
the registered holder of the Shares to be withdrawn as set forth on such Share
Certificates if different from the name of the person who tendered such
Shares. If Share Certificates have been delivered or otherwise identified to
the Depositary, then, prior to the physical release of such Share
Certificates, the serial numbers shown on such Share Certificates must be
furnished to the Depositary and, unless such Shares have been tendered by an
Eligible Institution, the signatures on the notice of withdrawal must be
guaranteed by an Eligible Institution. If Shares have been delivered pursuant
to the procedures for book-entry transfer set forth in Section 2 above, any
notice of withdrawal must specify the name and number of the account at the
Book-Entry Transfer Facility to be credited with such withdrawn Shares and
otherwise comply with the Book-Entry Transfer Facility's procedures for
withdrawal, in which case a notice of withdrawal will be effective if
delivered to the Depositary by any method of delivery described in the first
sentence of this paragraph.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by Purchaser in its sole discretion,
and its determination will be final and binding. No withdrawal of Shares will
be deemed to have been properly made until all defects and irregularities have
been cured or waved. None of Purchaser, the Depositary, the Information Agent
or any other person will be obligated to give notice of any defects or
irregularities in any notice of withdrawal, nor shall any of them incur any
liability for failure to give any such notice.
Withdrawals of tenders of Shares may not be rescinded, and any Shares
properly withdrawn will thereafter be deemed not validly tendered for purposes
of the Offer. However, withdrawn Shares may be retendered by following one of
the procedures described in Section 2 above at any time on or prior to the
Expiration Date.
9
<PAGE>
4. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any extension or
amendment), and provided that the Repurchase shall have been completed,
subject only to the condition that Purchaser shall have paid for Shares
pursuant to the Offer, Purchaser will accept for payment, and will pay for, up
to 13,933,000 Shares validly tendered on or prior to the Expiration Date
(subject to any pro rata adjustment in accordance with the terms of the Offer
in the event more than 13,933,000 Shares are validly tendered in the Offer)
and not properly withdrawn in accordance with the procedures set forth in "THE
TENDER OFFER--3. Withdrawal Rights" promptly after the latest to occur of (i)
the Expiration Date, (ii) the expiration or termination of any applicable
waiting periods under the Hart-Scott-Rodino Antitrust Improvement Act of 1976,
as amended (the "HSR Act"), (iii) the satisfaction of the Share Number
Condition, and (iv) the satisfaction or waiver of the other conditions to the
Offer set forth under "THE TENDER OFFER--15. Certain Conditions of the Offer."
Subject to applicable rules of the Commission and the terms and conditions of
the Merger Agreement, Purchaser expressly reserves the right, in its sole
discretion, to delay acceptance for payment of, or payment for, Shares in
order to comply in whole or in part with any applicable law or governmental
regulation.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of (i)
the Share Certificates (or timely Book-Entry Confirmation of the book-entry
transfer of such Shares into the Depositary's account at a Book-Entry Transfer
Facility pursuant to the procedures set forth under Section 2 above), (ii) the
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, together with any required signature guarantees, or an Agent's
Message in connection with a book-entry transfer, and (iii) any other
documents required by the Letter of Transmittal.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, the Shares validly tendered to Purchaser
(subject to any pro rata adjustment in accordance with the terms of the Offer
in the event more than 13,933,000 Shares are validly tendered) and not
properly withdrawn as, if and when Purchaser gives oral or written notice to
the Depositary of Purchaser's acceptance for payment of such Shares pursuant
to the Offer. In all cases, upon the terms and subject to the conditions of
the Offer, payment for Shares so accepted for payment will be made by the
deposit of the purchase price therefor with the Depositary, which will act as
agent for tendering shareholders for the purpose of receiving payment from
Purchaser and transmitting payment to validly tendering shareholders. UNDER NO
CIRCUMSTANCES WILL INTEREST BE PAID BY PURCHASER ON THE PURCHASE PRICE OF THE
SHARES TENDERED PURSUANT TO THE OFFER, REGARDLESS OF ANY EXTENSION OF THE
OFFER OR ANY DELAY IN MAKING SUCH PAYMENT. Purchaser will pay any stock
transfer taxes with respect to the transfer and sale to it or its order
pursuant to the Offer, except as otherwise provided in Instruction 6 of the
Letter of Transmittal, as well as any charges and expenses of the Depositary
and the Information Agent.
If Purchaser extends the Offer, is delayed in its acceptance for payment of
Shares or is unable to accept Shares for payment pursuant to the Offer for any
reason, then, without prejudice to Purchaser's rights under the Offer, the
Depositary may, nevertheless, on behalf of Purchaser, retain tendered Shares,
and such Shares may not be withdrawn except to the extent that tendering
Shareholders are entitled to withdrawal rights as described in this Section.
Any such delay will be by an extension of the Offer to the extent required by
law. The reservation by Purchaser of the right to delay the acceptance or
purchase of or payment for Shares is subject to the provisions of Rule 14e-
1(c) under the Exchange Act, which requires Purchaser to pay the consideration
offered or to return Shares deposited by or on behalf of Shareholders promptly
after the termination or withdrawal of the Offer. "THE TENDER OFFER--3.
Withdrawal Rights."
If any tendered Shares are not purchased pursuant to the Offer because of an
invalid tender or for any reason, Share Certificates for any such Shares will
be returned, without expense, to the tendering shareholder (or, in the case of
Shares delivered by book-entry transfer of such Shares into the Depositary's
account at the Book-Entry Transfer Facility pursuant to the procedures set
forth under Section 2 above, such Shares will be credited to an account
maintained at such Book-Entry Transfer Facility) as promptly as practicable
following the expiration or termination of the Offer.
10
<PAGE>
Purchaser reserves the right to designate, by written notice to the Company,
another wholly-owned direct or indirect subsidiary to be party to the Merger
Agreement and to consummate the transactions contemplated thereby, including
the Offer and the Merger.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The summary of federal income tax consequences set forth below is for
general information only and is based on Purchaser's understanding of the law
as currently in effect. The tax consequences to each shareholder will depend
in part upon such shareholder's particular situation. Special tax consequences
not described herein may be applicable to particular classes of taxpayers,
such as financial institutions, insurance companies, tax-exempt organizations,
broker-dealers, persons who are not citizens or residents of the United States
and shareholders who acquired their Shares through the exercise of an employee
stock option or otherwise as compensation. ALL SHAREHOLDERS SHOULD CONSULT
WITH THEIR OWN TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES OF THE OFFER
AND THE MERGER, INCLUDING THE APPLICABILITY AND EFFECT OF THE ALTERNATIVE
MINIMUM TAX AND ANY STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX LAWS AND OF
CHANGES IN SUCH TAX LAWS.
SHARES TENDERED IN THE OFFER OR EXCHANGED PURSUANT TO THE MERGER
The receipt of cash for Shares tendered pursuant to the Offer will be a
taxable transaction for federal income tax purposes and may also be a taxable
transaction under applicable state, local or foreign tax laws. Generally, a
shareholder who receives cash for Shares pursuant to the Offer will recognize
gain or loss for federal income tax purposes equal to the difference between
the amount of cash received in exchange for the Shares sold and such
shareholder's adjusted tax basis in such Shares. In addition, shareholders
should note that the receipt of the Merger Consideration (whether consisting
solely of shares of Parent Common Stock or of both shares of Parent Common
Stock and cash) if the Merger is carried out as contemplated by the parties
will be a taxable event for federal income tax purposes and may also be a
taxable transaction under applicable state, local or foreign tax laws. In such
event, a shareholder who receives Parent Common Stock pursuant to the Merger
will recognize gain or loss for federal income tax purposes equal to the
difference between the fair market value of the Parent Common Stock at the
Effective Time (plus the amount of any cash received) and such shareholder's
adjusted tax basis in the Shares exchanged in the Merger. Thus, a shareholder
recognizing a gain under the foregoing rule could be in the position of
incurring a tax liability as a result of the Merger without the corresponding
receipt of cash. ALL SHAREHOLDERS SHOULD TAKE INTO ACCOUNT THE TAX TREATMENT
OF THE RECEIPT OF THE MERGER CONSIDERATION WHEN CONSIDERING WHETHER TO TENDER
SHARES PURSUANT TO THE OFFER.
If the Shares constitute capital assets in the hands of the shareholder,
then gain or loss recognized with respect to either the receipt of cash
pursuant to the Offer or the receipt of the Merger Consideration pursuant to
the Merger will be capital gain or loss. Gain or loss will be calculated
separately for each block of Shares (i.e., a group of Shares with the same tax
basis and holding period) tendered pursuant to the Offer. The initial tax
basis of any Parent Common Stock received pursuant to the Merger will be the
fair market value of such stock at the Effective Time.
The Taxpayer Relief Act of 1997 (the "1997 Act") created several new
categories of capital gains applicable to noncorporate taxpayers. Under prior
law, noncorporate taxpayers were generally taxed at a maximum rate of 28% on
net capital gain (generally, the excess of net long-term capital gain over net
short-term capital loss). Noncorporate taxpayers are now generally taxed at a
maximum rate of 20% on net capital gain attributable to the sale of property
held for more than eighteen months, and a maximum rate of 28% on net capital
gain attributable to the sale of property held for more than one year but not
more than eighteen months. The 1997 Act did not affect the treatment of short-
term capital gain or loss (generally, gain or loss attributable to capital
assets held for one year or less) and did not affect the taxation of capital
gains in the hands of corporate taxpayers.
11
<PAGE>
A shareholder whose Shares are purchased in the Offer may be subject to 31%
backup withholding unless certain information is provided to Parent and
Purchaser or an exemption applies. See "THE TENDER OFFER--2. Procedure for
Accepting the Offer and Tendering Shares--Backup Federal Income Tax
Withholding."
THE NSC DISTRIBUTION
Pursuant to the Merger Agreement, concurrently with the acceptance by
Purchaser of Shares for payment in the Offer, the Company shall make a pro
rata taxable distribution (the "NSC Distribution") of all of the shares of
common stock, par value $0.01 per share, of NSC Corporation (the "NSC Shares")
held by the Company to holders of record of the Shares as of the close of
business on the date immediately prior to the date Purchaser accepts Shares
for payment in the Offer.
The NSC Distribution is an integral part of the plan of acquisition of the
Company by Purchaser and Parent. Therefore, for federal income tax purposes,
the NSC Distribution should be treated as a redemption of a pro rata portion
of the Shares held by each holder of the Shares for an amount of consideration
equal to the fair market value of the NSC Shares received. Such redemption
will be treated as a sale or exchange of the Shares deemed surrendered in the
redemption provided that the redemption (i) results in a "complete
termination" of the holder's stock interest in the Company under section
302(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), (ii)
is "substantially disproportionate" with respect to the holder under
section 302(b)(2) of the Code, or (iii) is "not essentially equivalent to a
dividend" with respect to the holder under section 302(b)(1) of the Code. If
the redemption is treated as a sale or exchange, gain or loss will be
recognized for federal tax purposes equal to the difference between the fair
market value of the NSC Shares received in the redemption and the holder's
adjusted tax basis in the Shares deemed surrendered in the redemption.
A distribution to a holder is "not essentially equivalent to a dividend" if
it results in a "meaningful reduction" in the holder's stock interest in the
Company, but there cannot always be certainty as to when such a "meaningful
reduction" has occurred because the applicable test is not based on numerical
criteria. Satisfaction of the "complete termination" and "substantially
disproportionate" exceptions is dependent upon compliance with the more
objective tests set forth in sections 302(b)(3) and 302(b)(2) of the Code,
respectively.
In applying the tests under sections 302(b)(1)-(3) of the Code, the holder
must take into account not only the stock of the Company which the holder
actually owns, but also stock he constructively owns within the meaning of
section 318 of the Code. In addition, a redemption that is part of a firm and
fixed integrated plan is to be tested under Code sections 302(b)(1)-(3) by
taking into account all changes in the holder's proportionate stock ownership
in the Company that occur as a result of such overall plan. Accordingly,
assuming that the Offer and Merger are consummated, the NSC Distribution,
Offer and Merger together are expected to be viewed as resulting in a
"complete termination" of each holder's interest in the Company or,
alternatively, that these events will result in a "substantially
disproportionate" reduction or "meaningful reduction" in each holder's
interest in the Company.
If the NSC Distribution is not treated as a sale or exchange to the holder
of Shares under the tests of sections 302(b)(1)-(3) of the Code, it will be
treated as a distribution in the amount of the fair market value of the NSC
Shares received and will be taxable as ordinary dividend income to the extent
of the holder's share of the Company's current or accumulated earnings and
profits, as computed for federal income tax purposes. If the amount of the
distribution exceeds the holder's share of the Company's current or
accumulated earnings and profits, such distribution will be treated first as a
return of capital that will be applied against and reduce the adjusted basis
of the holder's Shares. Any remaining amount of the distribution after such
tax basis has been reduced to zero will be taxed as capital gain.
Regardless of whether the tests of sections 302(b)(1)-(3) are satisfied, the
holder's basis in any NSC Shares received will equal the fair market value of
such shares on the date of the NSC Distribution, and the holder's holding
period for such NSC Shares will commence on the following day.
12
<PAGE>
6. PRICE RANGE OF THE SHARES.
The Shares are traded on the NYSE under the symbol OHM. The following table
sets forth, for the periods indicated, the high and low sales prices of the
Shares on the New York Stock Exchange Composite Tape:
<TABLE>
<CAPTION>
HIGH LOW
---------- ---------
<S> <C> <C>
Year Ended December 31, 1996:
First Quarter........................................ $ 8 3/8 $ 6 7/8
Second Quarter....................................... $ 9 3/8 $ 6
Third Quarter........................................ $ 8 $ 6 3/8
Fourth Quarter....................................... $ 9 1/4 $ 7
Year Ended December 31, 1997:
First Quarter........................................ $ 9 1/8 $ 7 3/4
Second Quarter....................................... $ 8 5/8 $ 7 1/4
Third Quarter........................................ $ 8 5/8 $ 6 13/16
$ 7
Fourth Quarter....................................... $ 9 1/2 5/16
Year Ending December 31, 1998:
First Quarter (through January 15, 1998)............. $10 15/16 $ 7 5/8
</TABLE>
On January 14, 1998, the last full day of trading prior to the public
announcement of the execution of the Merger Agreement, according to published
sources, the closing price of the Shares on the NYSE was $9 1/8 per Share. On
January 15, 1998, the last full day of trading before the commencement of the
Offer, according to published sources, the last closing price of the Shares on
the NYSE was $10 7/8 per Share. SHAREHOLDERS ARE URGED TO OBTAIN A CURRENT
MARKET QUOTATION FOR THE SHARES.
7. CERTAIN INFORMATION CONCERNING THE COMPANY.
GENERAL
The Company is an Ohio corporation with its principal offices located at
16406 U.S. Route 224 East, Findlay, Ohio 45840.
The Company is one of the largest providers of technology-based, on-site
hazardous waste remediation services in the United States. The Company has
been in the environmental services business since 1969. The Company has
successfully completed approximately 31,000 projects involving contaminated
groundwater, soil and facilities.
COMPANY AVAILABLE INFORMATION
The Company is subject to the informational filing requirements of the
Exchange Act and, in accordance therewith, is required to file periodic
reports, proxy statements and other information with the Commission relating
to its business, financial condition and other matters. Certain information,
as of particular dates, concerning the Company's directors and officers
(including their remuneration, stock options granted to them and shares held
by them), the principal holders of the Company's securities, and any material
interest of such persons in transactions with the Company is required to be
disclosed in proxy statements and annual reports distributed to the Company's
shareholders and filed with the Commission. Such reports, proxy statements and
other information are available for inspection and copying at the public
reference facilities of the Commission located in Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the regional offices of the
Commission located in Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661, and Seven World Trade Center, Suite 1300, New York,
New York 10048. Copies of this material may also be obtained by mail, upon
payment of the Commission's customary fees from the Commission's principal
office at 450 Fifth Street N.W., Washington, D.C. 20549. The Commission also
maintains an Internet site on the World Wide Web at <http://www.sec.gov> that
contains reports, proxy statements and other information. In addition, such
material should also be available for inspection at the NYSE, 20 Broad Street,
New York, NY 10005.
13
<PAGE>
DIRECTORS AND OFFICERS
The name, address, principal occupation or employment, five-year employment
history and citizenship of each director and executive officer of the Company
is set forth in Schedule I hereto.
SUMMARY FINANCIAL INFORMATION
The following tables set forth certain summary consolidated financial
information with respect to the Company and its consolidated subsidiaries
derived from the audited financial statements contained in the Company's 1996
Annual Report on Form 10-K for the fiscal year ended December 31, 1996 and the
unaudited financial statements contained in the Company's Quarterly Reports on
Form 10-Q for the periods ended September 30, 1997 and September 30, 1996. The
following summary is qualified in its entirety by reference to the more
comprehensive financial information included in such documents, including the
financial statements and related notes contained therein as well as other
documents filed by the Company with the Commission, which are available for
inspection in the manner set forth above under "Company Available
Information."
THE COMPANY AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL DATA
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
NINE MONTHS ENDED FISCAL YEAR ENDED
--------------------------- --------------------------------------
SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Revenue............... $381,467 $406,412 $550,984 $457,925 $323,381
Operating income
(loss)............... (19,115) 16,985 22,810 19,553 (5,059)
Net income (loss)..... (25,257) 7,705 11,515 6,807 (7,616)
Net income (loss) per
share................ (0.93) 0.29 0.43 0.30 (0.49)
</TABLE>
<TABLE>
<CAPTION>
AT AT AT AT
SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31, DECEMBER 31,
1997 1996 1996 1995
<S> <C> <C> <C> <C>
Balance Sheet Data:
Total assets........... $309,019 $350,804 $336,537 $376,506
Current liabilities.... 103,558 101,607 103,603 110,949
Non-current
liabilities........... 53,632 79,136 58,362 105,065
Shareholders' equity... 151,829 170,061 174,572 160,492
</TABLE>
Except as otherwise noted in this Offer to Purchase, all of the information
with respect to the Company set forth in this Offer to Purchase has been
derived from publicly available information. Although Purchaser has no
knowledge that any such information is untrue, Purchaser takes no
responsibility for the accuracy or completeness of information contained in
this Offer to Purchase with respect to the Company or for any failure by the
Company to disclose events which may have occurred or may affect the
significance or accuracy of any such information.
CERTAIN COMPANY PROJECTIONS
In the course of discussions giving rise to the Merger Agreement (see "The
TENDER OFFER--11. Contacts with the Company; Background of the Offer and the
Merger"), representatives of the Company furnished representatives of Parent
certain business and financial information that was not publicly available,
including certain financial projections for the fiscal years ending December
31, 1998, 1999 and 2000 (the "Company Projections"). The Company Projections
were prepared solely for the Company's internal purposes and were prepared for
publication or with a view to complying with the published guidelines of the
Commission
14
<PAGE>
regarding projections or with the American Institute of Certified Public
Accountants Guide for Prospective Financial Statements, and such information is
being included in the Offer To Purchase solely because it was furnished to
Parent in connection with the discussions giving rise to the Merger Agreement.
The independent accountants of the Company, have neither examined nor compiled
the prospective financial information set forth below and, accordingly, do not
express an opinion or any other form of assurance with respect thereto. The
reports of such independent accountants incorporated by reference in this Offer
To Purchase relate to the historical financial information of the Company and
do not extend to the prospective financial information and should not be
construed to do so.
THE PROJECTED FINANCIAL INFORMATION SET FORTH BELOW NECESSARILY REFLECTS
NUMEROUS ASSUMPTIONS WITH RESPECT TO GENERAL BUSINESS AND ECONOMIC CONDITIONS
AND OTHER MATTERS, MANY OF WHICH ARE INHERENTLY UNCERTAIN OR BEYOND THE
COMPANY'S OR PARENT'S CONTROL, AND DOES NOT TAKE INTO ACCOUNT ANY CHANGES IN
THE COMPANY'S OPERATIONS OR CAPITAL STRUCTURE WHICH MAY RESULT FROM THE OFFER
AND THE MERGER. SEE "THE TENDER OFFER--12. PURPOSE OF THE OFFER AND THE MERGER;
PLANS FOR THE COMPANY; THE MERGER AGREEMENT; THE COMPANY VOTING AGREEMENT; THE
PARENT VOTING AGREEMENT; THE OPTION TERMINATION AGREEMENT; APPRAISAL RIGHTS."
IT IS NOT POSSIBLE TO PREDICT WHETHER THE ASSUMPTIONS MADE IN PREPARING THE
PROJECTED FINANCIAL INFORMATION WILL BE VALID AND ACTUAL RESULTS MAY PROVE TO
BE MATERIALLY HIGHER OR LOWER THAN THOSE CONTAINED IN THE PROJECTIONS. IN
ADDITION TO THE SPECIFIC ASSUMPTIONS RELATING TO SUCH PROJECTIONS SET FORTH
BELOW, CERTAIN OTHER INFORMATION PERTINENT TO THE COMPANY PROJECTIONS WAS
FURNISHED BY THE COMPANY. THE INCLUSION OF THIS INFORMATION SHOULD NOT BE
REGARDED AS AN INDICATION THAT THE COMPANY, PARENT OR ANYONE ELSE WHO RECEIVED
THIS INFORMATION CONSIDERED IT A RELIABLE PREDICTOR OF FUTURE EVENTS, AND THIS
INFORMATION SHOULD NOT BE RELIED ON AS SUCH. NONE OF PARENT, PURCHASER, THE
COMPANY OR ANY OF THEIR RESPECTIVE REPRESENTATIVES ASSUMES ANY RESPONSIBILITY
FOR THE VALIDITY, REASONABLENESS, ACCURACY OR COMPLETENESS OF THE PROJECTED
FINANCIAL INFORMATION, AND THE COMPANY HAS MADE NO REPRESENTATION TO PARENT OR
PURCHASER REGARDING SUCH INFORMATION.
<TABLE>
<CAPTION>
1998 1999 2000
---- ---- ----
(AMOUNTS IN
MILLIONS)
<S> <C> <C> <C>
Gross revenue......................................... $618.0 $727.0 $841.0
Earnings before interest, taxes, depreciation and
amortization......................................... 48.0 53.0 60.0
Operating income...................................... 31.4 36.9 42.5
Net income............................................ $ 16.6 $ 21.2 $ 25.7
</TABLE>
The major assumptions made by the Company with respect to the Company
Projections and conveyed to Parent were:
(1) Gross revenues are projected to increase at a compounded annual rate of
approximately 17% from 1998 to 2000, based primarily on assumed increased
revenue from opportunities related to significant government outsourcing and
Department of Energy ("DOE") environmental remediation at nuclear weapons'
facilities.
Additionally, the revenue projection is based on the assumption that the
largest segment of the Company's revenue, which is remediation for the
Department of Defense ("DOD"), is stable with consistent government funding. In
the second quarter of 1997, the Company increased its position in the
outsourcing business. During 1998, 1999 and 2000 the Company expects to derive
approximately 22% of its total revenue from outsourcing.
(2) Gross margin percentages are assumed to decrease, reflecting the
performance of contracts in backlog and continued competition. However
operating income as a percentage of revenue are assumed to be stable at 5.1% as
selling, general and administrative expenses are reduced through improved cost
controls and economies of scale.
15
<PAGE>
(3) Net interest expense is assumed to decline. The Company Projections
assume interest rates will be relatively stable and cash from operations will
be utilized to pay down debt and to generate additional interest income.
(4) The Company Projections assume a 38% tax rate and utilization of the
deferred tax asset, which reduces cash taxes during the forecast periods.
8. CERTAIN INFORMATION CONCERNING PURCHASER AND PARENT.
GENERAL
Purchaser is an Ohio corporation with its principal executive offices
located at 11499 Chester Road, Cincinnati, Ohio 45246. Purchaser is a wholly
owned subsidiary of Parent which was organized to acquire the Company and has
not conducted any unrelated activities since its organization.
Parent is a Delaware corporation with its principal office located at 2790
Mosside Boulevard, Monroeville, Pennsylvania 15416-2792. Parent provides a
wide range of environmental management services and technologies including the
assessment, engineering, and remediation of situations involving hazardous
materials and pollution prevention and minimization. Parent was incorporated
in 1983; the earliest antecedent of the Company commenced operations in
California in 1926.
DIRECTORS AND OFFICERS
The name, business address, citizenship, present principal employment or
occupation and five-year employment history of each of the executive officers
of Parent and Purchaser are set forth in Schedule II hereto.
Except as described in this Offer to Purchase (i) none of Parent or
Purchaser nor, to the best of Parent's knowledge, any of the persons listed in
Schedule II hereto, or any associate or majority-owned subsidiary of Parent or
any of the persons so listed, beneficially owns or has any right to acquire
directly or indirectly any Shares or has any contract, arrangement,
understanding or relationship with any other person with respect to any
Shares, including, but not limited to, any contract, arrangement,
understanding or relationship concerning the transfer or the voting of any
Shares, joint ventures, loan or option arrangements, puts or calls, guaranties
of loans, guaranties against loss, or the giving or withholding of proxies,
and (ii) none of Parent or Purchaser nor, to the best knowledge of Parent, any
of the other persons referred to above, or any of the respective directors,
executive officers or subsidiaries of any of the foregoing, has effected any
transaction in any Shares during the past 60 days.
Except as set forth in this Offer to Purchase, since January 1, 1995,
neither Parent or Purchaser nor, to the best knowledge of Parent, any of the
persons listed on Schedule II hereto, has had any transaction with the Company
or any of its executive officers, directors or affiliates that is required to
be reported under the rules and regulations of the Commission applicable to
the Offer. Except as set forth in this Offer to Purchase, since January 1,
1995 there have been no contracts, negotiations or transactions between
Parent, Purchaser, or any of their subsidiaries or, to the best knowledge of
Parent, any of the persons listed in Schedule II to this Offer to Purchase, on
the one hand, and the Company or its affiliates, on the other hand, concerning
a merger, consolidation or acquisition; a tender offer for or other
acquisition of securities of any class of the Company; an election of
directors of the Company; or a sale or other transfer of a material amount of
assets of the Company or any of its subsidiaries.
SUMMARY FINANCIAL INFORMATION
The following tables set forth certain selected consolidated financial
information with respect to Parent and its subsidiaries excerpted from the
information contained in Parent's 1997 Annual Report to on Form 10-K for the
fiscal year ended March 28, 1997 and Parent's Quarterly Reports on Form 10-Q
for the periods ended September 26, 1997 and September 27, 1996. The following
summary is qualified in its entirety by reference to
16
<PAGE>
the more comprehensive financial information included in such documents,
including the financial statements and related notes contained therein as well
as other documents filed by Parent with the Commission, which are available
for inspection in the manner set forth under "Parent Available Information."
PARENT AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
SIX MONTHS ENDED FISCAL YEAR ENDED
--------------------------- ----------------------------
MARCH MARCH MARCH
SEPTEMBER 26, SEPTEMBER 27, 28, 28, 28,
1997 1996 1997 1996 1995
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Revenue............... $201,021 $173,906 $362,131 $400,042 $423,972
Operating income
(loss)............... 3,887 (9,198) (3,696) 20,027 19,440
Net loss applicable to
common stock......... (4,062) (12,531) (13,693) (3,654) (18,483)
Net loss per share:
Continuing operations
(net of preferred
stock dividends).... (0.42) (1.37) (1.48) (0.41) (0.89)
Discontinued
operations:
From disposition... -- -- -- -- (1.19)
-------- -------- -------- -------- --------
-- -- -- -- (2.08)
======== ======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
AT SEPTEMBER 26, AT SEPTEMBER 27, AT MARCH 28, AT MARCH 28,
1997 1996 1997 1996
(UNAUDITED)
<S> <C> <C> <C> <C>
Balance Sheet Data:
Total assets.......... $337,051 $302,455 $342,531 $315,314
Long-term debt........ 65,711 65,392 65,874 65,611
Long-term accrued
liabilities.......... 9,813 23,875 16,004 30,223
Stockholders' equity.. 166,267 128,475 168,853 140,865
</TABLE>
PARENT AVAILABLE INFORMATION
Parent is subject to the informational requirements of the Exchange Act and,
in accordance therewith, files reports relating to its business, financial
condition and other matters. Information, as of particular dates, concerning
Parent's directors and officers, their remuneration, stock options and other
matters, the principal holders of Parent's securities and any material
interest of such persons in transactions with Parent is required to be
disclosed in proxy statements distributed to Parent's stockholders and filed
with the Commission. Such reports, proxy statements and other information
should be available for inspection at the Commission and copies thereof should
be obtainable from the Commission in the same manner as is set forth with
respect to the Company in Section 7.
9. SOURCE AND AMOUNT OF FUNDS.
Purchaser estimates that the total amount of funds required to purchase
Shares pursuant to the Offer will be approximately $170.2 million (including
$10.0 million for payment of estimated costs and expenses), and the total
amount of funds required to complete the Merger and to pay related costs and
expenses will be approximately $304.0 million.
Parent and Purchaser have received a financing commitment through April 1,
1998 for credit facilities (the "Tender Offer Credit Facilities") of up to
$240.0 million from Citicorp USA, Inc. ("Citicorp" and, in its capacity as
administrative agent, the "Administrative Agent") and BankBoston, N.A.
("BankBoston" and, in its capacity as agent, together with the Administrative
Agent, the "Agents"), individually and as agent banks for a group of lenders
to be arranged by Citicorp Securities, Inc. and BancBoston Securities Inc.
(the "Arrangers"). The commitments of Citicorp and BankBoston are not
conditioned upon the participation in the Tender Offer Credit Facilities of
any other lenders.
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The Tender Offer Credit Facilities will consist of an eighteen-month term
loan of up to $80 million that will be made to Purchaser and an eighteen-month
revolving credit facility of up to $160 million that will be made available to
Parent and its wholly owned subsidiary, IT Corporation ("IT"). The proceeds of
the loan made to Purchaser and a portion of the revolving credit loans made to
Parent under the Tender Offer Credit Facilities will be used to finance the
Offer. Parent will contribute approximately $80 million of proceeds from the
revolving loans to the common equity capital of Purchaser, which funds will be
used by Purchaser, together with the proceeds of the loan to it, to pay for
Shares accepted for payment in the Offer. Existing cash and the balance of the
proceeds of the revolving credit loans made to Parent and IT will be used by
Parent to pay certain expenses and costs related to the Offer, to refinance
IT's existing secured revolving credit facility provided by a group of lenders
for which The Chase Manhattan Bank is agent (under which no amounts were
outstanding at December 31, 1997), to repay certain of IT's secured notes
(which had an aggregate outstanding principal amount of $65 million at
December 31, 1997) held by a group of insurance companies (and to pay certain
costs associated therewith), and to provide working capital for Parent and its
subsidiaries (other than the Company) after consummation of the Offer.
A portion of the revolving credit facility in the amount of $17 million is
reserved to finance permitted future acquisitions by Parent or a subsidiary of
Parent.
The Tender Offer Credit Facilities will be secured by a security interest in
substantially all of the assets of Parent and its subsidiaries (including the
Shares acquired by Purchaser upon completion of the Offer but excluding the
assets of the Company and its subsidiaries).
The availability of the Tender Offer Credit Facilities is subject to the
following conditions: (i) no amendment, waiver or modification of the terms of
the Offer, the Share Repurchase Agreement, the Company Voting Agreement, the
Parent Voting Agreement and the Option Termination Agreement (as defined
below), other than extension of the Offer for up to 30 business days after the
original Expiration Date; (ii) the board of directors of the Company shall
have recommended that shareholders of the Company tender their Shares, and
shall not have withdrawn or modified such recommendation; (iii) satisfaction
of the conditions to the Offer (including that a number of Shares at least
equal to the Offer Share Number are tendered and not withdrawn), without any
waiver that is not approved by the Agents and the lenders; (iv) the Merger
Agreement shall have been duly authorized (other than by necessary shareholder
approval), executed and delivered by all of the parties thereto; (v) the
absence of any material breach or default under the Merger Agreement; (vi) no
material adverse change with respect to Parent or the Company or their
respective principal operating subsidiaries and (vii) certain other conditions
customary for credit facilities of this type.
Citicorp and BankBoston also have committed to provide credit facilities
(the "Merger Credit Facilities" and, together with the Tender Offer Credit
Facilities, the "Credit Facilities") of up to $425 million that will be
available upon completion of the Merger. The Agents will be agent banks for a
group of lenders to be arranged by the Arrangers. The commitments of Citicorp
and BankBoston are not conditioned upon the participation in the Merger Credit
Facilities of any other lenders. The Merger Credit Facilities will consist of
an eight-year amortizing term loan of up to $225 million and a six-year
revolving credit facility of up to $200 million. (The terms of the commitments
provide that the Arrangers may reallocate up to $50 million from the revolving
credit facility to the term loan.) The proceeds of loans made under the Merger
Credit Facilities will be used to finance the cash consideration, if any, to
be paid in the Merger, to pay related expenses and costs, to refinance
Parent's, IT's and Purchaser's loans outstanding under the Tender Offer Credit
Facility and the Company's loans outstanding under its existing credit
facility provided by a group of lenders for which Citicorp USA, Inc. is agent
(under which no amounts were outstanding as of December 31, 1997 but under
which the Company intends to borrow approximately $60.2 million to fund the
Repurchase), to provide working capital for Parent and its subsidiaries
(including the Company and its subsidiaries) after completion of the Merger,
and for general corporate purposes of Parent and its subsidiaries.
The Merger Credit Facilities will be secured by a security interest in
substantially all of the assets of Parent and its subsidiaries (including the
assets of the Company and its subsidiaries).
The availability of the Merger Credit Facilities is subject to the following
conditions: (i) satisfaction of the conditions to the Merger, without any
waiver that is not approved by the Agents and the lenders; (ii) the Merger
Agreement not having been amended, waived or modified in any material respect
without the approval of the
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Agents and the lenders; (iii) the Merger shall have been consummated in
accordance with the terms of the Merger Agreement, (iv) no material adverse
change with respect to Parent and the Company on a combined basis or their
respective principal operating subsidiaries; and (v) certain other conditions
customary for credit facilities of this type.
Parent expects that the Credit Facilities will provide sufficient
availability to finance the Offer and related costs and expenses and to
provide for Parent's and its subsidiaries' (including, after the Merger, the
Company's) ongoing working capital needs.
Loans made under the Tender Offer Credit Facilities will bear interest at a
rate equal to LIBOR plus 2.50% per annum (or Citibank's base rate plus 1.50%
per annum) through the date that is four months after completion of the Offer.
If the loans continue to be outstanding on that date, the rate will increase
by 1.00% per annum, and will increase by an additional 0.50% per annum on the
corresponding date in each of the six succeeding months, if the loans are
still outstanding on those dates. A commitment fee of 0.50% per annum will
accrue on the entire amount of the Tender Offer Credit Facility from the date
of Citicorp's and BankBoston's commitment until the completion of the Offer,
and thereafter upon the portion of the revolving credit facility that is
unused from time to time. As of January 14, 1998, based on the prevailing one-
month LIBOR rate of 5.61%, the interest rate under the Tender Offer Facility
is estimated to be approximately 8.11%.
The term loans made under the Merger Credit Facilities will bear interest at
a rate equal to LIBOR plus 2.50% per annum (or Citibank's base rate plus 1.50%
per annum), and revolving loans made under the Merger Credit Facilities will
bear interest at a rate equal to LIBOR plus 2.00% per annum (or Citibank's
base rate plus 1.00% per annum), through the date that is six months after
completion of the Merger, with adjustments thereafter based on the ratio of
Parent's consolidated total debt to consolidated EBITDA. A commitment fee of
0.375% per annum will accrue on the maximum amount of the Merger Offer Credit
Facility (less the amount of the Tender Offer Credit Facility) from May 1,
1998 (if the Merger has not then occurred) to the earlier of the date on which
the Merger is completed or the termination of the commitment for the Merger
Credit Facility (which occurs 270 days after completion of the Offer). After
completion of the Merger a commitment fee will accrue on the portion of the
revolving credit facility that is unused from time to time at a rate initially
equal to 0.375% per annum, subject to adjustment based on the ratio of
Parent's consolidated total debt to consolidated EBITDA.
The loans made under the Tender Offer Credit Facilities will not amortize,
and will be payable in full at their maturity if not refinanced with proceeds
of loans made under the Merger Credit Facility. The term loan made under the
Merger Credit Facility will amortize on a quarterly basis in aggregate annual
installments of $2,250,000 for the first six years after the Merger, with the
remainder payable in eight equal quarterly installments in the seventh and
eighth years after the Merger. Parent will also be required to prepay the
loans under the Credit Facilities with the net proceeds of asset sales and
certain debt and equity financings, and loans under the Merger Credit
Facilities will be required to be prepaid with a portion of Parent's
consolidated excess cash flow.
The Credit Facilities will include certain representations and warranties
and covenants customary for facilities of this type, including: (i) financial
covenants consisting of a minimum fixed charge coverage ratio, a minimum
interest expense coverage ratio, a maximum leverage ratio, a minimum liquidity
requirement, a minimum EBITDA requirement (applicable only in 1998), a maximum
capital expenditure limitation and a minimum net worth requirement;
(ii) maintenance of cash concentration accounts and lockboxes,
(iii) preservation of corporate existence, compliance with laws, payment of
taxes, maintenance of properties and insurance and financial and other
reporting requirements; and (iv) limitations (subject to certain exceptions)
on indebtedness, guarantees, liens, lease obligations, mergers and
acquisitions, sales of assets and other fundamental changes, joint ventures
and other investments, transactions with affiliates, dividends and stock
repurchases and redemptions, prepayment or modification of debt, and certain
hedging obligations. The Credit Facilities will also include customary events
of default, including payment defaults, breaches of representations and
warranties,
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covenant defaults, cross defaults to other indebtedness, bankruptcy events,
defaults in satisfaction of money judgments, material adverse change, certain
events under the Employee Retirement Income Security Act of 1974, as amended, a
change of control of the Parent and, with respect to the Tender Offer Facility,
the failure by the Company to recommend to its shareholders approval of the
Merger Agreement or to take all lawful action to solicit such approval or the
failure of Parent to recommend to its stockholders approval of the issuance of
Parent Common Stock in the Merger or to take all lawful action to solicit such
approval.
Purchaser's obligation to purchase Shares tendered pursuant to the Offer is
not subject to financing.
Except as disclosed herein with respect to the Merger Credit Facility, Parent
has no plans or arrangements to finance or repay the Tender Offer Credit
Facilities.
10.CERTAIN TRANSACTIONS BETWEEN PARENT AND THE COMPANY.
In 1991, Parent and the Company formed IT-OHM, a Louisiana joint venture (the
"Joint Venture"), in order to bid on the cleanup of the Bayou Bonfouca, located
in Slidell, Louisiana, and a National Priorities List Superfund site (the
"Site").The Company contributed approximately $2.0 million in cash to and held
a 32% ownership interest in the Joint Venture. Parent contributed certain
assets used in the clean-up of the Site and held a 68% ownership interest in
the Joint Venture. The Joint Venture successfully submitted a lump sum/unit
price bid of approximately $109.0 million for the clean-up of the Site which
included (i) dredging the bottom of the Site to gather contaminated sediments;
(ii) dewatering the Site's contaminated sediments with the Company's dewatering
treatment technology; (iii) feeding such sediments into Parent's Hybird Thermal
Treatment System technology; and (iv) placing the treated sediments, soils and
dirt into an on-site landfill. Although the Joint Venture successfully
completed the project, during the course of the job, it negotiated certain
changes in its client contract. As a result of these changes, the total gross
revenue derived from the project was adjusted to approximately $120.0 million.
Currently, the Joint Venture is engaged in negotiations with the U.S. Army
Corps of Engineers with regard to the resolution of certain final changes in
the approximate amount of $1.5 million in connection with services performed by
the Joint Venture in the process of cleaning up the Site.
11. CONTACTS WITH THE COMPANY; BACKGROUND OF THE OFFER AND THE MERGER.
On November 20, 1996, the Parent stockholders approved an investment in the
aggregate amount of $45,000,000 by Carlyle in exchange for shares of newly
issued Parent Preferred Stock and warrants to purchase 1,250,000 additional
shares of Parent Common Stock. Since that time, Parent has been pursuing
expansion and diversification opportunities through the potential acquisition
of other companies in the environmental consulting, engineering and remediation
industry in order to create long-term value for its stockholders. As part of
this strategy, at a meeting in July 1997 with members of the management of
Parent and WMX, and representatives from Carlyle and Parent's financial
advisor, Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"), Parent
expressed an interest in WMX's various investments in the environmental
consulting, engineering and remediation industry. During the meeting, the
participants discussed WMX's investment in approximately 35% of the outstanding
Shares. Management of Parent indicated they believed there would be significant
cost savings created in a combination of Parent and the Company and offered to
explain more fully the benefits of a combination to the Company's Board.
At a subsequent meeting in August 1997 with the same participants, the
management of Parent expressed an interest in pursuing a combination of Parent
and the Company in which Parent would issue stock in exchange for the
outstanding stock of the Company at existing market prices and described the
anticipated synergies that could be achieved as a result of such a combination.
The representatives of WMX agreed to convey Parent's interest in pursuing a
combination with the Company to the Company's Board. In August 1997,
representatives of WMX contacted DLJ and indicated that the Company's Board
might be interested in exploring further a potential combination with several
conditions: (i) the estimated synergies that Parent had described would need to
be evaluated (ii) any transaction proposed would need to offer a premium for
the Company and have a significant cash component and (iii) all further
discussions must be conducted through the Company's management and its
representatives.
During the month of September the respective management teams of Parent and
the Company and representatives from Carlyle and DLJ had numerous discussions
regarding the likely synergies that could be
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created in a combination of Parent and the Company. At a meeting in October
1997, representatives of Parent and the Company met to discuss the potential
synergies created by a combination. Both managements indicated that they
believed significant synergies could be achieved and that a combination should
be explored.
During October 1997, representatives of DLJ and Union Bancaire Privee
International, Inc. ("UBP"), a financial advisor to the Company, had several
discussions regarding potential transaction structures and the valuation of
the Company. DLJ indicated to UBP that Parent would consider offering $10.50 a
share for the Company, with 50% of the consideration consisting of Parent
Common Stock and 50% of the consideration consisting of cash. UBP indicated
that the Company's Board would review Parent's indication of interest at its
regularly scheduled Board meeting on October 30, 1997. Following the Board
meeting, UBP indicated to DLJ that the Company's Board considered any
transaction at the level of Parent's interest to be inadequate and that a
greater premium and cash component would be required for the Company to be
interested in negotiating a transaction. After numerous telephonic discussions
and several meetings in November 1997 between representatives of the Company,
UBP, Parent, Carlyle and DLJ, Parent proposed, subject to due diligence of the
Company by Parent and its lenders and to negotiation of and agreement upon a
definitive merger agreement, that it would be prepared to offer $8.00 in cash
and, subject to being able to undertake significant due diligence, 0.424
shares of Parent Common Stock for each share of Company Common Stock, and
Parent would allow the Company to distribute to its shareholders its ownership
in NSC.
The Company agreed to move forward on the foregoing basis. On December 8,
1997, the Company and Parent began conducting due diligence sessions.
Participants in these sessions included representatives of the Company's and
Parent's management and financial, legal and accounting advisers as well as
representatives from Parent's proposed lending group. In December 1997, the
Company, Parent and Carlyle and their respective legal and financial advisors
began negotiating a definitive merger agreement.
At a Parent Board of Directors meeting on January 9, 1998, certain members
of Parent's management presented a comprehensive analysis of the proposed
transaction. The presentation included an overview of the Company, as well as
a description of various aspects of its operations, financial condition and
market position. Parent's Board of Directors also discussed the anticipated
synergies that might be realized from a combination with Parent, consisting
primarily of certain corporate and operational overhead reductions, bid and
proposal and marketing cost reductions and enhanced staff utilization. During
the January 9, 1998 Parent Board of Directors meeting, DLJ described the
valuation methodologies used in connection with its preliminary evaluation of
the fairness to Parent, from a financial point of view, of the consideration
to be paid by Parent for the Company. Parent's Board of Directors conducted a
review with counsel of the provisions of the proposed draft of the Merger
Agreement including the termination fee payable in the event the Merger
Agreement transactions are not consummated for reasons specified in the Merger
Agreement and the terms and provisions of the proposed financing for the
transaction. Parent's Board of Directors also received a report on the due
diligence review conducted with respect to the Company. Management was
directed to continue negotiations with the Company and with Parent's lender
group to attempt to finalize the terms of both the Merger Agreement and an
acceptable financing commitment.
At a meeting held on January 14, 1998, management presented a report on the
final negotiation of open issues and DLJ provided to the Board its opinion
that the consideration to be paid by Parent for the Company is fair to Parent,
from a financial point of view. Parent's Board of Directors then unanimously
approved the Merger Agreement and the transactions contemplated thereby,
including the Merger and the Offer.
On January 14, 1998, the Board of Directors of the Company met to consider
the results of the negotiation process and, after considering information
provided by the Company's management, counsel and financial advisors,
unanimously (i) approved the Offer and the Merger and determined that the
transactions contemplated by the Merger Agreement, including without
limitation the Offer and the Merger, are fair to, and in the best interests
of, the Company and its shareholders, and (ii) voted to enter into the Merger
Agreement, the Repurchase Agreement, the Company Voting Agreement, the Parent
Voting Agreement and the Option Termination Agreement, and to recommend that
shareholders accept the Offer and tender their Shares.
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12. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY; THE MERGER
AGREEMENT; THE COMPANY VOTING AGREEMENT; THE PARENT VOTING AGREEMENT; THE
OPTION TERMINATION AGREEMENT; APPRAISAL RIGHTS.
PURPOSE AND STRUCTURE
The purpose of the Offer and Repurchase is for Purchaser to acquire a
substantial majority of the outstanding Shares. Upon completion of the Offer
and the Repurchase, it is expected that Purchaser will own approximately 63%
of the outstanding Shares. The purpose of the Merger is for Parent to acquire
the remaining equity interest in the Company not acquired pursuant to the
Offer and as a result of the Repurchase. Upon consummation of the Merger, the
Company will become a direct, wholly-owned subsidiary of Parent. The
acquisition of Shares has been structured as a cash tender offer followed by a
stock-for-stock merger in order to provide a prompt and orderly transfer of
ownership of the equity interest in the Company held by the Company's
shareholders (excluding the Excluded Shares) from them to Parent.
Under the OGCL, the approval of the Company's Board and the affirmative vote
of the holders of a majority of the outstanding Shares are required to approve
and adopt the Merger Agreement and the transactions contemplated thereby,
including the Merger. The Joint Proxy Statement/Registration Statement
containing detailed information concerning the Merger will be furnished to
shareholders of the Company in connection with a special meeting to be called
by the Company to vote on the Merger. In the Merger Agreement, the Company has
agreed to take all action necessary to convene a special meeting of its
shareholders as promptly as practicable after the consummation of the Offer
for the purpose of considering and taking action on the Merger Agreement and
the transactions contemplated thereby.
The Board of Directors of the Company has unanimously determined that the
transactions contemplated by the Merger Agreement are in the best interests of
the Company Shareholders, and have approved and adopted the Merger Agreement
and the transactions contemplated thereby, and the only remaining required
corporate action of the Company is the approval and adoption of the Merger
Agreement and the transactions contemplated thereby by the holders of a
majority of the outstanding Shares. If Purchaser acquires 13,933,000 Shares in
the Offer and the Repurchase is consummated (which is a condition to the
Offer), it will have sufficient voting power to cause the approval and
adoption of the Merger Agreement and the transactions contemplated thereby
without the affirmative vote of any other shareholder of the Company.
Purchaser has agreed that all Shares owned by it and any of its affiliates
will be voted in favor of the Merger Agreement and the transactions
contemplated thereby.
Certain shareholders of the Company, WMX, James L. Kirk, Joseph R. Kirk and
H. Wayne Huizenga, who in the aggregate beneficially own approximately 55% of
the Company's outstanding voting securities, have entered into the Company
Voting Agreement with the Company and Parent providing that each of them will,
among other things, (i) tender or cause to be tendered in the Offer all (or,
in the case of WMX, 2,142,141) Shares beneficially owned by them, (ii) vote
all Shares and any other shares of capital stock of the Company held by them
to facilitate the consummation of the Merger, including the approval of the
Merger Agreement and the transactions contemplated thereby, and in favor of
Parent's designees to the Company's Board (the "Parent Representatives"),
(iii) not transfer or otherwise dispose of any of the Shares or any other
shares of capital stock of the Company beneficially owned by them or any other
shares of capital stock of the Company acquired by them prior to the Effective
Time of the Merger, and (iv) deliver to Parent an irrevocable proxy to vote
the Shares beneficially owned by them and any other shares of capital stock of
the Company acquired by them prior to the Effective Time, in connection with
the transactions contemplated by the Merger Agreement.
The Merger Agreement also provides that if shareholder approval of the
issuance of shares of Parent Common Stock in connection with the Merger is
required under the rules of the NYSE, Parent will take all action necessary to
convene a meeting of its shareholders as promptly as practicable to consider
and vote upon such issuance. Carlyle, the beneficial owner of approximately
38% of Parent's outstanding voting securities, has entered into a voting
agreement (the "Carlyle Voting Agreement") with Parent and the Company
providing that Carlyle will, among other things, (i) vote the Parent Preferred
Stock and any other shares of capital stock of
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Parent beneficially owned by them to facilitate the consummation of the
Merger, including the approval of the issuance of Parent Common Stock in
connection with the Merger and the transactions contemplated thereby, (ii) not
to transfer or otherwise dispose of any of the Parent Preferred Stock, or any
other shares of capital stock of Parent beneficially owned by them, or any
other shares of capital stock of Parent acquired by Carlyle prior to the
Effective Time, and (iii) deliver to the Company an irrevocable proxy to vote
the shares of Parent Preferred Stock beneficially owned by them, and any other
shares of capital stock of Parent acquired by them prior to the Effective
Time, with respect to the approval of the issuance of the Parent Company Stock
in connection with the Merger. Purchaser reserves the right to purchase
additional Shares in the open market after termination of the Offer.
PLANS FOR THE COMPANY
It is anticipated that, following the consummation of the Offer, the
Company's business will be integrated into Parent's operations. Parent plans
to reorganize the Company into Parent's existing business line/project
delivery organizational structure, which is expected to produce administrative
and operational efficiencies and to result in the elimination of redundant
positions in the combined organization and the closure or consolidation of
certain Parent and Company locations. Such integration and reorganization is
anticipated to result in approximately $25 million in net cost reductions,
taking into account possible loss of revenue, with approximately 50% of the
cost reductions expected to be realized in calendar 1998. Pursuant to the
Merger Agreement, upon consummation of the Offer, Parent will be entitled to
designate a number of directors to the Company's board such that the Parent
Representatives represent the percentage of Company directors not less than
equal to the percentage of the outstanding Shares owned by Purchaser, provided
that at all times prior to the Effective Time of the Merger, the Company's
Board shall contain at least two members who are neither officers,
shareholders, designees nor affiliates of Parent or Purchaser. See "The Merger
Agreement--Board Representation." Therefore, Parent will be entitled to
designate a majority of the Company's Board and will control the Company,
subject to certain limitations set forth in the Merger Agreement. Except for
the Merger and as otherwise as described in this section and elsewhere herein,
Purchaser and Parent have no current plans or proposals that would result in
an extraordinary corporate transaction, such as a merger, reorganization, or
consolidation of the Surviving Corporation with or into any third entity, the
sale or transfer of substantially all of the Surviving Corporation's assets to
a third party, a material change in the Company's capitalization or dividend
structure or any other material changes in the Surviving Corporation's
corporate structure or business to reorganize the Company. Following the
consummation of the Offer, Parent intends to continue its evaluation and
review the Surviving Corporation's operations and the potential opportunities
for synergies with Parent's operations, and consideration of what, if any,
additional changes would be desirable in light of the results of such
evaluations and reviews.
THE MERGER AGREEMENT
The following summary of certain provisions of the Merger Agreement is
presented only as a summary and is qualified in its entirety by reference to
the Merger Agreement, a copy of which is filed as an exhibit to Parent's
Schedule 14D-1.
The Offer. The Merger Agreement provides for the making of the Offer.
Pursuant to the Offer, each tendering shareholder shall receive the Offer
Price for each Share tendered in the Offer, subject to proration. If more than
13,933,000 Shares are validly tendered prior to the Expiration Date and not
withdrawn, Purchaser will, upon the terms and subject to the conditions of the
Offer, accept 13,933,000 Shares for payment on a pro rata basis, with
adjustments to avoid purchases of fractional Shares, based upon the number of
Shares validly tendered prior to the Expiration Date and not withdrawn by each
tendering shareholder. Because of the difficulty of determining precisely the
number of Shares validly tendered and not withdrawn, if proration is required,
Purchaser would not expect to announce the final results of the proration
until at least seven NYSE trading days after the Expiration Date. Preliminary
results of proration will be announced by press release as promptly as
practicable after the Expiration Date. Holders of Shares may obtain such
preliminary information from the
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Depositary, and may also be able to obtain such preliminary proration
information from their brokers. Purchaser will not pay for any Shares accepted
for payment pursuant to the Offer until the final proration factor is known.
Purchaser's obligation to accept for payment or pay for Shares is subject to
the satisfaction of the conditions that are described in "THE TENDER OFFER--
15. Certain Conditions of the Offer." Purchaser reserves the right to increase
the price per Share payable in the Offer (although it has no present intention
of doing so) or to make any other changes in the terms and conditions of the
Offer, except that, pursuant to the Merger Agreement, unless previously
approved by the Company's Board in writing, Purchaser may not (i) decrease the
Offer Price, (ii) change the form of consideration payable in the Offer, (iii)
decrease the number of Shares sought pursuant to the Offer, (iv) change the
conditions to the Offer set forth in "THE TENDER OFFER--15. Certain Conditions
to the Offer," (v) impose additional conditions of the Offer or amend any
other term of the Offer in any manner adverse to holders of Shares or extend
the Offer if all of the conditions to the Offer are satisfied or waived, or
(vi) waive the condition set forth in paragraph (f) of Section 15 hereof.
Notwithstanding the foregoing, if at any scheduled Expiration Date any of
the conditions to the Offer have not been satisfied or waived, at the request
of the Company from time to time, Purchaser shall extend the Offer for a
period not to exceed ten business days after the previously scheduled
Expiration Date of the Offer; provided, however, in no event shall Purchaser
be obligated to extend the Offer beyond March 31, 1998.
Board Representation. If requested by Parent, the Company will, subject to
compliance with applicable law and promptly following the purchase by
Purchaser of such number of Shares pursuant to the Offer as satisfies the
Minimum Condition, take all actions necessary to cause the Parent
Representatives to become directors of the Company so that the total number of
the Parent Representatives equals not less than the product of the total
number of directors on the Board (giving effect to the directors elected
pursuant to this sentence) multiplied by the percentage that the aggregate
number of Shares beneficially owned by Parent, Purchaser or any other direct
or indirect subsidiary of Parent bears to the total number of Shares then
issued and outstanding rounded up to the next greatest nearest whole number.
In furtherance thereof, the Company will increase the size of the Board, or
use its reasonable best efforts to secure the resignation of directors, or
both, as is necessary to permit the Parent Representatives to be elected to
the Company's Board of Directors; provided that at all times prior to the
Effective Time, the Company's Board of Directors shall consist of at least two
members who are neither officers, shareholders, designees nor affiliates of
Parent, Purchaser or any other direct or indirect subsidiaries of Parent. At
such time, the Company, if so requested, will use its reasonable best efforts
to cause persons designated by Parent to constitute the same percentage of
each committee of such board, each board of directors of each subsidiary of
the Company and each committee of each such board (in each case to the extent
of the Company's ability to elect such persons). The Company's obligations to
appoint designees of Parent to the Board of Directors of the Company shall be
subject to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder. Parent intends to choose the Parent Representatives from the
executive officers and directors of Parent and Purchaser listed in Schedule II
hereto.
Promptly after the Effective Time of the Merger, Parent will increase the
size of its Board of Directors or exercise its reasonable best efforts to
secure the resignation of present directors in order to cause two nominees of
the Company, Herbert A. Getz and Richard W. Pogue (the "Nominees"), to be
appointed to Parent's Board of Directors and, subject to fiduciary obligations
under applicable law, will use its reasonable best efforts to cause the
Nominees to be elected (or remain in office) as directors of Parent (divided
as evenly as is possible among classes of directors) at the first annual
meeting of stockholders of Parent with a proxy mailing date after the
Effective Time.
WMX Share Repurchase. Pursuant to the Merger Agreement and the Repurchase
Agreement, the Company will repurchase from WMX 5,235,381 Shares for $11.50
per Share in cash concurrently with the payment for Shares pursuant to the
Offer. In addition, pursuant to the Repurchase Agreement, WMX has agreed not
to tender more than 2,142,141 Shares in the Offer, which, in conjunction with
the Repurchase, will result in WMX receiving cash and Parent Common Stock in
the same proportion as other Company shareholders, assuming all outstanding
Shares (other than 7,525,859 Shares held by WMX) are tendered in the Offer.
See "--The Repurchase Agreement."
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The Merger. As soon as practicable after the satisfaction or waiver of the
conditions to the Merger, Purchaser will be merged with and into the Company,
as a result of which the separate corporate existence of Purchaser will cease
and the Company will continue as the Surviving Corporation. The Effective Time
will occur at the date and time that a certificate of merger, in such form as
is required by, and executed in accordance with, the relevant provisions of
the OGCL (the "Certificate of Merger"), is filed with the Secretary of State
of the State of Ohio. The Surviving Corporation shall continue its corporate
existence under the laws of the State of Ohio. The Articles of Incorporation
(the "Articles") of the Purchaser, in effect at the Effective Time will be the
Articles of Incorporation of the Surviving Corporation until duly amended in
accordance with the terms thereof and the OGCL, except that the Article FIRST
of the Articles shall be amended such that the name of the Surviving
Corporation shall be "OHM Corporation." The Regulations of Purchaser in effect
at the Effective Time shall be the Regulations of the Surviving Corporation.
The directors of Purchaser and the officers of the Company at the Effective
Time will be the directors and officers, respectively, of the Surviving
Corporation until their successors are duly elected or appointed and
qualified. It is expected that, immediately following the Effective Time, the
Board of Directors of the Surviving Corporation will appoint Anthony J.
DeLuca, President and Chief Executive Officer of Parent, as President and
Chief Executive Officer of the Surviving Corporation.
Consideration to Be Paid in the Merger. At the Effective Time, each issued
and outstanding Share (other than Excluded Shares), will be cancelled and
converted automatically into the right to receive 1.394 (the "Exchange Ratio")
fully paid and nonassessable shares of the Parent Common Stock; provided,
however, that if the aggregate number of Shares accepted for payment and paid
for pursuant to the Offer and purchased from WMX pursuant to the Repurchase
Agreement is less than 19,168,381 Shares (the "Cash Share Number") (the number
of Shares so paid for and purchased being referred to herein as the "Purchased
Share Number"), then the Exchange Ratio shall be adjusted (the "Adjusted
Exchange Ratio") and shall be equal to the product obtained by multiplying the
Exchange Ratio by a fraction, (A) the numerator of which is equal to (x) the
Final Outstanding Number plus (y) the Purchased Share Number minus (z) the
Cash Share Number and (B) the denominator of which is the Final Outstanding
Number and (ii) if the Exchange Ratio has been adjusted pursuant to the
immediately preceding proviso, an amount in cash equal to a fraction, (A) the
numerator of which is the product of $11.50 and the amount by which the Cash
Share Number exceeds the Purchased Share Number and (B) the denominator of
which is the Final Outstanding Number.
Employee/Director Stock Options. Pursuant to the Merger Agreement, each
holder of an option to purchase a Share under the Stock Plans (each a "Company
Option") granted under the Company's 1986 Stock Option Plan, Director's
Deferred Fee Plan the Incentive Stock Plan and Nonqualified Stock Option Plan
for Directors (collectively, the "Stock Plans") is required to elect the
treatment of their Company Options under the provisions of the Merger
Agreement. Company Option holders may elect that, at the Effective Time, each
Company Option, whether vested or unvested, exercisable or unexercisable,
shall be converted into the right to receive cash consideration equal to the
product of (x) (1) the excess of $11.50 over (2) the then current exercise
price per Share subject to such Company Option and (y) the number of Shares
subject to such Company Option, payable to the holder of such Company Option
as soon as practicable following the Effective Time; provided, that the
Company shall be entitled to withhold from such consideration any amounts
required to be withheld by applicable law. Each Company Option to which this
paragraph applies will be cancelled and will cease to exist by virtue of such
payment.
Alternatively, Company Option holders may elect that, at the Effective Time,
each Company Option, whether vested or unvested, exercisable or unexercisable,
be converted into an option to acquire, on the same terms and conditions as
were applicable under such Company Option, a number of shares of Parent
Company Stock equivalent to the number of Shares that could have been
purchased immediately prior to the Effective Time under such Company Option
multiplied by the Exchange Ratio (without regard to any adjustment thereof and
rounded up to the nearest whole number of shares of Parent Company Stock), at
a price per share of Parent Company Stock (rounded up to the nearest whole
cent) equal to (y) the aggregate exercise price for the Shares otherwise
purchasable pursuant to such Company Option divided by (z) the Exchange Ratio
(without regard to any adjustment thereof); provided, however, that in the
case of any Company Option to which Section 422 of
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the Internal Revenue Code of 1986, as amended (the "Code") applies, the option
price, the number of shares purchasable pursuant to such option and the terms
and conditions of exercise of such option shall be determined in accordance
with the foregoing, subject to such adjustments as are necessary in order to
satisfy the requirements of Section 424(a) of the Code. Pursuant to the Merger
Agreement, Parent will assume each Company Option to which this second
election applies in accordance with the terms of the Stock Plans under which
such Company Option was issued and the stock option agreement by which it is
evidenced.
At or prior to the Effective Time, Parent shall take all corporate action
necessary to reserve for issuance a sufficient number of shares of Parent
Common Stock for delivery upon exercise of Company Options assumed by it in
accordance with the Merger Agreement.
