OHM CORP, PREM14A, 1995-02-24

OHM CORP
PREM14A, 1995-02-24
HAZARDOUS WASTE MANAGEMENT

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<PAGE> 1

SCHEDULE 14A
(RULE 14A-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant /X/

Filed by a Party other than the Registrant / /

Check the appropriate box:

/X/ Preliminary proxy statement
/ / Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12

OHM CORPORATION
- - - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- - - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):

/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2).

/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).

/X/ Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
$15,293

(1) Title of each class of securities to which transaction applies:

COMMON STOCK, PAR VALUE $.10 PER SHARE
(2) Aggregate number of securities to which transaction applies:

10,368,000
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1

$7,375*
(4) Proposed maximum aggregate value of transaction:

$76,464,000

/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount previously paid:

(2) Form, schedule or registration statement no.:

(3) Filing party:

(4) Date Filed:

- - - ---------------
1 Set forth the amount on which the filing fee is calculated and state how it
was determined.

* Average of the high and low sales price on The New York Stock Exchange on
February 22, 1995.
<PAGE> 2

[LOGO]
OHM CORPORATION

February 24, 1995
JAMES L. KIRK
Chairman of the Board
President
Chief Executive Officer

Dear Fellow Shareholders:

I am pleased to enclose a preliminary Proxy Statement for OHM's 1995 Annual
Meeting of Shareholders, which was filed today with the Securities and Exchange
Commission, and a copy of our 1994 Annual Report. Because this is only a
preliminary proxy statement, there is no action for you to take at this time.
You will receive a final copy of our 1994 Annual Report and the definitive Proxy
Statement in April, along with a proxy card, so that you can vote on the issues
to be considered at our Annual Meeting on May 11, 1995.

The attached preliminary Proxy Statement details the proposed merger of Rust
International's hazardous and nuclear waste remediation businesses with our own,
which OHM's Board of Directors unanimously approved.

The merger is an important step in OHM's strategic plan, and will position your
company for significant future growth and profitability. The benefits of the
transaction include the following:

- - - - OHM will now be the largest company focused entirely on remediation, with pro
forma combined 1994 revenues of more than $550 million. Our combined
resources will include 3,100 employees, a nationwide client base in the
public and private sectors, and a contract backlog of $2.1 billion.

- - - - The transaction will substantially strengthen OHM's financial position. The
Company's balance sheet will improve significantly; OHM's cash flow should
increase; and WMX Technologies, Inc., Rust's parent company, will provide a
$75 million, five-year guarantee of the Company's debt obligations, which
should lead to lower interest rates.

- - - - We expect to achieve substantial operating cost savings through the
combination of the two companies.

- - - - We expect that OHM, with its expanded resources and resulting size, will be
viewed even more favorably by the government in determining future awards of
government term contracts.

- - - - The combination should immediately add to earnings per share.

Two other issues to be considered at the meeting include the election of
Directors and approval of the Directors' Deferred Fee Plan. Six current
Directors are up for re-election to the Board, and, upon closing the Rust
transaction, the Company will increase the size of its Board to nine by adding
three designees of Rust. The Directors' Deferred Fee Plan will help to further
align the interests of Directors and shareholders and assist in attracting and
retaining qualified individuals to serve as Directors.

We appreciate your continued support of OHM, and we hope you will vote in favor
of the Rust transaction when you receive your final Proxy Statement and proxy
card in April.

Sincerely,

/S/ James L. Kirk

THIS IS ONLY A PRELIMINARY PROXY STATEMENT, AND THERE IS NO ACTION FOR YOU
TO TAKE AT THIS TIME. You will receive a final copy of the Proxy Statement and a
proxy card in April, so that you can vote on issues to be raised at our Annual
Meeting on May 11, 1995. If you have any questions in the meantime, please
contact our Information Agent:

GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005

Or call toll free to 1-800-223-2064

<TABLE>
<S> <C> <C> <C>
16406 U.S. Route 224 East -- P.O. Box 551 -- Findlay, Ohio 45839-0551 -- 419-428-3529
</TABLE>

<PAGE> 3

PRELIMINARY COPY
FEBRUARY 24, 1995
[LOGO]
OHM CORPORATION

16406 U.S. ROUTE 224 EAST
FINDLAY, OHIO 45840
------------------------

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 11, 1995
------------------------

This preliminary copy of a Proxy Statement is being furnished to you solely
for informational purposes and is not accompanied by a form of Proxy. You are
not being asked to execute and deliver a form of Proxy with respect to the
matters described herein at this time. The information set forth herein is
subject to change, and you will receive a Definitive Proxy Statement reflecting
such changes, as well as a form of Proxy, which you will be asked to execute and
deliver with respect to the matters described herein at a later time. A
preliminary copy of this Proxy Statement has been filed with the Securities and
Exchange Commission.

To the Shareholders of
OHM Corporation:

The Annual Meeting of Shareholders of OHM Corporation (the "Company") will
be held at the Elks Lodge located at 601 South Main Street, Findlay, Ohio 45840
on Thursday, May 11, 1995, at 10:00 a.m. local time for the following purposes:

1. To consider and act upon a proposal to issue an aggregate of 10,368,000
shares of the Company's common stock, par value $.10 per share, to Rust
International Inc., a majority-owned subsidiary of WMX Technologies,
Inc. in connection with the merger of a wholly-owned subsidiary of Rust
International Inc. with and into OHM Remediation Services Corp., a
wholly-owned subsidiary of the Company, pursuant to an Agreement and
Plan of Reorganization, dated as of December 5, 1994.

2. To elect six Directors to serve for the ensuing year;

3. To consider and act upon a proposal to approve the Company's Directors'
Deferred Fee Plan; and

4. To transact such other business as may properly come before the meeting
or any adjournment thereof.

Only shareholders of record at the close of business on March 31, 1995,
will be entitled to vote at the meeting and any adjournment thereof. A list of
such shareholders will be available at the time and place of the meeting and,
during the ten days prior to the meeting, at the Company's principal office.

By Order of the Board of Directors

/S/ RANDALL M. WALTERS
RANDALL M. WALTERS
Vice President, General Counsel
and Secretary
Findlay, Ohio

April , 1995
<PAGE> 4

OHM CORPORATION
16406 U.S. ROUTE 224 EAST
FINDLAY, OHIO 45840
------------------------

PROXY STATEMENT FOR THE 1995 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 11, 1995
------------------------

OHM Corporation (the "Company") is mailing this Proxy Statement to the
Company's shareholders in connection with the solicitation of proxies by the
Company's Board of Directors. The proxies will be used at the Annual Meeting of
Shareholders to be held at 10:00 a.m. on Thursday, May 11, 1995, at the Elks
Lodge, located at 601 South Main Street, Findlay, Ohio 45840 and at any
adjournment thereof (the "Annual Meeting").

At the Annual Meeting, the Company's shareholders will be asked to consider
and vote upon (i) the issuance of an aggregate of 10,368,000 shares of the
Company's common stock, par value $.10 per share (the "Common Stock") to
subsidiaries of Rust International Inc. ("Rust"), a majority-owned subsidiary of
WMX Technologies, Inc. ("WMX"), pursuant to the Agreement and Plan of
Reorganization dated December 5, 1994 (the "Reorganization Agreement") by and
among the Company, Rust Remedial Services Inc. ("Remedial"), Enclean
Environmental Services Group, Inc. ("Enclean"), Rust Environmental Inc.
("Environmental") and Rust whereby the Company will acquire, through a merger of
Environmental with and into the Company's wholly-owned subsidiary, OHM
Remediation Services Corp. ("OHMR"), substantially all of the assets and
certain of the liabilities comprising the environmental remediation services
businesses conducted by Rust through its subsidiaries (the "Division"), (ii) the
election as directors of the six nominees named below, and (iii) the proposal to
approve the Company's Directors' Deferred Fee Plan.

If a shareholder properly executes and returns the enclosed form of proxy
and specifies a choice with respect to any matter to be acted upon at the Annual
Meeting, it will be voted according to his or her instructions. If no
instructions are given, the proxy will be voted for the proposal to issue shares
of Common Stock to Rust pursuant to the Reorganization Agreement, for the
election as directors of the six nominees identified in this Proxy Statement,
for the approval of the Company's Directors' Deferred Fee Plan and in the
discretion of the proxies with respect to any other matter that may come before
the Annual Meeting. Any proxy may be revoked by a later appointment received by
the Company or by giving notice of revocation to the Company in writing or in
open meeting before the proxy is exercised. No appraisal rights exist for any
action proposed to be taken at the Annual Meeting.

The Company will pay the expenses of soliciting proxies, including the
charges and expenses of brokers, nominees, fiduciaries and custodians incurred
in sending proxy materials to principals and obtaining their instructions. In
addition to the use of the mail, proxies may be solicited in person or by
telephone, telecopy or other electronic means. Directors, officers and regular
employees of the Company may solicit proxies without additional compensation.
The Company has retained Georgeson & Company, Inc., New York, New York, to aid
in the solicitation of proxies.

This Proxy Statement and the accompanying form of proxy are being mailed to
shareholders on or about April , 1995.

VOTING

The Board of Directors has fixed the close of business on March 31, 1995 as
the record date (the "Record Date") for determining the shareholders entitled to
notice of and to vote at the Annual Meeting. As of the Record Date, there were
outstanding shares of the Company's Common Stock, all of one class and
all of which are entitled to be voted at the Annual Meeting. Holders of issued
and outstanding shares of Common Stock are entitled to one vote for each share
held.
<PAGE> 5

<TABLE>

TABLE OF CONTENTS

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PAGE
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SUMMARY............................................................................... 5
Proposed Transaction........................................................... 5
The Meeting.................................................................... 9

SUMMARY FINANCIAL DATA................................................................ 10
The Company.................................................................... 10
The Division................................................................... 12
Pro Forma Combined............................................................. 13

THE MEETING........................................................................... 14
The Proposals.................................................................. 14
Record Date; Voting............................................................ 14
Proxies........................................................................ 15

THE PROPOSED TRANSACTION.............................................................. 16
Background of the Transaction.................................................. 16
Reasons for the Proposed Transaction -- Recommendation of the Board of
Directors..................................................................... 18
Opinion of Financial Advisor................................................... 19
Engagement of Lazard Freres.................................................... 22
Certain Effects of the Proposed Transaction.................................... 22
Accounting Treatment........................................................... 22
Certain Federal Income Tax Consequences........................................ 22

THE REORGANIZATION AGREEMENT.......................................................... 23
General........................................................................ 23
Adjustments.................................................................... 23
Representations and Warranties of the Company.................................. 24
Representations and Warranties of Rust......................................... 24
Certain Covenants of the Company............................................... 24
Certain Covenants of Rust...................................................... 25
Conditions..................................................................... 25
Certain Business Agreements.................................................... 25
Indemnification................................................................ 26
Termination.................................................................... 26
Standstill and Non-Competition Agreement....................................... 26
The Merger Agreement........................................................... 27

THE COMPANY........................................................................... 28
General........................................................................ 28
OHM's Environmental Remediation Services....................................... 28
Treatment Technologies......................................................... 29
Focus on larger Projects and Government Contracts.............................. 31
Environmental Contractor Risks................................................. 32
Dependence on Environmental Regulation......................................... 33
Markets and Customers.......................................................... 33
Seasonality and Fluctuation in Quarterly Results............................... 33
Competition.................................................................... 33
Insurance...................................................................... 34
Employees...................................................................... 34
Patents........................................................................ 34
Regulation..................................................................... 35
Backlog and Potential Value of Term Contracts.................................. 36
</TABLE>

2
<PAGE> 6

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Equity Investments............................................................. 36
Properties..................................................................... 37
Legal Proceedings.............................................................. 37

THE DIVISION.......................................................................... 38
Hazardous and Radioactive Substance Remediation Services....................... 38
Markets and Customers.......................................................... 39
Competition.................................................................... 40
Insurance...................................................................... 40
Employees...................................................................... 41
Technology and Other Rights.................................................... 41
Regulation..................................................................... 41
Backlog........................................................................ 42
Properties..................................................................... 42
Legal Proceedings.............................................................. 42

SELECTED FINANCIAL DATA -- THE COMPANY............................................... 43

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS -- THE COMPANY....................................... 45

SELECTED FINANCIAL DATA -- THE DIVISION............................................... 53

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS -- THE DIVISION...................................... 54

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION.......................... 57

COMPARATIVE MARKET PRICE AND DIVIDEND DATA............................................ 62

ELECTION OF DIRECTORS................................................................. 63
Information Concerning the Nominees............................................ 63
Committees of the Board of Directors and Meetings Held......................... 64
Directors' Fees................................................................ 65

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF....................................... 65

EXECUTIVE COMPENSATION AND OTHER INFORMATION.......................................... 67
Summary of Cash and Certain Other Compensation................................. 67
Stock Options.................................................................. 67
Option Exercises and Holdings.................................................. 68
Employment and Indemnification Agreements...................................... 68
Compensation and Stock Option Committee Interlocks and Insider Participation... 69
Board Compensation and Stock Option Committee Report........................... 69
Performance Graph.............................................................. 71

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS........................................ 72
Transactions with Management................................................... 72

APPROVAL OF DIRECTORS' DEFERRED FEE PLAN.............................................. 72
Principal Features............................................................. 72
Federal Tax Consequences....................................................... 73
General........................................................................ 73
Approval by Shareholders....................................................... 73

INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS.............................................. 73
</TABLE>

3
<PAGE> 7

<TABLE>
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PAGE
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<S> <C>
SHAREHOLDER PROPOSALS................................................................. 73

OTHER MATTERS......................................................................... 74

AUDITED FINANCIAL STATEMENTS.......................................................... F-1
The Company.................................................................... F-1
NSC Corporation................................................................ F-20
The Division................................................................... F-36

APPENDIX A: OPINION OF ALEX. BROWN & SONS INCORPORATED

APPENDIX B: AGREEMENT AND PLAN OF REORGANIZATION DATED DECEMBER 5, 1994, AMONG OHM
CORPORATION, RUST REMEDIAL SERVICES INC., ENCLEAN ENVIRONMENTAL SERVICES
GROUP, INC., RUST ENVIRONMENTAL INC. AND RUST INTERNATIONAL INC.

APPENDIX C: DIRECTORS' DEFERRED FEE PLAN
</TABLE>

4
<PAGE> 8

SUMMARY

The following is a summary of certain information contained elsewhere in
this Proxy Statement. Reference is made to, and this Summary is qualified in its
entirety by, the more detailed information contained in this Proxy Statement and
the Appendices attached hereto. Shareholders are urged to read this Proxy
Statement and the Appendices attached hereto in their entirety.

PROPOSED TRANSACTION

The Company................... The Company is a leading provider of
technology-based, on-site hazardous waste
remediation services to federal, state and
local government agencies and departments and
chemical, petroleum, transportation and
industrial companies. The Company provides its
services through 29 regional offices, one fixed
laboratory, nine mobile laboratories, and over
3,000 pieces of mobile treatment and related
field equipment. The Company specializes in
applying a full spectrum of on-site
technologies, including biological, chemical,
physical, soil vapor extraction and thermal
technologies, to remediate hazardous and
industrial wastes on both a planned and an
emergency response basis. The Company's
principal executive office is located at 16406
U.S. Route 224 East, Findlay, Ohio 45840 and
its telephone number is (419) 423-3526. See
"THE PROPOSED TRANSACTION -- The Company."

The Division.................. The Division provides field services for the
on-site remediation of sites contaminated with
hazardous waste, radioactive materials, mixed
waste and hazardous substances to commercial
customers in the industrial, manufacturing,
utility, and nuclear sectors and to government
clients. The Division initially operated as a
part of Chemical Waste Management, Inc.
("CWM"), a subsidiary of WMX and a leading
provider of hazardous waste management
services. As a CWM division, the Division
originally focused primarily on the removal and
transportation of hazardous substances from
customer locations to off-site treatment and
disposal operations of CWM. In the early
1990's, the Division's business began to change
from removal for off-site treatment and
disposal to on-site remediation requiring
extensive engineering, technological and
project management skills. In January 1993 the
Division's businesses were contributed to Rust,
whose principal business is to provide
engineering, construction, environmental and
infrastructure consulting and other on-site
industrial and related services. See "THE
PROPOSED TRANSACTION -- The Division."

Reorganization Agreement:
General....................... Under the Reorganization Agreement, the Company
will, subject to the terms and conditions set
forth in the Reorganization Agreement, acquire
substantially all of the assets and certain of
the liabilities comprising the Division through
the merger of Environmental with and into OHMR
(the "Merger"), and the shares of common stock
of Environmental will be converted into the
right to receive 10,368,000 newly-issued shares
of Common Stock. See "THE REORGANIZATION
AGREEMENT -- General."

Certain Other Aspects of the
Reorganization Agreement.... Pursuant to the Reorganization Agreement, the
net book value of the assets being transferred
(the "Transferred Assets") may be

5
<PAGE> 9

adjusted based on the average per share price
of the Company's Common Stock for a 20 trading
day period prior to Closing (the "Closing
Price"). Under the Reorganization Agreement,
Rust makes customary representations and
warranties regarding the Division. Furthermore,
Rust has agreed to (i) pay one-half, up to
$500,000, of all costs and expenses incurred
within 180 days of the Closing in connection
with the closing of offices and certain other
costs of the Merger, (ii) assist the Company in
obtaining employment agreements with designated
management employees, (iii) allow the Company
to provide certain environmental remediation
services under government Total Environmental
Restoration Contracts ("TERCs"), and (iv) use
reasonable efforts to assist the Company in
securing discounts and other favorable pricing
arrangements from vendors that are generally
available to WMX affiliates. The Company,
pursuant to the Reorganization Agreement, shall
offer employment to substantially all of the
Division's active employees. As a condition to
the Company's obligation to effect the Closing
under the Reorganization Agreement, the Company
must have the right, immediately after the
Closing, and upon the satisfaction of certain
conditions, to cause WMX to guarantee
indebtedness of the Company up to $75,000,000,
for a period of five years (the "WMX
Guarantee"). The Reorganization Agreement also
contemplates (i) a Standstill and
Non-Competition Agreement (the "Standstill
Agreement") providing for certain arrangements
with respect to ownership and voting of the
Common Stock held by WMX, Rust and their
respective affiliates, both in their individual
capacities and collectively (the "WMX Group"),
certain non-competition agreements and certain
preferred provider arrangements, and (ii) a
Merger Agreement pursuant to which
Environmental will merge with and into OHMR and
the Environmental common stock will be
converted into the right to receive Company
Common Stock (the "Merger Agreement"). See "THE
REORGANIZATION AGREEMENT -- Adjustments,"
"-- Representations and Warranties of Rust,"
"-- Certain Covenants of the Company,"
"-- Certain Covenants of Rust,"
"-- Conditions," and "-- Certain Business
Agreements."

Certain Effects of the
Reorganization Agreement,
including Dilution.......... As a result of the Merger, Environmental will
be merged with and into OHMR and the Company
will become one of the largest providers of
environmental remediation services in the
United States. Also, as a result of the
conversion of the Environmental shares into the
right to receive 10,368,000 shares of Common
Stock, the Company will be owned 40% by Rust
and its subsidiaries and 60% by the existing
Company shareholders. See "THE PROPOSED
TRANSACTION -- Certain Effects of the Proposed
Transaction."

Standstill and Non-Competition
Agreement................... The Standstill Agreement provides that no
member of the WMX Group will acquire any of the
Company's Common Stock or any of the Company's
other securities entitled to vote generally for
the election of directors, in each case now or
hereinafter outstanding (the "Voting
Securities") other than (i) pursuant to the
Reorgani-

6
<PAGE> 10

zation Agreement, or (ii) in acquisitions that
do not result in the aggregate ownership by the
WMX Group of more than 40% of the Company's
Voting Securities, or such lesser percentage as
may exist from time to time as the result of
voluntary dispositions by the WMX Group (the
"Ownership Limit").

Pursuant to the Standstill Agreement, no member
of the WMX Group shall acquire Voting
Securities which would result in the WMX Group
owning Voting Securities beyond the Ownership
Limit unless the acquisition is (i) made
pursuant to an offer for all of the Company's
outstanding Voting Securities at the same
price, or (ii) is approved by either the
Company's independent directors or the
Company's shareholders, other than the WMX
Group and certain other shareholders, pursuant
to the Control Share Acquisition provisions of
the Company's Amended and Restated Articles of
Incorporation. The Standstill Agreement also
provides that if the WMX Group's ownership
level falls below 20% of the outstanding Voting
Securities, the WMX Group shall have an option
to purchase from the Company sufficient Voting
Securities at fair market value to raise its
ownership to not more than 21% of the
outstanding Voting Securities. The WMX Group,
pursuant to the Standstill Agreement, agrees,
among other things, not to solicit proxies in
opposition to any matter recommended by a
majority of the Company's directors not
representing Rust (the "Non-Rust Directors"),
or to solicit a tender offer or business
combination.

Immediately following the Closing, three
designees of the WMX Group shall be elected to
the Company's Board of Directors and
thereafter, as long as the WMX Group owns at
least 20% of the Voting Securities, the Company
will include as nominees to the Board a number
of Rust designees proportionate to the WMX
Group's ownership interest (to the lowest
corresponding whole directorship). Furthermore,
so long as the WMX Group owns at least 20% of
the outstanding Voting Securities, WMX shall
take all actions in its control to include at
least three independent directors on the
Company's Board. The Standstill Agreement
provides that the WMX Group shall vote its
Common Stock for the Company's nominees to the
Board of Directors selected by a majority of
the Non-Rust Directors. The WMX Group shall
vote on all other matters (i) in accordance
with the recommendations of the majority of the
Non-Rust Directors or (ii) if no recommendation
is made, in the same proportion as other
stockholders of the Company shall vote.

Pursuant to the Standstill Agreement WMX, Rust
and their respective wholly-owned subsidiaries
(the "WMX Affiliates") have agreed not to
engage in the business of providing field
services for the on-site remediation of
hazardous substances in North America for seven
years after the Closing except as otherwise
provided in the Standstill Agreement. The
Standstill Agreement also provides that for so
long as the WMX Group owns at least 20% of the
outstanding Voting Securities, (i) the Company
shall be a preferred provider of certain
environmental remediation services to the WMX
Affiliates, and (ii) the WMX Affiliates shall
be

7
<PAGE> 11

preferred providers of engineering, consulting,
and design, environmental and waste management
services to the Company. Also, Rust will
provide the Company access to its engineering,
consulting, design and project management
services personnel on the same terms and
conditions as Rust provides them to WMX
Affiliates. See "THE PROPOSED
TRANSACTION -- Standstill and Non-Competition
Agreement."

Merger Agreement.............. The Reorganization Agreement provides that
substantially all of the assets and certain of
the liabilities of the Division shall be
transferred to, and be assumed by,
Environmental prior to the Merger. Pursuant to
the Merger Agreement, Environmental will merge
with and into OHMR, with OHMR being the
surviving corporation. See "THE PROPOSED
TRANSACTION -- The Merger Agreement."

Antitrust Considerations...... The waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act expired in January
1995.

Election of Directors......... The Company has nominated Messrs. Gorr,
Hollister, James Kirk, Joseph Kirk, Pogue and
Schmidt to stand for reelection as directors.
Immediately following the consummation of the
Merger, the Board of Directors shall increase
in size to nine directors and Rust has
designated Messrs. Getz, Gilbert and Ingalls to
fill the remaining directorships. See "ELECTION
OF DIRECTORS -- Information Concerning the
Nominees."

Reasons for the Proposed
Transaction; Recommendation of
the Company's Board of
Directors................... The Company's Board of Directors has
unanimously determined that the transactions
set forth in the Reorganization Agreement are
advisable and in the best interests of the
Company and unanimously recommends that the
Company's shareholders approve the issuance of
shares of Common Stock to Rust. The Board of
Directors believes that the Merger represents a
unique opportunity to increase the Company's
operating capacity by adding operating assets
and an experienced workforce and to create the
largest provider of on-site remediation
services in the United States. Further, the
directors believe that the transaction
contemplated by the Reorganization Agreement
will enhance the financial position of the
Company by reducing its leverage and increasing
its equity base. See "THE PROPOSED
TRANSACTION -- Reasons for the Proposed
Transaction -- Recommendation of the Board of
Directors."

Conditions to Closing......... The obligation of the Company to consummate the
Merger is subject to the satisfaction of
certain closing conditions including (i) the
absence of any developments or events having a
material adverse effect on the Division or the
Transferred Assets, and (ii) Environmental's
prior acquisition of the right to cause WMX to
issue the WMX Guarantee. Rust's obligation to
consummate the Merger is also subject to the
satisfaction of certain closing conditions
including (i) the absence of any developments
or events having a material adverse effect on
the Company and its subsidiaries, (ii) a
Closing Price of not less than $6.00, and (iii)
receipt by

8
<PAGE> 12

the Company of waivers by certain of the
Company's executive officers of their rights
under certain change in control employment
agreements with respect to the Merger. See "THE
REORGANIZATION AGREEMENT -- Conditions."

Certain Federal Income Tax
Consequences................ The Company will not realize any gain or loss
from the issuance of Common Stock to Rust as
payment for the Transferred Assets. See "THE
PROPOSED TRANSACTION -- Certain Federal Income
Tax Consequences."

Accounting Treatment.......... The Merger is intended to be treated as a
purchase by the Company for financial reporting
purposes. See "THE PROPOSED
TRANSACTION -- Accounting Treatment."

Opinion of Financial
Advisor....................... Alex. Brown & Sons Incorporated ("Alex. Brown")
has rendered an opinion regarding the fairness,
from a financial point of view, to the
Company's shareholders of the consideration
proposed to be paid by the Company pursuant to
the Merger. See "THE PROPOSED
TRANSACTION -- Opinion of Financial Advisor."

Appraisal Rights.............. Under Ohio law, holders of Common Stock will
not be entitled to exercise appraisal rights in
connection with the issuance of shares of
Common Stock to Rust.

Recent Prices of the Common
Stock....................... The reported closing price of the Common Stock
on The New York Stock Exchange ("NYSE") on
December 5, 1994, the last full trading day
prior to the public announcement of the signing
of the Reorganization Agreement, was $6 7/8 per
share. On April , 1995, the last full trading
day prior to the distribution of the Proxy
Statement, the reported closing price of the
Common Stock was $ per share.

THE MEETING

Time, Date and Place.......... The Annual Meeting will be held on Thursday,
May 11, 1995 at Elks Lodge located at 601 South
Main Street, Findlay, Ohio, 45840 commencing at
10:00 a.m.

Record Date: Shares Entitled
to Vote..................... Holders of record of shares of Common Stock at
the close of business on the Record Date are
entitled to notice of and to vote at the Annual
Meeting. At the close of business on the Record
Date, there were shares of Common
Stock issued and outstanding, each of which
will be entitled to one vote on each matter
scheduled to be acted upon or any matter
brought properly before the Annual Meeting.

Vote Required................. In all matters other than the election of
directors, the affirmative vote of a majority
of the issued and outstanding shares of Common
Stock present and actually voting at the Annual
Meeting in person or by proxy is required to
approve each proposal to be considered at the
Annual Meeting. Directors will be elected by a
plurality of the votes of the shares present in
person or by proxy at the Annual Meeting and
entitled to vote on the election of directors.

9
<PAGE> 13

SUMMARY FINANCIAL DATA -- THE COMPANY

The following summary historical consolidated financial information of the
Company has been derived from and should be read in conjunction with the
"AUDITED FINANCIAL STATEMENTS -- THE COMPANY," "SELECTED FINANCIAL DATA -- THE
COMPANY" and "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS -- THE COMPANY," which are included elsewhere in this
Proxy Statement.