H. Wayne Huizenga Options. Pursuant to a letter agreement, dated January 15,
1998 (the "Option Termination Agreement"), between the Company and H. Wayne
Huizenga, who holds an option to purchase up to 620,000 Shares at an exercise
price of $10.00 per Share and an option to purchase up to 380,000 Shares at an
exercise price of $12.00 per Share, such options will be terminated on the
earliest to occur of (i) the acceptance by Purchaser of Shares for payment in
the Offer, or (ii) the Effective Time, in exchange for the payment by the
Company to Mr. Huizenga of $1,500,000 in cash. See "--Option Termination
Agreement."
WMX Warrants. WMX holds warrants to purchase 700,000 Shares at an exercise
price of $15.00 per Share. Pursuant to the Merger Agreement and the Repurchase
Agreement, such Warrants will be cancelled at the Effective Time without the
payment of any separate consideration. See "--The Repurchase Agreement."
Representations and Warranties. The Merger Agreement contains various
representations and warranties of the parties thereto. These include
representations and warranties of the Company, Purchaser and Parent with
respect to corporate existence and power, capitalization, subsidiaries,
corporate authorization relative to the Merger Agreement, governmental
consents and approvals, Commission reports, financial statements, absence of
certain changes or events, litigation and liabilities, compliance with laws,
environmental laws, documents relating to the Offer and the Merger and other
matters. No representations or warranties made by the Company, Parent or
Purchaser will survive beyond the Effective Time, and no covenants or
agreements made in the Merger Agreement will survive beyond the Effective Time
except for those covenants or agreements which by their terms contemplate
performance after the Effective Time. Certain of the representations and
warranties set forth in the Merger Agreement will not be breached unless the
matter constituting the breach, individually or in the aggregate with all such
other breaches, would have, or be reasonably likely to have, a material
adverse effect on the financial conditions, properties, business or results of
operations of the Company and its subsidiaries taken as a whole (a "Company
Material Adverse Effect") or Parent or its subsidiaries taken as a whole (a
"Parent Material Adverse Effect").
THE REPURCHASE AGREEMENT
In connection with the Merger Agreement, the Company, Parent, WMX and Rust
entered into the Repurchase Agreement, pursuant to which the Company will
repurchase from WMX 5,235,381 Shares for $11.50 per Share concurrently with
the payment to the Depositary of the aggregate purchase price for all Shares
purchased in the Offer. In addition, pursuant to the Repurchase Agreement, WMX
has agreed not to tender more than 2,142,141 shares in the Offer. The effect
of the Repurchase will be to increase the aggregate number of Shares acquired
for cash in connection with the transactions contemplated by the Merger
Agreement, make it possible for the Merger Consideration to consist solely of
shares of Parent Common Stock, and result in WMX receiving cash and Parent
Common Stock in the same proportion as other shareholders of the Company,
assuming all outstanding Shares (other than 7,525,859 Shares held by WMX) are
tendered in the Offer. Consummation of the Repurchase is subject to the
satisfaction or waiver of certain conditions, including (i) the payment by
Purchaser for Shares pursuant to the Offer concurrently with the Repurchase,
and (ii) the absence of any statutes, rules, regulations, judgments, decrees,
injunctions or other orders prohibiting consummation of the Transactions or
the transactions contemplated by the Repurchase Agreement.
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Pursuant to the Repurchase Agreement, WMX has agreed, among other things,
(i) to vote all Shares held by it (A) in favor of adoption of the Merger
Agreement and the consummation of the Transactions, (B) against any action or
agreement that would compete with, impede, interfere with or inhibit the
timely consummation of the Transactions, (C) against any action or agreement
that would result in a breach of any covenant, representation or warranty or
any other obligation of the Company under the Merger Agreement and (D) against
any merger, consolidation, business combination, reorganization,
recapitalization, liquidation or sale or transfer of any material assets of
the Company or its subsidiaries, except the Transactions, (ii) to deliver to
Parent an irrevocable proxy to vote the Shares held by WMX in a manner
consistent with clause (i) of this paragraph, (iii) not to take certain
actions, or encourage or assist any other party in taking any action, which
would compete with, impede, interfere with or attempt to discourage the
Transactions or inhibit timely consummation of the Transactions and (iv) not
to transfer or otherwise dispose of Shares or Warrants held by WMX during the
term of the Repurchase Agreement, except in accordance therewith. In addition,
pursuant to the Repurchase Agreement, the Company and WMX have agreed (w) to
make certain amendments to the Standstill and Non-Competition Agreement among
the Company, WMX and Rust which will, as of the consummation of the
Repurchase, terminate WMX's agreement not to compete with, or acquire any
interest in any entity that competes with the Company in certain businesses,
(x) to terminate the Warrants, (y) to provide for the termination WMX's
guaranty of the indebtedness incurred by the Company pursuant to the Company's
revolving credit agreement, and (z) terminate various miscellaneous agreements
and arrangements to which WMX and the Company are parties. The Repurchase
Agreement will terminate automatically upon the termination of the Merger
Agreement, and may be terminated (p) by the Company, if WMX shall have failed
to comply with any of its covenants or agreements contained in the Repurchase
Agreement, or (q) by WMX, if the Company shall have failed to comply with any
of its covenants or agreements contained in the Repurchase Agreement.
THE COMPANY VOTING AGREEMENT
In connection with the Merger Agreement, Parent, the Company and the Company
Shareholders (who hold approximately 20% of the outstanding Shares) entered
into the Company Voting Agreement, pursuant to which the Company Shareholders
have agreed, among other things, (i) to vote all Shares held by them (A) in
favor of the adoption of the Merger Agreement and in favor of consummation of
the Transactions, (B) in favor of each of the Parent Representatives, (C)
against any action or agreement that would compete with, impede, interfere
with, attempt to discourage the Transactions or inhibit the timely
consummation of the Transactions (D) against any action or agreement that
would result in a breach of any covenant, representation or warranty or other
obligation of the Company under the Merger Agreement and (E) against any
merger, consolidation, business combination, reorganization, recapitalization,
liquidation or sale or transfer of any material assets of the Company or its
subsidiaries that could compete with, impede, interfere with or attempt to
discourage the Transactions or inhibit the timely consummation of the
Transactions, (ii) to deliver to Parent an irrevocable proxy to vote the
Shares held by the Company Shareholders in a manner consistent with clause (i)
of this paragraph, (iii) not to take certain actions, or encourage or assist
any other party in taking any action, which would compete with, impede,
interfere with or attempt to discourage the Transactions or inhibit the timely
consummation of the Transactions and (iv) not to transfer or otherwise dispose
of Shares held by the Company Shareholders during the term of the Company
Voting Agreement except for tenders into the Offer and except in accordance
with the provisions of the Company Voting Agreement. The Company Voting
Agreement will terminate automatically upon the termination of the Merger
Agreement or upon the Effective Time, but is not otherwise terminable.
THE PARENT VOTING AGREEMENT
In connection with the Merger Agreement, Parent, the Company and the Parent
Stockholders (which are entitled to cast approximately 38% of the Parent's
voting securities) entered into the Parent Voting Agreement, pursuant to which
the Parent Stockholders have agreed, among other things, (i) to vote all
shares of Parent Preferred Stock held by them (A) in favor of the issuance of
shares of Parent Common Stock in connection with the Merger, (B) against any
action or agreement that would compete with, impede, interfere with or attempt
to
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discourage the Transactions or inhibit the timely consummation of the
Transactions, (C) against any action or agreement that would result in a
breach of any covenant, representation or warranty or any other obligation of
Parent or Purchaser under the Merger Agreement, and (D) against any merger,
consolidation, business combination, reorganization, recapitalization,
liquidation or sale or transfer of any material asset of Parent, Purchaser or
their respective subsidiaries that could compete with, impede, interfere with
or attempt to discourage the Transactions or inhibit the timely consummation
of the Transactions, (ii) to deliver to the Company an irrevocable proxy to
vote the shares of Parent Preferred Stock held by the Parent Stockholders in a
manner consistent with clause (i) of this paragraph, (iii) not to take certain
actions, or encourage or assist any other party in taking any action, which
would compete with, impede, interfere with or attempt to discourage the
Transactions or inhibit the timely consummation of the Transactions, and (iv)
not to transfer or otherwise dispose of shares of Parent Preferred Stock held
by the Parent Stockholders during the term of the Parent Voting Agreement,
except in accordance therewith. The Parent Voting Agreement will terminate
automatically upon the termination of the Merger Agreement or upon the
Effective Time, but is not otherwise terminable.
THE CONFIDENTIALITY AGREEMENT
Pursuant to a letter agreement, dated September 25, 1997 (the
"Confidentiality Agreement"), the Company and Parent agreed to disclose to
each other certain non-public or confidential information in order to evaluate
a possible combination of the two companies. Pursuant to the Confidentiality
Agreement, the Company and Parent agreed not to use or disclose such
confidential information for a period of 24 months after the last receipt of
any material.
CONDUCT OF BUSINESS
The Company. The Company has agreed that, prior to the date on which the
Parent Representatives are elected to the Company's Board and represent at
least a majority of such directors (unless Parent shall otherwise approve in
writing, which approval shall not be unreasonably withheld or delayed, and
except as otherwise expressly contemplated by the Merger Agreement), (i) the
business of the Company and its subsidiaries will be conducted in the ordinary
and usual course consistent with past practice, (ii) the Company and its
subsidiaries shall use all reasonable best efforts to preserve its business
organization intact and maintain its existing relations and goodwill with
customers, suppliers, distributors, creditors, lessors, employees and business
associates; (iii) the Company will not, among other things, (a) issue, sell,
pledge, dispose of or encumber any capital stock in any of its subsidiaries,
(b) amend its or its subsidiaries' certificate or articles of incorporation or
bylaws or regulations, (c) split, combine or reclassify the outstanding
capital stock of the Company or its subsidiaries, (d) declare, set aside or
pay any dividend payable in cash, stock or property in respect of any capital
stock other than dividends from its direct or indirect wholly-owned
subsidiaries, or (e) amend the terms of, repurchase, redeem or otherwise
acquire, or permit any of its subsidiaries to purchase or otherwise acquire,
except in connection with the Stock Plans or the Stock Repurchase Agreement,
any shares of its capital stock or any securities convertible into or
exchangeable or exercisable for any shares of its capital stock and
(iv) neither the Company nor any of its subsidiaries will (a) issue, sell,
pledge, dispose of or encumber any shares of, or securities convertible into
or exchangeable or exercisable for, or options, warrants, calls, commitments
or rights of any kind to acquire, any shares of its capital stock of any class
of any voting debt or any other property or assets (other than Shares issuable
pursuant to Company Options outstanding on the date hereof under the Stock
Plans or upon conversion of outstanding debentures or exercise of the
Warrants, (b) other than in the ordinary and usual course of business
consistent with past practice, transfer, lease, license, guarantee, sell,
mortgage, pledge, dispose of or encumber any other property or assets
(including capital stock of any of its subsidiaries) or incur or modify any
indebtedness or other liability in excess of $1,000,000, (c) make any loans or
advances to any person, except to employees in the ordinary course of business
consistent with past practice, (d) make or authorize or commit to any capital
expenditures other than in the ordinary and usual course of business
consistent with past practice or in amounts less than $200,000 individually
and $1,000,000 in the aggregate or, by any means, make any acquisition of, or
investment in, assets or stock of any other Person or entity, (e) increase the
salary, wage, bonus or other compensation of any employee except increases
occurring in the ordinary and usual
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course of business consistent with past practice (which shall include normal
periodic performance reviews and related compensation and benefit increases);
(f) enter into new employment agreements or severance agreement with any
director, officer or other employee of the Company or its subsidiaries except
for agreements with certain employees and for renewal of any existing
agreement by operation of its terms in the ordinary and usual course of
business consistent with post practice, (g) terminate, establish, adopt, enter
into, make any new grants or awards under, or amend or otherwise modify any
compensation or benefit plan, (h) change any accounting principles or
practices or cash policies or procedures, other than as required by the GAAP,
(i) compromise or settle any material claims or litigation, except for
settlements or compromises made in the ordinary course of business consistent
with past practice involving payments by the Company or any of its
subsidiaries not in excess of $200,000 individually or $1,000,000 in the
aggregate, or, except in the ordinary and usual course of business consistent
with past practice, modify, amend or terminate any of its material contracts
or waive, release or assign any material rights or claims, (j) make a tax
election or agree to an extension of a statute of limitations for any
assessments of federal income tax or material state corporate income or
franchise tax or permit any insurance policy naming it as a beneficiary or
loss-payable payee to be cancelled or terminated except in the ordinary and
usual course of business, (k) neither it nor its subsidiaries shall take any
action that would be reasonably likely to diminish the value to the Company of
the net operating losses set forth in the September 30, 1997 financial
statements included in the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1997, except for the consummation of the
Transactions; and (l) take any action that would be reasonably likely to
impede or delay the Offer or the Merger or adversely affect the parties'
ability to consummate the Offer or the Merger or (m) enter into any contract,
agreement, commitment or arrangement with respect to any of the foregoing.
Parent. Parent has agreed that as to itself and its subsidiaries, prior to
the Effective Time (unless the Company shall otherwise approve in writing,
which approval shall not be unreasonably withheld or delayed, and except as
otherwise expressly contemplated by the Merger Agreement, (i) the business of
the Parent and its subsidiaries will be conducted in the ordinary and usual
course consistent with past practice, (ii) it will not (a) amend its charter
documents, articles or those of its subsidiaries; (b) split, combine or
reclassify its outstanding shares of capital stock or any of its subsidiaries;
or (c) declare, set aside or pay any dividend payable in cash, stock or
property in respect of any capital stock other than dividends from its direct
or indirect wholly-owned subsidiaries and other than regular quarterly cash or
payment in kind dividends on the Parent Preferred Shares, and (iii) neither
the Parent nor any of its subsidiaries will take any action that would be
reasonably likely to impede or delay the Offer of the Merger or adversely
affect the parties' ability to consummate the Offer or the Merger, or (iv)
neither Parent nor any of its subsidiaries will authorize or enter into an
agreement to do any of the foregoing.
Indemnification. Pursuant to the Merger Agreement, Parent will, from and
after the Effective Time, indemnify and hold harmless, to the fullest extent
permitted under applicable law (and Parent will also advance expenses as
incurred to the fullest extent permitted under applicable law, provided the
person to whom expenses are advanced provides an undertaking to repay such
advances if it is ultimately determined that such person is not entitled to
indemnification), each present and former director and officer of the Company
and its subsidiaries against any costs or expenses (including reasonable
attorneys' fees), judgments, fines, losses, claims, damages or liabilities
incurred in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative,
arising out of or pertaining to matters existing or occurring at or prior to
the Effective Time, including the transactions contemplated by the Merger
Agreement, which is based or arises out of the fact that such person is or was
a director or officer of the Company or any of its subsidiaries. In addition,
for not less than six years after the Effective Time, Parent and the Surviving
Corporation shall maintain the Company's and its subsidiaries' existing
directors' and officers' liability insurance ("D&O Insurance"), subject to
certain maximum premium payments, provided that Parent may substitute therefor
policies having at least the same coverage and containing terms which are no
less advantageous to the intended beneficiaries thereof than the existing D&O
Insurance with respect to matters existing or occurring at or prior to the
Effective Time or may purchase a six-year extended reporting endorsement under
the Company's existing D&O Insurance.
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Conditions to the Merger. Pursuant to the Merger Agreement, if Purchaser
shall have purchased Shares pursuant to the Offer, the respective obligations
of Parent, Purchaser and the Company to consummate the Merger shall be subject
to the fulfillment of each of the following conditions, any or all of which
may be waived in whole or in part by Parent, Purchaser or the Company, as the
case may be:
(a) No United States or state court or other government entity of
competent jurisdiction shall have enacted, issued, promulgated, enforced or
entered any statute, rule, regulation, judgment, decree, injunction or
other order (whether temporary, preliminary or permanent) which is in
effect and prohibits consummation of the transactions contemplated by the
Merger Agreement (collectively, an "Order");
(b) The Registration Statement shall have been declared effective by the
Commission under the Securities Act. No stop order suspending the
effectiveness of the Registration Statement shall have been issued by the
Commission and no proceedings for that purpose and no similar proceeding in
respect of the Proxy Statement shall have been initiated or threatened by
the Commission;
(c) The Merger Agreement and the Merger shall have been approved and
adopted by the holders of a majority of the Shares, and if required, the
issuance of the Parent Common Stock in the Merger shall have been approved
by the requisite vote of the shareholders of Parent; and
(d) The Parent Common Stock to be issued in connection with the
transactions contemplated by the Merger Agreement, upon exercise of the
Company Options and the Debentures have been approved for listing, subject
to official notice of issuance, on the NYSE.
If Purchaser shall not have purchased Shares pursuant to the Offer, the
respective obligations of Parent and Purchaser to consummate the Merger shall
be subject to the fulfillment of each of the conditions described in
paragraphs (a) through (d) above and the following conditions, any or all of
which may be waived in whole or in part by Parent or Purchaser, as the case
may be:
(e) The representations and warranties of the Company set forth in the
Merger Agreement shall have been true and complete in all material respects
when made and as of the Effective Time, and Parent shall have received a
certificate of the Chief Executive Officer and Chief Financial Officer of
the Company to such effect;
(f) The Company shall have performed in all material respects all
obligations to be performed by it under the Merger Agreement at or prior to
the Effective Time, and Parent shall have received a certificate of the
Chief Executive Officer and Chief Financial Officer of the Company to such
effect;
(g) The waiting period applicable to the consummation of the Merger under
the HSR Act shall have expired or terminated;
If Purchaser shall not have purchased Shares pursuant to the Offer, the
obligations of the Company to consummate the Merger shall be subject to the
fulfillment of each of the conditions set forth in paragraphs (a) through (d)
above and the following conditions, any or all of which may be waived in whole
or in part by the Company:
(h) The representations and warranties of Parent set forth in the Merger
Agreement shall have been true and complete in all material respects when
made and as of the Effective Time, and the Company shall have received a
certificate of the Chief Executive Officer and Chief Financial Officer of
Parent to such effect;
(i) Parent and Purchaser shall have performed in all material respects
all obligations to be performed by them under the Merger Agreement at or
prior to the Effective Time, and the Company shall have received a
certificate of the Chief Executive Officer and Chief Financial Officer of
Parent to such effect;
(j) The waiting period applicable to the consummation of the Merger under
the HSR Act shall have expired or terminated.
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Acquisition Proposals. Pursuant to the Merger Agreement, the Company has
agreed that neither it nor any of its subsidiaries nor any officer, director
or employee of the Company or its subsidiaries will, and that it will direct
and use its best efforts to cause its and its subsidiaries' agents and
representatives (including any investment banker, attorney or accountant
retained by it or any of its subsidiaries) not to, directly or indirectly
through another person or entity, initiate, solicit, encourage or otherwise
facilitate any inquiries or the making of any proposal or offer with respect
to a merger, reorganization, share exchange, consolidation or similar
transaction involving, or any purchase of all or any significant portion of
the assets or any equity securities of, the Company or any of its subsidiaries
(any such proposal or offer being hereinafter referred to as an "Acquisition
Proposal"). The Company has further agreed that neither it nor any of its
subsidiaries nor any of their respective officers, directors, or employees
will, and that it will direct and use its best efforts to cause its and its
subsidiaries' agents and representatives (including any investment banker,
attorney or accountant retained by it or any of its subsidiaries) not to,
directly or indirectly through another person or entity, engage or participate
in any negotiations concerning, or provide any confidential information or
data to, or have any discussions with, any person relating to an Acquisition
Proposal, or otherwise facilitate any effort or attempt to make or implement
an Acquisition Proposal; provided, however, that nothing contained in the
Merger Agreement prevents either the Company or the Company's Board at any
time prior to the purchase of Shares pursuant to the Offer from (A) complying
with Rule 14e-2 promulgated under the Exchange Act with regard to an
Acquisition Proposal; (B) providing information in response to a request
therefor by a person who has made an unsolicited bona fide written Acquisition
Proposal if the Company's Board receives from the person or entity so
requesting such information an executed confidentiality agreement on terms
substantially similar to those set forth in the Confidentiality Agreement; (C)
engaging in any negotiations or discussions with any person or entity who has
made an unsolicited bona fide written Acquisition Proposal; or (D)
recommending such an Acquisition Proposal to the shareholders of the Company,
as the case may be, if and only to the extent that, in each such case referred
to in clause (B), (C) or (D) above, the Company's Board (x) determines in good
faith, taking into consideration the advice of outside legal counsel, that
such action is likely to be required in order for its members to comply with
their fiduciary duties under applicable law and (y) determines in good faith,
after consultation with its financial advisor, that such Acquisition Proposal
is reasonably likely to be consummated, taking into account all legal,
financial and regulatory aspects of the proposal and the person making the
proposal and would, if consummated, result in a transaction more favorable to
the Company's shareholders from a financial point of view than the transaction
contemplated by the Merger Agreement (any such Acquisition Proposal being
referred to herein as a "Superior Proposal"). The Company has agreed to notify
Parent as promptly as reasonably practicable (and in any event not later than
one business day after an inquiry or proposal is made) if any such inquiries
or proposals (including the identity of the party making such inquiry or
proposal and the terms thereof) are received by, any such information is
requested from, or any such negotiations or discussions are sought to be
initiated or continued with, the Company or such representatives.
Termination of the Merger Agreement. The Merger Agreement may be terminated
at any time prior to the expiration or termination of the Offer, whether
before or after shareholder approval thereof, (i) by the mutual consent of
Parent and the Company by action of their respective Board of Directors, (ii)
by either Parent or the Company after June 15, 1998 if prior thereto Purchaser
shall not have purchased Shares pursuant to the Offer and the Effective Time
shall not have occurred; provided, the party seeking termination is not in
violation of the terms of the Merger Agreement, (iii) by Parent if (A) the
Company shall have failed to comply in any material respect with any of the
covenants or agreements contained in the Merger Agreement to be complied with
or performed by the Company at or prior to the expiration or termination of
the Offer, or (B) the Company's Board shall have withdrawn or modified in a
manner adverse to Parent or Purchaser its approval or recommendation of the
Offer, the Merger Agreement or the Merger or the Company's Board, upon request
by Parent, fails to reaffirm such approval or recommendation, or (C) the
condition to the obligations of Parent and Purchaser that the representations
and warranties of the Company set forth in the Merger Agreement shall have
been true and correct when made and as of the Effective Time, is incapable of
being satisfied prior to June 15, 1998; provided that Parent shall not have
breached its obligations under the Merger Agreement, (iv) by the Company if
prior to the expiration or termination of the Offer (A) Parent or Purchaser
fail to comply in any material respect with any of the covenants or agreements
contained in the Merger Agreement to be complied with or performed by Parent
31
<PAGE>
or Purchaser at or prior to the expiration or termination of the Offer, (B)
any representation or warranty of Parent or Purchaser set forth in the Merger
Agreement is inaccurate or incomplete in any material respect when made or
thereafter and remains inaccurate or incomplete in any material respect, (C)
there occurs an event that has or is reasonably likely to have a Parent
Material Adverse Effect, (D) Parent or Purchaser shall have failed to commence
the Offer within the time required pursuant to the terms of the Merger
Agreement, or (E) the Company's Board receives an Acquisition Proposal or an
unsolicited tender or exchange offer for the Shares is commenced, the
Company's Board determines in good faith, taking into consideration the advice
of outside legal counsel, that approval, acceptance or recommendation of such
transaction is likely to be required in order for the members of the Company's
Board to comply with their fiduciary duties under applicable law, and the
Company determines in good faith, after consultation with its financial
advisor, that such transaction is a Superior Proposal, and pays the Parent the
termination fee provided for in the Merger Agreement.
Pursuant to the Merger Agreement, if (i) after the date of the Merger
Agreement, (x) any corporation, partnership, person, other entity or group (as
defined in Section 13(d)(3) of the Exchange Act) other than Parent or
Purchaser or any of their respective subsidiaries or affiliates (collectively,
a "13(d)(3) Person") shall have become the beneficial owner of a majority or
more of the outstanding Shares or any 13(d)(3) Person shall have commenced, or
shall have publicly announced an intention to commence, a bona fide tender
offer or exchange offer for one third or more of the outstanding Shares, (y)
the Share Number Condition shall not have been satisfied and the Offer is
terminated without the purchase of any Shares thereunder, and (z) within one
year following such termination, the Company shall have entered into an
agreement with respect to an Acquisition Proposal with any person or other
entity other than Parent or any person or other entity becomes the beneficial
owner of a majority or more of the outstanding Shares, in either case at a
price per Share of $11.50 or more, (ii) Parent shall have terminated the
Merger Agreement due to the withdrawal or modification, in a manner adverse to
Parent or Purchaser, of the approval or recommendation of the Offer by the
Company's Board, or (iii) the Company shall have terminated the Merger
Agreement as a result of an Acquisition Proposal, then, the Company shall
promptly, but in no event later than two days after the date of such agreement
or the effective time of such termination as the case may be, pay Parent a fee
of $15,000,000, provided that no such fee shall be paid to Parent if Parent
has materially breached any of its obligations under the Merger Agreement.
Amendment and Waiver. The Merger Agreement can only be amended by a written
agreement executed by duly authorized officers of the respective parties.
Expenses. Whether or not the Merger is consummated, all costs and expenses
incurred in connection with the negotiation, execution and delivery of the
Merger Agreement, the Merger and the other transactions contemplated by the
Merger Agreement, including the Offer, shall be paid by the party incurring
such expense, except that expenses incurred in connection with the filing fee
for the Joint Proxy Statement/Registration Statement and the printing and
mailing of such documents shall be borne by the Parent.
APPRAISAL RIGHTS IN THE MERGER
No appraisal rights are available in connection with the Offer. If the
Merger is consummated, however, shareholders of the Company will have certain
rights under the OGCL to dissent and demand appraisal of, and to receive
payment in cash of the fair value of, their Shares. Shareholders who perfect
such rights by complying with the procedures set forth in Section 1701.84 will
have the fair value of their Shares determined by the Ohio trial court and
will be entitled to receive a cash payment equal to such fair value from the
Surviving Corporation. In addition, such dissenting shareholders would be
entitled to receive payment of a fair rate of interest from the date and at a
rate determined by the trial court on the amount determined to be the fair
value of their Shares. In determining the fair value of the Shares, the court
is required to take into account all relevant factors, provided, however, that
any appreciation or depreciation in market value resulting from the
transactions contemplated by the Merger Agreement will be excluded.
Accordingly, such determination could be based upon considerations other than,
or in addition to, the market value of the Shares, including, among other
things, asset values and earning capacity.
32
<PAGE>
THE FOREGOING SUMMARY OF THE RIGHTS OF DISSENTING SHAREHOLDERS DOES NOT
PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY
SHAREHOLDERS DESIRING TO EXERCISE ANY AVAILABLE APPRAISAL RIGHTS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF SECTION 1701.84
INCLUDED HEREWITH IN ANNEX A. THE PRESERVATION AND EXERCISE OF APPRAISAL
RIGHTS ARE CONDITIONED ON STRICT ADHERENCE TO THE APPLICABLE PROVISIONS OF THE
OGCL.
GOING PRIVATE TRANSACTIONS
The Merger or another business combination following the purchase of Shares
pursuant to the Offer in which the Purchaser seeks to acquire the remaining
Shares not held by it would have to comply with any applicable Federal law
operating at the time of its consummation. Rule 13e-3 under the Exchange Act
is applicable to certain "going private" transactions. If applicable, Rule
13e-3 would require, among other things, that certain financial information
concerning the Company and certain information relating to the fairness of the
Merger or such other business combination and the consideration offered to
minority shareholders be filed with the Commission and disclosed to minority
shareholders prior to the consummation of the Merger or such other business
combination. However, Rule 13e-3 will not be applicable to the Merger or any
such other business combination if (i) the Shares are deregistered under the
Exchange Act prior to the Merger or other business combination, (ii) the
Merger or other business combination is consummated within one year after the
purchase of the Shares pursuant to the Offer and the value of the
consideration paid per Share in the Merger or other business combination
(measured at the time of consummation of the Merger) is at least equal to the
amount paid per Share in the Offer or (iii) in the Offer.
33
<PAGE>
INTERESTS OF CERTAIN PERSONS IN THE OFFER AND THE MERGER
Consummation of the Offer and the Merger will have certain effects under
certain compensation and incentive plans and arrangements in which officers
and directors of the Company are participants, as summarized below.
The table below sets forth information for each director or executive
officer who will be entitled to receive cash compensation in connection with
the Offer or the Merger with respect to Shares owned or Options to purchase
Shares.
SHARE AND OPTION AMOUNTS WITH RESPECT
TO THE COMPANY'S DIRECTORS AND EXECUTIVE OFFICERS(1)
<TABLE>
<CAPTION>
DOLLAR DOLLAR
AMOUNT AMOUNT
AT OFFER NUMBER AT OFFER
PRICE OF OPTIONS PRICE FOR
SHARES FOR SHARES IN-THE- IN-THE-MONEY TOTAL CASH
NAME OWNED(#) OWNED($) MONEY(#) OPTIONS($) CONSIDERATION($)
<S> <C> <C> <C> <C> <C>
Pamela K. M. Beall...... 2,202 $ 25,323.00 66,865 $ 768,947.50 $ 794,270.50
Robert J. Blackwell..... 34,505 396,807.50 133,092 1,530,558.00 1,927,365.50
Herbert A. Getz......... 0 0.00 10,000 115,000.00 115,000.00
Ivan W. Gorr............ 10,606 121,969.00 30,000 345,000.00 466,969.00
Fred H. Halvorsen....... 2,754 31,671.00 37,546 431,779.00 463,450.00
Kris E. Hansel.......... 1,982 22,793.00 57,981 666,781.50 689,574.50
Steven E. Harbour....... 0 0.00 50,000 575,000.00 575,000.00
Dr. Charles D.
Hollister.............. 0 0.00 30,000 345,000.00 345,000.00
William P. Hulligan..... 0 0.00 20,000 230,000.00 230,000.00
James L. Kirk........... 1,817,681(1) 20,903,331.50 388,279 4,465,208.50 25,368,540.00
Joseph R. Kirk.......... 2,359,138(2) 27,130,087.00 0 0.00 28,970,087.00
James E. Koenig......... 150(3) 1,725.00 10,000 115,000.00 116,725.00
Philip V. Petrocelli.... 30,163 346,874.50 175,489 2,018,123.50 2,364,998.00
Richard W. Pogue........ 13,000(4) 149,500.00 30,000 345,000.00 494,500.00
Charles W. Schmidt...... 48,190(5) 554,185.00 20,000 230,000.00 784,185.00
Philip O. Strawbridge... 13,770 158,355.00 122,967 1,414,120.50 1,572,475.50
Michael A. Szomjassy.... 19,754 227,171.00 200,275 2,303,162.50 2,530,333.50
--------- -------------- --------- ------------- --------------
4,352,895 $50,069,792.50 1,542,494 $ 17,738,681 $67,808,473.50
========= ============== ========= ============= ==============
</TABLE>
- ---------------------
(1) Includes 20,562 Shares held in three trusts by Mr. James L. Kirk's wife as
trustee for the benefit of the Kirks' children and 2,600 held in trust by
Mr. James L. Kirk's daughter as trustee for the benefit of Mr. Kirk's
grandchild, as to which Mr. James L. Kirk disclaims beneficial ownership.
(2) Includes 30,201 Shares held in three trusts by Mr. Joseph R. Kirk's wife
as trustee for the benefit of the Kirks' children, as to which Mr. Joseph
R. Kirk disclaims beneficial ownership.
(3) Includes 150 Shares held in trust for the benefit of Mr. Koenig's brother
as to which he disclaims beneficial ownership.
(4) Includes 1,000 Shares held in trust for the benefit of Mr. Pogue's wife as
to which he disclaims beneficial ownership.
(5) Includes 10,000 Shares held in trust for the benefit of Mr. Schmidt's wife
as to which he disclaims beneficial ownership.
(6) Except as set forth in the table above, no director or executive officer
is entitled to receive any cash compensation in connection with the Offer
or the Merger for Shares owned or options to purchase Shares.
34
<PAGE>
EMPLOYMENT AGREEMENTS
The Merger will result in a change in control of the Company for purposes of
employment agreements entered into by the Company with eight executive officers
of the Company (the "Employment Agreements"). As a result of the change in
control, under the Employment Agreements such executives will continue their
employment with the Company in their present positions for a period of
approximately three years following the date of the change in control. During
the term of employment, each executive will be entitled to receive a base
salary and to continue to participate in incentive and employee benefit plans
at levels no less favorable to him or her than existed prior to the change in
control. In the event that the Company terminates an executive's employment
during the employment term, or the executive terminates his or her employment
under circumstances amounting to good reason under the Employment Agreement,
the executive will be entitled to receive a lump sum payment, subject to an
overall limitation which assures that payments will not constitute "excess
parachute payments" under federal income tax law.
If the eight executive officers were terminated following the change in
control of the Company, such executives would receive aggregate payments equal
to approximately $6,500,000. Of that total, Mr. James L. Kirk would receive
approximately $1,300,000, Mr. Petrocelli would receive approximately
$1,000,000, Mr. Szomjassy would receive approximately $840,000, Mr. Strawbridge
would receive approximately $1,025,000 and Mr. Blackwell would receive
approximately $848,000.
The Company entered into an employment agreement with Joseph R. Kirk in
August of 1996, for a term of five years. As a result of the change in control
of the Company, Mr. Kirk's employment will terminate and he will be entitled to
receive a lump sum payment equal to the sum of $250,000 for the first year and
$25,000 less for each additional year remaining in the employment term.
Prior to the date of the Merger, the Company will enter into an agreement
with [an officer] of the Company (which may be characterized as either a
severance agreement or a retention agreement) which will provide for a
severance payment of not more than one year's base salary during the one-year
period following the change in control of the Company.
RESTRICTED STOCK AWARDS
The Company has entered into restricted stock agreements ("Restricted Stock
Agreements") with five executive officers of the Company, including Mr. James
L. Kirk, Mr. Petrocelli, Mr. Szomjassy and Mr. Blackwell, pursuant to the
Company's Incentive Stock Plan. The Incentive Stock Plan is described more
fully in the Information Statement. In connection with the Merger, the Company
has amended the Restricted Stock Agreements to provide that each executive's
restricted stock award will vest prior to the commencement of the Offer. Absent
such action by the Company, such restricted stock awards would have vested upon
the filing of the Schedule 14D-1 in respect of the Offer.
STOCK OPTION AWARDS
In connection with the Merger, the holders of Company stock options under the
Company's 1986 Stock Option Plan and the Nonqualified Stock Option Plan for
Directors, including the executive officers of the Company and participating
Directors, will be entitled to elect to receive a cash payment in return for
the cancellation of their options. The cash payment for each Company option
would equal the difference between $11.50 and the exercise price of such
option, multiplied by the number of Shares subject to such option. Such
payments will be made prior to the date of the Merger. If each executive
officer of the Company who is not also a Director elects to receive the cash
payment, the Company will make aggregate payments equal to approximately
$2,658,672. Of that total, Mr. Petrocelli would receive approximately $573,403;
Mr. Szomjassy would receive approximately $682,109; Mr. Strawbridge would
receive approximately $399,897 and Mr. Blackwell would receive approximately
$441,912.
35
<PAGE>
If each non-executive Director elects to receive the cash payment in lieu of
his options, the Company would make an aggregate payment to such Directors in
the amount of $543,125. Mr. Joseph R. Kirk would be entitled to receive
approximately $493,750 in the event that he elects to receive the cash payment
in lieu of his options. Mr. James L. Kirk would be entitled to receive
approximately $1,169,622 in the event he elects to receive the cash payment in
lieu of his option.
DEFERRED COMPENSATION PLANS
The Company maintains the Retirement and Incentive Compensation Plan (the
"RICP"), the terms of which are more fully described in the Information
Statement. The Merger will result in a change in control of the Company for
purposes of the RICP. Upon the change in control, all Matching Contributions,
Interest and Dividends (as defined in the RICP) will fully vest and
participants in the RICP, including the executive officers of the Company, will
be paid the value of their RICP accounts. As of December 31, 1997 the aggregate
value of the unvested portion of the Matching Contribution accounts of the
executive officers of the Company was $358,783.
In addition, the Merger Agreement contains certain provisions with respect to
indemnification of directors and executive officers, advancement of expenses
and maintenance of directors' and officers' liability insurance subsequent to
the Effective Time. See "The Merger Agreement--Indemnification."
36
<PAGE>
BENEFICIAL OWNERSHIP OF SHARES
The Company's Common Stock is the Company's only outstanding class of voting
securities. The following table sets forth certain information as of January
10, 1998 with respect to the beneficial ownership of the Company's Common Stock
by (i) holders of 5% or more of the outstanding Common Stock, (ii) each
Director of the Company, (iii) the executive officers named in Schedule I
hereto, and (iv) all Directors and executive officers of the Company as a
group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENTAGE
NAME BENEFICIAL OWNERSHIP (1) OF CLASS
---- ------------------------ ----------
<S> <C> <C>
WMX Technologies, Inc. (2)
3003 Butterfield Road
Oak Brook, Illinois 60521............... 10,368,000 37.63%
State of Wisconsin Investment Board (3)
P.O. Box 7842
Madison, Wisconsin 53707................ 1,517,000 5.51%
H. Wayne Huizenga (4)
200 South Andrews Avenue
Fort Lauderdale, Florida 33301.......... 1,500,000 5.25%
James L. Kirk (5) (6) (7)................ 2,280,960 8.14%
Joseph R. Kirk (5) (6) (7)............... 2,569,138 9.25%
Herbert A. Getz (5)(6)................... 25,000 *
Ivan W. Gorr (5) (6) (8)................. 50,606 *
Dr. Charles D. Hollister (5) (6)......... 40,000 *
William P. Hulligan (5) ................. 20,000 *
James E. Koenig (5) (6) (7).............. 25,150 *
Richard W. Pogue (5) (6) (7)............. 53,000 *
Charles W. Schmidt (5) (6) (7) (8)....... 78,190 *
Robert J. Blackwell (5) (6) (8).......... 173,076 *
Philip V. Petrocelli (5) (6) (8)......... 212,735 *
Philip O. Strawbridge (5) (6) (8)........ 148,274 *
Michael A. Szomjassy (5) (6) (8)......... 223,159 *
All Directors and executive officers as a
group (17 persons) (5) (6).............. 6,122,185 20.87%
</TABLE>
- --------
*less than 1%.
(1) Information with respect to beneficial ownership is based on information
furnished to the Company by each shareholder included in this table. Except
as indicated in the notes to the table, each shareholder included in the
table has sole voting and investment power with respect to the shares shown
to be beneficially owned. Beneficial ownership is calculated in accordance
with the rules and regulations of the Commission.
(2) According to a Schedule 13D dated June 8, 1995 jointly filed by WMX
Technologies Inc. ("WMX"), Chemical Waste Management, Inc., Rust Holding
Company Inc., and Rust International Inc. Assumes the exercise of warrants
currently exercisable to purchase 700,000 shares of Common Stock pursuant
to that certain Warrant Agreement between the Company and WMX described
below.
(3) According to an Amendment No. 8 to Schedule 13G filed by the State of
Wisconsin Investment Board.
(4) According to a Schedule 13D, dated April 1, 1995, filed by Mr. Huizenga.
Assumes the exercise of options currently exercisable or exercisable within
60 days to purchase 1,000,000 shares of Common Stock, but does not include
500,000 shares of Common Stock owned by the Huizenga Family Foundation,
Inc. as to which Mr. Huizenga disclaims beneficial ownership.
(5) The address of the shareholder is c/o OHM Corporation, 16406 U.S. Route 224
East, Findlay, Ohio 45840.
(6) Assumes the exercise of options to purchase 463,279, 210,000, 25,000,
40,000, 40,000, 20,000, 25,000, 40,000, 30,000, 133,092, 175,489, 122,967,
200,275, and 1,737,494 by Messrs. James L. Kirk, Joseph R. Kirk, Getz,
Gorr, Hollister, Hulligan, Koenig, Pogue, Schmidt, Blackwell, Petrocelli,
Strawbridge, Szomjassy, respectively, and all directors and executive
officers as a group, respectively.
37
<PAGE>
(7) Includes 20,562 shares of Common Stock held in three trusts by Mr. James L.
Kirk's wife as trustee for the benefit of the Kirks' children and 2,600
held in trust by Mr. James L. Kirk's daughter as trustee for the benefit of
Mr. Kirk's grandchild, as to which Mr. James L. Kirk disclaims beneficial
ownership. Includes 30,201 shares of Common Stock held in three trusts by
Mr. Joseph R. Kirk's wife as trustee for the benefit of the Kirks'
children, as to which Mr. Joseph R. Kirk disclaims beneficial ownership.
Includes 150 shares of Common Stock held in trust for the benefit of Mr.
Koenig's brother as to which he disclaims beneficial ownership. Includes
1,000 shares of Common Stock held in trust for the benefit of Mr. Pogue's
wife as to which he disclaims beneficial ownership. Includes 10,000 shares
of Common Stock held in trust for the benefit of Mr. Schmidt's wife as to
which he disclaims beneficial ownership.
(8) Includes 8,606, 8,190, 5,479, 7,083, 11,537, and 3,130 phantom stock units
held by Messrs. Gorr, Schmidt, Blackwell, Petrocelli, Strawbridge, and
Szomjassy, respectively.
James L. Kirk and Joseph R. Kirk are brothers, each of whom disclaims
beneficial interest in the shares owned by the other.
13. DIVIDENDS AND DISTRIBUTIONS.
According to the Company's 1996 Annual Report on Form 10-K, the Company has
not paid cash dividends to date and intends to retain future earnings for use
in the business.
Pursuant to the terms of the Merger Agreement, prior to the time that
Parent's nominees are elected to the Company's Board and represent at least a
majority of such directors, the Company will not, without the consent of
Parent, split, combine or reclassify the outstanding Shares or declare, set
aside or pay any dividend payable in cash, stock or property with respect to
the Shares.
14. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; NEW YORK STOCK EXCHANGE AND
EXCHANGE ACT REGISTRATION.
The consummation of the transactions contemplated by the Merger Agreement
will reduce the number of Shares that might otherwise trade publicly, may
reduce the number of holders of Shares and could thereby adversely affect the
liquidity and market value of the remaining publicly held Shares.
NEW YORK STOCK EXCHANGE LISTING
Upon consummation of the Offer, the Shares may no longer meet the standards
for continued listing on the NYSE. According to the NYSE's published
guidelines, the NYSE would consider delisting the Shares if, among other
things, the number of publicly held Shares falls below 600,000, the number of
holders of Shares falls below 100 or the aggregate market value of such
publicly held Shares falls below $5,000,000. Shares held directly or indirectly
by an officer or director of the Company or by a beneficial owner of more than
10% of the Shares will ordinarily not be considered as being publicly held for
purposes of these standards. In the event the Shares are no longer listed or
traded on the NYSE, it is possible that the Shares would trade on another
securities exchange or in the over-the-counter market and that price quotations
would be reported by such exchanges, through NASDAQ or other sources. However,
the extent of the public market for the Shares and the availability of such
quotations would depend upon the number of holders and/or the aggregate market
value of such Shares remaining at such time, the interest in maintaining a
market in such Shares on the part of securities firms, the possible termination
of registration of such Shares under the Exchange Act, as described herein and
other factors. There are 27,554,547 Shares outstanding and approximately 734
holders of record of the Shares.
EXCHANGE ACT REGISTRATION
The Shares are currently registered under the Exchange Act. Such registration
may be terminated upon application by the Company to the Commission if the
Shares are not listed on a national securities exchange and there are fewer
than 300 record holders. The termination of the registration of the Shares
under the Exchange
38
<PAGE>
Act would substantially reduce the information required to be furnished by the
Company to holders of Shares and to the Commission and would make certain
provisions of the Exchange Act, such as the short-swing profit recovery
provisions of Section 16(b), the requirements of furnishing a proxy statement
in connection with shareholders' meetings and the requirements of Rule l3e-3
under the Exchange Act with respect to "going private" transactions, no longer
applicable to the Shares. In addition, "affiliates" of the Company and persons
holding "restricted securities" of the Company may be deprived of the ability
to dispose of such securities pursuant to Rule 144 promulgated under the
Securities Act of 1933, as amended. If registration of the Shares under the
Exchange Act were terminated, the Shares would no longer be "margin securities"
or be eligible for NYSE market reporting. Parent currently intends to seek to
cause the Company to terminate the registration of the Shares under the
Exchange Act as soon after the Effective Time as the requirements for
termination of registration are met.
MARGIN REGULATIONS
The Shares are currently "margin securities" under the regulations of the
Board of Governors of the Federal Reserve System (the "Federal Reserve Board"),
which has the effect, among other things, of allowing brokers to extend credit
on the collateral of such Shares for the purpose of buying, carrying or trading
in securities ("Purpose Loans"). Depending upon factors similar to those
described above regarding the continued listing, public trading and market
quotations of the Shares, it is possible that, following the consummation of
the transactions contemplated by the Merger Agreement, the Shares would no
longer constitute "margin securities" for the purposes of the margin
regulations of the Federal Reserve Board and therefore could no longer be used
as collateral for Purpose Loans made by brokers.
15. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, and provided that (i) the
Share Repurchase shall have been completed subject only to the condition that
Purchaser shall have paid for Shares pursuant to the Offer and (ii) Purchaser
shall not be obligated to accept for payment any Shares until expiration or
termination of all applicable waiting periods under the HSR Act, Purchaser
shall not be required to accept for payment, or may delay the acceptance for
payment for any tendered Shares, or may, subject to the terms and conditions of
the Merger Agreement, terminate or amend the Offer as to any Shares not then
accepted for payment if the Share Number Condition is not met, or, if on or
after January 15, 1998 and prior to the time of acceptance for payment for any
of such Shares, any of the following events shall occur:
(a) the Company shall have breached or failed to perform in any material
respect its obligations, covenants or agreements under the Merger Agreement
and, with respect to any such failure that can be remedied, the failure
shall not have been remedied within five business days after Parent has
furnished the Company written notice of such failure, or any representation
or warranty of the Company set forth in the Merger Agreement shall have
been inaccurate or incomplete in any material respect when made or
thereafter shall become and remain inaccurate or incomplete in any material
respect;
(b) there shall be instituted or pending any action, litigation,
proceeding, investigation or other application (hereinafter, an "Action")
before any court of competent jurisdiction or other governmental or
regulatory authority, agency or commission in the United States (each a
"Governmental Entity") by any Governmental Entity: (i) seeking to prohibit
the consummation of the transactions contemplated by the Offer or the
Merger; (ii) seeking to prohibit, or impose any material limitations on
Parent's or Purchaser's ownership or operation of all or a material portion
of the Company's business or assets, or to compel Parent or Purchaser to
dispose of or hold separate all or a material portion of the Company's
business or assets; or (iii) seeking to make the acceptance for payment of,
purchase of, or repayment for, some or all of the Shares illegal;
(c) any statute, rule, regulation, order or injunction shall be enacted,
promulgated, entered, enforced or deemed to be or become applicable to the
Offer or the Merger that results in any of the consequences referred to in
clauses (i) through (iii) of paragraph (b) above;
39
<PAGE>
(d) it shall have been publicly disclosed or Parent shall have otherwise
learned that any person or "group" (as defined in Section 13(d)(3) of the
Exchange Act), other than Parent and its subsidiaries or any group of which
any of them is a member, shall have acquired beneficial ownership
(determined pursuant to Rule 13d-3 under the Exchange Act) or more than 50%
of the outstanding shares, or any person, entity or group shall have
entered into a definitive written agreement with the Company with respect
to a tender offer or exchange offer for some portion of all of the Shares
or a merger, consolidation or other business combination with or involving
the Company;
(e) there shall have occurred any event or events that, individually or
in the aggregate, have or are reasonably likely to have a Company Material
Adverse Effect;
(f) the Merger Agreement shall have been terminated by the Company or
Parent or Purchaser in accordance with its terms or Parent or Purchaser
shall have reached an agreement or understanding in writing with the
Company providing for a termination or amendment of the Offer or a delay in
the acceptance for payment for the Shares; or
(g) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on the NYSE, (other than a
shortening of trading hours or any coordinated trading halt triggered
solely as a result of a specified increase or decrease in a market index),
(ii) the declaration of any banking moratorium or any suspension of
payments in respect of banks, or any limitation (whether or not mandatory)
by any Governmental Entity on, or other event materially adversely
affecting, the extension of credit by lending institutions in the United
States, or (iii) a commencement of a war or armed hostilities directly or
indirectly involving the United States;
which, in the reasonable judgment of Parent and Purchaser, in any such case,
make it inadvisable to proceed with the Offer and/or with the acceptance for
payment for Shares.
The conditions set forth above are for the sole benefit of Parent and
Purchaser and may be asserted by Parent or Purchaser regardless of the
circumstances giving rise to such condition or may be waived by Parent or
Purchaser, by express and specific action to that effect, in whole or in part
at any time and from time to time in their sole discretion, except as otherwise
provided in the Merger Agreement.
16. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.
GENERAL
Except as described below, based upon an examination of publicly available
filings made by the Company with the Commission, other publicly available
information about the Company and the representations and warranties of the
Company in the Merger Agreement, neither Purchaser nor Parent is aware of any
license or regulatory permit that appears to be material to the business of the
Company and its subsidiaries, taken as a whole, that might be adversely
affected by Purchaser's acquisition of Shares pursuant to the Offer, or of any
approval or other action by any governmental, administrative or regulatory
agency or authority or public body, domestic or foreign, that would be required
for the acquisition or ownership of Shares by Purchaser pursuant to the Offer.
Should any such approval or other action be required, it is presently
contemplated that such approval or action would be sought except as described
below in this Section under "State Takeover Statutes." While, except as
otherwise expressly described herein, Purchaser does not currently intend to
delay acceptance for payment of Shares tendered pursuant to the Offer pending
the outcome of any such matter, there can be no assurance that any such
approval or other action, if needed, would be obtained without substantial
conditions or that adverse consequences might not result to the Company's
business or that certain parts of the Company's business might not have to be
disposed of in the event that such approvals were not obtained or such other
actions were not taken or in order to obtain any such approval or other action,
any of which could cause Purchaser to decline to accept for payment or pay for
any Shares tendered. Purchaser's obligation under the Offer to accept for
payment and pay for shares is subject to the Offer Conditions, including
conditions relating to legal matters discussed in this Section 16.
40
<PAGE>
ANTITRUST
Under the HSR Act and the rules that have been promulgated thereunder by the
Federal Trade Commission ("FTC"), certain acquisition transactions may not be
consummated unless certain information has been furnished to the Antitrust
Division of the Department of Justice (the "Antitrust Division") and the FTC
and certain waiting period requirements have been satisfied. The acquisition of
Shares pursuant to the Offer is subject to such requirements.
Purchaser expects to file a Notification and Report Form with respect to the
Offer under the HSR Act as soon as practicable following commencement of the
Offer. The waiting period under the HSR Act with respect to the Offer will
expire at 11:59 p.m. Washington D.C. City time, on the 15th day after the date
such form is filed, unless early termination of the waiting period is granted.
In addition, the Antitrust Division or the FTC may extend such waiting period
by requesting additional information or documentary material from Purchaser. If
such a request is made with respect to the Offer, the waiting period related to
the Offer will expire at 11:59 p.m. Washington D.C. time on the 10th day after
substantial compliance by Purchaser with such request. With respect to each
acquisition, the Antitrust Division or the FTC may issue only one request for
additional information. In practice, complying with a request for additional
information or material can take a significant amount of time. In addition, if
the Antitrust Division or the FTC raises substantive issues in connection with
a proposed transaction, the parties may engage in negotiations with the
relevant governmental agency concerning possible means of addressing those
issues and may agree to delay consummation of the transaction while such
negotiations continue. Expiration or termination of applicable waiting periods
under the HSR Act is a condition to Purchaser's obligation to accept for
payment and pay for Shares tendered pursuant to the Offer.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed purchase of the Shares
by Purchaser pursuant to the Offer. At any time before or after such purchase,
the Antitrust Division or the FTC could take such action under the antitrust
laws as it deems necessary or desirable in the public interest, including
seeking to enjoin the transaction or seeking divestiture of the Shares so
acquired or divestiture of substantial assets of Purchaser, Parent or the
Company. Litigation seeking similar relief could be brought by private parties.
Purchaser does not believe that consummation of the Offer and the other
transactions contemplated by the Merger Agreement will result in violation of
any applicable antitrust laws. However, there can be no assurance that a
challenge to the Offer and the other transactions contemplated by the Merger
Agreement on antitrust grounds will not be made, or if such a challenge is
made, what the result will be. See Section 15 for certain conditions to the
purchase of the Shares in the Offer, including conditions with respect to
litigation and certain governmental actions.
STATE TAKEOVER STATUTES
A number of states have adopted "takeover" statutes that purport to apply to
attempts to acquire corporations that are incorporated in such states, or whose
business operations have substantial economic effects in such states, or which
have substantial assets, security holders, employees, principal executive
offices or places of business in such states.
Ohio Take-Over Act. Sections 1707.041, 1707.042, 1707.23 and 1707.26 of the
Ohio Revised Code (collectively, the "Ohio Take-Over Act") regulate tender
offers for any equity security of a subject company from a resident of Ohio if,
after the purchase, the offeror would directly or indirectly be the beneficial
owner of more than 10% of any class of issued and outstanding equity securities
of such company (a "control bid"). A subject company includes an issuer, such
as the Company, that either has its principal place of business or principal
executive offices located in Ohio or owns or controls assets located in Ohio
that have a fair market value of at least $1.0 million dollars, and that has
more than 10% of its beneficial or record equity security holders resident in
Ohio, or has more than 10% of its equity securities owned, beneficially or of
record, by residents of Ohio, or has 1,000 beneficial or record equity security
holders who are resident in Ohio. A subject company, however, need not be
incorporated in Ohio.
41
<PAGE>
The Ohio Take-Over Act prohibits an offeror from making a control bid for
securities of a subject company pursuant to a tender offer until the offeror
has filed specified information with the Ohio Division. In addition, the
offeror is required to deliver a copy of such information to the subject
company not later than the offeror's filing with the Ohio Division and to send
or deliver such information and the material terms of the proposed offer to all
offerees in Ohio as soon as practicable after the offeror's filing with the
Ohio Division.
Within five calendar days of such filing, the Ohio Division may, by order,
summarily suspend the continuation of the control bid if it determines that the
offeror has not provided all of the specified information or that the control
bid materials provided to offerees do not provide full disclosure of all
material information concerning the control bid. If the Ohio Division summarily
suspends a control bid, it must schedule and hold a hearing within 10 calendar
days of the date on which the suspension is imposed and must make its
determination within three calendar days after the hearing has been completed
but no later than 14 calendar days after the date on which the suspension is
imposed. The Ohio Division may maintain its suspension of the continuation of
the control bid if, based upon the hearing, it determines that all of the
information required to be provided by the Ohio Take-Over Act has not been
provided by the offeror, that the control bid materials provided to offerees do
not provide full disclosure of all material information concerning the control
bid, or that the control bid is in material violation of any provision of the
Ohio securities laws. If, after the hearing, the Ohio Division maintains the
suspension, the offeror has the right to correct the disclosure and other
deficiencies identified by the Ohio Division and to reinstitute the control bid
by filing new or amended information pursuant to the Ohio Take-Over Act.
Purchaser and Parent have filed the information required under the Ohio Take-
Over Statute.
The Ohio Business Combination Law. The Ohio Business Combination Law
prohibits certain business combinations and other transactions (each, a
"Chapter 1704 Transaction"), such as the Merger, between an issuing public
corporation (such as the Company) and any "Interested Shareholder" (defined
generally as any person that, directly or indirectly, is entitled to exercise
or direct the exercise of 10% or more of the outstanding voting power of a
corporation in the election of directors) for a period of three years after the
date the person becomes an Interested Shareholder. After such three year
period, a Chapter 1704 Transaction between an issuing public corporation and
such Interested Shareholder is prohibited unless either certain "fair price"
provisions are complied with or the Chapter 1704 Transaction is approved by
certain supermajority shareholder votes.
The Ohio Business Combination Law restrictions do not apply to a Chapter 1704
Transaction with an Interested Shareholder if either the acquisition of the
corporation's shares that would cause the Interested Shareholder to become an
Interested Shareholder or the Chapter 1704 Transaction is approved by a
resolution of the board of directors of the corporation adopted prior to the
date on which the Interested Shareholder became an Interested Shareholder.
The Company's Board has approved the Merger Agreement and the transactions
contemplated thereby, including the Offer and the Merger, so that the Ohio
Business Combination Law does not apply to the acquisition of Shares pursuant
to the Offer or the Merger.
In Edgar v. MITE Corporation, the Supreme Court of the United States
invalidated on constitutional grounds the Illinois Business Takeover Act,
which, as a matter of state securities law, made takeovers of corporations
meeting certain requirements more difficult. However, in CTS Corp. v. Dynamics
Corp. of America, the Supreme Court held that a state may, as a matter of
corporate law and, in particular, those laws concerning corporate governance,
constitutionally disqualify a potential acquirer from voting on the affairs of
a target corporation without prior approval of the remaining shareholders,
provided that such laws were applicable under certain conditions, in
particular, that the corporation has a substantial number of shareholders in
the state and is incorporated there.
The Company, directly or through subsidiaries, conducts business in a number
of states throughout the United States, which have enacted takeover statutes.
Purchaser does not know whether any of these statutes will,
42
<PAGE>
by their terms, apply to the Offer, and Purchaser has not complied with any
such statutes. To the extent that certain provisions of these statutes purport
to apply to the Offer, Purchaser believes that there are reasonable bases for
contesting such statutes. If any person should seek to apply any state takeover
statute, Purchaser would take such action as then appears desirable, which
action may include challenging the validity or applicability of any such
statute in appropriate court proceedings. If it is asserted that one or more
takeover statutes apply to the Offer and it is not determined by an appropriate
court that such statute or statutes do not apply or are invalid as applied to
the Offer, Purchaser might be required to file certain information with, or
receive approvals from, the relevant state authorities, and Purchaser might be
unable to accept for payment or pay for Shares tendered pursuant to the Offer,
or be delayed in continuing or consummating the Offer. In such case, Purchaser
may not be obligated to accept for payment or pay for Shares tendered pursuant
to the Offer.
17. FEES AND EXPENSES.
Pursuant to arrangements entered into in connection with Carlyle's investment
in Parent in 1996, Carlyle is entitled to an investment banking fee equal to 1%
of the aggregate transaction value for certain investment banking services
provided to Parent, and reimbursement of reasonable out of pocket expenses.
Parent and Carlyle have agreed that Parent will pay Carlyle a fee of $2.5
million and reimbursement of reasonable out-of-pocket expenses in connection
with the transactions (less than the 1% fee of $[3.73 million] to which Carlyle
would otherwise be entitled).
DLJ is acting as financial advisor to Parent in connection with the Offer and
the Merger. Parent has agreed to pay DLJ for its services (i) a retainer fee of
$100,000, (ii) a fee of $500,000 at the time DLJ notified Parent's Board of
Directors that it was prepared to deliver an opinion to Parent as to the
fairness, from a financial point of view, to Parent of the consideration to be
paid by Parent or Purchaser in connection with the transactions contemplated by
the Merger Agreement (the "DLJ Fairness Opinion") and an additional fee of
$100,000 for each update of a prior DLJ Fairness Opinion delivered by DLJ with
respect to the Offer and the Merger, (iii) additional cash compensation,
payable at the consummation of a Transaction (as defined below), in an amount
equal to $2,750,000 less any amounts paid by Parent pursuant to clauses (i) and
(ii) of this paragraph, and (iv) reimbursements for reasonable out-of-pocket
expenses. Additionally, DLJ will be entitled to receive the greater of $750,000
or 10% of any termination fee paid to Parent pursuant to the Merger Agreement.
Parent has also agreed to indemnify DLJ against certain liabilities and
expenses in connection with the services provided by DLJ, including certain
liabilities under the federal securities laws. For purposes of the DLJ
engagement, "Transaction" means, among other things, the acquisition by Parent
of a majority of the outstanding Shares on a fully diluted basis and/or a
merger of the Company with Parent or an affiliate of Parent (including the
Purchaser).
Purchaser has retained MacKenzie Partners, Inc. to act as the Information
Agent and BankBoston, N.A. to act as the Depositary in connection with the
Offer. The Information Agent may contact holders of Shares by mail, telephone,
telegraph and personal interview and may request brokers, dealers and other
nominee shareholders to forward the Offer materials to beneficial owners. The
Information Agent will receive a fee for services as Information Agent of
$6,500 and will be reimbursed for certain out-of-pocket expenses. The
Depositary will receive reasonable and customary compensation for services
relating to the Offer and will be reimbursed for certain out-of-pocket
expenses. Purchaser has also agreed to indemnify the Information Agent and the
Depositary against certain liabilities and expenses in connection with the
Offer, including certain liabilities under the federal securities laws.
Purchaser will not pay any fees or commissions to any broker or dealer or any
other person for soliciting tenders of Shares pursuant to the Offer (other than
to the Information Agent). Brokers, dealers, commercial banks, trust companies
and other nominees will, upon request, be reimbursed by Purchaser for customary
mailing and handling expenses incurred by them in forwarding offering materials
to their customers.
Except as set forth above, Purchaser will not pay any fees or commissions to
any broker or dealer or other person for soliciting tenders of Shares pursuant
to the Offer. Brokers, dealers, commercial banks and trust
43
<PAGE>
companies will be reimbursed by Purchaser for customary mailing and handling
expenses incurred by them in forwarding the offering materials to their
customers.
18. MISCELLANEOUS.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the securities,
blue sky or other laws of such jurisdiction. Purchaser may, in its discretion,
however, take such action as it may deem necessary to make the Offer in any
jurisdiction and extend the Offer to holders of Shares in any such
jurisdiction.
No person has been authorized to give any information or to make any
representation on behalf of Purchaser not contained herein or in the Letter of
Transmittal and, if given or made, such information or representation must not
be relied upon as having been authorized. Neither the delivery of this Offer to
Purchase nor any purchase pursuant to the Offer shall, under any circumstances,
create any implication that there has been no change in the affairs of
Purchaser or the Company since the date as of which information is furnished or
the date of this Offer to Purchase.