<TABLE>

OHM CORPORATION

HISTORICAL CONSOLIDATED SUMMARY FINANCIAL DATA

<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------------
1994 1993 1992 1991 1990
---------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Gross revenues............................... $ 323,381 $242,401 $221,370 $189,137 $189,624
Net revenues................................. 220,267 175,740 161,909 137,670 141,051
Gross profit................................. 27,222 40,060 35,663 25,597 36,856
Operating income (loss)...................... (5,059) 12,950 4,818 393 14,791
Net interest expense (1)..................... 9,149 7,720 7,075 7,393 8,006
Equity in net (earnings) loss of affiliates'
continuing operations...................... (1,032) (1,600) 1,121 2,443 (2,741)
Income (loss) from continuing operations..... (7,616) 4,407 (3,114) (6,863) 14,394
Special charges (gains), net (2)............. 15,000 -- 4,712 3,950 (6,219)
Income (loss) from continuing operations
excluding special charges.................. 7,384 4,407 1,598 (2,913) 8,175
Income (loss) per share from continuing
operations................................. (0.49) 0.35 (0.26) (0.57) 1.20
Special charges (gains) per share (2)........ 0.96 -- 0.39 0.33 (0.52)
Income (loss) per share from continuing
operations excluding special charges....... 0.47 0.35 0.13 (0.24) 0.68
Weighted average number of common and common
equivalent shares outstanding.............. 15,582 12,506 12,051 12,042 12,015
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------------------------------
1994 1993 1992 1991 1990
---------- -------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
SELECTED OPERATING DATA:
Backlog (3).................................. $ 255,000 $201,000 $164,000 $ 61,000 $ 90,000
Term contracts (4)........................... 1,498,000 652,000 207,000 223,000 106,000
---------- -------- -------- -------- --------
Total contract backlog..................... $1,753,000 $853,000 $371,000 $284,000 $196,000
========== ========= ========= ========= =========
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------------------------------
1994 1993 1992 1991 1990
---------- -------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital.............................. $116,464 $ 69,985 $ 56,148 $ 43,919 $ 27,547
Total assets................................. 272,546 215,357 185,415 168,986 171,425
Long-term debt............................... 127,279 71,113 101,085 81,500 71,500
Shareholders' equity......................... 76,920 82,743 43,833 48,253 54,743
</TABLE>

10
<PAGE> 14

NOTES:

(1) Net interest expense is interest expense net of investment income. For the
years ended December 31, 1994, 1993, 1992, 1991 and 1990 investment income
was $28,000, $28,000, $31,000, $30,000, and $109,000, respectively.

(2) Special and nonrecurring items of income and expense include: (i) for the
year ended December 31, 1994, the Company recorded a special charge of
$25,000,000 ($15,000,000 net of income tax benefit of $10,000,000) to
establish a reserve for accounts receivable, primarily where such accounts
are in litigation, which was recorded as a reduction in gross revenues; (ii)
for the year ended December 31, 1992, special charges of $2,550,000 (net of
income tax benefit of $1,600,000) recorded by the Company, and $2,162,000
recorded by NSC Corporation ("NSC"), both of which relate to the
restructuring of the Company and NSC's asbestos abatement operations in
anticipation of NSC's acquisition of the asbestos abatement division of The
Brand Companies, Inc. ("Brand") (completed on May 4, 1993), and which
include provisions for legal and insurance reserves, and for certain other
matters; (iii) for the year ended December 31, 1991, charges of $3,950,000
for equity losses in Concord Resources Group, Inc. ("Concord"); and (iv) for
the year ended December 31, 1990, a nonrecurring gain of $8,275,000 (net of
income tax of $950,000) which resulted from an initial public offering of
NSC's common stock, nonrecurring charges of $1,426,000 (net of income tax
benefit of $950,000) related to a pension agreement and certain
nonproductive assets, and a charge of $630,000 (net of income tax benefit of
$420,000) for equity losses in Concord.

(3) Backlog is defined as the unearned portion of the Company's existing
contracts and unfilled orders. See "THE COMPANY -- Backlog and Potential
Value of Term Contracts."

(4) Term contracts are defined as the potential value of government term
contracts. See "THE COMPANY -- Backlog and Potential Value of Term
Contracts."

11
<PAGE> 15

SUMMARY FINANCIAL DATA -- THE DIVISION

The following historical combined summary financial information of the
Division has been derived from and should be read in conjunction with the
"AUDITED FINANCIAL STATEMENTS -- THE DIVISION," "SELECTED FINANCIAL DATA -- THE
DIVISION," and "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS -- THE DIVISION," which are included elsewhere in this
Proxy Statement.

<TABLE>

ENVIRONMENTAL REMEDIATION SERVICES BUSINESSES
OF RUST INTERNATIONAL INC.

HISTORICAL SUMMARY FINANCIAL DATA

<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------------------------------
(UNAUDITED)
---------------------
1994 1993 1992 1991 1990
-------- -------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Gross Revenues...................... $231,058 $228,457 $317,660 $233,019 $358,400
Operating Income (Loss)............. 5,977 64 (16,406) (11,937) 32,290
Income (Loss) Before Income Tax
(Benefit)......................... 1,524 (2,498) (20,148) (17,317) 26,197
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------------------------------
(UNAUDITED)
---------------------
1994 1993 1992 1991 1990
-------- -------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total Assets........................ $125,784 $133,991 $124,742 $107,318 $114,185
Noncurrent Liabilities, Including
Current Portion................... 720 400 -- -- --
Investment by Rust International.... 97,478 89,062 96,772 69,451 93,745
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------------------------------
(UNAUDITED)
---------------------
1994 1993 1992 1991 1990
-------- -------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
SELECTED OPERATING DATA:
Backlog............................. $177,000 $158,000 $155,100 $189,700 *
Term Contracts...................... 227,000 262,000 -- -- *
-------- -------- -------- --------
Total contract backlog......... $404,000 $420,000 $155,100 $189,700 *
======== ======== ======== ========
</TABLE>

* Not available

12
<PAGE> 16

UNAUDITED PRO FORMA CONDENSED COMBINED SUMMARY
FINANCIAL DATA

The following unaudited pro forma condensed combined summary financial data
gives effect to the issuance of 10,368,000 shares of Common Stock of the Company
in exchange for the net assets of the Division using the purchase method of
accounting, as if such transactions had occurred on January 1, 1994 for the pro
forma combined statement of operations data and on December 31, 1994 for the pro
forma combined balance sheet data. In addition, this data gives effect to the
allocation of purchase price to the acquired assets of the Division and does not
reflect any cost savings from operating synergies that the Company expects to
achieve from the combination. The unaudited pro forma condensed combined summary
financial data should be read in conjunction with the "UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL INFORMATION," "AUDITED FINANCIAL STATEMENTS" and
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS" for each of the Company and the Division included elsewhere in this
Proxy Statement.

<TABLE>

OHM CORPORATION AND THE ENVIRONMENTAL REMEDIATION SERVICES BUSINESSES
OF RUST INTERNATIONAL INC.
UNAUDITED PRO FORMA CONDENSED COMBINED SUMMARY FINANCIAL DATA

<CAPTION>
HISTORICAL
---------------------
THE THE PRO FORMA
COMPANY DIVISION COMBINED(2)
-------- -------- -----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA (YEAR ENDED DECEMBER 31,
1994):
Gross revenues........................................... $323,381 $231,058 $ 554,439
Operating income (loss).................................. (5,059) 5,977 4,546
Net income (loss)........................................ (7,616) 914(3) (152)
Net income (loss) per share.............................. (0.49) -- (0.01)
Weighted average number of common and common equivalent
shares outstanding..................................... 15,582 -- 25,950

BALANCE SHEET DATA (AS OF DECEMBER 31, 1994):
Working capital.......................................... $116,464 $ 38,053 $ 132,291
Total assets............................................. 272,546 125,784 359,846
Noncurrent liabilities................................... 128,277 720 109,392
Stockholders' equity..................................... 76,920 97,478 149,826
Long-term debt to total capitalization................... 63% -- 42%

- - - ---------------
<FN>
(1) In 1994 the Company recorded a $25 million pre-tax special charge to
establish a reserve for accounts receivable, primarily where such accounts
are in litigation. The following table shows additional pro forma
information adjusted to eliminate this special charge (in thousands except
per share data):

</TABLE>

<TABLE>
<CAPTION>
HISTORICAL
----------
THE COMPANY THE PRO FORMA
AS ADJUSTED DIVISION COMBINED(2)
----------- ---------- -----------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA (YEAR ENDED DECEMBER 31, 1994):
Gross revenues........................................... $ 348,381 $ 231,058 $ 579,439
Operating income......................................... 19,941 5,977 29,546
Net income............................................... 7,384 914(3) 14,848
Net income per share..................................... 0.47 -- 0.57
Weighted average number of common and common equivalent
shares outstanding..................................... 15,582 -- 25,950
<FN>
(2) See "UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION" for
explanations of the pro forma adjustments.

(3) Net income for the Division assumes a 40% tax rate as applied to the
reported historical income before income taxes.

</TABLE>

13
<PAGE> 17

THE MEETING

THE PROPOSALS

At the Company's Annual Meeting, the Company's shareholders will be asked
to consider and vote upon (i) the issuance of an aggregate of 10,368,000 shares
of Common Stock to Rust subsidiaries pursuant to the Merger, (ii) the election
of six members to the Board of Directors of the Company, and (iii) the approval
of the Company's Directors' Deferred Fee Plan.

The proposal to issue shares of Common Stock to Rust subsidiaries is being
submitted to the Company's shareholders in accordance with the rules of NYSE.
The relevant portion of such rules requires shareholder approval for the
issuance of shares of common stock in a transaction or series of transactions if
(i) the common stock has or will have upon issuance voting power equal to or in
excess of 20% of the voting power outstanding before the issuance of such stock,
or (ii) the number of shares of common stock to be issued is or will be equal to
or in excess of 20% of the number of shares of common stock outstanding before
the issuance of such stock. The shares of Common Stock to be issued to Rust
pursuant to the Reorganization Agreement will, upon issuance, represent
approximately 40% of the Common Stock then issued and outstanding, and will
represent in the aggregate approximately 40% of the Company's outstanding voting
power.

A Standstill and Non-Competition Agreement between the Company, Rust and
WMX to be entered into at the Closing provides that, for so long as the WMX
Group owns 20% or more of the issued and outstanding shares of Common Stock, the
Company will include a number of qualified WMX Group designees, acceptable to
both the WMX Group and the Company, as nominees to the Board of Directors such
that the percentage of the Board of Directors proposed to be comprised of such
WMX Group designees is proportionately equal (to the lowest whole directorship)
to the WMX Group's percentage ownership in the Company. Immediately following
the Closing, the Company will increase the size of the Board of Directors to
nine and elect to the Board of Directors, Messrs. Getz, Gilbert and Ingalls, the
designees of the WMX Group. See "THE REORGANIZATION AGREEMENT -- Standstill and
Non-Competition Agreement" and "ELECTION OF DIRECTORS -- Information Concerning
the Nominees."

At the Annual Meeting, the Company's shareholders will also be asked to
consider and vote upon the approval of the Company's Directors' Deferred Fee
Plan. See "APPROVAL OF DIRECTORS' DEFERRED FEE PLAN."

THE BOARD OF DIRECTORS RECOMMENDS A VOTE
"FOR" EACH OF THESE PROPOSALS

RECORD DATE; VOTING

The Board of Directors has fixed the close of business on March 31, 1995 as
the Record Date for determining the holders of Common Stock entitled to notice
of and to vote at the Annual Meeting. As of the Record Date, there were
outstanding shares of the Company's Common Stock, all of one class and all
of which are entitled to be voted at the Annual Meeting. Holders of issued and
outstanding shares of Common Stock are entitled to one vote for each share held.

The presence at the Annual Meeting, in person or by proxy, of the holders
of a majority of the issued and outstanding shares of Common Stock entitled to
vote will constitute a quorum for the transaction of business. In all matters
other than the election of directors, the affirmative vote of the holders of a
majority of the issued and outstanding shares of Common Stock present and
actually voting at the Annual Meeting in person or by proxy is required to
approve each proposal to be considered at the Annual Meeting. Directors will be
elected by a plurality of the votes of the shares present in person or by proxy
at the Annual Meeting and entitled to vote on the election of directors.

At the Annual Meeting, the results of shareholder voting will be tabulated
by the inspector of elections appointed for the Annual Meeting. Properly
executed proxies either marked "abstain" or held in "street name" by brokers
that are not voted on one or more particular proposals (if otherwise voted on at
least one

14
<PAGE> 18

proposal) will be counted for purposes of determining whether a quorum has been
achieved at the Annual Meeting but will not be treated as either a vote for or a
vote against any of the proposals to which such abstention or broker non-vote
applies.

PROXIES

This Proxy Statement is being furnished to the Company's shareholders in
connection with the solicitation of proxies by and on behalf of the Board of
Directors of the Company for use at the Annual Meeting.

If a shareholder properly executes and returns the enclosed form of proxy,
it will be voted according to his or her instructions. If no instructions are
given, the proxy will be voted for the proposal to issue shares of Common Stock
to Rust pursuant to the Reorganization Agreement, for the election as directors
of the six nominees identified in this Proxy Statement, for the approval of the
Company's Directors' Deferred Fee Plan and in the discretion of the proxies with
respect to any other matter that may come before the Annual Meeting. Any proxy
may be revoked by a later appointment received by the Company or by giving
notice of revocation to the Company in writing or in open meeting before the
proxy is exercised. No appraisal rights exist for any action proposed to be
taken at the Annual Meeting.

15
<PAGE> 19

THE PROPOSED TRANSACTION

BACKGROUND OF THE TRANSACTION

As a result of several significant awards of government term contracts
beginning in January 1994, the Company's backlog and potential value of
government term contracts grew from $853 million at December 31, 1993 to $1.4
billion at March 31, 1994. Because of the size of the contract backlog and the
anticipated release of delivery orders, management determined that the
anticipated future growth of the Company's remediation business would require
either rapid internal growth or growth through acquisition. In addition,
management determined that the Company's governmental client base would view
favorably a significant acquisition that added needed capacity and would
favorably consider the Company's resulting size in determining future awards of
government term contracts. Accordingly, the Company's management began to
evaluate various acquisition alternatives.

In March 1994, the Company had initial discussions with one acquisition
candidate which did not continue beyond the preliminary stage. Beginning in June
1994, the Company entered into discussions with another acquisition candidate
that continued throughout the summer. In September 1994, the Company determined
not to pursue a transaction with that candidate.

On March 4, 1994, Samuel H. Iapalucci, then Vice President and Chief
Financial Officer of the Company, and Harold W. Ingalls, Vice President and
Chief Financial Officer of Rust, who were both members of the Board of Directors
of NSC, following a meeting of the Executive Committee of the NSC Board of
Directors, initially discussed, in very preliminary fashion, the possibility of
a combination of the environmental remediation businesses of the Company and the
Division. During the spring and early summer of 1994, the Company continued its
discussions with the acquisition candidates mentioned above, but had no further
substantive discussions with Rust. The evening prior to the August 2, 1994 Board
of Directors' meeting of NSC, Mr. Iapalucci and Mr. Ingalls, as well as Herbert
A. Getz, Vice President, General Counsel and Secretary of WMX, and Frank A.
McBride, Vice President of the Company, who were also members of the Board of
Directors of NSC, had another discussion concerning the combination of the
remediation businesses of the Company and the Division. Following these initial
conversations, the Company's management began to analyze the benefits of a
combination with the Division. Management recognized that the transaction
presented a unique opportunity to increase the Company's capacity to perform
environmental remediation services as well as to offer services to Rust's
significant industrial client base. On September 21, 1994, James L. Kirk,
Chairman, Chief Executive Officer and President of the Company, met with Mr.
Iapalucci and Mr. Ingalls and discussed such a combination. Mr. Iapalucci
indicated to Mr. Ingalls that such a combination should be structured as a
transaction in which Company Common Stock would be issued for the environmental
remediation business of the Division and invited Mr. Ingalls to develop a
proposal.

During the first two weeks of October 1994, Messrs. Kirk, Iapalucci,
Ingalls, Getz and Rodney C. Gilbert, President and Chief Executive Officer of
Rust, met twice to discuss the proposed business combination. It was determined
in these meetings that any such transaction would generally involve Rust
receiving a substantial equity interest in the Company in exchange for the
Division's businesses. The initial position of Rust in these meetings was that,
based on its analysis of the projected 1995 earnings of the Company and the
Division, Rust would expect to receive approximately 45% of the outstanding
Common Stock of the Company. The initial position of the Company in these
meetings was that based on its analysis of the operating results and prospects
of the Division, the Company would not expect to issue more than 35% of its
outstanding Common Stock.

In late October 1994, the Company discussed the proposed transaction with
representatives of Lehman Brothers at which time Lehman Brothers commenced a
preliminary review of the transaction. On October 28, 1994, representatives of
the Company and Rust met at Rust's headquarters to begin preliminary
negotiations on the structure of the proposed transaction. As a result of such
negotiations, the structure of the proposed transaction generally involved Rust
receiving 10,368,000 shares of OHM Common Stock, or 40% of the OHM Common Stock
outstanding following the consummation of the transaction, in exchange for the
Division. The Company was of the view that a transaction in which Rust received
a substantial equity interest would

16
<PAGE> 20

facilitate the negotiation of various additional benefits to the Company from
Rust and WMX in connection with the transaction and would encourage the support
of the future operations of the Company by Rust and WMX. For example, the
Company expected that WMX would guarantee up to $75 million of the Company's
financing and that the Company and the affiliates of WMX would each recognize
the others as "preferred providers" for services with respect to their business
needs, such as remediation services. In addition, the Company expected that WMX
and its affiliates would agree to certain standstill arrangements that would
limit their ability to purchase additional Common Stock, restrict their rights
to sell Common Stock and provide for proportional representation on the
Company's Board of Directors. Following these meetings, each of Rust and the
Company continued due diligence investigations.

On November 3, 1994, at a regularly scheduled meeting of the Board of
Directors of the Company, management of the Company discussed the preliminary
structure of the transaction with members of the Board of Directors of the
Company. All directors were present at this meeting except for John W. Dewey, a
Managing Director of Lehman Brothers. While certain directors raised concerns
with respect to the substantial equity interest which Rust would have in the
Company following the consummation of the transaction, the Board authorized
management to proceed with negotiations.

In late October, 1994 Mr. Iapalucci began preliminary conversations with
Alex. Brown & Sons Incorporated ("Alex. Brown") concerning a hypothetical
transaction in which the Company would issue a substantial equity interest in
connection with an acquisition of an environmental remediation business. On
November 5, 1994, Alex. Brown was retained to advise the Company with respect to
the proposed transaction. Alex. Brown began its own review of the terms of the
transaction and began to assist the Company in its due diligence investigation.

On November 7, 1994, Mr. Kirk met Mr. Dewey to discuss the proposed
transaction. Mr. Dewey indicated that he was concerned that the issuance of a
large equity interest to Rust might result in a change in control of the
Company. Mr. Dewey, previously, had also expressed concerns about certain of the
Company's strategic initiatives and the Company's use of other financial
advisors. A representative of Lehman Brothers informed the Company on November
9, 1994 that, at the instruction of Mr. Dewey, who was out of the country,
Lehman Brothers was to discontinue its involvement with the transaction. The
Company had no further communications with Mr. Dewey until November 15, 1994
when the Company received a letter of resignation from Mr. Dewey which set forth
no reasons for his resignation. In a subsequent letter received by the Company
on December 15, 1994, Mr. Dewey stated that he resigned from the Company's Board
of Directors when he determined that he would not be able to vote to approve the
transaction because he believed ". . . effective control of OHM would be
transferred to WMX without OHM receiving an appropriate control premium" and
that Lehman Brothers resigned as the Company's investment banker when ". . . it
was determined that it would be unable to render a fairness opinion with respect
to the proposed OHM acquisition." On December 20, 1994, Mr. Kirk sent a letter
to Mr. Dewey that stated, in part ". . . I cannot understand how you and your
firm could possibly reach such conclusions about the transaction at a time when
the terms of the transaction were being actively negotiated and before the terms
of the transaction were finally agreed upon by the parties." Additionally, Mr.
Kirk indicated ". . . Obviously, between the time of your last involvement with
the transaction and its unanimous approval by the Board, there were extensive
negotiations and changes not only with respect to financial terms, but also with
respect to a 'standstill' arrangement pursuant to which Rust and WMX have agreed
to a number of provisions which greatly limit and restrict their ability to
dispose of or acquire additional voting securities of OHM, the voting of their
shares, and their ability to enter into or propose other transactions with OHM."

On November 14 and 15, 1994, representatives of the Company and Rust met to
negotiate the terms of the transaction. On November 16, 1994, at a special
meeting of the Board of Directors of the Company, management of the Company
discussed with the Board of Directors the status of the negotiations.
Representatives of Alex. Brown and Lazard Freres & Co. ("Lazard Freres") who had
been retained on November 11, 1994, at the suggestion of the Board of Directors,
to act as financial advisors to the Company and to assist the Board in
evaluating the transaction also attended the special meeting of the Board of
Directors and gave their preliminary views of the transaction.

17
<PAGE> 21

Representatives of the Company and Rust met in Oak Brook, Illinois on
November 22 and 23, 1994 to continue to negotiate the terms of the transaction,
including substantially strengthened standstill arrangements to which Rust
agreed. On November 29, 1994, an analyst from Lehman Brothers announced she was
discontinuing coverage of the Common Stock. Almost three million shares of
Common Stock were traded on the NYSE on November 29, 1994, and the price of the
Common Stock declined from $8.75 to $6.88. In the early afternoon of November
29, 1994, the Company issued a press release announcing that Lehman Brothers had
withdrawn coverage of the Company and that John Dewey had resigned from the
Board of Directors of the Company. On November 30, 1994 and December 1, 1994,
representatives of the Company and representatives of Rust met to continue
negotiations of the terms of the proposed transaction. Due to the decline in the
price of the Company's Common Stock from the time discussions concerning the
proposed transaction first began, Rust proposed certain price adjustments.
Although the Company initially resisted such adjustments, as a result of the
substantial price decline of the Common Stock on November 29, 1994, the terms of
the transaction were revised to exclude certain accounts receivable from the
Division's assets and to provide for a possible further exclusion of accounts
receivable or a cash payment to the Company depending upon whether the price of
the Common Stock declined or increased prior to the Closing. See "THE
REORGANIZATION AGREEMENT -- Adjustments."

On December 2, 1994 the Board of Directors of the Company met
telephonically to review the status of the negotiations at a special meeting of
the Board. On December 5, 1994, the Boards of Directors of the Company and Rust
each met separately to consider the Reorganization Agreement. At the meeting of
the Board of Directors of the Company, which was attended by the legal and
financial advisors of the Company, including Alex. Brown and Lazard Freres,
Alex. Brown delivered its written opinion, dated December 5, 1994, to the effect
that, as of such date and based on and subject to the review, analyses and
limitations described therein, the consideration proposed to be paid by the
Company for the Division pursuant to the Reorganization Agreement is fair to the
shareholders of OHM from a financial point of view. The Board of Directors also
inquired of the representatives of Lazard Freres whether Lazard Freres agreed
with Alex. Brown's analysis. Lazard Freres stated that they were not retained to
give a fairness opinion with respect to the transaction, but that they did not
disagree with Alex. Brown's analysis. The Board of Directors of the Company
approved the Reorganization Agreement. The Rust Board of Directors approved the
Reorganization Agreement at its December 5, 1994 meeting as well, and on the
evening of December 5, 1994, the Reorganization Agreement was executed by the
Company and Rust.

REASONS FOR THE PROPOSED TRANSACTION -- RECOMMENDATION OF THE COMPANY'S BOARD OF
DIRECTORS

On December 5, 1994, the Board of Directors of the Company unanimously
approved the Reorganization Agreement and recommended that the shareholders of
the Company approve the issuance of 10,368,000 shares of Common Stock to Rust.
The decision of the Board of Directors to approve the Reorganization Agreement
was based upon a variety of factors. The following summarizes the material
factors considered by the Board of Directors in reaching its decision.

The directors believed that the acquisition of the Division represented a
unique opportunity to increase the Company's operating capacity by the addition
of operating assets and an experienced workforce and, therefore, to create the
largest provider of on-site remediation services in the United States in the
belief that the combined entity would achieve greater value for shareholders.
The directors believed that in view of the rapid growth of the Company's backlog
and potential value of government term contracts, such increased capacity would
better enable the Company to continue to provide quality services to its
customer base and would uniquely position the Company to take advantage of
future business opportunities. The directors also believed the Merger would
create certain synergies and other cost reduction opportunities which would
enhance the combined earnings of the Company and the Division. Further, the
directors believed that the Merger would enhance the financial position of the
Company by increasing its equity base, and thereby reducing the ratio of debt to
total capitalization.

In reaching its conclusion, the Board of Directors reviewed and relied upon
historical and projected financial results of both the Company and the Division.
The Board of Directors also considered analyses of the combined pro forma
financial impact on the Company of the Merger.

18
<PAGE> 22

Finally, the Board of Directors requested and received an oral presentation
from, and a written opinion of, Alex. Brown dated December 5, 1994 to the effect
that, based on and subject to the review and analyses described therein, the
consideration proposed to be paid by the Company for the Division pursuant to
the Reorganization Agreement is fair to the shareholders of the Company from a
financial point of view. The Board of Directors also inquired of the
representatives of Lazard Freres whether Lazard Freres agreed with Alex. Brown's
analysis. Lazard Freres stated that they were not retained to give a fairness
opinion with respect to the transaction, but that they did not disagree with
Alex. Brown's analysis.

OPINION OF FINANCIAL ADVISOR

The Company has engaged Alex. Brown to render an opinion regarding the
fairness, from a financial point of view, to the Company's shareholders of the
consideration proposed to be paid by the Company in the Merger.

Alex. Brown has delivered to the Board of Directors of the Company its
written opinion dated December 5, 1994 to the effect that, as of such date and
based on and subject to the review, analyses and limitations described therein,
the consideration proposed to be paid by the Company for the Division pursuant
to the Reorganization Agreement is fair to the shareholders of the Company from
a financial point of view. Alex. Brown's opinion is directed only to the
consideration proposed to be paid by the Company for the Division pursuant to
the Reorganization Agreement and does not constitute a recommendation to any
shareholder of the Company as to how such shareholder should vote at the Annual
Meeting. The full text of such opinion, which contains a description of the
assumptions and qualifications made, procedures followed, matters considered,
and limitations on the review undertaken by Alex. Brown in rendering its
opinion, is set forth in Appendix A and should be read in its entirety.

In connection with its opinion, Alex. Brown interviewed certain senior
officers and other representatives of the Company and Rust regarding the
business and prospects of the Company and the Division as well as the strategic,
financial and operating benefits anticipated from the proposed transaction.
Alex. Brown also (i) reviewed the Reorganization Agreement, (ii) reviewed
certain business and financial information relating to the Company and the
Division which was publicly available, (iii) reviewed certain financial
forecasts and other data for the Company and the Division provided by the
Company and Rust, (iv) reviewed historical financial information of the Company
and the Division, (v) compared certain financial information of the Division and
the Company with similar information for selected companies within the
environmental remediation, engineering and construction industry whose
securities are publicly traded, (vi) reviewed the financial terms of certain
recent business combinations which Alex. Brown deemed comparable in whole or in
part, and (vii) reviewed the pro forma financial impact of the transaction on
the Company. Alex. Brown also conducted such other analyses and examinations as
it deemed necessary in arriving at its opinion.

In preparing its opinion, however, Alex. Brown was not requested to and did
not make an independent evaluation or appraisal of the assets or liabilities of
the Company or the Division, nor did Alex. Brown make a complete physical
inspection of the properties or assets of the Company or the Division. No
limitations were imposed by the Company or its affiliates with respect to the
investigations made or the procedures followed by Alex. Brown in rendering its
opinion. Alex. Brown assumed and relied upon, without independent verification,
the accuracy and completeness of the financial and other information publicly
available or furnished to Alex. Brown by the Company and Rust. With respect to
financial forecasts and other information provided to Alex. Brown, and
discussions with the management of the Company and Rust relating to such
forecasts and information, Alex. Brown assumed that such forecasts and
information were reasonably prepared on bases reflecting the best currently
available estimates and judgments of the management of the Company and Rust as
to the expected future financial performance of the Company and the Division,
respectively. Alex. Brown expressed no opinion as to the value, upon issuance,
of the Common Stock included in the consideration to be paid by the Company
under the Reorganization Agreement or the price at which the Common Stock will
trade following the consummation of the transactions contemplated by the
Reorganization Agreement. Alex. Brown was not requested to consider, and its
opinion does not address, the relative merits of the acquisition as compared
with any alternative business strategies that might exist for the Company. Alex.
Brown's opinion is based upon circumstances existing and disclosed to it as of
the date of such opinion.

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As stated in the opinion, Alex. Brown was requested by the Company to
render an opinion as to the fairness to the shareholders of the Company, from a
financial point of view, of the consideration proposed to be paid by the Company
in the Merger pursuant to the Reorganization Agreement. Accordingly, the opinion
is solely for the benefit of the Board of Directors of the Company in connection
with its consideration of the Reorganization Agreement and the transactions
contemplated thereby and is not on behalf of, and is not intended to confer
rights or remedies upon, any shareholder of the Company, Rust or any person,
other than the Board of Directors of the Company.

In connection with its engagement, Alex. Brown prepared and delivered to
the Board of Directors of the Company, at a special meeting of the Board on
December 5, 1994, an oral presentation analyzing the transactions contemplated
by the Reorganization Agreement, which included a discussion of various
valuation analyses and methodologies relating to the Company and the Division.
In addition, Alex. Brown used written materials consisting of the financial
information referred to in the opinion and the measurements referred to in the
discussion below. The preparation of a fairness opinion involves various
determinations as to the most appropriate and relevant methods of financial
analyses and application of those methods to the particular circumstances, and
therefore such an opinion is not readily susceptible to summary description.
Furthermore, in arriving at its fairness opinion, Alex. Brown did not attribute
any particular weight to any analysis or factor considered by it but rather made
qualitative judgments as to the significance and relevance of each analysis and
factor. Accordingly, Alex. Brown believes that its analyses must be considered
as a whole and that considering any portions of such analyses and of the factors
considered, without considering all analyses and factors, could create a
misleading or incomplete view of the process underlying the opinion. In its
analyses, Alex. Brown made numerous assumptions with respect to the
environmental services industry, general business and economic conditions and
other matters, many of which are beyond the control of the Company and the
Division. Any estimates contained in these analyses are not necessarily
indicative of actual values or predictive of future results or values (including
as to the future market price for the Company Common Stock), which may be
significantly more or less favorable than as set forth therein. In addition,
analyses relating to the value of businesses do not purport to be appraisals or
to reflect the price at which businesses actually may be sold. The consideration
to be paid in connection with the transaction was determined through arms-length
negotiations between the Company and Rust and Alex. Brown did not participate in
such negotiations. The following is a brief summary of various financial
analyses conducted by Alex. Brown in connection with its opinion.

Contribution Analysis. Alex. Brown reviewed the respective contributions
of each of the Company and the Division to revenues, gross profit, operating
income (defined as earnings before interest and taxes) and net income for the
twelve months ended September 30, 1994 and for the years 1994 through 1996 on
the basis of information provided by the managements of the Company and the
Division, before taking into account any operating synergies which may be
expected to result from the acquisition of the Division. This review
demonstrated that for the twelve months ended September 30, 1994 the Company and
the Division would contribute 59.5% and 40.5% of revenues, 67.8% and 32.2% of
gross profit, 73.1% and 26.9% of operating income and 57.7% and 42.3% of net
income, respectively. The review demonstrated that for fiscal year 1994 the
Company and the Division would be expected to contribute 60.8% and 39.2% of
revenues, 67.4% and 32.6% of gross profit, 71.8% and 28.2% of operating income
and 59.2% and 40.8% of net income, respectively. The review demonstrated that
for fiscal year 1995 the Company and the Division would be expected to
contribute 65.5% and 34.5% of revenues, 70.8% and 29.2% of gross profit, 71.9%
and 28.1% of operating income and 61.3% and 38.7% of net income, respectively.
The review demonstrated that for fiscal year 1996, the Company and the Division
would be expected to contribute 66.9% and 33.1% of revenues, 71.1% and 28.9% of
gross profit, 71.2% and 28.8% of operating income and 63.2% and 36.8% of net
income, respectively.

Pro Forma Accretion/Dilution Analysis. Alex. Brown's analysis of the
Merger included an estimate of the impact of the transaction upon the projected
earnings per share ("EPS") for 1995 of the Company as forecasted by its
management. This analysis, which was based on Division management's 1995 net
income forecast for the Division, indicated that for fiscal 1995, the Merger
would increase the EPS of the Company by 6.3% if the transaction is recorded at
a Company share price of $6.00 and by 1.8% if the transaction is recorded at a
share price of $12.00, before recognition of any anticipated operating
synergies.

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Analysis of Selected Mergers and Acquisitions. Alex. Brown also reviewed
selected recent mergers and acquisitions. In performing its analysis, Alex.
Brown compared selected financial data, including equity purchase price as a
multiple of the latest twelve months ("LTM") net income, book value, and
aggregate purchase price (equity purchase price adjusted for long-term debt and
cash) as a multiple of LTM revenues and operating income for 46 selected merger
and acquisition transactions in the environmental remediation, engineering and
construction industry. Alex. Brown also reviewed the same information for a
single transaction which it deemed most comparable to the Company's acquisition
of the Division (the "Most Comparable Transaction"). Alex. Brown noted that,
based on the consideration to be paid by the Company pursuant to the
Reorganization Agreement, the Transaction results in multiples to LTM revenues,
operating income, net income and book value that are within the range of the
multiples for the 46 selected transactions. Alex. Brown also noted that, based
on the consideration to be paid by the Company pursuant to the Reorganization
Agreement, the Merger results in multiples to LTM revenues, operating income
book value that are less than the multiples for the Most Comparable Transaction.

Analysis of Selected Publicly Traded Companies. Alex. Brown compared
selected financial data of the Division with similar publicly available data of
selected publicly traded companies involved in the environmental remediation,
engineering and construction industry. The specific companies reviewed by Alex.
Brown were Rust International Inc., Dames & Moore, Inc., OHM Corporation,
International Technology Corporation, Sevenson Environmental Services, Inc.,
Groundwater Technology, Inc., The Earth Technology Corporation (USA), Roy F.
Weston, Inc., Harding Associates, Inc., and Canonie Environmental Services Corp.
(the "Selected Companies"). Alex. Brown compared the equity market values of the
Selected Companies as multiples of latest twelve month EPS, estimated current
fiscal year EPS, estimated following fiscal year EPS, and most recently reported
book value per share. Alex. Brown also compared the total market capitalization
of the Selected Companies as a multiple of latest twelve months net revenue,
earnings before interest and taxes ("EBIT") and earnings before interest, taxes,
depreciation and amortization ("EBITDA").

The equity market values of the Selected Companies as a multiple of the
latest twelve months EPS ranged from 12.1x to 26.4x, with a median ratio of
15.6x. As a multiple of estimated current fiscal year EPS, the equity market
value of the Selected Companies ranged from 11.6x to 23.2x with a median ratio
of 15.0x; based on estimated EPS for the following fiscal year, the equity value
multiples for the Selected Companies ranged from 9.7x to 20.4x, with a median
ratio of 11.9x. Equity market values of the Selected Companies as a multiple of
book value ranged from 0.6x to 3.2x book value, with a median ratio of 1.1x. The
total market capitalization of the Selected Companies as a multiple of LTM
revenues ranged from 0.3x to 0.9x with a median of 0.6x. The total market
capitalization of the Selected Companies ranged from 3.7x to 10.8x LTM EBITDA
with a median ratio of 6.5x. The total market capitalization of the Selected
Companies as a multiple of LTM EBIT ranged between 4.2x and 14.3x, with a median
ratio of 11.8x. Alex. Brown noted that the implied equity market values and
total market capitalization of the Division based on these multiples supported
its opinion that the consideration paid for the Division is fair to the
shareholders of the Company from a financial point of view.

Discounted Cash Flow Analysis. Alex. Brown performed a discounted cash
flow valuation analysis of the Division based on certain operating and financial
assumptions provided by management of the Division. Based on discount rates
between 15% and 45%, and terminal multiples of 11.0x, 13.0x and 15.0x applied to
the Division's EBIT, Alex. Brown arrived at an estimated stand-alone implied
aggregate valuation range for the assets of the Division of $108.2 million to
$258.2 million and the same range for an implied equity value, which assumed no
interest expense due to the elimination of the Division's intercompany
indebtedness.

As part of its investment banking business, Alex. Brown is regularly
engaged in the valuation of businesses and securities in connection with
negotiated underwritings, mergers and acquisitions, private placements and
valuations for corporate and other purposes. Alex. Brown was retained by the
Company for, among other things, Alex. Brown's expertise in financial matters in
general and in the environmental services industry in particular.

Pursuant to a letter agreement dated November 8, 1994 (the "Engagement
Letter"), the Company paid Alex. Brown (i) an engagement fee in the amount of
$50,000 upon the execution of the Engagement Letter,

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(ii) a fairness opinion fee in the amount of $250,000 in connection with the
delivery of the fairness opinion to the Board of Directors and will pay an
additional fee of $100,000 upon closing of the transactions contemplated by the
Reorganization Agreement, with such fee being contingent upon the Closing. Under
the Engagement Letter, the Company has agreed to reimburse Alex. Brown for its
reasonable out-of-pocket expenses (including legal fees) and to indemnify Alex.
Brown against certain liabilities.

The Company has engaged Alex. Brown in connection with certain previous
transactions, including as co-managing underwriter for the public offering of
Common Stock by the Company in December 1993 and for other financial advisory
services in the summer of 1994. Alex. Brown received customary underwriting
discounts in connection with such offering and a $50,000 retainer in connection
with the other financial advisory services. Except as disclosed above, Alex.
Brown has not received any other compensation for services rendered to the
Company or its affiliates during the past two years. In the ordinary course of
its business, Alex. Brown and its affiliates may hold positions in equity and/or
debt securities of the Company and Rust and, accordingly, may at any time hold a
long or short position in such securities.

ENGAGEMENT OF LAZARD FRERES

The Company also engaged the investment banking firm of Lazard Freres to
advise it in connection with the transactions contemplated by the Reorganization
Agreement, but did not request that Lazard Freres provide a fairness opinion.
Pursuant to a letter agreement dated November 11, 1994, the Company paid Lazard
Freres a financial advisory fee in the amount of $300,000, which amount
represents all fees paid by the Company to Lazard Freres during the past two
years. Under such engagement letter, the Company has agreed to reimburse Lazard
Freres for its reasonable out-of-pocket expenses (including legal fees) and to
indemnify Lazard Freres against certain liabilities.

CERTAIN EFFECTS OF THE PROPOSED TRANSACTION

As a result of the Merger, the Company will become the largest provider of
on-site environmental remediation services in the United States. Following the
completion of the transactions set forth in the Reorganization Agreement, the
Company will be owned approximately 40% by Rust and the rest by the existing
shareholders of the Company. Pursuant to the Standstill Agreement described
under "DESCRIPTION OF THE TRANSACTION -- Standstill and Non-Competition
Agreement," WMX and its affiliates have agreed to certain restrictions on its
voting, acquisition and disposition of Company Common Stock.

ACCOUNTING TREATMENT

The Merger is expected to be recorded using the purchase method of
accounting for financial reporting purposes. The Company will determine the cost
of the Merger in accordance with generally accepted accounting principles.

The Company is currently evaluating whether it will incur any significant
costs for restructuring its organization and operations upon consummation of the
Merger. Such costs would be recorded as a restructuring charge and may include
the costs of closing certain of the Company's offices and other non-recurring
expenses related to such restructuring.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

The following summary describes certain federal income tax consequences of
the Merger.

The Company will not realize any gain or loss from the issuance of Common
Stock to Rust in the Merger.

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The Company's adjusted basis in each of the assets of the Division
(including non-depreciable intangible assets such as goodwill) will be
determined by allocating the total consideration paid by the Company among the
assets in accordance with allocation rules prescribed by the Internal Revenue
Code and the Treasury Regulations thereunder. For these purposes, the total
consideration paid by the Company will include the Common Stock issued to Rust
and any liabilities of the Division assumed by the Company. The Company's
holding period in the assets will commence on the date of the acquisition of the
Division.

THE DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY.
THE DISCUSSION IS BASED ON CURRENTLY EXISTING PROVISIONS OF THE INTERNAL REVENUE
CODE, EXISTING AND PROPOSED TREASURY REGULATIONS PROMULGATED THEREUNDER AND
CURRENT ADMINISTRATIVE RULINGS AND COURT DECISIONS. ALL OF THE FOREGOING ARE
SUBJECT TO CHANGE AND ANY SUCH CHANGE COULD AFFECT THE CONTINUING VALIDITY OF
THIS DISCUSSION. NO INFORMATION IS PROVIDED IN THIS PROXY STATEMENT WITH RESPECT
TO THE TAX CONSEQUENCES, IF ANY, OF THE PROPOSED ACQUISITION OF THE DIVISION
UNDER APPLICABLE FOREIGN, STATE AND LOCAL LAWS.

THE REORGANIZATION AGREEMENT

The following summarizes certain provisions contained in the Reorganization
Agreement attached hereto as Appendix B. Such summary is qualified in its
entirety by reference to the Reorganization Agreement.

GENERAL

The Reorganization Agreement was entered into on December 5, 1994 by and
among Remedial, Enclean (the "Rust Subsidiaries") Rust, Environmental and the
Company. Immediately prior to the consummation of the transactions set forth in
the Reorganization Agreement (the "Closing"), the Rust subsidiaries will
transfer the environmental remediation services business of Rust to
Environmental which shall at the Closing be merged with and into OHMR, a
wholly-owned subsidiary of the Company. The assets transferred to Environmental
shall include (i) all right, title and interest in and to the properties,
business and assets reflected on the balance sheet of the Division at September
30, 1994 (the "Division Balance Sheet") and (ii) all other assets whether real,
personal, tangible or intangible, wherever located as are presently used solely
in the environmental remediation services businesses of the Division. The
Transferred Assets shall not include (i) assets set forth on an excluded assets
schedule including certain intellectual property and related technology, labor
union agreements and certain accounts receivable, (ii) assets relating to
certain specific projects, and (iii) the right to the name "Rust" for longer
than a transitional period. The assumed liabilities include all liabilities and
obligations of the Division other than the excluded liabilities which include
(i) liabilities arising under the Reorganization Agreement, (ii) one-half of all
expenses, taxes, etc. imposed by a governmental entity and arising out of the
acquisition, (iii) all expenses of Rust arising out of the transaction, (iv)
liabilities resulting from the projects excluded from the Transferred Assets,
and (v) expenses arising out of the excluded assets.

In connection with the Merger, the shares of Environmental will be
converted into the right to receive an aggregate of 10,368,000 shares of Common
Stock or approximately 40% of the Common Stock outstanding following the
consummation of the transactions contemplated by the Reorganization Agreement.
OHMR will survive the Merger, Environmental's separate corporate existence shall
cease, and Environmental's stockholders shall receive a distribution of the
Company's Common Stock.

ADJUSTMENTS

The Reorganization Agreement requires that the Transferred Assets be
adjusted in certain circumstances as of the Closing Date based on the Closing
Price. If the Closing Price is between $6.00 per share and $8.00 per share, Rust
shall retain certain receivables with a book value equal to the difference
between $8.00 per share and the Closing Price multiplied by 10,368,000, but not
to exceed a value of $20,000,000.

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If the Closing Price is greater than $9.65 per share, Rust shall pay to the
Company at the Closing, an amount, in cash, equal to the amount by which the
Closing Price exceeds $9.65 per share multiplied by 10,368,000, but not more
than $20,000,000 in the aggregate.

If the Closing Price is between $8.00 per share and $9.65 per share, no
adjustments will be made. If the Closing Price is less than $6.00 per share,
Rust may, at its option, determine not to consummate the transactions
contemplated in the Reorganization Agreement.

Finally, the Reorganization Agreement also provides that prior to the
Closing, the Company shall conduct environmental assessments of certain of the
real property to be transferred to the Company and if such assessments are not
satisfactory to the Company such real estate shall not be included in the
Transferred Assets.

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company has made certain representations and warranties in the
Reorganization Agreement concerning (i) customary corporate matters, (ii) the
absence of a conflict between the Reorganization Agreement and certain specified
agreements and other instruments, (iii) the absence of regulatory approvals
required in connection with the transactions contemplated by the Reorganization
Agreement, (iv) the absence of litigation pertaining to the transactions
contemplated by the Reorganization Agreement, (v) certain of the Company's
patents and trademarks, (vi) the capitalization of the Company, (vii) the
accuracy of the Company's filings made or to be made with the Securities and
Exchange Commission (the "Commission"), and (viii) the absence of certain
material adverse events since the date of the Company's most recent Form 10-Q
filed with the Commission.

REPRESENTATIONS AND WARRANTIES OF RUST

Rust, Remedial, Enclean and Environmental, have made certain
representations and warranties in the Reorganization Agreement concerning (i)
certain customary corporate and securities law matters, (ii) the absence of a
conflict between the Reorganization Agreement and certain specified agreements
and other instruments (iii) the absence of regulatory approvals required in
connection with the transactions contemplated by the Reorganization Agreement,
(iv) the absence of litigation pertaining to the Division except as described,
(v) title to the assets of the Division and authority to own and lease the
Division's properties, (vi) the accuracy of certain financial statements of the
Division, (vii) various aspects of the business of the Division, including
operations in the ordinary course of business, (viii) the absence of certain
material adverse events since the date of the Division Balance Sheet, (ix)
certain patents, trademarks, copyrights and franchises, (x) compliance with the
law, courts and governmental orders, including environmental laws, (xi)
compliance with all regulatory requirements relating to or arising from
government contracting projects, (xii) the absence of undisclosed liabilities,
(xiii) certain project contracts and commitments, (xiv) the collectability of
accounts receivable and inventories, (xv) the extent of the Division's interests
in real and personal property, and (xvi) certain employee benefit plans and
labor contracts.

CERTAIN COVENANTS OF THE COMPANY

The Company has made certain pre-Closing covenants in the Reorganization
Agreement, including (i) conducting its business in the ordinary course, (ii)
using its best efforts to consummate the transactions contemplated by the
Reorganization Agreement and (iii) affording Rust access to the Company's
plants, properties and records.

The Company has also made a post-Closing covenant to offer employment to
substantially all of the Division's active employees on the same terms and
conditions and with the same benefits as employees of the Company with the same
seniority. The Company has no obligation to assume any labor contract or
employee benefits plan of the Division or Rust.

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CERTAIN COVENANTS OF RUST

Rust has made certain pre-Closing covenants in the Reorganization
Agreement, including (i) conducting the business of the Division in the ordinary
course of business, (ii) not entering into discussions or negotiations with any
other person concerning the sale of all or any substantial part of the Division,
(iii) using its best efforts to consummate the transactions contemplated by the
Agreement, and (iv) affording the Company access to Rust's plants, properties
and records.

Rust has also made certain post-Closing covenants in the Reorganization
Agreement, including (i) paying one-half of all costs and expenses incurred
within 180 days after the Closing in connection with the closing of certain of
the Division's offices and certain other costs of the Merger; provided that such
payment does not exceed $500,000 in the aggregate, and (ii) assisting the
Company in obtaining employment agreements between the Company and certain key
employees.

The Reorganization Agreement provides financial covenants with respect to
certain enumerated projects of the Division. With respect to certain of those
projects, Rust has agreed to transfer to Environmental, as part of the
Transferred Assets, an account receivable of Rust in an amount equal to the book
value of the project receivables, in substitution for the actual project
receivables, although the Company and Rust have a preliminary oral agreement
that the present value of such receivable may be paid at Closing. Rust's
substituted receivable will be payable on the earlier of collection of all or
part of the project receivables or the date one year from the Closing Date. With
respect to other projects, Rust has agreed to retain sole responsibility for
ongoing project work, with the Company acting as subcontractor to Rust at
certain agreed upon rates. Risk of loss on these projects remains with Rust.
Finally Rust has agreed to reimburse the Company for any losses relating to one
project, up to a specified limit.

CONDITIONS

The obligation of the Company to effect the Closing is subject to the
satisfaction of several conditions, including (i) the receipt of certain
consents and approvals, including the approval of the shareholders of the
Company for the issuance of Common Stock to Rust, (ii) the absence of certain
material adverse changes with respect to the Division, (iii) delivery of
certified resolutions of Rust's Board of Directors authorizing the transactions
contemplated by the Reorganization Agreement, (iv) the receipt by the Company of
the right to cause WMX to guarantee indebtedness of the Company, up to
$75,000,000, for a period of five years after the Closing upon satisfaction of
certain conditions, (v) the execution and delivery by WMX, Rust and the Company
of the Standstill and Non-Competition Agreement, (vi) the Company having
received a fairness opinion from a recognized investment banking firm with
respect to the transactions contemplated by the Reorganization Agreement, and
(vii) the execution and delivery of the Merger Agreement.

The obligation of Rust to effect the Closing is subject to the satisfaction
of several conditions, including (i) the receipt of certain consents and
approvals, including the approval of the shareholders of the Company for the
issuance of Common Stock, (ii) the absence of certain material adverse changes
in the business of the Company, (iii) delivery by the Company's Board of
Directors of resolutions authorizing the transactions contemplated by the
Reorganization Agreement, (iv) the execution and delivery of the Merger
Agreement, (v) the receipt by the Company of waivers by certain of the Company's
executive officers of their rights under certain change in control employment
agreements with respect to the Merger, and (vi) that the Closing Price shall not
be less than $6.00 per share.

CERTAIN BUSINESS AGREEMENTS

The Reorganization Agreement provides for certain specified business
agreements between Rust and the Company. First, Rust agrees that the Company
will provide certain environmental remediation services under Rust's TERCs in
exchange for a proportion of all fees earned under such contracts. Also, Rust
agrees to take all actions necessary to maintain after the Closing all existing
payment, performance and surety bonds on the Division's projects. The Company
has agreed to indemnify and hold Rust and its subsidiaries and affiliates
harmless from any loss incurred as a result of any payment which might be made
by a surety under such bonds related to the activities of the Company following
the Closing. Rust also agreed under the Reorganization

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Agreement to assist the Company following the Closing in securing discounts and
favorable pricing from WMX vendors.

INDEMNIFICATION

The Reorganization Agreement provides that Rust will indemnify the Company
from and against all losses incurred or suffered by the Company (i) resulting
from inaccurate representations or warranties relating to (a) Rust's having good
title to the assets or (b) any contamination caused by Rust or its subsidiaries
on the Division's Hawaiian Remediation & Recycling Facility in Kapolei, Hawaii,
(ii) resulting from any default in the performance of any of the covenants or
agreements made by Rust (including any of its affiliates) in the Reorganization
Agreement or any of the other agreements contemplated by the Reorganization
Agreement, (iii) arising from, resulting from or relating to the activities of
the Division or ownership and use of the assets comprising the Division prior to
August 1, 1993 with respect to Transferred Assets previously owned by Enclean
and January 1, 1993 for all other assets, other than certain project losses
incurred in the ordinary course of performance, or (iv) arising out of the
Excluded Liabilities.

The Reorganization Agreement provides that the Company will indemnify Rust
from and against all losses incurred or suffered by Rust resulting from (i) any
default in the performance of any of the covenants or agreements made by the
Company in the Reorganization Agreement or any of the other agreements
contemplated by the Reorganization Agreement, or (ii) arising from the Assumed
Liabilities.

TERMINATION

The Reorganization Agreement may be terminated prior to the Closing by (i)
either the Company or Rust in the event of a material default or a material
breach by the other with respect to the due and timely performance of any of its
covenants, agreements or inaccurate representations and warranties, which
default or inaccuracy cannot be cured, (ii) the mutual consent of each of the
Company and Rust, or (iii) either the Company or Rust if the Closing does not
occur, other than through the failure of the terminating party to fulfill its
obligations under the Reorganization Agreement, on or before September 30, 1995
or such later date as the parties may agree.

STANDSTILL AND NON-COMPETITION AGREEMENT

In connection with the transactions contemplated by the Reorganization
Agreement, the Company, WMX and Rust will enter into the Standstill Agreement to
provide for certain arrangements with respect to the ownership and voting of
Common Stock by the WMX Group, including an aggregate ownership limit of 40% of
the Voting Securities or such lesser percentage as shall constitute the
Ownership Limit. The Standstill Agreement provides that no member of the WMX
Group will acquire any of the Company's Voting Securities other than (i)
pursuant to the Reorganization Agreement, or (ii) acquisitions that do not
result in the WMX Group's beneficial ownership of more than the Ownership Limit.
If the Ownership Limit is exceeded, the WMX Group shall dispose of an
appropriate amount of Voting Securities to decrease its ownership to less than
or equal to the Ownership Limit. The WMX Group, however, shall not be obligated
to dispose of Voting Securities if the increase above the Ownership Limit is a
result of (i) an action by another person, such as a recapitalization or a
repurchase by the Company of Common Stock, or (ii) stock dividends or other
distributions.

The Standstill Agreement provides that the WMX Group shall vote its Common
Stock (a) for the Company's nominees to the Board of Directors selected by a
majority of the Non-Rust Directors and (b) on all other matters either in
accordance with the recommendations of the majority of the Non-Rust Directors,
or, if no recommendation is made, in the same proportion as other shareholders
of the Company shall vote.

The WMX Group further agrees under the Standstill Agreement not to (i)
deposit its Common Stock into a voting trust or subject it to any voting
arrangement, (ii) solicit proxies in opposition to any matter recommended by a
majority of the Non-Rust Directors, (iii) participate in a group for the purpose
of acquiring, holding, voting or disposing of Voting Securities, or (iv) solicit
a tender offer or business combination in which Voting Securities would be
acquired. The Standstill Agreement also limits the ability of the WMX Group to
transfer its Common Stock and provides for a legend on the shares which
references the Standstill Agreement.

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The above provisions of the Standstill Agreement relating to the Voting
Securities will remain in effect until the earlier to occur of either (i) the
Company failing to meet its reimbursement obligations with respect to a draw on
the WMX Guarantee or (ii) the WMX Group no longer owning 20% of the Voting
Securities and failing to exercise the anti-dilution option referred to below
("Term of the Agreement").

Under the Standstill Agreement, the Company grants the WMX Group an option
to purchase additional Common Stock any time the WMX Group's beneficial
ownership falls below 20% so as to raise its holdings to no more than 21% of the
outstanding shares of Common Stock (the "Anti-Dilution Option"). The price of
such additional Common Stock shall be the average closing price per share
measured by the five trading days prior to the exercise date of the
Anti-Dilution Option.

The Standstill Agreement provides that for so long as the WMX Group owns at
least 20% of the outstanding Voting Securities, the WMX Group shall take all
actions within its control to include at least three independent directors on
the Company's Board. In addition, the Standstill Agreement provides that, (i)
immediately following the Closing, the Company shall elect to its Board of
Directors three designees of Rust, and (ii) thereafter, for so long as the WMX
Group owns at least 20% of the outstanding Voting Securities of the Company or
so long as the Anti-Dilution Option has not expired, the Company will include a
number of qualified Rust designees acceptable to the Company, as nominees to the
Board of Directors such that the percentage of the Board of Directors proposed
to be comprised of such WMX Group designees is proportionately equal (to the
lowest whole directorship) to the WMX Group's percentage ownership in the
Company.

Whether or not the Term of the Agreement has expired, the WMX Group also
agrees that so long as the WMX Group owns 20% of the outstanding Voting
Securities, no member of the WMX Group shall purchase or otherwise acquire any
Voting Securities unless (i) the purchase is pursuant to an offer for all
outstanding shares at the same price, (ii) the purchase is approved by either
(a) the independent directors or (b) a majority of the outstanding Voting
Securities, other than those owned by the WMX Group and certain other
shareholders, at a meeting of shareholders called pursuant to the Control Share
Acquisition provisions in Article V of the Company's Amended and Restated
Articles of Incorporation.

Subject to certain limited exceptions, WMX and Rust and their respective
subsidiaries (other than WTI and Waste Management International plc and their
respective subsidiaries) have agreed for a period of seven years not to engage
in North America in the business of providing field services for the on-site
remediation of hazardous waste, radioactive materials, mixed waste, waste
contaminated with petroleum, hydrocarbons, crude oil, PCBs, or any "Hazardous
Substances" as such term is defined in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 as amended ("CERCLA").