Purchaser and Parent have filed with the Commission a Tender Offer Statement
on Schedule 14D-1, together with exhibits, pursuant to Rule 14d-3 under the
Exchange Act, furnishing certain additional information with respect to the
Offer. In addition, the Company has filed with the Commission the Schedule 14D-
9, together with exhibits, pursuant to Rule 14d-9 under the Exchange Act,
setting forth the recommendations of the Board with respect to the Offer and
the reasons for such recommendations and furnishing certain additional related
information. Such Schedules and any amendments thereto, including exhibits, may
be inspected and copies may be obtained from the Commission in the manner set
forth in Section 7 (except that they will not be available at the regional
offices of the Commission).
IT-OHIO, INC.
January 16, 1998
44
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth the name, business or residence address,
principal occupation or employment at the present time and during the last
five years, the name of any corporation or other organization in which such
employment is conducted or was conducted, those securities for which there is
a right to acquire, and the aggregate amount and percentage of securities
beneficially owned, for each executive officer and director of the Company.
Except as otherwise indicated, all of the persons listed below are citizens of
the United States. The business address of each executive officer of the
Company is 16406 U.S. Route 224 East, Findlay, Ohio 45840, unless otherwise
set forth below. Each occupation set forth opposite a person's name, unless
otherwise indicated, refers to employment with the Company. Directors of the
Company are indicated with an asterisk. Unless otherwise indicated, none of
the persons listed below have bought or sold any Common Stock within the past
60 days.
<TABLE>
<CAPTION>
NUMBER OF
SHARES
PRESENT MATERIAL POSITIONS -------------- PERCENTAGE
NAME, CITIZENSHIP AND OCCUPATION HELD DURING THE OPTIONS OF SHARES
CURRENT BUSINESS ADDRESS OR EMPLOYMENT PAST FIVE YEARS (A) TOTAL OUTSTANDING
<S> <C> <C> <C> <C> <C>
*Herbert A. Getz........ Director and Senior Vice 25,000 25,000 **
Member of the President of WMX
Compensation and from May 1995 to
Stock Option the present;
Committee. General Counsel of
Director since WMX from August
June 1995. 1992 to the
present; Vice
President of WMX
from May 1990 to
May 1995; Secretary
of WMX from January
1988 to the
present; Vice
President and
Secretary of
Wheelabrator
Technologies Inc.
from July 1995 to
January 1997.
*Ivan W. Gorr........... Director and Director of Amcast 40,000 50,606 **
Chairman of the Industrial
Audit Committee Corporation, Arvin
and Member of Industries, The
the Compensation Fifth and Third
and Stock Option Bancor and Borg-
and Executive Warner Automotive.
Committees.
Director since
November 1990.
*Dr. Charles D. Director and Senior Scientist 40,000 40,000 **
Hollister.............. Member of the and Vice President
Audit Committee. of Woods Hole
Director since Oceanographic
July 1992. Institution since
1979.
</TABLE>
S-1
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY--(CONTINUED)
<TABLE>
<CAPTION>
NUMBER OF SHARES
PRESENT MATERIAL POSITIONS ------------------ PERCENTAGE
NAME, CITIZENSHIP AND OCCUPATION HELD DURING THE OPTIONS OF SHARES
CURRENT BUSINESS ADDRESS OR EMPLOYMENT PAST FIVE YEARS (A) TOTAL OUTSTANDING
<S> <C> <C> <C> <C> <C>
*William P. Hulligan.... Director and Executive Vice 20,000 20,000 **
Member of the President of Waste
Executive Management, Inc.
Committee. ("WMX") from
Director since January 1996 to
October 1996. November 1997.
Currently serves as
a consultant to
WMX; President of
the Midwest Group
of WMX from March
1983 to January
1996.
*James L. Kirk.......... Director, President and Chief 463,279 2,280,960 8.14%
President and Executive Officer
Chief Executive since July 1986.
Officer;
Director since
July 1986.
*Joseph L. Kirk......... Director and Executive Vice 210,000 2,569,138 9.25%
Executive Vice President since
President; July 1986.
Director since
July 1986.
*James E. Koenig........ Director and Executive Vice 25,000 25,150 **
Member of the President of WMX
Audit Committee. and President of
Director since Waste Management
June 1995. Shared Services
from February 1997
to October 1997;
remains an employee
of WMX; Senior Vice
President of WMX
from May 1992 to
February 1997.
*Richard W. Pogue....... Director and Consultant with Dix 40,000 53,000 **
Member of the and Eaton--present;
Executive Partner of the law
Committee. firm Jones, Day,
Director since Reavis & Pogue from
July 1996. 1961 to June 1994.
*Charles W. Schmidt..... Director and Formerly the Senior 30,000 78,190 **
Chairman of the Vice President,
Compensation and External Affairs of
Stock Option Raytheon Company,
Committee and and President and
Member of the Chief Executive
Executive Officer of SCA
Committee. Services, Inc.
Director since
July 1996.
</TABLE>
S-2
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY--(CONTINUED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES
PRESENT MATERIAL POSITIONS --------------- PERCENTAGE
NAME, CITIZENSHIP AND OCCUPATION HELD DURING THE OPTIONS OF SHARES
CURRENT BUSINESS ADDRESS OR EMPLOYMENT PAST FIVE YEARS (A) TOTAL OUTSTANDING
<S> <C> <C> <C> <C> <C>
Pamela K.M. Beall....... Vice President, Vice President from 66,865 2,202(B) **
Treasurer and August 1994 to the
Assistant present; Treasurer
Secretary. and Assistant
Secretary from
January 1986 to the
present.
Robert J. Blackwell..... Vice President, Vice President, 133,092 34,505(B) **
Marketing and Marketing and
Strategic Strategic Planning
Planning. from October 1995
to the present;
Vice President,
Government Business
Development of OHM
Remediation
Services Corp., a
wholly-owned
subsidiary of the
Company ("OHMR")
from July 1993 to
October 1995; Vice
President for
Federal Marketing
and Legislative
Affairs of Ebasco
Services
Incorporated
("Ebasco") from
January 1993 to
July 1993; Director
of Marketing and
Federal Relations
of Ebasco from
January 1989 to
December 1992.
Fred H. Halvorsen....... Vice President, Vice President, 37,546 2,754 **
Health and Health and Safety
Safety. since May 1987.
Kris E. Hansel.......... Vice President Vice President and 57,981 1,982 **
and Controller. Controller since
October 1992.
Steven E. Harbour....... Vice President, Vice President, 50,000 0 **
Legal and Legal and Secretary
Secretary. from December 1996
to the present;
Vice President of
the Coca-Cola
Bottling Company of
New York, Inc. from
1993 to 1995.
</TABLE>
S-3
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY--(CONTINUED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES
PRESENT MATERIAL POSITIONS --------------- PERCENTAGE
NAME, CITIZENSHIP AND OCCUPATION HELD DURING THE OPTIONS OF SHARES
CURRENT BUSINESS ADDRESS OR EMPLOYMENT PAST FIVE YEARS (A) TOTAL OUTSTANDING
<S> <C> <C> <C> <C> <C>
Philip V. Petrocelli.... Vice President, Vice President, 175,489 30,163(B) **
Western Western Operations
Operations. from May 1995 to
the present; Senior
Vice President,
Western Operations
of OHMR from
October 1995 to the
present; Vice
President Western
Region of OHMR from
August 1993 to
October 1995.
Philip O. Strawbridge... Vice President, Vice President, 122,967 11,537(B) **
Chief Financial Chief Financial and
and Administrative
Administrative Officer from
Officer. February 1996 to
the present; Senior
Director of
Government
Contracts and
Compliance of Fluor
Daniel, Inc. prior
to February 1996.
</TABLE>
S-4
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY--(CONTINUED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES
PRESENT MATERIAL POSITIONS --------------- PERCENTAGE
NAME, CITIZENSHIP AND OCCUPATION HELD DURING THE OPTIONS OF SHARES
CURRENT BUSINESS ADDRESS OR EMPLOYMENT PAST FIVE YEARS (A) TOTAL OUTSTANDING
<S> <C> <C> <C> <C> <C>
Michael A. Szomjassy.... Vice President, Vice President, 200,775 19,754(B) **
Eastern Eastern Operations
Operations. from October 1995
to the present;
Senior Vice
President, Eastern
Operations of OHMR
from October 1995
to the present;
Vice President,
Southeast Region of
OHMR from November
1989 to October
1995.
</TABLE>
- ---------------------
(A) Includes shares which executive officers and directors have the right to
acquire within 60 days of January 15, 1998, under stock option and warrant
agreements.
(B) Does not include any phantom stock held pursuant to the Company Retirement
and Incentive Compensation Plan.
** less than 1%
S-5
<PAGE>
SCHEDULE II
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND PURCHASER
The following table sets forth the name, business or residence address,
principal occupation or employment at the present time and during the last
five years, and the name of any corporation or other organization in which
such employment is conducted or was conducted of each executive officer or
director of Parent. Except as otherwise indicated, all of the persons listed
below are citizens of the United States of America. Each occupation set forth
opposite a person's name, unless otherwise indicated, refers to employment
with Parent. Unless otherwise indicated, the principal business address of
each director or executive officer is 2790 Mosside Boulevard, Monroeville,
Pennsylvania 15146-2792. Directors of Parent are indicated with an asterisk.
Unless otherwise indicated, none of the persons listed below have bought or
sold any Parent Common Stock within the past 60 days.
<TABLE>
<CAPTION>
NAME, CITIZENSHIP
AND CURRENT PRESENT OCCUPATION MATERIAL POSITIONS HELD
BUSINESS ADDRESS OR EMPLOYMENT DURING THE PAST FIVE YEARS
<S> <C> <C>
*Anthony J. Chief Executive Officer and Chief Executive Officer and President
DeLuca............ President. Director since from July 1997 to the present;
1996. President and acting Chief Executive
Officer from July 1996 to July 1997;
Senior Vice President and Chief
Financial Officer from March 1990 to
July 1997.
*E. Martin Gibson.. Chairman of the Board of Chairman of the Board of Directors
Directors. Director since from April 1995 to November 1996;
1994. Chairman of Corning Life Sciences,
Inc. from 1992 to December 1994.
*James C. McGill... Director and Private Director from 1990 to the present;
Investor. Director since Private investor for the last 5 years.
1990.
*Daniel A.
D'Aniello......... Managing Director of Managing Director of Carlyle from 1987
Carlyle. Director since to the present.
1996.
*Philip B. Dolan... Vice President of Carlyle. Vice President of Carlyle from 1989 to
Director since 1996. the present.
*Admiral James
David Watkins..... President of the Joint President of JOI from 1993 to the
Oceanographic Institutions, present; President of Consortium
Inc. ("JOI"). Director since Oceanographic Research and Education
1996. from 1994 to the present; Secretary of
Energy under President Bush from 1989
to 1993.
*Robert F. Special Counsel to Eckert Special Counsel to Eckert from 1993 to
Pugliese.......... Seamans Cherin & Mellott the present.
("Eckert"). Director since
1996.
Franklin E. Senior Vice President, DOE Senior Vice President, DOE Programs,
Coffman........... Programs, Corporate Business Corporate Business Development from
Development. July 1996 to the present; Senior Vice
President, Government and Commercial
Program Development from March 1995 to
July 1996; Vice President, Government
Programs from October 1984 to March
1995.
</TABLE>
S-6
<PAGE>
SCHEDULE II
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND PURCHASER--(CONTINUED)
<TABLE>
<CAPTION>
NAME, CITIZENSHIP AND PRESENT OCCUPATION MATERIAL POSITIONS HELD
CURRENT BUSINESS ADDRESS OR EMPLOYMENT DURING THE PAST FIVE YEARS
<S> <C> <C>
James R. Mahoney........ Senior Vice President, Senior Vice President, Consulting and
Consulting and Ventures and Ventures from July 1996 through the
Corporate Development. present; Senior Vice President,
Technical Operations and Corporate
Development from March 1995 to July
1996; Senior Vice President, Corporate
Development and Sales from April 1992
to March 1995.
Raymond J. Pompe........ Senior Vice President, Senior Vice President, Engineering and
Engineering and Construction from July 1996 to the
Construction. present; Senior Vice President,
Project Operations from March 1995 to
July 1996; Vice President,
Construction and Remediation from 1988
to March 1995.
James G. Kirk........... Vice President, General Vice President, General Counsel and
Counsel and Secretary. Secretary from September 1996 to the
present; General Counsel, Eastern
Operations from 1991 to September
1996.
</TABLE>
The following table sets forth the name, business or residence address,
principal occupation or employment at the present time and during the last
five years, and the name of any corporation or other organization in which
such employment is conducted or was conducted of each executive officer or
director of Purchaser. Except as otherwise indicated, all of the persons
listed below are citizens of the United States of America. Unless otherwise
indicated, the principal business address of each director or executive
officer is 2790 Mosside Boulevard, Monroeville, Pennsylvania 15146-2792,
except Mr. Register, whose principal business address is 11499 Chester Road,
Cincinnati, Ohio 45246. Directors of Purchaser are indicated with an asterisk.
<TABLE>
<CAPTION>
NAME, CITIZENSHIP AND PRESENT OCCUPATION MATERIAL POSITIONS HELD
CURRENT BUSINESS ADDRESS OR EMPLOYMENT DURING THE PAST FIVE YEARS
<S> <C> <C>
*Anthony J. DeLuca...... Chief Executive Officer and Chief Executive Officer and President
President. Director since of Parent from July 1997 to the
1998. present; Director of Parent from 1996
to the present; President and acting
Chief Executive Officer of Parent from
July 1996 to July 1997; Senior Vice
President and Chief Financial Officer
of Parent from March 1990 to July
1997.
*Daniel A. D'Aniello.... Director since 1998. Managing Director of Carlyle from 1987
to the present. Director of Parent
from 1996 to the present.
*Philip B. Dolan........ Director since 1998. Vice President of Carlyle from 1989 to
the present. Director of Parent from
1996 to the present.
</TABLE>
S-7
<PAGE>
SCHEDULE II
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND PURCHASER--(CONTINUED)
<TABLE>
<CAPTION>
NAME, CITIZENSHIP AND
CURRENT BUSINESS PRESENT OCCUPATION MATERIAL POSITIONS HELD
ADDRESS OR EMPLOYMENT DURING THE PAST FIVE YEARS
<S> <C> <C>
Harry J. Soose....... Treasurer. Currently Vice President, Finance and
Controller of Parent and has been an
employee of Parent since 1991. He has
held the positions of Vice President
and Controller and Controller,
Construction and Remediation Division
of Parent.
James G. Kirk........ Vice President and Vice President, General Counsel and
Secretary. Secretary of Parent from September
1996 to the present; General Counsel,
Eastern Operations from 1991 to
September 1996.
James M. Redwine..... Assistant Secretary. Currently Senior Corporate Counsel and
Assistant Secretary of Parent and has
been an employee of Parent for the
past five years. He has held the
positions of Corporate Counsel and
Associate Counsel of Parent.
Joseph K. Register, Jr... Vice President. Currently Vice President, Consulting
Services of Parent, and has been an
employee of Parent for the past five
years. He has held the positions of
Director, North Region Operations,
Director, Midwest Operations, and
Project Hydrogeologist for Parent.
</TABLE>
S-8
<PAGE>
ANNEX A
TEXT OF SECTIONS 1701.84 AND 1701.85 OF THE OHIO GENERAL CORPORATION LAW
1701.84 DISSENTING SHAREHOLDERS ENTITLED TO RELIEF.--The following are
entitled to relief as dissenting shareholders under section 1701.85 of the
Revised Code:
(A) Shareholders of a domestic corporation that is being merged or
consolidated into a surviving or new entity, domestic or foreign, pursuant to
section 1701.78, 1701.781, 1701.79, or 1701.801 of the Revised Code;
(B) In the case of a merger into a domestic corporation, shareholders of the
surviving corporation who under section 1701.78 or 1701.781 of the Revised
Code are entitled to vote on the adoption of an agreement of merger, but only
as to the shares so entitling them to vote;
(C) Shareholders, other than the parent corporation, of a domestic
subsidiary corporation that is being merged into the domestic or foreign
parent corporation pursuant to section 1701.80 of the Revised Code;
(D) In the case of a combination or a majority share acquisition,
shareholders of the acquiring corporation who under section 1701.83 of the
Revised Code are entitled to vote on such transaction, but only as to the
shares so entitling them to vote;
(E) Shareholders of a domestic subsidiary corporation into which one or more
domestic or foreign corporations are being merged pursuant to section 1701.801
of the Revised Code. (Last amended by H.B. 495, L. '96, eff. 10-3-96.).
1701.85 RELIEF FOR DISSENTING SHAREHOLDERS; QUALIFICATION; PROCEDURES.--
(A)(1) A shareholder of a domestic corporation is entitled to relief as a
dissenting shareholder in respect of the proposals described in sections
1701.74, 1701.76, and 1701.84 of the Revised Code, only in compliance with
this section.
(2) If the proposal must be submitted to the shareholders of the corporation
involved, the dissenting shareholder shall be a record holder of the shares of
the corporation as to which he seeks relief as of the date fixed for the
determination of shareholders entitled to notice of a meeting of the
shareholders as to which the proposal is to be submitted, and such shares
shall not have been voted in favor of the proposal. Not later than ten days
after the date on which the vote on the proposal was taken at the meeting of
the shareholders, the dissenting shareholder shall deliver to the corporation
a written demand for payment to him of the fair cash value of the shares as to
which he seeks relief, which demand shall state his address, the number and
class of such shares, and the amount claimed by him as the fair cash value of
the shares.
(3) The dissenting shareholder entitled to relief under division (C) of
section 1701.84 of the Revised Code in the case of a merger pursuant to
section 1701.80 of the Revised Code and a dissenting shareholder entitled to
relief under division (E) of section 1701.84 of the Revised Code in the case
of a merger pursuant to section 1701.801 of the Revised Code shall be a record
holder of the shares of the corporation as to which he seeks relief as of the
date on which the agreement of merger was adopted by the directors of that
corporation. Within twenty days after he has been sent the notice provided in
section 1701.80 or 1701.801 of the Revised Code, the dissenting shareholder
shall deliver to the corporation a written demand for payment with the same
information as that provided for in division (A)(2) of this section.
(4) In the case of a merger or consolidation, a demand served on the
constituent corporation involved constitutes service on the surviving or the
new entity, whether the dissenting shareholder, within fifteen days from the
date of the sending of such request, shall deliver to the corporation the
certificates requested so that the corporation may forthwith endorse on them a
legend to the effect that demand for the fair cash value of such shares has
been made. The corporation promptly shall return such endorsed certificates to
the dissenting shareholder. A dissenting shareholder's failure to deliver such
certificates terminates his rights as a dissenting
A-1
<PAGE>
shareholder, at the option of the corporation, exercised by written notice
sent to the dissenting shareholder within twenty days after the lapse of the
fifteen-day period, unless a court for good cause shown otherwise directs. If
shares represented by a certificate on which such a legend has been endorsed
are transferred, each new certificate issued for them shall bear a similar
legend, together with the name of the original dissenting holder of such
shares. Upon receiving a demand for payment from a dissenting shareholder who
is the record holder of uncertificated securities, the corporation shall make
an appropriate notation of the demand for payment in its shareholder records.
If uncertificated shares for which payment has been demanded are to be
transferred, any new certificate issued for the shares shall bear the legend
required for certificated securities as provided in this paragraph. A
transferee of the shares so endorsed, or of uncertificated securities where
such notation has been made, acquires only such rights in the corporation as
the original dissenting holder of such shares had immediately after the
service of a demand for payment of the fair cash value of the shares. A
request under this paragraph, by the corporation is not an admission by the
corporation that the shareholder is entitled to relief under this section.
(B) Unless the corporation and the dissenting shareholder have come to an
agreement on the fair cash value per share of the shares as to which the
dissenting shareholder seeks relief, the dissenting shareholder or the
corporation, which in case of a merger or consolidation may be the surviving
or new entity, within three months after the service of the demand by the
dissenting shareholder, may file a complaint in the court of common pleas of
the county in which the principal office of the corporation that issued the
shares is located or was located when the proposal was adopted by the
shareholders of the corporation, or, if the proposal was not required to be
submitted to the shareholders, was approved by the directors. Other dissenting
shareholders, within that three-month period, may join as plaintiffs or may be
joined as defendants in any such proceeding, and any two or more such
proceedings may be consolidated. The complaint shall contain a brief statement
of the facts, including the vote and the facts entitling the dissenting
shareholder to the relief demanded. No answer to such a complaint is required.
Upon the filing of such a complaint, the court, on motion of the petitioner,
shall enter an order fixing a date for a hearing on the complaint and
requiring that a copy of the complaint and a notice of the filing and of the
date for hearing be given to the respondent or defendant in the manner in
which summons is required to be served or substituted service is required to
be made in other cases. On the day fixed for the hearing on the complaint or
any adjournment of it, the court shall determine from the complaint and from
such evidence as is submitted by either party whether the dissenting
shareholder is entitled to be paid the fair cash value of any shares and, if
so, the number and class of such shares. If the court finds that the
dissenting shareholder is so entitled, the court may appoint one or more
persons as appraisers to receive evidence and to recommend a decision on the
amount of the fair cash value. The appraisers have such power and authority as
is specified in the order of their appointment. The court thereupon shall make
a finding as to the fair cash value of a share and shall render judgment
against the corporation for the payment of it, with interest at such rate and
from such date as the court considers equitable. The costs of the proceeding,
including reasonable compensation to the appraisers to be fixed by the court,
shall be assessed or apportioned as the court considers equitable. The
proceeding is a special proceeding and final orders in it may be vacated,
modified, or reversed on appeal pursuant to the Rules of Appellate Procedure
and, to the extent not in conflict with those rules, Chapter 2505 of the
Revised Code. If, during the pendency of any proceeding instituted under this
section, a suit or proceeding is or has been instituted to enjoin or otherwise
to prevent the carrying out of the action as to which the shareholder has
dissented, the proceeding instituted under this section shall be stayed until
the final determination of the other suit or proceeding. Unless any provision
in division (D) of this section is applicable, the fair cash value of the
shares that is agreed upon by the parties or fixed under this section shall be
paid within thirty days after the date of final determination of such value
under this division, the effective date of the amendment to the articles, or
the consummation of the other action involved, whichever occurs last. Upon the
occurrence of the last such event, payment shall be made immediately to a
holder of uncertificated securities entitled to such payment. In the case of
holders of shares represented by certificates, payment shall be made only upon
and simultaneously with the surrender to the corporation of the certificates
representing the shares for which the payment is made.
(C) If the proposal was required to be submitted to the shareholders of the
corporation, fair cash value as to those shareholders shall be determined as
of the day prior to the day on which the vote by the shareholders
A-2
<PAGE>
was taken, and, in the case of a merger pursuant to section 1701.80 or
1701.801 of the Revised Code, fair cash value as to shareholders of a
constituent subsidiary corporation shall be determined as of the day before
the adoption of the agreement of merger by the directors of the particular
subsidiary corporation. The fair cash value of a share for the purposes of
this section is the amount that a willing seller who is under no compulsion to
sell would be willing to accept and that a willing buyer who is under no
compulsion to purchase would be willing to pay, but in no event shall the fair
cash value of a share exceed the amount specified in the demand of the
particular shareholder. In computing such fair cash value, any appreciation or
depreciation in market value resulting from the proposal submitted to the
directors or to the shareholders shall be excluded.
(D)(1) The right and obligation of a dissenting shareholder to receive such
fair cash value and to sell such shares as to which he seeks relief, and the
right and obligation of the corporation to purchase such shares and to pay
fair cash value of them terminates if any of the following applies:
(a) The dissenting shareholder has not complied with this section, unless
the corporation by its directors waives such failure;
(b) The corporation abandons the action involved or is finally enjoined
or prevented from carrying it out, or the shareholders rescind their
adoption, of the action involved;
(c) The dissenting shareholder withdraws his demand, with the consent of
the corporation by its directors;
(d) The corporation and the dissenting shareholder have not come to an
agreement as to the fair cash value per share, and neither the shareholder
nor the corporation filed or joined in a complaint under division (B) of
this section within the period provided in that division.
(2) For purposes of division (D)(1) of this section, if the merger or
consolidation has become effective and the surviving or new entity is not a
corporation, action required to be taken by the directors of the corporation
shall be taken by the general partners of a surviving or new partnership or
the comparable representatives of any other surviving or new entity.
(E) From the time of the dissenting shareholder's giving of the demand until
either the termination of the rights and obligations arising from it or the
purchase of the shares by the corporation, all other rights accruing from such
shares, including voting and dividend or distribution rights, are suspended.
If during the suspension, any dividend or distribution is paid in money upon
shares of such class or any dividend, distribution, or interest is paid in
money upon any securities issued in extinguishment of or in substitution for
such shares, an amount equal to the dividend, distribution, or interest which,
except for the suspension, would have been payable upon such shares or
securities, shall be paid to the holder of record as a credit upon the fair
cash value of the shares. If the right to receive fair cash value is
terminated other than by the purchase of the shares by the corporation, all
rights of the holder shall be restored and all distributions which, except for
the suspension, would have been made shall be made to the holder of record of
the shares at the time of termination.
A-3
<PAGE>
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. Letters of Transmittal and certificates for Shares should be sent or
delivered by each shareholder of the Company or his broker, dealer, commercial
bank or trust company to the Depositary at one of its addresses set forth
below:
The Depositary for the Offer is:
BANKBOSTON, N.A.
By Mail: By Overnight Courier: By Hand:
Boston EquiServe, L.P.
Corporate Reorganization
Post Office Box 2089
Boston, MA 02266-2089
BankBoston, N.A. Boston EquiServe, L.P. Corporate Reorganization 150 Royall
Street Mail Stop 45-02-53 Canton, MA 02021
BankBoston, N.A.
Securities Transfer &
Reporting Service Inc.
55 Broadway, 3rd Floor
New York, NY 10006 Attn:
Delivery Window
By Facsimile Confirm by Telephone:
Transmission:
(781) 575-3204
(For Eligible
Institutions Only) (781)
575-2420
Any questions or requests for assistance may be directed to the Information
Agent at its address and telephone numbers set forth below. Requests for
additional copies of this Offer to Purchase and the Letter of Transmittal may
be directed to the Information Agent, or the Depositary. Shareholders may also
contact their brokers, dealers, commercial banks or trust companies for
assistance concerning the Offer.
The Information Agent for the Offer is:
LOGO
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (call collect)
or
CALL TOLL-FREE (800) 322-2885
<PAGE>
EXHIBIT (A)(2)
LETTER OF TRANSMITTAL
Exhibit (a)(2)
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER 13,933,000 SHARES OF COMMON STOCK
OF
OHM CORPORATION
AT
$11.50 NET PER SHARE
PURSUANT TO THE OFFER TO PURCHASE DATED JANUARY 16, 1998
OF
IT-OHIO
A WHOLLY-OWNED SUBSIDIARY OF
INTERNATIONAL TECHNOLOGY CORPORATION
- -------------------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 9:00 A.M.,
NEW YORK CITY TIME, ON TUESDAY, FEBRUARY 17, 1998, UNLESS THE OFFER IS
EXTENDED.
- -------------------------------------------------------------------------------
The Depositary for the Offer is:
BANKBOSTON, N.A.
By Mail: By Overnight Courier: By Hand:
Boston EquiServe, L.P. BankBoston, N.A. BankBoston, N.A.
Corporate Reorganization Boston EquiServe, L.P. Securities Transfer &
Post Office Box 2089 Corporate Reorganization Reporting Service, Inc.
Boston, MA 02266-2089 150 Royall Street 55 Broadway, 3rd Floor
Mail Stop 45-02-53 New York, NY 10006
Canton, MA 02021 Attn: Delivery Window
By Facsimile Transmission: Confirm by Telephone:
(For Eligible Institutions Only) 781-575-3204
781-575-2420
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- -------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) CERTIFICATE(S) TENDERED
(PLEASE FILL IN, IF BLANK) (ATTACH ADDITIONAL LIST IF NECESSARY)
- -------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER
OF SHARES NUMBER OF
CERTIFICATE REPRESENTED BY SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
-------------------------------------------
<S> <C> <C>
-------------------------------------------
-------------------------------------------
-------------------------------------------
TOTAL SHARES
-------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
* Need not be completed by Shareholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares being
delivered to the Depositary are being tendered. See Instruction 4.
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
Exhibit (a)(2)-1
<PAGE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN ONE LISTED
ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF
TRANSMITTAL IN THE APPROPRIATE SPACE PROVIDED THEREFOR, WITH SIGNATURE
GUARANTEE IF REQUIRED, AND COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW.
SEE INSTRUCTION 1.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used either if certificates are to be
forwarded herewith or, unless an Agent's Message (as defined in the Offer to
Purchase) is utilized, if delivery is to be made by book-entry transfer to the
account maintained by the Depositary at The Depositary Trust Company (the
"Book-Entry Transfer Facility") pursuant to the procedures set forth in
Section 2 of the Offer to Purchase. Shareholders whose certificates are not
immediately available or who cannot deliver their certificates or deliver
confirmation of the book-entry transfer of their Shares (as defined below)
into the Depositary's account at the Book-Entry Transfer Facility ("Book-Entry
Confirmation") and all other documents required hereby to the Depositary on or
prior to the Expiration Date (as defined in the Offer to Purchase) must tender
their Shares according to the guaranteed delivery procedures set forth in
Section 2 of the Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS
TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY
TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution: _____________________________________________
Account Number _____________________________________________________________
Transaction Code Number ____________________________________________________
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Owner(s): ____________________________________________
Window Ticket Number (if any): _____________________________________________
Date of Execution of Notice of Guaranteed Delivery: ________________________
Name of Institution that Guaranteed Delivery: ______________________________
If Delivered by Book-Entry Transfer, Check box: [ ]
Account Number _____________________________________________________________
Transaction Code Number ____________________________________________________
Exhibit (a)(2)-2
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ CAREFULLY THE ACCOMPANYING INSTRUCTIONS.
Ladies and Gentlemen:
The undersigned hereby tenders to IT-Ohio, Inc., an Ohio corporation (the
"Purchaser"), which is a newly-formed, wholly-owned subsidiary of
International Technology Corporation, a Delaware corporation (the "Parent"),
the above-described shares of Common Stock, par value $0.10 per share (the
"Common Stock" or the "Shares"), of OHM Corporation, an Ohio corporation (the
"Company"), pursuant to Purchaser's offer to purchase 13,933,000 Shares upon
the terms and subject to the conditions set forth in the Offer to Purchase
dated January 16, 1998 (the "Offer to Purchase"), receipt of which is hereby
acknowledged, and in this Letter of Transmittal (which, together with the
Offer to Purchase, constitute the "Offer"), at the purchase price of $11.50
per Share, net to each tendering shareholder in cash (the "Offer Price").
Subject to, and effective upon, acceptance for payment of the Shares
tendered herewith in accordance with the terms and subject to the conditions
of the Offer, the undersigned hereby sells, and transfers to, upon the order
of Purchaser, all right, title and interest in and to all the Shares that are
being tendered hereby and irrevocably constitutes and appoints the Depositary
the true and lawful agent and attorney-in-fact of the undersigned with respect
to such Shares with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to (a) deliver
certificates for such Shares, or transfer ownership of such Shares (and any
such other Shares or securities) on the account books maintained by the Book-
Entry Transfer Facility, together in either such case with all accompanying
evidences of transfer and authenticity, to or upon the order of Purchaser upon
receipt by the Depositary, as the undersigned's agent, of the Offer Price
(adjusted, if appropriate, as provided in the Offer to Purchase), (b) present
such Shares for transfer on the books of the Company and (c) receive all
benefits and otherwise exercise all rights of beneficial ownership of such
Shares, all in accordance with the terms of the Offer.
The undersigned hereby irrevocably appoints designees of Purchaser as such
shareholders and proxies, each with full power of substitution, to the full
extent of such shareholder's rights with respect to the Shares tendered by
such shareholder and accepted for payment by Purchaser and in the manner as
each such attorney and proxy or his substitute shall in his sole discretion
deem proper, and otherwise act (including pursuant to written consent) with
respect to all the Shares tendered hereby which have been accepted for payment
by Purchaser prior to the time of such vote or action, which the undersigned
is entitled to vote at any meeting of shareholders (whether annual or special
and whether or not an adjourned meeting) of the Company, or consent in lieu of
any such meeting, or otherwise. This proxy is coupled with an interest in the
Company and in the Shares and is irrevocable and is granted in consideration
of, and is effective upon, the deposit by Purchaser with the Depositary of the
Offer Price for such Shares in acceptance with the terms of the Offer. Such
acceptance for payment shall revoke all proxies granted by the undersigned at
any time with respect to such Shares and no subsequent proxies will be given
(and if given will be deemed not to be effective) with respect thereto by the
undersigned.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby and that, when the same are accepted for payment for Purchaser,
Purchaser will acquire good and unencumbered title thereto, free and clear of
all liens, restrictions, charges and encumbrances and the same will not be
subject to any adverse claim. The undersigned, upon request, will execute and
deliver any additional documents deemed by the Depositary or Purchaser to be
necessary or desirable to complete the sale, assignment and transfer of the
Shares tendered hereby.
All authority herein conferred or agreed to be conferred in this Letter of
Transmittal shall not be affected by, and shall survive, the death or
incapacity of the undersigned and any obligation of the undersigned hereunder
shall be binding upon the successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned. Except as stated
in the Offer to Purchase, this tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 2 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the
undersigned and Purchaser upon the terms and subject to the conditions of the
Offer.
Exhibit (a)(2)-3
<PAGE>
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the total purchase price or any certificates for
Shares not tendered or accepted for payment in the name(s) of the undersigned.
Similarly, unless otherwise indicated under "Special Delivery Instructions,"
please mail the check for the total purchase price or return any certificates
for Shares not tendered or accepted for payment (and accompanying documents,
as appropriate) to the undersigned at the address shown below the
undersigned's signature. In the event that both the Special Delivery
Instructions and the Special Payment Instructions are completed, please issue
the check for the total purchase price or any certificates for Shares not
tendered or accepted for payment in the name of, and deliver such check or
return such certificates to the person or persons so indicated. Shareholders
delivering Shares by book-entry transfer may request that any Shares not
accepted for payment be returned by crediting such account maintained at the
Book-Entry Transfer Facility by making an appropriate entry under "Special
Payment Instructions." The undersigned recognizes that Purchaser has no
obligation pursuant to the Special Payment Instructions to transfer any Shares
from the name of the registered holder thereof if Purchaser does not accept
for payment any of the Shares so tendered.
___________________________________ ___________________________________
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7) (SEE INSTRUCTIONS 1, 4, 5, 6 AND 7)
To be completed ONLY if certif- To be completed ONLY if certif-
icates for Shares not tendered icates for Shares not tendered
or not purchased and/or the or not purchased and/or the
check for the Offer Price of check for the Offer Price of
Shares purchased are to be is- Shares purchased are to be sent
sued in the name of someone to someone other than the under-
other than the undersigned, or signed, or to the undersigned at
if Shares delivered by book-en- an address other than that shown
try transfer which are not pur- above.
chased are to be returned by
credit to an account maintained Issue check and/or certificate to:
at the Book-Entry Transfer Fa-
cility other than that desig-
nated above. Name: ___________________________
(PLEASE PRINT)
Issue check and/or certificate to:
Address: ________________________
Name: ___________________________ _________________________________
(PLEASE PRINT) (INCLUDE ZIP CODE)
Address: ________________________ _________________________________
(TAX IDENTIFICATION OR SOCIAL
SECURITY NUMBER)
_________________________________
(INCLUDE ZIP CODE)
_________________________________
(TAX IDENTIFICATION OR SOCIAL
SECURITY NUMBER)
[ ] Credit unpurchased Shares
delivered by book-entry
transfer to the Book-Entry
Transfer Facility account.
_________________________________ _________________________________
(ACCOUNT NUMBER)
_________________________________
Exhibit (a)(2)-4
<PAGE>
- -------------------------------------------------------------------------------
SIGN HERE
(Complete Substitute Form W-9 on Reverse)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Signature(s) Of Owner(s)
Dated: , 1998
-----------------------------------------------------------------
(Must be signed by registered holder(s) exactly as name(s) appear(s) on stock
certificate(s) or on a security position listing or by person(s) authorized to
become registered holder(s) by certificates and documents transmitted herewith.
If signature is by a trustee, executor, administrator, guardian, attorney-in-
fact, agent, officer of a corporation or other person acting in a fiduciary or
representative capacity, please provide the following information. See
Instructions 1 and 5.)
Name(s)
----------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Please Print)
Capacity (Full Title)
--------------------------------------------------------
(See Instruction 5)
Address
---------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number
-----------------------------------------------
Tax Identification or Social Security No.
------------------------------------
(Complete Substitute Form W-9 on Reverse)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED--SEE INSTRUCTIONS 1 AND 5)
Authorized Signature
--------------------------------------------------------
Name
------------------------------------------------------------------------
(Please Print)
Title
-----------------------------------------------------------------------
Name of Firm
----------------------------------------------------------------
Address
---------------------------------------------------------------------
-----------------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number
----------------------------------------------
Dated: , 1998
----------------------------------------------------------------
-----------------------------------------------------------------------------
Exhibit (a)(2)-5
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. No signature guarantee on this Letter of
Transmittal is required (i) if this Letter of Transmittal is signed by the
registered holder of the Shares (which term, for purposes of this document,
shall include any participant in the Book-Entry Transfer Facility whose name
appears on a security position listing as the owner of Shares) tendered
herewith, unless such holder has completed either the box entitled "Special
Delivery Instructions" or the box entitled "Special Payment Instructions" on
the reverse hereof, or (ii) if such Shares are tendered for the account of a
bank, broker, dealer, credit union, savings-association or other entity that
is a member in good standing of the Securities Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program (each an "Eligible Institution"). In all
other cases, all signatures on this Letter of Transmittal must be guaranteed
by an Eligible Institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Certificates. This Letter of
Transmittal is to be completed by shareholders either if certificates are to
be forwarded herewith or if tenders of Shares are to be made pursuant to the
procedures for delivery-by book-entry transfer set forth in Section 2 of the
Offer to Purchase. Certificates for all physically tendered Shares, or any
Book-Entry Confirmation of Shares, as the case may be, as well as a properly
completed and duly executed Letter of Transmittal (or facsimile thereof), with
any required signature guarantees, or an Agent's Message (as defined in the
Offer to Purchase) in connection with a book-entry transfer, and any other
required documents required by this Letter of Transmittal, must be received by
the Depositary at one of its addresses set forth herein on or prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase). Tendering
shareholders whose certificates for Shares are not immediately available or
who cannot deliver their certificates and all other required documents to the
Depositary on or prior to the Expiration Date may tender their Shares by
properly completing and duly executing the Notice of Guaranteed Delivery
pursuant to the guaranteed delivery procedure set forth in Section 2 of the
Offer to Purchase. Pursuant to such procedure, (i) such tender must be made by
or through an Eligible Institution, (ii) a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form provided by
Purchaser, must be received by the Depositary prior to the Expiration Date,
and (iii) the certificates for all physically tendered Shares or Book-Entry
Confirmation of Shares, as the case may be, together with a properly completed
and duly executed Letter of Transmittal (or facsimile thereof), unless an
Agent's Message is utilized, and any other documents required by this Letter
of Transmittal, must be received by the Depositary within three New York Stock
Exchange trading days after the date of execution of such Notice of Guaranteed
Delivery, all as provided in Section 2 of the Offer to Purchase.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE CERTIFICATE FOR
SHARES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-
ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING
STOCKHOLDER AND, EXCEPT AS OTHERWISE PROVIDED IN THIS INSTRUCTION 2, THE
DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF
DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
INSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering shareholders, by execution
of this Letter of Transmittal (or facsimile thereof), waive any right to
receive any notice of the acceptance of their Shares for payment.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
signed schedule attached hereto.
4. Partial Tenders. (Not applicable to shareholders who tender by book-entry
transfer.) If fewer than all the Shares evidenced by any certificate submitted
are to be tendered, fill in the number of Shares which are to be tendered in
the box entitled "Number of Shares Tendered." In such case, new certificate(s)
for the remainder of the Shares that were evidenced by your old certificate(s)
will be sent to you, unless otherwise provided in the
Exhibit (a)(2)-6
<PAGE>
appropriate box on this Letter of Transmittal, as soon as practicable after
the Expiration Date. All Shares represented by certificates delivered to the
Depositary will be deemed to have been tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal, Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond exactly with the name(s) as
written on the face of the certificate(s) without alteration, enlargement or
any change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal or any certificates or stock powers are signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of
a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Purchaser of such person's authority so to act must be
submitted.
When this Letter of Transmittal is signed by the registered owner(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment or certificates for Shares
not tendered or purchased are to be issued to a person other than the
registered owner(s). Signatures on such certificates or stock powers must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Shares listed, the certificates must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name or names of the registered owner or owners appear on the certificates.
Signatures on such certificates or stock powers must be guaranteed by an
Eligible Institution.
6. Stock Transfer Taxes. Except as set forth in this Instruction 6,
Purchaser will pay or cause to be paid any stock transfer taxes with respect
to the transfer and sale of purchased Shares to it or its order pursuant to
the Offer. If payment of the purchase price is to be made to, or if
certificates for Shares not tendered or purchased are to be registered in the
name of, any person other than the registered holder, or if tendered
certificates are registered in the name of any person other than the person(s)
signing this Letter of Transmittal, the amount of any stock transfer taxes
(whether imposed on the registered holder or such person) payable on account
of the transfer to such person will be deducted from the total purchase price
for all tendered Shares unless satisfactory evidence of the payment of such
taxes or exemption therefrom is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATES LISTED IN THIS LETTER OF
TRANSMITTAL.
7. Special Payment and Delivery Instructions. If a check or certificates for
unpurchased Shares are to be issued in the name of a person other than the
signer of this Letter of Transmittal or if a check is to be sent or such
certificates are to be returned to someone other than the signer of this
Letter of Transmittal or to an address other than that shown above, the
appropriate boxes on this Letter of Transmittal should be completed.
Shareholders tendering Shares by book-entry transfer may request that Shares
not purchased be credited to such account maintained at the Book-Entry
Transfer Facility. If no such instructions are given, such Shares not
purchased will be returned by crediting the account at the Book-Entry Transfer
Facility.
8. Requests for Assistance or Additional Copies. Requests for assistance may
be directed to, or additional copies of the Offer to Purchase and this Letter
of Transmittal may be obtained from, the Information Agent at its address set
forth below or from your broker, dealer, commercial bank or trust company.
Exhibit (a)(2)-7
<PAGE>
9. Waiver of Conditions. Subject to the terms of the Merger Agreement (as
defined in the Offer to Purchase), the conditions of the Offer may be waived
by Purchaser, in whole or in part, at any time and from time to time in the
Purchaser's sole discretion, in the case of any Shares tendered.
10. Substitute Form W-9. The tendering shareholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on
Substitute Form W-9 which is provided under "Important Tax Information" below,
and to certify whether the shareholder is subject to backup withholding of
Federal income tax. If a tendering shareholder is subject to backup
withholding, the shareholder must cross out item (2) of the Certification box
of the Substitute Form W-9. Failure of shareholder to provide its correct TIN
or to provide the certification called for on the Substitute Form W-9 may
subject the tendering shareholder to 31% Federal income tax withholding on the
payment of all reportable payments made to such shareholder. If the tendering
shareholder has not been issued a TIN and has applied for a number or intends
to apply for a number in the near future, he or she should write "Applied For"
in the space provided for the TIN in Part I, and sign and date the Substitute
Form W-9. If "Applied For" is written in Part I and the Depositary is not
provided with a TIN within 60 days, the Depositary will withhold 31% on all
payments of the purchase price until a TIN is provided to the Depositary.
11. Lost, Destroyed or Stolen Certificates. If any certificate(s)
representing Shares has been lost, destroyed or stolen, the shareholder should
promptly notify the Depositary. The shareholder will then be instructed as to
the steps that must be taken in order to replace the certificate(s). This
Letter of Transmittal and related documents cannot be processed until the
procedures for replacing lost or destroyed certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE THEREOF), TOGETHER
WITH CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER
REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE DEPOSITARY, OR THE NOTICE OF
GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY, ON OR PRIOR TO THE
EXPIRATION DATE.
IMPORTANT TAX INFORMATION
Under Federal income tax law, a shareholder whose tendered Shares are
accepted for payment is required to provide the Depositary with such
shareholder's correct TIN on Substitute Form W-9 below. If such shareholder is
an individual, the TIN is his or her social security number. If a tendering
shareholder is subject to backup withholding, he or she must cross out item
(2) of the Certification box on the Substitute Form W-9. If the Depositary is
not provided with the correct TIN, the shareholder may be subject to a $50
penalty imposed by the Internal Revenue Service. In addition, payments that
are made to such shareholder with respect to Shares purchased pursuant to the
Offer may be subject to backup withholding.
Certain shareholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, that shareholder must submit a statement, signed under penalties of
perjury, attesting to that individual's exempt status. Such statements may be
obtained from the Depositary. Exempt shareholders, other than foreign
individuals, should furnish their TIN, write "Exempt" on the face of the
Substitute Form W-9 below and sign, date and return the Substitute Form W-9 to
the Depositary. See the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any payments made to the shareholder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will
be reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund may be obtained.
Exhibit (a)(2)-8
<PAGE>
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a shareholder
with respect to Shares purchased pursuant to the Offer, the shareholder is
required to notify the Depositary of his or her correct TIN by completing the
form below certifying that the TIN provided on the Substitute Form W-9 is
correct (or that such shareholder is awaiting a TIN).
WHAT NUMBER TO GIVE THE DEPOSITARY
The shareholder is required to give the Depositary the social security
number or employer identification number of the record owner of the Shares. If
the Shares are in more than one name or are not in the name of the actual
owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidelines on
which number to report. If the tendering shareholder has not been issued a TIN
and has applied for a number or intends to apply for a number in the near
future, the shareholder should write "Applied For" in the space provided for
in the TIN in Part I, and sign and date the Substitute Form W-9. If "Applied
For" is written in Part I and the Depositary is not provided with a TIN within
60 days, the Depositary will withhold 31% on all payments of the purchase
price until a TIN is provided to the Depositary.
Exhibit (a)(2)-9
<PAGE>
- -------------------------------------------------------------------------------
PAYER'S NAME:
- -------------------------------------------------------------------------------
PART I--Please provide -------------------------
your TIN in the box at Social Security Number
right and certify by or Employer
SUBSTITUTE signing and dating Identification Number
FORM W-9 below. (if awaiting TIN write
DEPARTMENT OF "Applied For")
THE TREASURY -----------------------------------------------------
INTERNAL PART II--For Payees exempt from backup
REVENUE SERVICE withholding, see the attached Guidelines for
Certification of Taxpayer Identification Number on
Substitute Form W-9 and complete as instructed
therein.
-----------------------------------------------------
PAYER'S REQUEST FOR CERTIFICATION--Under the penalties of perjury, I
TAXPAYER IDENTIFICATION certify that:
NUMBER (TIN) (1) The number shown on this form is my correct
Taxpayer Identification Number (or a Taxpayer
Identification Number has not been issued to
me) and either (a) I have mailed or delivered
an application to receive a Taxpayer
Identification Number to the appropriate
Internal Revenue Service ("IRS") or Social
Security Administration office or (b) I intend
to mail or deliver an application in the near
future. (I understand that if I do not provide
a Taxpayer Identification Number within 60
days, 31% of all reportable payments made to
me thereafter will be withheld until I provide
a number); and
(2) I am not subject to backup withholding either
because I have not been notified by the IRS that
I am subject to backup withholding as a result of
a failure to report all interest or dividends, or
the IRS has notified me that I am no longer
subject to backup withholding.
CERTIFICATION INSTRUCTIONS--You must cross out
item (2) above if you have been notified by the
IRS that you are subject to backup withholding
because of underreporting interest or dividends on
your tax return. However, if after being notified
by the IRS that you were subject to backup
withholding you received another notification from
the IRS that you are no longer subject to backup
withholding, do not cross out item (2). (Also see
instructions in the enclosed Guidelines.)
-----------------------------------------------------
SIGNATURE __________________ DATE _________________
- --------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE
REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
Exhibit (a)(2)-10
<PAGE>
The Information Agent for the Offer is:
[LOGO OF MACKENZIE PARTNERS, INC.]
156 FIFTH AVENUE
NEW YORK, NEW YORK 10010
(212) 929-5500 (CALL COLLECT)
OR
CALL TOLL FREE (800) 322-2885
Exhibit (a)(2)-11
<PAGE>
EXHIBIT (A)(3)
NOTICE OF GUARANTEED DELIVERY
Exhibit (a)(3)
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF 13,933,000 SHARES OF COMMON STOCK
OF
OHM CORPORATION
TO
IT-OHIO, INC.
A WHOLLY-OWNED SUBSIDIARY
OF
INTERNATIONAL TECHNOLOGY CORPORATION
- -------------------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 9:00
A.M., NEW YORK CITY TIME, ON TUESDAY, FEBRUARY 17, 1998, UNLESS THE OFFER
IS EXTENDED.
- -------------------------------------------------------------------------------
This form, or one substantially equivalent hereto, must be used to accept
the Offer (as defined below) if certificates representing shares of common
stock, par value $0.10 per share (the "Shares"), of OHM Corporation, an Ohio
corporation (the "Company"), are not immediately available, if the procedure
for Book-Entry transfer cannot be completed on a timely basis or if time will
not permit all required documents to reach the Depositary (as defined in the
Offer to Purchase) prior to the Expiration Date (as defined in the Offer to
Purchase). Such form may be delivered by hand or transmitted by telegram,
facsimile transmission or mail to the Depositary. See Section 2 of the Offer
to Purchase.
The Depositary for the Offer is:
BANKBOSTON, N.A.
By Mail: By Overnight Courier: By Hand:
Boston EquiServe, L.P. BankBoston, N.A. BankBoston, N.A.
Corporate Reorganization Boston EquiServe, L.P. Securities Transfer &
Post Office Box 2089 Corporate Reorganization Reporting Services, Inc.
Boston, MA 02266-2089 150 Royall Street 55 Broadway, 3rd Floor
Mail Stop 45-02-53 New York, New York 10006
Canton, MA 02021 Attn: Delivery Window
By Facsimile Transmission: Confirm by Telephone:
(For Eligible Institutions Only) (781) 575-3204
(781) 575-2420
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
Exhibit (a)(3)-1
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to IT-Ohio, Inc., an Ohio corporation (the
"Purchaser"), which is a newly formed, wholly owned subsidiary of
International Technology Corporation, a Delaware corporation ("Parent") upon
the terms and subject to the conditions set forth in the Offer to Purchase
dated January 16, 1998 (the "Offer to Purchase") and the related Letter of
Transmittal (which, together with the Offer to Purchase, constitute the
"Offer"), receipt of which is hereby acknowledged. The information regarding
the number of Shares indicated below is provided pursuant to the guaranteed
delivery procedures set forth in Section 2 of the Offer to Purchase.
Certificate No(s). Name(s) of Record Holder(s) _______
(if available) ____________________
___________________________________
Number of Shares: _________________
___________________________________ ___________________________________
Check box if Shares will be (PLEASE TYPE OR PRINT)
tendered by book-entry transfer:
[_] Address(es) _______________________
Account Number ____________________
Dated ______________________ , 1998 Area Code and Tel. No. ____________
Signature(s) ______________________
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a bank, broker, dealer, credit union, savings association
or other entity that is a member in good standing of the Securities Transfer
Agents Medallion Program, the New York Stock Exchange Medallion Signature
Guarantee Program or the Stock Exchange Medallion Program, (a) represents that
the above named person(s) "own(s)" the Shares tendered hereby within the
meaning of Rule l4e-4 promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), (b) represents that such tender of Shares
complies with Rule 14e-4 under the Exchange Act, and (c) guarantees delivery
to the Depositary, at one of its addresses set forth above, of certificates
representing the Shares tendered hereby in proper form for transfer, or
confirmation of book-entry transfer of such Shares into the Depositary's
accounts at The Depositary Trust Company, in each case with delivery of a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), and any other required documents, within three New York Stock
Exchange trading days after the date hereof.
___________________________________ ___________________________________
NAME OF FIRM AUTHORIZED SIGNATURE
___________________________________ ___________________________________
ADDRESS TITLE
___________________________________ Name ______________________________
ZIP CODE PLEASE TYPE OR PRINT
Area Code and Tel. No. ____________ Date ________________________, 1998
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE.
CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL
Exhibit (a)(3)-2
<PAGE>
EXHIBIT (A)(4)
LETTER TO BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES AND OTHER
NOMINEES
Exhibit (a)(4)
<PAGE>
MACKENZIE PARTNERS, INC.
OFFER TO PURCHASE FOR CASH
13,933,000 SHARES OF COMMON STOCK
OF
OHM CORPORATION
AT
$11.50 NET PER SHARE
BY
IT-OHIO, INC.
A WHOLLY-OWNED SUBSIDIARY
OF
INTERNATIONAL TECHNOLOGY CORPORATION
- -----------------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 9:00 A.M.,
NEW YORK CITY TIME, ON TUESDAY, FEBRUARY 17, 1998, UNLESS THE OFFER IS
EXTENDED.
- -----------------------------------------------------------------------------
January 16, 1998
To Brokers, Dealers, Commercial Banks,
Trust Companies And Other Nominees:
We have been engaged to act as Information Agent in connection with the
offer by IT-Ohio, Inc., an Ohio corporation ("Purchaser"), which is a newly
formed, wholly owned subsidiary of International Technology Corporation, a
Delaware corporation ("Parent"), to purchase 13,933,000 shares of common
stock, par value $0.10 per share (the "Shares"), of OHM Corporation, an Ohio
corporation (the "Company"), at $11.50 per Share, net to each tendering
shareholder in cash, upon the terms and subject to the conditions set forth in
Purchaser's Offer to Purchase dated January 16, 1998 (the "Offer to Purchase")
and the related Letter of Transmittal (which, together with the offer to
Purchase, constitute the "Offer").
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY TENDERED
BY THE EXPIRATION DATE AND NOT WITHDRAWN AT LEAST 13,933,000 SHARES OF
COMMON STOCK, $0.10 PAR VALUE PER SHARE, OF THE COMPANY. THE OFFER
IS ALSO CONDITIONED ON THE SATISFACTION OR WAIVER OF CERTAIN
OTHER CONDITIONS, INCLUDING RECEIPT BY PURCHASER AND
THE COMPANY OF CERTAIN REGULATORY APPROVALS,
WHICH ARE DESCRIBED IN SECTION 15 OF
THE OFFER TO PURCHASE.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, or who hold
Shares registered in their own names, we are enclosing the following
documents:
1. Offer to Purchase dated January 16, 1998;
2. Letter of Transmittal to be used by shareholders of the Company in
accepting the Offer and tendering Shares;
3. Letter to Shareholders of the Company from the Chairman, President and
Chief Executive Officer of the Company, accompanied by the Company's
Solicitation/Recommendation Statement on Schedule 14D-9.
4. Letter to Clients which may be sent to your clients for whose account
you hold Shares in your name or in the name of your nominees, with space
provided for obtaining such clients' instructions with regard to the Offer;
5. Notice of Guaranteed Delivery to be used to accept the Offer if
certificates for Shares are not immediately available or time will not
permit all required documents to reach the Depositary prior to the
Expiration Date (as defined in the Offer to Purchase) or if the procedures
for book-entry transfer, as set forth in the Offer to Purchase, cannot be
completed in a timely manner;
Exhibit (a)(4)-1
<PAGE>
6. Guidelines for certification of taxpayer identification number on
substitute Form W-9; and
7. Return envelope addressed to BankBoston, N.A., as Depositary.
THE COMPANY'S BOARD OF DIRECTORS HAS UNANIMOUSLY DETERMINED THAT THE
TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT (AS DEFINED BELOW),
INCLUDING WITHOUT LIMITATION, THE OFFER AND THE MERGER, ARE FAIR TO AND IN THE
BEST INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS AND HAS UNANIMOUSLY
APPROVED AND ADOPTED THE MERGER AGREEMENT AND THE OFFER, THE MERGER AND THE
TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT. ACCORDINGLY, THE COMPANY'S
BOARD UNANIMOUSLY RECOMMENDS THAT THE COMPANY'S SHAREHOLDERS ACCEPT THE OFFER
AND TENDER THEIR SHARES.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension
or amendment), Purchaser will accept for payment and pay for up to 13,933,000
Shares validly tendered pursuant to the Offer on or prior to the Expiration
Date and not withdrawn in accordance with the provisions set forth in this
Offer to Purchase. The term "Expiration Date" shall mean 9:00 A.M., New York
City time, on Tuesday, February 17, 1998, unless and until Purchaser, in its
sole discretion (subject to restrictions set forth in the Offer to Purchase),
shall from time to time have extended the period of time during which the
Offer is open, in which event the term "Expiration Date" shall mean the latest
time and date at which the Offer, as so extended by Purchaser, shall expire.
If at any scheduled Expiration Date any of the conditions to the Offer has
not been satisfied or waived, at the request of the Company from time to time,
Purchaser shall extend the Offer for a period not to exceed ten business days
(as defined in the Offer to Purchase) after the previously scheduled
Expiration Date of the Offer; provided, however, in no event shall Purchaser
be obligated to extend the Offer beyond March 31, 1998. Purchaser expressly
reserves the right, in its sole discretion (but subject to the terms and
conditions set forth in the Offer to Purchase), including the occurrence of
any of the conditions specified in Section 15 of the Offer to Purchase, at any
time and from time to time, to extend for any reason the period of time during
which the Offer is open by giving oral or written notice of such extension to
the Depositary. During any such extension, all Shares previously tendered and
not withdrawn will remain subject to the Offer, subject to the rights of a
tendering shareholder to withdraw such shareholder's Shares. If Purchaser
extends the Offer, or if Purchaser (whether before or after its acceptance for
payment of Shares) is delayed in its payment for Shares or is unable to pay
for Shares pursuant to the Offer for any reason, then, without prejudice to
Purchaser's rights under the Offer, the Depositary may retain tendered Shares
on behalf of Purchaser, and such Shares may not be withdrawn except to the
extent tendering shareholders are entitled to withdrawal rights as described
in the Offer to Purchase. However, the ability of Purchaser to delay payment
for Shares that Purchaser has accepted for payment is limited by Rule 14e-1(c)
under the Exchange Act.
For a shareholder to validly tender Shares pursuant to the Offer, either (i)
a properly completed and duly executed Letter of Transmittal (or facsimile
thereof), together with any required signature guarantees, or an Agent's
Message (as defined in the Offer to Purchase), in connection with a book-entry
delivery of Shares, and any other required documents, must be received by the
Depositary at one of its addresses set forth on the back cover of the Offer to
Purchase, and either certificates for Shares ("Share Certificates") for
tendered Shares must be received by the Depositary at one of such addresses or
such Shares must be delivered pursuant to the procedure for book-entry
transfer set forth, in each case prior to the Expiration Date, or (ii) the
tendering shareholder must comply with the guaranteed delivery procedures set
forth in the Offer to Purchase. Under no circumstances will interest be paid
on the purchase price for shares, regardless of any extension to the Offer or
any delay in making such payment pursuant to the Offer.
Neither Parent nor Purchaser will pay any fees or commissions to any broker
or dealer or other person (other than the Depositary and the Information Agent
as described in the Offer to Purchase) in connection with the solicitation of
tenders of Shares pursuant to the Offer. However, Purchaser will upon request,
reimburse you
Exhibit (a)(4)-2
<PAGE>
for customary mailing and handling expenses incurred by you in forwarding the
enclosed materials to your clients.
Purchaser will pay or cause to be paid any stock transfer taxes payable on
the transfer of Shares to it, except as otherwise provided in Instruction 6 of
the enclosed Letter of Transmittal.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 9:00 A.M., NEW YORK CITY TIME, ON TUESDAY, FEBRUARY 17, 1998, UNLESS
THE OFFER IS EXTENDED.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal and any other required documents should be sent
to the Depositary and certificates representing the tendered Shares should be
delivered, or such Shares should be tendered by book-entry transfer, all in
accordance with the instructions set forth in the Letter of Transmittal and the
Offer to Purchase.
If holders of Shares wish to tender, but it is impracticable for them to
forward their certificates or other required documents prior to the expiration
of the Offer, a tender may be effected by following the guaranteed delivery
procedures specified under Section 2 in the Offer to Purchase.
Any inquiries you may have with respect to the Offer should be addressed to
MacKenzie Partners, Inc. at its address and telephone number set forth on the
back cover page of the Offer to Purchase.
Additional copies of the enclosed materials may be obtained from the
undersigned, MacKenzie Partners, Inc., at (212) 929-5500 or (800) 322-2885.
Very truly yours,
MacKenzie Partners, Inc.
Enclosures
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY PERSON AS AN AGENT OF PURCHASER, THE DEPOSITARY, THE INFORMATION AGENT OR
AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON
BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS
ENCLOSED AND THE STATEMENTS CONTAINED THEREIN.
Exhibit (a)(4)-3
<PAGE>
EXHIBIT (a)(5)
LETTER TO CLIENTS FOR USE BY BROKERS, DEALERS, COMMERCIAL BANKS,
TRUST COMPANIES AND OTHER NOMINEES
Exhibit (a)(5)
<PAGE>
OFFER TO PURCHASE FOR CASH
13,933,000 SHARES OF COMMON STOCK
OF
OHM CORPORATION
AT
$11.50 NET PER SHARE
BY
IT-OHIO, INC.
A WHOLLY-OWNED SUBSIDIARY
OF
INTERNATIONAL TECHNOLOGY CORPORATION
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 9:00 A.M.,
NEW YORK CITY TIME, ON TUESDAY, FEBRUARY 17, 1998, UNLESS THE OFFER IS
EXTENDED.