The Standstill Agreement also provides that for so long as the WMX Group
owns at least 20% of the outstanding Voting Securities, WMX agrees that the
Company shall be a preferred provider of certain environmental remediation
services to WMX and its affiliates. Rust also agrees to provide the Company
access to and the services of its engineering, consulting, design and project
management services personnel on the same basis and at the same cost as Rust
provides them to WMX and its affiliates. In addition, for so long as the WMX
Group owns at least 20% of the outstanding Voting Securities, the Company agrees
that WMX shall be a preferred provider of engineering, consulting and design and
environmental and waste management services.

THE MERGER AGREEMENT

In connection with the Reorganization Agreement, Rust and the Company have
agreed to cause their respective subsidiaries, Environmental and OHMR, to enter
into the Merger Agreement. Pursuant to the Reorganization Agreement Rust,
Remedial and Enclean shall transfer all of the Transferred Assets and
Transferred Liabilities to Environmental, a wholly-owned subsidiary of Remedial.
Pursuant to the Merger Agreement, Environmental shall merge with and into OHMR
with OHMR being the surviving corporation. The Merger shall become effective
upon filing of the appropriate certificates with the Secretaries of State of
Ohio and Delaware.

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THE COMPANY

GENERAL

The Company is one of the largest providers, on the basis of revenues, of
technology-based, on-site hazardous waste remediation services in the United
States. The Company and its predecessors have been in the environmental services
business since 1969. Over time the Company developed emergency response cleanup
and planned remediation capabilities. The Company has successfully completed
over 19,000 projects involving contaminated groundwater, soil and facilities.

The Company provides a wide range of environmental services, primarily to
large chemical, petroleum, transportation and industrial companies, and to
government agencies. The Company has worked for most of the Fortune 100
industrial companies, the Environmental Protection Agency (the "EPA"), the
Department of Defense (the "DOD") (including the U.S. Army Corp of Engineers
("USACE") and the U.S. Departments of the Air Force and Navy), the Department of
Energy ("DOE") and a number of state and local governments. The Company
specializes in applying a full spectrum of on-site technologies, including
biological, chemical, physical, soil vapor extraction and thermal technologies,
to remediate hazardous and industrial wastes on both a planned and an emergency
response basis. In 1994, planned services represented approximately 95% of net
revenues and emergency response services represented approximately 5% of net
revenues. Although the Company primarily performs technology-based, on-site
remediation services, it also offers a broad range of other services, including
site assessment, engineering, remedial design and analytical testing. Service is
provided through 29 regional offices, one fixed laboratory at its headquarters
in Findlay, Ohio, nine mobile laboratories, and more than 3,000 pieces of mobile
treatment and related field equipment.

In response to what the Company perceived as increased opportunities in the
field of on-site hazardous waste remediation services, since 1990 the Company
has substantially completed a program to divest itself of or reduce its
ownership in its nonremediation businesses in order to focus on its core
remediation business. In 1991 the Company sold its three commercial testing
laboratories for $12.9 million and completed the write-off of its investment in
Concord, a joint venture with Consolidated Rail Corporation which owned and
operated fixed-base hazardous waste facilities. In 1993 the Company sold its
fixed-base hazardous waste treatment and storage facility for $14.6 million and
the Company's investment in NSC was reduced from 70% to 40% as a result of NSC's
purchase of the asbestos abatement division of Brand in exchange for NSC's
industrial cleaning and maintenance business and the issuance of 4,010,000
shares of NSC's common stock.

OHM'S ENVIRONMENTAL REMEDIATION SERVICES

The Company assists its clients by providing comprehensive on-site
treatment of toxic materials and hazardous wastes. By applying a broad range of
biological, chemical, physical, soil vapor extraction and thermal treatment
technologies, the Company performs on-site treatment and remediation services
for the control, detoxification, decontamination, and volume reduction of
hazardous and toxic material. Accordingly, the Company has designed a wide range
of modular mobile treatment equipment, which can be used on-site, either
independently or in a system, for removing, detoxifying, reducing the volume of,
or stabilizing contaminants. This equipment includes thermal destruction units,
dewatering presses, filters, separators, ion exchangers, stripping systems and
mobile process equipment which apply various physical, chemical and biological
technologies to remediate contaminants. Since 1970, the Company has completed
over 19,000 projects throughout the United States, cleaning up hazardous wastes,
removing toxic chemicals from groundwater, and cleaning facilities of
contaminants. Since the disposition by the Company in early 1993 of its interest
in OHM Resource Recovery Corp., the operator of a hazardous waste treatment and
disposal facility, the Company does not own or operate any hazardous waste
disposal sites or other off-site waste treatment or disposal facilities. The
Company generally coordinates through licensed subcontractors the transportation
and disposal of any hazardous waste which is not remediated on-site.

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The Company endeavors to offer clients an increasingly broad array of
on-site treatment services, either on a planned or emergency basis, from its 29
regional offices located throughout the country. On-site environmental
remediation services provided by the Company include:

- Treatment, stabilization or removal of contaminants;

- Decontamination of industrial facilities;

- Assessment, characterization and treatment of contaminated soil and/or
groundwater;

- Surface impoundment restoration, including volume reduction,
stabilization and closure of contaminated lagoons;

- Management of underground and aboveground storage tanks;

- Design, engineering, fabrication, installation and operation of on-site
treatment equipment; and

- Emergency response to virtually any kind of industrial or
transportation-related accident involving hazardous waste or materials.

The Company undertakes these projects on both a planned basis, which is
scheduled in advance, and an emergency basis, which is performed in direct
response to spills, fires and industrial accidents. The Company places its
emphasis upon planned work because of its more predictable resource
requirements, and because of its larger potential market. In 1994, planned
projects accounted for 95% of the Company's net revenues.

The Company believes that professional project management and cost
accounting systems are key factors in ensuring that projects are accurately and
successfully completed on time and within prescribed cost estimates. The
Company's project management structure combines the various functional areas
performing work at the project, including technical, engineering, administrative
and accounting specialists, into a coordinated team, reporting directly to the
project manager. The project manager's responsibility for scheduling and project
completion allows technical and operations specialists to operate efficiently
with fewer distractions.

The Company also believes that professional project management is a
critical element in limiting the significant risks and potential liabilities
involved in environmental remediation projects due to the presence of hazardous
and toxic substances. The Company has adopted a number of risk management
policies and practices including special employee training and health monitoring
programs. The Company's health and safety staff establish a safety plan for each
project prior to the initiation of work, monitor compliance with the plan and
administer the Company's medical monitoring program. The Company believes it has
an excellent overall health and safety record.

TREATMENT TECHNOLOGIES

Designing, developing and implementing solutions to environmental hazards
requires an interdisciplinary approach combining practical field experience with
remediation processes and technical skills in fields such as chemistry,
microbiology, hydrogeology, fluid mechanics, thermodynamics, and geotechnical,
biochemical and process engineering. The Company employs scientific and
engineering professionals in the environmental services field who enhance the
Company's ability to effectively participate in larger, more technically complex
remediation projects.

The Company has significant experience in the commercialization and
practical field application of new and existing technologies for the treatment
of hazardous wastes, with emphasis on the further development and application of
existing technologies. To provide direct support for its efforts to place
innovative technology in the field, in 1973, the Company built its own equipment
fabrication facility; in 1978, the Company built a laboratory dedicated to
developing commercial applications of biological treatment of hazardous wastes;
and in 1993, built a treatability laboratory to support testing and enhancement
of a broad range of innovative technology applications. In 1986, the Company
formally organized its technology application efforts through the creation of
its Technology Assessment and Commercialization ("TAC") group. The TAC group
studies emerging technologies in the laboratory and, through pilot scale
studies, provides scientific and engineering

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support for full-scale commercial remediation. The Company also provides
technology development services under contract to its clients.

The following represent the principal technologies used by the Company for
remediation projects:

- BIOLOGICAL REMEDIATION: The Company's biological treatability laboratory
designs and tests bioremediation techniques for treating hazardous waste.
Biological treatment technologies generally utilize enhanced
microbiological activity to decompose and detoxify contaminants, often
using a site's natural flora to remediate a problem. The Company's
biological laboratories can "feed" the microorganisms that destroy the
pollutant so that they grow at a faster rate than would occur in nature.
The Company has developed considerable expertise in transferring
innovative bioremediation techniques from the laboratory to the field,
having performed more than 48 full-scale bioremediation projects since
1976, and is considered one of the country's most experienced providers of
this emerging technology. The Company utilizes the following biological
treatment technologies:

Anaerobic Digestion Vessel -- degradation of organic contaminants in the
absence of air.

Trickling Filters -- secondary treatment on large-scale treatment
applications to enhance the oxygenation process.

Activated Sludge Reactor -- treatment utilizing holding tanks to enhance
biological degradation.

Submerged Fixed Reactor Vessel -- combines a trickling filter and an
activated sludge reactor for more efficient degradation of contaminants.

Aeration Lagoons -- secondary or tertiary treatment to remove carbon,
nitrogen or phosphorous.

- CHEMICAL TREATMENT: The Company's mobile chemical treatment equipment
utilizes the following technologies:

Carbon Adsorption -- passage of a liquid or vapor discharge stream
through a bed of activated carbon which adsorbs certain contaminants.

Oxidation/Reduction -- conversion of complex components of the
wastestream into simpler, less toxic materials through addition of
oxidizing or reducing agents such as ozone, hydrogen peroxide and sodium
bisulfate.

Clarification/Flocculation -- addition of chemicals which bond with
dissolved metals to form insoluble products which separate through
settling techniques.

Ion-Exchange -- ion-exchange resins used for the selective removal of
heavy metals and hazardous ions.

Ultra-Violet Treatment -- use of ultra-violet light to kill pathogens
and weaken strong bonds associated with some organic chemicals.

- PHYSICAL TREATMENT: The Company's physical treatment technologies
generally involve removal of contaminants through osmosis, settlement or
filtration. The Company's mobile physical treatment equipment utilizes the
following technologies:

Heated Volatile Stripping -- removal of contaminants with low boiling
points by passage of air under pressure through the wastestream.

Fume Scrubbing -- passage of a vaporized stream through an aerosol spray
to remove contaminant particles from the vapor stream.

Immiscible Fraction Separation -- removal of a component of a
wastestream which is immiscible in water through settling techniques.

Mixed Media Filtration -- removal of suspended particles by passage
through selected filter media.

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- SOIL VAPOR EXTRACTION AND SOIL FLUSHING: The Company has applied several
innovative technologies, known generally as soil vapor extraction and soil
flushing, based on a patent granted in 1984 for a portable method of soil
decontamination above or below the groundwater table. The technologies
generally involve the use of a system of pressurized injection and vacuum
extraction wells to induce a pressure gradient and a fluid flow to extract
contaminants and treat them in-situ or in an aboveground system. The
technologies can be used to remove contaminants in soils and groundwater,
in-situ or ex-situ, and can be combined with bioremediation to treat
mixtures of volatile and non-volatile contaminants.

- THERMAL TREATMENT: The Company's thermal treatment technologies include
infrared incineration, rotary kiln technology and thermal desorption.
Infrared incineration uses electric powered resistance heaters as a source
of radiant heat for removal and destruction of hazardous organic
contaminants. Rotary kiln incineration is the traditional incineration
process for destroying organic hazardous waste constituents in a
refractory lined rotating kiln. Thermal desorption is a thermal treatment
technology which uses heat to remove volatile compounds from a waste
without oxidation of the compounds. The Company has established a thermal
treatment engineering group to assess, develop and commercialize thermal
technologies for on-site remediation. The Company provides incineration
services through three thermal destruction units which can be moved
directly onto a project site involving PCBs or other toxic organics. The
Company has successfully completed five large-scale, on-site incineration
projects with its mobile infrared unit. The Company has constructed a 30
tons per hour state-of-the-art mobile treatment system that will be used
for its Baird & McGuire Superfund site remediation project.

FOCUS ON LARGER PROJECTS AND GOVERNMENT CONTRACTS

Recently, the Company has pursued larger projects as a method to achieve a
more predictable revenue stream, more consistent utilization of equipment and
personnel, and greater leverage of sales and marketing costs. Historically, the
Company relied most heavily on private sector remediation projects in the
Northeast and Midwest that typically involved planned cleanups of sites that
were contaminated in the normal course of manufacturing activity and emergency
cleanups of oil or chemical spills. Contract values typically were less than $1
million in size and less than one year in duration. While this type of
remediation activity still comprises a majority of the work performed by the
Company, it now aggressively targets more complex, multi-million dollar,
multi-year private sector and government site-specific and term contracts. As a
result of its shift in project focus, since the beginning of 1991 the Company
has been awarded a number of large, site-specific contracts which, in some
cases, may require several years to complete. Larger, site-specific projects may
offer the Company the opportunity to realize margins higher than on other types
of contracts, but also impose heightened risks of loss in the event that actual
costs are higher than those estimated at the time of bid due to unanticipated
problems, inefficient project management, or disputes over the terms and
specifications of the contracted performance.

Since the beginning of 1991, the Company has been awarded 18 government
term contracts with potential values ranging from $10 million to $250 million
and terms ranging from three to ten years. Such government term contracts
typically are performed by completing remediation work under delivery orders,
issued by the contracting government entity, for a large number of small- to
medium-sized projects throughout the geographic area covered by the contract.
Such government term contracts do not represent commitments with respect to the
amount, if any, that will actually be expended pursuant to such contracts, may
generally be cancelled, delayed or modified at the sole option of the
government, and are subject to annual funding limitations and public sector
budget constraints. Accordingly, such government contracts represent the
potential dollar value that may be expended under such contracts, but there is
no assurance that such amounts, if any, will be actually spent on any projects,
or of the timing thereof.

For the year ended December 31, 1994, 64.5% of the Company's gross revenues
were derived from federal, state and local government contracts. The Company
expects that the percentage of its revenues attributable to such government
clients may continue to grow and represent a greater portion of its revenues. In
addition to its dependence on government contracts, the Company also faces the
risks associated with such contracting, which could include substantial civil
and criminal fines and penalties. As a result of its

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government contracting business, the Company is, has been and may in the future
be subject to audits and investigations by government agencies. In addition to
potential damage to the Company's business reputation, the failure by the
Company to comply with the terms of any of its government contracts could also
result in the Company's suspension or debarment from future government contracts
for a significant period of time. The fines and penalties which could result
from noncompliance with appropriate standards and regulations, or the Company's
suspension or debarment, could have a material adverse effect on the Company's
business, particularly in light of the increasing importance to the Company of
work for various government agencies. See "THE COMPANY -- Legal Proceedings."

ENVIRONMENTAL CONTRACTOR RISKS

Although the Company believes that it generally benefits from increased
environmental regulations, and from enforcement of those regulations, increased
regulation and enforcement also creates significant risks for the Company. The
assessment, remediation, analysis, handling and management of hazardous
substances necessarily involve significant risks, including the possibility of
damages or injuries caused by the escape of hazardous materials into the
environment, and the possibility of fines, penalties or other regulatory action.
These risks include potentially large civil and criminal liabilities for
violations of environmental laws and regulations, and liabilities to customers
and to third parties for damages arising from performing services for clients,
which could have a material adverse effect on the Company.

Potential Liabilities Arising Out of Environmental Laws and
Regulations. All facets of the Company's business are conducted in the context
of a rapidly developing and changing statutory and regulatory framework. The
Company's operations and services are affected by and subject to regulation by a
number of federal agencies including the EPA, the Occupational Safety and Health
Administration ("OSHA"), and, on limited occasions, the Nuclear Regulatory
Commission, as well as applicable state and local regulatory agencies. (For a
description of certain applicable laws and regulations, see "THE COMPANY --
Regulation.")

Potential Liabilities Involving Clients and Third Parties. In performing
services for its clients, the Company could potentially be liable for breach of
contract, personal injury, property damage, and negligence, including claims for
lack of timely performance and/or for failure to deliver the service promised
(including improper or negligent performance or design, failure to meet
specifications, and breaches of express or implied warranties). The damages
available to a client, should it prevail in its claims, are potentially large
and could include consequential damages.

Environmental contractors, in connection with work performed for clients,
also potentially face liabilities to third parties from various claims including
claims for property damage or personal injury stemming from a release of
hazardous substances or otherwise. Claims for damage to third parties could
arise in a number of ways, including through a sudden and accidental release or
discharge of contaminants or pollutants during the performance of services,
through the inability, despite reasonable care, of a remedial plan to contain or
correct an ongoing seepage or release of pollutants, through the inadvertent
exacerbation of an existing contamination problem, or through reliance on
reports prepared by the Company. Personal injury claims could arise
contemporaneously with performance of the work or long after completion of the
project as a result of alleged exposure to toxic substances. In addition,
increasing numbers of claimants assert that companies performing environmental
remediation should be adjudged strictly liable, i.e., liable for damages even
though its services were performed using reasonable care, on the grounds that
such services involved "abnormally dangerous activities."

Clients frequently attempt to shift various of the liabilities arising out
of remediation of their own environmental problems to contractors through
contractual indemnities. Such provisions seek to require the Company to assume
liabilities for damage or injury to third parties and property and for
environmental fines and penalties. The Company has adopted risk management
policies designed to address these problems, but cannot assure their adequacy.
In addition, the Company generally coordinates through subcontractors the
transportation of any hazardous waste which is not remediated on-site to a
licensed hazardous waste disposal or incineration facility.

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Recently the EPA has constricted significantly the circumstances under
which it will indemnify its contractors against liabilities incurred in
connection with CERCLA projects.

DEPENDENCE ON ENVIRONMENTAL REGULATION

Much of the Company's business is generated either directly or indirectly
as a result of federal and state laws, regulations and programs related to
environmental issues. Accordingly, a reduction in the number or scope of these
laws and regulations, or changes in government policies regarding the funding,
implementation or enforcement of such laws, regulations and programs, could have
a material adverse effect on the Company's business.

MARKETS AND CUSTOMERS

The Company provides its services to a broad base of clients in both the
private and government sectors. Its private sector clients include large
chemical, petroleum, manufacturing, transportation, real estate, electronics,
automotive, aerospace and other industrial companies, as well as engineering and
consulting firms. The Company has worked for a majority of the Fortune 100
industrial companies. Historically, the majority of the Company's private sector
revenues were derived from projects with values typically less than $1 million
in size and less than one year in duration. Net revenues from industrial clients
for 1994 were $78.3 million and constituted 35.5% of the Company's net revenues.

In the government sector, the market for the Company's services primarily
consists of federal government agencies. The Company has been a prime contractor
to the EPA since 1984 under Emergency Response Cleanup Services ("ERCS")
contracts administered under the Superfund Removal Program. In addition, through
site specific and term contracts, the Company provides its services to the DOD,
including USACE, the U.S. Departments of the Navy, Air Force and Army, at DOE
facilities and to state and local governments. Net revenues from government
agencies in 1994 aggregated $142.0 million and accounted for 64.5% of net
revenues, of which the USACE and the Department of the Navy accounted for
approximately $56 million and 25.4% and $32.8 million and 14.9% of net revenues,
respectively.

At December 31, 1994, the Company had 259 Environmental Service Agreements
in place with commercial customers and 14 with government customers. Under these
agreements, which generally have terms of one to five years, the Company agrees
to provide its services to customers upon request at stipulated prices.

SEASONALITY AND FLUCTUATION IN QUARTERLY RESULTS

Quarterly results are subject to fluctuation due to a number of factors.
The timing of the Company's revenues is dependent on its backlog, contract
awards and the performance requirements of each contract. The Company's revenues
are also affected by the timing of its clients' planned remediation activities
which generally increase during the third and fourth quarters. Because of this
change in demand, the Company's quarterly revenues can fluctuate, and revenues
for the first and second quarters of each year have historically been lower than
for the third and fourth quarters. Accordingly, results for any one quarter
should not be considered indicative of results to be expected for any other
quarter or for a full fiscal year.

COMPETITION

The environmental services industry is highly competitive with numerous
companies of various size, geographic presence and capabilities participating.
The Company believes that it has approximately a dozen principal competitors in
the environmental remediation sector of the environmental services industry and
numerous smaller competitors. The Company believes that the principal
competitive factors in its business are operational experience, technical
proficiency, breadth of services offered, local presence and price. In certain
aspects of the Company's environmental remediation business, substantial capital
investment is required for equipment. Certain of the Company's competitors have
greater financial resources, which could allow for greater investment in
equipment and provide better access to bonding and insurance markets to provide
the financial assurance instruments which are often required by clients.
Additionally, the relatively recent entry of

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several aerospace and defense contractors, as well as large construction and
engineering firms, into the environmental services industry has increased the
level of competition. The Company believes that the demand for environmental
services is still developing and expanding and, as a result, many small and
large firms will continue to be attracted to the industry.

INSURANCE

The Company's insurance program in effect from November 1, 1994 through
October 31, 1995 includes primary commercial general liability coverage in the
amount of $1,000,000 per occurrence/$2,000,000 aggregate, primary automobile
liability coverage in the amount of $1,000,000 combined single limit, workers'
compensation liability to statutory limits and employer's liability insurance of
$1,000,000. The Company's primary insurance is in a deductible program with
self-insured retentions equal to the limit of liability and up to $500,000 per
occurrence for the Company's workers' compensation and employer's liability
insurance coverage in most states. With respect to certain other states, the
Company's workers' compensation and employer's liability insurance is provided
under an arrangement with an insurance company pursuant to which the Company's
captive insurance subsidiary (the "Captive") reinsures such policies and
indemnifies the insurance carrier against all losses and costs of defense up to
a self insured retention of $500,000 per occurrence. With respect to the
Company's primary insurance coverages in effect prior to November 1, 1994, such
coverages were also provided under a reinsurance arrangement pursuant to which
the Captive reinsured the limits of each such policy (except for the worker's
compensation policy with a self-insured retention of $500,000 per occurrence).
The Company supports the indemnity commitment of the Captive with letters of
credit provided under the Company's Revolving Credit Facility. The Company has
caused to be issued $7,030,000 in letters of credit to support the Captive's
existing or anticipated obligations to indemnify the insurance carrier, which
amount is adjusted from time to time. From a risk management perspective, the
deductible amounts under the Company's primary insurance policies and all
policies reinsured by the Captive are, in effect, a self-insurance layer.
Additionally, the Company has $40,000,000 excess liability policies insuring
claims in excess of the primary insurance coverages described above. The Company
also has other insurance policies with various self-insured retentions,
including property coverage in the amount of $121,000,000, consultants'
environmental liability coverage in the amount of $30,000,000 per claim and in
the aggregate, and environmental impairment liability coverage in the amount of
$5,000,000 with respect to the Company's fixed base laboratory facility.

Although the Company believes its insurance program to be appropriate for
the management of its risks, its insurance policies may not fully cover risks
arising from the Company's operations. The exclusion of certain pollution and
other liabilities from some insurance policies, or losses in excess of the
coverage, may cause all or a portion of one or more losses not to be covered by
such insurance. Further, the cost and limited availability of insurance has
resulted in the Company's use of deductible programs and self-insurance through
the Captive, thus exposing the Company to additional liabilities.

EMPLOYEES

The Company had approximately 2,168 employees as of December 31, 1994. The
Company is not party to collective bargaining agreements. The Company considers
relations with its employees to be satisfactory.

PATENTS

The Company currently owns two patents covering certain design features of
equipment employed in its on-site remediation business. The first relates to a
filtration system developed and used by the Company to remove pollutants from
flowing creeks and streams and the second, known as a Portable Method for
Decontaminating Earth, relates to a decontamination system used by the Company
to remove contaminants from the soil through a process, commonly known as soil
vapor extraction. Although the Company considers its patents to be important,
they are not a material factor in its business.

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REGULATION

The environmental services business, including the remediation services
segment of the industry, has benefited enormously from extensive federal and
state regulation of environmental matters. On the other hand, the Company's
environmental services are also subject to extensive federal and state
legislation as well as regulation by the EPA, the Occupational Safety and Health
Administration and applicable state and local regulatory agencies. All facets of
the Company's business are conducted in the context of a rapidly developing and
changing statutory and regulatory framework and an aggressive enforcement and
regulatory posture. The full impact of these laws and regulations, and the
enforcement thereof, on the Company's business is difficult to predict,
principally due to the complexity of the relatively new legislation, new and
changing regulations, and the impact of political and economic pressures. The
assessment, remediation, analysis, handling and management of hazardous
substances necessarily involve significant risks, including the possibility of
damages or injuries caused by the escape of hazardous materials into the
environment, and the possibility of fines, penalties or other regulatory action.

The Comprehensive Environmental Response, Compensation and Liability Act of
1980 ("CERCLA") addresses cleanup of sites at which there has been a release or
threatened release of hazardous substances into the environment. CERCLA assigns
liability for costs of cleanup of such sites and for damage to natural resources
to any person who, currently or at the time of disposal of a hazardous
substance, owned or operated any facility at which hazardous substances were
disposed of; to any person who by agreement or otherwise arranged for disposal
or treatment, or arranged with a transporter for transport for disposal or
treatment of hazardous substances owned or possessed by such person for disposal
or treatment by others; and to any person who accepted hazardous substances for
transport to disposal or treatment facilities or sites selected by such persons
from which there is a release or threatened release of hazardous substances.
CERCLA authorizes the federal government both to clean up these sites itself and
to order persons responsible for the situation to do so. In addition, under the
authority of Superfund and its implementing regulations, detailed requirements
apply to the manner and degree of remediation of facilities and sites where
hazardous substances have been or are threatened to be released into the
environment. CERCLA created the Superfund to be used by the federal government
to pay for the cleanup efforts. Where the federal government expends money for
remedial activities, it may seek reimbursement from the "potentially responsible
parties." CERCLA imposes strict, joint and several retroactive liability upon
such parties. Increasingly, there are efforts to expand the reach of CERCLA to
make environmental contractors responsible for cleanup costs by claiming that
environmental contractors are owners or operators of hazardous waste facilities
or that they arranged for treatment, transportation or disposal of hazardous
substances. Several recent court decisions have accepted these claims. Should
the Company be held responsible under CERCLA for damages caused while performing
services or otherwise, it may be forced to bear such liability by itself,
notwithstanding the potential availability of contribution or indemnity from
other parties. Although CERCLA's taxing authority expires December 31, 1995, EPA
and congressional analysts concur that a sufficient surplus of unspent
appropriated funds exist to run the program through mid-1997. The Company
believes Superfund reauthorization hearings will begin this year and anticipates
its reauthorization in 1995 or 1996.

The Resource Conservation and Recovery Act of 1976, as amended in 1984
("RCRA"), is the principal federal statute governing hazardous waste generation,
treatment, storage and disposal. RCRA, or EPA-approved state programs at least
as stringent, govern waste handling activities involving wastes classified as
"hazardous." Under RCRA, liability and stringent operating requirements are
imposed on a person who is either a "generator" or "transporter" of hazardous
wastes, or an "owner" or "operator" of a hazardous waste treatment, storage or
disposal facility. The EPA has issued regulations under RCRA for hazardous waste
generators, transporters and owners and operators of hazardous waste treatment,
storage or disposal facilities. These regulations impose detailed operating,
inspection, training, emergency preparedness and response standards, and
requirements for closure, continuing financial responsibility, manifesting,
recordkeeping and reporting. The Company's clients remain responsible by law for
the generation or transportation of hazardous wastes or ownership or operation
of hazardous waste treatment, storage or disposal facilities. Although the
Company does not believe its conduct in performing environmental remediation
services would cause it to be considered liable as an owner or operator of a
hazardous waste treatment, storage or disposal facility, or a

35
<PAGE> 39

generator or transporter of hazardous wastes under RCRA, RCRA and similar state
statutes regulate the Company's practices for the treatment, transportation and
other handling of hazardous materials, and substantial fines and penalties may
be imposed for any violation of such statutes and the regulations thereunder.

The Company's services are also utilized by its clients in complying with,
and the Company's operations are subject to regulation under, among others, the
following federal laws: the Toxic Substances Control Act, the Clean Water Act,
the Safe Drinking Water Act, the Occupational Safety and Health Act and the
Hazardous Materials Transportation Act. In addition, many states have passed
Superfund-type legislation and other statutes, regulations and policies to cover
more detailed aspects of hazardous materials management.

The Company, through its on-site treatment capabilities and the use of
subcontractors, attempts to minimize its transportation of hazardous substances
and wastes. However, there are occasions, especially in connection with its
emergency response activities, when the Company does transport hazardous
substances and waste. Such transportation activities are closely regulated by
the United States Department of Transportation, the Interstate Commerce
Commission, and transportation regulatory bodies in each state. The applicable
regulations include licensing requirements, truck safety requirements, weight
limitations and, in some areas, rate limitations and operating conditions.

BACKLOG AND POTENTIAL VALUE OF TERM CONTRACTS

The following table lists at the dates indicated (i) the Company's backlog,
defined as the unearned portion of the Company's existing contracts and unfilled
orders, and (ii) the Company's term contracts, defined as the potential value of
government term contracts (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------
1994 1993 1992
---------- -------- --------
<S> <C> <C> <C>
Backlog........................................... $ 255,000 $201,000 $164,000
Term contracts.................................... 1,498,000 652,000 207,000
---------- -------- --------
Total contract backlog....................... $1,753,000 $853,000 $371,000
========= ======== ========
</TABLE>

Backlog. In accordance with industry practice, substantially all of the
Company's contracts in backlog may be terminated at the convenience of the
client. In addition, the amount of the Company's backlog is subject to changes
in the scope of services to be provided under any given contract. The Company
has not historically experienced any material contract terminations and
generally experiences favorable changes in contract scope. The Company estimates
that approximately 65% of the backlog at December 31, 1994 will be realized
within the next year.

Term Contracts. The significant increase in the potential value of term
contracts since 1992 has resulted from the award of 18 government contracts
ranging in size from $10,000,000 to $250,000,000 and with terms ranging from
three to ten years. The majority of dollars awarded came from the U.S.
Departments of the Navy, Army and Air Force. Such government term contracts
typically are performed by completing remediation work under delivery orders,
issued by the contracting government entity, for a large number of small- to
medium-sized projects throughout the geographic area covered by the contract.
The Company's government term contracts generally may be cancelled, delayed or
modified at the sole option of the government, and typically are subject to
annual funding limitations and public sector budget constraints. Accordingly,
such government contracts represent the potential dollar value that may be
expended under such contracts, but there is no assurance that such amounts, if
any, will be actually spent on any projects, or of the timing thereof.

EQUITY INVESTMENTS

NSC Corporation. NSC is the leading provider of asbestos abatement
services to a broad range of commercial and industrial clients and government
agencies throughout the United States. NSC provides services to abate, primarily
through removal, the hazards associated with asbestos insulation and materials

36
<PAGE> 40

containing asbestos in large commercial and public buildings, and in connection
with large industrial facility decontamination and decommissioning projects. In
May 1993, the Company's investment in NSC was reduced from 70% to 40% as a
result of NSC's purchase of the asbestos abatement division of Brand in exchange
for its industrial cleaning and maintenance business and the issuance of
4,010,000 shares of NSC common stock. The Company owns 40% of NSC and accounts
for NSC on the equity method. Rust owns another 40% of NSC, and the remaining
20% is publicly held.

PROPERTIES

The Company currently owns property in four states and leases property in
19 states and the District of Columbia. The property owned by the Company
includes approximately 26 acres in Findlay, Ohio, upon which are located the
Company's 31,200 square foot corporate headquarters, a 39,600 square foot
laboratory and technical facility, a 20,000 square foot support services
facility, as well as its fabrication, maintenance and remediation service center
facilities. The Company also owns remediation service centers in Covington,
Georgia (approximately ten acres of land and an 8,200 square foot building),
Clermont, Florida (approximately five acres of land and a 6,500 square foot
building) and Baton Rouge, Louisiana (approximately ten acres of land and a
52,500 square foot building).

The Company operates other offices and remediation service centers in the
following states: Alaska, California, Colorado, the District of Columbia,
Florida, Hawaii, Illinois, Iowa, Georgia, Massachusetts, Minnesota, Missouri,
New Jersey, New York, Ohio, Pennsylvania, Tennessee, Texas, Virginia and
Washington. All of these offices and service center facilities are leased. Under
these leases, the Company is required to pay base rentals, real estate taxes,
utilities and other operating expenses. Annual rental payments for the
remediation service centers and office properties are approximately $2,600,000.

LEGAL PROCEEDINGS

In October 1993, the Company was retained by Citgo Petroleum Corporation
("Citgo") for the removal of surface impoundment sludge at its Lake Charles,
Louisiana refinery. Based on information provided to the Company by Citgo, the
Company bid and was awarded a contract for approximately $28,600,000. During
April 1994, the Company submitted to Citgo a request for a substantial equitable
adjustment to the contract as a result of deficient project specifications
provided by Citgo as well as other unplanned events controlled by Citgo. On
April 29, 1994, Citgo filed a declaratory judgment action in the United States
District Court for the Western District of Louisiana requesting a declaratory
judgment that the Company is not entitled to additional compensation and
requesting an order for specific performance requiring the Company to perform
the contract. The financial statements of the Company as of December 31, 1994
reflect a claim receivable and other accounts receivable relating to performance
of the Citgo project aggregating approximately $28,210,000. The Company's answer
to the declaratory judgment action was filed on July 29, 1994, together with
counterclaims against Citgo for negligent misrepresentation, breach of contract
and quantum meruit seeking damages in excess of $35,000,000. Subsequent to
filing of the Company's answer and counterclaim, Citgo amended its complaint
seeking damages under the contract, which the Company believes approximates the
amount of disputed accounts receivable that Citgo is currently withholding. In
December 1994 Citgo filed a motion to allow it to file, and in January 1995
Citgo filed, a third party complaint against Occidental Oil and Gas Corporation
and OXY USA, Inc. asserting various claims relating to their prior involvement
with the Citgo site and its contract specifications.

37
<PAGE> 41

misconduct. The third party complaint seeks damages and contribution from the
Company and the other third party defendants. The Company has submitted claims
for indemnification related to this lawsuit under its contract with the USACE
and the EPA and has notified its contractors pollution liability insurance
carrier. The Company believes the lawsuit is without merit, intends to
vigorously defend against it and does not believe that it will have a material
adverse effect on the results of future operations or financial condition of the
Company. In May 1994 the Company learned a criminal and civil investigation had
been commenced by the government relating to the Company's billings to the EPA
and USACE and its work at the Site. The Company believes the investigation
followed certain allegations made by the PRPs in defense of the main cost
recovery action. The Company is cooperating with the investigation. See Note 15
to AUDITED FINANCIAL STATEMENTS -- The Company.

THE DIVISION

HAZARDOUS AND RADIOACTIVE SUBSTANCE REMEDIATION SERVICES

The Division is one of the largest providers of on-site remediation
services, on the basis of revenues, in the United States. The Division, through
its 962 employees at 13 locations nationwide, provides field services for the
on-site remediation of hazardous waste, radioactive materials, mixed waste and
hazardous substances to commercial customers in industrial, manufacturing,
utility and nuclear sectors and to government clients, including the DOD and DOE
in connection with such projects as the remediation of military bases and other
government installations, the EPA in connection with CERCLA projects, and
various state environmental agencies. In 1994, the Division's work for
industrial customers constituted 88.5% of its gross revenues.

The Division began operations as a division of CWM, a leading provider of
hazardous waste management services, including transportation, treatment,
resource recovery and disposal, and by 1990 CWM had expanded its capabilities to
remediate sites contaminated with radioactive materials. Initially, the
Division's business focused on the removal of hazardous wastes from customers'
premises for treatment and disposal at off-site commercial facilities operated
by CWM. In the early 1990's, however, the Division's customers increasingly
elected on-site remediation in lieu of off-site treatment and disposal. On-site
remedies typically require more extensive engineering technology as well as
sophisticated project management skills. As the business demand moved towards
on-site remediations, the Division was required to rapidly enhance its expertise
in these areas.

On January 1, 1993, in connection with the formation of Rust, WTI
contributed primarily engineering, construction, environmental and
infrastructure consulting, design and construction management services
businesses and CWM contributed the Division, among other assets, to Rust. In
part, CWM's contribution of the Division was motivated by CWM management's view
that the Division's ability to compete successfully for large on-site
remediation projects would be enhanced by closer integration with the businesses
contributed by WTI.

Rust instituted a variety of changes in management of the Division in order
to enhance its ability to provide in situ remedies. Excess staff positions were
eliminated, project management and project estimating skills were improved and
the Division continued its shift in focus to on-site treatment of hazardous
substances, in part drawing on the engineering capabilities resident in the Rust
organization.

The Division, had approximately $318 million, $228 million and $231 million
in total consolidated revenues in 1992, 1993 and 1994, respectively, from the
performance of hazardous and radioactive substance remediation services. The
revenues and net income from remediation can fluctuate for interim periods and
from year to year for a number of reasons, including (i) the demand for many of
these services is seasonal (less activity during the winter months), (ii) the
performance of such services on a given project may be affected by technical
problems, labor shortages and disputes, weather, and delays caused by external
sources, and (iii) changes in federal, state and local funding or enforcement
priorities.

The Division treats hazardous substances on-site using a variety of methods
and technologies. When appropriate, the Division utilizes PY*ROX(R) mobile
incineration technology to treat hazardous substances. In addition, the Division
utilizes X*TRAX(R) and LT*X(R) units to perform thermal desorption services and
its

38
<PAGE> 42

PO*WW*ER(R) units to treat wastewater. The X*TRAX(R) and LT*X(R) systems are
waste treatment processes that thermally separate organic contaminants from
soils or solids with subsequent treatment of the organic vapor stream. Other
methods utilized by the Division to treat hazardous substances on-site include
sludge drying, soil washing, stabilization (in-situ and ex-situ), physical
separation and to a lesser extent, bioremediation, which involves the breakdown
of hazardous substances with microorganisms. The Division's hazardous substance
remediation services also include the containment and closure of contaminated
sites and the cleaning, relining and sealing of liquid containment and treatment
ponds, lagoons and other surface impoundments.

Contracts for remediation services may be negotiated with prospective
clients or, especially in the case of governments and their agencies at the
federal, state and local level, may be awarded on the basis of sealed bids which
provide limited or no opportunity to vary the terms of the client's
solicitation. The pricing provisions of such contracts may provide for the
Division to be reimbursed for its costs incurred in performing specified work,
plus a fee (which may be fixed or may vary based on the customer's evaluation of
the Division's performance under the contract), or may require the Division to
perform the work at fixed-unit or lump-sum prices. Contracts of the latter type
involve risks such as the possibility of unforeseen delays, changes in
regulations affecting the performance of services or production problems which
may result in substantially increased costs being incurred by the Division
without being assured of increased revenue.

A substantial portion of the Division's hazardous substance remediation
services contracts are performed on the basis of a combination of lump-sum
payments and fixed-unit price terms. Remediation services generally contain two
distinct elements -- mobilization and demobilization operations -- the scope of
which permits reasonable estimation of costs prior to performance, and
intermediate services which tend to be incapable of precise estimation prior to
performance. In order to efficiently allocate the risks associated with
performing such contracts, charges for mobilization and demobilization
operations are commonly paid on a lump-sum basis (although they may be paid on a
cost or time and materials basis) and charges for intermediate services such as
hazardous substance identification, excavation, treatment and disposal are paid
on a fixed-unit (e.g., per ton) price basis. The remaining hazardous substance
remediation services contracts entered into by the Division are cost-plus
contracts and time and materials contracts.

Hazardous substance remediation services provided to the Division's private
industry clients often involve the implementation of "records of decision"
promulgated by the EPA in response to results of an EPA environmental analysis
and investigation, which is sometimes performed in conjunction with client
environmental personnel and, in some instances, an independent environmental
consultant.

The Division also performs work on large, comprehensive, federal government
cost-plus contracts at federal government facilities, including military bases.
Some of these services are or will be provided under DOE Environmental
Restoration and Management Contracts ("ERMCs") and DOD TERCs. Although ERMCs and
TERCs represent a relatively new trend in federal government contracting for the
remediation of military bases and other government installations, the DOE has
already indicated that it plans to discontinue the use of ERMCs in favor of
agreements specifically tailored to the sites being remediated. The DOD and DOE
are experimenting with awarding multi-disciplined remediation contracts to a
single company capable of providing the management services necessary to oversee
the entire project. The company selected is, in effect, the project's general
contractor.

MARKETS AND CUSTOMERS

The Division's services are primarily marketed by the Division's local
sales force located throughout the United States. Sales personnel develop and
maintain relationships with clients in an effort to keep abreast of planned
future projects and, where applicable, attempt to ensure that the Division is on
proposal or bid lists. The Division markets its services by stressing its
skills, project performance record, the price at which its services are provided
and the efficiency with which its services are performed.

The Division provides remediation services to both private sector and
governmental customers. Its private sector customers include large chemical,
petroleum, manufacturing, automotive and other industrial compa-

39
<PAGE> 43

nies, as well as engineering and consulting firms. In 1994, the Division
received approximately 88.5% of its total consolidated revenues from industrial
customers.

The Division's governmental customers primarily include the United States
government and its various departments and agencies, such as the DOD and the
DOE. In 1994, the Division received approximately 11.5% of its total
consolidated revenues from governmental customers. Business with the United
States government is highly competitive and there is no assurance that the
Division will continue to receive such business.

COMPETITION

The hazardous substance remediation industry is highly competitive and
consists of numerous companies of various sizes and capabilities. The Division
believes that it has approximately a dozen major competitors and several smaller
ones. The Division encounters intense competition primarily in pricing,
technical proficiency, and the quality of services being performed. Other
competitive factors include the ability to deliver an expanded range of
environmental services, types of equipment used, response time and employee
safety record. Some competitors of the Division may have larger financial
resources than those available to the Division. Particularly with respect to
large contracts, such as for the government sector, the Division may have to
commit substantial resources over a long period of time without any assurance of
being selected to perform, or of successfully completing, such projects.

INSURANCE

While the Division believes it operates professionally and prudently, the
hazardous substance remediation business exposes it to risks such as the
potential for liability under government regulations governing any waste
handling activities involving substances classified as "hazardous," and for
liability with respect to workers' compensation claims and related liability
insurance claims. WMX maintains liability insurance programs which also cover
Rust and its subsidiaries (including the Division) for which WMX charges Rust
the full amount of all deductibles and Rust's share of premium payment based on
Rust's total payroll during the coverage period. The programs have coverage
terms, conditions, limits of liability and deductibles commensurate with the
size and financial condition of WMX and Rust, respectively. While the Division
believes such programs are adequate, there can be no assurance that a claim or
claims will not be excluded by the applicable insurance policy or exceed the
limits of liability maintained thereunder. Such claim or claims against the
Division, as well as claims for amounts below applicable deductible amounts, if
successful and of sufficient magnitude, could have a material adverse effect on
the Division's business, results of operation or financial condition.

The market for non-sudden environmental impairment liability insurance is
constricted, with only a few insurance companies currently offering coverage in
limited amounts with restrictive terms and high premium costs. Rust, and
therefore the Division, has determined not to obtain such insurance on a risk
transfer basis. WMX maintains a claims-made policy of non-sudden environmental
impairment liability insurance which requires that WMX pre-fund or reimburse the
insurer for any claims which are paid. The Division is insured under such policy
to meet financial responsibility requirements of its customers and as mandated
by law or regulation. Rust is obligated to pay to WMX the amount of any such
pre-funding or reimbursement in respect of claims involving the Division's
operations. A portion of that cost is passed on to the Division.

Insurance coverage for losses arising out of damage to certain of the
Division's personal property (e.g., buildings, equipment, furniture, etc.) is
provided through risk-transfer policies procured by Rust.

The Division's requirements for surety bonds are currently being met
through placements arranged by WMX. WMX has agreed to indemnify the surety
companies providing bonds for the Division, and Rust has agreed in turn to
indemnify WMX for any expense or liability incurred by WMX in connection
therewith.

40
<PAGE> 44

Upon the closing of the transactions contemplated by the Reorganization
Agreements, the Division will cease to participate in the insurance programs of
WMX and Rust except that payment, performance and surety bonds in place at the
Closing will be maintained, subject to the Company's indemnification of Rust for
any loss or expense to Rust in connection therewith.

EMPLOYEES

The Division employed approximately 962 persons as of December 31, 1994.
Approximately 13 employees are represented by various labor unions. The Division
considers its employee relations to be satisfactory.

TECHNOLOGY AND OTHER RIGHTS

The Division has not expended a material amount of funds on
Division-sponsored research and development projects in the last three fiscal
years. It is expected that, consistent with past experience, any technological
advances by the Division will be made in response to specific needs and
opportunities. The Division has historically benefitted from technological and
operational advances realized in connection with specific remediation projects
and through acquisitions.

The Clemson Technical Center (the "Center") located in Anderson, South
Carolina, is operated by Rust and provides the Division with technical support,
including hazardous substances treatability studies and pilot plant design and
demonstration services pursuant to fee arrangements negotiated on a
project-by-project basis. Such services are primarily funded by third parties.
For instance, the Center is currently performing process development services
under several programs being funded by the DOE to test specific technology
applications at DOE facilities. After the Merger, the Center's services will be
available to the Company on substantially the same terms as are presently
available to the Division.

The Division owns or licenses a number of patents and patent applications
or other proprietary technology that are used in various aspects of its
business, but the patents and licenses are not considered material to the
conduct of its business as a whole. The Division believes that its business
depends primarily on such factors as quality and cost of services, project
development capability, technical proficiency, and financial strength rather
than on intellectual property protection.

REGULATION

The Division's business generally benefits from increasing government
environmental regulation of hazardous, solid and radioactive wastes. Such
regulation has created numerous business opportunities for the Division, from
both industry and government, especially the DOD and DOE. For a description of
certain of such environmental regulations, see "THE COMPANY -- Regulation."

The increased emphasis on environmental regulation also poses risks for the
Division. The Division's hazardous and radioactive substance remediation
operations are subject to, and substantially affected by, numerous federal,
state, and local laws and regulations in the jurisdictions in which it operates
or may seek to operate which govern environmental protection, liability and
other matters. These extensive laws and regulations are continually evolving in
response to technological advances and heightened citizen awareness and
political concern. While in general the Division believes that it has benefitted
substantially from the governmental regulation of hazardous substance management
services because of the effect which regulation has on demand for more
technologically advanced and capital intensive environmental services performed
by experienced companies, the Division cannot predict the extent to which it may
be affected by any legislation or regulation that may be enacted or enforced in
the future against it. The Division makes a continuing effort to anticipate
regulatory, political and legal developments that might affect operations, but
is not always able to do so. Such matters could have an impact on earnings for
one or more fiscal periods.

41
<PAGE> 45

BACKLOG

The Division's backlog consists of remediation services contracts. As of
December 31, 1994, the Division had an estimated backlog of work under contracts
believed to be firm of approximately $177 million, as compared with an estimated
backlog of approximately $158 million as of December 31, 1993. Approximately 70%
of the Company's backlog is expected to be completed in 1995. Although backlog
reflects only business considered to be firm and is an indication of future
revenues, there can be no assurance that contract cancellations or scope
adjustments will not occur, or as to when revenue from such backlog will be
realized. Backlog shown above for 1994 does not include approximately $227
million in respect of two TERCs awarded to Rust, which the Division may have an
opportunity to perform. There can be no assurance that delivery orders
ultimately issued and performed by the Division under the TERCs will aggregate
$227 million in revenues.

PROPERTIES

The Division currently owns three parcels of real property in Texas and
leases real property in 14 states. Real property owned by the Division includes
approximately five acres in Corpus Christi, Texas on which is located a 12,000
square foot office/work shop facility owned by the Division, approximately 50
unimproved acres adjoining the City of Odem, Texas, and approximately 206
unimproved acres in Nueces County, Texas. With respect to the Nueces County
property, the Division holds surface rights only as to 166 acres, 46 acres of
which are also subject to a reservation for oil, gas and mineral rights. The
remaining 40 acres in Nueces County are owned by the Division in fee simple,
subject to a reservation for oil, gas and mineral rights.

The Division leases offices and/or remediation facilities in each of:
Alabama, Arizona, California, Colorado, Georgia, Florida, Hawaii, Illinois,
Louisiana, Pennsylvania, South Carolina, Texas, Utah and Washington. Aggregate
annual rental payments on real estate leased by the Division are approximately
$1.9 million.

LEGAL PROCEEDINGS

Incident to its business, the Division is involved a number of legal
proceedings. A substantial number of these involve employment-related claims
arising in the ordinary course of business. A majority of the remaining
proceedings, other than environmental proceedings, involve matters as to which
the liability, if any, of the Division would be adequately covered by insurance.
With respect to litigation outside the scope of applicable insurance coverage
and to the extent that insured claims may exceed liability limits, it is the
opinion of the management of the Division, based upon advice of counsel, that
these matters individually and in the aggregate will not likely have a material
adverse effect upon the consolidated financial position or results of the
operations of the Division.

Because of heightened public awareness of environmental issues, companies
in the environmental remediation business, including the Division, may in the
normal course of their business be expected periodically to become subject to
judicial and administrative proceedings relating to violations of laws,
regulations or permits or other matters. The Division may also from time to time
become a party to judicial or administrative proceedings relating to violations
of federal, state or local government procurement laws or regulations.
Governmental agencies may seek to impose fines or civil monetary penalties on
the Division in such matters. The Division is also subject to actions brought by
private parties or special interest groups in connection with environmental
matters.

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<PAGE> 46

SELECTED FINANCIAL DATA -- THE COMPANY

The following summary historical consolidated financial information of the
Company has been derived from and should be read in conjunction with the
"AUDITED FINANCIAL STATEMENTS -- THE COMPANY" and "MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS -- THE COMPANY" which
are included elsewhere in this Proxy Statement.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------------------
1994 1993 1992 1991 1990
-------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Gross Revenues.............................. $323,381 $242,401 $221,370 $189,137 $189,624
Less direct subcontract costs.......... 103,114 66,661 59,461 51,467 48,573
-------- -------- -------- -------- --------
Net Revenues................................ 220,267 175,740 161,909 137,670 141,051
Cost of services.......................... 193,045 135,680 126,246 112,073 104,195
-------- -------- -------- -------- --------
Gross Profit................................ 27,222 40,060 35,663 25,597 36,856
Selling, general and administrative
expenses............................... 32,281 27,110 30,845 25,204 22,065
-------- -------- -------- -------- --------
Operating Income (Loss)..................... (5,059) 12,950 4,818 393 14,791
-------- -------- -------- -------- --------
Other (Income) Expenses:
Investment income......................... (28) (28) (31) (30) (109)
Interest expense.......................... 9,177 7,748 7,106 7,423 8,115
Gain on sale of common stock of
subsidiary............................. -- -- -- -- (9,225)
Equity in net (earnings) loss of
affiliates' continuing operations...... (1,032) (1,600) 1,121 2,443 (2,741)
Miscellaneous expense..................... 898 341 966 789 2,654
-------- -------- -------- -------- --------
9,015 6,461 9,162 10,625 (1,306)
-------- -------- -------- -------- --------
Income (Loss) From Continuing Operations
Before Income Taxes (Benefit)............. (14,074) 6,489 (4,344) (10,232) 16,097
Income taxes (benefit)................. (6,458) 2,082 (1,230) (3,369) 1,703
-------- -------- -------- -------- --------
Income (Loss) From Continuing Operations.... (7,616) 4,407 (3,114) (6,863) 14,394
Discontinued Operations, Net of Income Taxes
(Benefit):
Income (Loss) from operations............. -- -- 122 -- (2,271)
Provision for loss on disposition......... -- -- (420) -- (6,195)
-------- -------- -------- -------- --------
Income (Loss) Before Cumulative Effect of
Accounting Change......................... (7,616) 4,407 (3,412) (6,863) 5,928
Cumulative effect of accounting
change............................... -- -- (857) -- --
-------- -------- -------- -------- --------
Net Income (Loss)........................... $ (7,616) $ 4,407 $ (4,269) $ (6,863) $ 5,928
======== ======== ======== ======== ========
Net Income (Loss) Per Share:
Continuing operations..................... $ (0.49) $ 0.35 $ (0.26) $ (0.57) $ 1.20
Discontinued operations:
From operations........................ -- -- 0.01 -- (0.19)
From disposition....................... -- -- (0.03) -- (0.52)
-------- -------- -------- -------- --------
Income (Loss) per share before effect of
cumulative accounting change.............. (0.49) 0.35 (0.28) (0.57) 0.49
Cumulative effect of accounting
change............................... -- -- (0.07) -- --
-------- -------- -------- -------- --------
Net Income (Loss) Per Share................. $ (0.49) $ 0.35 $ (0.35) $ (0.57) $ 0.49
======== ======== ======== ======== ========
Weighted Average Number Of Common And Common
Equivalent Shares Outstanding............. 15,582 12,506 12,051 12,042 12,015
======== ======== ======== ======== ========
</TABLE>

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<PAGE> 47

NOTES:

(1) The results of operations for each of the four years ended December 31, 1993
have been presented to reflect the accounting for discontinued operations of
certain business units. See "Note 2 to the Consolidated Financial
Statements."

(2) The cumulative effect of accounting change of $857,000 or $0.07 per share
for the year ended December 31, 1992 is for adoption of Financial Accounting
Standards Board Statement No. 109, "Accounting for Income Taxes." See "Note
9 to the Consolidated Financial Statements."

(3) Special and nonrecurring items of income and expense include: (i) for the
year ended December 31, 1994, the Company recorded a special charge of
$15,000,000 (net of income tax benefit of $10,000,000) to establish a
reserve for accounts receivable, primarily where such accounts are in
litigation; (ii) for the year ended December 31, 1992, special charges of
$2,550,000 (net of income tax benefit of $1,600,000) recorded by the
Company, and $2,162,000 recorded by NSC, both of which relate to the
restructuring of the Company and NSC's asbestos abatement operations in
anticipation of NSC's acquisition of the asbestos abatement division of
Brand (completed on May 4, 1993), and which include provisions for legal and
insurance reserves, and for certain other matters; (iii) for the year ended
December 31, 1991, charges of $3,950,000 for equity losses in Concord; and
(iv) for the year ended December 31, 1990, a nonrecurring gain of $8,275,000
(net of income tax of $950,000) which resulted from an initial public
offering of NSC's common stock, nonrecurring charges of $1,426,000 (net of
income tax benefit of $950,000) related to a pension agreement and certain
nonproductive assets, and a charge of $630,000 (net of income tax benefit of
$420,000) for equity losses in Concord.

<TABLE>

FIVE YEAR SUMMARY OF FINANCIAL POSITION
(IN THOUSANDS)

<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------------------
1994 1993 1992 1991 1990
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Working capital............................. $116,464 $ 69,985 $ 56,148 $ 43,919 $ 27,547
Total assets................................ 272,546 215,357 185,415 168,986 171,425
Long-term debt.............................. 127,279 71,113 101,085 81,500 71,500
Shareholders' equity........................ 76,920 82,743 43,833 48,253 54,743
</TABLE>

NOTE:

The Company has not declared any cash dividends on its common stock and is
restricted by bank covenants from the payment of cash dividends in the future.
See "Note 7 to the Consolidated Financial Statements."

44
<PAGE> 48

OHM CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

GENERAL

OHM Corporation ("the Company") provides a broad range of environmental and
hazardous waste remediation services to its clients located primarily in the
United States. The timing of the Company's revenues is dependent on its backlog,
contract awards and the performance requirements of each contract. The Company's
revenues are also affected by the timing of its clients' planned remediation
activities which generally increase during the third and fourth quarters.
Because of this change in demand, the Company's quarterly revenues can
fluctuate, and revenues for the first and second quarters of each year have
historically been lower than for the third and fourth quarters, although there
can be no assurance that this will occur in future years. Accordingly, quarterly
or other interim results should not be considered indicative of results to be
expected for any quarter or full fiscal year.

On December 5, 1994, the Company entered into a definitive agreement to
acquire substantially all of the assets and certain liabilities of the hazardous
and nuclear waste remediation services business units of Rust International Inc.
("Rust") in exchange for 10,368,000 shares of common stock of the Company, or
approximately 40% of the outstanding shares of the Company's common stock upon
completion of the transaction. In addition, Rust's parent company, WMX
Technologies, Inc. ("WMX"), will provide the Company with a credit enhancement
in the form of guarantees issued from time to time upon request of the Company,
of up to $75,000,000 of the Company's indebtedness outstanding during the five
years following the closing of the transaction. Such enhancement should enable
the Company to secure lower cost financing to fund its growth. The transaction
is subject to the approval of the shareholders of the Company. The required
waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired in
January 1995. The anticipated closing date of such transaction is May 1995. The
Company is currently evaluating whether it will incur any significant costs for
restructuring its organization and operations upon consummation of the Merger.
Such costs would be recorded as a restructuring charge and may include the costs
of closing certain of the Company's offices and other non-recurring expenses
related to such restructuring.