January 16, 1998
To Our Clients:
Enclosed for your consideration is an Offer to Purchase dated January 16,
1998 (the "Offer to Purchase") and the related Letter of Transmittal (which,
together with the Offer to Purchase, constitute the "Offer") relating to an
offer by IT-Ohio, Inc., an Ohio corporation ("Purchaser"), which is a newly
formed, wholly owned subsidiary of International Technology Corporation, a
Delaware corporation ("Parent"), to purchase 13,933,000 shares of common
stock, par value $0.10 per share (the "Shares"), of OHM Corporation, an Ohio
corporation (the "Company"), at a purchase price of $11.50 per Share (the
"Offer Price"), net to each tendering shareholder in cash, upon the terms and
subject to the conditions set forth in the Offer. We are the holder of record
of Shares held by us for your account. The Letter of Transmittal is furnished
to you for your information only and cannot be used by you to tender Shares. A
tender of Shares can be made only by us as the holder of record of your Shares
and pursuant to your instructions.
We request instructions as to whether you wish to tender any or all of the
Shares held by us for your account, pursuant to the terms and conditions set
forth in the Offer.
Your attention is directed to the following:
1. The Offer Price is $11.50 per Share, net to each tendering shareholder
in cash, without interest thereon, on the terms and subject to the
conditions of the Offer.
2. The Offer is being made for 13,933,000 Shares.
3. The Offer is being made pursuant to the terms of an Agreement and Plan
of Merger, dated as of January 15, 1998 (the "Merger Agreement"), by and
among the Company, Purchaser and Parent. The Merger Agreement provides,
among other things, for the commencement of the Offer by Purchaser, and
further provides that, following the purchase of Shares pursuant to the
Offer and promptly after the satisfaction or, if permissible, waiver of
certain other conditions, Purchaser will be merged with and into the
Company (the "Merger"). The Company will continue as the surviving
corporation after the Merger.
At the effective time of the Merger (the "Effective Time"), each issued
and outstanding Share (other than Shares held by Parent, Purchaser or any
other subsidiary of Parent or held in the treasury of the Company or by any
subsidiary of the Company, which will be cancelled and retired without any
payment with respect thereto, or Shares (the "Dissenting Shares") with
respect to which the holder properly exercises such holder's dissenters'
rights under all of the relevant provisions of Sections 1701.84 et seq.
("Section 1701.84") of the Ohio General Corporation Law ("OGCL")
(collectively, the "Excluded Shares")) will be cancelled and converted
automatically into the right to receive (i) 1.394 (the "Exchange Ratio")
fully paid and nonassessable shares of common stock, par value $0.01, of
Parent (the "Parent
Exhibit (a)(5)-1
<PAGE>
Common Stock"); provided, however, that if the aggregate number of Shares
accepted for payment and paid for pursuant to the Offer and purchased from
Waste Management, Inc., a Delaware corporation ("WMX") pursuant to the
Repurchase Agreement (as defined in the Offer to Purchase) is less than
19,168,381 Shares (the "Cash Share Number") (the number of Shares so paid
for and purchased being referred to herein as the "Purchased Share Number")
then the Exchange Ratio shall be adjusted (the "Adjusted Exchange Ratio")
to be equal to the product obtained by multiplying the Exchange Ratio by a
fraction, (A) the numerator of which is equal to (x) the number of Shares
issued and outstanding immediately prior to the Effective Time (excluding
Excluded Shares other than Dissenting Shares) (the "Final Outstanding
Number") plus (y) the Purchased Share Number minus (z) the Cash Share
Number and (B) the denominator of which is the Final Outstanding Number and
(ii) if the Exchange Ratio has been adjusted pursuant to the immediately
preceding proviso, an amount in cash equal to a fraction, (A) the numerator
of which is the product of $11.50 and the amount by which the Cash Share
Number exceeds the Purchased Share Number and (B) the denominator of which
is the Final Outstanding Number. The foregoing shall be referred to
collectively as the "Merger Consideration."
At the Effective Time, all Shares shall no longer be outstanding and
shall be cancelled and retired and shall cease to exist (in the case of
Excluded Shares other than the Dissenting Shares (each as defined in the
Offer to Purchase), without the payment of any consideration therefor), and
each certificate formerly representing any of such Shares, other than
Excluded Shares, shall thereafter represent only the right to receive the
Merger Consideration and the right, if any, to receive cash in lieu of
fractional shares and any distribution or dividends pursuant to the Merger
Agreement.
If more than 13,933,000 Shares are validly tendered prior to the
Expiration Date and not withdrawn, Purchaser will, upon the terms and
subject to the conditions of the Offer, accept for payment and pay for the
Shares purchased in the Offer on a pro rata basis, with adjustments to
avoid purchases of fractional Shares, based upon the number of Shares
validly tendered prior to the Expiration Date and not withdrawn by each
tendering shareholder. If proration is required, Purchaser would not expect
to announce the final results of the proration until approximately seven
New York Stock Exchange, Inc. ("NYSE") trading days after the Expiration
Date. Tendering shareholders will not receive Shares accepted for payment
pursuant to the Offer until the final proration factor is known.
4. The Company's Board of Directors has unanimously determined that the
transactions contemplated by the Merger Agreement, including, without
limitation, the Offer and the Merger, are fair to and in the best interests
of the Company and its shareholders and has unanimously approved and
adopted the Merger Agreement and the Offer, the Merger and the transactions
contemplated by the Merger Agreement. Accordingly, the Company's Board
unanimously recommends that the Company's shareholders accept the Offer and
tender their shares thereunder.
BT Alex Brown Incorporated ("BT Alex Brown"), financial advisor to the
Company, has delivered a written opinion to the Company's Board of
Directors, dated January 14, 1998 (the "Opinion"), to the effect that, as
of that date, the consideration to be received by the shareholders of the
Company pursuant to the Merger Agreement is fair from a financial point of
view to such shareholders. The full text of the Opinion is contained in the
Company's solicitation/recommendation statement on Schedule 14D-9 filed
with the Securities and Exchange Commission in connection with the Offer.
Shareholders are urged to read such opinion carefully and in its entirety
for assumptions made, matters considered and limits of the review of BT
Alex Brown.
5. The Offer, proration period and withdrawal rights will expire at 9:00
A.M., New York time, on Tuesday, February 17, 1998, unless extended.
6. The Offer is conditioned upon, among other things, there being validly
tendered by the expiration date and not withdrawn at least 13,933,000
Shares. The Offer is also subject to, among other things, the satisfaction
or waiver of certain conditions to the obligations of Parent and Purchaser
to consummate the Offer, including receipt by Purchaser and the Company of
certain governmental and regulatory approvals.
Exhibit (a)(5)-2
<PAGE>
7. Shareholders who tender Shares will not be obligated to pay brokerage
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, transfer taxes on the purchase of Shares by Purchaser pursuant
to the Offer.
If you wish to have us tender any or all of your Shares, please complete,
sign and return the form set forth on the reverse side of this letter. Your
instructions to us should be forwarded in ample time to permit us to submit a
tender on your behalf prior to the expiration of the Offer.
INSTRUCTIONS WITH RESPECT TO THE OFFER
TO PURCHASE FOR CASH 13,933,000 SHARES OF COMMON STOCK
OF
OHM CORPORATION
BY
IT-OHIO, INC.
A WHOLLY-OWNED SUBSIDIARY
OF
INTERNATIONAL TECHNOLOGY CORPORATION
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase of IT-Ohio, Inc., an Ohio corporation ("Purchaser"), which is a
newly formed, wholly owned subsidiary of International Technology Corporation,
a Delaware corporation ("Parent"), dated January 16, 1998 and the related
Letter of Transmittal relating to shares of common stock, par value $0.10 per
share (the "Shares"), of OHM Corporation, an Ohio corporation (the "Company").
This will instruct you to tender to Purchaser the number of Shares indicated
below held by you for the account of the undersigned, on the terms and subject
to the conditions set forth in the Offer to Purchase and Letter of Transmittal.
NUMBER OF SHARES TO BE TENDERED: SIGN HERE
SHARES*
_____________________________________
_____________________________________
SIGNATURE(S)
_____________________________________
_____________________________________
PLEASE PRINT NAME(S) AND ADDRESS(ES)
HERE
ACCOUNT NUMBER: _____________________
DATED: _______________________ , 1997 _____________________________________
TAX IDENTIFICATION OR SOCIAL
SECURITY NUMBER
* Unless otherwise indicated, it will be assumed that all of your Shares held
by us for your account are to be tendered.
Exhibit (a)(5)-3
<PAGE>
EXHIBIT (a)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE
FORM W-9
Exhibit (a)(6)
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.-- Social Security numbers have nine digits separated by two hyphens:
i.e. 000-00-0000. Employer identification numbers have nine digits separated by
only one hyphen: i.e. 00-0000000. The table below will help determine the
number to give the payer.
- ----------------------------------------------------
<TABLE>
<CAPTION>
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ----------------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals The actual owner
(joint account) of the account
or, if combined
funds, any one
of the
individuals(1)
3. Husband and wife (joint The actual owner
account) of the account
or, if joint
funds, either
person(1)
4. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
5. Adult and minor (joint The adult or, if
account) the minor is the
only contributor,
the minor(1)
6. Account in the name of The ward, minor,
guardian or committee or incompetent
for a designated ward, person(3)
minor, or incompetent
person
7. a The usual revocable The grantor-
savings trust account trustee(1)
(grantor is also
trustee)
b So-called trust account The actual
that is not a legal or owner(1)
valid trust under State
law
8. Sole proprietorship The owner(4)
account
- ----------------------------------------------------
<CAPTION>
GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ----------------------------------------------------
<S> <C>
9. A valid trust, estate, The legal entity
or pension trust (Do not furnish
the identifying
number of the
personal
representative
or trustee
unless the legal
entity itself is
not designated
in the account
title.)(5)
10. Corporate account The corporation
11. Religious, charitable, The organization
or educational
organization
12. Partnership account The partnership
held in the name of the
business
13. Association, club, or The organization
other tax-exempt
organization
14. A broker or registered The broker or
nominee nominee
15. Account with the The public
Department of entity
Agriculture in the name
of a public entity
(such as a State or
local government,
school district, or
prison) that receives
agricultural program
payments
- ----------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension
trust.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
Exhibit (a)(6)-1
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you do not have a taxpayer identification number or you do not know your
number, obtain Form 55-5, Application for a Social Security Number Card, or
Form 55-4, Application for an Employer Identification Number, at the local
office of the Social Security Administration or the Internal Revenue Service
and apply for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include
the following:
. A corporation.
. A financial institution.
. An organization exempt from tax under Section 501(a), or an individual
retirement plan.
. The United States or any agency or instrumentality thereof.
. A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
. A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
. An international organization or any agency, or instrumentality thereof.
. A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
. A real estate investment trust.
. A common trust fund operated by a bank under Section 584(a).
. An exempt charitable remainder trust, or a non-exempt trust described in
Section 4947(a)(1).
. An entity registered at all times under the Investment Company Act of
1940.
. A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
. Payments to nonresident aliens subject to withholding under Section 1441.
. Payments to partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident partner.
. Payments of patronage dividends where the amount received is not paid in
money.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
. Payments of interest on obligations issued by individuals. Note: You may
be subject to backup withholding if this interest is $600 or more and is
paid in the course of the payer's trade or business and you have not
provided your correct taxpayer identification number to the payer.
. Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
. Payments described in Section 6049(b)(5) to nonresident aliens.
. Payments on tax-free covenant bonds under Section 1451.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT
TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS,
ALSO SIGN AND DATE THE FORM.
Certain payments other than interest dividends, and patronage dividends, that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Payers must generally withhold 31% of taxable
interest, dividend, and certain other payments to a payee who does not furnish
a taxpayer identification number to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you
fail to furnish your taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is due
to reasonable cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to
include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 5% on any portion of an
underpayment attributable to that failure unless there is clear and convincing
evidence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
Exhibit (a)(6)-2
<PAGE>
EXHIBIT (a)(7)
SUMMARY ADVERTISEMENT, DATED JANUARY , 1998
Exhibit (a)(7)
<PAGE>
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares (as defined below). The Offer (as defined below) is made
solely by the Offer to Purchase, dated January 16, 1998, the related Letter of
Transmittal and any amendments or supplements thereto, and is being made to
all holders of Shares. The Offer is not being made to (nor will tenders be
accepted from or on behalf of) holders of Shares in any jurisdiction in which
the making of the Offer or the acceptance thereof would not be in compliance
with the securities, blue sky or other laws of such jurisdiction. Purchaser
(as defined below) may, in its discretion, however, take such action as it may
deem necessary to make the Offer in any jurisdiction and extend the Offer to
holders of Shares in such jurisdiction. In any jurisdiction where the
securities, blue sky or other laws require the Offer to be made by a licensed
broker or dealer, the Offer shall be deemed to be made on behalf of Purchaser
by or one or more registered brokers or dealers licensed under the laws of
such jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
13,933,000 SHARES OF COMMON STOCK
OF
OHM CORPORATION
AT
$11.50 NET PER SHARE
BY
IT-OHIO, INC.
A WHOLLY-OWNED SUBSIDIARY
OF
INTERNATIONAL TECHNOLOGY CORPORATION
IT-Ohio, Inc., an Ohio corporation ("Purchaser"), which is a newly-formed,
wholly-owned subsidiary of International Technology Corporation, a Delaware
corporation ("Parent"), is offering to purchase 13,933,000 shares of Common
Stock, par value $0.10 per share (the "Shares"), of OHM Corporation, an Ohio
corporation (the "Company"), at a price of $11.50 per share (the "Offer
Price"), net to each tendering shareholder in cash, upon the terms and subject
to the conditions set forth in the Offer to Purchase, dated January 16, 1998
(the "Offer to Purchase"), and in the related Letter of Transmittal (which,
together with the Offer to Purchase, constitute the "Offer"). The purpose of
the Offer is to acquire for cash 13,933,000 Shares as a first step in
acquiring the entire equity interest in the Company. Following the
consummation of the Offer, Parent intends to effect the Merger described
below.
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT
9:00 A.M., NEW YORK CITY TIME, ON TUESDAY, FEBRUARY 17, 1998, UNLESS THE
OFFER IS EXTENDED.
The Offer is conditioned upon, among other things, there being validly
tendered by the Expiration Date and not withdrawn 13,933,000 Shares. The Offer
is also conditioned on the satisfaction or waiver of certain other conditions,
including receipt by Purchaser and the Company of certain governmental and
regulatory approvals, which are described in Section 15 of the Offer to
Purchase.
THE COMPANY'S BOARD OF DIRECTORS HAS UNANIMOUSLY DETERMINED THAT THE
TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT (AS DEFINED BELOW),
INCLUDING WITHOUT LIMITATION, THE OFFER AND THE MERGER, ARE FAIR TO AND IN THE
BEST INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS AND HAS UNANIMOUSLY
APPROVED AND ADOPTED THE MERGER AGREEMENT AND THE OFFER, THE MERGER AND THE
TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT. ACCORDINGLY, THE COMPANY'S
BOARD UNANIMOUSLY RECOMMENDS THAT THE COMPANY'S SHAREHOLDERS ACCEPT THE OFFER
AND TENDER THEIR SHARES.
Exhibit (a)(7)-1
<PAGE>
The Offer is being made pursuant to the terms of an Agreement and Plan of
Merger, dated as of January 15, 1998 (the "Merger Agreement"), by and among
the Company, Purchaser and Parent. The Merger Agreement provides, among other
things, for the commencement of the Offer by Purchaser, and further provides
that regardless of whether Shares are purchased pursuant to the Offer and
subject to the satisfaction or, if permissible, waiver of certain other
conditions, Purchaser will be merged with and into the Company (the "Merger").
The Company will continue as the surviving corporation after the Merger (the
"Surviving Corporation"). At the effective time of the Merger (the "Effective
Time"), each issued and outstanding Share (other than Shares held by Parent,
Purchaser or any other subsidiary of Parent or held in the treasury of the
Company or by any subsidiary of the Company, which will be cancelled and
retired without any payment with respect thereto, or Shares (the "Dissenting
Shares") with respect to which the holder properly exercises such holder's
appraisal rights under all of the relevant provisions of Sections 1701.84 et
seq. ("Section 1701.84") of the Ohio General Corporation Law ("OGCL")
(collectively, the "Excluded Shares")), will be cancelled and converted
automatically into the right to receive (i) 1.394 (the "Exchange Ratio") fully
paid and nonassessable shares of common stock, par value $.01 per share, of
Parent (the "Parent Common Stock"); provided, however, that the aggregate
number of Shares accepted for payment and paid for pursuant to the Offer and
purchased pursuant to the Share Repurchase Agreement (as defined below) is
less than 19,168,381 Shares (the "Cash Share Number") (the number of Shares so
accepted for payment and paid for being referred to herein as the "Purchased
Share Number"), then the Exchange Ratio shall be adjusted and Shares shall be
equal to the product obtained by multiplying the Exchange Ratio by a fraction,
(A) the numerator of which is equal to (x) the number of Shares issued and
outstanding immediately prior to the Effective Time (excluding Excluded Shares
other than Dissenting Shares) (the "Final Outstanding Number") plus (y) the
Purchased Share Number minus (z) the Cash Share Number and (B) the denominator
of which is the Final Outstanding Number and (ii) if the Exchange Ratio has
been adjusted pursuant to the immediately preceding proviso, an amount in cash
equal to a fraction, (A) the numerator of which is the product of $11.50 and
the amount by which the Cash Share Number exceeds the Purchased Share Number
and (B) the denominator of which is the Final Outstanding Number. The
foregoing consideration shall be referred to collectively as the "Merger
Consideration." The Merger Agreement is more fully described in Section 12 of
the Offer to Purchase.
At the Effective Time, all Shares shall no longer be outstanding and shall
be cancelled and retired and shall cease to exist, and each certificate
formerly representing any of such Shares (other than any Excluded Shares)
shall thereafter represent only the right to receive the Merger Consideration
and the right, if any, to receive cash in lieu of fractional shares and any
distribution or dividends pursuant to the Merger Agreement.
If more than 13,933,000 Shares are validly tendered prior to the Expiration
Date and not withdrawn, Purchaser will, upon the terms and subject to the
conditions of the Offer, accept for payment (and thereby purchase) 13,933,000
Shares on a pro rata basis, with adjustments to avoid purchases of fractional
Shares, based upon the number of Shares validly tendered prior to the
Expiration Date (as defined below) and not withdrawn by each tendering
shareholder. If proration is required, Purchaser would not expect to announce
the final results of the proration until at least seven New York Stock
Exchange, Inc. trading days after the Expiration Date. Tendering shareholders
will not receive payment for Shares accepted for payment pursuant to the Offer
until the final proration factor is known.
Pursuant to the Merger Agreement and the Share Repurchase Agreement, dated
as of January 15, 1998 (the "Repurchase Agreement"), among the Company,
Parent, Waste Management, Inc., a Delaware corporation which holds 9,668,000
Shares or approximately 35% of the outstanding Shares ("WMX"), and Rust
International Inc., a Delaware corporation and wholly owned subsidiary of WMX,
the Company will repurchase from WMX 5,235,381 Shares for $11.50 per Share
concurrently with the payment for Shares pursuant to the Offer (the
"Repurchase"). In addition, pursuant to the Repurchase Agreement, WMX has
agreed to tender only 2,142,141 Shares in the Offer, which, in conjunction
with the Repurchase, will result in WMX receiving cash and Parent Common Stock
in the same proportion as other Company shareholders, assuming all outstanding
Shares (other than 7,525,859 Shares held by WMX) are tendered in the Offer.
The effect of the Repurchase Agreement will be to increase the aggregate
number of Shares acquired for cash in connection with the
Exhibit (a)(7)-2
<PAGE>
transactions contemplated by the Merger Agreement and make it possible for the
consideration paid in the Merger to consist solely of shares of Parent Common
Stock.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), Purchaser will accept for payment and pay for up to 13,933,000
Shares validly tendered pursuant to the Offer on or prior to the Expiration
Date and not withdrawn in accordance with the provisions set forth in this
Offer to Purchase. The term "Expiration Date" shall mean 9:00 A.M., New York
City time, on Tuesday, February 17, 1998, unless and until Purchaser, in its
sole discretion (but subject to restrictions contained in the Merger
Agreement), shall from time to time have extended the period of time during
which the Offer is open, in which event the term "Expiration Date" shall mean
the latest time and date at which the Offer, as so extended by Purchaser, shall
expire. If at any scheduled Expiration Date any of the conditions to the Offer
has not been satisfied or waived, at the request of the Company from time to
time, Purchaser shall extend the Offer for a period not to exceed ten business
days (as defined in the Offer to Purchase) after the previously scheduled
Expiration Date of the Offer; provided, however, in no event shall Purchaser be
obligated to extend the Offer beyond March 31, 1998.
Purchaser expressly reserves the right, in its sole discretion (but subject to
the terms and conditions of the Merger Agreement), at any time and from time to
time, to extend for any reason the period of time during which the Offer is
open by giving oral or written notice of such extension to the Depositary. Any
such extension will be followed as promptly as practicable by public
announcement thereof, such announcement to be issued not later than 9:00 A.M.,
New York City time, on the next business day after the previously scheduled
expiration date of the Offer. During any such extension, all Shares previously
tendered and not withdrawn will remain subject to the Offer, subject to the
rights of a tendering shareholder to withdraw such shareholder's Shares. If
Purchaser extends the Offer, or if Purchaser (whether before or after its
acceptance for payment of Shares) is delayed in its payment for Shares or is
unable to pay for Shares pursuant to the Offer for any reason, then, without
prejudice to Purchaser's rights under the Offer, the Depositary may retain
tendered Shares on behalf of Purchaser, and such Shares may not be withdrawn
except to the extent tendering shareholders are entitled to withdrawal rights
as described in the Offer to Purchase. However, the ability of Purchaser to
delay payment for Shares that Purchaser has accepted for payment is limited by
Rule 14e-1(c) under the Exchange Act.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of either (a) a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), together with any required signature guarantees, or (b) an Agent's
Message (as defined in the Offer to Purchase), in connection with a book-entry
delivery of Shares, and any other required documents, which must be received by
the Depositary at one of its addresses set forth on the back cover of the Offer
to Purchase, and either (i) certificates for Shares ("Share Certificates") for
tendered Shares must be received by the Depositary at one of such addresses or
such Shares must be delivered pursuant to the procedure for book-entry transfer
set forth in Section 2 to the Offer to Purchase, in each case prior to the
Expiration Date, or (ii) the tendering shareholder must comply with the
guaranteed delivery procedures set forth in Section 2 of the Offer to Purchase.
Subject to the terms of the Merger Agreement, Purchaser reserves the right
(but shall not be obligated) to accept for payment more than 13,933,000 Shares
pursuant to the Offer, although Purchaser has no present intention of doing so.
If a number of additional Shares in excess of 2% of the outstanding Shares is
to be accepted for payment, and, at the time notice of Purchaser's decision to
accept for payment such additional Shares is first published, sent or given to
holders of Shares, the Offer is scheduled to expire at any time earlier than
the tenth business day from the date that such notice is so published, sent or
given, the Offer will be extended until the expiration of the such period of
ten business days.
Pursuant to the Merger Agreement, Purchaser may make any changes in the terms
and conditions of the Offer, provided that, unless previously approved by the
Company's Board of Directors in writing, Purchaser may not (i) decrease the
Offer Price, (ii) change the form of consideration payable in the Offer, (iii)
decrease the number of Shares sought pursuant to the Offer, (iv) change the
conditions to the Offer, (v) impose additional conditions of the Offer or amend
any other term of the Offer in any manner adverse to holders of Shares or
Exhibit (a)(7)-3
<PAGE>
extend the Offer if all of the conditions to the Offer are satisfied or waived,
or (vi) waive the condition to the Offer that the Merger Agreement shall not
have been terminated by the Company or Parent or Purchaser in accordance with
its terms or Parent or Purchaser shall have reached an agreement or
understanding in writing with the Company providing for termination or
amendment of the Offer or a delay in the acceptance for payment for the Shares.
Tenders of Shares made pursuant to the Offer will be irrevocable, except that
Shares tendered may be withdrawn at any time prior to the Expiration Date, and,
unless theretofore accepted for payment and paid for as provided herein, may
also be withdrawn at any time on or after 60 days from the Expiration Date. For
a withdrawal to be effective, a written, telegraphic or facsimile transmission
notice of withdrawal must be timely received by the Depositary at one of its
addresses set forth on the back cover of the Offer to Purchase. Any notice of
withdrawal must specify the name of the person who tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and the name of the registered
holder of the Shares to be withdrawn as set forth on such Share Certificates if
different from the name of the person who tendered such Shares. If Share
Certificates have been delivered or otherwise identified to the Depositary,
then, prior to the physical release of such Share Certificates, the serial
numbers shown on such Share Certificates must be furnished to the Depositary
and, unless such Shares have been tendered by an Eligible Institution, the
signatures on the notice of withdrawal must be guaranteed by an Eligible
Institution. If Shares have been delivered pursuant to the procedures for book-
entry transfer set forth in Section 2 of the Offer to Purchase, any notice of
withdrawal must specify the name and number of the account at the Book-Entry
Transfer Facility (as defined in the Offer to Purchase) to be credited with
such withdrawn Shares and otherwise comply with such Book-Entry Transfer
Facility's procedures for withdrawal, in which case a notice of withdrawal will
be effective if delivered to the Depositary by any method of delivery described
in the first sentence of this paragraph. All questions as to the form and
validity (including time of receipt) of notices of withdrawal will be
determined by Purchaser in its sole discretion, and its determination will be
final and binding. No withdrawal of Shares will be deemed to have been properly
made until all defects and irregularities have been cured or waved. Withdrawals
of tenders of Shares may not be rescinded, and any Shares properly withdrawn
will thereafter be deemed not validly tendered for purposes of the Offer.
However, withdrawn Shares may be retendered by following one of the procedures
described in Section 3 of the Offer to Purchase at any time on or prior to the
Expiration Date.
The Company has provided Purchaser with the Company shareholder list, a
nonobjecting beneficial owners list, and security position listings for the
purpose of disseminating the Offer to holders of Shares. The Offer to Purchase
and the Letter of Transmittal and other material relevant to the Offer will be
mailed to record holders of Shares and furnished to brokers, dealers,
commercial banks, trust companies and similar persons whose names, or the names
of whose nominees, appear on the shareholder list or, if applicable, who are
listed as participants in a clearing agency's security position listing, for
subsequent transmittal to beneficial owners of Shares.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) and Rule
13e-3(e)(1) of the General Rules and Regulations under the Securities Exchange
Act of 1934, as amended, is contained in the Offer to Purchase and is
incorporated herein by reference.
The Offer to Purchase and the Letter of Transmittal contain important
information which should be read carefully before any decision is made with
respect to the Offer.
Exhibit (a)(7)-4
<PAGE>
Requests for copies of the Offer to Purchase, the Letter of Transmittal and
other materials related to the Offer may be directed to the Information Agent
as set forth below, and copies will be furnished promptly at Purchaser's
expense. Questions or requests for assistance may be directed to the
Information Agent.
The Information Agent for the Offer is:
LOGO
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
CALL TOLL-FREE (800) 322-2885
January 16, 1998
Exhibit (a)(7)-5
<PAGE>
EXHIBIT (a)(8)
PRESS RELEASE, DATED JANUARY 15, 1998, ISSUED BY PURCHASER
Exhibit (a)(8)
<PAGE>
NEWS RELEASE
[LETTERHEAD OF SITRICK AND COMPANY INC.]
FOR IMMEDIATE RELEASE
- ---------------------
INTERNATIONAL TECHNOLOGY CORPORATION AND
OHM CORPORATION ANNOUNCE MERGER
COMBINATION CREATES NEW LEADER IN ENVIRONMENTAL REMEDIATION SECTOR
AND PROVIDES SPRINGBOARD FOR FUTURE GROWTH AND DIVERSIFICATION
PITTSBURGH, Pennsylvania and FINDLAY, OHIO, JANUARY 15, 1998 --
INTERNATIONAL TECHNOLOGY CORPORATION (NYSE:ITX)("IT") and OHM CORPORATION
(NSYE:OHM)("OHM") today jointly announced that they have signed a definitive
agreement for the merger of their two companies, establishing a new leader in
the $11.5 billion U.S. environmental consulting and remediation services
industry. The merger, which will create a company with projected 1998 revenues
of approximately $1.0 billion and a backlog of $3.0 billion, is expected to be
completed in April 1998.
Anthony J. DeLuca, IT's Chief Executive Officer and President, said that
the merger represents a continuation of IT's strategy to strengthen its core
remediation business, while providing resources to allow continued
diversification into complementary businesses and new markets. He said that the
merger is expected to result in approximately $25 million in net cost synergies,
with at least 50 percent of these synergies realized in calendar year 1998,
resulting in an immediate material accretive impact upon IT's earnings.
1
<PAGE>
Mr. DeLuca said, "This merger clearly establishes IT as one of the
strongest environmental remediation firms, and it also significantly enhances
our ability to grow through diversification. As a result of the anticipated
synergies from the merger, we expect to have strong annual cash flow, decreasing
leverage, significantly increased revenues, and an improved backlog mix, all of
which are expected to contribute to a significant increase in our earnings per
share over the next three years, and continued growth in EPS thereafter."
James L. Kirk, Chairman, Chief Executive Officer and President of OHM,
stated, "The combining of our two companies creates an extremely powerful
platform to more effectively compete in the government and commercial markets.
Not only are our companies highly compatible in terms of clients and services,
but OHM's entry into the government outsourcing market provides an opportunity
for continuing growth in a sector that is not dependent upon regulatory
enforcement.
"We have tremendous respect and admiration for the work that Tony DeLuca
and his staff have accomplished at IT, and are highly confident that they will
build upon the success that we have achieved at OHM, further solidifying IT's
position as a major force in the environmental management industry," Mr. Kirk
concluded.
Rationale for Merger
- -------------------
In explaining the rationale behind the merger, Mr. DeLuca said, "As we look
at the market realities, we see continued consolidation of our competitors,
increasing price sensitivity, and stable demand, all of which contribute to
limited growth potential in our core markets. Our response to these difficult
market conditions is to merge with a proven industry leader, whose corporate
culture, financial strength, client base, and management talent complement our
own organization's skills and resources. As a result of this merger, in
addition to becoming a leader in remediation, we will also become a stronger
low-cost competitor.
"Furthermore, the merger broadens our relationships at the DOD and the U.S.
Environmental Protection Agency, improves our competitive position in the
emerging DOE remediation market, provides us with greater geographic coverage,
enhances our skill set, and
2
<PAGE>
strengthens our turnkey capabilities. Additionally, through our expanded
engineering and consulting capabilities we will be able to provide more
comprehensive solutions to our commercial clients," Mr. DeLuca added.
The Transaction
- ---------------
According to the terms of the agreement, OHM shareholders will receive
$11.50 per share, comprised of $8.00 in cash and 0.42 shares of IT (valued at
$3.50 assuming a per share price of $8.25 for IT's shares), for a total purchase
price of approximately $365 million (including the assumption of OHM debt).
This price represents an approximately 40 percent premium to the current market
price of OHM shares based on the last 30-day average. Concurrently with
completion of the tender offer described below, OHM will spin off to its
shareholders its 40 percent ownership interest in NSC Corporation, which has an
estimated value of $0.32 per OHM share.
The transaction is structured in two steps. In the first step, which is
designed to distribute the cash portion of the transaction consideration, IT
will execute a cash tender offer at $11.50 per share for 50.6 percent of OHM's
outstanding shares and concurrently with the purchase of shares in the tender
offer OHM will repurchase from WMX Technologies, one of OHM's principal
shareholders, a number of shares equal to approximately 19 percent of OHM's
outstanding shares. WMX will only tender a number of shares in the tender offer
such that upon completion, WMX will receive cash for the same percentage of its
shares as all other OHM shareholders. After this step, IT is expected to own
approximately 63 percent of OHM and will seat a majority of OHM's board. OHM
will also spin-off its investment in NSC to the OHM shareholders of record
immediately prior to completion of the tender offer.
Step two will consist of the merger of OHM with a wholly-owned subsidiary
of IT in which each of the remaining outstanding shares of OHM not acquired
through the cash tender offer will be converted into 1.394 shares of IT. Both
steps of the transactions will be taxable to OHM shareholders for federal and
state income tax purposes.
3
<PAGE>
Financing of the Transaction
- ----------------------------
IT will execute the tender offer with a $240 million credit facility, which
will be used to fund the tender offer, refinance IT's existing $65 million
principal amount of senior notes and for acquisitions and working capital. At
the completion of the merger, IT will effect a $425 million refinancing which
will refinance the tender offer loan and OHM's debt, consisting of a $200
million, 6-year revolving line of credit, and an 8-year, $225 million term loan.
Funding of the tender offer loan and the merger facility is subject to various
conditions. These loans were arranged by Citicorp and Bank Boston.
It is anticipated that IT will commence the tender offer by January 16,
1998. The transaction is subject to a number of conditions, including approvals
related to the merger by the shareholders of both companies, and other customary
conditions and regulatory approvals, including termination or expiration of the
waiting period under the Hart-Scot-Rodino Act. Shareholders of OHM currently
owning in the aggregate approximately 55 percent of the outstanding shares have
agreed to vote for the transaction and have given proxies to IT. The Carlyle
Group, IT's principal shareholder currently owning approximately 38 percent of
its voting shares, has also agreed to vote its shares in favor of the
transaction. Upon completion of the merger, two of OHM's directors will join
IT's board of directors, which will be expanded to 11 with Carlyle adding two
new members since Carlyle is entitled under its existing agreements with IT to
control its board of directors through November 2001, so long as it continues to
own 20 percent of IT's outstanding shares on a fully-diluted basis.
Stakeholder Benefits
- --------------------
Mr. DeLuca said that the merger represents a tremendous opportunity for all
of the companies' stakeholders. "Shareholders will benefit from improved and
more stable earnings growth and enhanced cash flow, which in turn should result
in enhanced shareholder value. Clients should benefit from expanded services,
broader geographic coverage, lower costs for services, and improved
capabilities. Our employees should also enjoy increased opportunities," he
said.
4
<PAGE>
"OHM is an ideal merger partner for IT. Our corporate cultures are highly
compatible, and from a marketing standpoint, OHM's significant Navy and Air
Force contracts, when combined with IT's work with the Army, will result in an
enhanced presence in the DOD market. Furthermore, OHM's DOE experience, which
is primarily remediation construction, complements IT's consulting and
engineering expertise, providing a strong presence in this $30 billion industry.
In addition, through its recent acquisition of Beneco Enterprises Inc. OHM
provides IT with a significant presence in the government outsourcing market for
operations, maintenance and construction, a $6 billion market which is expected
to grow at 10 percent per year," Mr. DeLuca added.
Commitment to Continued Diversification
- ---------------------------------------
Daniel A. D'Aniello, Chairman of IT and a partner of The Carlyle Group,
stated, "When we made our initial investment in IT, our objective was to
position IT to be an active participant in the environmental management industry
consolidation. This merger represents a major milestone in the implementation
of this strategy. Not only does it further strengthen IT's position in its core
remediation business, but it provides the financial and human resources to
facilitate continued growth and future diversification."
According to IT, to derive maximum benefit from the potential synergies
associated with the combination, the OHM organization will be integrated into
IT.
About IT
- --------
IT is a leading global environmental infrastructure solutions firm. The
Company provides a full range of technology-driven, value-added consulting,
engineering and construction capabilities through a network of more than 40
offices in the U.S. and select international locations.
IT had revenues of $362.1 million in the fiscal year ended March 28, 1997.
Revenues for the six months ended September 26, 1997 were $201.0 million, with
net income of $0.6 million, or $0.06 per share, excluding special charges. The
Company's common stock and depositary shares are traded on the NYSE under the
symbols ITX and ITX pr, respectively.
5
<PAGE>
About OHM
- ---------
OHM, is a leading diversified services firm, providing a broad range of
outsourced services for government and private sector clients. The Company has
worked at 300 military bases on projects for the U.S. Army Corps of Engineers,
the U.S. Departments of the Navy and the Air Force as well as projects for the
U.S. Environmental Protection Agency and the Department of Energy. Private
sector clients include those in petroleum, chemical, transportation and general
manufacturing.
OHM had revenues of $551.0 million for the year ended December 31, 1996.
For the nine months ended September 30, 1997 net income, excluding non-recurring
charges, was $9.6 million, or $0.35 per share, on revenues of $381.5 million.
Forward Looking Statements
- --------------------------
Statements contained in this press release which are not historical facts
are forward-looking statements as that term is defined in the Private Securities
Litigation Reform Act of 1995 that involve risks and uncertainties, including
statements concerning synergies and cost savings anticipated from the
transaction and anticipated financial results, as well as general economic
conditions, funding of backlog, the effects of the Company's restructuring and
industry-wide market factors. As a result, the Company's actual results could
differ materially from those projected in such forward looking statements as a
result of the above and other factors including projected financial results.
6
<PAGE>
EXHIBIT (b)(1)
CITICORP SECURITIES, INC. BANCBOSTON SECURITIES INC.
CITICORP USA, INC. BANKBOSTON, N.A.
399 PARK AVENUE 100 FEDERAL STREET
NEW YORK, NEW YORK 10043 BOSTON, MASSACHUSETTS 02110
January 15, 1998
International Technology Corporation
2790 Mosside Blvd.
Monroeville, PA 15146-2792
Attention: Anthony J. DeLuca
Chief Executive Officer and President
$240,000,000 TENDER OFFER FACILITIES AND $425,000,000 MERGER FACILITIES
COMMITMENT LETTER
Ladies and Gentlemen:
You have advised us that International Technology Corporation (the "Company" or
"you") desires to establish credit facilities in the aggregate principal amount
of up to $425,000,000 for the purpose of acquiring the stock of OHM Corporation,
an Ohio corporation (the "Target"), in a two-step transaction.
You have indicated that the acquisition of the Target will be made by a cash
tender offer by IT-Ohio, Inc., a newly formed, wholly owned subsidiary of the
Company ("Acquisition Sub"), for approximately 50.57% or 13.9 million of the
outstanding shares of the Target's publicly traded common stock (the "Shares")
for a purchase price not to exceed $11.50 per Share or $161,000,000 in the
aggregate (the "Tender Offer") followed by a merger of Acquisition Sub into the
Target, with the Target being the surviving corporation (the "Merger"). The
consideration paid to the existing shareholders of the Target (other than
Acquisition Sub) to consummate the Merger will be a combination of cash and
shares of common stock of the Company, with the aggregate cash consideration
paid in both the Tender Offer and the Merger (including any stock repurchase and
payments in respect of the cancellation of stock options and warrants) not to
exceed $235,000,000. The directors of each of the Company, Acquisition Sub and
the Target have approved, and have executed and delivered, an Agreement and Plan
of Merger dated as of January 15, 1998 (the "Merger Agreement").
<PAGE>
You have advised us that the Company will need (i) up to $240 million in credit
facilities (the "Tender Offer Facilities") at the closing of the Tender Offer in
order to consummate the Tender Offer, to refinance certain existing indebtedness
of the Company and its subsidiaries, to pay transaction costs and to provide
working capital for the Company and its subsidiaries during the period from the
consummation of the Tender Offer to the closing of the Merger and (ii) up to
$425 million in credit facilities (the "Merger Facilities"; and together with
the Tender Offer Facilities, the "Facilities") at the closing of the Merger in
order to consummate the Merger, to repay loans outstanding under the Tender
Offer Facilities, to refinance certain existing indebtedness of the Target and
its subsidiaries, to pay transaction costs and to provide working capital for
the Company and its subsidiaries (including the Target) on an ongoing basis.
You have asked Citicorp USA, Inc. ("Citicorp") and BankBoston, N.A.
("BankBoston") to provide you with financing commitments for the entire amount
of the Facilities.
Citicorp is pleased to inform you of its commitment to provide 60% the maximum
amount of the Facilities and BankBoston is pleased to inform you of its
commitment to provide 40% of the maximum amount of the Facilities, in each case
subject to the terms and conditions described in this letter and the attached
Annex I (collectively, and together with the Fee Letter referred to below, the
"Commitment Letter").
CONDITIONS PRECEDENT
- --------------------
In addition to the conditions precedent to the initial funding of each of the
Tender Offer Facilities and the Merger Facilities contained in the Annex, the
commitments of Citicorp and BankBoston hereunder are subject to: (i) the
preparation, execution and delivery of mutually acceptable loan documentation,
including a credit agreement incorporating substantially the terms and
conditions outlined in this Commitment Letter; (ii) the absence of (A) (x) in
the case of the Tender Offer Facilities, a Pre-Merger Material Adverse Change
(as defined in the Annex), (B) in the case of the Merger Facilities, a Post-
Merger Material Adverse Change (as defined in the Annex), and (C) in the case of
either the Tender Offer Facilities or the Merger Facilities, any change in loan
syndication, financial or capital market conditions generally that, in the
judgment of either Citicorp Securities, Inc. ("Citicorp Securities") or
BancBoston Securities Inc. ("BSI"), would materially impair syndication of the
Facilities; (iii) the accuracy and completeness of all representations that you
make to us and all information that you furnish to us and your compliance with
the terms of this Commitment Letter; (iv) the payment in full of all fees,
expenses and other amounts payable under this Commitment Letter; (v) a closing
of the Tender Offer Facilities on or prior to April 1, 1998 and (vi) solely in
the case of the commitments for the Merger Facilities, a closing of the Merger
Facilities on or prior to the 270th day after the closing of the Tender Offer
Facilities.
COMMITMENT TERMINATION
- ----------------------
Citicorp's and BankBoston's commitments for both the Tender Offer Facilities and
the Merger Facilities set forth in this Commitment Letter will terminate on
April 1, 1998, unless the Tender Offer Facilities close on or before such date.
Prior to such date, this Commitment Letter may be terminated
-2-
<PAGE>
(i) by you at any time at your option upon payment of all fees, expenses and
other amounts then payable under this Commitment Letter or (ii) by either
Citicorp or BankBoston if any event occurs or information has become available
that, in its judgment, results or is likely to result in the failure to satisfy
any condition set forth in the immediately preceding paragraph or in the Annex.
SYNDICATION
- -----------
Each of Citicorp and BankBoston reserves the right, prior to or after the
execution of definitive documentation with respect to the Facilities, to
syndicate all or a portion of its commitment to one or more other financial
institutions acceptable to each of them and you that will become parties to such
definitive documentation pursuant to a syndication to be managed by Citicorp
Securities and BSI (the financial institutions becoming parties to such
definitive documentation being collectively referred to herein as the
"Lenders"). You understand that Citicorp Securities and BSI intend to commence
syndication efforts promptly.
Citicorp Securities and BSI will manage all aspects of the syndication in
consultation with you, including the timing of all offers to potential Lenders,
the acceptance of commitments, and the determination of the amounts offered and
the compensation provided.
You agree to take all action as Citicorp Securities and BSI may reasonably
request to assist them in forming a syndicate acceptable to them and you. Your
assistance in forming such a syndicate shall include but not be limited to: (i)
making senior management and representatives of the Company and the Target
available to participate in information meetings with potential Lenders at such
times and places as Citicorp Securities and BSI may reasonably request; (ii)
using your best efforts to ensure that the syndication efforts benefit from your
lending relationships and those of your equity holders; and (iii) providing
Citicorp Securities and BSI with all information reasonably deemed necessary by
them to successfully complete the syndication (including using your best efforts
to obtain a third party review of the cost savings anticipated in connection
with the Merger reasonably satisfactory to Citicorp Securities and BSI).
To ensure an orderly and effective syndication of the Facilities, you agree that
until the termination of the syndication (as determined by Citicorp Securities
and BSI), you will not, and will not permit any of your affiliates to, syndicate
or issue, attempt to syndicate or issue, or announce or authorize the
announcement of the syndication or issuance of, any debt facility (other than
the Facilities) or debt security (including any renewals thereof), without the
prior written consent of Citicorp Securities and BSI.
You agree that Citicorp will be the Collateral Agent and Administrative Agent
for the Facilities and that BankBoston will be the Documentation Agent for the
Facilities and that no additional agents, co-agents or arrangers will be
appointed, or other titles conferred, without the consent of Citicorp Securities
and BSI. You agree that no Lender will receive any compensation of any kind for
its participation in the Facilities, except as expressly provided for in the Fee
Letter referred to below and Annex I.
-3-
<PAGE>
FEES
- ----
In addition to the fees described in Annex I, you agree to pay the fees set
forth in that certain letter between you and us of even date herewith (the "Fee
Letter"). The terms of the Fee Letter are an integral part of Citicorp's and
BankBoston's commitment hereunder, and constitute part of this Commitment Letter
for all purposes hereof. Each of the fees described in the Fee Letter shall be
nonrefundable when paid.
INDEMNIFICATION
- ---------------
You agree to indemnify and hold harmless Citicorp, Citicorp Securities,
BankBoston, BSI and each of their affiliates and each of their respective
officers, directors, employees, agents, advisors, attorneys and representatives
(each, an "Indemnified Party") from and against any and all claims, damages,
losses, liabilities and expenses (including, without limitation, fees and
disbursements of counsel), joint or several, that may be incurred by or asserted
or awarded against any Indemnified Party arising out of or in connection with or
relating to any investigation, litigation or proceeding or the preparation of
any defense with respect thereto arising out of or in connection with or
relating to this Commitment Letter, the Tender Offer, the Merger or the other
transactions contemplated hereby, or any use made or proposed to be made with
the proceeds of the Facilities, whether or not such investigation, litigation or
proceeding is brought by the Company, the Target, any of their respective
shareholders or creditors, an Indemnified Party or any other person, or an
Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated hereby are consummated, except to the extent such
claim, damage, loss, liability or expense is found in a final, non-appealable
judgment of a court of competent jurisdiction to have resulted from such
Indemnified Party's gross negligence or willful misconduct. You further agree
that no Indemnified Party shall have any liability (whether direct or indirect,
in contract, tort or otherwise) to the Company, the Target or any of their
respective shareholders or creditors for or in connection with the transactions
contemplated hereby, except to the extent such liability is found in a final,
non-appealable judgment of a court of competent jurisdiction to have resulted
from such Indemnified Party's gross negligence or willful misconduct. In no
event, however, shall any Indemnified Party be liable on any theory of liability
for any special, indirect, consequential or punitive damages.
COSTS AND EXPENSES
- ------------------
In further consideration of the commitments of Citicorp and BankBoston
hereunder, and recognizing that in connection herewith Citicorp, Citicorp
Securities, BankBoston and BSI are incurring substantial costs and expenses
(including, without limitation, fees and disbursements of counsel, filing and
recording fees and due diligence, syndication (including printing, distribution
and bank meetings), transportation, computer, duplication, messenger, appraisal,
audit, insurance and consultant costs and expenses), you hereby agree to pay, or
reimburse Citicorp, Citicorp Securities, BankBoston and BSI on demand for, all
such costs and expenses (whether incurred before or after the date hereof),
-4-
<PAGE>
regardless of whether any of the transactions contemplated hereby is
consummated. You also agree to pay all costs and expenses of Citicorp, Citicorp
Securities, BankBoston and BSI (including, without limitation, fees and
disbursements of counsel) incurred in connection with the enforcement of any of
their rights and remedies hereunder.
CONFIDENTIALITY
- ---------------
By accepting delivery of this Commitment Letter, you and we agree that this
Commitment Letter is for your and our confidential use only and that neither its
existence nor the terms hereof will be disclosed by either party to any person
other than its officers, directors, employees, accountants and attorneys, and
then only on a "need to know" basis in connection with the transactions
contemplated hereby and on a confidential basis. Notwithstanding the foregoing,
following your acceptance of the provisions hereto and your return of an
executed counterpart of this Commitment Letter to us as provided below, either
party (i) may make public disclosure of the existence and amount of Citicorp's
and BankBoston's commitments hereunder and of Citicorp's identity as Collateral
Agent and Administrative Agent and BankBoston's identity as Documentation Agent,
(ii) may file a copy of this Commitment Letter (other than the Fee Letter) in
any public record in which it is required by law to be filed and (iii) may make
such other public disclosures of the terms and conditions hereto as such party
is required by law, in the opinion of its counsel, to make.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
- ---------------------------------------------
You represent and warrant that (i) all information (other than financial
projections) that has been or will hereafter be made available to Citicorp,
Citicorp Securities, BankBoston, BSI, any Lender or any potential Lender by you
or any of your representatives in connection with the transactions contemplated
hereby is and will be complete and correct in all material respects and does not
and will not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements contained therein not
misleading in light of the circumstances under which such statements were or are
made and (ii) all financial projections, if any, that have been or will be
prepared by you and made available to Citicorp, Citicorp Securities, BankBoston,
BSI, any Lender or any potential Lender have been or will be prepared in good
faith based upon reasonable assumptions (it being understood that such
projections are subject to significant uncertainties and contingencies, many of
which are beyond the Company's control, and that no assurance can be given that
the projections will be realized). You agree to supplement the information and
projections from time to time so that the representations and warranties
contained in this paragraph remain correct in all material respects.
In issuing this Commitment Letter, each of Citicorp, Citicorp Securities,
BankBoston and BSI is relying on the accuracy of the information furnished to it
by or on behalf of the Company, the Target and their respective affiliates
without independent verification thereof.
-5-
<PAGE>
NO THIRD PARTY RELIANCE, ETC.
- ----------------------------
The agreements of Citicorp and BankBoston hereunder and of any Lender that
issues a commitment to provide financing under the Facility are made solely for
the benefit of the Company and may not be relied upon or enforced by any other
person. Please note that those matters that are not covered or made clear
herein or in Annex I or in the Fee Letter are subject to mutual agreement of the
parties. The terms and conditions of this Commitment Letter may be modified only
in writing.
You should be aware that Citicorp, BankBoston or one or more of their respective
affiliates may be providing financing or other services to parties whose
interests may conflict with yours. Be assured, however, that consistent with
Citicorp's and BankBoston's longstanding policy to hold in confidence the
affairs of their respective customers, none of Citicorp, BankBoston or any of
their respective affiliates will furnish confidential information obtained from
you to any of their other customers.
GOVERNING LAW
- -------------
This Commitment Letter shall be governed by, and construed in accordance with,
the laws of the State of New York. This Commitment Letter sets forth the entire
agreement between the parties with respect to the matters addressed herein and
supersedes all prior communications, written or oral, with respect hereto. This
Commitment Letter may be executed in any number of counterparts, each of which,
when executed, shall be deemed to be an original and all of which, taken
together, shall constitute one and the same Commitment Letter. Delivery of an
executed counterpart of the signature page to this Commitment Letter by
telecopier shall be as effective as delivery of a manually executed counterpart
of this Commitment Letter. Your obligations under the paragraphs captioned
"Fees", "Indemnification", "Costs and Expenses" and "Confidentiality" shall
survive the expiration or termination of this Commitment Letter.
WAIVER OF JURY TRIAL
- --------------------
EACH PARTY HERETO IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO THIS COMMITMENT LETTER OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THE ACTIONS OF CITICORP, CITICORP SECURITIES, BANKBOSTON
OR BSI IN THE NEGOTIATION, PERFORMANCE OR ENFORCEMENT HEREOF.
-6-
<PAGE>
Please indicate your acceptance of the provisions hereof by signing the enclosed
copies of this Commitment Letter and the Fee Letter and returning them, together
with the fees then payable under the Fee Letter, to (a) Timothy L. Freeman,
Managing Director, Citicorp Securities, Inc., 399 Park Avenue, New York, New
York 10043 (telecopier: (212) 793-1290) and (b) Lindsay W. McSweeney, Vice
President, BankBoston, N.A., 100 Federal Street, Boston, Massachusetts 02110
(telecopier: (617) 434-2160), at or before 5:00 p.m. (New York City time) on
January 20, 1998, the time at which this Commitment (if not so accepted prior
thereto) will expire. If you elect to deliver this Commitment Letter via
telecopier, please arrange for the executed original to follow by next-day
courier.
Very truly yours,
CITICORP SECURITIES, INC.
By: /s/ Timothy L. Freeman
________________________
Title: Managing Director
CITICORP USA, INC.
By: /s/ Timothy L. Freeman
_________________________
Title: Attorney-in-fact
BANKBOSTON, N.A.
By: /s/ Lindsay W. McSweeney
_________________________
Title: Vice President
BANCBOSTON SECURITIES INC.
By: /s/ David Vega
_____________________
Title: Vice President
ACCEPTED this 15th day
of January, 1998
INTERNATIONAL TECHNOLOGY CORPORATION
By: /s/ Anthony J. DeLuca
____________________________
Title: Chief Executive
Officer and President
-7-
<PAGE>
Annex
-----
TENDER OFFER AND MERGER FACILITIES
Summary of Terms
and Conditions as of January 15, 1998
This Summary of Terms and Conditions outlines certain terms of the Facilities
referred to in the Commitment Letter dated January 15, 1998, addressed to
International Technology Corporation (the "Company") from Citicorp Securities,
-------
Inc., Citicorp USA, Inc., BancBoston Securities Inc. and BankBoston, N.A. (the
"Commitment Letter"). This Summary of Terms and Conditions is part of and
-----------------
subject to the Commitment Letter. Certain capitalized terms used herein are
defined in the Commitment Letter.
I. LENDERS, AGENTS AND FEES (APPLICABLE TO ALL FACILITIES)
-------------------------------------------------------
LENDERS: Citicorp USA, Inc. or one of its affiliates ("Citicorp"),
- ------- --------
BankBoston, N.A. ("BankBoston") and other financial
----------
institutions acceptable to the Agents and reasonably
acceptable to the Company. Each of Citicorp and BankBoston
may assign (before or after the Tender Offer Funding Date
and the Merger Funding Date (as such terms are defined
below)) all or any part of its share of the Facilities to
one or more other financial institutions that are Eligible
Assignees (as defined in the Loan Documents (as defined
below)) acceptable to the Agents (and, prior to the Merger
Funding Date, reasonably acceptable to the Company), and
upon such assignment such financial institutions shall
become Lenders for all purposes under the Loan Documents.
Upon such assignment and reallocation of commitments,
Citicorp or BankBoston, as the case may be, would be
relieved of all further liability with respect to the
portions of the Facilities so assigned or reallocated.
The Company shall cooperate with the Arrangers in connection
with the syndication of the Facilities and shall provide and
cause its advisors to provide all information deemed
necessary by the Arrangers to complete a successful
syndication as provided in the Commitment Letter.
ARRANGERS: Citicorp Securities, Inc. and BancBoston Securities Inc.
- --------- (the "Arrangers")
---------
<PAGE>
COLLATERAL AND
- --------------
ADMINISTRATIVE
- --------------
AGENT: Citicorp (the "Administrative Agent").
- ----- --------------------
DOCUMENTATION
- -------------
AGENT: BankBoston (together with the Administrative Agent, the
- ----- "Agents").
------
ISSUING BANKS: Citibank, N.A. ("Citibank") and BankBoston.
- ------------- --------
UNUSED COMMITMENT
- -----------------
FEE:
- --- The Company shall pay a commitment fee to the Administrative
Agent for the account of the Lenders ratably in proportion
to their commitments under the Tender Offer Facilities and
Merger Facilities as in effect from time to time. This fee
shall be computed based on actual days in a 360 day year and
shall be earned and payable:
(i) From the date of acceptance of the Commitment Letter to
the earlier of: (a) the Merger Funding Date and (b) the
expiration or termination of the Tender Offer Facilities, on
the difference from time to time between (x) the maximum
amount of the Tender Offer Facilities and (y) Loans and
obligations in respect of Letters of Credit (as defined
below), if any, outstanding from time to time thereunder, at
the rate of 1/2% per annum, payable in arrears, (A) on the
Tender Offer Funding Date, if any, or, if earlier, upon
expiration or termination of the commitments under the
Tender Offer Facilities, (B) quarterly on each three month
anniversary of the Tender Offer Funding Date until the
Merger Funding Date and (C) on the Merger Funding Date, if
any, or if earlier, upon expiration or termination of the
commitments under the Tender Offer Facilities; and
(ii) Only if the Merger Funding Date has not occurred prior
to May 1, 1998, from and after May 1, 1998 to the earlier of
(a) the Merger Funding Date and (b) the expiration or
termination of the Merger Facilities, on the maximum amount
of the Merger Facilities less the maximum amount of the
----
Tender Offer Facilities at the rate of 3/8% per annum,
payable in arrears, (A) quarterly on each three month
anniversary of May 1, 1998 until the Merger Funding Date and
(B) on the Merger Funding Date, if any, or if earlier, upon
expiration or termination of the commitments under the
Merger Facilities.
-2-
<PAGE>
FEES: In addition to the Unused Commitment Fee and the fees
- ---- applicable to each of the Facilities described below, the
fees specified or referred to in the Fee Letter (as defined
in the Commitment Letter) shall be due and payable as stated
therein. All such fees shall be fully earned and non-
refundable when paid .
II. TENDER OFFER FACILITIES
BORROWERS: The Company, IT-Ohio, Inc., a wholly-owned special purpose
- --------- subsidiary of the Company established for the purpose of
consummating the Tender Offer ("Acquisition Sub"), and IT
---------------
Corporation, a wholly-owned subsidiary of the Company
("ITC").
---
THE TENDER OFFER
- ----------------
FACILITIES: Up to $240,000,000 in the aggregate of loans (the
- ---------- "Loans") provided as follows:
-----
(a) Tender Offer Loan. An eighteen-month term loan shall
-----------------
be made available to Acquisition Sub in a single drawing on
the Tender Offer Funding Date in a principal amount of up
to the lesser of (i) $80,000,000 and (ii) 50% of the
aggregate Purchase Price (as defined below) of the shares
of common stock of the Target (the "Shares") accepted for
------
payment in the Tender Offer, payable in full on the
earlier to occur of the Merger Funding Date and the date
occurring eighteen months after the Tender Offer Funding
Date (the "Tender Offer Loan").
-----------------
(b) Revolving Facility. An eighteen-month revolving credit
------------------
facility (the "Revolving Facility") shall be made available
------------------
to the Company in a principal amount of up to $160,000,000
at any time outstanding with a sublimit of up to $25,000,000
(the "Letter of Credit Subfacility") for standby and trade
----------------------------
letters of credit ("Letters of Credit"). All loans
-----------------
outstanding under the Revolving Facility ("Revolving Loans")
---------------
shall be payable in full, and the commitments thereunder
terminated, on the date occurring eighteen months after the
Tender Offer Funding Date; provided, however, if the Merger
-------- -------
Funding Date occurs on or prior to such date, then the
commitments thereunder shall not be terminated, but instead
shall be adjusted to reflect the terms of the Revolving
Facility constituting a portion of the Merger Facilities.
PURPOSE: Proceeds of up to $80,000,000 of the Revolving Loans shall
be contributed by the Company to Acquisition Sub as a
capital contribution for the purpose of permitting
Acquisition Sub, together with the proceeds of the Tender
Offer Loan, to purchase
-3-
<PAGE>
the Shares pursuant to the Tender Offer for a price per
Share not exceeding the Purchase Price. The remaining
proceeds of the Revolving Loans shall be used by the Company
to refinance the Company's existing senior secured notes and
its senior secured credit facility, to pay transaction costs
and to provide working capital for the Company and its
subsidiaries; provided that $17,000,000 of the Revolving
Facility shall be reserved solely for the purpose of
financing Permitted Acquisitions (as defined below).
TENDER OFFER
- ------------
FUNDING DATE: On or before April 1, 1998.
- ------------
INTEREST: Loans would bear interest, at Company's option, at one or
- -------- more of the following rates:
(a) the Applicable Margin (as defined below) plus the
----
higher of (i) Citibank's "base rate" as in effect from time
to time and (ii) Citicorp's Alternate Base Rate III, payable
monthly in arrears (the "Base Rate"); and
---------
(b) the current LIBO rate as quoted by reference banks
acceptable to the Agents, adjusted for reserve requirements,
if any, and subject to customary change of circumstance
provisions, for an interest periods of 1 or 2 months (the
"LIBO Rate") plus the Applicable Margin, payable at the end
---------- ----
of the relevant interest period.
The "Applicable Margin" shall mean (i) 1.5% per annum in the
-----------------
case of loans bearing interest at the Base Rate and (ii)
2.5% per annum in the case of Loans bearing interest at the
LIBO Rate; provided, however, the Applicable Margin shall
-------- -------
increase by 1.0% per annum on the date occurring four months
after the Tender Offer Funding Date and by an additional
0.5% per annum on each corresponding date occurring in each
of the following six months thereafter.
Interest would be calculated on the basis of the actual
number of days elapsed in a 360-day year. No more than five
LIBO Rate interest periods may be in effect at any one time.
During the continuance of an event of default (as defined in
the Loan Documents), Loans would bear interest at an
additional 2% per annum.
-4-
<PAGE>
LETTER OF
- ---------
CREDIT FEE:
- ---------- A Letter of Credit Fee equal to the Applicable Margin in
respect of LIBO Loans less 1/4% per annum shall be payable
----
to the Administrative Agent for the benefit of the Lenders,
in arrears, on the aggregate undrawn face amount of all
outstanding Letters of Credit. In addition, 1/4% per annum
shall be payable to each Issuing Bank, in arrears, on the
aggregate undrawn face amount of all outstanding Letters of
Credit issued by such Issuing Bank plus, in each case,
----
standard administration charges (e.g. opening, amendment,
----
presentation and wire charges).
During the continuance of an event of default (as defined in
the Loan Documents), the Letter of Credit Fee would be
increased by an additional 2% per annum.
SECURITY: A valid and perfected first priority security interest in
- -------- all capital stock of the Company's present and future
subsidiaries (including, without limitation, Acquisition
Sub), and all such other present and future property and
assets, real and personal, of the Company and such
subsidiaries (including, without limitation, the Shares
owned by Acquisition Sub), as the Administrative Agent shall
request (with such exceptions as shall be mutually agreed
upon between the Company and the Administrative Agent),
including owned real estate, leaseholds, fixtures, accounts,
license rights, patents, trademarks, trade names,
copyrights, chattel paper, insurance proceeds, contract
rights, hedge agreements, cash, bank accounts, tax refunds,
documents, instruments, investment property, general
intangibles, inventory, equipment, vehicles and other goods
(collectively, the "Collateral"). The Tender Offer Loan and
----------
the Revolving Facility shall be cross-collateralized and
cross-defaulted. To the extent the Agents determine that an
environmental assessment from an outside environmental
consultant is necessary or desirable in connection with
taking a lien on any real property, the Company will provide
such assessment within a time to be agreed after the Tender
Offer Funding Date.