During the fourth quarter of 1994, certain developments within and external
to the Company caused management to revaluate certain accounts receivable
recorded during 1994. As a result, the Company recorded a $25,000,000 pre-tax
charge, $15,000,000 after-tax or $0.96 per share, to establish a reserve for
accounts receivable, primarily where such accounts are in litigation, including
projects performed by the Company for Citgo Petroleum Company ("Citgo") and
Occidental Chemical Corporation ("Occidental"). The Company is in litigation
with Citgo over contract specifications in which the Company has asserted claims
for payment in excess of $35,000,000. Citgo has recently named Occidental Oil
and Gas Corporation and OXY USA, Inc. as third party defendants in such
litigation because of their prior involvement with the Citgo site and its
contract specifications. The Company has also become involved in litigation with
Occidental relating to a separate project it performed in 1994 for Occidental in
New York. While the Company believes its legal position in the litigation
remains strong, the establishment of the reserve provides the Company with
flexibility to pursue resolution of such matters. See "Note 15 to the
Consolidated Financial Statements."

45
<PAGE> 49

RESULTS OF OPERATIONS

The following table sets forth for the periods indicated the percentage
relationship that items in the statement of operations bear to net revenues:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER
31,
----------------------
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Gross revenues....................................................... 147 % 138 % 137 %
Less direct subcontract costs........................................ 47 38 37
---- ---- ----
Net revenues......................................................... 100 100 100
Cost of services..................................................... 88 77 78
---- ---- ----
Gross profit......................................................... 12 23 22
Selling, general and administrative expenses......................... 15 16 19
---- ---- ----
Operating income (loss).............................................. (3 ) 7 3
Net interest expense................................................. 4 4 4
Equity in net earnings (loss) of affiliates' continuing operations... 1 1 (1 )
Miscellaneous, net................................................... -- -- 1
---- ---- ----
Income (loss) from continuing operations before income taxes
(benefit).......................................................... (6 ) 4 (3 )
---- ---- ----
Income taxes (benefit)............................................... (3 ) 1 (1 )
---- ---- ----
Income (loss) from continuing operations............................. (3 )% 3 % (2 )%
==== ==== ====
</TABLE>

TWELVE MONTHS ENDED DECEMBER 31, 1994 VS. TWELVE MONTHS ENDED DECEMBER 31, 1993

Gross Revenues. The following table sets forth the Company's gross
revenues by client type for the twelve months ended December 31, 1994 and 1993
(in thousands, except percentages):

<TABLE>
<CAPTION>
1994 1993
---------------- ----------------
<S> <C> <C> <C> <C>
Federal, State, and Local Government........... $208,610 65% $113,346 47%
Industrial..................................... 114,771 35 129,055 53
-------- --- -------- ---
Total Gross Revenues......................... $323,381 100% $242,401 100%
======== === ======== ===
</TABLE>

Total gross revenues increased by $80,980,000 to $323,381,000 for the year
ended December 31, 1994 from $242,401,000 for 1993. Gross revenues reflect all
amounts to be billed by the Company to its clients for work performed and
include subcontract costs that are generally passed through to clients at a
minimal amount of mark-up. The Company's management believes that net revenues
are a better measurement of the Company's ability to generate profit from
activities performed by the Company and, accordingly, management's discussion
and analysis of revenues focuses on net revenues.

Direct Subcontract Costs. Direct subcontract costs for the year ended
December 31, 1994 increased $36,453,000 or 55% to $103,114,000 from $66,661,000
for 1993. Increases or decreases in direct subcontract costs generally result
from varying requirements for the use of subcontractors in the projects
performed by the Company during the year when compared to the projects performed
in the prior year. The increase in direct subcontract costs is primarily due to
the increase in gross revenues in 1994 over 1993. Direct subcontract costs as a
percentage of gross revenues was 32% in 1994 and 28% in 1993.

Net Revenues. The following table sets forth the Company's consolidated
net revenues by client type for the years ended December 31, 1994 and 1993 (in
thousands, except percentages):

<TABLE>
<CAPTION>
1994 1993
---------------- ----------------
<S> <C> <C> <C> <C>
Federal, State, and Local Government........... $141,990 64% $ 82,996 47%
Industrial..................................... 78,277 36 92,744 53
-------- --- -------- ---
Total Net Revenues........................... $220,267 100% $175,740 100%
======== === ======== ===
</TABLE>

46
<PAGE> 50

Total net revenues for the year ended December 31, 1994 increased 25% to
$220,267,000 from $175,740,000 in 1993. Such improvement resulted primarily from
increased net revenues from the Company's contracts with the United States Army
Corps of Engineers ("USACE"), the U.S. Navy, the Environmental Protection Agency
("EPA") and certain state and local governments.

The Company experienced a $14,467,000 or 16% decrease in net revenues from
industrial clients for the year ended December 31, 1994 as compared to 1993.
Industrial revenues were negatively impacted by the previously discussed
$25,000,000 accounts receivable reserve which was primarily related to
industrial clients. The Company's industrial sector revenues remain sluggish,
which the Company believes is due to anticipated changes in the Superfund law
which may result from its pending reauthorization and current economic
conditions in certain industry and geographic sectors. Industrial sector net
revenues as a percentage of total net revenues decreased to 36% for 1994 from
53% in 1993.

During 1994, the Company experienced a $58,994,000 or 71% increase in net
revenues from government agencies. This improvement resulted primarily from
increased activity under the Company's term contracts with USACE, the United
States Navy, the EPA, and certain state and local governments. The Company also
experienced a significant increase in net revenues from its USACE thermal
incineration project in Holbrook, Massachusetts. In addition, the Company
continues to experience a significant amount of proposal activity with the
various Department of Defense agencies.

During 1994, the Company's government revenues as a percent of total
revenues increased to 64% from 47% in 1993. The Company believes that this shift
in revenue mix toward the government sector will continue for the foreseeable
future in light of the Company's significant term contracts with the Department
of Defense, combined with continued increased spending by the federal government
for environmental remediation as well as other factors discussed above.

Cost of Services and Gross Profit. Cost of services for the year ended
December 31, 1994 increased 42% to $193,045,000 from $135,680,000 in 1993. As a
percentage of net revenues, cost of services increased to 88% in 1994 from 77%
in 1993. The increase in cost of services as a percentage of net revenues was
primarily due to the aforementioned charge for accounts receivable. Gross profit
decreased 32% to $27,222,000 in 1994 from $40,060,000 in 1993. Gross profit
decreased primarily as a result of the recording of the accounts receivable
reserve and other factors discussed above.

Selling, General and Administrative Expenses. Selling, general and
administrative ("SGA") expenses for the year ended December 31, 1994 increased
19% to $32,281,000 from $27,110,000 in 1993. The increase in SGA expense was due
primarily to the increase in gross revenues and the expansion of the Company's
Northeast and Western operations as a result of the award of certain significant
term contracts from the Department of Defense. SGA expense as a percent of net
revenues was 15% for both 1994 and 1993, and would have declined to 13% of net
revenues excluding the accounts receivable reserve discussed above.

Operating Income (Loss). Operating income (loss) for 1994 decreased
$18,009,000 to $(5,059,000) from $12,950,000 in 1993, due primarily to the
recording of the accounts receivable reserve and the factors discussed above.

Other (Income) Expenses. Other (income) expenses, excluding the Company's
equity in net earnings of affiliate, increased $1,986,000 to $10,047,000 for
1994 compared to $8,061,000 in 1993. Such increase was primarily due to a
$1,429,000 increase in interest expense. Such increase was due to additional
borrowings as a result of the increased working capital requirements, including
accounts receivable, of certain of the Company's large remediation projects and
its government contracts. In addition, the Company experienced an increase in
the interest rates charged under its revolving credit facility. Miscellaneous
expense increased $557,000 to $898,000 for 1994 compared to $341,000 in 1993 and
was primarily due to losses incurred on the disposal of certain of the Company's
equipment and offices.

Equity in Net Earnings (Loss) of Affiliates. The Company's equity interest
in NSC's net earnings from continuing operations decreased $568,000 to
$1,032,000 in 1994 from $1,600,000 in 1993. NSC's financial

47
<PAGE> 51

results for 1994 were negatively impacted by significant losses from its New
York City operations, which were closed in early 1994. The asbestos abatement
industry continues to experience competitive pressures in the marketplace which
have negatively impacted the gross margin on NSC's projects.

Income (Loss) from Continuing Operations. The loss from continuing
operations for the year ended December 31, 1994 was $(7,616,000) or $(0.49) per
share compared to income of $4,407,000 or $0.35 per share in 1993. Excluding the
charge to establish the accounts receivable reserve discussed above, income from
continuing operations for the year ended December 31, 1994 would have been
$7,384,000 or $0.47 per share.

TWELVE MONTHS ENDED DECEMBER 31, 1993 VS. TWELVE MONTHS ENDED DECEMBER 31, 1992

Gross Revenues. The following table sets forth the Company's gross revenue
by client type for the twelve months ended December 31, 1993 and 1992 (in
thousands, except percentages):

<TABLE>
<CAPTION>
1993 1992
---------------- ----------------
<S> <C> <C> <C> <C>
Federal, State, and Local Government........... $113,346 47% $ 64,798 29%
Industrial..................................... 129,055 53 156,572 71
-------- --- -------- ---
Total Gross Revenues......................... $242,401 100% $221,370 100%
======== === ======== ===
</TABLE>

Total gross revenues increased by $21,031,000 to $242,401,000 for the year
ended December 31, 1993 from $221,370,000 for 1992. Gross revenues reflect all
amounts to be billed by the Company to its clients for work performed and
include subcontract costs that are generally passed through to clients at a
minimal amount of mark-up. The Company's management believes that net revenues
are a better measurement of the Company's ability to generate profit from
activities performed by the Company and, accordingly, management's discussion
and analysis of revenues focuses on net revenues.

Direct Subcontract Costs. Direct subcontract costs for the year ended
December 31, 1993 increased $7,200,000 or 12% to $66,661,000 from $59,461,000
for 1992. Increases or decreases in direct subcontract costs generally result
from varying requirements for the use of subcontractors in the projects
performed by the Company during the year when compared to the projects performed
in the prior year. The increase in direct subcontract costs is primarily due to
the increase in gross revenues in 1993 over 1992. Direct subcontract costs as a
percentage of gross revenues was 28% in 1993 and 27% in 1992.

Net Revenues. The following table sets forth the Company's consolidated
net revenues by client type for the years ended December 31, 1993 and 1992 (in
thousands, except percentages):

<TABLE>
<CAPTION>
1993 1992
---------------- ----------------
<S> <C> <C> <C> <C>
Federal, State, and Local Government........... $ 82,996 47% $ 47,415 29%
Industrial..................................... 92,744 53 114,494 71
-------- --- -------- ---
Total Net Revenues........................... $175,740 100% $161,909 100%
======== === ======== ===
</TABLE>

Total net revenues for the year ended December 31, 1993 increased 9% to
$175,740,000 from $161,909,000 in 1992. The Company experienced a $21,750,000 or
19% decrease in net revenues from industrial clients for the year ended December
31, 1993 when compared to 1992. Industrial sector net revenues as a percentage
of total net revenues decreased to 53% for 1993 from 71% in 1992.

During 1993, the Company also experienced a decrease in net revenues from
the Emergency Response Cleanup Services ("ERCS") program with the EPA when
compared to 1992. Such decline is primarily due to the expiration of certain of
the Company's ERCS contracts in late 1991 and 1992 and delays in the procurement
process relating to certain new ERCS contracts which the Company was pursuing.
In 1993, the Company was awarded three of the EPA's outstanding ERCS
procurements that it was pursuing and experienced a significant increase in
activity under the ERCS contracts during the fourth quarter of 1993 when
compared to the same period in 1992. The decrease in net revenues from the
Company's ERCS contracts were offset by an increase in net revenues from
government agencies other than the EPA. This

48
<PAGE> 52

improvement resulted primarily from contracts with the USACE, the United States
Navy, and certain state and local governments. Net revenues from USACE increased
primarily due to the Company's thermal incineration project in Holbrook,
Massachusetts and its 32% owned joint venture at the Bayou Bonfouca site in
Slidell, Louisiana.

Cost of Services and Gross Profit. Cost of services for the year ended
December 31, 1993 increased 8% to $135,680,000 from $126,246,000 in 1992. As a
percentage of net revenues, cost of services decreased to 77% in 1993 from 78%
in 1992. The decrease in cost of services as a percentage of net revenues was
primarily due to cost control measures, including reduction of certain personnel
costs and the realignment of certain regional administrative functions,
initiated during the fourth quarter of 1992 and the first quarter of 1993. Gross
profit increased 12% to $40,060,000 in 1993 from $35,663,000 in 1992. Gross
profit increased primarily as a result of the increase in net revenues and other
factors discussed above.

Selling, General and Administrative Expenses. SGA expenses for the year
ended December 31, 1993 decreased 12% to $27,110,000 from $30,845,000 in 1992.
The decrease is primarily due to $3,500,000 of special and nonrecurring charges
recorded in 1992 for the restructuring of the Company in anticipation of NSC's
acquisition of the asbestos abatement division of Brand, provisions for
insurance and legal reserves, and certain other matters.

Operating Income. Operating income for 1993 increased $8,132,000 to
$12,950,000 from $4,818,000 in 1992, due primarily to the factors discussed
above.

Other (Income) Expenses. Other (income) expenses, excluding the Company's
equity in net earnings of affiliate and special charges, increased $670,000 to
$8,061,000 for 1993 compared to $7,391,000 in 1992. Such increase was primarily
due to a $642,000 increase in interest expense. Interest expense was negatively
impacted during 1993 by capital expenditure requirements on certain of the
Company's projects and increased working capital requirements (primarily
accounts receivable) resulting from the increase in revenues from government
agencies which resulted in increased borrowings by the Company.

Other (income) expenses for 1992 include a special charge of $650,000 or
$0.03 per share related to the write down of the Company's investment in NSC
resulting from the issuance of NSC common stock in connection with its
acquisition of the asbestos abatement division of Brand.

Equity in Net Earnings (Loss) of Affiliates. The Company's equity interest
in NSC's net earnings from continuing operations, excluding special charges
recorded by NSC, increased $559,000 to $1,600,000 in 1993 from $1,041,000 in
1992. On May 4, 1993, NSC completed the acquisition of all of the assets and
certain liabilities of the asbestos abatement division of Brand, in exchange for
4,010,000 shares of NSC's common stock and NSC's industrial maintenance
business. The result of such acquisition reduced the Company's ownership and
significantly increased the size of NSC's business and operations.

Equity in NSC's net earnings for the year ended December 31, 1992 includes
special charges related to the restructuring of NSC's acquisition of the
asbestos abatement division of Brand. The Company's equity interest in such
special charges was $2,162,000 or $0.18 per share.

Income (Loss) from Continuing Operations. Income (loss) from continuing
operations for the year ended December 31, 1993 was $4,407,000 or $0.35 per
share compared to losses of $(3,114,000) or $(0.26) per share in 1992. Income
from continuing operations for the year ended December 31, 1992, excluding the
nonrecurring and special charges discussed above, was $1,598,000 or $0.13 per
share.

49
<PAGE> 53

CONTRACT BACKLOG

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------
1994 1993 1992
---------- -------- --------
<S> <C> <C> <C>
Backlog......................................... $ 255,000 $201,000 $164,000
Term contracts.................................. 1,498,000 652,000 207,000
---------- -------- --------
Total contract backlog........................ $1,753,000 $853,000 $371,000
========= ======== ========
</TABLE>

Term Contracts. The significant increase in the potential value of term
contracts since 1993 has resulted from the award of two $250,000,000 five-year
term contracts with the U.S. Navy and a $45,000,000 five-year term contract with
the Air Force. In addition, the Company was awarded three five-year term
contracts aggregating $210,000,000 from the U.S. Department of the Air Force
Center for Environmental Excellence and a ten-year TERC with the Tulsa District
of USACE with an aggregate value of $216,000,000. Term contracts are typically
performed under delivery orders, issued by the contracting government entity,
for a large number of small- to medium-sized remediation projects throughout the
geographic area covered by the contract. The Company's government term contracts
generally may be cancelled, delayed or modified at the sole option of the
government, and typically are subject to annual funding limitations and public
sector budget constraints. Accordingly, such government contracts represent the
potential dollar value that may be expended under such contracts, but there is
no assurance that such amounts, if any, will be actually spent on any projects
or of the timing thereof.

LIQUIDITY AND CAPITAL RESOURCES

The Company is a party to a $135,000,000 Revolving Credit Facility (as
amended on January 18, 1995) to provide letters of credit and cash borrowings
which has a three year term and is scheduled to expire on May 11, 1996. Under
the terms of the agreement, cash borrowings may not exceed $95,000,000 and bear
interest at either the prime rate plus a percentage ranging from .75% to 1.875%
or, at the Company's option, the Eurodollar market rate plus a percentage
ranging from 1.75% to 2.875%. The percentage over the prime rate or the
Eurodollar market rate is based on the aggregate amount borrowed under the
facility as well as the Company's financial performance as measured by an
interest coverage ratio and a total funded debt ratio. The agreement provides
the participating banks a security interest in the Company's equipment,
inventories, accounts receivable, general intangibles and in the Company's
investment in the common stock of NSC as well as the Company's other
subsidiaries. The agreement also imposes, among other covenants, a minimum
tangible net worth covenant and a restriction on all of the Company's retained
earnings which precludes the declaration and payment of cash dividends. The
amounts outstanding for cash borrowings under the Revolving Credit Facility at
December 31, 1994 and 1993 were $57,700,000 and $7,000,000, respectively, and
aggregate letters of credit outstanding at December 31, 1994 and 1993 were
$34,771,000 and $40,327,000, respectively.

Capital expenditures for the years ended December 31, 1994, 1993, and 1992
were $13,354,000, $15,783,000, and $8,859,000. The Company's capital
expenditures are primarily related to the purchase of heavy equipment and the
fabrication of custom equipment by the Company for the execution of remediation
projects. The Company expects capital expenditures for 1995 to approximate
$15,000,000 dependent upon the type and size of future remediation projects
awarded to the Company.

50
<PAGE> 54

During 1994, the Company derived 65% of its gross revenues from government
agencies compared to 47% for 1993, a trend which the Company expects to
continue. Revenues from government agencies historically have required greater
working capital, the major component of which is accounts receivable, than
revenues from industrial sector clients. During 1994, the Company completed a
large remediation project for Citgo, now in litigation, which resulted in a
large investment by the Company in accounts receivable from Citgo. In addition,
the Company is bidding on a number of large, long-term contract opportunities
which, if awarded to the Company, would also increase working capital needs and
capital expenditures. As a result of these factors, the Company believes it will
be required to supplement its cash flows from continuing operations with
additional external sources to finance its short and long-term capital
expenditure and working capital needs.

The Company believes it will be able to finance its increased working
capital needs and capital expenditures, in the short-term, through a combination
of cash flows from continuing operations, borrowings under its Revolving Credit
Facility and proceeds from permitted asset sales. In addition, the terms of the
agreement for the Company's pending acquisition of Rust's hazardous and nuclear
waste remediation business units provide that Rust's parent company, WMX will
provide the Company with a credit enhancement, in the form of guarantees, issued
from time to time upon request of the Company, of up to $75,000,000 of the
Company's indebtedness outstanding during the five years following the closing
of the transaction. Such guarantee should expand the Company's borrowing
capacity and lower its cost of capital after the completion of the acquisition.

The Company's identified long-term capital needs consist of payments upon
the maturity of the Company's Revolving Credit Facility in 1996 and sinking fund
payments commencing in 1996 as well as payments upon maturity of its Convertible
Debentures in 2006. The Company expects that it will be able to refinance this
indebtedness as necessary. The Company is currently actively negotiating a new
credit facility with a group of banks which it expects to become effective
concurrent with the consummation of the acquisition of Rust's hazardous and
nuclear waste remediation business units.

INFLATION

Historically, inflation has not been a significant factor to the Company or
to the cost of its operations.

RECENTLY ENACTED PRONOUNCEMENTS

The Company has recorded a valuation allowance for its deferred tax assets
to the extent that the Company believes such deferred tax assets may not be
realized. With respect to deferred tax assets for which a valuation allowance
has not been established, the Company believes it will realize the benefit of
these assets through the reversal of taxable temporary differences and future
income. The Company believes that future taxable income of approximately
$12,000,000 necessary to realize the deferred tax asset is reasonably assured
because of its substantial backlog and term contracts from which the Company has
historically realized sufficient margin to produce consolidated net income.
Exclusive of non-recurring special charges and the accounts receivable reserve
recorded in 1994, such deferred tax asset would have been realized during the
three years ended December 31, 1994. The principal uncertainty of realization of
the deferred tax asset is the Company's ability to convert its backlog to
revenues and margin. See "Contract Backlog" and "Environmental Matters and
Government Contracting" in other sections of Management's Discussion and
Analysis of Financial Condition and Results of Operations. The Company intends
to evaluate the realizability of its deferred tax assets quarterly by assessing
the need for an additional valuation allowance.

ENVIRONMENTAL MATTERS AND GOVERNMENT CONTRACTING

51
<PAGE> 55

regulations, and liabilities to customers and to third parties for damages
arising from performing services for clients, which could have a material
adverse effect on the Company.

The Company does not believe there are currently any material environmental
liabilities which should be recorded or disclosed in its financial statements.
The Company anticipates that its compliance with various laws and regulations
relating to the protection of the environment will not have a material effect on
its capital expenditures, future earnings or competitive position.

Because of its dependence on government contracts, the Company also faces
the risks associated with such contracting, which could include civil and
criminal fines and penalties. As a result of its government contracting
business, the Company has been, is, and may in the future be subject to audits
and investigations by government agencies. The fines and penalties which could
result from noncompliance with the Company's government contracts or appropriate
standards and regulations, or the Company's suspension or debarment from future
government contracting, could have a material adverse effect on the Company's
business. See "Note 15 to the Consolidated Financial Statements."

52
<PAGE> 56

SELECTED FINANCIAL DATA -- THE DIVISION

The following summary historical consolidated financial information of the
Division has been derived from and should be read in conjunction with the
"AUDITED FINANCIAL STATEMENTS -- THE DIVISION" and "MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS -- THE DIVISION," which are included
elsewhere in this Proxy Statement.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------------------
UNAUDITED
-------------------
1994 1993 1992 1991 1990
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net Revenues................................ $231,058 $228,457 $317,660 $233,019 $358,400
Operating Income (Loss)..................... 5,977 64 (16,406) (11,937) 32,290
Income (Loss) before income taxes........... 1,524 (2,498) (20,148) (17,317) 26,197
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------------------------------
UNAUDITED
--------------------
1994 1993 1992 1991 1990
-------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total Assets................................ $125,784 $133,991 $124,742 $107,318 $ 114,185
Noncurrent Liabilities, including Current
Portion................................... 720 400 -- -- --
Investment by Rust International............ 97,478 89,062 96,772 69,451 93,745
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------------------------------
UNAUDITED
--------------------
1994 1993 1992 1991 1990
-------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
SELECTED OPERATING DATA:
Backlog..................................... $177,000 $158,000 $155,100 $189,700 *
Term Contracts.............................. 227,000 262,000 -- -- *
-------- -------- -------- --------
Total contract backlog.................... $404,000 $420,000 $155,100 $189,700 *
======== ======== ======== ========

</TABLE>
[FN]
* Not available.

53
<PAGE> 57

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS -- THE DIVISION

The Division provides a broad range of hazardous substance remediation
services to government clients and clients in the utility, nuclear and general
industrial manufacturing sectors in the United States. Such services include
remediation of hazardous chemical and radioactive substances in soil and
groundwater.

The Division began operations as a division of CWM, a leading provider of
hazardous waste management services, including transportation, treatment,
resource recovery and disposal, and by 1990 CWM had expanded its capabilities to
remediate sites contaminated with radioactive materials. Initially, the
Division's business focused on the removal of hazardous wastes from customers'
premises for treatment and disposal at off-site commercial facilities operated
by CWM. In the early 1990's, however, the Division's customers increasingly
elected on-site remediation in lieu of off-site treatment and disposal. On-site
remedies typically require more extensive engineering technology as well as
sophisticated project management skills. As business demand moved towards
on-site remediation, the Division was required to rapidly enhance its expertise
in these areas.

Rust instituted a variety of changes in management of the Division in order
to enhance its ability to provide on-site remedies. Excess staff positions were
eliminated, project management and project estimating skills were improved and
the Division continued its shift in focus to on-site treatment of hazardous
substances, in part drawing on the engineering capabilities resident in the Rust
organization.

Because of the business factors referenced above and the management changes
implemented by Rust since January 1993, results of operations prior to 1993 may
not be representative of the Division's current operations, and results for 1993
and 1994 reflect the transitional nature of the business as its focus was
redirected to on-site remediation.

The Division's revenues and earnings from remediation services can
fluctuate for interim periods and from year to year as a result of changes in
the demand for many of these services which is seasonal (less activity during
the winter months), performance issues such as technical difficulties, labor
shortages, disputes, weather and delays caused by external sources, such as
changes in federal, state and local funding or enforcement priorities.

RESULTS OF OPERATIONS

The following table presents for the years ended December 31 certain items
in the Division's statements of revenues and expenses (excluding income taxes)
as a percentage of revenue.

<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Revenue........................................................ 100% 100% 100%
Costs and expenses:
Operating.................................................... 90.6% 90.4% 98.4%
Selling and administrative................................... 6.8% 9.6% 6.8%
Interest, net................................................ 1.9% 1.1% 1.2%
Income (loss) before income taxes.............................. .7% (1.1%) (6.4%)
</TABLE>

54
<PAGE> 58

REVENUE

The Division's revenue for 1994 was comparable to its revenue for 1993,
while revenue for 1993 declined 28.1% from 1992. The Division's business changed
significantly in January 1993 when the Division became a unit of Rust as
discussed above. In 1992 the Division performed a significant amount of
remediation services by removing, transporting and disposing of hazardous wastes
from its customers' premises for treatment and disposal at the off-site
commercial facilities of CWM. As customers increasingly elected on-site
remediation in lieu of off-site transportation and disposal the revenues of and
costs to the Division were significantly reduced.

The Division's backlog and unobligated portion of government term contracts
at December 31, 1994 was $177 million and $227 million, respectively, as
compared to $158 million and $262 million, respectively, at December 31, 1993.
The unobligated portion of government term contracts relates to two TERCs
awarded to Rust by the Department of Defense in 1993 which the Division may have
the opportunity to perform. There can be no assurance that specific delivery
orders ultimately issued to and performed by the Division pursuant to the TERCs
will result in aggregate revenue of $227 million over their remaining terms.

Approximately 11.5%, 7.3% and 6.8% of the Division's revenue was from
various departments and agencies of the U.S. Government, for 1994, 1993 and
1992, respectively.

OPERATING EXPENSES

Operating expenses as a percentage of revenue changed very little from 1993
to 1994 but declined from 1992 levels. The improvement from 1992 was the result
of changes in the business of the Division as described above, and changes that
were implemented in the Division to improve its estimating and project
management skills. During 1993 and 1994, the Division added experienced
personnel in estimating, operations, finance and administration to strengthen
the organization and expanded its training programs in all areas. Systems and
procedures were implemented to improve the control and reporting capability for
all project activities.

SELLING AND ADMINISTRATIVE EXPENSES

Selling and administrative expenses as a percentage of revenue were 6.8% in
1994, 9.6% in 1993 and 6.8% in 1992. The decline in 1994 of $6.2 million was due
to cost reduction measures including the reduction of personnel and
administrative functions. Although as a percentage of revenue selling and
administrative expenses were significantly higher in 1993 when compared to 1992
the actual amount of expenses did not change significantly. The Division was not
able to reduce its expenses as a percent of revenue as rapidly as its revenue
declined in 1993 as described above.

INTEREST EXPENSE, NET

Interest expense, net as a percentage of revenue, was 1.9% in 1994, 1.1% in
1993 and 1.2% in 1992. The Division's interest expense, net, primarily consists
of intercompany interest charges. See "Liquidity and Capital Resources."

INCOME (LOSS) BEFORE INCOME TAXES

Income (Loss) before income taxes as a percentage of revenue was .7% in
1994, (1.1%) in 1993 and (6.4%) in 1992. Pretax income improved since 1992
reflecting the completion of several large unprofitable contracts in 1992 and
the implementation of cost reduction programs in the selling and administrative
areas as discussed above.

INCOME TAXES

The results of operations of the Division were included in Rust's
consolidated income tax return. Accordingly, income taxes on a separate Division
basis have not been presented.

55
<PAGE> 59

ENVIRONMENTAL MATTERS

The Division has significant operations in the environmental services area,
including remediation services involving hazardous and radioactive substances.
Such operations involve the Division with numerous federal and state laws and
regulations, including RCRA and CERCLA. The Division believes its operations
generally benefit from increased environmental regulation of hazardous, solid
and radioactive wastes, as such regulations create opportunities for the
Division's business. However, the increased emphasis on environmental regulation
also poses risks for the Division. These extensive laws and regulations are
continually evolving in response to technological advances and heightened
citizen awareness and political concern.

The Division does not believe that there are currently any material
environmental liabilities which should be recorded or disclosed in its financial
statements. However, it is reasonably possible that technological, regulatory or
enforcement developments, the results of environmental studies or other factors
could alter this belief and necessitate the recording of liabilities which could
be material. The impact of possible future events cannot be estimated at the
current time.

ACCOUNTING CHANGES

The Financial Accounting Standards Board issued Statements of Financial
Accounting Standards No. 112 -- Employers' Accounting for Postemployment
Benefits ("FAS 112"), and No. 115 -- Accounting for Certain Debt and Equity
Securities ("FAS 115"), both of which were required to be adopted in 1994.
Effective January 1, 1994, the Division adopted FAS 112, which did not have a
material impact on the financial statements because the Division's current
accounting was substantially in compliance with the new standard. The Division
does not have, and does not contemplate acquiring, significant investments of
the type covered in FAS 115.

LEGAL MATTERS

For information pertaining to legal proceedings, see "THE DIVISION -- Legal
Proceedings."

LIQUIDITY AND CAPITAL RESOURCES

The Division had working capital of $38.1 million at December 31, 1994, and
$33.5 million at December 31, 1993.

Rust participates in a centralized cash management program administered by
WMX. Cash is remitted to WMX and advances are made by WMX, as needed, to cover
Rust's expenses. Cash remitted to WMX and advances made by WMX attributable to
the Division have been treated as an adjustment to the "Equity -- Advances From
(Payments to) Rust International Inc." account in the accompanying financial
statements. Rust allocates a portion of its interest expense to the Division
based on the ratio which cumulative net cash advances to the Division bears to
Rust's cumulative net cash advances to all of its subsidiaries and the value of
net tangible assets. The interest rates charged were 4.9%, 3.3% and 3.8% in
1994, 1993 and 1992, respectively. Management believes that the allocation of
interest expense is representative of financing costs attributable to the
Division and that the methodology used to allocate interest expense is
reasonable.

Capital expenditures, including net transfers with WMX and its affiliates,
were $9.6 million in 1994, $11.5 million in 1993 and $9.9 million in 1992. These
expenditures were primarily related to the purchase and fabrication of heavy
equipment used in the execution of remediation projects. The 1995 capital
expenditure budget is $10.0 million. During 1993, the Division acquired a
business for $2.5 million in cash and notes.

INFLATION

Historically, inflation has not been a significant factor to the Division
or to its cost of operations.

56
<PAGE> 60

OHM CORPORATION AND THE ENVIRONMENTAL REMEDIATION SERVICES BUSINESS OF RUST
INTERNATIONAL INC.

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 1994

The following unaudited pro forma condensed combined balance sheet as of
December 31, 1994 and the unaudited pro forma condensed combined statement of
operations for the year ended December 31, 1994 have been prepared to give
effect to the issuance of 10,368,000 shares of the Common Stock in exchange for
the net assets of the Division, as if such transactions had occurred on January
1, 1994 for the pro forma condensed combined statement of operations and on
December 31, 1994 for the pro forma condensed combined balance sheet. After the
completion of the Merger, Rust will indirectly own approximately 40% of the
outstanding shares of Common Stock of the Company. The pro forma condensed
combined financial information has been adjusted to reflect certain provisions
set forth in the Reorganization Agreement, a copy of which is attached to this
Proxy Statement as Appendix B. The pro forma condensed combined financial
information has been prepared utilizing the audited historical consolidated
financial statements of the Company and the Division and should be read in
conjunction with such financial statements and accompanying notes included
elsewhere in this Proxy Statement.

The pro forma condensed combined financial information has been prepared
using the purchase method of accounting for the Merger. Under this method of
accounting, an allocation of the purchase price consideration to be transferred
plus related costs to be incurred by the Company in connection with the Merger
has been made based upon estimates of the fair values of the net assets of the
Division. The fair value of the 10,368,000 shares of Common Stock that will be
issued by the Company upon consummation of the Merger has been estimated using a
market price of $8.00 per share, adjusted to reflect an estimated discount of
approximately 12% for the restricted nature of the Common Stock issued. The
actual purchase accounting adjustments to reflect the fair values of the net
assets to be acquired from Rust will be based upon management's evaluation of
such assets, and, accordingly, the adjustments that have been used in the pro
forma condensed combined financial information are subject to change pending the
final allocation of the purchase price.

The pro forma condensed combined financial information does not reflect the
cost savings expected to be achieved from operating synergies as a result of the
combination. Accordingly, the following pro forma condensed combined financial
information does not purport to be indicative of the financial position or
results of operations that would have been reported had these transactions
occurred on the dates indicated above, nor the financial condition or results of
operations which will be reported in the future.

57
<PAGE> 61

OHM CORPORATION AND THE ENVIRONMENTAL REMEDIATION SERVICES BUSINESSES
OF RUST INTERNATIONAL INC.

PRO FORMA CONDENSED COMBINED BALANCE SHEET (UNAUDITED)

AS OF DECEMBER 31, 1994
(IN THOUSANDS)

<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
--------------------- -----------------------------------------------
THE THE TRANSACTION(1) OTHER PRO FORMA
COMPANY DIVISION ADJUSTMENTS ADJUSTMENTS COMBINED
-------- -------- --------------- ----------- ---------
<S> <C> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents...... $ 4,930 $ -- $19,605(2) $ (19,605)(5) $ 4,930
Accounts receivable............ 86,663 41,934 (11,670)(2) 116,927
Costs and estimated earnings on
contracts in process in
excess of billings........... 65,437 23,212 (9,324)(2) -- 79,325
Materials and supply inventory,
at cost...................... 10,099 -- -- -- 10,099
Prepaid expenses and other
assets....................... 7,252 493 -- -- 7,745
Deferred income taxes.......... 6,744 -- -- -- 6,744
Refundable income taxes........ 205 -- -- -- 205
-------- -------- --------------- ----------- ---------
Total Current Assets......... 181,330 65,639 (1,389) (19,605) 225,975
Property and equipment, net...... 57,240 47,210 3,627(3) (15,000)(6) 93,077
Intangibles related to acquired
business, net.................. -- 6,117 -- (6,117)(7) --
Deferred costs, net.............. -- 6,818 -- -- 6,818
Other assets..................... 33,976 -- -- -- 33,976
-------- -------- --------------- ----------- ---------
Total Assets................. $272,546 $125,784 $ 2,238 $ (40,722) $359,846
========= ========= ================ ============ ==========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current Liabilities:
Accounts payable............... $47,936 $ 13,443 $ 1,105(4) $ -- $ 62,484
Billings on contracts in
process in excess of costs
and estimated earnings....... 40 2,920 (873)(2) -- 2,087
Accrued compensation and
related taxes................ 3,874 -- -- -- 3,874
Federal, state and local income
taxes........................ 102 -- -- -- 102
Other accrued liabilities...... 9,652 11,223 -- 1,000(8) 21,875
Current portion of noncurrent
liabilities.................. 3,262 -- -- -- 3,262
-------- -------- --------------- ----------- ---------
Total Current Liabilities.... 64,866 27,586 232 1,000 93,684
Noncurrent liabilities........... 128,277 720 -- (19,605)(5) 109,392
Deferred income taxes............ 2,483 -- -- 4,461(9) 6,944
Stockholders' equity............. 76,920 97,478 2,006 (26,578) 149,826
-------- -------- --------------- ----------- ---------
Total Liabilities and
Stockholders' Equity....... $272,546 $125,784 $ 2,238 $ (40,722) $359,846
========= ========= ================ ============ ==========
</TABLE>

58
<PAGE> 62

OHM CORPORATION AND THE ENVIRONMENTAL REMEDIATION SERVICES BUSINESSES
OF RUST INTERNATIONAL INC.

PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS (UNAUDITED)

YEAR ENDED DECEMBER 31, 1994
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
HISTORICAL PRO FORMA(17)
--------------------- -----------------------------------------------
THE THE TRANSACTION(1) OTHER PRO FORMA
COMPANY DIVISION ADJUSTMENTS ADJUSTMENTS COMBINED
-------- -------- --------------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Gross revenues................... $323,381 $231,058 $ -- $ -- $554,439
Cost of services................. 296,159 209,408 (1,938)(10) -- 503,629
-------- -------- --------------- ----------- ---------
Gross profit................... 27,222 21,650 1,938 -- 50,810
Selling, general and
administrative expenses........ 32,281 15,673 (2,190)(11) 500(12) 46,264
-------- -------- --------------- ----------- ---------
Operating income (loss)........ (5,059 ) 5,977 4,128 (500) 4,546
-------- -------- --------------- ----------- ---------
Other (income) expenses:
Investment income.............. (28 ) (379) 379(13) -- (28 )
Interest expense............... 9,177 4,832 (4,832)(13) (2,835)(15) 6,342
Equity in net earnings of
affiliate.................... (1,032 ) -- -- -- (1,032 )
Miscellaneous expense.......... 898 -- -- -- 898
-------- -------- --------------- ----------- ---------
9,015 4,453 (4,453) (2,835) 6,180
-------- -------- --------------- ----------- ---------
Income (loss) before income taxes
(benefit)...................... (14,074 ) 1,524 8,581 2,335 (1,634 )
Income taxes (benefit)......... (6,458 ) 4,042(14) 934(14) (1,482 )
-------- -------- --------------- ----------- ---------
Net income (loss)................ $(7,616 ) $ 1,524 $ 4,539 $ 1,401 $ (152 )
========= ========= ================ ============ ==========
Net income (loss) per share...... $ (0.49 ) $ (0.01 )
========= ==========
Weighted average number of common
and common equivalent shares
outstanding.................... 15,582 10,368(1) 25,950
========= ================ ==========
</TABLE>

NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION (UNAUDITED)
AS OF AND FOR THE YEAR ENDED DECEMBER 31, 1994

(1) Pursuant to the Reorganization Agreement, the Company will issue 10,368,000
shares of Common Stock to Rust for substantially all of the assets and certain
of the liabilities comprising the environmental remediation services businesses
of Rust (the "Division"). The Reorganization Agreement requires that the
Transferred Assets be adjusted as of the Closing Date if the average price per
share of the Company's Common Stock for a twenty trading day period prior to
Closing (the "Closing Price") is greater than $9.65 or less than $8.00. For
purposes of constructing the pro forma information the Closing Price was assumed
to be $8.00 per share, adjusted to reflect an estimated discount of
approximately 12% for the restricted nature of the Common Stock issued. If the
Closing Price is between $6.00 per share and $8.00 per share, Rust shall retain
certain accounts receivable with a book value equal to the difference between
$8.00 per share and the Closing Price multiplied by 10,368,000, but not to
exceed a value of $20,000,000. If the Closing Price is greater than $9.65 per
share, Rust shall pay to the Company at the Closing, an amount equal to the
amount by which the Closing Price exceeds $9.65 per share multiplied by
10,368,000, but not to exceed $20,000,000.

(2) To record the cash for payment of certain guaranteed accounts receivable by
Rust, the present value of which is expected to be paid at Closing, pursuant to
a preliminary oral agreement between the Company and Rust.

59
<PAGE> 63

(3) To provide for the expected addition of certain equipment under
construction by the Division, primarily related to an incineration project,
which will be made prior to closing.

(4) The net current assets of the Division to be transferred to the Company at
Closing under the Reorganization Agreement shall be adjusted to include or
exclude a sufficient amount of the Division's accounts receivable, cash, or
accounts payable, on a dollar for dollar basis, by which the closing net current
assets of the Division fall short of or exceed $36,948,232. The net current
assets of the Division were reduced by $1,105,000, the amount by which the
Division's net current assets at December 31, 1994 exceeded $36,948,232.

(5) To reduce debt for the cash received from Rust for payment of certain
guaranteed accounts receivable which are expected to be paid at Closing pursuant
to a preliminary oral agreement between the Company and Rust.

(6) To record an estimate for the reduction in value of certain of the
Division's property and equipment, net of accumulated depreciation, which may
not be fully utilized in the Company's future operations as a result of the
Company following a different business strategy.

(7) To eliminate the net amount of the Division's intangibles related to
acquired businesses.

(8) To record an estimate for certain acquisition costs to be paid by the
Company.

(9) To record the tax effect of purchase accounting adjustments under Financial
Accounting Standards No. 109 to long-term deferred taxes at a 40% estimated pro
forma combined effective tax rate.

(10) To adjust depreciation expense on the pro forma property and equipment
acquired as follows (in thousands):

<TABLE>
<S> <C>
Pro forma property and equipment acquired............................ $35,837
Estimated useful life in years....................................... 6
-------
Pro forma depreciation expense, as recalculated................. 5,973
Historical depreciation expense...................................... 7,911
-------
Pro forma depreciation expense adjustment....................... $(1,938)
=======
</TABLE>

(11) To adjust selling, general and administrative expenses to eliminate
amortization of the Division's net intangible assets related to acquired
businesses ($838,000) and fees charged to the division by WMX for financial,
administrative, legal and certain other corporate staff services ($1,352,000).

(12) To record an estimate for the expected increase in costs for third party
services (such as legal, accounting and banking fees) of the Company after the
Merger.

(13) Investment income and interest expense has been eliminated as the Company
will not assume or incur any debt as a result of the merger.

(14) To record the income taxes on income before taxes of the Division and
adjustments at an effective rate of 40%.

(15) To reflect estimated interest savings from the upgrade in the Company's
implied credit rating as a result of WMX's $75 million guarantee of the
Company's debt. In addition, to reflect reduced debt from the receipt of cash
for certain guaranteed accounts receivable pursuant to a preliminary oral
agreement between the Company and Rust to pay the present value of such
receivables at Closing.

(16) The Company is currently evaluating whether it will incur any significant
costs for restructuring its organization and operations upon consummation of the
Merger. As such, the pro forma condensed combined statement of operations does
not include any restructuring charge.

60
<PAGE> 64

(17) In 1994 the Company recorded a $25 million pre-tax special charge to
establish a reserve for accounts receivable, primarily where such accounts are
in litigation. The following table shows additional pro forma information
adjusted to eliminate this special charge (in thousands except per share data):

<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
THE ---------- -------------------------------------
COMPANY THE TRANSACTION OTHER PRO FORMA
AS ADJUSTED DIVISION ADJUSTMENTS ADJUSTMENTS COMBINED
----------- ---------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Gross revenues..... $ 348,381 $231,058 $ -- $ -- $579,439
Cost of services... 296,159 209,408 (1,938) -- 503,629
----------- ---------- ----------- ----------- ---------
Gross profits.... 52,222 21,650 1,938 -- 75,810
Selling, general
and
administrative
expenses......... 32,281 15,673 (2,190) 500 46,264
----------- ---------- ----------- ----------- ---------
Operating
income........ 19,941 5,977 4,128 (500) 29,546
----------- ---------- ----------- ----------- ---------
Other (income)
expenses:
Investment
income........ (28) (379) 379 -- (28 )
Interest
expense....... 9,177 4,832 (4,832) (2,835) 6,342
Equity in net
earnings of
affiliate..... (1,032) -- -- -- (1,032 )
Miscellaneous
expense....... 898 -- -- -- 898
----------- ---------- ----------- ----------- ---------
9,015 4,453 (4,453) (2,835) 6,180
----------- ---------- ----------- ----------- ---------
Income before
income taxes..... 10,926 1,524 8,581 2,335 23,366
Income taxes..... 3,542 4,042 934 8,518
----------- ---------- ----------- ----------- ---------
Net Income......... $ 7,384 $ 1,524 $ 4,539 $ 1,401 $ 14,848
=========== ========= =========== =========== =========
Net income per
share............ $ 0.47 $ 0.57
=========== =========
Weighted average
number of common
and common
equivalent
shares
outstanding...... 15,582 10,368 25,950
=========== =========== =========
</TABLE>

61
<PAGE> 65

COMPARATIVE MARKET PRICE AND DIVIDEND DATA

The Company's Common Stock is listed on the NYSE under the symbol OHM. On
April , 1995, the reported closing sale price of the Common Stock was
$ per share. On December 5, 1994, the last full trading day prior to
the public announcement of the signing of the Reorganization Agreement, the
reported closing sale price of the Common Stock was $6 7/8 per share. As of
March 31, 1995, there were holders of record of the Common Stock (which
number does not include the number of shareholders whose shares are held of
record by a broker or clearing agency but does include such a brokerage house or
clearing agency as one recordholder). The Company has never paid any dividends
on the Common Stock and does not presently have any plans for the declaration or
payment of dividends. At the present time the Company intends to reinvest its
earnings to finance future growth. The Company's Revolving Credit Facility
currently prohibits the Company from paying a cash dividend on its Common Stock.
The Common Stock does not have any pre-emptive rights.

The table below sets forth, for the calendar quarters indicated, the
reported high and low closing sale prices of the Common Stock on the NYSE, as
reported by The Wall Street Journal.

<TABLE>
<CAPTION>
QUARTER ENDED HIGH LOW
-------------------------------------------------------------- ---- ---
<S> <C> <C>
1994
Fourth Quarter................................................ 11 3/8 6 7/8
Third Quarter................................................. 13 1/2 11
Second Quarter................................................ 18 1/2 10 5/8
First Quarter................................................. 17 1/4 11 3/8

1993
Fourth Quarter................................................ 12 1/8 10 3/4
Third Quarter................................................. 12 9
Second Quarter................................................ 9 7 1/2
First Quarter................................................. 9 3/8 7 1/4
</TABLE>

The Division does not have any publicly traded capital stock.

THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR
PROPOSAL 1.

62
<PAGE> 66

PROPOSAL 2: ELECTION OF DIRECTORS

INFORMATION CONCERNING THE NOMINEES

Six Directors will be elected at the Annual Meeting. Each Director elected
at the Annual Meeting will hold office until the next Annual Meeting of
Shareholders and until his successor is duly elected and qualified, or until his
earlier death, resignation or removal from office. The Company's management
intends that the shares represented by the enclosed proxy will be voted, unless
the shareholder executing the proxy otherwise instructs, for the election to the
Board of Directors of each of the six nominees named below.

The Company has no reason to believe that any of such nominees will be
unable, if elected, to serve as a Director. However, if such an event should
occur, the Company's management intends that the shares represented by the
enclosed proxy will be voted for the remainder of the nominees, and for such
substitute nominee or nominees as may be selected by the Company's current Board
of Directors.

All of the nominees for Director named below are currently serving as
Directors of the Company for terms expiring at the Annual Meeting. Mr. Gorr and
Dr. Hollister became Directors of the Company on November 15, 1990 and July 2,
1992, respectively. Mr. James Kirk, Mr. Joseph Kirk, Mr. Pogue, and Mr. Schmidt
became Directors of the Company effective July 1, 1986.

<TABLE>
<CAPTION>
POSITIONS AND OTHER RELATIONSHIPS
NAME AGE WITH THE COMPANY AND BUSINESS EXPERIENCE
- - - ----------------------------- --- -------------------------------------------------------
<S> <C> <C>
Ivan W. Gorr................. 65 Director and Chairman of the Audit Committee and member
of the Executive Committee. Mr. Gorr retired as
Chairman of the Board of Directors and Chief Executive
Officer of Cooper Tire & Rubber Company of Findlay,
Ohio, a manufacturer of tires and other rubber
products. Mr. Gorr is a director of Cooper Tire &
Rubber Company, Amcast Industrial Corporation, Arvin
Industries, Inc. and The Fifth Third Bancorp.
Dr. Charles D. Hollister..... 58 Director and member of the Audit Committee. Dr.
Hollister is Senior Scientist and Vice President of
Woods Hole Oceanographic Institution, Woods Hole,
Massachusetts, a non-profit scientific/educational
research institution.
James L. Kirk(1)............. 45 Chairman of the Board of Directors, President and Chief
Executive Officer and Chairman of the Executive
Committee. Mr. Kirk has been President and Chief
Executive Officer of the Company since July 1986 and,
in addition, was elected Chairman of the Board in
January 1987. He has served as Chairman of the Board
and Chief Executive Officer of OHMR since April 1985.
Mr. Kirk is a founder of OHMR and has served in various
capacities as an officer and director of OHMR.
Joseph R. Kirk(1)............ 43 Executive Vice President and Director. Mr. Kirk served
as Vice Chairman of OHMR from April 1985 until July
1986 and continues to serve as Executive Vice President
of OHMR. He is a founder of OHMR and has served in
various capacities as an officer and director of OHMR.
Richard W. Pogue............. 66 Director and Chairman of the Compensation and Stock
Option Committee and a member of the Executive
Committee. Mr. Pogue is a consultant with Dix & Eaton,
a public relations firm. Effective June 30, 1994 Mr.
Pogue retired as Senior Partner of the law firm of
Jones, Day, Reavis & Pogue, Cleveland, Ohio, of which
he had been a partner since 1961. Mr. Pogue is also a
director of Continental Airlines, Inc., Derlan
Industries Limited, M.A. Hanna Company, KeyCorp,
Redland PLC, Rotek Incorporated and TRW Inc.
</TABLE>

63
<PAGE> 67

- - - ---------------
[FN]
(1) James L. Kirk and Joseph R. Kirk are brothers.

Pursuant to the Standstill Agreement immediately following the consummation
of the transaction contemplated by the Reorganization Agreement, the Company
will increase the size of its Board of Directors from six to nine and elect to
the Board of Directors of the Company three designees of Rust mutually agreeable
to both the Company and Rust. The following sets forth certain information
concerning each of the three designees.

<TABLE>
<CAPTION>
POSITIONS AND OTHER RELATIONSHIPS
NAME AGE WITH THE COMPANY AND BUSINESS EXPERIENCE
- - - ----------------------------- --- -------------------------------------------------------
<S> <C> <C>
Rodney C. Gilbert............ 55 President and Chief Executive Officer of Rust since
January 1993. A director of WTI from August 1989 to May
1993. President and Chief Operating Officer of WTI from
November 1990 until December 1992. Managing
Director -- President of WTI from September 1987 to
November 1990.
Herbert A. Getz.............. 39 Vice President of WMX since May 1990 and General
Counsel of WMX since August 1992. Secretary of WMX
since January 1988. Vice President, General Counsel and
Secretary of WTI from November 1990 until May 1993.
Vice President and Secretary of Rust from December 1992
until May 1994. Vice President and General Counsel of
Waste Management, Inc. from April 1989 until December
1993. Director of NSC since May 1993.
Harold W. Ingalls............ 47 Vice President of Rust since January 1993. Chief
Financial Officer and Treasurer of Rust since November
1993. Controller of Rust from December 1992 until
November 1993. Vice President and Chief Financial
Officer of The Brand Companies, Inc. ("Brand") from
1988 until May 1993. Treasurer of Brand from January
1990 until May 1993. Staff Vice President of CWM from
September 1988 until December 1991. Director of NSC
since May 1993.
</TABLE>

None of the Rust designees presently own any shares of Company Common
Stock.

COMMITTEES OF THE BOARD OF DIRECTORS AND MEETINGS HELD

During 1994 the Board of Directors of the Company held a total of seven
meetings.

The Executive Committee of the Board of Directors presently consists of
Messrs. Ivan W. Gorr, James L. Kirk and Richard W. Pogue and did not meet during
1994. The function of the Executive Committee is to exercise, when the full
Board is not in session, the powers of the Board in the management of the
business and affairs of the Company.

The Compensation and Stock Option Committee of the Board of Directors met
three times during 1994. Messrs. Gorr, Pogue and Schmidt are presently members
of the Compensation and Stock Option Committee,

64
<PAGE> 68

the primary functions of which are to review and approve salaries and other
benefits for executive officers of the Company, to administer and approve awards
of stock options made under the Company's 1986 Stock Option Plan, and to make
recommendations to the Board of Directors with respect to the adoption of
employee benefit programs.

The Company has a standing Audit Committee, the primary function of which
is to oversee the accounting and auditing affairs of the Company. Messrs. Gorr,
Hollister and Schmidt serve as members of the Audit Committee which met once
during 1994.

The Company has no standing nominating committee or committee performing
similar functions.

DIRECTORS' FEES

Directors of the Company who are not employees receive $18,000 per annum.
Members of the Company's Executive Committee who are not employees receive
$1,500 per meeting, and each non-employee member of any other committee of the
Company's Board of Directors receives $500 per meeting. Rust has requested that
its designees not be paid a directors' fee.

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

The Company's Common Stock is the Company's only outstanding class of
voting securities. The following table sets forth certain information as of
February 15, 1995 with respect to the beneficial ownership of the Company's
Common Stock by (i) holders of 5% or greater, (ii) each Director of the Company,
(iii) the executive officers named in the Summary Compensation Table under
"EXECUTIVE COMPENSATION AND OTHER INFORMATION" and (iv) by all Directors and
officers of the Company as a group.

<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENTAGE
NAME OF BENEFICIAL OWNERSHIP(1) OF CLASS
---------------------------------------------------- -------------------------- ----------
<S> <C> <C>
State of Wisconsin Investment Board(2).............. 1,500,000 9.59
P.O. Box 7842
Madison, Wisconsin 53707
FMR Corp.(3)........................................ 1,088,795 6.96
82 Devonshire Street
Boston, Massachusetts 02109
James L. Kirk(4)(5)................................. 1,958,972 12.47
Joseph R. Kirk(4)(6)................................ 2,418,053 15.42
Ivan W. Gorr(4)(7).................................. 27,000 *
Dr. Charles D. Hollister(4)(7)...................... 25,000 *
Richard W. Pogue(4)(7)(8)........................... 53,000 *
Charles W. Schmidt(4)(7)............................ 35,000 *
Frank A. McBride(4)(9).............................. 113,000 *
Michael A. Szomjassy(4)(10)......................... 53,040 *
Randall M. Walters(4)(11)........................... 80,000 *
Samuel H. Iapalucci(12)(14)......................... 6,720 *
All Directors and executive officers as a group
(16 persons)(13)(14).............................. 4,977,274 30.52
</TABLE>

- - - ---------------
[FN]
* 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 by him.

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<PAGE> 69

(2) According to an Amendment No. 6 to Schedule 13G filed by State of Wisconsin
Investment Board.

(3) According to a Schedule 13G dated January 10, 1995, filed by FMR Corp.,
which indicates that FMR has the sole power to dispose or direct the
disposition of all 1,088,795 shares, sole power to vote with respect to
43,100 shares and shared power to vote with respect to 0 shares.

(4) The address of each shareholder is c/o OHM Corporation, 16406 U.S. Route
224 East, Findlay, Ohio 45840.

(5) Assumes the exercise of options currently exercisable or exercisable within
60 days to purchase 70,000 shares of Common Stock, but does not include
15,828 shares of Common Stock held in three trusts by Mr. Kirk's wife as
trustee for the benefit of the Kirks' children, as to which Mr. Kirk
disclaims beneficial ownership.

(6) Assumes the exercise of options currently exercisable or exercisable within
60 days to purchase 46,000 shares of Common Stock, but does not include
21,780 shares of Common Stock held in three trusts by Mr. Kirk's wife as
trustee for the benefit of the Kirks' children, as to which Mr. Kirk
disclaims beneficial ownership.

(7) Assumes the exercise of options currently exercisable or exercisable within
60 days to purchase 25,000 shares of Common Stock.