GUARANTIES: Each Borrower shall each guarantee the obligations of
- ---------- the other Borrowers under the Loan Documents and each
subsidiary of the Company (other than the Borrowers) shall
guarantee the obligations of the Borrowers under the Loan
Documents.
MANDATORY
- ---------
PREPAYMENTS: (a) All net cash proceeds from the sale of assets, including
- ----------- without limitation, all sale-leasebacks of property, plant
and equipment of the Company or any of its subsidiaries
(excluding sales in the
-5-
<PAGE>
ordinary course of business and certain de minimis
----------
exceptions to be agreed) permitted under the Loan
Documents, (b) all proceeds of debt issuance and (c)
all proceeds of extraordinary cash infusions and
issuances of equity (except for those occurring in
connection with the Merger) shall be used to prepay the
Tender Offer Facilities and to reduce permanently
availability under the Tender Offer Facilities.
Except to the extent an alternative application may be
required by applicable law, all such mandatory
prepayments shall be applied first to the repayment and
permanent reduction of the Revolving Facility and then
to the repayment of the Tender Offer Loans.
The Borrower shall immediately repay all amounts
outstanding under the Revolving Facility to the extent
such amounts exceed the available commitments
thereunder.
PERMITTED ACQUISITIONS: The Loan Documents will permit the Company and its
- ---------------------- subsidiaries to consummate prior to the Merger
acquisitions of previously identified and approved
targets, provided that, after giving effect to any
proposed acquisition, the following conditions shall
have been met:
(a) no event of default exists or would result from the
proposed acquisition and all representations and
warranties contained in the Loan Documents would
remain true and correct after giving effect to such
proposed acquisition;
(b) the assets subject to the proposed acquisition and
the stock of the target, if applicable, shall be
pledged to the Administrative Agent as additional
collateral in accordance with the provisions of the
Loan Documents;
(c) the board of directors of the target have approved
the proposed acquisition; and
(d) the Loans made to finance the proposed acquisition
do not exceed $17,000,000 and are made in
compliance with all requirements of law (including,
without limitation, Regulations G, T, U and X of
the Federal Reserve Board).
-6-
<PAGE>
CONDITIONS
- ----------
PRECEDENT TO
- ------------
INITIAL FUNDING
- ---------------
OF THE TENDER OFFER
- -------------------
FACILITIES: The following conditions shall have been satisfied prior to, or
- ---------- concurrently with, the initial funding of the Tender Offer
Facilities:
(a) The terms and conditions of the Tender Offer shall be as set
forth in the draft dated January 13, 1998 of the Offer to
Purchase and the draft dated January 14, 1998 of the related
Letter of Transmittal, copies of which have been delivered
to the Agents. Following the commencement of the Tender
Offer, the terms and conditions of the Tender Offer as set
forth in such draft Offer to Purchase and draft Letter of
Transmittal shall not have been amended, waived or modified
from the form of such drafts without the approval of the
Agents and the Lenders (other than non-material amendments,
waivers or modifications to such terms that do not in the
aggregate materially affect the interests of the Agents and
the Lenders in the Facilities or the Collateral ("Non-
----
Material Changes")); provided that the Tender Offer may be
---------------- --------
extended for up to 30 additional business days without the
approval of the Agents and the Lenders. The purchase price
per Share in the Tender Offer shall not exceed $11.50 per
Share (the "Purchase Price") and the aggregate amount paid
--------------
for all Shares accepted for payment in the Tender Offer
shall not exceed $161,000,000. All conditions precedent to
the consummation of the Tender Offer shall have been
satisfied to the satisfaction of the Agents and the Lenders.
(b) The number of Shares accepted for payment in the Tender
Offer by Acquisition Sub shall be equal to no less than the
minimum number of shares, determined on a fully diluted
basis, necessary to approve the consummation of the Merger
in accordance with the provisions of any applicable
corporate statute, anti-takeover statute or provision in the
Company's certificate of incorporation, by-laws, etc. (the
"Minimum Number of Shares"). The Board of Directors of the
------------------------
Target shall have published its recommendation that the
shareholders of the Target tender their Shares pursuant to
the Tender Offer, and such recommendation shall not have
been withdrawn or adversely modified.
-7-
<PAGE>
(c) None of the terms of (i) the Share Repurchase Agreement
dated as of January 15, 1998 between the Target and its largest
shareholder, (ii) the Parent Voting Agreement dated as of
January 15, 1998 among the Company, certain shareholders of the
Company and the Target, (iii) the Company Voting Agreement dated
as of January 15, 1998 among the Company, certain shareholders
of the Target and the Target and (iv) the Option Termination
Agreement dated as of January 15, 1998 between H. Wayne Huizenga
and the Target, copies of which have been received by the
Agents, shall have been amended, waived or modified without the
approval of the Agents and the Lenders (other than Non-Material
Changes).
(d) The Company, Acquisition Sub and the Target shall have
entered into the Merger Agreement dated as of January 15, 1998
among the Company, Acquisition Sub and the Target, a copy of
which has been received by the Agents, and the Merger Agreement
shall have been approved by all necessary corporate action of
the Company, Acquisition Sub and the Target, except approval by
the Company's and the Target's shareholders. None of the terms
of the Merger Agreement shall have been amended, waived or
modified without the approval of the Agents and the Lenders
(other than Non-Material Changes), and there shall not have
occurred or exist any material breach or default thereunder. The
representations and warranties contained in the Merger Agreement
shall be true and correct in all material respects on the Tender
Offer Funding Date. All documentation relating to the Tender
Offer and the Merger (other than the documents referred to in
clauses (a) and (c) above and the Merger Agreement) shall be in
form and substance satisfactory to the Agents and the Lenders.
(e) All governmental and third party consents and approvals
necessary in connection with the Tender Offer and the Merger and
the related financings and grant of security interests shall
have been obtained (without the imposition of any conditions
that are not acceptable to the Agents and the Lenders) and shall
remain in effect, and all applicable waiting periods (including
any required for HSR antitrust clearance) shall have expired
without any action being taken by any competent authority; and
no law or regulation shall be applicable in the judgment of the
Lenders that restrains,
-8-
<PAGE>
prevents or imposes materially adverse conditions upon the
Tender Offer, the Merger or any related transactions.
(f) Except with respect to actions, suits, investigations,
litigation or proceedings of the Company, the Target and their
respective subsidiaries disclosed in the most recent Forms 10-K
issued by the Company and the Target and the Forms 10-Q issued
subsequent to such Forms 10-K and prior to the date of the
Commitment Letter (the "Public Information") and in the Company
------------------
Disclosure Letter and the Parent Disclosure Letter (as defined
in the Merger Agreement) (the "Existing Actions"), (x) there
shall exist no action, suit, investigation, litigation or
proceeding pending or threatened in any court or before any
arbitrator or governmental instrumentality that (i) has or could
reasonably be expected to have a material adverse effect on the
business, condition (financial or otherwise), operations,
performance or properties of (A) the Company and its
subsidiaries (other than the Target and its subsidiaries) taken
as a whole (and individually, with respect to ITC) and (B) the
Target and its subsidiaries taken as a whole (and individually,
with respect to each Target Subsidiary Borrower (as defined
below)) ("Material Adverse Effect") or (ii) enjoins, seeks to
-----------------------
enjoin, delays the consummation of, or imposes material adverse
conditions on, the Tender Offer or the Merger or any transaction
contemplated thereby or purports to affect the Facilities. There
has occurred no change or development in the Existing Actions
from that disclosed in the Public Information, the Company
Disclosure Letter or the Parent Disclosure Letter, which change
or development, when aggregated with all such changes or
developments, has or could reasonably be expected to have a
Material Adverse Effect.
(g) All documentation evidencing the Tender Offer Facilities and
the Merger Facilities (the "Loan Documents") shall have been
--------------
completed and shall in each case be in form and substance
satisfactory to the Agents and the Lenders.
(h) There shall have been no material adverse change in the
information disclosed to the Agents prior to the date of the
Commitment Letter with respect to (i) with the amounts, sources,
terms and conditions of funds to be used for the equity and
other debt financing for the Tender Offer and the Merger, (ii)
the structure contemplated for the Merger,
-9-
<PAGE>
including all legal and tax (including ERISA) aspects and (iii)
with the corporate, capital and legal structure of the Company
and each of its subsidiaries, and of the Target and each of its
Subsidiaries, and the proposed corporate, capital and legal
structure of the Company and its subsidiaries after giving
effect to the Merger.
(i) The facts and assumptions underlying (i) the financial
forecasts dated December 26, 1997 giving effect to the
transactions contemplated in the Merger Agreement prepared by
the management of the Company and (ii) the pro forma estimated
balance sheets of (A) the Company and its subsidiaries at the
Tender Offer Funding Date giving effect to the transactions
contemplated in the Tender Offer and (B) the Company and its
subsidiaries (including the Target and its subsidiaries) at the
Merger Funding Date giving effect to transactions contemplated
in the Merger Agreement (but excluding any purchase accounting
adjustments) shall not have changed in any materially adverse
respect such that such forecasts do not reasonably project the
Company's or the Target's, or their combined, financial
performance for the fiscal periods covered thereby and such that
such pro forma estimated balance sheets do not reasonably
estimate the assets, liabilities and shareholder equity of the
Company and the Target as anticipated at the Tender Offer
Funding Date and the Merger Funding Date.
(j) All capital stock of Acquisition Sub shall be owned directly
by the Company free and clear of any lien, charge or encumbrance
(except in favor of the Administrative Agent); the Lenders shall
have a valid and perfected first priority lien on and security
interest in such stock of Acquisition Sub and each of the
Company's other subsidiaries and in the other Collateral; all
filings, recordations and searches necessary or desirable in
connection with such liens and security interests shall have
been duly made; and all filing and recording fees and taxes
shall have been duly paid. The Lenders shall have received
endorsements naming the Administrative Agent, on behalf of the
Lenders as an additional insured under all insurance policies to
be maintained with respect to the properties of the Company and
its subsidiaries forming part of the Collateral.
(k) There shall have occurred no material adverse change in the
business, condition (financial or otherwise), operations,
-10-
<PAGE>
performance or properties of (i) the Company and its
subsidiaries (other than the Target and its subsidiaries) taken
as a whole (and individually, with respect to ITC), since March
28, 1997 and (ii) the Target and its subsidiaries taken as a
whole (and individually, with respect to each Target Subsidiary
Borrower), since December 31, 1996 ("Pre-Merger Material Adverse
---------------------------
Change").
------
(l) The Agents shall have received an officer's certificate in
form and substance satisfactory to them from the chief financial
officer of the Company to the effect that, after giving effect
separately (i) to the Tender Offer and (ii) the Merger, the
Company and its consolidated subsidiaries, including the Target,
taken as a whole, is solvent and will be solvent subsequent to
incurring the indebtedness in connection with the transactions
contemplated in the Merger Agreement, will be able to pay its
debts as they become due and will not be left with unreasonably
small capital. The solvency letter dated January 14, 1998 from
Valuation Research Corporation, a copy of which has been
received by the Agents, must have been reconfirmed in all
material respects as of the Tender Offer Funding Date. The
Agents shall have received a copy of the fairness opinions
received by the Company and by the Target relating to the Tender
Offer and the Merger.
(m) The Lenders shall have received (i) satisfactory opinions of
counsel to the Borrowers, counsel to the Target and local
counsel to the Lenders as necessary and counsel to the
Administrative Agent as to the transactions contemplated hereby
(including, without limitation, compliance with all applicable
laws and regulations, including the Ohio state takeover statute
and all applicable requirements and regulations of the Board of
Governors of the Federal Reserve System (including Regulations
G, T, U and X thereunder)) and (ii) such corporate resolutions,
certificates and other documents as the Lenders shall reasonably
request.
(n) There shall exist no default under any of the Loan
Documents, and the representations and warranties of the Company
and its subsidiaries therein shall be true and correct
immediately prior to, and after giving effect to, funding.
-11-
<PAGE>
(o) The Lenders shall be satisfied that no change has
occurred in the amount and nature of any environmental
liabilities to which the Company, the Target and their
respective subsidiaries may be subject from that
disclosed to the Agents prior to the date hereof, which
change, when aggregated with all such changes, has or
could reasonably be expected to have a Material Adverse
Effect.
(p) All accrued fees and expenses (including the
reasonable fees and expenses of counsel to the Agents
and local counsel to the Administrative Agent for the
benefit of the Lenders, if any) shall have been paid.
(q) There shall not have occurred, after the date of
the commitment letter, a material disruption or adverse
change in the markets for loan syndications for
transactions of this type or in the United States
financial or capital markets generally.
CONDITIONS
- ----------
PRECEDENT TO
- ------------
ALL TENDER OFFER AND
- --------------------
REVOLVING LOANS:
- --------------- There shall exist no default under any of the Loan
Documents, the representations and warranties of the
Borrower therein shall be true and correct immediately
prior to, and after giving effect to, funding and no
material adverse change shall have occurred in (i) the
business, condition (financial or otherwise),
operations, performance or properties of the Company
and its subsidiaries (other than the Target and its
subsidiaries) taken as a whole (and individually, with
respect to ITC), since March 28, 1997, (ii) the
business, condition (financial or otherwise),
operations, performance or properties of the Target and
its subsidiaries taken as a whole (and individually,
with respect to each Target Subsidiary Borrower), since
December 31, 1996, (iii) the ability of the Company or
any of its subsidiaries to perform their obligations
under the Loan Documents or (iii) the ability of the
Administrative Agent and the Lenders to enforce the
Loan Documents.
III. MERGER FACILITIES
BORROWERS: The Company, ITC, the Target and the following wholly-
owned subsidiaries of the Target: OHM Remediation
Services Corp. and Beneco Enterprises, Inc. (the
"Target Subsidiary Borrowers").
---------------------------
-12-
<PAGE>
THE MERGER FACILITIES: Up to $425,000,000 in the aggregate of Loans provided
- --------------------- as follows:
(a) Term Loan. An eight-year term loan apportioned
---------
between the Borrowers in a single drawing on the Merger
Funding Date shall be made in a principal amount of up
to $225,000,000 (the "Term Loan"), payable in semi-
---------
annual installments aggregating $2,250,000 per year
during the first six years after the Merger Funding
Date with the remainder payable during the seventh and
eighth years after the Merger Funding Date in eight
equal quarterly installments. The amount of the Term
Loan owing by each Borrower shall be set forth in the
Loan Documents and shall be satisfactory to each of the
Lenders.
(b) Revolving Facility. On the Merger Funding Date, the
------------------
Revolving Facility constituting a portion of the Tender
Offer Facilities shall be extended to a six-year
revolving credit facility and shall be increased and
made available to the Borrowers in an aggregate
principal amount of up to $200,000,000 at any time
outstanding. The Letter of Credit Subfacility shall be
increased to $50,000,000 and shall be made available to
each Borrower. All Loans under the Revolving Facility
("Revolving Loans"; together with the Term Loans, the
---------------
"Merger Loans") shall be payable in full on the date
------------
occurring six years after the Merger Funding Date. The
amount of the Revolving Loans owing by each Borrower on
the Merger Funding Date shall be set forth in the Loan
Documents and shall be satisfactory to each of the
Lenders. At the sole discretion of the Arrangers,
$50,000,000 of the Revolving Facility may be
reallocated to the Term Loan on the Merger Funding
Date. A reserve shall be established against a portion
of the Revolving Facility on the Merger Funding Date in
an amount equal to the amount required to defease or
redeem the 8% Convertible Subordinated Debentures of
the Target (the "Debentures"), which reserve shall
----------
abate upon such defeasance or redemption.
PURPOSE: Proceeds of the Merger Loans shall be used (i) for the
- ------- purpose of consummating the Merger, (ii) to repay Loans
outstanding under the Tender Offer Facilities, (iii) to
refinance the Debentures and the Target's existing
senior secured credit facility, (iv) to pay transaction
costs and (v) to provide working capital for the
Company and its subsidiaries.
MERGER FUNDING DATE: Not later than 270 days after the Tender Offer Funding
- ------------------- Date.
INTEREST: Loans would bear interest, at Borrowers' option, at one
- -------- or more of the following rates:
-13-
<PAGE>
(a) the Base Rate Margin (as defined below) plus the
----
Base Rate, payable monthly in arrears; and
(b) the LIBO Rate for interest periods of 1, 2, 3 or 6
months, as selected by the Borrower, plus the LIBO Rate
----
Margin, payable at the end of the relevant interest
period, but in any case at least quarterly.
The "Base Rate Margin" shall mean for an initial period
----------------
of six months: (i) 1.0% per annum in the case of
Revolving Loans and (ii) 1.5% per annum in the case of
Term Loans. The Base Rate Margin may increase or
decrease in subsequent periods based upon a pricing
grid attached hereto as Exhibit A (the "Pricing
--------- -------
Grid").
----
The "LIBO Rate Margin" shall mean for an initial period
----------------
of six months: (i) 2.0% per annum in the case of
Revolving Loans and (ii) 2.5% per annum in the case of
Term Loans. The LIBO Rate Margin may increase or
decrease in subsequent periods based upon the Pricing
Grid.
Interest would be calculated on the basis of the actual
number of days elapsed in a 360-day year. No more than
ten LIBO Rate interest periods may be in effect at any
one time.
During the continuance of an event of default (as
defined in the Loan Documents), Loans would bear
interest at an additional 2% per annum.
LETTER OF
- ---------
CREDIT FEE: A Letter of Credit Fee equal to the LIBO Rate Margin
less 1/4% per annum shall be payable to the
Administrative Agent for the benefit of the Lenders, in
arrears, on the aggregate undrawn face amount of all
outstanding Letters of Credit. In addition, 1/4% per
annum shall be payable to each Issuing Bank, in
arrears, on the aggregate undrawn face amount of all
outstanding Letters of Credit issued by such Issuing
Bank plus, in each case, standard administration
----
charges (e.g. opening, amendment, presentation and wire
----
charges).
During the continuance of an event of default (as
defined in the Loan Documents), the Letter of Credit
Fee would be increased by an additional 2% per annum.
-14-
<PAGE>
UNUSED COMMITMENT
- -----------------
FEE: From and after the Merger Funding Date, an Unused
- --- Commitment Fee at the Unused Commitment Fee Rate,
payable quarterly in arrears on each three month
anniversary of the Merger Funding Date, applied to the
average daily unused portion of the Revolving Facility
during the previous quarter. For this purpose, undrawn
amounts under outstanding Letters of Credit shall
constitute usage of the Revolving Facility. The "Unused
Commitment Fee Rate" shall be 3/8% per annum for an
initial period of six months and may increase or
decrease in subsequent periods based upon the Pricing
Grid.
SECURITY: A valid and perfected first priority security interest
- -------- in all capital stock of the Borrowers' present and
future subsidiaries, and all such other present and
future property and assets, real and personal, of the
Borrowers and such subsidiaries, as the Administrative
Agent shall request (with such exceptions as shall be
mutually agreed upon between the Borrowers and the
Administrative Agent), including owned real estate,
leaseholds, fixtures, accounts, license rights,
patents, trademarks, trade names, copyrights, chattel
paper, insurance proceeds, contract rights, hedge
agreements, cash, bank accounts, tax refunds,
documents, instruments, investment property, general
intangibles, inventory, equipment, vehicles and other
goods (collectively, the "Collateral"). The Term Loans
----------
and the Revolving Facility shall be cross-
collateralized and cross-defaulted.
GUARANTIES: Each Borrower shall each guarantee the obligations of
- ---------- the other Borrowers under the Loan Documents and each
subsidiary of the Company (other than the Borrowers)
shall guarantee the obligations of the Borrowers under
the Loan Documents.
MANDATORY
- ---------
PREPAYMENTS: (a) All net cash proceeds from the sale of assets,
- ----------- including without limitation, all sale-leasebacks of
property, plant and equipment of the Company or any of
its subsidiaries (excluding sales in the ordinary course
of business and certain exceptions to be agreed)
permitted under the Loan Documents, (b) all proceeds of
debt issuance (except for (i) non-recourse debt issued
by non-restricted subsidiaries and (ii) so long as no
event of default has occurred and is continuing under
the Loan Documents or would result from such issuance,
up to $150,000,000 of subordinated indebtedness issued
on terms and conditions acceptable to the Requisite
Lenders), (c) 50% of all proceeds of extraordinary cash
infusions and issuances
-15-
<PAGE>
of equity (except for that occurring in conjunction
with Permitted Acquisitions and in connection with the
Merger) and (d) 75% (or 50%, if the Company's debt to
EBITDA ratio is reduced to an agreed level) of the
Company's Excess Cash Flow (as defined in the Loan
Documents) shall be used to prepay the Merger
Facilities and to reduce permanently availability under
the Merger Facilities.
All such mandatory prepayments shall be applied first
to the repayment of the Term Loans (pro rata to all
remaining installments thereof) and then to the
repayment and permanent reduction of the Revolving
Facility.
The Borrowers shall immediately repay all amounts
outstanding under the Revolving Facility to the extent
such amounts exceed the available commitments
thereunder.
PERMITTED ACQUISITIONS: The Loan Documents will permit the Company and its
- ---------------------- subsidiaries to consummate acquisitions after the
Merger, provided that, after giving effect to any
proposed acquisition, the following conditions shall
have been met:
(a) the target is in a similar or complementary line
of business;
(b) no less than $25,000,000 of availability exists
under the Revolving Facility;
(c) the amount borrowed to finance the proposed
acquisition does not exceed eight times the
target's last twelve month EBITDA;
(d) the Company remains in compliance with the
financial covenants of the Merger Facilities when
these covenants are applied to the proposed
acquisition on a historical pro forma basis;
(e) no event of default exists or would result from
the proposed acquisition and all representations
and warranties contained in the Loan Documents
would remain true and correct after giving effect
to such proposed acquisition;
(f) the assets subject to the proposed acquisition and
the stock of the target, if applicable, shall be
pledged to the Administrative Agent as additional
collateral in accordance with the provisions of
the Loan Documents; and
-16-
<PAGE>
(g) the board of directors of the target have approved
the proposed acquisition.
The Company may complete up to $25,000,000 of other
acquisitions, provided that the conditions in clauses
(a), (d), (e), (f) and (g) above are satisfied.
CONDITIONS
- ----------
PRECEDENT TO
- ------------
INITIAL FUNDING
- ---------------
OF THE MERGER
- -------------
FACILITIES: The initial funding of the Merger Facilities will be
- ---------- subject to, as applicable, the satisfaction as of the
time of Merger and initial funding under the Merger
Facilities of clauses (b), (c), (e), (f), (g), (h), (i)
and (m) of the Conditions To Borrowing under the Tender
Offer Facilities (except that all references therein to
"Lenders" shall mean Lenders in respect of the Merger
Facilities and that all references therein and below to
"Material Adverse Effect" shall mean a material adverse
effect on the business, condition (financial or
otherwise), operations, performance or properties of
the Company and its subsidiaries taken as a whole (and
individually, with respect to each principal subsidiary
of the Company, which on the date of this Commitment
Letter shall include ITC and each Target Subsidiary
Borrower), since March 28, 1997 (or, in the case of OHM
Remediation Services Corp., since December 31, 1996,
and in the case of Beneco Enterprises, Inc., since June
1, 1997)) and to the following:
(a) The Merger Agreement shall have been approved by
the Minimum Number of Shares and the Merger shall
have been consummated prior to the termination or
expiration of the Tender Offer Facilities in
compliance with all applicable laws and in
accordance with the Merger Agreement, the
provisions of which shall not have been amended,
waived or modified without the prior written
approval of the Agents and the Requisite Lenders
(other than Non-Material Changes). None of the
other documentation relating to the Merger and
approved by the Agents prior to the date of the
Commitment Letter shall have been amended, waived
or modified without the prior written approval of
the Agents and the Requisite Lenders (other than
Non-Material Changes) and all other documentation
relating to the Merger shall be in form an
substance satisfactory to the Agents and the
Requisite Lenders. The consideration provided to
shareholders of the Target in connection with
-17-
<PAGE>
both the Tender Offer and the Merger (including any
stock repurchase and payments in respect of the
cancellation of stock options and warrants) shall not
exceed $235,000,000 in cash and shall otherwise only
include common stock issued by the Company.
(b) The solvency certificate and solvency letter described
in clause (l) of Conditions to Funding under the
Tender Offer Facilities must have been reconfirmed in
all material respects as of the Merger Funding Date.
(c) The Lenders shall have a valid and perfected first
priority lien on and security interest in each of the
Company's and the Target's subsidiaries and in the
other Collateral; all filings, recordations and
searches necessary or desirable in connection with
such liens and security interests shall have been duly
made; and all filing and recording fees and taxes
shall have been duly paid. The Lenders shall have
received endorsements naming the Administrative Agent,
on behalf of the Lenders as an additional insured
under all insurance policies to be maintained with
respect to the properties of the Company, the Target
and their respective subsidiaries forming part of the
Collateral.
(d) The Agents and the Requisite Lenders shall be
satisfied that all existing debt and all contingent
liabilities and obligations of the Company and its
subsidiaries which are not to remain outstanding after
the Merger are satisfied and extinguished with the
initial funding under the Merger Facilities.
(e) The Borrowers shall have cash or cash equivalents on
hand sufficient, together with proceeds of Loans made
on and after the Merger Funding Date, (a) to pay in
full the consideration for the Merger and fees and
expenses related to the Merger, (b) to refinance in
full the outstanding indebtedness of the Target under
the Debentures and its existing senior secured credit
facility and (c) to pay an amount determined by the
Agents to be within the range of the Target's
reasonable possible liability with respect to any
exercise of dissenters' rights as to the Merger.
(f) There shall have occurred no material adverse change
in (i) the business, condition (financial or
otherwise), operations, performance or properties of
the Company and its subsidiaries taken as a whole (and
individually, with respect
-18-
<PAGE>
to each principal subsidiary of the Company, which on
the date of this Commitment Letter shall include ITC
and each Target Subsidiary Borrower), since March 28,
1997 (or, in the case of OHM Remediation Services
Corp., since December 31, 1996, and in the case of
Beneco Enterprises, Inc., since June 1, 1997) ("Post-
-----
Merger Material Adverse Change"), other than, in each
------------------------------
case, with respect to matters that are disclosed in
the schedules to the Loan Documents; provided that,
--------
with respect to such matters, no change or development
shall have occurred with respect thereto, which change
or development, when aggregated with all such changes
and developments, has or could reasonably be expected
to have a Material Adverse Effect. No material adverse
change shall have occurred in (i) the ability of the
Company or any of its subsidiaries to perform their
obligations under the Loan Documents or (ii) the
ability of the Administrative Agent and the Lenders to
enforce the Loan Documents.
(h) There shall exist no default under any of the Loan
Documents, and the representations and warranties of
the Company and its subsidiaries therein shall be true
and correct immediately prior to, and after giving
effect to, funding.
(i) All accrued fees and expenses (including the
reasonable fees and expenses of counsel to the Agents
and local counsel to the Administrative Agent for the
benefit of the Lenders, if any) shall have been paid.
(j) There shall not have occurred, after the Tender Offer
Funding Date, a material disruption or adverse change
in the markets for loan syndications for transactions
of this type or in the United States financial or
capital markets generally.
CONDITIONS
- ----------
PRECEDENT TO
- ------------
ALL REVOLVING LOANS
- -------------------
MADE AFTER THE MERGER
- ---------------------
FUNDING DATE: There shall exist no default under any of the Loan
- ------------ Documents, the representations and warranties of the
Borrower therein shall be true and correct immediately prior
to, and after giving effect to, funding, and no material
adverse change shall have occurred in (i) the business,
condition (financial or otherwise), operations, performance,
properties or prospects of the Company and its
-19-
<PAGE>
subsidiaries taken as a whole (and individually, with
respect to each principal subsidiary of the Company, which
on the date of this Commitment Letter shall include ITC and
each Target Subsidiary Borrower), since March 28, 1997 (or,
in the case of OHM Remediation Services Corp., since
December 31, 1996, and in the case of Beneco Enterprises,
Inc., since June 1, 1997), (ii) the ability of the Company
or any of its subsidiaries to perform their obligations
under the Loan Documents or (iii) the ability of the
Administrative Agent and the Lenders to enforce the Loan
Documents.
IV. TERMS AND CONDITIONS APPLICABLE TO ALL FACILITIES
REPRESENTATIONS
- ---------------
AND WARRANTIES: Those customarily found in the Agents' credit
- -------------- agreements for secured leveraged acquisition financings
and others appropriate in the judgment of the Agents
for this transaction, including, without limitation,
(i) for representations and warranties made prior to
the Merger Funding Date, absence of any Pre-Merger
Material Adverse Change and (ii) for representations
and warranties made on or after the Merger Funding
Date, absence of any Post-Merger Material Adverse
Change.
COVENANTS: Those negative, affirmative and financial covenants
- --------- customarily found in the Agents' credit agreements for
secured leveraged acquisition financings (applicable to
the Company and its subsidiaries) and others
appropriate in the judgment of the Agents for this
transaction, including, without limitation, the
following:
(a) Comply in all material respects with laws
(including, without limitation, ERISA,
environmental laws and applicable defense
department regulations), pay taxes, maintain all
necessary licenses and permits, preserve corporate
existence, maintain appropriate and adequate
insurance and permit inspection of properties,
books and records.
(b) Perform obligations under leases, related
documents, material contracts and other
agreements.
(c) Conduct all transactions with affiliates on terms
reasonably equivalent to those obtainable in arm's
length transactions, including restrictions on
management fees and royalties to affiliates to be
agreed upon in the Loan Documents.
-20-
<PAGE>
(d) Maintain with the Administrative Agent main cash
concentration accounts and, with the
Administrative Agent or other banks acceptable to
the Administrative Agent (and with respect to
which lockbox agreements in form and substance
acceptable to the Administrative Agent have been
executed), lockbox accounts into which all
proceeds of collateral are paid and which are
swept daily.
(e) Financial covenants, including, but not limited
to, minimum EBITDA maintenance (tested only on
9/30/98), minimum net worth, minimum fixed charge
coverage, minimum interest coverage, minimum
liquidity, maximum leverage (measured on a debt to
EBITDA basis) and maximum capital expenditures.
(f) Not incur or assume any additional debt, give any
guaranties, create any liens, charges or
encumbrances or incur additional lease
obligations, in each case beyond agreed upon
limits; merge or consolidate with any other
person, or change the nature of business or
corporate structure or create new subsidiaries
beyond agreed upon limits or amend its charter or
by-laws; sell, lease or otherwise dispose of
assets beyond agreed upon limits or agree to give
a negative pledge on any assets in favor of any
person other than the Administrative Agent and the
Lenders.
(g) Not prepay, redeem, purchase, defease, exchange or
repurchase any debt (as defined in the Loan
Documents) or amend or modify any of the terms of
any such debt or other similar agreements entered
into by the Company or its subsidiaries, subject
to certain exceptions to be agreed (it being
understood and agreed that the Company shall be
obligated to defease or redeem the Debentures as
soon as practicable after the Merger Funding Date
but in no event more that 90 days after the Merger
Funding Date).
(h) Not make any loans, advances, capital
contributions or acquisitions, form any joint
ventures or partnerships or make any other
investments in unrestricted subsidiaries or any
other person, subject to agreed upon exceptions
and Permitted Acquisitions.
(i) Not make or commit to make any payments in respect
of warrants, options, repurchases of stock,
dividends or any
-21-
<PAGE>
other distributions to shareholders, subject to agreed
upon exceptions.
(j) Not permit any change in ownership or control of the
Company or any of the Company's subsidiaries or any
change in accounting treatment or reporting practices,
except as required by GAAP and as permitted by the Loan
Documents.
(k) Execute and deliver notice of assignment forms (to be
held by the Administrative Agent) for all material
government contracts, and upon written request of the
Requisite Lenders, obtain requisite governmental
consents.
(l) Within 60 days after the Merger Funding Date, the
Borrower shall obtain interest rate protection
agreement(s) in effect on terms and with a tenor
satisfactory to the Requisite Lenders covering a
notional amount of 40% of the maximum amount of the
Merger Facilities drawn on the Merger Funding Date.
FINANCIAL
- ---------
REPORTING
- ---------
REQUIREMENTS: Within 30 days after the end of each month, furnish monthly
- ------------ consolidated, and, solely in the case of the last month of a
fiscal quarter, quarterly consolidating, balance sheets,
income statements and statements of cash flow of the Company
and its subsidiaries certified by the Company's chief
financial officer (which certification may be subject to
year-end audit adjustments) and certificates as to
compliance with the Loan Documents. Within 50 days after the
end of each calendar quarter, furnish reports on Form 10-Q
filed with the Securities and Exchange Commission certified
by the Company's chief financial officer. Within 95 days
after the end of each fiscal year, furnish (i) reports on
Form 10-K filed with the Securities and Exchange Commission
certified by the Company's chief financial officer and (ii)
audited annual consolidated financial statements of the
Company and its subsidiaries certified by Ernst & Young or
other independent certified public accountants acceptable to
the Requisite Lenders. No later than 30 days after the end
of each fiscal year, furnish the annual business plan of the
Company and its subsidiaries and furnish forecasts prepared
by management of the Company, in each case in form and
detail satisfactory to the Requisite Lenders, of balance
sheets, income statements and cash flow statements on a
monthly basis for the next 12 months and on an annual basis
for each of the
-22-
<PAGE>
following years until the scheduled final maturity of the
Facilities. Concurrently with the filing thereof with the
Securities and Exchange Commission, furnish copies of all
other reports so filed. Promptly after requested, furnish
all other business and financial information that any Lender
through the Administrative Agent may reasonably request.
EVENTS OF
- ---------
DEFAULT: Those customarily found in the Agents' credit agreements for
- ------- secured leveraged acquisition financings and others
appropriate in the judgment of the Agents for this
transaction, including, without limitation failure to pay
principal or interest or fees when due; any representation
or warranty proving to have been materially incorrect when
made; failure to perform or observe covenants (with agreed
upon grace periods when customary and appropriate); cross-
defaults to other indebtedness; bankruptcy defaults;
material judgment defaults; impairment of loan documentation
or security; change in ownership or control; ERISA defaults;
any material adverse change in the business, condition
(financial or otherwise), operations, performance,
properties or prospects of the Company and its subsidiaries
taken as a whole; the failure of the Company or the Target
to comply with the terms of the Merger Agreement; the
failure of the Target to recommend approval of the Merger to
their respective shareholders or to otherwise take all
lawful action to solicit such approval; the failure of the
Company to recommend approval of the issuance of the
Company's common stock in connection with the Merger to
their respective shareholders or to otherwise take all
lawful action to solicit such approval.
EXPENSES: The Borrowers shall, jointly and severally, pay all of the
- -------- Agents' due diligence, transportation, computer,
duplication, appraisal, audit, insurance, consultant,
search, filing and recording fees, syndication expenses
(including printing, distribution and bank meetings) and all
other out-of-pocket expenses incurred by the Agents
(including the reasonable fees and expenses of counsel to
the Agents) whether or not any of the transactions
contemplated hereby are consummated, as well as all expenses
of the Administrative Agent in connection with the
administration of the loan documentation. Such expenses
shall be separate from and in addition to the fees paid
directly to the Agents. The Borrower shall also, jointly and
severally, pay the expenses of the Lenders in connection
with the enforcement of any of the Loan Documents.
INDEMNITY: The Borrowers will, jointly and severally, indemnify
- --------- and hold harmless the Administrative Agent, the Agents, the
Arrangers, each
-23-
<PAGE>
Lender and each of their respective affiliates and each of
their respective officers, directors, employees, agents,
advisors, attorneys and representatives (each, an
"Indemnified Party") from and against any and all claims,
damages, losses, liabilities and expenses (including,
without limitation, fees and disbursements of counsel),
joint or several, that may be incurred by or asserted or
awarded against any Indemnified Party arising out of or in
connection with or relating to any investigation, litigation
or proceeding or the preparation of any defense with respect
thereto arising out of or in connection with or relating to
the Loan Documents, this Commitment Letter, the Facilities,
the Tender Offer, the Merger or the other transactions
contemplated hereby, or any use made or proposed to be made
with the proceeds of the Facilities, whether or not such
investigation, litigation or proceeding is brought by the
Company, the Target, any of their respective shareholders or
creditors, an Indemnified Party or any other person, or an
Indemnified Party is otherwise a party thereto and whether
or not the transactions contemplated hereby are consummated,
except to the extent such claim, damage, loss, liability or
expense is found in a final, non-appealable judgment of a
court of competent jurisdiction to have resulted from such
Indemnified Party's gross negligence or willful misconduct.
No Indemnified Party shall have any liability (whether
direct or indirect, in contract, tort or otherwise) to the
Company, the Target or any of their respective subsidiaries
or any of their respective shareholders or creditors for or
in connection with the transactions contemplated hereby,
except to the extent such liability is found in a final,
non-appealable judgment of a court of competent
jurisdiction to have resulted from such Indemnified Party's
gross negligence or willful misconduct. In no event,
however, shall any Indemnified Party be liable on any
theory of liability for any special, indirect, consequential
or punitive damages.
ASSIGNMENTS AND
- ---------------
PARTICIPATIONS: Assignments must be in a minimum amount of $5 million, other
- -------------- than in the case of an assignment to a Lender or an
assignment of the entirety of a Lender's interest in the
Facilities, and are subject to the approval of the
Administrative Agent. No participation shall include voting
rights, other than for matters requiring 100% of the
Lenders' consent. All assignments under the Tender Offer
Facilities shall be pro rata to both facilities thereunder.
REQUISITE LENDERS: Lenders holding at least 51% of the outstanding commitments
- ----------------- under the Facilities.
-24-
<PAGE>
MISCELLANEOUS: The Loan Documents would include standard yield protection
- ------------- (including, without limitation, provisions relating to
compliance with risk-based capital guidelines, increased
costs, and payments free and clear of withholding taxes).
COUNSEL TO
- ----------
THE ADMINISTRATIVE
- ------------------
AGENT: Sidley & Austin.
- -----
GOVERNING LAW: New York.
- -------------
-25-
<PAGE>
EXHIBIT (c)(1)
Execution Copy
--------------
AGREEMENT AND PLAN OF MERGER
Among
OHM CORPORATION,
INTERNATIONAL TECHNOLOGY CORPORATION
and
IT-OHIO, INC.
Dated as of January 15, 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
-----
RECITALS
ARTICLE I
The Tender Offer and the Stock Purchase
<C> <S> <C>
1.1. Tender Offer................................................................................2
1.2. Company Action..............................................................................3
1.3. The Share Repurchase........................................................................4
1.4. Directors; Committees.......................................................................5
ARTICLE II
The Merger; Closing; Effective Time
2.1. The Merger..................................................................................6
2.2. Closing.....................................................................................6
2.3. Effective Time..............................................................................6
ARTICLE III
Articles of Incorporation, Regulations and
Officers and Directors of the Surviving Corporation
3.1. The Articles of Incorporation...............................................................7
3.2. The Regulations.............................................................................7
3.3. Officers and Directors......................................................................7
ARTICLE IV
Effect of the Merger on Capital Stock;
Exchange of Certificates
4.1. Effect on Capital Stock.....................................................................7
4.2. Exchange of Certificates....................................................................9
4.3. Dissenters' Rights.........................................................................12
4.4. Adjustments to Prevent Dilution............................................................13
4.5. Treatment of Warrants and WH Options.......................................................13
4.6. Treatment of the Debentures................................................................13
4.7. NSC Spinoff................................................................................13
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
Page
----
ARTICLE V
Representations and Warranties
<C> <S> <C>
5.1. Representations and Warranties of the Company..............................................14
5.2. Representations and Warranties of Parent
and Merger Sub........................................................................28
ARTICLE VI
Covenants
6.1. Company Interim Operations.................................................................41
6.2. Parent Interim Operations..................................................................44
6.3. Acquisition Proposals......................................................................45
6.4. Meeting of the Company's Shareholders......................................................46
6.5. Meeting of Parent's Stockholders...........................................................47
6.6. Proxy Statement; Registration Statement....................................................47
6.7. Filings; Other Action; Notification........................................................48
6.8. Access.....................................................................................50
6.9. Stock Exchange Listing and De-listing......................................................50
6.10. Publicity..................................................................................50
6.11. Benefits...................................................................................51
6.12. Expenses...................................................................................54
6.13. Indemnification; Directors' and
Officers' Insurance...................................................................55
6.14. Debentures.................................................................................57
6.15. Takeover Statutes..........................................................................58
6.16. Agreement of Affiliates....................................................................58
6.17. Legal Opinion..............................................................................58
ARTICLE VII
Conditions
7.1. Conditions to Obligations of Parent
and Merger Sub........................................................................59
7.2. Conditions to Obligations of the Company...................................................61
ARTICLE VIII
Termination
8.1. Termination by Mutual Consent..............................................................63
8.2. Termination by Either Parent or the Company................................................63
8.3. Termination by Parent......................................................................63
8.4. Termination by the Company.................................................................63
8.5. Effect of Termination and Abandonment......................................................64
</TABLE>
-ii-
<PAGE>
<TABLE>
<CAPTION>
Page
---
ARTICLE IX
Miscellaneous and General
<C> <S> <C>
9.1. Survival...................................................................................65
9.2. Modification or Amendment..................................................................66
9.3. Waiver of Conditions.......................................................................66
9.4. Counterparts...............................................................................66
9.5. GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL..............................................66
9.6. Notices....................................................................................67
9.7. Entire Agreement; No Other Representations.................................................68
9.8. No Third Party Beneficiaries...............................................................69
9.9. Obligations of Parent and of the Company...................................................69
9.10. Severability...............................................................................69
9.11. Interpretation.............................................................................69
9.12. Assignment.................................................................................70
</TABLE>
-iii-
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (hereinafter called this "Agreement"),
dated as of January 15, 1998, among OHM CORPORATION, an Ohio corporation (the
"Company"), INTERNATIONAL TECHNOLOGY CORPORATION, a Delaware corporation
-------
("Parent"), and IT-OHIO, INC., an Ohio corporation and a wholly-owned subsidiary
------
of Parent ("Merger Sub"), the Company and Merger Sub sometimes being hereinafter
----------
collectively referred to as the "Constituent Corporations."
----------- ------------
RECITALS
WHEREAS, the Boards of Directors of Parent and the Company each have
determined that it is in the best interests of their respective shareholders for
Parent and the Company to combine their respective businesses upon the terms and
subject to the conditions set forth herein; and
WHEREAS, in furtherance of such combination, it is proposed that
Merger Sub shall make a cash tender offer (the "Offer") to acquire 13,933,000
-----
Shares (as defined in Section 1.1(a)) for $11.50 per Share, net to the seller in
cash, upon the terms and subject to the conditions set forth herein; and
WHEREAS, also in furtherance of such combination, the Boards of
Directors of Parent, Merger Sub and the Company have each approved the merger
(the "Merger") of Merger Sub with and into the Company in accordance with the
------
applicable provisions of the Ohio General Corporation Law (the "OGCL"), and upon
----
the terms and subject to the conditions set forth herein; and
WHEREAS, the Boards of Directors of Parent and the Company wish, as a
part of the transactions contemplated by this Agreement, to provide for the
purchase by the Company of 5,235,381 Shares (as defined in Section 1.1(a)) from
Waste Management, Inc., a Delaware corporation ("WMX"), concurrently with the
payment to BankBoston, N.A., as Depositary for the Offer on behalf of holders of
Shares tendering into the Offer, of the aggregate purchase price for all Shares
purchased in the Offer in a manner that will increase the aggregate number of
Shares acquired for cash and make it possible for the Merger Consideration (as
defined in Section 4.1(a)) to consist solely or primarily of
<PAGE>
shares of Parent Common Stock (as defined in Section 4.1(a)); and
WHEREAS, certain shareholders of Parent have entered into agreements
with the Company and Parent providing that such shareholders will vote or cause
all shares of 6% Preferred Shares (as defined in Section 5.2(c)) controlled by
them to be voted in favor of the issuance of shares of Parent Common Stock in
the Merger (as defined in Section 2.1); and
WHEREAS, certain shareholders of the Company have entered into
agreements with the Company and Parent providing that such shareholders will
tender or cause to be tendered in the Offer all or a specified number of Shares
controlled by them, and will vote or cause to be voted all Shares controlled by
them in favor of the Merger; and
WHEREAS, the Company, Parent and Merger Sub desire to make certain
representations, warranties, covenants and agreements in connection with this
Agreement.
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements contained herein the
parties hereto hereby agree as follows:
ARTICLE I
The Tender Offer and the Stock Purchase
1.1. Tender Offer. (a) Provided that this Agreement shall not have
------------
been terminated in accordance with Article VIII hereof and none of the events
set forth in Annex A hereto shall have occurred or be existing, within five
business days of the date hereof, Merger Sub will commence the Offer for
13,933,000 Shares at a price of $11.50 per Share, net to the seller in cash,
subject to the conditions set forth in Annex A hereto. Subject to the conditions
of the Offer set forth in Annex A hereto, Merger Sub will promptly accept for
payment and pay for all Shares that are validly tendered and not withdrawn as
soon as practicable after the later of 9:00 a.m. e.s.t. on February 17, 1998 and
the twentieth business day of the Offer. Merger Sub shall not, without the prior
written consent of the Company (such consent to be authorized by the Board of
Directors of the Company), decrease the price per Share or
-2-
<PAGE>
change the form of consideration payable in the Offer, decrease the number of
Shares sought, change the conditions to the Offer, impose additional conditions
to the Offer or amend any other term of the Offer in any manner adverse to the
holders of Shares or extend the Offer if all of the conditions to the Offer are
satisfied or waived or waive the condition set forth in paragraph (f) of Annex A
to this Agreement. So long as this Agreement is in effect and the conditions to
the Offer have not been satisfied or waived, at the request of the Company from
time to time, Merger Sub shall extend the Offer for a period not to exceed 10
business days after the previously scheduled expiration date of the Offer;
provided, however, in no event shall Parent be obligated to extend the Offer
- -------- -------
beyond March 31, 1998.
(b) Parent agrees that the Offer to Purchase and related Letter of
Transmittal relating to the Offer (which together constitute the "Offer
-----
Documents") shall, in all material respects, comply with the requirements of the
- ---------
Securities Exchange Act of 1934, as amended (the "Exchange Act") and the rules
------------
and regulations thereunder and other applicable laws. The Company and its
counsel shall be given an opportunity to review and comment on the Offer
Documents prior to their being filed with the SEC.
1.2. Company Action
--------------
(a) The Company hereby approves of and consents to the Offer and
represents that its Board of Directors, at a meeting duly called and held on
January 14, 1998, (i) unanimously determined that the transactions contemplated
by this Agreement, including without limitation the Offer and the Merger, are
fair to and in the best interests of the Company and its shareholders and
unanimously approved and adopted this Agreement and the Offer, the Merger and
the other transactions contemplated hereby (the "Transactions"), and (ii)
------------
unanimously recommended that the shareholders of the Company accept the Offer
and adopt this Agreement.
(b) On the date of commencement of the Offer, the Company shall file
with the Securities and Exchange Commission (the "SEC") a
---
Solicitation/Recommendation Statement on Schedule 14D-9 (together with all
amendments and supplements thereto, the "Schedule 14D-9") containing the
--------------
recommendation of the Company's Board of Directors described in Section 1.2(a);
provided, however, that if the Board of Directors of the Company determines in
- -------- -------
good faith,
-3-
<PAGE>
taking into consideration the advice of outside legal counsel, that
the amendment or withdrawal of such recommendation is likely to be required in
order for its members to comply with their fiduciary duties under applicable
law, then any such amendment or withdrawal, and any related amendment of the
Schedule 14D-9, shall not constitute a breach of this Agreement. The Company
shall disseminate the Schedule 14D-9 to the extent required by Rule 14d-9
promulgated under the Exchange Act and any other applicable federal securities
laws. The Schedule 14d-9 shall, in all material respects, comply with the
requirements of the Exchange Act and the rules and regulations thereunder and
other applicable laws. Merger Sub and its counsel shall be given an opportunity
to review and comment on the Schedule 14D-9 and any amendment thereto prior to
their being filed with the SEC.
(c) In connection with the Offer, the Company will cause its transfer
agent to furnish promptly to Merger Sub a list, as of a recent date, of the
shareholders of record of Shares and their addresses, as well as mailing labels
containing the names and addresses of all record holders of Shares and lists of
security positions of Shares held in stock depositories. The Company will
furnish Merger Sub with such additional information (including, but not limited
to, updated lists of holders of Shares and their addresses, mailing labels and
lists of security positions) and such other assistance as Parent or Merger Sub
or their agents may reasonably request in communicating the Offer to the record
and beneficial holders of Shares.
1.3. The Share Repurchase. The Company agrees that it shall,
--------------------
concurrently with the payment to BankBoston, N.A., as Depositary for the Offer
on behalf of holders of Shares tendering into the Offer, of the aggregate
purchase price for all Shares purchased in the Offer, purchase from WMX, at a
price of $11.50 per Share in cash, 5,235,381 Shares, all pursuant to the Share
Repurchase Agreement, dated the date hereof (the "Share Repurchase Agreement"),
--------------------------
between the Company and WMX (the "Share Repurchase").
----------------
1.4. Directors; Committees.
---------------------
(a) If requested by Parent, the Company will, promptly following the
purchase by Merger Sub of Shares pursuant to the Offer, take all actions
necessary to cause persons designated by Parent to become directors of the
Company so that the total number of such persons equals not
-4-
<PAGE>
less than the product of the total number of directors on the Board (giving
effect to the directors elected pursuant to this sentence) multiplied by the
percentage that the aggregate number of Shares beneficially owned by the Parent
Companies (as hereinafter defined) bears to the total number of Shares then
issued and outstanding rounded up to the next greatest nearest whole number. In
furtherance thereof, the Company will increase the size of the Board, or use its
reasonable best efforts to secure the resignation of directors, or both, as is
necessary to permit Parent's designees to be elected to the Company's Board of
Directors; provided that at all times prior to the Effective Time, the Company's
--------
Board of Directors shall consist of at least two members who are neither
officers, stockholders, designees nor affiliates of the Parent Companies
("Parent Representatives"). At such time, the Company, if so requested, will use
----------------------
its reasonable best efforts to cause persons designated by Parent to constitute
the same percentage of each committee of such board, each board of directors of
each Subsidiary (as hereinafter defined) of the Company and each committee of
each such board (in each case to the extent of the Company's ability to elect
such persons). The Company's obligations to appoint designees of Parent to the
Board of Directors of the Company shall be subject to Section 14(f) of the
Exchange Act and Rule 14f-1 promulgated thereunder. The Company shall promptly
take all actions required pursuant to such Section and Rule in order to fulfill
its obligations under this Section 1.4(a) and shall include in the Schedule 14D-
9, or in a separate Rule 14f-1 information statement provided to shareholders,
such information with respect to the Company and its officers and directors and
the Parent Representatives as is required under Section 14(f) and Rule 14f-1 to
fulfill its obligations under this Section 1.4(a). Parent and Merger Sub will
supply to the Company and will be solely responsible for any information with
respect to either of them and their nominees, officers, directors and affiliates
required by Section 14(f) and Rule 14f-1.
(b) No action taken by the Board of Directors of the Company prior to
the Effective Time pursuant to Article VIII or Sections 9.2 or 9.3 shall be
effective unless such action is approved by the affirmative vote of at least a
majority of the directors of the Company who are not Parent Representatives.
-5-
<PAGE>
ARTICLE II
The Merger; Closing; Effective Time
2.1. The Merger. Subject to the terms and conditions of this
----------
Agreement, at the Effective Time (as defined in Section 2.3) Merger Sub shall be
merged with and into the Company and the separate corporate existence of Merger
Sub shall thereupon cease (the "Merger"). The Company shall be the surviving
------
corporation in the Merger (sometimes hereinafter referred to as the "Surviving
---------
Corporation") and shall continue to be governed by the laws of the State of
- -----------
Ohio, and the separate corporate existence of the Company with all its rights,
privileges, immunities, powers and franchises shall continue unaffected by the
Merger, except as set forth in Section 3.1. The Merger shall have the effects
specified in the OGCL.
2.2. Closing. The closing of the Merger (the "Closing") shall take
-------
place (i) at the offices of Gibson, Dunn & Crutcher, LLP, 200 Park Avenue, New
York, New York at 10:00 A.M. on the first business day following the day on
which the last to be fulfilled or waived of the conditions set forth in Article
VII hereof shall be fulfilled or waived in accordance with this Agreement or
(ii) at such other place and time and/or on such other date as the Company and
Parent may agree. The date on which the Closing occurs is hereinafter referred
to as the "Closing Date."
------------
2.3. Effective Time. As soon as practicable following the Closing,
--------------
the Company and Parent will cause a Certificate of Merger (the "Ohio Certificate
----------------
of Merger") to be executed and filed with the Secretary of State of the State of
- ---------
Ohio as provided in Section 1701.81 of the OGCL. The Merger shall become
effective on the date on which the Ohio Certificate of Merger has been duly
filed with the Secretary of State of the State of Ohio, and such time is
hereinafter referred to as the "Effective Time."
--------------
ARTICLE III
Articles of Incorporation, Regulations and
Officers and Directors of the Surviving Corporation
3.1. The Articles of Incorporation. Unless otherwise determined by
-----------------------------
Parent prior to the Effective Time, the articles of incorporation of Merger Sub
(the "Articles") in effect at the Effective Time shall be the articles of
--------
-6-
<PAGE>
incorporation of the Surviving Corporation, until duly amended in accordance
with the terms thereof and the OGCL, except that Article FIRST of the Articles
shall be amended to read in its entirety as follows:
"The name of the Corporation shall be OHM Corporation."
3.2. The Regulations. Unless otherwise determined by Parent prior
---------------
to the Effective Time, the regulations of Merger Sub in effect at the Effective
Time shall be the Regulations of the Surviving Corporation, until duly amended
in accordance with the terms thereof and the OGCL.
3.3. Officers and Directors. The directors of Merger Sub and the
----------------------
officers of the Company at the Effective Time shall, from and after the
Effective Time, be the directors and officers, respectively, of the Surviving
Corporation until their successors have been duly elected or appointed and
qualified or until their earlier death, resignation or removal in accordance
with the Articles and the Surviving Corporation's regulations.
ARTICLE IV
Effect of the Merger on Capital Stock;
Exchange of Certificates
4.1. Effect on Capital Stock. At the Effective Time, as a result
-----------------------
of the Merger and without any action on the part of the holders of any shares of
capital stock of the Company or Merger Sub:
(a) Merger Consideration. Each share of Common Stock, par value $0.10
--------------------
per share, of the Company (each, a "Share" and, collectively, the "Shares")
----- ------
issued and outstanding immediately prior to the Effective Time (other than (x)
Shares purchased in the Offer or otherwise owned by Parent, Merger Sub or any
other direct or indirect Subsidiary of Parent (collectively, the "Parent
------
Companies"), (y) Shares that are owned by the Company or any direct or indirect
- ---------
Subsidiary of the Company and in each case not held on behalf of third parties,
or (z) Shares ("Dissenting Shares") that are owned by shareholders ("Dissenting
----------------- ----------
Shareholders") that have properly exercised appraisal rights pursuant to
- ------------
Sections 1701.84 et seq. of the OGCL (collectively, "Excluded Shares")) shall be
-- --- ---------------
converted into,
-7-
<PAGE>
and become exchangeable for the right to receive (i) 1.394 (the
"Exchange Ratio") fully paid and non-assessable shares of Common Stock, $.01 par
--------------
value per share, of Parent (the "Parent Common Stock"); provided, however, that
------------------- -------- -------
if the aggregate number of Shares accepted for payment and paid for pursuant to
the Offer and purchased from WMX pursuant to the Repurchase Agreement is less
than 19,168,381 Shares (the "Cash Share Number") (the number of Shares so paid
-----------------
for and purchased being referred to herein as the "Purchased Share Number"),
----------------------
then the Exchange Ratio shall be adjusted (the "Adjusted Exchange Ratio") and
-----------------------
shall be equal to the product obtained by multiplying the Exchange Ratio by a
fraction, (A) the numerator of which is equal to (x) the number of Shares issued
and outstanding immediately prior to the Effective Time (excluding Excluded
Shares other than Dissenting Shares) (the "Final Outstanding Number") plus (y)
------------------------
the Purchased Share Number minus (z) the Cash Share Number and (B) the
denominator of which is the Final Outstanding Number and (ii) if the Exchange
Ratio has been adjusted pursuant to the immediately preceding proviso, an amount
in cash equal to a fraction, (A) the numerator of which is the product of
$11.50 and the amount by which the Cash Share Number exceeds the Purchased Share
Number and (B) the denominator of which is the Final Outstanding Number. The
consideration referred to in clauses (i) and (ii) of this Section 4.1(a) is
hereafter referred to collectively as the "Merger Consideration." At the
--------------------
Effective Time, all Shares shall no longer be outstanding and shall be cancelled
and retired and shall cease to exist (in the case of Excluded Shares other than
Dissenting Shares, without the payment of any consideration therefor), and each
certificate (a "Certificate") formerly representing any of such Shares, other
-----------
than Excluded Shares, shall thereafter represent only the right to receive the
Merger Consideration and the right, if any, to receive cash in lieu of
fractional shares pursuant to Section 4.2(e) and any distribution or dividends
pursuant to Section 4.2(c).
(b) Capital Stock of Merger Sub. At the Effective Time, each share
---------------------------
of Common Stock, par value $0.10 per share, of Merger Sub issued and outstanding
immediately prior to the Effective Time shall be converted into one share of
common stock of the Surviving Corporation.
-8-
<PAGE>
4.2. Exchange of Certificates.
------------------------
(a) Exchange Agent. As of the Effective Time, Parent shall deposit,
--------------
or shall cause to be deposited, with an exchange agent selected by Parent with
the Company's prior approval, which shall not be unreasonably withheld (the
"Exchange Agent"), for the benefit of the holders of Shares (other than Excluded
- ---------------
Shares), certificates representing Parent Common Stock and (if applicable) cash
comprising the aggregate Merger Consideration payable in accordance with Section
4.1(a) and, after the Effective Time, if applicable, any cash, dividends or
other distributions with respect to the Parent Common Stock to be issued or paid
pursuant to the last sentence of Section 4.2(c) in exchange for Shares
outstanding immediately prior to the Effective Time (other than Excluded Shares)
upon due surrender of the Certificates (or affidavits of loss in lieu thereof)
pursuant to the provisions of this Article IV (such certificates for shares of
Parent Common Stock and cash (if any) comprising the Merger Consideration,
together with the amount of any dividends or other distributions payable with
respect thereto, being hereinafter referred to as the "Exchange Fund").
-------------
(b) Exchange Procedures. As soon as reasonably practicable following
-------------------
the Effective Time, the Surviving Corporation shall cause the Exchange Agent to
mail to each holder of record of Shares (other than holders of Excluded Shares)
(i) a letter of transmittal specifying that delivery shall be effected, and risk
of loss and title to the Certificates shall pass, only upon delivery of the
Certificates (or affidavits of loss in lieu thereof) to the Exchange Agent, such
letter of transmittal to be in such form and have such other provisions as
Parent and the Company may reasonably agree, and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for (A) certificates
representing shares of Parent Common Stock comprising the Merger Consideration,
(B) if applicable, cash comprising the Merger Consideration, and (C) any unpaid
dividends and other distributions and cash in lieu of fractional shares.
Subject to Section 4.2(g), upon surrender of a Certificate for cancellation to
the Exchange Agent together with such letter of transmittal, duly executed, the
holder of such Certificate shall be entitled to receive in exchange therefor (x)
a certificate representing that number of whole shares of Parent Common Stock
that such holder is entitled to receive pursuant to
-9-
<PAGE>
this Article IV, (y) a check in the amount (after giving effect to any required
tax withholdings) of (A) any cash comprising the Merger Consideration, plus (B)
any cash in lieu of fractional shares, plus (C) any unpaid non-stock dividends
and any other dividends or other distributions that such holder has the right to
receive pursuant to the provisions of this Article IV, and the Certificate so
surrendered shall forthwith be cancelled. No interest will be paid or accrued on
any amount payable upon due surrender of the Certificates. In the event of a
transfer of ownership of Shares that is not registered in the transfer records
of the Company, a certificate representing the proper number of shares of Parent
Common Stock, together with a check for any cash to be paid upon due surrender
of the Certificate and any other dividends or distributions in respect thereof,
may be issued and/or paid to such a transferee if the Certificate formerly
representing such Shares is presented to the Exchange Agent, accompanied by all
documents required to evidence and effect such transfer and to evidence that any
applicable stock transfer taxes have been paid, in form and substance reasonably
satisfactory to Parent and the Exchange Agent. If any check or any certificate
for shares of Parent Common Stock is to be issued in a name other than that in
which the Certificate surrendered in exchange therefor is registered, it shall
be a condition of such exchange that the Person (as defined below) requesting
such exchange shall pay any transfer or other taxes required by reason of the
issuance of certificates for shares of Parent Common Stock in a name other than
that of the registered holder of the Certificate surrendered, or shall establish
to the satisfaction of Parent and the Exchange Agent that such tax has been paid
or is not applicable.
For the purposes of this Agreement, the term "Person" shall mean any
------
individual, corporation (including not-for-profit), general or limited
partnership, limited liability company, joint venture, estate, trust,
association, organization, Governmental Entity (as defined in Section 5.1(d)) or
other entity of any kind or nature.
(c) Distributions with Respect to Unexchanged Shares; Voting. No
--------------------------------------------------------
dividends or other distributions declared or made after the Effective Time with
respect to Parent Common Stock with a record date after the Effective Time shall
be paid to the holder of any unsurrendered Certificate until the holder of such
Certificate shall surrender such Certificate. Subject to the effect of
-10-
<PAGE>
applicable laws, following surrender of any Certificate, there shall be issued
and/or paid to the former holder of such Certificate, without interest, the
dividends or other distributions payable with respect to whole shares of Parent
Common Stock with a record date on or after the Effective Time but with a
payment date prior to surrender.
(d) No Further Ownership Right in Shares. All shares of Parent Common
------------------------------------
Stock issued upon the surrender for exchange of Certificates in accordance with
the terms of this Article IV (including any cash paid pursuant to this Article
IV) will be deemed, to the fullest extent permitted by applicable law, to have
been issued (and paid) in full satisfaction of all rights pertaining to the
Shares theretofore represented by such Certificates. After the Effective Time,
there shall be no transfers on the stock transfer books of the Company of the
Shares that were outstanding immediately prior to the Effective Time.
(e) Fractional Shares. Notwithstanding any other provision of this
-----------------
Agreement, no fractional shares of Parent Common Stock will be issued and any
holder of Shares entitled to receive a fractional share of Parent Common Stock
but for this Section 4.2(e) shall be entitled to receive a cash payment in lieu
thereof, which payment shall represent such holder's proportionate interest in a
share of Parent Common Stock based on the average closing price per share of
Parent Common Stock on the New York Stock Exchange, Inc. (the "NYSE") for the
----
ten trading days immediately prior to the Effective Time, as reported in the New
York City edition of The Wall Street Journal.
-----------------------
(f) Termination of Exchange Fund. Any portion of the Exchange Fund
----------------------------
(including the proceeds of any investments thereof and any Parent Common Stock)
that remains unclaimed by the shareholders of the Company for six months
following the Effective Time shall be paid to Parent. Any shareholders of the
Company who have not theretofore complied with this Article IV shall thereafter
look only to Parent for payment of their shares of Parent Common Stock and any
cash, dividends and other distributions in respect thereof payable and/or
issuable pursuant to Section 4.1 and Section 4.2(c) upon due surrender of their
Certificates (or affidavits of loss in lieu thereof), in each case, without any
interest thereon. Notwithstanding the foregoing, none of Parent, the Surviving
Corporation, the Exchange Agent or any other Person shall be liable to any
former holder of Shares for any amount properly delivered to a public
-11-
<PAGE>
official pursuant to applicable abandoned property, escheat or similar laws.
(g) Lost, Stolen or Destroyed Certificates. In the event any
--------------------------------------
Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such Certificate to be lost,
stolen or destroyed and, if required by Parent, the posting by such Person of a
bond in customary amount as indemnity against any claim that may be made against
it with respect to such Certificate, the Exchange Agent will issue in exchange
for such lost, stolen or destroyed Certificate the shares of Parent Common Stock
and any cash, cash in lieu of fractional shares and any unpaid dividends or
other distributions in respect of the Shares represented by such Certificate
pursuant to this Agreement.
4.3. Dissenters' Rights. No Dissenting Shareholder shall be
------------------
entitled to any portion of the Merger Consideration or cash in lieu of
fractional shares thereof or any dividends or other distributions pursuant to
this Article IV unless and until such Dissenting Shareholder shall have failed
to perfect or shall have effectively withdrawn or lost such holder's right to
dissent from the Merger under the OGCL, and any Dissenting Shareholder shall be
entitled to receive only the payment provided by Sections 1701.85 et seq. of the
-- ---
OGCL with respect to Shares owned by such Dissenting Shareholder. If any Person
who otherwise would be deemed a Dissenting Shareholder shall have failed to
properly perfect or shall have effectively withdrawn or lost the right to
dissent with respect to any Shares, such Shares shall thereupon be treated as
though such Shares had been converted into the right to receive the Merger
Consideration with respect to such Shares as provided in this Article IV. The
Company shall give Parent (i) prompt notice of any written demands for
appraisal, attempted withdrawals of such demands, and any other instruments
served pursuant to applicable law received by the Company relating to
shareholders rights of appraisal and (ii) the opportunity to direct all
negotiations and proceedings with respect to demand for appraisal under the
OGCL. The Company shall not, except with the prior written consent of Parent,
voluntarily make any payment with respect to any demands for appraisals of
Dissenting Shares, offer to settle or settle any such demands or approve any
withdrawal of any such demands.
-12-
<PAGE>
4.4. Adjustments to Prevent Dilution. In the event that the
-------------------------------
Company changes the number of Shares or securities convertible or exchangeable
into or exercisable for Shares, or Parent changes the number of shares of Parent
Common Stock or securities convertible or exchangeable into or exercisable for
shares of Parent Common Stock, issued and outstanding prior to the Effective
Time as a result of a reclassification, stock split (including a reverse split),
stock dividend or distribution, recapitalization, merger, subdivision, issuer
tender or exchange offer, or other similar transaction, the Merger Consideration
shall be equitably adjusted.
4.5. Treatment of Warrants and WH Options. In consideration of the
------------------------------------
parties' respective agreements to consummate the Transactions, the Company,
Parent and Merger Sub hereby agree as follows:
(a) Pursuant to the Share Repurchase Agreement, at the Effective Time,
the Warrants (as hereinafter defined) shall be cancelled and the Warrant
Agreement (as hereinafter defined) shall be terminated.
(b) Pursuant to that certain letter agreement, dated the date hereof,
between the Company and the holder of the WH Options (the "Option Termination
Agreement"), the WH Options shall be terminated on the earliest to occur of (i)
the acceptance by Merger Sub of Shares for payment in the Offer, or (ii) the
Effective Time, in exchange for the payment by the Company to such holder of
$1,500,000 in cash.
4.6. Treatment of the Debentures. The Company"s 8% Convertible
---------------------------
Subordinated Debentures due October 1, 2006 (the "Debentures") shall be treated
----------
as set forth in Section 6.13.
4.7. NSC Spinoff. Concurrently with the acceptance by Merger Sub
-----------
of Shares for payment in the Offer, the Company shall pay a pro rata taxable
--- ----
distribution (the "NSC Distribution"), to holders of record of the Shares as of
----------------
the close of business on the date immediately prior to the date Merger Sub
accepts Shares for payment in the Offer, of all of the shares of common stock,
par value $0.01 per share, of NSC Corporation held by the Company in a manner
reasonably satisfactory to Parent, and the Offer Documents shall not contain any
terms or conditions requiring holders of Shares to deliver NSC Corporation
shares to Parent. All corporate action on the part of the Company necessary to
-13-
<PAGE>
effect the NSC Distribution shall be taken prior to the date on which Merger Sub
accepts Shares for payment pursuant to the Offer. The NSC Distribution is an
integral part of the plan of acquisition of the Company by Parent, with the
result that for federal income tax purposes the NSC Distribution will be treated
as a redemption of a pro rata portion of the Shares held by each holder of
--- ----
Shares under the principle of Zenz v. Quinlivan, 213 F.2d 914 (6th Cir. 1954).
---- ---------
ARTICLE V
Representations and Warranties
5.1. Representations and Warranties of the Company. Except as set
---------------------------------------------
forth in the corresponding sections or subsections of the disclosure letter
delivered to Parent by the Company on or prior to entering into this Agreement
(the "Company Disclosure Letter"), the Company hereby represents and warrants to
-------------------------
Parent and Merger Sub that:
(a) Organization, Good Standing and Qualification. Each of the
---------------------------------------------
Company and its Subsidiaries is a corporation duly organized, validly existing
and in good standing under the laws of its respective jurisdiction of
organization and has all requisite corporate or similar power and authority to
own and operate its properties and assets and to carry on its business as
presently conducted and is qualified to do business and is in good standing as a
foreign corporation in each jurisdiction where the ownership or operation of its
properties or conduct of its business requires such qualification, except where
any failure to be so qualified or in good standing, individually or when taken
together with all other such failures, is not reasonably likely to have a
Company Material Adverse Effect (as defined below). The Company has made
available to Parent a complete and correct copy of the Company's and its
Subsidiaries' articles or certificates of incorporation and by-laws or
regulations, each as amended to the date hereof. The Company's and its
Subsidiaries' articles or certificates of incorporation and by-laws or
regulations so delivered are in full force and effect.
As used in this Agreement, the term (i) "Subsidiary" means, with
----------
respect to the Company, Parent or Merger Sub, as the case may be, any entity,
whether incorporated or unincorporated, of which at least a majority
-14-
<PAGE>
of the securities or ownership interests having by their terms ordinary voting
power to elect a majority of the board of directors or other persons performing
similar functions is directly or indirectly owned or controlled by such party or
by one or more of its respective Subsidiaries or by such party and any one or
more of its respective Subsidiaries, and (ii) "Company Material Adverse Effect"
-------------------------------
means a material adverse effect on the financial condition, properties, business
or results of operations of the Company and its Subsidiaries taken as a whole;
provided, however, that to the extent that any such effect results directly from
- -------- -------
the public announcement of the transactions contemplated by this Agreement or
actions taken by Parent or its Subsidiaries after the date of this Agreement,
such effect shall not be considered when determining if a Company Material
Adverse Effect has occurred.
(b) Capital Structure. The authorized capital stock of the Company
-----------------
consists of 50,000,000 Shares, of which 27,554,547 Shares were outstanding as of
the close of business on January 14, 1998, 1,000,000 shares of Class A Preferred
Stock, par value $10.00 per share, of which no shares were outstanding as of the
date of this Agreement, and 1,000,000 shares of Class B Preferred Stock, par
value $10.00 per share, of which no shares were outstanding as of the date of
this Agreement. All of the outstanding Shares have been duly authorized and are
validly issued, fully paid and nonassessable. The Company has no Shares or
shares of Class A Preferred Stock or Class B Preferred Stock reserved for
issuance, except that, as of January 14, 1998, there were 4,950,000 Shares
reserved for issuance pursuant to the Company's 1986 Stock Option Plan,
Incentive Stock Plan and Nonqualified Stock Option Plan for Directors, and
Shares having a maximum aggregate offering price of $2,400,000 reserved for
issuance pursuant to the Company's Directors' Deferred Fee Plan (such plan,
collectively with such 1986 Stock Option Plan, Incentive Stock Plan and
Nonqualified Stock Option Plan for Directors, the "Stock Plans"), 700,000 Shares
-----------
subject to issuance upon exercise of the warrants (the "Warrants") issued under
--------
the Warrant Agreement, dated May 30, 1995, among the Company, WMX and Rust
International Inc., 1,000,000 Shares subject to issuance upon exercise of the
options set forth in the First Option Agreement and Second Option Agreement,
each dated as of March 28, 1995, between the Company and H. Wayne Huizenga (the
"WH Options"), and 2,395,834 Shares subject to issuance pursuant to the
Debentures. The Company Disclosure Letter contains a correct and complete list
of each outstanding option to
-15-
<PAGE>
purchase Shares under the Stock Plans (each a "Company Option"), including the
--------------
holder (each of whom is a current or former director, officer or employee of the
Company or its Subsidiaries), date of grant, exercise price and number of Shares
subject thereto. Each of the outstanding shares of capital stock or other
securities of each of the Company's Subsidiaries is duly authorized, validly
issued, fully paid and nonassessable and, except for directors' qualifying
shares, owned by a direct or indirect wholly owned subsidiary of the Company,
free and clear of any lien, pledge, security interest, claim or other
encumbrance. Except as set forth above, there are no preemptive or other
outstanding rights, options, warrants, conversion rights, stock appreciation
rights, redemption rights, repurchase rights, agreements, arrangements or
commitments to issue or sell any shares of capital stock or other securities of
the Company or any of its Subsidiaries or any securities or obligations
convertible or exchangeable into or exercisable for, or giving any Person a
right to subscribe for or acquire, any securities of the Company or any of its
Subsidiaries, and no securities or obligations evidencing such rights are
authorized, issued or outstanding. Except for the Warrants, the WH Options and
the Debentures, the Company does not have outstanding any bonds, debentures,
notes or other obligations the holders of which have the right to vote (or
convertible into or exercisable for securities having the right to vote) with
the stockholders of the Company on any matter ("Voting Debt"). The Company is
-----------
not the beneficial owner of any equity securities, except shares of capital
stock of the Company's Subsidiaries.
(c) Corporate Authority; Approval and Fairness. (i) The Company has
------------------------------------------
all requisite corporate power and authority and has taken all corporate action
necessary in order to execute, deliver and perform its obligations under this
Agreement and to consummate, subject only to adoption of this Agreement by the
holders of a majority of the outstanding Shares (the "Company Requisite Vote"),
----------------------
the Merger. This Agreement is a valid and binding agreement of the Company
enforceable against the Company in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles (the "Bankruptcy and Equity Exception").
-------------------------------
(ii) The board of directors of the Company has received the opinion
of its financial advisor, BT Alex.
-16-
<PAGE>
Brown Incorporated, to the effect that the aggregate consideration to be
received by the holders of the Shares in the Offer, the Merger and the NSC
Distribution is fair from a financial point of view to such holders.
(d) Governmental Filings; No Violations. (i) Other than the filings
-----------------------------------
and/or notices (A) under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"), the Securities Act of 1933, as amended (the
-------
"Securities Act")and the Exchange Act, (B) to comply with state securities or
- ---------------
"blue sky" laws, including, without limitation, the filing required by Section
1707.041 of the Ohio Revised Code, and (C) required to be made with the NYSE, no
notices, reports or other filings are required to be made by the Company with,
nor are any consents, registrations, approvals, permits or authorizations
required to be obtained by the Company from, any governmental or regulatory
authority, agency, commission, body or other governmental entity (each, a
"Governmental Entity"), in connection with the execution and delivery of this
- --------------------
Agreement by the Company and the Merger and the other transactions contemplated
hereby, except those that the failure to make or obtain are not, individually or
in the aggregate, reasonably likely to have a Company Material Adverse Effect or
prevent, materially delay or materially impair the ability of the Company to
consummate transactions contemplated by this Agreement.
(ii) The execution, delivery and performance of this Agreement by the
Company do not, and the consummation by the Company of the Merger and the other
transactions contemplated hereby will not, constitute or result in (A) a breach
or violation of, or a default under, the articles of incorporation or the
regulations of the Company or the comparable governing instruments of any of its
Subsidiaries, (B) a breach or violation of, or a default under, the acceleration
of any obligations or the creation of a lien, pledge, security interest or other
encumbrance on the assets of the Company or any of its Subsidiaries (with or
without notice, lapse of time or both) pursuant to, any agreement, lease,
contract, note, mortgage, indenture, arrangement or other obligation reasonably
likely to result in payments made by any party of $1,000,000 or more in any
calendar year and not otherwise terminable by the other party thereto on 90
days' or less notice ("Contracts") binding upon the Company or any of its
---------
Subsidiaries or any Law (as defined in Section 5.1(i)) or governmental or non-
governmental permit or license to which the Company or any of its Subsidiaries
-17-
<PAGE>
is subject or (C) any change in the rights or obligations of any party under any
such Contract, except, in the case of clause (B) or (C) above, for any breach,
violation, default, acceleration, creation or change that, individually or in
the aggregate, is not reasonably likely to have a Company Material Adverse
Effect or prevent, materially delay or materially impair the ability of the
Company to consummate the transactions contemplated by this Agreement. Section
5.1(d) of the Company Disclosure Letter sets forth, to the knowledge of the
executive officers of the Company, a correct and complete list of Contracts of
the Company and its Subsidiaries pursuant to which consents or waivers are or
may be required prior to consummation of the transactions contemplated by this
Agreement (whether or not subject to the exception set forth with respect to
clauses (B) and (C) above).
(e) Company Reports; Financial Statements. The Company has delivered
-------------------------------------
to Parent each registration statement, report, proxy statement or information
statement prepared by it since December 31, 1996, including (i) the Company's
Annual Report on Form 10-K for the year ended December 31, 1996, (ii) the
Company's Quarterly Reports on Form 10-Q for the periods ended March 31, 1997,
June 30, 1997, and September 30, 1997, and (iii) the Company's two Current
Reports on Form 8-K dated June 17, 1997, each in the form (including exhibits,
annexes and any amendments thereto) filed with the SEC (collectively, including
any such reports filed subsequent to the date hereof, the "Company Reports").
---------------
As of their respective dates, the Company Reports did not, and any Company
Reports filed with the SEC subsequent to the date hereof will not, contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements made therein, in light of
the circumstances in which they were made, not misleading. Each of the
consolidated balance sheets included in or incorporated by reference into the
Company Reports (including the related notes and schedules) fairly presents, or
will fairly present, the consolidated financial position of the Company and its
Subsidiaries as of its date and each of the consolidated statements of income
and of cash flows included in or incorporated by reference into the Company
Reports (including any related notes and schedules) fairly presents, or will
fairly present, the results of operations, retained earnings and changes in
financial position, as the case may be, of the Company and its Subsidiaries for
the periods set forth therein (subject, in the case of unaudited statements, to
notes and normal
-18-
<PAGE>
year-end audit adjustments that will not be material in amount or effect), in
each case in accordance with generally accepted accounting principles ("GAAP")
----
consistently applied during the periods involved, except as may be noted
therein.
(f) Absence of Certain Changes. Except as disclosed in the Company
--------------------------
Reports filed prior to the date hereof, and except for the NSC Distribution and
the Share Repurchase and the transactions incident thereto, since September 30,
1997 the Company and its Subsidiaries have conducted their respective businesses
only in, and have not engaged in any material transaction other than according
to, the ordinary and usual course of such businesses and there has not been (i)
any change in the financial condition, properties, business or results of
operations of the Company and its Subsidiaries or any development or combination
of developments of which the executive officers of the Company have knowledge
that, individually or in the aggregate, has had or is reasonably likely to have
a Company Material Adverse Effect; (ii) any material damage, destruction or
other casualty loss with respect to any material asset or property owned, leased
or otherwise used by the Company or any of its Subsidiaries, whether or not
covered by insurance; (iii) any declaration, setting aside or payment of any
dividend or other distribution in respect of the capital stock of the Company,
except for dividends or other distributions on its capital stock publicly
announced prior to the date hereof; or (iv) any change by the Company in
accounting principles, practices or methods. Since September 30, 1997, except
as provided for herein or as disclosed in the Company Reports filed prior to the
date hereof, there has not been any increase in the compensation payable or that
could become payable by the Company or any of its Subsidiaries to any of their
respective officers or any amendment of any of the Compensation and Benefit
Plans other than increases or amendments in the ordinary course of business.
(g) Litigation and Liabilities. Except as disclosed in the Company
--------------------------
Reports filed prior to the date hereof, there are no (i) civil, criminal or
administrative actions, suits, claims, hearings, investigations or proceedings
pending or, to the knowledge of the executive officers of the Company,
threatened against the Company or any of its Subsidiaries or (ii) obligations or
liabilities of the Company or any of its Subsidiaries, whether or not accrued,
contingent or otherwise and whether or not required to be disclosed, including
those relating to matters
-19-
<PAGE>
involving any Environmental Law (as defined in Section 5.1(j)), or any other
facts or circumstances of which the executive officers of the Company have
knowledge that could result in any claims against, or obligations or liabilities
of, the Company or any of its Subsidiaries, except for those that are not,
individually or in the aggregate, reasonably likely to have a Company Material
Adverse Effect or prevent or materially burden or materially impair the ability
of the Company to consummate the transactions contemplated by this Agreement.
(h) Employee Benefits.
-----------------
(i) A copy of each bonus, deferred compensation, pension, retirement,
profit-sharing, thrift, savings, employee stock ownership, stock bonus, stock
purchase, restricted stock, stock option, employment, termination, severance,
compensation, medical, health or other plan, agreement, policy or arrangement
that covers employees, directors, former employees or former directors of the
Company and its Subsidiaries (the "Compensation and Benefit Plans") and any
------------------------------
trust agreement or insurance contract forming a part of such Compensation and
Benefit Plans has been made available to Parent prior to the date hereof. The
Compensation and Benefit Plans are listed in Section 5.1(h) of the Company
Disclosure Letter and any "change of control" or similar provisions therein are
specifically identified in Section 5.1(h) of the Company Disclosure Letter.
(ii) Except for such instances as would not, individually or in the
aggregate, be reasonably likely to have a Company Material Adverse Effect: (w)
all Compensation and Benefit Plans are in compliance with all applicable law,
including the Internal Revenue Code of 1986, as amended (the "Code") and the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"); (x) each
-----
Compensation and Benefit Plan that is an "employee pension benefit plan" within
the meaning of Section 3(2) of ERISA (a "Pension Plan") and that is intended to
------------
be qualified under Section 401(a) of the Code has received a favorable
determination letter from the Internal Revenue Service (the "IRS"), and the
---
Company is not aware of any circumstances likely to result in revocation of any
such favorable determination letter; (y) as of the date hereof, there is no
pending or, to the knowledge of the executive officers of the Company,
threatened material litigation relating to the Compensation and Benefit Plans;
and (z) neither the Company nor any of its Subsidiaries has engaged in a
transaction
-20-
<PAGE>
with respect to any Compensation and Benefit Plan that, assuming the taxable
period of such transaction expired as of the date hereof, would subject the
Company or any of its Subsidiaries to a tax or penalty imposed by either Section
4975 of the Code or Section 502 of ERISA.
(iii) As of the date hereof, no liability under Subtitle C or D of
Title IV of ERISA has been or is expected to be incurred by the Company or any
Subsidiary with respect to any ongoing, frozen or terminated "single-employer
plan", within the meaning of Section 4001(a)(15) of ERISA, currently or formerly
maintained by any of them, or the single-employer plan of any entity which is
considered one employer with the Company under Section 4001 of ERISA or Section
414 of the Code (an "ERISA Affiliate"), except for such instances as are not,
---------------
individually or in the aggregate, reasonably likely to have a Company Material
Adverse Effect. The Company and its Subsidiaries have not incurred and do not
expect to incur any withdrawal liability with respect to a multiemployer plan
under Subtitle E to Title IV of ERISA that would have, individually or in the
aggregate, a Company Material Adverse Effect. No notice of a "reportable
event", within the meaning of Section 4043 of ERISA for which the 30-day
reporting requirement has not been waived, has been required to be filed for any
Pension Plan or by any ERISA Affiliate within the 12-month period ending on the
date hereof or will be required to be filed in connection with the transactions
contemplated by this Agreement.
(iv) The consummation of the Merger and the other transactions
contemplated by this Agreement will not (x) entitle any employees of the Company
or its Subsidiaries to severance pay, (y) accelerate the time of payment or
vesting or trigger any payment of compensation or benefits under, increase the
amount payable or trigger any other material obligation pursuant to, any of the
Compensation and Benefit Plans or (z) result in any breach or violation of, or a
default under, any of the Compensation and Benefit Plans.
(v) Except for such instances as would not, individually or in the
aggregate, be reasonably likely to have a Company Material Adverse Effect: (x)
no compensation payable by the Company or its Subsidiaries to any of its
employees under any existing Compensation and Benefit Plan (including by reason
of the transactions contemplated hereby) will be subject to disallowance under
Section 162(m) of the Code; and (y) any amount that could be received
-21-
<PAGE>
(whether in cash or property or the vesting of property) by any employee,
officer, director or independent contractor of the Company or any of its
Subsidiaries who is a "disqualified individual" (as such term is defined in
proposed Treasury Regulation Section 1.280G-1) under any employment arrangement
would not be characterized as an "excess parachute payment" (as such term is
defined in Section 280G(b)(1) of the Code).
(vi) except as specifically identified in Section 5.1(h) of the
Company Disclosure Letter, no Compensation and Benefit Plan provides or will
provide welfare benefits to former employees of the Company or any or its
Subsidiaries except as required under Code Section 4980B.
(i) Compliance with Laws; Permits. Except as set forth in the
-----------------------------
Company Reports filed prior to the date hereof, the businesses of each of the
Company and its Subsidiaries have not been, and are not being, conducted in
violation of any federal, state, local or foreign law, statute, ordinance, rule,
regulation, judgment, order, injunction, decree, arbitration award, agency
requirement, license or permit of any Governmental Entity (collectively,
"Laws"), except for violations or possible violations that, individually or in
----
the aggregate, are not reasonably likely to have a Company Material Adverse
Effect or prevent or materially burden or materially impair the ability of the
Company to consummate the transactions contemplated by this Agreement. No
material change is required in the Company's or any of its Subsidiaries'
processes, properties or procedures in connection with any such Laws, and the
Company has not received any notice or communication of any material
noncompliance with any such Laws that has not been cured as of the date hereof.
The Company and its Subsidiaries each has all permits, licenses, trademarks,
patents, trade names, copyrights, service marks, franchises, variances,
exemptions, orders and other governmental authorizations, consents and approvals
necessary to conduct its business as presently conducted except those the
absence of which are not, individually or in the aggregate, reasonably likely to
have a Company Material Adverse Effect or prevent or materially burden or
materially impair the ability of the Company to consummate the Merger and the
other transactions contemplated by this Agreement.
(j) Environmental Matters. Except as disclosed in the Company Reports
---------------------
and except for such instances as
-22-
<PAGE>
would not, individually or in the aggregate, be reasonably likely to have a
Company Material Adverse Effect: (i) the properties currently owned or operated
by the Company and its Subsidiaries are in compliance with all applicable
Environmental Laws; (ii) the properties currently owned or operated by the
Company or any of its Subsidiaries are not the subject of any pending or, to the
knowledge of the executive officers of the Company, threatened investigation or
notice from any Governmental Entity alleging the violation of any applicable
Environmental Law; (iii) the Company and its Subsidiaries have not received any
notice of violation concerning the operation of the business that has not been
resolved; (iv) neither the Company nor any Subsidiary is currently subject to
any court order, administrative order or consent decree in connection with any
Environmental Law; (v) to the knowledge of the executive officers of the
Company, the properties currently owned or operated by the Company or any of its
Subsidiaries have not been used for the disposal of Hazardous Substances; (vi)
to the knowledge of the executive officers of the Company, the properties
currently owned or operated by the Company and its Subsidiaries have not had any
emissions or discharges of any Hazardous Substances except as permitted under
applicable Environmental Laws; (vii) the properties currently owned or operated
by the Company or any of its Subsidiaries possess all material permits,
licenses, authorizations and approvals required under applicable Environmental
Laws with respect to the present conduct of the business; (viii) there are no
circumstances that would reasonably be expected to subject the Company or any of
its Subsidiaries to liability under any Environmental Law for the assessment,
cleanup, response or removal of any Hazardous Substance at any location; and
(ix) in the 12 months prior to the date of this Agreement, the Company and its
Subsidiaries have substantially complied at all times with the terms and
conditions contained in the "Waste Handling Activities" Section of the Company's
June 1997 Contracts Manual. As used herein the term "Environmental Law" means
-----------------
any federal, state or local law, statute, ordinance, rule, regulation, code,
license, permit, order, decree or injunction enacted for the protection of the
environment, (including air, water, soil and natural resources) or otherwise
regulating the use, storage, handling, release or disposal of any hazardous or
toxic substance and the term "Hazardous Substance" means any hazardous substance
-------------------
within the meaning of 101(14) of CERCLA, 42 U.S.C. ' 9601(14) or any other
substance listed, defined,
-23-
<PAGE>
designated or classified as hazardous, toxic or radioactive pursuant to any
applicable Environmental Law.
(k) Taxes. Except for such instances as would not, individually or in
-----
the aggregate, be reasonably likely to have a Company Material Adverse Effect:
(i) The Company and its subsidiaries have filed completely and correctly in all
material respects all Tax Returns which are required by all applicable laws to
be filed by them, and have paid, or made adequate provision for the payment of,
all material Taxes which have or may become due and payable pursuant to said Tax
Returns and all other Taxes, governmental charges and assessments received to
date other than those Taxes being contested in good faith for which adequate
provision has been made on the most recent consolidated balance sheet of the
Company set forth in the Company Reports. The Tax Returns of the Company and
its Subsidiaries have been prepared, in all material respects, in accordance
with all applicable laws and generally accepted principles applicable to
taxation consistently applied; (ii) all material Taxes which the Company and its
Subsidiaries are required by law to withhold and collect have been duly withheld
and collected, and have been paid over, in a timely manner, to the proper taxing
authorities to the extent due and payable; (iii) the Company and its
Subsidiaries have not executed any waiver to extend, or otherwise taken or
failed to take any action that would have the effect of extending, the
applicable statute of limitations in respect of any Tax liabilities of the
Company or any of its Subsidiaries for the fiscal years prior to and including
the most recent fiscal year; (iv) neither the Company nor any of its
Subsidiaries is a "consenting corporation" within the meaning of Section 341(f)
of the Code; (v) the Company has at all times been taxable as a Subchapter C
corporation under the Code; (vi) the Company has never been a member of any
consolidated group (other than with the Company and its Subsidiaries) for Tax
purposes; (vii) the Company is not a party to any tax sharing agreement or
arrangement, other than with its Subsidiaries; (viii) no liens for Taxes exist
with respect to any of the assets or properties of the Company, except for
statutory liens for Taxes not yet due or payable or that are being contested in
good faith; (ix) all of the U.S. Federal income Tax Returns filed by or on
behalf of each of the Company and its Subsidiaries have been examined by and
settled with the Internal Revenue Service, or the statute of limitations with
respect to the relevant Tax liability expired, for all taxable periods through
and including the period ending on the date on which the
-24-
<PAGE>
Effective Time occurs; (x) all Taxes due with respect to any completed and
settled audit, examination or deficiency litigation with any taxing authority
have been paid in full; (xi) there is no audit, examination, deficiency, or
refund litigation pending with respect to any Taxes and during the past three
years no taxing authority has given written notice of the commencement of any
audit, examination or deficiency litigation, with respect to any Taxes; (xii)
neither the Company nor any of its Subsidiaries is bound by any currently
effective private ruling, closing agreement or similar agreement with any taxing
authority relating to a material amount of Taxes; (xiii) except with respect to
like-kind exchanges pursuant to Section 1031 of the Code, the Company shall not
be required to include in a taxable period ending after the Effective Time, any
taxable income attributable to income that economically accrued in a prior
taxable period as a result of Section 481 of the Code, the installment method of
accounting or any comparable provision of state or local Tax law; (xiv) (A) no
material amount of property of the Company is "tax exempt property" within the
meaning of Section 168(h) of the Code, (B) no material amount of assets of the
Company is subject to a lease under Section 7701(h) of the Code, and (C) the
Company is not a party to any material lease made pursuant to Section 168(f)(8)
of the Internal Revenue Code of 1954, as amended and in effect prior to the date
of enactment of the Tax Equity and Fiscal Responsibility Act of 1982; and (xv)
immediately following the Merger, the Company will not have any material amount
of income or gain that has been deferred under Treasury Regulation Section
1.1502-13, or any material excess loss account in a Subsidiary under Treasury
Regulation Section 1.1502-19.
As used in this Agreement, (i) the term "Tax" (including, with
---
correlative meaning, the terms "Taxes", and "Taxable") includes all federal,
----- -------
state, local and foreign income, profits, franchise, gross receipts,
environmental, customs duty, capital stock, severances, stamp, payroll, sales,
employment, unemployment, disability, use, property, withholding, excise,
production, value added, occupancy and other taxes, duties or assessments of any
nature whatsoever, together with all interest, penalties and additions imposed
with respect to such amounts and any interest in respect of such penalties and
additions, and (ii) the term "Tax Return" includes all returns and reports
----------
(including elections, declarations, disclosures, schedules, estimates and
information returns) required to be supplied to a Tax authority relating to
Taxes.
-25-
<PAGE>
(l) Labor Matters. Neither the Company nor any of its Subsidiaries
-------------
is, as of the date hereof, a party to or otherwise bound by any collective
bargaining agreement, contract or other agreement or understanding with a labor
union or labor organization, nor, as of the date hereof, is the Company or any
of its Subsidiaries the subject of any material proceeding asserting that the
Company or any of its Subsidiaries has committed an unfair labor practice or is
seeking to compel it to bargain with any labor union or labor organization nor,
except as would not, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect, is there pending or, to the knowledge of
the executive officers of the Company, threatened, any material labor strike,
dispute, walk-out, work stoppage, slow-down or lockout involving the Company or
any of its Subsidiaries.
(m) Takeover Statutes. Assuming the accuracy of Parent's
-----------------
representations and warranties contained in Section 5.2(n), the board of
directors of the Company has taken all necessary action so that no "fair price,"
"moratorium," "control share acquisition" or other similar anti-takeover statute
or regulation (including the control share acquisition provisions codified in
Sections 1701.831 et seq. of the OGCL and the moratorium provisions codified in
-- ---
Sections 1704.02 et seq. of the OGCL (each a "Takeover Statute")) or any
-- --- ----------------
applicable anti-takeover provision in the Company's articles of incorporation or
regulations is applicable to the Company, the Shares or the Transactions, except
for the filing required by Section 1707.041 of the Ohio Revised Code.
(n) Vote Requirements. The affirmative vote of the holders of a
-----------------
majority of the outstanding Shares at the Company Meeting to approve this
Agreement and the Merger is the only vote of the holders of any class or series
of the Company's capital stock necessary to approve or adopt this Agreement and
the transactions contemplated hereby.
(o) Information Supplied. None of the information supplied or to be
--------------------
supplied by the Company specifically for inclusion or incorporation by reference
in (i) the Offer Documents, at the time such documents are first published, sent
or given to the holders of Shares, and at any time they are amended or
supplemented, (ii) the Registration Statement (as defined in Section 6.6) to be
filed with the SEC by Parent in connection with the issuance of Parent Common
Stock in the Merger, at the time the
-26-
<PAGE>
Registration Statement is filed with the SEC or at the time it becomes effective
under the Securities Act, or (iii) the Proxy Statement (as defined in Section
6.6), at the date it is first mailed to the Company shareholders and Parent
stockholders or at the time of the Company Meeting or the Parent Meeting will
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Proxy Statement will comply as to form in all material respects
with the requirements of the Exchange Act and the rules and regulations
thereunder, except that no representations and warranties are made by the
Company with respect to statements made or incorporated by reference therein
based on information supplied by Parent or Merger Sub specifically for inclusion
or incorporation by reference in the Proxy Statement or contained in the Parent
Reports incorporated by reference in the Offer Documents, the Registration
Statement or the Proxy Statement.
(p) Available Funds. The Company has availability under the Revolving
---------------
Credit Agreement, dated as of May 31, 1995, among the Company, OHM Remediation
Services Corp., Citicorp USA, Inc., as administrative agent, Bank of America
Illinois, as issuing and paying agent, and the financial institutions listed
therein (the "Credit Agreement") to consummate the transactions contemplated by
the Share Repurchase Agreement, and has obtained all consents and approvals to
permit the transactions contemplated by the Share Repurchase Agreement, and all
consents and approvals of the lenders under the Credit Agreement required to
permit the transactions contemplated by this Agreement and the Transactions.
(q) Brokers and Finders. Neither the Company nor any of its officers,
-------------------
directors or employees has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders' fees in connection
with the Merger or the other transactions contemplated in this Agreement except
that the Company has employed Union Bancaire Privee International, Inc. and BT
Alex. Brown Incorporated as its financial advisors, the arrangements with which
have been disclosed to Parent prior to the date hereof.
5.2. Representations and Warranties of Parent and Merger Sub.
-------------------------------------------------------
Except as set forth in the corresponding
-27-
<PAGE>
sections or subsections of the disclosure letter delivered to the Company by
Parent on or prior to entering into this Agreement (the "Parent Disclosure
-----------------
Letter"), Parent and Merger Sub each hereby represents and warrants to the
- -------
Company that:
(a) Capitalization of Merger Sub. The authorized capital stock of
----------------------------
Merger Sub consists of 1,000 shares of Common Stock, par value $0.10 per share,
all of which are validly issued and outstanding. All of the issued and
outstanding capital stock of Merger Sub is, and at the Effective Time will be,
owned by Parent, and there are (i) no other shares of capital stock or voting
securities of Merger Sub, (ii) no securities of Merger Sub convertible into or
exchangeable for shares of capital stock or voting securities of Merger Sub and
(iii) no options or other rights to acquire from Merger Sub, and no obligations
of Merger Sub to issue, any capital stock, voting securities or securities
convertible into or exchangeable for capital stock or voting securities of
Merger Sub. Merger Sub has not conducted any business prior to the date hereof
and has no, and prior to the Effective Time will have no, assets, liabilities or
obligations of any nature other than those incident to its formation and
pursuant to this Agreement and the Merger and the other transactions
contemplated by this Agreement.
(b) Organization, Good Standing and Qualification. Each of Parent and
---------------------------------------------
the Subsidiaries of Parent listed in Section 5.2(b) of the Parent Disclosure
Letter is a corporation duly organized, validly existing and in good standing
under the laws of its respective jurisdiction of organization and has all
requisite corporate or similar power and authority to own and operate its
properties and assets and to carry on its business as presently conducted and is
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction where the ownership or operation of its properties or conduct
of its business requires such qualification, except where any failure to be so
qualified or in such good standing, individually or when taken together with all
other such failures, is not reasonably likely to have a Parent Material Adverse
Effect (as defined below). Parent has made available to the Company a complete
and correct copy of Parent's and its Subsidiaries' articles or certificates of
incorporation and by-laws or regulations, each as amended to the date hereof.
Parent's and its Subsidiaries' articles or certificates of
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<PAGE>
incorporation and by-laws or regulations so delivered are in full force and
effect.
As used in this Agreement, the term "Parent Material Adverse Effect"
------------------------------
means a material adverse effect on the financial condition, properties, business
or results of operations of the Parent and its Subsidiaries taken as a whole
provided, however, that to the extent that any such effect results directly from
- -------- -------
the public announcement of the transactions contemplated by this Agreement or
actions taken by the Company or its Subsidiaries after the date of this
Agreement, such effect shall not be considered when determining if a Parent
Material Adverse Effect has occurred.
(c) Capital Structure. The authorized capital stock of Parent
-----------------
consists of 50,000,000 shares of Parent Common Stock, of which 9,733,288 shares
were outstanding as of the close of business on January 13, 1998, 45,000 shares
of 6% Cumulative Convertible Participating Preferred Stock, par value $100 per
share (the "6% Preferred Shares"), of which 45,000 shares were outstanding as of
-------------------
the close of business on January 13, 1998, and 2,055,692 depositary shares, each
representing a 1/100th interest in a share of Parent's 7% Cumulative Convertible
Exchangeable Preferred Stock, par value $100 (the "7% Preferred Shares" and,
-------------------
collectively with the 6% Preferred Shares, the "Parent Preferred Shares"), of
-----------------------
which 20,556 were outstanding as of the close of business on January 13, 1998.
All of the outstanding Parent Common Stock and Parent Preferred Shares have been
duly authorized and are validly issued, fully paid and nonassessable. Parent
has no Parent Common Stock or Parent Preferred Shares reserved for issuance,
except that, as of January 1, 1998, there were 870,253 shares of Parent Common
Stock reserved for issuance pursuant to the Parent Compensation and Benefit
Plans, 5,625,000 shares of Parent Common Stock subject to issuance upon
conversion of the 6% Preferred Shares, 1,889,677 shares of Parent Common Stock
subject to issuance upon conversion of the 7% Preferred Shares and 1,889,677
shares of Parent Common Stock subject to issuance pursuant to Parent's 7%
Convertible Subordinated Debentures due 2008 (the "Parent Debentures"),
-----------------
1,250,000 shares of Parent Common Stock purchasable upon exercise of the
Warrants issued November 20, 1996 to purchasers affiliated with the Carlyle
Group, 65,157 shares of Parent Common Stock issuable pursuant to a litigation
settlement and 117,915 shares of Parent Common Stock issuable under an
acquisition agreement. Each of the outstanding shares of capital stock of each
of Parent's Subsidiaries is duly
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authorized, validly issued, fully paid and nonassessable and, except for
directors' qualifying shares, owned by a direct or indirect wholly owned
subsidiary of Parent, free and clear of any lien, pledge, security interest,
claim or other encumbrance. Except as set forth above, there are no preemptive
or other outstanding rights, options, warrants, conversion rights, stock
appreciation rights, redemption rights, repurchase rights, agreements,
arrangements or commitments to issue or to sell any shares of capital stock or
other securities of Parent or any of its Subsidiaries or any securities or
obligations convertible or exchangeable into or exercisable for, or giving any
Person a right to subscribe for or acquire, any securities of the Company or any
of its Subsidiaries, and no securities or obligation evidencing such rights are
authorized, issued or outstanding. Except for the Parent Debentures, Parent does
not have outstanding any bonds, debentures, notes or other obligations the
holders of which have the right to vote (or convertible into or exercisable for
securities having the right to vote) with the stockholders of Parent on any
matter ("Parent Voting Debt").
------------------
(d) Corporate Authority.
-------------------
(i) Each of the Parent and Merger Sub has all requisite corporate
power and authority and has taken all corporate action necessary in order to
execute, deliver and perform its obligations under this Agreement and to
consummate, subject only to any stockholder approval necessary to permit the
issuance of the shares of Parent Common Stock required to be issued pursuant to
Article IV (the "Parent Requisite Vote"), the Merger. This Agreement is a valid
---------------------
and binding agreement of Parent and Merger Sub, enforceable against each of
Parent and Merger Sub in accordance with its terms, subject to the Bankruptcy
and Equity Exception.
(ii) The board of directors of Parent (A) has unanimously approved
this Agreement, the Offer, the Merger and the other transactions contemplated
hereby, and (B) has received the opinion of its financial advisor, Donaldson
Lufkin & Jenrette Securities Corporation, to the effect that the consideration
to be paid by Parent pursuant to this Agreement is fair to the Company from a
financial point of view.
(iii) Prior to the Effective Time and subject to obtaining the
stockholder approval contemplated by Section 6.4, Parent will have taken all
necessary corporate
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action to permit it to issue the number of shares of Parent Common Stock
required to be issued pursuant to Article IV. The Parent Common Stock, when
issued, will be validly issued, fully paid and nonassessable, and no stockholder
of Parent will have any preemptive right of subscription or purchase in respect
thereof. The Parent Common Stock, when issued, will be registered under the
Securities Act and Exchange Act and registered or exempt from registration under
any applicable state securities or "blue sky" laws.
(e) Governmental Filings; No Violations. (i) Other than the filings
-----------------------------------
and/or notices (A) under the HSR Act, the Securities Act and the Exchange Act,
(B) to comply with state securities or "blue sky" laws, including, without
limitation, the filing required by Section 1707.041 of the Ohio Revised Code,
and (C) required to be made with the NYSE, no notices, reports or other filings
are required to be made by Parent or Merger Sub with, nor are any consents,
registrations, approvals, permits or authorizations required to be obtained by
Parent or Merger Sub from, any Governmental Entity, in connection with the
execution and delivery of this Agreement by Parent and Merger Sub and the Offer,
the Merger and the other transactions contemplated hereby, except those that the
failure to make or obtain are not, individually or in the aggregate, reasonably
likely to have a Parent Material Adverse Effect or prevent, materially delay or
materially impair the ability of Parent or Merger Sub to consummate the
transactions contemplated by this Agreement.
(ii) The execution, delivery and performance of this Agreement by
Parent and Merger Sub do not, and the making or consummation by Parent and
Merger Sub of the Offer, the Merger and the other transactions contemplated
hereby will not, constitute or result in (A) a breach or violation of, or a
default under, the certificate or by-laws of Parent and Merger Sub or the
comparable governing instruments of any of its Subsidiaries, (B) a breach or
violation of, or a default under, the acceleration of any obligations or the
creation of a lien, pledge, security interest or other encumbrance on the assets
of Parent or any of its Subsidiaries (with or without notice, lapse of time or
both) pursuant to, any Contracts binding upon Parent or any of its Subsidiaries
or any Law or governmental or non-governmental permit or license to which Parent
or any of its Subsidiaries is subject or (C) any change in the rights or
obligations of any party under any such Contract, except, in the case of clause
(B) or (C) above, for breach, violation,
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<PAGE>
default, acceleration, creation or change that, individually or in the
aggregate, is not reasonably likely to have a Parent Material Adverse Effect or
prevent, materially delay or materially impair the ability of Parent or Merger
Sub to consummate the transactions contemplated by this Agreement. Section
6.2(e) of the Parent Disclosure Letter sets forth, to the knowledge of the
executive officers of Parent, a correct and complete list of Contracts of Parent
and its Subsidiaries pursuant to which consents or waivers are or may be
required prior to consummation of the transactions contemplated by this
Agreement (whether or not subject to the exception set forth with respect to
clauses (B) and (C) above).
(f) Parent Reports; Financial Statements. Parent has delivered to the
------------------------------------
Company each registration statement, report, proxy statement or information
statement prepared by it since March 28, 1997, including (i) Parent's Annual
Report on Form 10-K for the year ended March 28, 1997, (ii) Parent's Amendment
on Form 10-K/A dated July 28, 1997, (iii) Parent's Quarterly Reports on Form 10-
Q for the periods ended June 27, 1997 and September 26, 1997, (iv) Parent's
Current Reports on Form 8-K, dated January 17, 1997 and June 19, 1997, (iv)
Parent's registration statement on Form S-4 (File No. 333-32219); and (v)
Parent's Amendment No. 1 to registration statement on Form S-4 (File No. 333-
32219); each in the form (including exhibits, annexes and any amendments
thereto) filed with the SEC (collectively, including any such reports filed
subsequent to the date hereof, the "Parent Reports"). As of their respective
--------------
dates, the Parent Reports did not, and any Parent Reports filed with the SEC
subsequent to the date hereof will not, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances in
which they were made, not misleading. Each of the consolidated balance sheets
included in or incorporated by reference into the Parent Reports (including the
related notes and schedules) fairly presents, or will fairly present, the
consolidated financial position of Parent and its Subsidiaries as of its date
and each of the consolidated statements of income and of cash flows included in
or incorporated by reference into the Parent Reports (including any related
notes and schedules) fairly presents, or will fairly present, the results of
operations, retained earnings and changes in financial position, as the case may
be, of Parent and its Subsidiaries for the periods set forth therein (subject,
in the case of unaudited statements, to
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<PAGE>
notes and normal year-end audit adjustments that will not be material in amount
or effect), in each case in accordance with GAAP consistently applied during the
periods involved, except as may be noted therein.
(g) Absence of Certain Changes. Except as disclosed in the Parent
--------------------------
Reports filed prior to the date hereof, since September 26, 1997 Parent and its
Subsidiaries have conducted their respective businesses only in, and have not
engaged in any material transaction other than according to, the ordinary and
usual course of such businesses and there has not been (i) any change in the
financial condition, properties, business or results of operations of Parent and
its Subsidiaries or any development or combination of developments of which the
executive officers of Parent have knowledge that, individually or in the
aggregate, has had or is reasonably likely to result in a Parent Material
Adverse Effect; (ii) any material damage, destruction or other casualty loss
with respect to any material asset or property owned, leased or otherwise used
by Parent or any of its Subsidiaries, whether or not covered by insurance; (iii)
any declaration, setting aside or payment of any dividend or other distribution
in respect of the capital stock of Parent, except for dividends or other
distributions on its capital stock publicly announced prior to the date hereof;
or (iv) any change by Parent in accounting principles, practices or methods.
(h) Litigation and Liabilities. Except as disclosed in the Parent
--------------------------
Reports filed prior to the date hereof, there are no (i) civil, criminal or
administrative actions, suits, claims, hearings, investigations or proceedings
pending or, to the knowledge of the executive officers of Parent, threatened
against Parent or any of its Subsidiaries or (ii) obligations or liabilities of
Parent or any of its Subsidiaries, whether or not accrued, contingent or
otherwise and whether or not required to be disclosed, including those relating
to matters involving any Environmental Law, or any other facts or circumstances
of which the executive officers of Parent have knowledge that could result in
any claims against, or obligations or liabilities of, Parent or any of its
Subsidiaries, except for those that are not, individually or in the aggregate,
reasonably likely to have a Parent Material Adverse Effect or prevent or
materially burden or materially impair the ability of Parent or Merger Sub to
consummate the transactions contemplated by this Agreement.
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<PAGE>
(i) Employee Benefits.
-----------------
(i) A copy of each bonus, deferred compensation, pension, retirement,
profit-sharing, thrift, savings, employee stock ownership, stock bonus, stock
purchase, restricted stock, stock option, employment, termination, severance,
compensation, medical, health or other plan, agreement, policy or arrangement
that covers employees, directors, former employees or former directors of Parent
and its Subsidiaries (the "Parent Compensation and Benefit Plans") and any trust
-------------------------------------
arrangement or insurance contract forming a part of such Parent Compensation and
Benefits Plans has been made available to the Company prior to the date hereof.
The Parent Compensation and Benefit Plans are listed in Section 5.2(i) of the
Parent Disclosure Letter and any "change of control" or similar provision
therein are specifically identified in Section 5.2(i) of the Parent Disclosure
Letter.
(ii) Except for such instances as would not, individually or in the
aggregate, be reasonably likely to have a Parent Material Adverse Effect: (w)
all Parent Compensation and Benefit Plans are in compliance with all applicable
law, including the Code and ERISA; (x) each Parent Compensation and Benefit Plan
that is an "employee pension benefit plan" within the meaning of Section 3(2) of
ERISA (a "Parent Pension Plan") and that is intended to be qualified under
-------------------
Section 401(a) of the Code has received a favorable determination letter from
the IRS, and Parent is not aware of any circumstances likely to result in
revocation of any such favorable determination letter; (y) as of the date
hereof, there is no pending or, to the knowledge of the executive officers of
Parent, threatened material litigation relating to the Parent Compensation and
Benefit Plans; and (z) neither Parent nor any of its Subsidiaries has engaged in
a transaction with respect to any Parent Compensation and Benefit Plan that,
assuming the taxable period of such transaction expired as of the date hereof,
would subject Parent or any of its Subsidiaries to a material tax or penalty
imposed by either Section 4975 of the Code or Section 502 of ERISA.
(iii) As of the date hereof, no liability under Subtitle C or D of
Title IV of ERISA has been or is expected to be incurred by Parent or any
Subsidiary with respect to any ongoing, frozen or terminated "single-employer
plan", within the meaning of Section 4001(a)(15) of ERISA, currently or formerly
maintained by any of them, or the
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<PAGE>
single-employer plan of any entity which is considered an ERISA Affiliate of
Parent, except for such instances as are not, individually or in the aggregate,
reasonably likely to have a Parent Material Adverse Effect. Parent and its
Subsidiaries have not contributed, or been obligated to contribute, to a
multiemployer plan under Subtitle E of Title IV of ERISA at any time since
September 26, 1980, except for such instances as are not, individually or in the
aggregate, reasonably likely to have a Parent Material Adverse Effect. No notice
of a "reportable event", within the meaning of Section 4043 of ERISA for which
the 30-day reporting requirement has not been waived, has been required to be
filed for any Parent Pension Plan or by any ERISA Affiliate within the 12-month
period ending on the date hereof or will be required to be filed in connection
with the transactions contemplated by this Agreement.
(iv) The consummation of the Merger and the other transactions
contemplated by this Agreement will not (x) entitle any employees of Parent or
its Subsidiaries to severance pay, (y) accelerate the time of payment or vesting
or trigger any payment of compensation or benefits under, increase the amount
payable or trigger any other material obligation pursuant to, any of the Parent
Compensation and Benefit Plans or (z) result in any breach or violation of, or
default under, any of the Parent Compensation and Benefit Plans.
(v) Except for such instances as would not, individually or in the
aggregate, be reasonably likely to have a Parent Material Adverse Effect: (x) no
compensation payable by Parent or its Subsidiaries to any of its employees under
any existing Parent Compensation and Benefit Plan (including by reason of the
transactions contemplated hereby) will be subject to disallowance under Section
162(m) of the Code; and (y) any amount that could be received (whether in cash
or property or the vesting of property) as a result of any of the transactions
contemplated by this Agreement by any employee, officer director or independent
contractor of Parent or any of its Subsidiaries who is a "disqualified
individual" (as such term is defined in proposed Treasury Regulation Section
1.280G-1) under any employment arrangement would not be characterized as an
"excess parachute payment" (as such term is defined in Section 280G(b)(1) of the
Code).
(vi) Except as specifically identified in Section 5.2(i) of the Parent
Disclosure Letter, no Parent
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<PAGE>
Compensation and Benefit Plan provides or will provide welfare benefits to
former employees of Parent or any of its Subsidiaries except as required under
the Code.
(j) Compliance with Laws; Permits. Except as set forth in the Parent
-----------------------------
Reports filed prior to the date hereof, the businesses of each of Parent and its
Subsidiaries have not been, and are not being, conducted in violation of any
Laws, except for violations or possible violations that, individually or in the
aggregate, are not reasonably likely to have a Parent Material Adverse Effect or
prevent or materially burden or materially impair the ability of Parent or
Merger Sub to consummate the transactions contemplated by this Agreement. No
material change is required in Parent's or any of its Subsidiaries' processes,
properties or procedures in connection with any such Laws, and Parent has not
received any notice or communication of any material noncompliance with any such
Laws that has not been cured as of the date hereof. Parent and its Subsidiaries
each has all permits, licenses, trademarks, patents, trade names, copyrights,
service marks, franchises, variances, exemptions, orders and other governmental
authorizations, consents and approvals necessary to conduct its business as
presently conducted except those the absence of which are not, individually or
in the aggregate, reasonably likely to have a Parent Material Adverse Effect or
prevent or materially burden or materially impair the ability of Parent or
Merger Sub to consummate the Merger and the other transactions contemplated by
this Agreement.
(k) Environmental Matters. Except as disclosed in the Parent Reports
---------------------
and except for such instances as would not, individually or in the aggregate, be
reasonably likely to have a Parent Material Adverse Effect: (i) the properties
currently owned or operated by Parent and its Subsidiaries are in compliance
with all applicable Environmental Laws; (ii) the properties currently owned or
operated by Parent or any of its Subsidiaries are not the subject of any pending
or, to the knowledge of the executive officers of the Parent, threatened
investigation or notice from any Governmental Entity alleging the violation of
any applicable Environmental Law; (iii) Parent and its Subsidiaries have not
received any notice of violation concerning the operation of the business that
has not been resolved; (iv) neither Parent nor any Subsidiary is currently
subject to any court order, administrative order or consent decree in connection
with any Environmental Law; (v) to the knowledge of the executive officers of
Parent, the
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<PAGE>
properties currently owned or operated by Parent or any of its Subsidiaries have
not been used for the disposal of Hazardous Substances; (vi) to the knowledge of
the executive officers of Parent, the properties currently owned or operated by
Parent and its Subsidiaries have not had any emissions or discharges of any
Hazardous Substances except as permitted under applicable Environmental Laws;
(vii) the properties currently owned or operated by Parent or any of its
Subsidiaries possess all material permits, licenses, authorizations and
approvals required under applicable Environmental Laws with respect to the
present conduct of the business; and (viii) there are no circumstances that
would reasonably be expected to subject Parent or any of its Subsidiaries to
liability under any Environmental Law for the assessment, cleanup, response or
removal of any Hazardous Substance at any location.
(l) Taxes. Except for such instances as would not, individually or in
-----
the aggregate, be reasonably likely to have a Parent Material Adverse Effect:
(i) Parent and its Subsidiaries have filed completely and correctly in all
material respects all Tax Returns which are required by all applicable laws to
be filed by them, and have paid, or made adequate provision for the payment of,
all material Taxes which have or may become due and payable pursuant to said Tax
Returns and all other Taxes, governmental charges and assessments received to
date other than those Taxes being contested in good faith for which adequate
provision has been made on the most recent consolidated balance sheet of Parent
set forth in the Parent Reports. The Tax Returns of Parent and its Subsidiaries
have been prepared, in all material respects, in accordance with all applicable
laws and generally accepted principles applicable to taxation consistently
applied; (ii) all material Taxes which Parent and its Subsidiaries are required
by law to withhold and collect have been duly withheld and collected, and have
been paid over, in a timely manner, to the proper taxing authorities to the
extent due and payable; (iii) Parent and its Subsidiaries have not executed any
waiver to extend, or otherwise taken or failed to take any action that would
have the effect of extending, the applicable statute of limitations in respect
of any Tax liabilities of Parent or any of its Subsidiaries for the fiscal years
prior to and including the most recent fiscal year; (iv) neither Parent nor any
of its Subsidiaries is a "consenting corporation" within the meaning of Section
341(f) of the Code; (v) Parent has at all times been taxable as a Subchapter C
corporation under the Code; (vi) Parent has never been a member of any
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<PAGE>
consolidated group (other than with Parent and its Subsidiaries) for Tax
purposes; (vii) Parent is not a party to any tax sharing agreement or
arrangement, other than with its Subsidiaries; (viii) no liens for Taxes exist
with respect to any of the assets or properties of Parent, except for statutory
liens for Taxes not yet due or payable or that are being contested in good
faith; (ix) all of the U.S. Federal income Tax Returns filed by or on behalf of
each of Parent and its Subsidiaries have been examined by and settled with the
Internal Revenue Service, or the statute of limitations with respect to the
relevant Tax liability expired, for all taxable periods through and including
the period ending on the date on which the Effective Time occurs; (x) all Taxes
due with respect to any completed and settled audit, examination or deficiency
litigation with any taxing authority have been paid in full; (xi) there is no
audit, examination, deficiency, or refund litigation pending with respect to any
Taxes and during the past three years no taxing authority has given written
notice of the commencement of any audit, examination or deficiency litigation,
with respect to any Taxes; (xii) neither Parent nor any of its Subsidiaries is
bound by any currently effective private ruling, closing agreement or similar
agreement with any taxing authority relating to a material amount of Taxes;
(xiii) except with respect to like-kind exchanges pursuant to Section 1031 of
the Code, Parent shall not be required to include in a taxable period ending
after the Effective Time, any taxable income attributable to income that
economically accrued in a prior taxable period as a result of Section 481 of the
Code, the installment method of accounting or any comparable provision of state
or local Tax law; (xiv) (A) no material amount of property of Parent is "tax
exempt property" within the meaning of Section 168(h) of the Code, (B) no
material amount of assets of Parent is subject to a lease under Section 7701(h)
of the Code, and (C) Parent is not a party to any material lease made pursuant
to Section 168(f)(8) of the Internal Revenue Code of 1954, as amended and in
effect prior to the date of enactment of the Tax Equity and Fiscal
Responsibility Act of 1982; and (xv) immediately following the Merger, Parent
will not have any material amount of income or gain that has been deferred under
Treasury Regulation Section 1.1502-13, or any material excess loss account in a
Subsidiary under Treasury Regulation Section 1.1502-19.
(m) Labor Matters. Neither Parent nor any of its Subsidiaries is, as
-------------
of the date hereof, a party to or otherwise bound by any collective bargaining
agreement,
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<PAGE>
contract or other agreement or understanding with a labor union or
labor organization, nor, as of the date hereof, is Parent or any of its
Subsidiaries the subject of any material proceeding asserting that Parent or any
of its Subsidiaries has committed an unfair labor practice or is seeking to
compel it to bargain with any labor union or labor organization nor, except as
would not, individually or in the aggregate, reasonably be expected to have a
Parent Material Adverse Effect, is there pending or, to the knowledge of the
executive officers of Parent, threatened, any material labor strike, dispute,
walk-out, work stoppage, slow-down or lockout involving Parent or any of its
Subsidiaries.
(n) Ownership of Shares. Neither Parent nor any of its Subsidiaries
-------------------
is the beneficial owner (as such terms is used for purposes of Rule 13d-3 under
the Exchange Act) of any Shares.
(o) Takeover Statutes. Assuming that neither the Company nor any of
-----------------
its Subsidiaries is the beneficial owner (as such term is used for purposes of
Rule 13d-3 under the Exchange Act) of any shares of Parent Common Stock or
Parent Preferred Shares, the board of directors of Parent has taken all
necessary action to be taken by Parent so that no Takeover Statute or any
applicable anti-takeover provision in the Parent's certificate of incorporation
or bylaws is applicable to Parent, the Parent Common Stock or the Transactions,
except for the filing required by Section 1707.041 of the Ohio Revised Code.
(p) Vote Requirements. The affirmative vote of the holders of a
-----------------
majority of the shares of Parent Common Stock and 6% Preferred Stock,
represented in person or by proxy and voting together as a single class at the
Parent Meeting to approve the issuance of shares of Parent Common Stock pursuant
to this Agreement, is the only vote of the holders of any class or series of
Parent's capital stock necessary in connection with the Transactions.
(q) Information Supplied. None of the information supplied or to be
--------------------
supplied by Parent specifically for inclusion or incorporation by reference in
(i) the Schedule 14D-9, at the time such document is first published, sent or
given to the holders of Shares, and at any time it is amended or supplemented,
(ii) the Registration Statement (as defined in Section 6.6) to be filed with the
SEC by Parent in connection with the issuance of Parent Common Stock in
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the Merger, at the time the Registration Statement is filed with the SEC or at
the time it becomes effective under the Securities Act, or (iii) the Proxy
Statement (as defined in Section 6.6), at the date it is first mailed to the
Company shareholders and Parent stockholders or at the time of the Company
Meeting or the Parent Meeting will contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading. The Registration Statement will
comply as to form in all material respects with the requirements of the
Securities Act and the rules and regulations thereunder, except that no
representations and warranties are made by Parent with respect to statements
made or incorporated by reference therein based on information supplied by the
Company specifically for inclusion or incorporation by reference in the
Registration Statement or the Proxy Statement or contained in the Company
Reports incorporated by reference in the Schedule 14D-9, the Registration
Statement or the Proxy Statement.
(r) Available Funds. Parent has available working capital and a
---------------
commitment from one or more financial institutions that, when funded in
accordance with its terms, will in the aggregate provide to Parent the funds
necessary to consummate the Offer and the Merger and to pay all fees, expenses
and costs in connection with its negotiation, execution and performance of this
Agreement.
(s) Brokers and Finders. Neither Parent nor any of its officers,
-------------------
directors or employees has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders' fees in connection
with the Merger or the other transactions contemplated by this Agreement, except
that Parent has employed Donaldson, Lufkin & Jenrette Securities Corporation as
its financial advisor, the arrangements with which have been disclosed in
writing to the Company prior to the date hereof.
ARTICLE VI
Covenants
6.1. Company Interim Operations. The Company covenants and agrees
--------------------------
as to itself and its Subsidiaries that, after the date hereof and prior to the
date on which
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Purchaser Representatives are elected to the Board of Directors of
the Company in accordance with Section 1.3(a) hereof and represent at least a
majority of such directors (unless Parent or the Company, as the case may be,
shall otherwise approve in writing, which approval shall not be unreasonably
withheld or delayed, except as otherwise expressly contemplated by this
Agreement and except as set forth in Section 6.1 of the Company Disclosure
Letter):
(a) the business of it and its Subsidiaries shall be conducted in the
ordinary and usual course consistent with past practice and it and its
Subsidiaries shall use all reasonable best efforts to preserve its business
organization intact and maintain its existing relations and goodwill with
customers, suppliers, distributors, creditors, lessors, employees and business
associates;
(b) it shall not (i) issue, sell, pledge, dispose of or encumber any
capital stock in any of its Subsidiaries; (ii) amend the articles or certificate
of incorporation or regulations or bylaws of the Company or any of its
Subsidiaries; (iii) split, combine or reclassify the outstanding shares of
capital stock of the Company or any of its Subsidiaries; (iv) declare, set aside
or pay any dividend payable in cash, stock or property in respect of any capital
stock other than dividends from its direct or indirect wholly-owned
Subsidiaries; or (v) amend the terms of, repurchase, redeem or otherwise
acquire, or permit any of its Subsidiaries to purchase or otherwise acquire,
except in connection with the Stock Plans or pursuant to the Share Repurchase
Agreement, any shares of its capital stock or any securities convertible into or
exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issue, sell,
pledge, dispose of or encumber any shares of, or securities convertible into or
exchangeable or exercisable for, or options, warrants, calls, commitments or
rights of any kind to acquire, any shares of its capital stock of any class or
any Voting Debt or any other property or assets (other than Shares issuable
pursuant to options outstanding on the date hereof under the Stock Plans or upon
conversion of the Debentures or exercise of the Warrants); (ii) other than in
the ordinary and usual course of business consistent with past practice,
transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or
encumber any other property or assets (including capital stock of any of its
Subsidiaries) or incur or modify any indebtedness or
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other liability in excess of $1,000,000; (iii) make any loans or advances to any
person, except to employees in the ordinary course of business consistent with
past practice; or (iv) make or authorize or commit for any capital expenditures
other than in the ordinary and usual course of business consistent with past
practice or in amounts less than $200,000 individually and $1,000,000 in the
aggregate or, by any means, make any acquisition of, or investment in, assets or
stock of any other Person or entity;
(d) neither it nor any of its Subsidiaries shall terminate, establish,
adopt, enter into, make any new grants or awards under, amend or otherwise
modify, any Compensation and Benefit Plans or increase the salary, wage, bonus
or other compensation of any employees except increases occurring in the
ordinary and usual course of business consistent with past practice (which shall
include normal periodic performance reviews and related compensation and benefit
increases) or enter into any new employment or severance agreement with any
director, officer or other employee of the Company or of any of its Subsidiaries
except (i) with respect to the individuals listed in Section 6.1(d) of the
Company Disclosure Letter or (ii) with respect to the renewal of any existing
agreement by operation of its terms in the ordinary and usual course of business
consistent with past practice;
(e) neither it nor any of its Subsidiaries shall settle or compromise
any material claims or litigation, except for settlements or compromises made in
the ordinary course of business consistent with past practice involving payments
by the Company or any of its Subsidiaries not in excess of $200,000 individually
or $1,000,000 in the aggregate, or, except in the ordinary and usual course of
business consistent with past practice, modify, amend or terminate any of its
material Contracts or waive, release or assign any material rights or claims;
(f) neither it nor any of its Subsidiaries shall make any Tax
election or agree to an extension of a statute of limitations for any
assessments of federal income tax or material state corporate income or
franchise tax or permit any insurance policy naming it as a beneficiary or loss-
payable payee to be canceled or terminated except in the ordinary and usual
course of business;
(g) neither it nor its Subsidiaries shall take any action, other than
as required by GAAP, to change
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accounting policies or procedures or cash maintenance policies or procedures;
(h) neither it nor its Subsidiaries shall take any action that would
be reasonably likely to impede or delay the Transactions or adversely affect the
parties' ability to consummate the Transactions;
(i) neither it nor its Subsidiaries shall take any action that would
be reasonably likely to diminish the value to the Company of the net operating
losses set forth in the September 30, 1997 financial statements included in the
Company Reports, except for the consummation of the Transactions; and
(j) neither it nor any of its Subsidiaries shall authorize or enter
into an agreement to do any of the foregoing.
6.2. Parent Interim Operations. Parent covenants and agrees as to
-------------------------
itself and its Subsidiaries that, after the date hereof and prior to the
Effective Time (unless the Company shall otherwise approve in writing, which
approval shall not be unreasonably withheld or delayed, and except as otherwise
expressly contemplated by this Agreement or in Section 6.2 of the Parent
Disclosure Letter):
(a) the business of it and its Subsidiaries shall be conducted in the
ordinary and usual course consistent with past practice and it and its
Subsidiaries shall use all reasonable best efforts to preserve its business
organization intact and maintain its existing relations and goodwill with
customers, suppliers, distributors, creditors, lessors, employees and business
associates;
(b) it shall not (i) amend the articles or certificate of
incorporation or regulations or bylaws of Parent or any of its Subsidiaries;
(ii) split, combine or reclassify the outstanding shares of capital stock of
Parent or any of its Subsidiaries; or (iii) declare, set aside or pay any
dividend payable in cash, stock or property in respect of any capital stock
other than dividends from its direct or indirect wholly owned Subsidiaries and
other than regular quarterly cash or "payment in kind" dividends on the Parent
Preferred Shares;
(c) neither it nor its Subsidiaries will take any action that would be
reasonably likely to impede or delay
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the Transactions or adversely affect the parties' ability to consummate the
Transactions; and
(d) neither it nor any of its Subsidiaries will authorize or enter
into an agreement to do any of the foregoing.
6.3. Acquisition Proposals. The Company agrees that neither it nor
---------------------
any of its Subsidiaries nor any officer, director or employee of the Company or
its Subsidiaries shall, and that it shall direct and use its best efforts to
cause its and its Subsidiaries' agents and representatives (including any
investment banker, attorney or accountant retained by it or any of its
Subsidiaries) not to, directly or indirectly through another person, initiate,
solicit, encourage or otherwise facilitate any inquiries or the making of any
proposal or offer with respect to a merger, reorganization, share exchange,
consolidation or similar transaction involving, or any purchase of all or any
significant portion of the assets or any equity securities of, the Company or
any of its Subsidiaries (any such proposal or offer being hereinafter referred
to as an "Acquisition Proposal"). The Company further agrees that neither it nor
--------------------
any of its Subsidiaries nor any of their respective officers, directors or
employees shall, and that it shall direct and use its best efforts to cause its
and its Subsidiaries' agents and representatives (including any investment
banker, attorney or accountant retained by it or any of its Subsidiaries) not
to, directly or indirectly through another person, engage or participate in any
negotiations concerning, or provide any confidential information or data to, or
have any discussions with, any Person relating to an Acquisition Proposal, or
otherwise facilitate any effort or attempt to make or implement an Acquisition
Proposal; provided, however, that nothing contained in this Agreement shall
-------- -------
prevent either the Company or its Board of Directors at any time prior to the
purchase of Shares pursuant to the Offer from (A) complying with Rule 14e-2
promulgated under the Exchange Act with regard to an Acquisition Proposal; (B)
providing information in response to a request therefor by a Person who has made
an unsolicited bona fide written Acquisition Proposal if the Board of Directors
receives from the Person so requesting such information an executed
confidentiality agreement on terms substantially similar to those contained in
the Confidentiality Agreement (as defined in Section 9.7); (C) engaging in any
negotiations or discussions with any Person who has made an unsolicited bona
fide written
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Acquisition Proposal; or (D) recommending such an Acquisition Proposal to the
shareholders of the Company, as the case may be, if and only to the extent that,
in each such case referred to in clause (B), (C) or (D) above, the Board of
Directors of the Company (x) determines in good faith, taking into consideration
the advice of outside legal counsel, that such action is likely to be required
in order for its members to comply with their fiduciary duties under applicable
law and (y) determines in good faith, after consultation with its financial
advisor, that such Acquisition Proposal is reasonably likely to be consummated,
taking into account all legal, financial and regulatory aspects of the proposal
and the person making the proposal and would, if consummated, result in a
transaction more favorable to the Company's shareholders from a financial point
of view than the transaction contemplated by this Agreement (any such
Acquisition Proposal being referred to herein as a "Superior Proposal"). The
Company agrees that it will immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any of the foregoing. The Company agrees that it will
take the necessary steps to promptly inform the individuals or entities referred
to in the first sentence hereof of the obligations undertaken in this Section
6.2 and in the Confidentiality Agreement. The Company will notify Parent as
promptly as reasonably practicable (and in any event not later than one business
day after an inquiry or proposal is made) if any such inquiries or proposals
(including the identity of the party making such inquiry or proposal and the
terms thereof) are received by, any such information is requested from, or any
such negotiations or discussions are sought to be initiated or continued with,
the Company or such representatives.
6.4. Meeting of the Company's Shareholders. The Company will take,
-------------------------------------
consistent with applicable law and the Company's articles of incorporation and
regulations, all action necessary to convene a meeting of holders of Shares (the
"Company Meeting") as promptly as practicable to consider and vote upon the
---------------
adoption of this Agreement. The Board of Directors of the Company shall
recommend such approval and the Company shall take all lawful action to solicit
such approval; provided, however, that if the Board of Directors of the Company
determines in good faith, taking into consideration the advice of outside legal
counsel, that not recommending or soliciting such approval is likely to be
required in order for its members to comply
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<PAGE>
with their fiduciary duties under applicable law, then any failure by the Board
of Directors of the Company to recommend or solicit such approval shall not
constitute a breach of this Agreement. At any such meeting of the Company,
Parent and Merger Sub shall cause all of the Shares acquired in the Offer and
any other Shares then owned by the Parent Companies to be voted in favor of this
Agreement.
6.5. Meeting of Parent's Stockholders. If approval of the issuance
--------------------------------
of shares of Parent Common Stock is required under the rules of the NYSE, Parent
will take, consistent with applicable law and its certificate of incorporation
and bylaws, all action necessary to convene a meeting of its shareholders (the
"Parent Meeting") as promptly as practicable to consider and vote upon such
--------------
issuance. The Board of Directors of Parent shall recommend such approval and
Parent shall take all lawful action to solicit such approval; provided, however,
-------- -------
that if the Board of Directors of Parent determines in good faith, taking into
consideration the advice of outside legal counsel, that not recommending or
soliciting such approval is likely to be required in order for its members to
comply with their fiduciary duties under applicable law, then any failure by the
Board of Directors of Parent to recommend or solicit such approval shall not
constitute a breach of this Agreement.
6.6. Proxy Statement; Registration Statement. As promptly as
---------------------------------------
practicable following the date of this Agreement, the Company and Parent shall
prepare and file with the SEC under the Securities Act and the Exchange Act and
shall use all reasonable efforts to have cleared by the SEC, a proxy
statement/prospectus or information statement/prospectus, as appropriate (the
"Proxy Statement"), with respect to the Company Meeting and/or the Parent
---------------
Meeting, including a registration statement (together with any amendments
thereto, the "Registration Statement") for the purpose of registering the shares
----------------------
of Parent Common Stock to be issued in connection with the Merger. As promptly
as practicable after the Proxy Statement has been cleared by the SEC and the
Registration Statement has been declared effective, the Company and Parent shall
mail the Proxy Statement to their respective shareholders as of the record date
for the Company Meeting or the Parent Meeting, as the case may be. Parent shall
take such action as may be required to be taken under applicable state
securities or "blue sky" laws in connection with issuance of the shares of
Parent Common Stock to be issued in connection with the
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<PAGE>
Merger; provided that Parent shall not be required to become qualified as a
--------
foreign corporation in any jurisdiction. The Proxy Statement shall contain the
recommendation of the Board of Directors of the Company in favor of and adoption
of this Agreement; provided, however, that if the Board of Directors of the
Company determines in good faith, taking into consideration the advice of
outside legal counsel, that for the Proxy Statement not to contain such
recommendation is likely to be required in order for its members to comply with
their fiduciary duties under applicable law, then any failure of the Proxy
Statement to contain such recommendation shall not constitute a breach of this
Agreement.
6.7. Filings; Other Action; Notification. (a) Subject to the terms
-----------------------------------
and conditions herein provided, the Company and Parent shall promptly make their
respective filings and thereafter make any other required submissions under (i)
the HSR Act, (ii) Section 1707.041 of the Ohio Revised Code, and (iii) the other
regulatory filings necessary or appropriate in connection with the Offer, the
Merger and the other transactions contemplated hereby. The Company and Parent
shall cooperate with each other and use (and shall cause their respective
Subsidiaries to use) their respective best efforts to take or cause to be taken
all actions, and do or cause to be done all things, necessary, proper or
advisable on its part under this Agreement and applicable Laws to consummate and
make effective the Merger and the other transactions contemplated by this
Agreement as soon as practicable, including preparing and filing as promptly as
practicable all documentation to effect all necessary notices, reports and other
filings and to obtain as promptly as practicable all consents, registrations,
approvals, permits and authorizations necessary or advisable to be obtained from
any third party and/or any Governmental Entity in order to consummate the Offer,
the Merger or any of the other transactions contemplated by this Agreement;
provided, however, that nothing in this Section 6.7 shall require Parent to
offer to, or agree to, sell or hold separate and agree to sell, before or after
the Effective Time, any material assets, businesses or any interest in any
material assets or businesses of Parent, the Company or any of their respective
affiliates (or to consent to any sale or agreement to sell by the Company of any
of its material assets or businesses), or to agree to any material change in or
restriction on the operations of any such assets or businesses, or to require,
or be construed to require, an offer or agreement that would, in the reasonable
judgment of
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<PAGE>
Parent, be likely to have a material adverse effect on the anticipated financial
condition, properties, business or results of operations of the Parent and its
Subsidiaries after the Merger, taken as a whole in order to obtain any necessary
or advisable consent, registration, approval, permit or authorization from any
Governmental Entity. Subject to applicable laws relating to the exchange of
information, Parent and the Company shall have the right to review in advance,
and to the extent practicable each will consult the other on, all the
information relating to Parent or the Company, as the case may be, and any of
their respective Subsidiaries, that appear in any filing made with, or written
materials submitted to, any third party and/or any Governmental Entity in
connection with the transactions contemplated by this Agreement. In exercising
the foregoing right, each of the Company and Parent shall act reasonably and as
promptly as practicable.
(b) The Company and Parent each shall, upon request by the other,
furnish the other with all information concerning itself, its Subsidiaries,
directors, officers and stockholders and such other matters as may be reasonably
necessary or advisable in connection with the Transactions or any statement,
filing, notice or application made by or on behalf of Parent, the Company or any
of their respective Subsidiaries to any third party and/or any Governmental
Entity in connection with the Offer, the Merger or the other transactions
contemplated by this Agreement.
(c) The Company and Parent each shall keep the other apprised of the
status of matters relating to completion of the transactions contemplated
hereby, including promptly furnishing the other with copies of notices or other
communications received by Parent or the Company, as the case may be, or any of
its Subsidiaries, from any third party and/or any Governmental Entity with
respect to the Transactions.
(d) Except as required by applicable law and except as expressly
contemplated by this Agreement, neither the Company, on the one hand, nor Parent
or Merger Sub, on the other hand, will, and they will not permit any of their
respective Subsidiaries to, take any action a purpose of which is to cause (i)
any of the representations or warranties of such party set forth in this
Agreement that are qualified as to materiality to become untrue, (ii) any of
such representations and warranties that are not so qualified to be untrue in
any material respect, or (iii) any
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of the conditions to the Merger set forth in Article VII not to be satisfied.
6.8. Access. Upon reasonable notice, and except as may otherwise
------
be required by applicable law, the Company and Parent each shall (and shall
cause its Subsidiaries to) afford the other's officers, employees, counsel,
accountants and other authorized representatives (collectively,
"Representatives") access, during normal business hours throughout the period
---------------
prior to the Effective Time, to its properties, books, contracts and records
and, during such period, each shall (and shall cause its Subsidiaries to)
furnish promptly to the other all information concerning its business,
properties and personnel as may reasonably be requested, provided that no
--------
investigation pursuant to this Section shall affect or be deemed to modify any
representation or warranty made by the Company, Parent or Merger Sub, and
provided, further, that the foregoing shall not require the Company or Parent to
- -------- -------
permit any inspection, or to disclose any information, that in the reasonable
judgment of the Company or Parent, as the case may be, would result in the
disclosure of any trade secrets of third parties or violate any of its
obligations with respect to confidentiality if the Company or Parent, as the
case may be, shall have used reasonable efforts to obtain the consent of such
third party to such inspection or disclosure. All requests for information made
pursuant to this Section shall be directed to an executive officer of the
Company or Parent, as the case may be, or such Person as may be designated by
either of its officers, as the case may be. All such information shall be
governed by the terms of the Confidentiality Agreement.
6.9. Stock Exchange Listing and De-listing. Parent shall use its
-------------------------------------
best efforts to cause the shares of Parent Common Stock to be issued in the
Merger to be approved for listing on the NYSE subject to official notice of
issuance, prior to the Closing Date. The Surviving Corporation shall use its
best efforts to cause the Shares to be de-listed from the NYSE and de-registered
under the Exchange Act as soon as practicable following the Effective Time.
6.10. Publicity. The initial press release pertaining to the
---------
transactions contemplated by this Agreement shall be a joint press release and
thereafter the Company and Parent each shall consult with each other prior to
issuing any press releases or otherwise making public
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<PAGE>
announcements with respect to the Merger and the other transactions contemplated
by this Agreement and prior to making any filings with any third party and/or
any Governmental Entity (including any national securities exchange) with
respect thereto, except as may be required by law or by obligations pursuant to
any listing agreement with or rules of any national securities exchange.
6.11. Benefits.
--------
(a) Stock Options. Prior to the Effective Time, each holder of a
-------------
Company Option shall be required to elect between the treatment of their Company
Options under the provisions of either paragraph (i) or paragraph (ii) below.
(i) Prior to the Effective Time, the Company shall take all corporate
action necessary to cause each Company Option, whether vested or unvested,
exercisable or unexercisable, without any action on the part of the holder
(other than an election to be treated under this paragraph) to be converted into
the right to receive an amount in cash equal to the product of (x) (1) the
excess of $11.50 over (2) the exercise price per Share subject to such Company
Option and (y) the number of Shares subject to such Company Option, payable to
the holder of such Company Option at any time during the period commencing on
the date hereof and ending immediately prior to the Effective Time; provided,
--------
that the Company shall be entitled to withhold from such cash payment any
amounts required to be withheld by applicable law. Each Company Option to which
this paragraph applies will be cancelled and shall cease to exist by virtue of
such payment.
(ii) (A) At the Effective Time, each Company Option, whether vested
or unvested, exercisable or unexercisable, shall be deemed to constitute an
option to acquire, on the same terms and conditions as were applicable under
such Company Option, a number of shares of Parent Company Stock equivalent to
the number of Shares that could have been purchased immediately prior to the
Effective Time under such Company Option multiplied by the Exchange Ratio
(without regard to any adjustment thereof and rounded up to the nearest whole
number of shares of Parent Company Stock), at a price per share of Parent
Company Stock (rounded up to the nearest whole cent) equal to (y) the aggregate
exercise price for the Shares otherwise purchasable pursuant to such Company
Option divided by (z) the Exchange Ratio (without regard to any adjustment
thereof); provided, however, that
-------- -------
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<PAGE>
in the case of any Company Option to which Section 422 of the Code applies, the
option price, the number of shares purchasable pursuant to such option and the
terms and conditions of exercise of such option shall be determined in
accordance with the foregoing, subject to such adjustments as are necessary in
order to satisfy the requirements of Section 424(a) of the Code. At or prior to
the Effective Time, the Company shall make all necessary arrangements with
respect to the Stock Plans to permit the assumption of the unexercised Company
Options to which this paragraph (ii) of this Section 6.11 applies by Parent.
(B) Effective at the Effective Time, Parent shall assume each Company
Option to which this paragraph (ii) of this Section 6.11 applies in accordance
with the terms of the Stock Plans under which it was issued and the stock option
agreement by which it is evidenced. As soon as practicable after the Effective
Time, Parent shall deliver to each holder of a Company Option to which paragraph
(ii) of this Section 6.11 applies appropriate notices setting forth such
holders' rights pursuant to the Stock Plans, and the agreements evidencing the
grants of such Company Options shall continue in effect on the same terms and
conditions (subject to the conversion required by this Section 6.11 after giving
effect to the Merger and the assumption by Parent as set forth above). To the
extent necessary to effectuate the provisions of this Section 6.11, Parent may
deliver new or amended agreements reflecting the terms of each Company Option
assumed by Parent.
(C) At or prior to the Effective Time, Parent shall take all corporate
action necessary to reserve for issuance a sufficient number of shares of Parent
Common Stock for delivery upon exercise of Company Options assumed by it in
accordance with this Section 6.11. Promptly, but in no event later than three
business days after the Effective Time, Parent shall file a registration
statement on Form S-3 or Form S-8, as the case may be (or any successor or other
appropriate forms), or another appropriate form, or shall cause such Company
Option to be deemed an option issued pursuant to a Parent Stock Plan for which
shares of Parent Common Stock have been previously registered pursuant to an
appropriate registration form, with respect to the Parent Common Stock subject
to such Company Options, and shall use its best efforts to maintain the
effectiveness of such registration statements (and maintain the current status
of the prospectus or prospectuses contained therein) for so long as such Company
Options remain outstanding.
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<PAGE>
(b) Employee Compensation and Benefits. (i) Parent agrees that
----------------------------------
following the Effective Time, the employees of the Company and its Subsidiaries
who are employed by the Surviving Corporation or its Subsidiaries ("Company
-------
Employees") shall become eligible to participate in the employee benefit plans
- ---------
and arrangements maintained by Parent or its Subsidiaries ("Parent Benefit
--------------
Plans") including, without limitation, severance plans, in the same manner as
similarly situated employees of Parent. Parent or its Subsidiaries shall grant
the Company Employees credit for all service credited by the Company for
purposes of eligibility, vesting and the determination of benefits under
vacation and severance pay plans. Parent shall, and shall cause the Surviving
Corporation to, honor in accordance with their terms all employee benefit
obligations to current and former employees under the Compensation and Benefit
Plans in existence on the date hereof (including, without limitation, the plans
and agreements listed in Section 5.1(h)(i) of the Company Disclosure Letter) and
all employment or severance agreements entered into by the Company or adopted by
the board of directors of the Company prior to the Effective Date; it being
-- -----
understood that nothing contained herein shall limit or restrict the ability of
- ----------
Parent to modify or terminate any Compensation and Benefit Plan, or to merge any
Compensation and Benefit Plan with any other plan, following the Effective Time.
(ii) Any pre-existing condition exclusion under any Parent Benefit
Plan providing medical or dental benefits shall be waived for any Company
Employee who, immediately prior to commencing participation in such Parent
Benefit Plan, was participating in a Company Benefit Plan providing medical or
dental benefits and had satisfied any pre-existing condition provision under
such Company Benefit Plan. Any expenses that were taken into account under a
Company Benefit Plan providing medical or dental benefits in which the Company
Employee participated immediately prior to commencing participation in a Parent
Benefit Plan providing medical or dental benefits shall be taken into account to
the same extent under such Parent Benefit Plan, in accordance with the terms of
such Parent Benefit Plan, for purposes of satisfying applicable deductible,
coinsurance and maximum out-of-pocket provisions and life-time benefit limits.
(iii) Parent and the Company agree that, as soon as practicable
following the date hereof, for purposes of Section 5(a)(ii) of each employment
agreement entered into
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<PAGE>
between the Company and the executives listed in paragraph 12 of Section
5.1(h)(i) of the Company Disclosure Letter (collectively, the "Employment
----------
Agreements"), Price Waterhouse, LLP, who is independent of both Parent and the
- ----------
Company, will be appointed as tax counsel ("Tax Counsel") to make all relevant
-----------
determinations required by Section 5(a) of the Agreements. It is further agreed
that Tax Counsel shall take into account and consider all information provided
by the parties, including the assumptions used and the valuations previously
prepared by Ernst & Young in connection with Section 5(a) of the Employment
Agreements (inclusive of the valuation of the non-competition agreements
contained in each Employment Agreement), in making his or her determinations.
The determinations of Tax Counsel shall be binding upon the executives and the
Company. All fees and expenses of Tax Counsel shall be borne solely by the
Company and the Company shall enter into any agreement requested by Tax Counsel
in connection with the performance of services under the Employment Agreements.
Parent also agrees that, effective as of the Effective Date, Section 5(a) of the
Employment Agreements will be amended in the manner set forth in the Company
Disclosure Letter.
(c) Election to Parent's Board of Directors. At the Effective Time of
---------------------------------------
the Merger, Parent shall promptly increase the size of its Board of Directors or
exercise its reasonable best efforts to secure the resignation of present
directors in order to cause Herbert A. Getz and Richard W. Pogue (the
"Nominees") to be appointed to Parent's board of directors and, subject to
--------
fiduciary obligations under applicable law, shall use its reasonable best
efforts to cause the Nominees to be elected (or remain in office) as directors
of Parent (divided as evenly as is possible among classes of directors) at the
first annual meeting of stockholders of Parent with a proxy mailing date after
the Effective Time.
6.12. Expenses. The Surviving Corporation shall pay all charges
--------
and expenses, including those of the Exchange Agent, in connection with the
transactions contemplated in Article IV, and Parent shall reimburse the
Surviving Corporation for such charges and expenses. Except as otherwise
provided in Section 8.5, whether or not the Merger is consummated, all costs and
expenses incurred in connection with this Agreement and the Merger and the other
transactions contemplated by this Agreement shall be paid by the party incurring
such expense, except that expenses incurred in connection with the filing fee
for the Proxy
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<PAGE>
Statement and the Registration Statement and printing and mailing such documents
shall be borne by Parent.
6.13. Indemnification; Directors' and Officers' Insurance. (a) From
---------------------------------------------------
and after the Effective Time, Parent shall indemnify and hold harmless, to the
fullest extent permitted under applicable law (and Parent shall also advance
expenses as incurred to the fullest extent permitted under applicable law,
provided the Person to whom expenses are advanced provides an undertaking to
repay such advances if it is ultimately determined that such Person is not
entitled to indemnification), each present and former director and officer of
the Company and its Subsidiaries (collectively, the "Indemnified Parties")
-------------------
against any costs or expenses (including reasonable attorneys' fees), judgments,
fines, losses, claims, damages or liabilities (collectively, "Costs") incurred
-----
in connection with any claim, action, suit, proceeding or investigation, whether
civil, criminal, administrative or investigative, arising out of or pertaining
to matters existing or occurring at or prior to the Effective Time, including
the transactions contemplated by this Agreement, which is based in whole or in
part on, or arises in whole or in part out of the fact that such person is or
was a director or officer of the Company or any of its Subsidiaries.
(b) Any Indemnified Party wishing to claim indemnification under
paragraph (a) of this Section 6.13, upon learning of any such claim, action,
suit, proceeding or investigation, shall promptly notify Parent thereof, but the
failure to so notify shall not relieve Parent of any liability it may have to
such Indemnified Party if such failure does not materially prejudice Parent. In
the event of any such claim, action, suit, proceeding or investigation (whether
arising before or after the Effective Time), (i) Parent shall have the right to
assume the defense thereof with counsel reasonably acceptable to the Indemnified
Party and Parent shall not be liable to any Indemnified Party for any legal
expenses of other counsel thereafter incurred in connection with the defense
thereof, (ii) the Indemnified Party will cooperate in all respects as reasonably
requested by Parent in the defense of any such matter, and in connection
therewith shall be entitled to reimbursement by Parent of expenses incurred in
connection therewith, and (iii) Parent shall not be liable for any settlement
effected without its prior written consent, which consent shall not be
unreasonably withheld or delayed; provided, however, that Parent shall not have
-------- -------
any obligation
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<PAGE>
hereunder to any Indemnified Party if a court shall ultimately determine, and
such determination shall have become final and nonappealable, that the
indemnification of such Indemnified Party in the matter contemplated hereby is
prohibited by law. If such indemnity is not available with respect to any
Indemnified Party, then Parent and the Indemnified Party shall contribute to the
amount payable in such proportion as is appropriate to reflect relative faults
and benefits.
(c) Parent and the Surviving Corporation shall maintain the Company's
and its Subsidiaries' existing officers' and directors' liability insurance
("D&O Insurance") for a period of six years after the Effective Time so long as
- ---------------
the annual premium therefor is not in excess of 200% of the last annual premium
paid prior to the date hereof (the "Current Premium"); provided, however, that
--------------- -------- -------
if the existing D&O Insurance expires, is terminated or canceled during such
six-year period, the Surviving Corporation will use its commercially reasonable
efforts to obtain as much D&O Insurance as can be obtained for the remainder of
such period for a premium not in excess (on an annualized basis) of 200% of the
Current Premium; provided further, that, in lieu of maintaining such existing
-------- -------
D&O Insurance as provided above, Parent may cause coverage to be provided under
any policy maintained for the benefit of Parent or any of its Subsidiaries, so
long as the terms are no less advantageous to the intended beneficiaries thereof
than the existing D&O Insurance. In lieu of the maintenance or purchase of such
insurance by Parent or the Surviving Corporation, the Parent or the Surviving
Corporation may purchase a six-year extended reporting period endorsement
("reporting tail coverage") under the Company's existing directors' and
officers' liability insurance coverage, provided that the total cost of the
reporting tail coverage shall not exceed $420,000, and provided that such
reporting tail coverage shall extend the director and officer liability coverage
in force as of the date hereof for a period of six years from the Effective Time
for any claims based upon, arising out of, directly or indirectly resulting
from, in consequence of, or in any way involving wrongful acts or omissions
occurring on or prior to the Effective Time, including without limitation all
claims based upon, arising out of, directly or indirectly resulting from, in
consequence of, or in any way involving the Offer, the Merger and any and all
related transactions or related events.
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(d) The provisions of this Section 6.13 are intended to be for the
benefit of, and shall be enforceable by, each of the Indemnified Parties and
their respective heirs and estates. Nothing in this Section 6.13 shall limit in
any way any other rights to indemnification that any current or former director
or officer of the Company or any of its Subsidiaries may have by contract or
otherwise.
(e) From and after the Effective Time, the Surviving Corporation shall
fulfill, assume and honor in all respects the obligations of the Company
pursuant to the Company's articles of incorporation, regulations and any
indemnification agreement between the Company and any of the Company's directors
and officers existing and in force as of the date of this Agreement. The
Company agrees that the indemnification obligations set forth in the Company's
articles of incorporation and regulations, in each case as of the date of this
Agreement, shall survive the Merger with respect to any matter which is based in
whole or in part on, or arises in whole or in part out of the fact that an
individual is or was a director or officer of the Company or any of its
Subsidiaries prior to the Effective Time.
(f) If the Surviving Corporation or any of its successors or assigns
(i) shall consolidate with or merge into any other corporation or entity and
shall not be the continuing or surviving corporation or entity of such
consolidation or merger or (ii) shall transfer all or substantially all of its
properties and assets to any individual, corporation or other entity, then, and
in each such case, proper provisions shall be made so that the respective
successors and assigns of the Parent and the Surviving Corporation shall assume
all of the obligations set forth in this Section.
6.14. Debentures. Prior to the Effective Time, the Company and
----------
Parent shall enter into a supplemental indenture with the Trustee (as defined in
the Debentures) pursuant to the indenture under which the Debentures were issued
to provide, among other things, that on and after the Effective Time the
Debentures will be convertible only into the Merger Consideration.
6.15. Takeover Statutes. If any Takeover Statute is or may become
-----------------
applicable to the Transactions, each of Parent and the Company and its board of
directors shall grant such approvals and take such actions as are reasonably
necessary so that such transactions may be consummated as
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<PAGE>
promptly as practicable on the terms contemplated by this Agreement or by the
Merger and otherwise act to eliminate or minimize the effects of such statute or
regulation on such transactions.
6.16. Agreement of Affiliates. The Company shall deliver to Parent,
-----------------------
prior to the date the Registration Statement becomes effective under the
Securities Act, a letter (the "Affiliate Letter") identifying all Persons who
----------------
are, or may be deemed to be, "affiliates" of the Company for purposes of Rule
145 under the Securities Act. The Company shall use its reasonable best efforts
to cause each such Person who is identified as an "affiliate" in the Affiliate
Letter to deliver to Parent, prior to the Effective Time, a written agreement
(the "Affiliate Agreement") in substantially the form of Annex B hereto.
-------------------
6.17. Legal Opinion. The Company shall use its reasonable efforts
-------------
to cause its Ohio counsel to render to the lenders designated by Parent a (i)
written "due incorporation", "due authorization" and "enforceability" opinion
with respect to the Company, of this Agreement, the Share Repurchase Agreement
and the Option Termination Agreement, (ii) written opinion that Chapter 1704 of
the Ohio Revised Code is not applicable to the Transactions and (iii) written
"due authorization" opinion by the Company with respect to those certain voting
agreements to which the Company and certain shareholders of Parent and the
Company are parties, which opinions shall contain assumptions, qualifications
and exceptions customarily contained in legal opinions of such firm concerning
such matters and shall be limited to the laws of the State of Ohio.
ARTICLE VII
Conditions
7.1. Conditions to Obligations of Parent and Merger Sub. (a) If
--------------------------------------------------
Merger Sub shall have purchased Shares pursuant to the Offer, the respective
obligations of Parent and Merger Sub to consummate the Merger shall be subject
to the fulfillment of each of the following conditions, any or all of which may
be waived in whole or in part by Parent or Merger Sub, as the case may be, to
the extent permitted by applicable law:
(i) Injunction. No United States or state court or other Governmental
----------
Entity of competent jurisdiction
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shall have enacted, issued, promulgated, enforced or entered any statute,
rule, regulation, judgment, decree, injunction or other order (whether
temporary, preliminary or permanent) which is in effect and prohibits
consummation of the transactions contemplated by this Agreement
(collectively, an "Order").
-----
(ii) Effectiveness of Registration Statement. The Registration
---------------------------------------
Statement shall have been declared effective by the SEC under the
Securities Act. No stop order suspending the effectiveness of the
Registration Statement shall have been issued by the SEC and no proceedings
for that purpose and no similar proceeding in respect of the Proxy
Statement shall have been initiated or threatened by the SEC.
(iii) Stockholder Approval. (1) This Agreement and the Merger shall
--------------------
have been approved and adopted by the holders of a majority of the Shares,
and (2) if required, the issuance of the Parent Common Stock in the Merger
shall have been approved by the requisite vote of the stockholders of
Parent.
(iv) NYSE Listing. The Parent Common Stock to be issued in the Merger,
------------
upon exercise of the Company Options assumed by Parent in connection with
the Merger and the Debentures have been approved for listing, subject to
official notice of issuance, on the NYSE.
(b) If Merger Sub shall not have purchased Shares pursuant to the
Offer, the respective obligations of Parent and Merger Sub to consummate the
Merger shall be subject to the fulfilment of each of the following conditions,
any or all of which may be waived in whole or in part by Parent or Merger Sub,
as the case may be, to the extent permitted by applicable law:
(i) Representations and Warranties. The representations and
------------------------------
warranties of the Company set forth in this Agreement shall have been true
and complete in all material respects when made and as of the Effective
Time, and Parent shall have received a certificate of the chief executive
officer and chief financial officer of the Company to such effect.
(ii) Performance of Obligations. The Company shall have performed in
--------------------------
all material respects all obligations to be performed by it under this
Agreement
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at or prior to the Effective Time, and Parent shall have received a
certificate of the chief executive officer and chief financial officer of
the Company to such effect.
(iii) HSR Act. The waiting period applicable to the
-------
consummation of the Merger under the HSR Act shall have expired or been
terminated.
(iv) Order. There shall be in effect no Order.
-----
(v) Effectiveness of Registration Statement. The Registration
---------------------------------------
Statement shall have been declared effective by the SEC under the
Securities Act. No stop order suspending the effectiveness of the
Registration Statement shall have been issued by the SEC and no proceedings
for that purpose and no similar proceeding in respect of the Proxy
Statement shall have been initiated or threatened by the SEC.
(vi) Stockholder Approval. (1) This Agreement and the Merger shall
--------------------
have been approved and adopted by the holders of a majority of the Shares,
and (2) if required, the issuance of the Parent Common Stock in the Merger
shall have been approved by the requisite vote of the stockholders of
Parent.
(vii) NYSE Listing. The Parent Common Stock to be issued in the
------------
Merger, upon exercise of the Company Options assumed by Parent in
connection with the Merger and the Debentures shall have been approved for
listing, subject to official notice of issuance, on the NYSE.
7.2. Conditions to Obligations of the Company. (a) If Merger Sub
----------------------------------------
shall have purchased Shares pursuant to the Offer, the obligations of the
Company to consummate the Merger shall be subject to the fulfillment of each of
the following conditions, any or all of which may be waived in whole or in part
by the Company to the extent permitted by applicable law:
(i) Order. There shall be in effect no Order.
-----
(ii) Effectiveness of Registration Statement. The Registration
---------------------------------------
Statement shall have been declared effective by the SEC under the
Securities Act. No stop order suspending the effectiveness of the
Registration
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<PAGE>
Statement shall have been issued by the SEC and no proceedings for that
purpose and no similar proceeding in respect of the Proxy Statement shall
have been initiated or threatened by the SEC.
(iii) Stockholder Approval. (1) This Agreement and the Merger shall
--------------------
have been approved and adopted by the holders of a majority of the Shares,
and (2) if required, the issuance of the Parent Common Stock in the Merger
shall have been approved by the requisite vote of the stockholders of
Parent.
(iv) NYSE Listing. The Parent Common Stock to be issued in the Merger,
------------
upon exercise of the Company Options assumed by Parent in connection with
the Merger and the Debentures shall have been approved for listing, subject
to official notice of issuance, on the NYSE.
(b) If Merger Sub shall not have purchased Shares pursuant to the
Offer, the obligations of the Company to consummate the Merger shall be subject
to the fulfillment of each of the following conditions, any or all of which may
be waived in whole or in part by the Company, as the case may be, to the extent
permitted by applicable law:
(i) Representations and Warranties. The representations and
------------------------------
warranties of Parent set forth in this Agreement shall have been true and
complete in all material respects when made and as of the Effective Time,
and the Company shall have received a certificate of the Chief Executive
Officer and chief financial officer of Parent to such effect.
(ii) Performance of Obligations. Parent and Merger Sub shall have
--------------------------
performed in all material respects all obligations to be performed by them
under this Agreement at or prior to the Effective Time, and the Company
shall have received a certificate of the chief executive officer and chief
financial officer of Parent to such effect.
(iii) HSR Act. The waiting period applicable to the consummation of
-------
the Merger under the HSR Act shall have expired or been terminated.
(iv) Order. There shall be in effect no Order.
-----
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<PAGE>
(v) Effectiveness of Registration Statement. The Registration
---------------------------------------
Statement shall have been declared effective by the SEC under the
Securities Act. No stop order suspending the effectiveness of the
Registration Statement shall have been issued by the SEC and no proceedings
for that purpose and no similar proceeding in respect of the Proxy
Statement shall have been initiated or threatened by the SEC.
(vi) Stockholder Approval. (1) This Agreement and the Merger shall
--------------------
have been approved and adopted by the holders of a majority of the Shares,
and (2) if required, the issuance of the Parent Common Stock in the Merger
shall have been approved by the requisite vote of the stockholders of
Parent.
(vii) NYSE Listing. The Parent Common Stock to be issued in the
------------
Merger, upon exercise of the Company Options assumed by Parent in
connection with the Merger and the Debentures shall have been approved for
listing, subject to official notice of issuance, on the NYSE.
ARTICLE VIII
Termination
8.1. Termination by Mutual Consent. This Agreement may be
-----------------------------
terminated and the Merger may be abandoned at any time prior to the expiration
or termination of the Offer, before or after the approval by holders of Shares,
by the mutual consent of Parent and the Company, by action of their respective
Boards of Directors.
8.2. Termination by Either Parent or the Company. This Agreement
-------------------------------------------
may be terminated and the Merger may be abandoned by action of the Board of
Directors of either Parent or the Company after June 15, 1998 if, prior thereto,
Merger Sub shall not have purchased Shares pursuant to the Offer and the
Effective Time shall not have occurred; provided, the party seeking termination
--------
shall not have breached its obligations under this Agreement.
8.3. Termination by Parent. This Agreement may be terminated and
---------------------
the Merger may be abandoned at any time prior to the acceptance for payment of
Shares pursuant to the Offer, by action of the Board of Directors of Parent, if
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<PAGE>
(x) the Company shall have failed to comply in any material respect with any of
the covenants or agreements contained in this Agreement to be complied with or
performed by the Company at or prior to the expiration or termination of the
Offer; or (y) the Board of Directors of the Company shall have withdrawn or
modified in a manner adverse to Parent or Merger Sub its approval or
recommendation of the Offer, this Agreement or the Merger or the Board of
Directors of the Company, upon request by Parent, shall fail to reaffirm such
approval or recommendation; or (z) the condition set forth in Section 7.1(b)(i)
shall be incapable of being satisfied prior to June 15, 1998; provided that
--------
Parent shall not have breached its obligations under this Agreement.
8.4. Termination by the Company. This Agreement may be terminated
--------------------------
and the Merger may be abandoned at any time prior to the acceptance for payment
of Shares pursuant to the Offer, by action of the Board of Directors of the
Company, (x) prior to the expiration or termination of the Offer, if (i) (A)
Parent or Merger Sub shall have failed to comply in any material respect with
any of the covenants or agreements contained in this Agreement to be complied
with or performed by Parent or Merger Sub at or prior to the expiration or
termination of the Offer, or (B) any representation or warranty of Parent or
Merger Sub set forth in this Agreement shall be inaccurate or incomplete in any
material respect when made or thereafter and remains inaccurate or incomplete in
any material respect, or (C) there shall have occurred any event or events that,
individually or in the aggregate, have or are reasonably likely to have a Parent
Material Adverse Effect, or (ii) Parent or Merger Sub shall have failed to
commence the Offer within the time required in Section 1.1; or (y) if (i) the
Board of Directors of the Company receives an unsolicited written offer with
respect to a merger, consolidation or sale of all or substantially all of the
Company's assets or an unsolicited tender or exchange offer for the Shares is
commenced, and the Board of Directors of the Company (A) determines in good
faith, taking into consideration the advice of outside legal counsel, that
approval, acceptance or recommendation of such transaction is likely to be
required in order for the members of the Company's Board of Directors to comply
with their fiduciary duties under applicable law, and (B) determines in good
faith, after consultation with its financial advisor, that such transaction is a
Superior Proposal, and (ii) the Company pays the fee required by Section 8.5(b);
or (z) the condition set forth in Section 7.2(b)(i) shall be incapable
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<PAGE>
of being satisfied prior to June 15, 1998; provided that the Company shall not
have breached its obligations under this Agreement. Upon the termination of this
Agreement pursuant to this Section, Parent and Merger Sub shall immediately
terminate the Offer.
8.5. Effect of Termination and Abandonment. (a) In the event of
-------------------------------------
termination of this Agreement and abandonment of the Merger pursuant to this
Article VIII, no party hereto (or any of its directors or officers) shall have
any liability or further obligation to any other party to this Agreement, except
as provided in Section 8.5(b) below and Section 9.2 and except that nothing
herein will relieve any party from liability for any breach of this Agreement.
(b) If (x)(i) after the date hereof any corporation, partnership,
person, other entity or group (as defined in Section 13(d)(3) of the Exchange
Act) other than Parent or Merger Sub or any of their respective subsidiaries or
affiliates (collectively, a "13(d)(3) Person") shall have become the beneficial
---------------
owner of a majority or more of the outstanding Shares or any 13(d)(3) Person
shall have commenced, or shall have publicly announced an intention to commence,
a bona fide tender offer or exchange offer for one third or more of the
---- ----
outstanding Shares, (ii) the Share Number Condition (as defined in Annex A)
shall not have been satisfied and the Offer is terminated without the purchase
of any Shares thereunder, and (iii) within one year following such termination,
the Company shall have entered into an agreement with respect to an Acquisition
Proposal with any person or other entity other than Parent or any Person or
other entity becomes the beneficial owner of a majority or more of the
outstanding Shares, in either case at a price per Share of $11.50 or more, or
(y) Parent shall have terminated this Agreement pursuant to Section 8.3(y), or
(z) the Company shall have terminated this Agreement pursuant to Section 8.4(y),
then (if such fee has not already been paid) the Company shall promptly, but in
no event later than two days after the date of such agreement or the effective
time of such termination, as the case may be, pay Parent a fee of $15,000,000;
provided that no fee shall be paid pursuant to this Section 8.5(b) if Parent
- --------
shall have materially breached any of its obligations hereunder. The Company
acknowledges that the agreements contained in this Section 8.5(b) are an
integral part of the transactions contemplated in this Agreement, and that,
without these agreements, Parent and Merger Sub would not enter
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<PAGE>
into this Agreement; accordingly, if the Company fails to promptly pay the
amounts due pursuant to this Section 8.5(b), and, in order to obtain such
payment, Parent or Merger Sub commences a suit which results in a judgment
against the Company for the fee set forth in this Section 8.5(b), the Company
shall pay to Parent or Merger Sub its costs and expenses (including attorneys'
fees) in connection with such suit, together with interest on the amount of the
fee at the prime rate of Citibank, N.A. on the date such payment was required to
be made.
ARTICLE IX
Miscellaneous and General
9.1. Survival. This Article IX and the agreements of the Company,
--------
Parent and Merger Sub contained in Sections 6.9 (Stock Exchange Listing and De-
listing), 6.11 (Benefits), 6.12 (Expenses) and 6.13 (Indemnification; Directors'
and Officers' Insurance) shall survive the consummation of the Merger. This
Article IX, the agreements of the Company, Parent and Merger Sub contained in
Section 6.12 (Expenses), Section 8.5 (Effect of Termination and Abandonment) and
the Confidentiality Agreement shall survive the termination of this Agreement.
All other representations, warranties, covenants and agreements in this
Agreement shall not survive the consummation of the Merger or the termination of
this Agreement.
9.2. Modification or Amendment. Subject to the provisions of
-------------------------
applicable law, at any time prior to the Effective Time, the parties hereto may
modify or amend this Agreement, by written agreement executed and delivered by
duly authorized officers of the respective parties.
9.3. Waiver of Conditions. The conditions to each of the parties'
--------------------
obligations to consummate the Merger are for the sole benefit of such party and
may be waived by such party in whole or in part to the extent permitted by
applicable law.
9.4. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts shall together constitute the same agreement.
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<PAGE>
9.5. GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL. (a) THIS
---------------------------------------------
AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL RESPECTS SHALL BE
INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE LAW OF THE
STATE OF OHIO WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF. The
parties hereby irrevocably submit to the jurisdiction of the courts of the State
of Ohio and the Federal courts of the United States of America located in the
State of Ohio solely in respect of the interpretation and enforcement of the
provisions of this Agreement and of the documents referred to in this Agreement,
and in respect of the transactions contemplated hereby, and hereby waive, and
agree not to assert, as a defense in any action, suit or proceeding for the
interpretation or enforcement hereof or of any such document, that it is not
subject thereto or that such action, suit or proceeding may not be brought or is
not maintainable in said courts or that the venue thereof may not be appropriate
or that this Agreement or any such document may not be enforced in or by such
courts, and the parties hereto irrevocably agree that all claims with respect to
such action or proceeding shall be heard and determined in such an Ohio State or
Federal court. The parties hereby consent to and grant any such court
jurisdiction over the person of such parties and over the subject matter of such
dispute and agree that mailing of process or other papers in connection with any
such action or proceeding in the manner provided in Section 9.5 or in such other
manner as may be permitted by law shall be valid and sufficient service thereof.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT,
OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY
MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 9.5.
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<PAGE>
9.6. Notices. Any notice, request, instruction or other document
-------
to be given hereunder by any party to the others shall be in writing and
delivered personally or sent by registered or certified mail, postage prepaid,
or by facsimile:
if to Parent or Merger Sub:
--------------------------
James G. Kirk
International Technology Corporation
2790 Mosside Boulevard
Monroeville, PA 15146-2792
Telecopier: (412) 858-3978
with a copy to:
Peter F. Ziegler
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue
Los Angeles, California 90071
Telecopier: (213) 229-7520
if to the Company:
-----------------
Steven E. Harbour
OHM Corporation
5445 Triangle Parkway, Suite 400
Norcross, Georgia 30092
Telecopier: (770) 849-3110
with a copy to:
Joseph B. Frumkin
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Telecopier: (212) 558-3588
and a copy to:
Thomas C. Daniels
Jones Day Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 90071
Telecopier: (216) 579-0212
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<PAGE>
or to such other persons or addresses as may be designated in writing by the
party to receive such notice as provided above.
9.7. Entire Agreement; No Other Representations. This Agreement
------------------------------------------
(including any exhibits hereto), the Company Disclosure Letter, the Parent
Disclosure Letter, the Share Repurchase Agreement, the Company Voting Agreement
and Parent Voting Agreement, and the Option Termination Agreement and the
Confidentiality Agreement, dated September 25, 1997, between Parent and the
Company (the "Confidentiality Agreement") constitute the entire agreement, and
supersede all other prior agreements, understandings, representations and
warranties both written and oral, among the parties, with respect to the subject
matter hereof. EACH PARTY HERETO AGREES THAT, EXCEPT FOR THE REPRESENTATIONS AND
WARRANTIES CONTAINED IN THIS AGREEMENT, NEITHER PARENT AND MERGER SUB NOR THE
COMPANY MAKES ANY OTHER REPRESENTATIONS OR WARRANTIES, AND EACH HEREBY DISCLAIMS
ANY OTHER REPRESENTATIONS OR WARRANTIES MADE BY ITSELF OR ANY OF ITS OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS, FINANCIAL AND LEGAL ADVISORS OR OTHER
REPRESENTATIVES, WITH RESPECT TO THE EXECUTION AND DELIVERY OF THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE
TO THE OTHER OR THE OTHER'S REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER
INFORMATION WITH RESPECT TO ANY ONE OR MORE OF THE FOREGOING.
9.8. No Third Party Beneficiaries. Except as provided in Section
----------------------------
6.13 (Indemnification; Directors' and Officers' Insurance), this Agreement is
not intended to confer upon any Person other than the parties hereto any rights
or remedies hereunder.
9.9. Obligations of Parent and of the Company. Whenever this
----------------------------------------
Agreement requires a Subsidiary of Parent to take any action, such requirement
shall be deemed to include an undertaking on the part of Parent to cause such
Subsidiary to take such action. Whenever this Agreement requires a Subsidiary of
the Company to take any action, such requirement shall be deemed to include an
undertaking on the part of the Company to cause such Subsidiary to take such
action and, after the Effective Time, on the part of the Surviving Corporation
to cause such Subsidiary to take such action.
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<PAGE>
9.10. Severability. The provisions of this Agreement shall be
------------
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability or the other provisions hereof. If any
provision of this Agreement, or the application thereof to any Person or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
9.11. Interpretation. The table of contents and headings herein
--------------
are for convenience of reference only, do not constitute part of this Agreement
and shall not be deemed to limit or otherwise affect any of the provisions
hereof. Where a reference in this Agreement is made to Section or Exhibit, such
reference shall be to a Section of or Exhibit to this Agreement unless otherwise
indicated. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation."
9.12. Assignment. This Agreement shall not be assignable by
----------
operation of law or otherwise; provided, however, that Parent may designate, by
-------- -------
written notice to the Company, another wholly-owned direct or indirect
Subsidiary to be a Constituent Corporation in lieu of Merger Sub, in which event
all references herein to Merger Sub shall be deemed references to such other
Subsidiary, except that all representations and warranties made herein with
respect to Merger Sub as of the date of this Agreement shall be deemed
representations and warranties made with respect to such other Subsidiary as of
the date of such designation.
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<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the parties hereto as of the date
first written above.
OHM CORPORATION
By: __________________________
Name: James L. Kirk
Title: Chairman, President and
Chief Executive Officer
INTERNATIONAL TECHNOLOGY CORPORATION
By: __________________________
Name: Anthony J. DeLuca
Title: President
IT-OHIO, INC.
By: __________________________
Name: Anthony J. DeLuca
Title: President
<PAGE>
Annex A
Certain Conditions of the Offer
-------------------------------
Notwithstanding any other provision of the Offer and provided that (i)
the Share Repurchase shall have been completed subject only to the condition
that Merger Sub shall have paid for Shares pursuant to the Offer and (ii) Merger
Sub shall not be obligated to accept for payment any Shares until expiration or
termination of all applicable waiting periods under the HSR Act, Merger Sub
shall not be required to accept for payment, or may delay the acceptance for
payment for any tendered Shares, or may, subject to the terms and conditions of
the Merger Agreement, terminate or amend the Offer as to any Shares not then
accepted for payment if 13,933,000 Shares shall not have been properly and
validly tendered pursuant to the Offer and not withdrawn prior to the expiration
of the Offer (the "Share Number Condition"), or, if on or after January 15, 1998
and prior to the time of acceptance for payment for any of such Shares, any of
the following events shall occur:
(a) the Company shall have breached or failed to perform in any
material respect its obligations, covenants or agreements under the Merger
Agreement and, with respect to any such failure that can be remedied, the
failure shall not have been remedied within five business days after Parent
has furnished the Company written notice of such failure, or any
representation or warranty of the Company set forth in the Merger Agreement
shall have been inaccurate or incomplete in any material respect when made
or thereafter shall become and remain inaccurate or incomplete in any
material respect;
(b) there shall be instituted or pending any action, litigation,
proceeding, investigation or other application (hereinafter, an "Action")
------
before any court of competent jurisdiction or other governmental or
regulatory authority, agency or commission in the United States (each a
"Governmental Entity") by any Governmental Entity: (i) seeking to prohibit
--------------------
the consummation of the transactions contemplated by the Offer or the
Merger; (ii) seeking to prohibit, or impose any material limitations on
Parent's or Merger Sub's ownership or operation of all or a material
portion of the Company's
A-1
<PAGE>
business or assets, or to compel Parent or Merger Sub to dispose of or hold
separate all or a material portion of the Company's business or assets; or
(iii) seeking to make the acceptance for payment of, purchase of, or
repayment for, some or all of the Shares illegal;
(c) any statute, rule, regulation, order or injunction shall be
enacted, promulgated, entered, enforced or deemed to or become applicable
to the Offer or the Merger that results in any of the consequences referred
to in clauses (i) through (iii) of paragraph (b) above;
(d) it shall have been publicly disclosed or Parent shall have
otherwise learned that any person or "group" (as defined in Section
13(d)(3) of the Exchange Act), other than Parent and its Subsidiaries or
any group of which any of them is a member, shall have acquired beneficial
ownership (determined pursuant to Rule 13d-3 under the Exchange Act) or
more than 50% of the outstanding shares, or any person, entity or group
shall have entered into a definitive written agreement with the Company
with respect to a tender offer or exchange offer for some portion or all of
the Shares or a merger, consolidation or other business combination with or
involving the Company;
(e) there shall have occurred any event or events that, individually
or in the aggregate, have or are reasonably likely to have a Company
Material Adverse Effect;
(f) the Merger Agreement shall have been terminated by the Company or
Parent or Merger Sub in accordance with its terms or Parent or Merger Sub
shall have reached an agreement or understanding in writing with the
Company providing for a termination or amendment of the Offer or a delay in
the acceptance for payment for the Shares; or
(g) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on the NYSE (other than a
shortening of trading hours or any coordinated trading halt triggered
solely as a result of a specified increase or decrease in a market index),
(ii) the declaration of any banking moratorium or any suspension of
payments in respect of
A-2
<PAGE>
banks, or any limitation (whether or not mandatory) by any Governmental
Entity on, or other event materially adversely affecting, the extension of
credit by lending institutions in the United States, or (iii) a
commencement of a war or armed hostilities directly or indirectly involving
the United States;
which, in the reasonable judgment of Parent and Merger Sub, in any such case,
make it inadvisable to proceed with the Offer and/or with the acceptance for
payment for Shares.
The conditions set forth in this paragraph 1 are for the sole benefit
of Parent and Merger Sub and may be asserted by Parent or Merger Sub regardless
of the circumstances giving rise to such condition or may be waived by Parent or
Merger Sub, by express and specific action to that effect, in whole or in part
at any time and from time to time in their sole discretion, except as otherwise
provided in the Merger Agreement.
A-3
<PAGE>
Annex B
FORM OF AFFILIATE AGREEMENT
---------------------------
February __, 1998
International Technology Corporation
2790 Mosside Boulevard
Monroeville, Pennsylvania 15146-2792
Ladies and Gentlemen:
Reference is made to the provisions of the Agreement and Plan of
Merger, dated as of January 15, 1998 (together with any amendments thereto, the
"Merger Agreement"), among OHM Corporation, an Ohio corporation (the "Company"),
International Technology Corporation, a Delaware corporation ("Parent"), and IT-
Ohio, Inc., an Ohio corporation and a wholly owned subsidiary of Parent ("Merger
Sub"), pursuant to which, among other things, Merger Sub will be merged with and
into the Company, with the Company continuing as the surviving corporation (the
"Merger"). This agreement constitutes the undertakings of the undersigned
contemplated by Section 6.16 of the Merger Agreement.
I understand that I may be deemed to be an "affiliate" of the Company,
as such term is defined for purposes of Rule 145 ("Rule 145") promulgated under
the Securities Act of 1933, as amended (the "Securities Act"), and that the
transferability of the shares of common stock, par value $0.01 per share, of
Parent (the "Parent Common Stock") which I will receive upon the consummation of
the Merger in exchange for my shares of common stock, par value $0.10 per share,
of the Company (the "Shares") may be restricted. Nothing herein shall be
construed as an admission that I am an affiliate.
I hereby represent, warrant and covenant to Parent that:
(a) I have the full power to execute and deliver this agreement and to
make the representations and warranties herein and to perform the obligations
hereunder;
<PAGE>
(b) I will not sell, transfer or otherwise dispose of any of the
shares of Parent Common Stock except (i) pursuant to an effective registration
statement under the Securities Act or (ii) as permitted by, and in accordance
with, Rule 145, if applicable, or another applicable exemption under the
Securities Act; and
(c) I will not exercise appraisal rights in connection with the
Merger.
Parent agrees to cause either or both of the conditions set forth in
Rule 144(c) under the Securities Act to be satisfied at all times during the
period prior to the second anniversary of the Effective Time (as defined in the
Merger Agreement).
I hereby acknowledge that except as otherwise provided in the Merger
Agreement or in the previous paragraph, Parent is under no obligation to
register the sale, transfer or other disposition of the shares of Parent Common
Stock or to take any other action necessary for the purpose of making an
exemption from registration available.
I understand that Parent will issue stop transfer instructions to its
transfer agent with respect to the shares of Parent Common Stock that I receive
upon consummation of the Merger and that a restrictive legend will be placed on
the certificates delivered to me evidencing the shares of Parent Common Stock in
substantially the following form:
"This certificate and the shares represented hereby have been issued
pursuant to a transaction governed by Rule 145 ("Rule 145") promulgated
under the Securities Act of 1933, as amended (the "Securities Act"), and
may not be sold or otherwise disposed of unless registered under the
Securities Act pursuant to a Registration Statement in effect at the time
or unless the proposed sale or disposition can be made in compliance with
Rule 145 or without registration in reliance on another exemption from
registration. Reference is made to that certain agreement dated February
__, 1998 between the Holder and the Issuer, a copy of which is on file in
the principal office of the Issuer.
Parent agrees to release such stop transfer instructions and to cause
this legend to be removed from the certificates delivered to me evidencing the
shares of Parent Common Stock free of charge to the holder thereof promptly
after the restrictions on transferability of the shares of Parent
B-2
<PAGE>
Common Stock imposed by Rule 145 are no longer applicable or Parent breaches its
obligations set forth in the first sentence of the fourth paragraph of this
agreement, and after I surrender such certificates to the transfer agent with a
request for such removal.
This agreement shall be binding on successors to Parent and on my
heirs, executors and estate.
I hereby acknowledge that the receipt of this agreement by Parent is
an inducement and a condition to Parent's obligation to consummate the Merger
under the Merger Agreement and this agreement shall be governed by the laws of
the State of Delaware.
Very truly yours,
AGREED:
INTERNATIONAL TECHNOLOGY CORPORATION
By: _________________________
Name:
Title:
B-3
<PAGE>
EXHIBIT (c)(2)
PARENT VOTING AGREEMENT
PARENT VOTING AGREEMENT (this "Agreement"), dated as of January 15,
1998, among International Technology Corporation, a Delaware corporation
("Parent"), the undersigned stockholders (the "Stockholders") of Parent and OHM
Corporation, an Ohio corporation (the "Company").
WHEREAS, concurrently with the execution of this Agreement, the
Company, Parent and IT-Ohio, Inc., an Ohio Corporation and a wholly owned
subsidiary of Parent ("Merger Sub"), have entered into an Agreement and Plan of
Merger (as it may be hereafter amended from time to time, the "Merger
Agreement"), which provides that Merger Sub shall make a tender offer (the
"Offer") for 13,933,000 shares of common stock of the Company and that Merger
Sub shall thereafter merge (the "Merger") with and into the Company pursuant to
the terms and conditions of the Merger Agreement, and sets forth certain
representations, warranties, covenants and agreements of the parties thereto in
connection with the Offer, the Merger and the other transactions contemplated
therein (the "Merger Transactions"); and
WHEREAS, upon consummation the Merger, the holders of outstanding
shares of common stock of the Company at the Effective Time (as defined in the
Merger Agreement) will receive the Merger Consideration (as defined in the
Merger Agreement), which will consist (at least in part) of shares of Common
Stock, par value $0.1 per share, of Parent ("Parent Common Stock") for each
share of common stock of the Company; and
WHEREAS, Section 6.4 of the Merger Agreement provides that if
stockholder approval of the issuance of shares of Parent Common Stock is
required under the rules of the New York Stock Exchange, Inc., Parent will take
all action necessary to convene a meeting of its stockholders as promptly as
practicable to consider and vote upon such issuance; and
WHEREAS, the Stockholders are the record holders of an aggregate of
45,000 shares of Cumulative Convertible Participating Preferred Stock, par value
$100 per share, of Parent (the "Preferred Shares") and warrants (the "Warrants")
to purchase 1,250,000 shares of Parent Common Stock; and
WHEREAS, in order to induce the Company, Parent and Merger Sub to
enter into the Merger Agreement, the Stockholders wish to agree (i) to vote the
Preferred Shares
<PAGE>
and any other shares of capital stock of Parent held by them so as to facilitate
the consummation of the Merger Transactions, (ii) except as provided in this
Agreement, not to transfer or otherwise dispose of any of the Preferred Shares
or, any other shares of capital stock held by them, or any other shares of
capital stock of Parent acquired by them hereafter and prior to the Effective
Time (as defined in the Merger Agreement), and (iii) to deliver to the Company
an irrevocable proxy to vote the Preferred Shares and any other shares of
capital stock held by them, and any other shares of capital stock of Parent
acquired by them hereafter and prior to the Effective Time, all in manner set
forth herein.
NOW, THEREFORE, for good and valuable considera tion, the receipt,
sufficiency and adequacy of which is hereby acknowledged, the parties hereto
agree as follows:
1. Representations of Stockholders. Each of the Stockholders
-------------------------------
represents and warrants to the Company, Parent and Merger Sub that (a) such
Stockholder lawfully owns beneficially (as such term is defined in the
Securities Exchange Act of 1934, as amended (the "1934 Act")), and of record the
number of Preferred Shares set forth opposite such Stockholder's name on Exhibit
A (such Stockholder's "Shares") free and clear of all liens, claims, charges,
security interests or other encumbrances and, except for this Agreement and the
Merger Agreement, there are no options, warrants or other rights, agreements,
arrangements or commitments of any character to which such Stockholder is a
party relating to the pledge, disposition or voting of any shares of capital
stock of Parent and there are no voting trusts or voting agreements with respect
to such Shares, (b) such Stockholder does not beneficially own any shares of
Parent Common Stock or any other shares of capital stock of Parent other than
such Shares and, except for such Shares, does not have any options, warrants or
other rights to acquire any additional shares of capital stock of Parent or any
security exercisable for or convertible into shares of capital stock of Parent,
other than the Warrants, (c) such Stockholder has full power and authority to
enter into, execute and deliver this Agreement and to perform fully such
Stockholder's obligations hereunder, and (d) this Agreement has been duly
executed and delivered by such Stockholder, constitutes the legal, valid and
binding obligation of such Stockholder, and is enforceable against such
Stockholder in accordance with its terms.
2. Agreement to Vote Shares. Each of the Stockholders agrees that
------------------------
during the term of this Agreement it will vote such Stockholder's Shares and any
New Shares
-2-
<PAGE>
(as defined in Section 6 hereof), and will cause any holder of record
of such Shares or New Shares to vote such Stockholder's Shares and New Shares:
(a) in favor of the Merger Transactions and the issuance of shares of Parent
Common Stock in connection with the Merger at every meeting of the stockholders
of Parent at which such matters are considered and at every adjournment thereof,
and in connection with any written consent of the stockholders of Parent (b) in
favor of each of the Nominees (as defined in Section 6.11(c) of the Merger
Agreement) to Parent's Board of Directors, (c) against any action or agreement
that would compete with, impede, interfere with or attempt to discourage the
Merger Transactions, or inhibit the timely consummation of the Merger
Transactions, (d) against any action or agreement that would result in a breach
in any material respect of any covenant, representation or warranty or any other
obligation of Parent or Merger Sub under the Merger Agreement and (e) against
any merger, consolidation, business combination, reorganization,
recapitalization, liquidation or sale or transfer of any material assets of
Parent, Merger Sub or their respective subsidiaries that could compete with,
impede, interfere with or attempt to discourage the Merger Transactions or
inhibit the timely consummation of the Merger Transactions. Each Stockholder
agrees to deliver to the Company upon request a proxy substantially in the form
attached hereto as Exhibit B, which proxy shall be irrevocable during the term
of this Agreement to the fullest extent permitted under Delaware law.
3. No Voting Trusts. Each of the Stockholders agrees that they will
----------------
not, nor will they permit any entity under their control to, deposit any of
their Shares or any New Shares held by them in a voting trust or subject any of
their Shares or any New Shares held by them to any arrangement with respect to
the voting of such Shares or New Shares that would result in a stockholder's
vote or action by consent of the stockholders of Parent in opposition to or in
competition with the consummation of the Merger Transactions.
4. No Proxy Solicitations. Each of the Stockholders agrees that
----------------------
such Stockholder will not, nor will such Stockholder permit any entity under
such Stockholder's control to, (a) solicit proxies or become a "participant" in
a "solicitation" (as such terms are defined in Regulation 14A under the 1934
Act) in opposition to or competition with the consummation of the Merger
Transactions or otherwise encourage or assist any party in taking or planning
any action which would compete with, impede, interfere with or attempt to
discourage the Merger
-3-
<PAGE>
Transactions or inhibit the timely consummation of the Merger Transactions, (b)
directly or indirectly encourage, initiate or cooperate in a stockholders' vote
or action by consent of Parent's stockholders in opposition to or in competition
with the consummation of the Merger Transactions, or (c) become a member of a
"group" (as such term is used in Section 13(d) of the 1934 Act) with respect to
any voting securities of Parent for the purpose of opposing or competing with
the consummation of the Merger Transactions.
5. Transfer and Encumbrance. On or after the date hereof and during
------------------------
the term of this Agreement, each of the Stockholders agrees not to transfer,
sell, offer, exchange, pledge or otherwise dispose of or encumber any of such
Stockholder's Shares or New Shares, unless the transferee agrees in written form
satisfactory to the Company to be bound by the terms of this Agreement.
6. Additional Purchases. Each of the Stockholders agrees that such
--------------------
Stockholder will not purchase or otherwise acquire beneficial ownership of any
shares of Parent Common Stock, Preferred Shares, 7% Cumulative Convertible
Exchangeable Preferred Stock, par value $100 per share (the "7% Preferred
Stock") or any other capital stock of Parent after the execution of this
Agreement ("New Shares"), nor will any Stockholder voluntarily acquire the right
to vote or share in the voting of any shares of Parent Common Stock, Preferred
Shares, 7% Preferred Stock or any other capital stock of Parent other than the
Shares, unless such Stockholder agrees to deliver to the Company immediately
after such purchase or acquisition an irrevocable proxy in the form attached
hereto as Exhibit B with respect to such shares. Each of the Stockholders also
severally agrees that any New Shares acquired or purchased by such Stockholder
shall be subject to the terms of this Agreement to the same extent as if they
constituted Shares.
7. Specific Performance. Each party hereto acknowledges that it
--------------------
will be impossible to measure in money the damage to the other party if a party
hereto fails to comply with any of the obligations imposed by this Agreement,
that every such obligation is material and that, in the event of any such
failure, the other party will not have an adequate remedy at law or damages.
Accordingly, each party hereto agrees that injunctive relief or other equitable
remedy, in addition to remedies at law or damages, is the appropriate remedy for
any such failure and will not oppose the granting of such relief on the basis
that the other party has an adequate remedy at law. Each party hereto agrees
that it will not seek, and agrees to waive any
-4-
<PAGE>
requirement for, the securing or posting of a bond in connection with any other
party's seeking or obtaining such equitable relief.
8. Entire Agreement. This Agreement supersedes all prior
----------------
agreements, written or oral, among the parties hereto with respect to the
subject matter hereof and con tains the entire agreement among the parties with
respect to the subject matter hereof. This Agreement may not be amended,
supplemented or modified, and no provisions hereof may be modified or waived,
except by an instrument in writing signed by all the parties hereto. No waiver
of any provisions hereof by any party shall be deemed a waiver of any other
provisions hereof by any such party, nor shall any such waiver be deemed a
continuing waiver of any provision hereof by such party.
9. Notices. Any notice, request, instruction or other document to
-------
be given hereunder by any party to the others shall be in writing and delivered
personally or sent by registered or certified mail, postage prepaid, or by
facsimile:
if to any Stockholder:
---------------------
Daniel A. D'Aniello
Managing Director
The Carlyle Group
1001 Pennsylvania Avenue, N.W.
Suite 220 South
Washington, DC 20004-2505
if to Parent or Merger Sub:
--------------------------
James G. Kirk
International Technology Corporation
2790 Mosside Boulevard
Monroeville, PA 15146-2792
Telecopier: (412) 858-3978
with a copy to:
Peter F. Ziegler
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue
Los Angeles, California 90071
Telecopier: (213) 229-7520
-5-
<PAGE>
if to the Company:
-----------------
Steven E. Harbour
OHM Corporation
5445 Triangle Parkway, Suite 400
Norcross, Georgia 30092
with a copy to:
Joseph B. Frumkin
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Telecopier: (212) 558-3588
and a copy to:
Thomas C. Daniels
Jones Day Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Telecopier: (216) 579-0212
or to such other persons or addresses as may be designated in writing by the
party to receive such notice as provided above.
10. Miscellaneous.
-------------
(a) This Agreement shall be deemed a contract made under, and for all
purposes shall be construed in accordance with, the laws of the State of
Delaware applicable to agreements executed in and solely to be performed within
such state.
(b) If any provision of this Agreement or the application of such
provision to any person or circumstances shall be held invalid or unenforceable
by a court of competent jurisdiction, such provision or application shall be
unenforceable only to the extent of such invalidity or unenforceability and the
remainder of the provision held invalid or unenforceable and the application of
such provision to persons or circumstances, other than the party as to which it
is held invalid, and the remainder of this Agreement, shall not be affected.
(c) This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an
-6-
<PAGE>
original but all of which together shall constitute one and the same instrument.
(d) This Agreement shall terminate automatically upon the termination
of the Merger Agreement or upon the Effective Time of the Merger. This
Agreement shall not otherwise be terminable.
(e) Each party hereto shall execute and deliver such additional
documents as may be necessary or desirable to effect the transactions
contemplated by this Agreement.
(f) All Section headings herein are for convenience of reference only
and are not part of this Agreement, and no construction or reference shall be
derived therefrom.
(g) The obligations of the Stockholders set forth in this Agreement
shall not be effective or binding upon any Stockholder until after such time as
the Merger Agreement is executed and delivered by the Company, Parent and Merger
Sub, and the parties agree that there is not and has not been any other
agreement, arrangement or understanding between the parties hereto with respect
to the matters set forth herein.
-7-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first written above.
International Technology
Corporation
By:__________________________
Name:
Title:
OHM Corporation
By:__________________________
Name:
Title:
Carlyle Partners II, L.P.
By: its General Partner, TC Group, L.L.C.
By:__________________________
Name: Daniel A. D'Aniello
Title: Managing Director
-8-
<PAGE>
Carlyle Partners III, L.P.
By: its General Partner, TC
Group, L.L.C.
By:__________________________
Name: Daniel A. D'Aniello
Title: Managing Director
Carlyle International Partners II, L.P.
By: its General Partner, TC
Group, L.L.C.
By:__________________________
Name: Daniel A. D'Aniello
Title: Managing Director
Carlyle International Partners III, L.P.
By: its General Partner, TC
Group, L.L.C.
By:__________________________
Name: Daniel A. D'Aniello
Title: Managing Director
C/S International Partners
By: its General Partner, TC
Group, L.L.C.
By:__________________________
Name: Daniel A. D'Aniello
Title: Managing Director
Carlyle Investment Group, L.P.
By: its General Partner, TC
Group, L.L.C.
By:__________________________
Name: Daniel A. D'Aniello
Title: Managing Director
-9-
<PAGE>
Carlyle-IT International Partners, L.P.
By: its General Partner, TC
Group, L.L.C.
By:__________________________
Name: Daniel A. D'Aniello
Title: Managing Director
Carlyle-IT International
Partners II, L.P.
By: its General Partner, TC
Group, L.L.C.
By:__________________________
Name: Daniel A. D'Aniello
Title: Managing Director
Carlyle-IT Partners, L.P.
By: its General Partner, TC
Group, L.L.C.
By:__________________________
Name: Daniel A. D'Aniello
Title: Managing Director
-10-
<PAGE>
State Board of Administration of Florida separate
account maintained pursuant to an Investment
Management Agreement dated as of September 6, 1996
between the State Board of Administration of
Florida, Carlyle Investment Group, L.P. and
Carlyle Investment Management, L.L.C.
By: Carlyle Investment
Management, L.L.C., as
Investment Manager
By: _________________________
Its: _________________________
-11-
<PAGE>
(EXHIBIT A)
Number of Shares
of Cumulative Convertible
Name of Stockholder Participating Preferred Stock
------------------- -----------------------------
Carlyle Partners II, L.P. 1,781,965
Carlyle Partners III, L.P. 81,357
Carlyle International Partners 1,504,210
II, L.P.
Carlyle International III, L.P. 81,042
C/S International Partners 338,682
Carlyle Investment Group, L.P. 1,907
Carlyle-IT International 2,366,299
Partners, L.P.
Carlyle-IT International 79,765
Partners II, L.P.
The State Board of Administration 748,520
of the State of Florida
Carlyle-IT Partners, L.P. 195,107
<PAGE>
(EXHIBIT B)
FORM OF PROXY
The undersigned, for consideration received, hereby appoints [insert
names of Company designees] and each of them my proxies, with power of
substitution and resubstitution, to vote all shares of Cumulative Convertible
Participating Preferred Stock, par value $100 per share, of International
Technology Corporation, a Delaware corporation ("Parent"), [and [insert any
other Shares (as defined in the Voting Agreement) owned by Stockholder]] owned
by the undersigned at the Special Meeting of Stockholders of Parent to be held
[insert date, time and place] and at any adjournment thereof IN FAVOR OF
consummation of the Offer, the Merger and the other transactions (the "Merger
Transactions") contemplated by the Merger Agreement, dated as of January 15,
1998 (the "Merger Agreement"), among OHM Corporation (the "Company"), Parent and
IT-Ohio, Inc. ("Merger Sub"), IN FAVOR OF the issuance of shares of common stock
of Parent in connection with the merger of Merger Sub with and into the Company,
IN FAVOR OF each of the Nominees (as defined in Section 6.11(c) of the Merger
Agreement) to Parent's Board of Directors and AGAINST [insert description of any
action or agreement that would compete with, impede, interfere with or attempt
to discourage the Merger Transactions or inhibit the timely consummation of the
Merger Transactions or any action or agreement that would result in a breach in
any material respect of any covenant, representation or warranty or any other
obligation of Parent under the Merger Agreement or any merger, consolidation,
business combination, reorganization, recapitalization, liquidation or sale or
transfer of any material assets of Parent or its subsidiaries]. This proxy is
coupled with an interest, revokes all prior proxies granted by the undersigned
and is irrevocable until such time as the Voting Agreement, dated as of January
15, 1998 among certain stockholders of Parent, including the undersigned,
Parent, Merger Sub and the Company terminates in accordance with its terms.
Dated ______, 1998
[NAME OF STOCKHOLDER]
By:___________________________
<PAGE>
EXHIBIT (c)(3)
COMPANY VOTING AGREEMENT
COMPANY VOTING AGREEMENT (this "Agreement"), dated as of January 15,
1998, among International Technology Corporation, a Delaware corporation
("Parent"), OHM Corporation, an Ohio corporation (the "Company") and the
undersigned shareholders of the Company (the "Shareholders").
WHEREAS, concurrently with the execution of this Agreement, the
Company, Parent and IT-Ohio, Inc., an Ohio Corporation and a wholly owned
subsidiary of Parent ("Merger Sub"), have entered into an Agreement and Plan of
Merger (as it may be hereafter amended from time to time, the "Merger
Agreement"), which provides that Merger Sub shall make a tender offer (the
"Offer") for 13,933,000 shares of common stock of the Company and that Merger
Sub shall thereafter merge (the "Merger") with and into the Company pursuant to
the terms and conditions of the Merger Agreement, and sets forth certain
representations, warranties, covenants and agreements of the parties thereto in
connection with the Offer, the Merger and the other transactions contemplated
therein (the "Merger Transactions"); and
WHEREAS, the Shareholders are the record holders of shares of Common
Stock, par value $0.10 per share ("Company Common Stock"), of the Company; and
WHEREAS, in order to induce the Company, Parent and Merger Sub to
enter into the Merger Agreement, the Shareholders wish to agree (i) to vote the
shares of Company Common Stock and any other shares of capital stock of the
Company held by them so as to facilitate the consummation of the Merger
Transactions, (ii) except as provided in this Agreement, not to transfer or
otherwise dispose of any of the shares of Company Common Stock or any other
shares of capital stock held by them, or any other shares of capital stock of
the Company acquired by them hereafter and prior to the Effective Time (as
defined in the Merger Agreement), and (iii) to deliver to Parent an irrevocable
proxy to vote the shares of Company Common Stock and any other shares of capital
stock held by them, and any other shares of capital stock of the Company
acquired by them hereafter and prior to the Effective Time.
NOW, THEREFORE, for good and valuable considera tion, the receipt,
sufficiency and adequacy of which is hereby acknowledged, the parties hereto
agree as follows:
<PAGE>
1. Representations of Shareholders. Each of the Shareholders
-------------------------------
represents and warrants to the Company, Parent and Merger Sub that (a) such
Shareholder lawfully owns beneficially (as such term is defined in the
Securities Exchange Act of 1934, as amended (the "1934 Act")), and of record the
number of shares of Company Common Stock set forth opposite such Shareholder's
name on Exhibit A (such Shareholder's "Shares") free and clear of all liens,
claims, charges, security interests or other encumbrances and, except for this
Agreement and the Merger Agreement, there are no options (other than options
described in the Company Disclosure Letter or annexes thereto), warrants or
other rights, agreements, arrangements or commitments of any character to which
such Shareholder is a party relating to the pledge, disposition or voting of any
shares of capital stock of the Company (other than, with respect to Mr. James L.
Kirk, a pledge of his Shares made in connection with a loan financing the
acquisition of real property) and there are no voting trusts or voting
agreements with respect to such Shares, (b) such Shareholder does not
beneficially own any shares of Company Common Stock or any other shares of
capital stock of the Company other than such Shares and, except for such Shares,
does not have any options, warrants or other rights to acquire any additional
shares of capital stock of the Company or any security exercisable for or
convertible into shares of capital stock of the Company, (c) such Shareholder
has full power and authority to enter into, execute and deliver this Agreement
and to perform fully such Shareholder's obligations hereunder, and (d) this
Agreement has been duly executed and delivered by such Shareholder, constitutes
the legal, valid and binding obligation of such Shareholder, and is enforceable
against such Shareholder in accordance with its terms.
2. Agreement to Vote Shares. Each of the Shareholders agrees that
------------------------
during the term of this Agreement it will vote such Shareholder's Shares and any
New Shares (as defined in Section 6 hereof), and will cause any holder of record
of such Shares or New Shares to vote such Shareholder's Shares and New Shares:
(a) in favor of adoption of the Merger Agreement and in favor of consummation of
the Merger Transactions at every meeting of the shareholders of the Company at
which such matters are considered and at every adjournment thereof and in
connection with any written consent of the shareholders of the Company, (b) in
favor of the election to the Company's Board of Directors of such number of
Parent Representatives as Parent is permitted to cause to be elected to the
Company's Board of Directors pursuant to Section 1.4 of the Merger Agreement,
(c) against any action or agreement that would compete with, impede, interfere
with or attempt to discourage the Merger Transactions, or inhibit the timely
consummation of the Merger Transactions, (d) against any action or agreement
that would result in a breach in any material respect of any covenant,
representation or warranty or
-2-
<PAGE>
any other obligation of the Company under the Merger Agreement and (e) against
any merger, consolidation, business combination, reorganization,
recapitalization, liquidation or sale or transfer of any material assets of the
Company or its subsidiaries that could compete with, impede, interfere with or
attempt to discourage the Merger Transactions or inhibit the timely consummation
of the Merger Transactions. Each Shareholder agrees to deliver to Parent upon
request a proxy substantially in the form attached hereto as Exhibit B, which
proxy shall be irrevocable during the term of this Agreement to the fullest
extent permitted under Delaware law.
3. No Voting Trusts. Each of the Shareholders agrees that they will
----------------
not, nor will they permit any entity under their control to, deposit any of
their Shares or any New Shares held by them in a voting trust or subject any of
their Shares or any New Shares held by them to any arrangement with respect to
the voting of such Shares or New Shares that could result in a shareholder's
vote or action by consent of the shareholders of the Company in opposition to or
in competition with the consummation of the Merger Transactions.
4. No Proxy Solicitations. Each of the Shareholders agrees that
----------------------
such Shareholder will not, nor will such Shareholder permit any entity under
such Shareholder's control to, (a) solicit proxies or become a "participant" in
a "solicitation" (as such terms are defined in Regulation 14A under the 1934
Act) in opposition to or competition with the consummation of the Merger
Transactions or otherwise encourage or assist any party in taking or planning
any action which would compete with, impede, interfere with or attempt to
discourage the Merger Transactions or inhibit the timely consummation of the
Merger Transactions, (b) directly or indirectly encourage, initiate or cooperate
in a shareholders' vote or action by consent of Parent's shareholders in
opposition to or in competition with the consummation of the Merger
Transactions, or (c) become a member of a "group" (as such term is used in
Section 13(d) of the 1934 Act) with respect to any voting securities of Parent
for the purpose of opposing or competing with the consummation of the Merger
Transactions.
5. Transfer and Encumbrance. On or after the date hereof and during
------------------------
the term of this Agreement, each of the Shareholders agrees not to transfer,
sell, offer, exchange, pledge or otherwise dispose of or encumber any of such
Shareholder's Shares or New Shares, except for tenders of such Shares into the
Offer, unless the transferee agrees in written form satisfactory to Parent to be
bound by the terms of this Agreement.
6. Additional Purchases. Each of the Shareholders agrees that such
--------------------
Shareholder will not purchase or otherwise
-3-
<PAGE>
acquire beneficial ownership of any shares of Company Common Stock or any other
capital stock of the Company after the execution of this Agreement ("New
Shares"), nor will any Shareholder voluntarily acquire the right to vote or
share in the voting of any shares of Company Common Stock or any other capital
stock of the Company other than the Shares, unless such Shareholder agrees to
deliver to Parent immediately after such purchase or acquisition an irrevocable
proxy in the form attached hereto as Exhibit B with respect to such shares. Each
of the Shareholders also severally agrees that any New Shares acquired or
purchased by such Shareholder shall be subject to the terms of this Agreement to
the same extent as if they constituted Shares.
7. Specific Performance. Each party hereto acknowledges that it
--------------------
will be impossible to measure in money the damage to the other party if a party
hereto fails to comply with any of the obligations imposed by this Agreement,
that every such obligation is material and that, in the event of any such
failure, the other party will not have an adequate remedy at law or damages.
Accordingly, each party hereto agrees that injunctive relief or other equitable
remedy, in addition to remedies at law or damages, is the appropriate remedy for
any such failure and will not oppose the granting of such relief on the basis
that the other party has an adequate remedy at law. Each party hereto agrees
that it will not seek, and agrees to waive any requirement for, the securing or
posting of a bond in connection with any other party's seeking or obtaining such
equitable relief.
8. Entire Agreement. This Agreement supersedes all prior
----------------
agreements, written or oral, among the parties hereto with respect to the
subject matter hereof and contains the entire agreement among the parties with
respect to the subject matter hereof. This Agreement may not be amended,
supplemented or modified, and no provisions hereof may be modified or waived,
except by an instrument in writing signed by all the parties hereto. No waiver
of any provisions hereof by any party shall be deemed a waiver of any other
provisions hereof by any such party, nor shall any such waiver be deemed a
continuing waiver of any provision hereof by such party.
9. Notices. Any notice, request, instruction or other document to
-------
be given hereunder by any party to the others shall be in writing and delivered
personally or sent by registered or certified mail, postage prepaid, or by
facsimile:
if to any Shareholder:
---------------------
to the address listed on Exhibit A hereto.
-4-
<PAGE>
if to the Company:
-----------------
Steven E. Harbour
OHM Corporation
5445 Triangle Parkway, Suite 400
Norcross, Georgia 30092
Telecopier: (770) 849-3110
with a copy to:
Joseph B. Frumkin
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Telecopier: (212) 558-3588
and a copy to:
Thomas C. Daniels
Jones Day Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Telecopier: (216) 579-0212
if to Parent or Merger Sub:
--------------------------
James G. Kirk
International Technology Corporation
2790 Mosside Boulevard
Monroeville, PA 15146-2792
Telecopier: (412) 858-3978
with a copy to:
Peter F. Ziegler
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue
Los Angeles, California 90071
Telecopier: (213) 229-7520
or to such other persons or addresses as may be designated in writing by the
party to receive such notice as provided above.
10. Miscellaneous.
-------------
(a) This Agreement shall be deemed a contract made under, and for all
purposes shall be construed in accordance with, the laws of the State of
Delaware applicable to agreements executed in and solely to be performed within
such state.
-5-
<PAGE>
(b) If any provision of this Agreement or the application of such
provision to any person or circumstances shall be held invalid or unenforceable
by a court of competent jurisdiction, such provision or application shall be
unenforceable only to the extent of such invalidity or unenforceability and the
remainder of the provision held invalid or unenforceable and the application of
such provision to persons or circumstances, other than the party as to which it
is held invalid, and the remainder of this Agreement, shall not be affected.
(c) This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.
(d) This Agreement shall terminate automatically upon the termination
of the Merger Agreement or upon the Effective Time of the Merger. This
Agreement shall not otherwise be terminable.
(e) Each party hereto shall execute and deliver such additional
documents as may be necessary or desirable to effect the transactions
contemplated by this Agreement.
(f) All Section headings herein are for convenience of reference only
and are not part of this Agreement, and no construction or reference shall be
derived therefrom.
(g) The obligations of the Shareholders set forth in this Agreement
shall not be effective or binding upon any Shareholder until after such time as
the Merger Agreement is executed and delivered by the Company, Parent and Merger
Sub, and the parties agree that there is not and has not been any other
agreement, arrangement or understanding between the parties hereto with respect
to the matters set forth herein.
-6-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first written above.
OHM CORPORATION
By:
-----------------------------
Name:
Title:
-----------------------------
(Shareholder)
-----------------------------
(Shareholder)
-----------------------------
(Shareholder)
-----------------------------
(Shareholder)
INTERNATIONAL TECHNOLOGY
CORPORATION
By:
-----------------------------
Name:
Title:
<PAGE>
(EXHIBIT A)
Name and Address of
Shareholder Number of Shares
------------------- ----------------
H. Wayne Huizenga 1,000,000
Huizenga Holdings
450 E. Las Olas Boulevard
Ft. Lauderdale, FL 33301
Huizenga Family Foundation, Inc. 500,000
450 E. Las Olas Boulevard
Ft. Lauderdale, FL 33301
James L. Kirk 1,223,716
OHM Corporation
16406 U.S. Rt. 224 East
Findlay, OH 45840
Joseph R. Kirk 2,088,060
OHM Corporation
16406 U.S. Rt. 224 East
Findlay, OH 45840
<PAGE>
(EXHIBIT B)
FORM OF PROXY
The undersigned, for consideration received, hereby appoints Anthony
J. Deluca and James G. Kirk and each of them my proxies, with power of
substitution and resubstitution, to vote all shares of Common Stock, par value
$0.10 per share, of OHM Corporation, an Ohio corporation (the "Company"), [and
[insert any other Shares (as defined in the Voting Agreement) owned by
Shareholder]] owned by the undersigned at the Special Meeting of Shareholders of
the Company to be held [insert date, time and place] and at any adjournment
thereof IN FAVOR OF adoption of the Agreement and Plan of Merger, dated as of
January 15, 1998 (the "Merger Agreement"), among the Company, International
Technology Corporation ("Parent") and IT-Ohio, Inc., IN FAVOR OF consummation of
the Merger Transactions, IN FAVOR OF [List such number of Parent Representatives
(as defined in Section 1.4 of the Merger Agreement) as Parent is permitted to
cause to be elected to the Company's Board of Directors pursuant to Section 1.4
of the Merger Agreement], and AGAINST [insert description of any action or
agreement that would compete with, impede, interfere with or attempt to
discourage the Merger Transactions or inhibit the timely consummation of the
Merger Transactions or any action or agreement that would result in a breach in
any material respect of any covenant, representation or warranty or any other
obligation of the Company under the Merger Agreement or any merger,
consolidation, business combination, reorganization, recapitalization,
liquidation or sale or transfer of any material assets of the Company or its
subsidiaries]. This proxy is coupled with an interest, revokes all prior
proxies granted by the undersigned and is irrevocable until such time as the
Voting Agreement, dated as of January 15, 1998 among certain shareholders of the
Company, including the undersigned, Parent, and the Company terminates in
accordance with its terms.
Dated ______, 1998
___________________________
(Shareholder)
<PAGE>
EXHIBIT (c)(4)
H. WAYNE HUIZENGA
January 15, 1998
To OHM CORPORATION:
With reference to the First Option Agreement, dated as of March 28,
1995 (the "First Option Agreement"), between OHM Corporation (the "Company") and
H. Wayne Huizenga (the "Holder") and the Second Option Agreement, dated as of
March 28, 1995 (the "Second Opinion Agreement"), between the Company and the
Holder, and the Agreement and Plan of Merger, dated the date hereof (the "Merger
Agreement"), among the Company, International Technologies Corporation and IT-
Ohio, Inc. ("Merger Sub"), this letter agreement will confirm our agreement as
follows:
1. Terms used herein but not defined herein shall have the respective meanings
set forth in the Merger Agreement.
2. In consideration of the agreement set forth in paragraphs 3, 4 and 5 of
this letter agreement, the Company agrees that, as promptly as practicable
after the earliest to occur of (i) the acceptance by Merger Sub of Shares
for payment in the Offer, or (ii) the Effective Time, the Company shall pay
to the Holder, in immediately available funds, $1,500,000 (the "Termination
Payment").
3. In consideration of the payment of the Termination Payment, the First
Option Agreement and the Second Option Agreement are hereby terminated,
effective as of the time of payment of the Termination Payment.
4. The Holder shall not exercise his rights pursuant to Sections 3.1 or 3.2 of
the First Option Agreement or Sections 3.1 or 3.2 of the Second Option
Agreement prior to the earliest to occur of (i) the second business day
subsequent to the Effective Time, and (ii) the termination of the Merger
Agreement in accordance with its terms.
<PAGE>
5. The Holder hereby waives his rights under Section 2.2 of the First Option
Agreement and Section 2.2 of the Second Merger Agreement with respect to
the NSC Distribution.
6. This letter agreement shall terminate upon the termination of the Merger
Agreement, but shall not otherwise be terminable.
7. This letter agreement and rights and obligations of the parties hereunder
shall be governed by, construed and interpreted in accordance with the laws
of the State of Ohio applicable to agreements executed by residents of that
state, and fully to be performed, in that state.
If the foregoing is in accordance with your understanding, please
execute one counterpart of this letter agreement, whereupon this letter
agreement shall constitute a binding agreement among the parties hereto.
Very truly yours,
______________________
(H. Wayne Huizenga)
Accepted and agreed
as of the date hereof:
OHM CORPORATION
By:_____________________
Name:
Title:
<PAGE>
EXHIBIT (c)(5)
SHARE REPURCHASE AGREEMENT
SHARE REPURCHASE AGREEMENT (this "Agreement"), dated as of January 15,
1998, among OHM Corporation, an Ohio corporation (the "Company"), Waste
Management, Inc., a Delaware corporation (the "Shareholder"), Rust International
Inc., a Delaware corporation ("Rust"), and International Technology Corporation,
a Delaware corporation ("Parent").
WHEREAS, certain of the parties to this Agreement are also parties to
the Standstill and Non-Competition Agreement, dated as of May 30, 1995, among
the Company, the Shareholder and Rust (the "Standstill Agreement"); and
WHEREAS, concurrently with the execution of this Agreement, the
Company, Parent and IT-Ohio, Inc., an Ohio corporation ("Merger Sub"), have
entered into an Agreement and Plan of Merger, dated as of the date hereof (as it
may be amended from time to time, the "Merger Agreement"), which provides that
Merger Sub will make a tender offer (the "Offer") for 13,933,000 shares of
Common Stock, par value $0.10 per share, of the Company ("Shares") and that,
subsequent to the consummation of the Offer, Merger Sub will merge with and into
the Company (the "Merger" and, collectively with the Offer and the other
transactions contemplated by the Merger Agreement, the "Merger Transactions");
and
WHEREAS, the Shareholder is the record holder of an aggregate of
9,668,000 Shares (the "Shareholder Shares"); and
WHEREAS, Parent, the Company and the Shareholder wish, as a part of
the Merger Transactions, to provide for the repurchase by the Company from the
Shareholder, concurrently with the payment to BankBoston, N.A., as Depositary
for the Offer on behalf of holders of Shares tendering into the Offer, of the
aggregate purchase price for all Shares purchased in the Offer (the "Payment
Time"), of 5,235,381 Shareholder Shares (the "Repurchased Shares"), in a manner
that will increase the aggregate number of Shares acquired for cash in the
Merger Transactions and make it possible for the Merger Consideration (as
defined in the Merger Agreement) to consist solely of shares of Parent Common
Stock (as defined in the Merger Agreement); and
<PAGE>
WHEREAS, the parties intend for the Shareholder not to receive any
greater consideration per Share in the Merger Transactions than the other
holders of Shares, and that for Shareholder not to receive any greater amount of
cash consideration per Share in the Merger Transactions than the other holders
of Shares; and
WHEREAS, in order to facilitate consummation of the Merger
Transactions, the Shareholder wishes to agree (i) to vote the Shareholder Shares
and any other shares of capital stock of the Company held by it so as to
facilitate consummation of the Merger Transactions, (ii) except as provided in
this Agreement, not to transfer or otherwise dispose of any of the Shareholder
Shares, or any other shares of capital stock of the Company, acquired by it
hereafter and prior to the Effective Time (as defined in the Merger Agreement),
(iii) to deliver to Parent an irrevocable proxy to vote the Shareholder Shares
and any other shares of capital stock of the Company acquired by the Shareholder
hereafter and prior to the Effective Time, and (iv) to amend or terminate, as
the case may be, certain agreements to which certain of the parties hereto are
parties, and (v) to make certain other agreements, all as provided for herein.
NOW, THEREFORE, for good and valuable considera tion, the receipt,
sufficiency and adequacy of which is hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
Definitions; Representations and Warranties
-------------------------------------------
1.1 Definitions. Terms used herein but not defined herein shall have
-----------
the respective meanings ascribed to such terms in the Merger Agreement.
1.2 Representations of the Shareholder. The Shareholder represents
----------------------------------
and warrants to the Company that (a) it owns beneficially (as such term is
defined in the Securities Exchange Act of 1934, as amended (the "1934 Act"))
9,668,000 Shares free and clear of all liens, claims, charges, security
interests or other encumbrances (each, a "Lien") and, except for this Agreement
and the warrants to purchase Shares (the "Warrants") issued pursuant to the
Warrant Agreement, dated as of May 30, 1995, among the Company and the
Shareholder (the "Warrant Agreement"), there are no options, warrants or other
rights, agreements,
-2-
<PAGE>
arrangements or commitments of any character to which the Shareholder is a party
relating to the pledge or disposition of any shares of capital stock of the
Company and, except for the Standstill Agreement and this Agreement, there are
no voting trusts or voting agreements to which the Shareholder is a party with
respect to any shares of capital stock of the Company; (b) the Shareholder does
not beneficially own any shares of capital stock of the Company other than the
Shareholder Shares and the Warrants and, except for the Warrants, does not have
any options, warrants or other rights to acquire any additional shares of
capital stock of the Company or any security exercisable for or convertible into
shares of capital stock of the Company; (c) the Shareholder has full power and
authority to enter into, execute and deliver this Agreement and to perform fully
its obligations under this Agreement; and (d) this Agreement has been duly
executed and delivered by each of the Shareholder and Rust, constitutes the
legal, valid and binding obligation of the Shareholder and Rust and is
enforceable against each of them in accordance with its terms. The foregoing
representations shall survive consummation of the Merger Transactions and the
other transactions contemplated by this Agreement.
1.3 Representations of the Company. The Company represents and
------------------------------
warrants to the Shareholder that (a) the Company has full power and authority to
enter into, execute and deliver this Agreement and to perform fully its
obligations under this Agreement, (b) this Agreement has been duly executed and
delivered by the Company, constitutes the legal, valid and binding obligation of
the Company and is enforceable against it in accordance with its terms, and (c)
the Company has obtained all consents, approvals, permits and authorizations
required to be obtained by the Company pursuant to any law, regulation,
contract, agreement or instrument in connection with the execution and delivery
of this Agreement. The foregoing representations shall survive consummation of
the Merger Transactions and the other transactions contemplated by this
Agreement.
ARTICLE II
The Repurchase and the Offer
----------------------------
2.1 Repurchase of Shares. (a) Subject to the terms and conditions
--------------------
of this Agreement, including the conditions set forth in Section 2.3, the
Company agrees to
-3-
<PAGE>
purchase from the Shareholder, and the Shareholder agrees to sell to the Company
(such purchase and sale transaction, the "Repurchase"), the Repurchased Shares,
free and clear of any Liens at a purchase price of $11.50 per Repurchased Share,
or such greater price per Repurchased Share as may be paid in the Offer (the
"Repurchase Price").
(b) If for any reason the Company has not repurchased the Repurchased
Shares immediately prior to the Effective Time (as defined in the Merger
Agreement), the Company shall take such action as may be necessary at such time
to purchase the Repurchased Shares at the Repurchase Price for cash at such
time, so that the Repurchased Shares shall have been acquired by the Company,
Parent or Merger Sub prior to the Effective Time.
2.2 Repurchase Closing. (a) The delivery of the Repurchased Shares
------------------
(the "Repurchase Closing") shall take place at the offices of Sullivan &
Cromwell, 125 Broad Street, New York, New York at the Payment Time.
(b) At the Repurchase Closing:
(i) The Shareholder shall deliver to the Company certificates
representing the Repurchased Shares, duly endorsed and in form for transfer
to the Company; and
(ii) The Company shall pay to the Shareholder, by wire transfer,
to an account designated by the Shareholder no fewer than two business days
prior to the Repurchase Closing, immediately available funds equivalent to
the Repurchase Price multiplied by the number of Repurchased Shares.
2.3 Conditions to the Repurchase. (a) The respective obligations of
----------------------------
the Company and the Shareholder to consummate the Repurchase are subject to the
fulfillment of each of the following conditions, any or all of which may be
waived in whole or in part by the Company or the Shareholder, as the case may
be, to the extent permitted by applicable law:
(i) Concurrently with the Repurchase Closing, Merger Sub shall have
paid for Shares pursuant to the Offer.
-4-
<PAGE>
(ii) No United States or state court or other Governmental Entity (as
defined in the Merger Agreement) of competent jurisdiction shall have
enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, judgment, decree, injunction or other order (whether temporary,
preliminary or permanent) which is in effect and prohibits consummation of
the transactions contemplated by the Merger Agreement or this Agreement.
(b) The obligation of the Company to consummate the Repurchase is
subject to the condition that the representations and warranties of the
Shareholder contained in Section 1.2 are true and accurate in all material
respects as of the date hereof and as of the Repurchase Closing, provided,
however, that the foregoing condition may be waived in whole or in part by the
Company.
(c) The obligation of the Shareholder to consummate the Repurchase is
subject to the condition that the representations and warranties of the Company
contained in Section 1.3 are true and accurate in all material respects as of
the date hereof and as of the Repurchase Closing, provided, however, that the
foregoing condition may be waived in whole or in part by the Shareholder.
2.4 The Tender Offer. The Shareholder agrees that it will not tender
----------------
more than 2,142,141 Shareholder Shares into the Offer.
ARTICLE III
The Merger
----------
3.1 Agreement to Vote Shares. In addition to and notwithstanding the
------------------------
provisions of Section 1.2 of the Standstill Agreement, the Shareholder agrees
that during the term of this Agreement it consents to and approves the voting of
the Shareholder Shares and any New Shares (as defined in Section 4.2), (a) in
favor of adoption of the Merger Agreement and in favor of consummation of the
Merger Transactions at every meeting of the shareholders of the Company at which
such matters are considered and at every adjournment thereof or in connection
with any written consent of the shareholders of the Company, (b) in favor of the
election to the Company's Board of Directors of such
-5-
<PAGE>
number of Parent Representatives as Parent is permitted to cause to be elected
to the Company's Board of Directors pursuant to Section 1.4 of the Merger
Agreement, (c) against any action or agreement that would compete with, impede,
interfere with or attempt to discourage the Merger Transactions, or inhibit the
timely consummation of the Merger Transactions, (d) against any action or
agreement that would result in a breach in any material respect of any covenant,
representation or warranty or any other obligation of the Company under the
Merger Agreement and (e) against any merger, consolidation, business
combination, reorganization, recapitalization, liquidation or sale or transfer
of any material assets of the Company or its subsidiaries, except for the Merger
Transactions. The Shareholder agrees to deliver to Parent upon request a proxy
substantially in the form attached hereto as Exhibit A, which proxy shall be
irrevocable during the term of this Agreement to the fullest extent permitted
under Ohio law.
3.2 No Voting Trusts. The Shareholder agrees that it will not, nor
----------------
will it permit any entity under their control to, deposit any of the Shareholder
Shares or any New Shares held by it in a voting trust or subject any of the
Shareholder Shares or any New Shares held by it to any arrangement with respect
to the voting of the Shareholder Shares that could result in a shareholder's
vote or action by consent of the shareholders of the Company in opposition to or
in competition with the consummation of the Merger Transactions.
3.3 No Proxy Solicitations. The Shareholder agrees that it will not,
----------------------
nor will it permit any entity under its control to, (a) solicit proxies or
become a "participant" in a "solicitation" (as such terms are defined in
Regulation 14A under the 1934 Act) in opposition to or competition with the
consummation of the Merger Transactions or otherwise encourage or assist any
party in taking or planning any action which would compete with, impede,
interfere with or attempt to discourage the Merger Transactions or inhibit the
timely consummation of the Merger Transactions, (b) directly or indirectly
encourage, initiate or cooperate in a shareholders' vote or action by consent of
the Company's shareholders in opposition to or in competition with the
consummation of the Merger Transactions, or (c) become a member of a "group" (as
such term is used in Section 13(d) of the 1934 Act) with respect to any voting
securities of the Company for the purpose of
-6-
<PAGE>
opposing or competing with the consummation of the Merger Transactions.
3.4 Waiver of Dissenters' Rights. The Shareholder hereby
----------------------------
unconditionally and irrevocably waives its rights pursuant to Sections 1701.84
et seq. of the Ohio General Corporation Law to exercise appraisal rights or
- -- ---
dissenters' rights with respect to the Offer, the Merger, or the other
transactions contemplated by the Merger Agreement.
ARTICLE IV
Other Agreements
----------------
4.1 No Transfer or Encumbrance. In addition to and notwithstanding
--------------------------
the provisions of Section 1.8 of the Standstill Agreement, the Shareholder
agrees not to transfer, sell, offer, exchange, pledge or otherwise dispose of or
encumber any of the Warrants, Shareholder Shares or New Shares on or after the
date hereof and during the term of this Agreement, except for tenders in
accordance with Section 2.4, unless the transferee agrees in writing in form
satisfactory to the Company and Parent to be bound by the terms of this
Agreement.
4.2 No Additional Purchases or Acquisitions. In addition to and
---------------------------------------
notwithstanding the provisions of Sections 1.1 and 2.4 of the Standstill
Agreement, the Shareholder agrees that it will not purchase or otherwise acquire
beneficial ownership of any Shares or any other capital stock of the Company
after the execution of this Agreement ("New Shares"), nor will the Shareholder
voluntarily acquire the right to vote or share in the voting of any Shares or
any other capital stock of the Company other than the Shareholder Shares, unless
(in either case) the Shareholder agrees to deliver to the Board of Directors of
the Company immediately after such purchase or acquisition an irrevocable proxy
in the form attached hereto as Exhibit A with respect to such New Shares. The
Shareholder also agrees that any New Shares acquired or purchased by it shall be
subject to the terms of this Agreement to the same extent as if they constituted
Shareholder Shares.
4.3 First Amendment to Standstill Agreement. The Standstill
---------------------------------------
Agreement is hereby amended ab initio, as of the
-7-
<PAGE>
execution of this Agreement, to amend Section 1.4 thereof by adding the
following clause to the end of such Section:
", except the Share Repurchase Agreement, dated January 15, 1998, among OHM
Corporation, Waste Management, Inc., Rust International Inc. and
International Technology Corporation."
4.4 Second Amendment to Standstill Agreement. The Standstill
----------------------------------------
Agreement is hereby further amended ab initio, as of the occurrence of the
Repurchase Closing, to delete therefrom Sections 2.1 through 2.7 thereof in
their entirety.
4.5 Third Amendment to Standstill Agreement. The Standstill
---------------------------------------
Agreement is hereby further amended ab initio, as of the Repurchase Closing, to
delete therefrom Sections 3.1, 3.2 and 3.3 thereof in their entirety.
4.6 Release from Intercreditor Agreement. The Shareholder hereby
------------------------------------
consents to the payment by the Company of a pro rata taxable distribution (the
--- ----
"NSC Distribution") to holders of record of the Shares of all of the shares of
common stock, par value $0.01 per share, of NSC Corporation held by the Company
(the "NSC Shares") and waives its rights to reimbursement pursuant to the
Reimbursement Agreement, dated as of May 31, 1995, among the Company,
Remediation and the Shareholder, and the Intercreditor Agreement, dated as of
May 31, 1995, among the Shareholder, the Administrative Agent and the Issuing
and Paying Agent, and hereby releases the NSC Shares from any security interest
(pursuant to pledge agreements or otherwise) which the Shareholder may have with
respect to such NSC Shares. The Shareholder agrees to execute any documents
reasonably necessary to give effect to the provisions of this Section, promptly
upon request therefor made by the Company.
4.7 Termination of the Guaranty Agreement. The parties hereby agree
-------------------------------------
that the Guaranty Agreement, dated as of May 30, 1995, between the Company and
the Shareholder, shall be terminated effective as of the Common Termination
Date.
4.8 Cancellation of The Warrants.
----------------------------
(a) The parties hereby agree that the Warrant Agreement shall be
terminated and the Warrants shall be
-8-
<PAGE>
canceled effective as of the date on which the Guaranty, made as of May 31,
1995, by the Shareholder in favor of the Banks listed therein (the "Guaranty")
terminates in accordance with Section 10(a) thereof (such date, the "Common
Termination Date"), without the payment of any separate consideration therefor.
The parties hereby agree to use their reasonable best efforts to cause the
events specified in Section 10(a) of the Guaranty to occur prior to the second
business day subsequent to the Effective Time.
(b) The Shareholder agrees not to exercise its rights pursuant to
Sections 3.1 or 3.2 of the Warrant Agreement prior to the earlier to occur of
(i) the second business day subsequent to the Effective Time, and (ii) the
termination of the Merger Agreement in accordance with its terms.
(c) The Shareholder agrees not to exercise its rights pursuant to
Section 2.2 of the Warrant Agreement with respect to the Merger Transactions
prior to the second business day subsequent to the Effective Time.
(d) The Shareholder hereby waives its rights under Sections 2.1
through 2.7 of the Warrant Agreement with respect to the NSC Distribution.
ARTICLE V
Miscellaneous
-------------
5.1 Specific Performance. Each party hereto acknowledges that it
--------------------
will be impossible to measure in money the damage to the other party if a party
hereto fails to comply with any of the obligations imposed by this Agreement,
that every such obligation is material and that, in the event of any such
failure, the other party will not have an adequate remedy at law or damages.
Accordingly, each party hereto agrees that injunctive relief or other equitable
remedy, in addition to remedies at law or damages, is the appropriate remedy for
any such failure and will not oppose the granting of such relief on the basis
that the other party has an adequate remedy at law. Each party hereto agrees
that it will not seek, and agrees to waive any requirement for, the securing or
posting of a bond in connection with any other party's seeking or obtaining such
equitable relief.
-9-
<PAGE>
5.2 Entire Agreement. This Agreement and the Standstill Agreement
----------------
(as herein amended) supersedes all prior agreements, written or oral, among the
parties hereto with respect to the subject matter hereof and contains the entire
agreement among the parties with respect to the subject matter hereof. This
Agreement may not be amended, supplemented or modified, and no provisions hereof
may be modified or waived, except by an instrument in writing signed by all the
parties hereto. No waiver of any provisions hereof by any party shall be deemed
a waiver of any other provisions hereof by any such party, nor shall any such
waiver be deemed a continuing waiver of any provision hereof by such party.
5.3 Notices. Any notice, request, instruction or other document to
-------
be given hereunder by any party to the others shall be in writing and delivered
personally or sent by registered or certified mail, postage prepaid, or by
facsimile:
if to the Shareholder or Rust:
-----------------------------
Herbert A. Getz
Waste Management, Inc.
3003 Butterfield Road
Oak Brook, Illinois 60523
Telecopier: (630) 572-9130
with a copy to:
John H. Bitner
Bell, Boyd & Lloyd
Three First National Plaza
70 West Madison Street, Suite 3300
Chicago, Illinois 60602-4207
Telecopier: (312) 372-2098
if to the Company:
-----------------
Steven E. Harbour
OHM Corporation
5445 Triangle Parkway, Suite 400
Norcross, Georgia 30092
Telecopier: (770) 849-3110
-10-
<PAGE>
with a copy to:
Joseph B. Frumkin
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Telecopier: (212) 558-3588
and a copy to:
Thomas C. Daniels
Jones Day Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Telecopier: (216) 579-0212
if to Parent:
------------
James G. Kirk
International Technology Corporation
2790 Mosside Boulevard
Monroeville, PA 15146-2792
Telecopier: (412) 858-3978
with a copy to:
Peter F. Ziegler
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue
Los Angeles, California 90071
Telecopier: (213) 229-7520
or to such other persons or addresses as may be designated in writing by the
party to receive such notice as provided above.
5.4 Miscellaneous.
-------------
(a) This Agreement shall be deemed a contract made under, and for all
purposes shall be construed in accordance with, the laws of the State of Ohio
applicable to agreements executed in and solely to be performed within such
State.
(b) If any provision of this Agreement or the application of such
provision to any person or circumstances shall be held invalid or unenforceable
by a court of
-11-
<PAGE>
competent jurisdiction, such provision or application shall be unenforceable
only to the extent of such invalidity or unenforceability and the remainder of
the provision held invalid or unenforceable and the application of such
provision to persons or circumstances, other than the party as to which it is
held invalid, and the remainder of this Agreement, shall not be affected.
(c) This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.
(d) This Agreement shall terminate automatically upon the termination
of the Merger Agreement. This Agreement may be terminated by the Company at any
time if the Shareholder shall have failed to comply with any of its covenants or
agreements contained in this Agreement. This Agreement may be terminated by the
Shareholder at any time if the Company shall have failed to comply with any of
its covenants or agreements contained in this Agreement.
(e) Each party hereto shall execute and deliver such additional
documents as may be necessary or desirable to effect the transactions
contemplated by this Agreement.
(f) All Section headings herein are for convenience of reference only
and are not part of this Agreement, and no construction or reference shall be
derived therefrom.
(g) The obligations of the parties set forth in this Agreement shall
not be effective or binding upon any party hereto until after such time as the
Merger Agreement is executed and delivered by the Company, Parent and Merger
Sub, and the parties agree that there is not and has not been any other
agreement, arrangement or understanding between the parties hereto with respect
to the matters set forth herein.
-12-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first written above.
OHM CORPORATION
By:__________________________
Name:
Title:
WASTE MANAGEMENT, INC.
By:__________________________
Name:
Title:
RUST INTERNATIONAL INC.
By:__________________________
Name:
Title:
INTERNATIONAL TECHNOLOGY
CORPORATION
By:__________________________
Name:
Title:
<PAGE>
(EXHIBIT A)
FORM OF PROXY
The undersigned, for consideration received, hereby appoints Anthony
J. DeLuca and James G. Kirk and each of them my proxies, with power of
substitution and resubstitution, to vote all shares of Common Stock of OHM
Corporation, an Ohio corporation (the "Company"), [and [insert any other Shares
(as defined in the Share Repurchase Agreement) or other shares of capital stock
of the Company owned by the Shareholder)]] owned by the undersigned at the
Special Meeting of Shareholders of the Company to be held [insert date, time and
place] and at any adjournment thereof IN FAVOR OF adoption of the Agreement and
Plan of Merger, dated as of January 15, 1998 (the "Merger Agreement"), among the
Company, International Technology Corporation ("Parent") and IT-Ohio, Inc., IN
FAVOR OF consummation of the Merger Transactions, IN FAVOR OF [List such number
of Parent Representatives (as defined in Section 1.4 of the Merger Agreement) as
Parent is permitted to cause to be elected to the Company's Board of Directors
pursuant to Section 1.4 of the Merger Agreement], and AGAINST [insert
description of any action or agreement that would compete with, impede,
interfere with or attempt to discourage the Merger Transactions or inhibit the
timely consummation of the Merger Transactions or any action or agreement that
would result in a breach in any material respect of any covenant, representation
or warranty or any other obligation of the Company under the Merger Agreement or
any merger, consolidation, business combination, reorganization,
recapitalization, liquidation or sale or transfer of any material assets of the
Company or its subsidiaries]. This proxy is coupled with an interest, revokes
all prior proxies granted by the undersigned and is irrevocable until such time
as the Share Repurchase Agreement, dated as of January 15, 1998 among the
undersigned and the Company terminates in accordance with its terms.
Dated _________, 1998
RUST INTERNATIONAL, INC.
By:___________________________
Name:
Title:
<PAGE>
EXHIBIT (c)(6)
September 25, 1997
Mr. James L. Kirk
Chairman, President and CEO
OHM Corporation
16406 U.S. Route 224 East
Findlay, OH 45840
Mr. Anthony J. DeLuca
President and CEO
International Technology Corporation
2790 Mosside Boulevard
Monroeville, PA 15146
Gentlemen:
In connection with a possible negotiated transaction (the "Transaction")
between OHM Corporation ("OHM") and International Technology Corporation ("ITX")
(each, a "Disclosing Party" or "Recipient," as the case may be), OHM and ITX are
each prepared to disclose to each other certain information which is non-public,
confidential or proprietary in nature ("Evaluation Material").
By execution of this letter agreement (the "Agreement"), each Recipient
agrees to treat all Evaluation Material provided by the Disclosing Party
confidentially (except as otherwise provided herein) and to observe the terms
and conditions set forth herein. For purposes of this Agreement, Evaluation
Material shall include all non-public confidential or proprietary in nature
information, regardless of the form in which it is communicated or maintained
(whether prepared by OHM, ITX or otherwise) that contains or otherwise reflects
information concerning the Disclosing Party that the Recipient or its
Representatives (as defined below) may be provided by or on behalf of the
Disclosing Party or its Representatives in the course of its evaluation of a
possible Transaction. The term "Evaluation Material" shall also include all
reports, analyses, notes or other information that are based on, contain or
reflect any Evaluation Material ("Notes"). The terms and conditions of this
Agreement shall not apply to those portions of the Evaluation Material that (i)
become generally available to the public other than as result of a disclosure by
the Recipient or any of its Representatives, (ii) were available to the
Recipient on a non-confidential basis prior to the disclosure of such Evaluation
Material to the Recipient pursuant to this Agreement, provided that the source
of such information was not known by the Recipient or any of its
Representatives, to be bound by a confidentiality agreement with or other
contractual, legal or fiduciary obligation of confidentiality to the Disclosing
Party or any of its affiliates with respect to such material or (iii) become
available on a non-confidential basis from a source other than the Disclosing
Party or its agents, advisors or representatives provided that the source of
such information was not known by the Recipient or any of its Representatives,
after inquiry, to be bound by a confidentiality agreement with or other
contractual, legal or fiduciary obligation of confidentiality to the Disclosing
Party or any of its affiliates with respect to such material.
<PAGE>
Page 2 September 25, 1997
The Recipient agrees that it will not use the Evaluation Material for
any purpose other than determining whether it wishes to enter into a
Transaction. The Recipient agrees not to disclose or allow disclosure to others
of any Evaluation Material; except that the Recipient may disclose Evaluation
Material to its directors, officers, employees, partners, affiliates, agents,
advisors or representatives (hereinafter, "Representatives") to the extent
necessary to permit such Representatives to assist in making the determination
referred to in the prior sentence, provided, however, that the Recipient shall
inform its Representatives of the confidential nature of the Evaluation
Material. The Recipient's obligation of confidentiality and non-use hereunder
shall expire 24 months after the last receipt of Evaluation Material.
In addition, the Recipient will not make any disclosure that it is
having or has had discussions concerning a Transaction, that it has received
Evaluation Material or that it is considering a possible Transaction; provided
that the Recipient may make such disclosure if it has received the opinion of
counsel that such disclosure must be made in order that the Recipient not commit
a violation of law and, prior to such disclosure, it promptly advises and
consults with the Disclosing Party and its legal counsel concerning the
information proposed to be disclosed.
Although the Disclosing Party has endeavored to include in the
Evaluation Material information known to it which it believes to be relevant for
the purpose set forth herein, neither of the Disclosing Parties nor any of their
respective affiliates, agents, advisors or representatives (i) have made or make
any representation or warranty, expressed or implied, as to the accuracy or
completeness of the Evaluation Material or (ii) shall have any liability
whatsoever to the Recipient or its Representatives relating to or resulting from
the use of the Evaluation Material or any errors therein or omissions therefrom.
Furthermore, the Disclosing Party shall not be obligated to provide any
information concerning pricing, cost or bidding, which in such party's or its
counsel's opinion may involve or lead to involvement in violations of antitrust
or procurement laws.
In the event that the Recipient or anyone to whom the Recipient
transmits any Evaluation Material in accordance with this Agreement is requested
or required (by deposition, interrogatories, requests for information or
documents in legal proceedings, subpoenas, civil investigative demand or similar
process), in connection with any proceeding, to disclose any Evaluation
Material, the Recipient will give the Disclosing Party prompt written notice of
such request or requirement so that the Disclosing Party may seek an appropriate
protective order or other remedy and/or waive compliance with the provisions of
this Agreement, and the Recipient will cooperate with the Disclosing Party to
obtain such protective order. In the event that such protective order or other
remedy is not obtained or the Disclosing Party waives compliance with the
relevant provisions of this Agreement, the Recipient (or such other persons to
whom such request is directed) will furnish only that portion of the Evaluation
Material which, in the opinion of counsel, is legally required to be disclosed
and, upon the Disclosing Party's request, use best efforts to obtain assurances
that confidential treatment will be accorded to such information.
If the Recipient decides that it does not wish to explore a possible
Transaction, it will promptly notify Disclosing Party of that decision. In that
case, or if the Disclosing Party shall elect at any time to terminate further
access to the Evaluation Material for any reason, if the Disclosing Party
requests in writing, the Recipient will promptly redeliver to the Disclosing
Party all copies of
<PAGE>
Page 3 September 25, 1997
the Evaluation Material and destroy all Notes. Notwithstanding the return or
destruction of Evaluation Material and Notes, the Recipient and its
Representatives will continue to be bound by its obligations of confidentiality
and other obligations hereunder.
The Recipient understands that the Disclosing Party shall have the right
to reject or accept any proposal by the Recipient, for any reason whatsoever, in
its sole discretion and neither the Disclosing Party nor any of its
Representatives shall have any claims whatsoever against the other Disclosing
Party or any of their respective directors, officers, stockholders, owners,
affiliates or agents arising out of or relating to the Transaction (other than
those against the parties to a definitive agreement in accordance with the terms
thereof). Each party hereto agrees that unless and until a definitive agreement
between OHM and ITX with respect to any Transaction has been executed and
delivered, neither party will be under any legal obligation of any kind
whatsoever with respect to such Transaction.
Each Recipient agrees that money damages would not be a sufficient
remedy for any breach of this Agreement by it or its Representatives, that in
addition to all other remedies, the Disclosing Party shall be entitled to
specific performance and injunctive or other equitable relief as a remedy for
any such breach, and the Recipient further agrees to waive, and to use its best
efforts to cause its Representatives to waive, any requirement for the securing
or posting of any bond in connection with such remedy. In the event of
litigation relating to this letter agreement, if a court of competent
jurisdiction determines that the Recipient or any of its Representatives have
breached this letter agreement, the Recipient shall be liable and pay to the
Disclosing Party the reasonable legal fees incurred by the Disclosing Party and
its Representatives in connection with such litigation, including any appeal
therefrom.
All modifications of, waivers of and amendments to this Agreement or any
part hereof must be in writing signed on behalf of each Disclosing Party. You
acknowledge that each Disclosing Party is intended to be benefited by this
Agreement and that each Disclosing Party shall be entitled to enforce this
Agreement and to obtain for itself the benefit of any remedies that may be
available for the breach hereof.
It is further understood and agreed that no failure or delay by either
Disclosing Party in exercising any right, power or privilege under this
Agreement shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise of any right, power or
privilege hereunder.
Each of OHM and ITX hereby irrevocably and unconditionally submit to the
exclusive jurisdiction of any State or Federal court sitting in New York City
over any suit, action or proceeding arising out of or relating to this letter.
Each hereby agrees that service of any process, summons, notice or document by
U.S. registered mail addressed to either party shall be effective service of
process for any action, suit or proceeding brought against you in any such
court. Each party hereby irrevocably and unconditionally waives any objection to
the laying of venue of any such suit, action or proceeding brought in any such
court and any claim that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum. Each party agrees that a final
judgment in any such suit, action or proceeding brought in any such court shall
be
<PAGE>
Page 4 September 25, 1997
conclusive and binding upon either party and may be enforced in any court to
whose jurisdiction either party is or may be subject, by suit upon such
judgment.
In the event that any provision or portion of this letter is determined
to be invalid or unenforceable for any reason, in whole or in part, the
remaining provisions of this letter shall be unaffected thereby and shall remain
in full force and effect to the fullest extent permitted by applicable law.
This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York.
If you are in agreement with the foregoing, please so indicate by
signing, dating and returning one copy of this Agreement, which will constitute
our agreement with respect to the matters set forth herein.
Agreed and accepted:
OHM Corporation International Technology Corporation
By: /s/ By: /s/ Anthony J. De Lucca
------------------------------ ------------------------------
Title: VP Comp Director Title: CEO
--------------------------- ---------------------------
Date: 10/10/97 Date: Oct. 1, 1997
--------------------------- ---------------------------