(8) Does not include 1,000 shares of Common Stock held in trust for the benefit
of Mr. Pogue's wife as to which he disclaims beneficial ownership.

(9) Assumes the exercise of options currently exercisable or exercisable within
60 days to purchase 113,000 shares of Common Stock.

(10) Assumes the exercise of options currently exercisable or exercisable within
60 days to purchase 53,000 shares of Common Stock.

(11) Assumes the exercise of options currently exercisable or exercisable within
60 days to purchase 80,000 shares of Common Stock.

(12) Mr. Iapalucci's address is 6060 S. Willow Drive, Englewood, Colorado 80111.

(13) Assumes the exercise of options currently exercisable or exercisable within
60 days to purchase an aggregate of 669,450 shares of Common Stock.

(14) Under the securities laws of the United States, the Company's directors,
its executive officers, and any persons holding more than 10 percent of the
Company's Common Stock are required to report their initial ownership of
the Company's Common Stock and any subsequent changes in that ownership to
the Commission. Specific due dates for these reports have been established,
and the Company is required to disclose in its Proxy Statement any failure
to file by these dates. All of these filing requirements were satisfied,
except that Samuel H. Iapalucci, who resigned his position with the Company
on November 30, 1994 and Phillip V. Petrocelli, Vice President, Western
Operations each failed to file one report relating to, in each case, one
transaction that occurred in December 1994.

James L. Kirk and Joseph R. Kirk are brothers, each of whom disclaims
beneficial interest in the shares owned by the other.

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<PAGE> 70

EXECUTIVE COMPENSATION AND OTHER INFORMATION

SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION

The following table shows, for the fiscal years ended December 31, 1994,
1993 and 1992, the cash compensation paid by the Company and its subsidiaries,
as well as certain other compensation paid or accrued for those years, to each
of the six most highly compensated executive officers of the Company in 1994,
including the Chief Executive Officer of the Company, in all capacities in which
they served:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
--------------
AWARDS
ANNUAL COMPENSATION --------------
------------------------------- STOCK OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) GRANTED(#) COMPENSATION($)(5)
- - - ------------------------------- ---- --------- -------- -------------- ------------------
<S> <C> <C> <C> <C> <C>
James L. Kirk.................. 1994 330,013 0 50,000 6,260
Chairman, President and Chief 1993 330,013 0 150,000 5,051
Executive Officer 1992 336,359 0 0 4,380

Joseph R. Kirk................. 1994 300,019 0 30,000 5,934
Executive Vice President 1993 300,019 0 100,000 5,141
1992 305,789 0 0 4,435

Randall M. Walters............. 1994 200,013 0 5,000 5,592
Vice President, General 1993 200,013 0 20,000 4,964
Counsel and Secretary 1992 203,859 0 75,000(2) 4,123

Frank A. McBride............... 1994 200,013 0 20,000 5,599
Vice President 1993 200,013 0 20,000 3,890
1992 203,859 0 115,000(3) 2,554

Michael A. Szomjassy........... 1994 185,108 0 30,000 5,558
Vice President 1993 163,953 0 35,000 3,380
1992 152,894 72,000 20,000(4) 3,571

Samuel H. Iapalucci(1)......... 1994 196,166 0 20,000 6,597
Vice President and Chief 1993 188,954 0 25,000 4,045
Financial Officer 1992 178,368 0 10,000 761
</TABLE>

- - - ---------------
(1) Mr. Iapalucci resigned his position with the Company effective November 30,
1994.

(2) Includes stock options with respect to 65,000 shares of Common Stock which
were granted on August 6, 1992 in exchange for the surrender of previously
granted options.

(3) Includes stock options with respect to 105,000 shares of Common Stock which
were granted on August 6, 1992 in exchange for the surrender of previously
granted options.

(4) Includes stock options with respect to 20,000 shares of Common Stock which
were granted on August 6, 1992 in exchange for the surrender of previously
granted options.

(5) Amounts include company matching contributions to the Company's Retirement
Savings Plan and excess premiums for group life insurance.

STOCK OPTIONS

The following table sets forth information with respect to grants of
options pursuant to the Company's 1986 Stock Option Plan made to the executive
officers named in the Summary Compensation Table during the 1994 fiscal year.

67
<PAGE> 71

STOCK OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
INDIVIDUAL GRANTS VALUE AT
--------------------------------------------------------- ASSUMED ANNUAL
% OF TOTAL RATES OF STOCK
OPTIONS PRICE APPRECIATION
GRANTED TO EXERCISE OR FOR OPTION TERM
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION -------------------
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
- - - ------------------------ ----------- ------------ ----------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
James L. Kirk........... 50,000 10.5 10.875 6/28/04 341,961 866,597
Joseph R. Kirk.......... 30,000 6.3 10.875 6/28/04 205,177 519,958
Randall M. Walters...... 5,000 1.0 10.875 6/28/04 34,196 86,660
Frank A. McBride........ 20,000 4.2 10.875 6/28/04 136,785 346,639
Michael A. Szomjassy.... 10,000 2.1 10.875 6/28/04 68,392 173,319
20,000 4.2 16.25 2/11/04 204,391 642,966
Samuel H. Iapalucci..... 20,000 4.2 10.875 6/28/04 136,785 346,639
</TABLE>

OPTION EXERCISES AND HOLDINGS

The following table sets forth information with respect to the executives
named in the Summary Compensation Table concerning the exercise of options
during the last fiscal year and unexercised options held as of the end of the
fiscal year:

AGGREGATED OPTION EXERCISES IN
LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
SHARES VALUE OF UNEXERCISED
ACQUIRED VALUE REALIZED NUMBER OF UNEXERCISED IN-THE-MONEY
ON (MARKET PRICE AT OPTIONS AT FY-END (#) OPTIONS AT FY-END ($)
EXERCISE EXERCISE LESS ----------------------------- -----------------------------
NAME (#) EXERCISE PRICE) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - - ------------------------ -------- ---------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James L. Kirk........... -- -- 70,000 130,000 7,500 11,250
Joseph R. Kirk.......... -- -- 46,000 84,000 5,000 7,500
Randall M. Walters...... -- -- 80,000 20,000 64,125 6,500
Frank A. McBride........ -- -- 113,000 42,000 90,375 15,250
Michael A. Szomjassy.... -- -- 53,000 52,000 28,188 10,563
Samuel H. Iapalucci..... 32,000 $ 18,000 0 0 0 0
</TABLE>

EMPLOYMENT AND INDEMNIFICATION AGREEMENTS

The Company has entered into agreements with the executive officers named
in the Summary Compensation Table and certain other executive officers providing
that in the event of any "change of control" of the Company such officers would
continue their employment with the Company in their present position for terms
of approximately three years following such change of control. During such term
of employment, each such officer would be entitled to receive base compensation
and to continue to participate in incentive and employee benefit plans at levels
no less favorable to him than prior to commencement of the term or to receive a
lump sum payment, following the termination of his employment. While each of
such agreements is presently in effect, none of them become operative until a
change in control of the Company has occurred, prior to which time the Company
and such officer each reserves the right at any time with or without cause to
terminate their employment relationship. The transactions that are deemed to
result in a change of control for the purposes of these agreements include (a)
merger or consolidation of the Company with, or sale of all or substantially all
its assets to another corporation, as a result of which less than a majority of
the voting shares of the surviving entity are owned by former shareholders of
the Company; (b) any person becoming the beneficial owner of 25% or more of the
voting stock of the Company; (c) reporting by the Company under specified
provisions of the federal securities laws that a change in control has occurred;
and (d) when within any two-year period, a majority of directors at the
beginning of such period (not including persons approved by

68
<PAGE> 72

at least two-thirds of the directors still in office who were directors at the
beginning of such period) cease to be directors of the Company. It is a
condition to Rust's obligation to consummate the transactions contemplated by
the Reorganization Agreement that the Company obtain waivers from the executive
officers who have entered into such employment agreements to the effect that the
transactions contemplated by the Reorganization Agreement will not result in a
"change of control" for purposes of these agreements.

The Company has also entered into indemnification agreements
("Indemnification Agreements") with each current member of the Board of
Directors as well as with each executive officer of the Company. The form and
execution of the Indemnification Agreements were approved by the Company's
shareholders at the Annual Meeting of Shareholders held on May 19, 1987. Such
agreements essentially provide that to the extent permitted by law, the Company
will indemnify the indemnitee against all expenses, costs, liabilities and
losses (including attorneys' fees, judgments, fines or settlements) incurred or
suffered by the indemnitee in connection with any suit in which the indemnitee
is a party or otherwise involved as a result of his service as a member of the
Board or as an officer.

COMPENSATION AND STOCK OPTION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Messrs. Gorr, Pogue and Schmidt are members of the Compensation and Stock
Option Committee of the Board of Directors of the Company. Effective June 30,
1994 Mr. Pogue retired as Senior Partner of Jones, Day, Reavis & Pogue, a law
firm which during 1994 was retained by the Company to perform various corporate
and litigation-related services for the Company and its subsidiaries. Jones,
Day, Reavis & Pogue may be called on to perform similar and other services for
the Company in the future.

BOARD COMPENSATION AND STOCK OPTION COMMITTEE REPORT*

The primary functions of the Compensation and Stock Option Committee are to
review and approve salaries and other benefits for executive officers of the
Company, to administer and approve awards under the Company's 1986 Stock Option
Plan and to make recommendations to the Board of Directors with respect to the
adoption of employee benefit programs. The Compensation and Stock Option
Committee is currently composed of three Directors, Messrs. Gorr, Pogue and
Schmidt, who are not executive officers of the Company. Mr. Dewey was a member
of the Compensation and Stock Option Committee until his resignation on November
14, 1994. Set forth below is a report of Messrs. Gorr, Pogue and Schmidt in
their capacity as the Board's Compensation and Stock Option Committee addressing
the Company's compensation policies for 1994 as they affected Mr. James L. Kirk
and the other executive officers of the Company.

The Compensation Committee's executive compensation policies are designed
to provide levels of compensation that integrate pay (considered in connection
with grants of stock options under the Company's 1986 Stock Option Plan) with
the Company's annual and long-term performance goals, reward individual
achievement and attract and retain qualified executives, all in the context of
the highly competitive industry in which the Company operates.

Salaries for executive officers are determined periodically by evaluating
the performance of the individuals reviewed and their contributions to the
performance of the Company and particular business units, as applicable, their
responsibilities, experience, potential and period of service at their current
salary. Financial results for the Company as a whole as well as appropriate
non-financial measures are considered. Factors consistent with the Company's
overall compensation policy and strategy, including events and the period of
time since an executive officer's last salary increase may also be considered.
With respect to executive officers, discretionary bonus awards may be granted
for exemplary performance or to reward special achievements which impact Company
results, but the Company has no formalized bonus plan. In its deliberations, the
Committee takes into account the recommendations of appropriate Company
officials. No particular weight is given to the above-referenced factors in the
Compensation and Stock Option Committee's deliberations.

- - - ---------------

*Note: This information is not incorporated by reference in any prior or future
Securities and Exchange Commission filings, directly or by reference to the
incorporation of proxy statements of the Company, unless such filing
specifically incorporates this information.

69
<PAGE> 73

The Compensation and Stock Option Committee also endorses the position that
stock ownership by management and stock-based performance compensation
arrangements are beneficial in allying management's and shareholders' interest
in the enhancement of shareholder value. Granting of stock options pursuant to
the Company's 1986 Stock Option Plan is also within the authority of the
Compensation and Stock Option Committee. In determining grants of stock options
to executive officers, the Compensation and Stock Option Committee has followed
policies substantially similar to those described above with respect to
compensation.

Mr. James L. Kirk's annual base salary of $330,000 was established in May
1991. Messrs. James Kirk, Joseph Kirk, Walters and McBride have not received
salary increases since 1991.

Section 162(m) of the Internal Revenue Code of 1986, as amended, prohibits
a publicly held corporation, such as the Company, from claiming a deduction on
its federal income tax return for compensation in excess of $1,000,000 paid for
a given fiscal year to certain executives. The Internal Revenue Service has
issued proposed regulations. There are a number of unanswered questions
concerning the operation of Section 162(m), but because of the Company's current
compensation levels, the Compensation Committee has developed no policies at
this time concerning Section 162(m).

IVAN W. GORR RICHARD W. POGUE CHARLES W. SCHMIDT

70
<PAGE> 74

PERFORMANCE GRAPH*

Set forth below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on the Common Stock against the
cumulative total return of the S&P Composite-500 Stock Index and a peer group of
companies selected by the Company consisting of companies engaged in the
environmental services industry. These companies are: Canonie Environmental
Services Corp., Chempower, Inc., Clean Harbors, Inc., ECI Environmental, Inc.,
Groundwater Technology, Inc., Handex Environmental Recovery, Inc., International
Technologies, Inc., Reidel Environmental Technologies, Inc., Sevenson
Environmental Services, Inc. and Roy F. Weston, Inc. (the "Peer Group").

COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN ON
COMMON STOCK, S&P 500 AND PEER GROUP

(MARKET VALUE OF $100 INVESTED ON DECEMBER 31, 1989)

<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) OHM PEER GROUP S&P 500
<S> <C> <C> <C>
1989 100.00 100.00 100.00
1990 93.02 84.85 93.44
1991 75.58 95.47 118.02
1992 69.77 73.25 123.29
1993 106.98 54.92 131.98
1994 79.07 49.85 129.96
</TABLE>

- - - ---------------

* Note: This information is not incorporated by reference in any prior or future
Securities and Exchange Commission filings, directly or by reference to
the incorporation of proxy statements of the Company, unless such filing
specifically incorporates this information.

71
<PAGE> 75

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

TRANSACTIONS WITH MANAGEMENT

The Company provides Robert W. Kirk, a former officer and shareholder of
OHM and father of James L. Kirk and Joseph R. Kirk, with a pension arrangement
pursuant to which OHM is to make payments of $96,000 per year, subject to
further cost of living adjustments, for the remainder of his life and that of
his spouse if she survives him. During 1994, the Company made payments totalling
$109,000 to Robert W. Kirk under this pension arrangement.

During 1994, Kirk Brothers Co., Inc. ("KBC"), the principal shareholders of
which are Richard C. Kirk and Robert W. Kirk, the brother and father,
respectively, of James L. Kirk and Joseph R. Kirk, provided subcontract services
to OHM on various projects pursuant to an Agreement dated June 6, 1994 which was
approved by the Board of Directors on February 11, 1994. During 1994, the
Company made payments to KBC totalling $2,055,000 under this Agreement.

In connection with the commencement of his employment, Phillip V.
Petrocelli, Vice President, Western Operations, received a $100,000 interest
free loan to be forgiven in equal installments on the anniversary date of his
employment over seven consecutive years. The balance of the loan becomes due and
payable immediately in the event Mr. Petrocelli voluntarily leaves the
employment of the Company or is terminated for cause before August 30, 2000.
During 1994, $11,000 of the principal balance was forgiven.

PROPOSAL 3: APPROVAL OF DIRECTORS' DEFERRED FEE PLAN

The Board of Directors has adopted, subject to the approval of the
Company's shareholders, the OHM Corporation Directors' Deferred Fee Plan (the
"Directors' Plan"). The purpose of the Directors' Plan is to help solidify the
common interest of directors and shareholders in enhancing the value of the
Company's Common Stock. It is also intended that the Directors' Plan will assist
in attracting and retaining qualified individuals to serve as directors. If
approved by shareholders, the Directors' Plan will give those directors who are
not also employees of the Company an opportunity to defer receipt, and therefore
the recognition as income for federal income tax purposes, of all or a portion
of their annual retainer and meeting fees payable by the Company for their
services as a director. A copy of the Directors' Plan is attached as Appendix C
hereto, and a summary description below is qualified in its entirety by
reference to such Appendix.

PRINCIPAL FEATURES

The Directors' Plan provides that any director who is not also an employee
of the Company may elect to defer all or a portion of the compensation payable
to him or her for services as a director during a fiscal year by delivering
written notice of such election prior to the beginning of such fiscal year
(except at the time of adoption of the Director's Plan or at the time a person
first becomes eligible to participate in the Directors' Plan).

Under the terms of the Directors' Plan, a director may elect to have his or
her director's fees credited to an account in either cash or Units (an
accounting unit equal in value to one share of Common Stock). Deferred fees that
a director elects to have credited in cash will be credited to the director's
account as they become payable to the director. A director's account to which
fees have been credited in cash will earn interest annually at the rate of
interest payable on 1-year U.S. Treasury Bills or such other rate as the
Committee designated by the Directors' Plan may establish. In no event, however,
will the rate of interest be more than 5 percent higher than the rate payable on
such U.S. Treasury Bills. Deferred fees payable in Units will be credited,
together with an amount equal to 25% of such deferred fees, to a director's
account at the end of the fiscal year on the basis of the average of the market
values of the Common Stock on the last trading day in each calendar month during
the year. Each account to which fees have been credited in Units shall be
credited annually after the end of each fiscal year with additional Units equal
in value to the amount of cash dividends paid by the Company during such year on
Common Stock equivalent to the average daily balance of Units in such account
during the year.

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<PAGE> 76

Distribution of a director's account may be made (a) in a lump sum, (b) in
five annual installments, or (c) a combination of the foregoing, as designated
by the director, upon: (i) the termination of service of the participant as a
director of the Company, for any reason, or (ii) if the director shall so elect,
only upon his or her death. Amounts credited to a director's account in dollars
are paid in cash, and amounts credited in Units are paid in full shares of
Common Stock.

Each director has the right at any time to designate the beneficiary to
whom payment under the Directors' Plan will be made in the event of his or her
death prior to complete distribution.

FEDERAL TAX CONSEQUENCES

No income will be recognized by a director at the time that cash or Units
are credited to his or her account. At the time of distribution, the director
generally will be required to include as taxable ordinary income in an amount
equal to the amount of cash received and the fair market value of any Common
Stock received.

GENERAL

The maximum number of Units that may be granted under the Director's Plan
during its term is 100,000.

The Directors' Plan will be administered by a Committee consisting of the
Chairman of the Board (provided he is not a nonemployee director) and two
Company officers or directors who are not nonemployee directors who shall be
appointed by the Chairman of the Board. The Committee shall supervise the
administration of the Directors' Plan, may from time to time adopt procedures
governing the Directors' Plan and shall have authority to give interpretive
rulings with respect to the Directors' Plan.

By its terms the Directors' Plan may be amended from time to time by the
Board of Directors, but no such amendment may affect the rights of directors to
amounts credited to directors under the Directors' Plan and without further
approval of the shareholders, no such amendment shall increase the maximum
number of shares available to be issued under the Directors' Plan or cause Rule
16b-3 under the 1934 Act to become inapplicable to the Directors' Plan.

APPROVAL BY SHAREHOLDERS

The approval and ratification of the Directors' Plan requires the
affirmative vote of the holders of a majority of the shares present or
represented and entitled to vote on the matter at the meeting.

THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR
PROPOSAL 3.

INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Ernst & Young LLP has been selected as the Company's independent certified
public accountants for the year ending December 31, 1995. Ernst & Young LLP has
served as the Company's independent certified public accountants since July 1,
1986. A representative of Ernst & Young LLP is expected to be present at the
Annual Meeting with an opportunity to make a statement if he desires to do so
and to respond to appropriate questions.

SHAREHOLDER PROPOSALS

Proposals for the 1996 Annual Meeting of Shareholders must be received by
, 1996, to be included in the Company's proxy statement and proxy.

73
<PAGE> 77

OTHER MATTERS

The Board of Directors knows of no other matters to be presented for action
at the forthcoming Annual Meeting. However, the proxy confers upon the persons
named therein discretionary authority to act upon any other matter that may
properly come before the meeting.

THE COMPANY WILL FURNISH A COPY OF ITS ANNUAL REPORT ON FORM 10-K FOR THE
YEAR ENDED DECEMBER 31, 1994, INCLUDING FINANCIAL STATEMENTS AND SCHEDULES
THERETO, BUT EXCLUDING OTHER EXHIBITS, WITHOUT CHARGE, TO ANY PERSON UPON
WRITTEN REQUEST ADDRESSED TO PAMELA K.M. BEALL, VICE PRESIDENT, TREASURER AND
ASSISTANT SECRETARY, OHM CORPORATION, 16406 U.S. ROUTE 224 EAST, FINDLAY, OHIO
45840.

RANDALL M. WALTERS
Vice President, General Counsel
and Secretary

April , 1995
Findlay, Ohio

74
<PAGE> 78

REPORT OF INDEPENDENT AUDITORS

Board of Directors and Shareholders
OHM Corporation

We have audited the accompanying consolidated balance sheets of OHM
Corporation and subsidiaries as of December 31, 1994 and 1993, and the related
consolidated statements of operations, changes in shareholders' equity, and cash
flows for each of the three years in the period ended December 31, 1994. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
OHM Corporation and subsidiaries at December 31, 1994 and 1993, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1994, in conformity with generally
accepted accounting principles.

ERNST & YOUNG LLP

Columbus, Ohio
February 1, 1995

F-1
<PAGE> 79

<TABLE>

OHM CORPORATION

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS)

<CAPTION>
DECEMBER 31,
---------------------
1994 1993
-------- --------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents...................................................... $ 4,930 $ 5,039
Accounts receivable............................................................ 86,663 64,384
Costs and estimated earnings on contracts in process in excess of billings..... 65,437 45,744
Materials and supply inventory, at cost........................................ 10,099 6,883
Prepaid expenses and other assets.............................................. 7,252 5,548
Deferred income taxes.......................................................... 6,744 --
Refundable income taxes........................................................ 205 91
-------- --------
181,330 127,689
-------- --------
Property and Equipment, net...................................................... 57,240 53,258
-------- --------
Other Noncurrent Assets:
Deferred debt issuance and financing costs..................................... 2,381 2,851
Investments in and advances to affiliated company.............................. 23,352 22,922
Deferred income taxes.......................................................... 336 617
Other assets................................................................... 7,907 8,020
-------- --------
33,976 34,410
-------- --------
Total Assets............................................................ $272,546 $215,357
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable............................................................... $ 47,936 $ 42,130
Billings on contracts in process in excess of costs and estimated earnings..... 40 709
Accrued compensation and related taxes......................................... 3,874 3,159
Federal, state and local taxes................................................. 102 297
Deferred income taxes.......................................................... - 1,006
Other accrued liabilities...................................................... 9,652 8,857
Current portion of noncurrent liabilities...................................... 3,262 1,546
-------- --------
64,866 57,704
-------- --------
Noncurrent Liabilities:
Long-term debt................................................................. 127,279 71,113
Capital leases................................................................. 92 65
Pension agreement.............................................................. 906 917
-------- --------
128,277 72,095
-------- --------
Deferred Income Taxes............................................................ 2,483 2,815
-------- --------
Commitments and Contingencies

Shareholders' Equity:
Preferred stock, $10.00 par value, 2,000,000 shares authorized; none issued and
outstanding.................................................................. -- --
Common stock, $.10 par value, 50,000,000 shares authorized;
Shares issued: 1994 - 15,848,089; 1993 - 15,763,089.......................... 1,584 1,576
Additional paid-in capital..................................................... 63,294 62,774
Retained earnings.............................................................. 14,598 22,222
-------- --------
79,476 86,572
Less treasury stock, 1994 - 211,624; 1993 - 317,049, at cost..................... (2,556) (3,829)
-------- --------
76,920 82,743
-------- --------
Total Liabilities and Shareholders' Equity.............................. $272,546 $215,357
========= =========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-2
<PAGE> 80

<TABLE>

OHM CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Gross Revenues............................................. $323,381 $242,401 $221,370
Less direct subcontract costs............................ 103,114 66,661 59,461
-------- -------- --------
Net Revenues............................................... 220,267 175,740 161,909
Cost of services......................................... 193,045 135,680 126,246
-------- -------- --------
Gross Profit............................................... 27,222 40,060 35,663
Selling, general and administrative expenses............. 32,281 27,110 30,845
-------- -------- --------
Operating Income (Loss).................................... (5,059) 12,950 4,818
-------- -------- --------
Other (Income) Expenses:
Investment income........................................ (28) (28) (31)
Interest expense......................................... 9,177 7,748 7,106
Equity in net (earnings) loss of affiliates' continuing
operations............................................ (1,032) (1,600) 1,121
Miscellaneous expenses................................... 898 341 966
-------- -------- --------
9,015 6,461 9,162
-------- -------- --------
Income (Loss) From Continuing Operations
Before Income Taxes (Benefit)............................ (14,074) 6,489 (4,344)
Income taxes (benefit)................................ (6,458) 2,082 (1,230)
-------- -------- --------
Income (Loss) From Continuing Operations................... (7,616) 4,407 (3,114)
Discontinued Operations of Investee, Net of Income Taxes
(Benefit):
Income from operations................................... -- -- 122
Provision for loss on disposition........................ -- -- (420)
-------- -------- --------
Income (Loss) Before Cumulative Effect of Accounting
Change................................................... (7,616) 4,407 (3,412)
Cumulative effect of accounting change................... -- -- (857)
-------- -------- --------
Net Income (Loss).......................................... $ (7,616) $ 4,407 $ (4,269)
======== ======== ========
Net Income (Loss) Per Share:
Continuing operations.................................... $ (0.49) $ 0.35 $ (0.26)
Discontinued operations:
From operations....................................... -- -- 0.01
From disposition...................................... -- -- (0.03)
-------- -------- --------
(0.49) 0.35 (0.28)
Cumulative effect of accounting change................... -- -- (0.07)
-------- -------- --------
$ (0.49) $ 0.35 $ (0.35)
======== ======== ========
Weighted average number of common and common equivalent
shares outstanding....................................... 15,582 12,506 12,051
======== ======== ========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-3
<PAGE> 81

<TABLE>

OHM CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(IN THOUSANDS, EXCEPT SHARE DATA)

<CAPTION>
COMMON STOCK
------------------- ADDITIONAL CUMULATIVE
NUMBER OF PAID-IN RETAINED TRANSLATION TREASURY
SHARES AMOUNT CAPITAL EARNINGS ADJUSTMENTS STOCK
---------- ------ ---------- -------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1991............... 12,398,089 $1,239 $ 28,948 $22,134 $129 $(4,197)
Deferred translation adjustments......... (151)
Net loss................................. (4,269 )
---------- ------ ---------- -------- ---------- -----------
BALANCE AT DECEMBER 31, 1992............... 12,398,089 1,239 28,948 17,865 (22) (4,197)
Proceeds from sale of 3,365,000 shares of
common stock, less issuance expenses
of $705,000........................... 3,365,000 337 33,921
Stock options exercised, 30,480 reissued
from treasury......................... (95) 368
Deferred translation adjustments......... (28)
Net income............................... 4,407
---------- ------ ---------- -------- ---------- -----------
BALANCE AT DECEMBER 31, 1993............... 15,763,089 1,576 62,774 22,272 (50) (3,829)
Proceeds from sale of 85,000 shares of
common stock, less issuance expenses
of $86,000............................ 85,000 8 789
Stock options exercised, 105,425 reissued
from treasury......................... (269) 1,273
Deferred translation adjustments......... (8)
Net loss................................. (7,616 )
---------- ------ ---------- -------- ---------- -----------
BALANCE AT DECEMBER 31, 1994............... 15,848,089 $1,584 $ 63,294 $14,656 $(58) $(2,556)
========= ======= ========= ======== ========== ==========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-4
<PAGE> 82

<TABLE>

OHM CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------
1994 1993 1992
------- -------- --------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)................................................... $(7,616) $ 4,407 $ (4,269)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Depreciation and amortization..................................... 7,395 7,073 7,186
Amortization of other noncurrent assets........................... 2,418 1,698 1,279
Deferred income taxes............................................. (7,801) 1,456 (2,228)
Loss on sale of property and equipment............................ 764 55 218
Equity in net (earnings) loss of affiliates' continuing
operations, net of dividends received........................... (430) 3,212 1,121
Provision for loss on disposition of discontinued operations,
including deferred income tax benefit........................... -- -- 420
Cumulative effect of accounting change............................ -- -- 857
Deferred translation adjustments and other........................ 90 255 486

Changes in current assets and liabilities:
Accounts receivable................................................. (22,279) (17,379) 541
Costs and estimated earnings on contracts in process in excess of
billings.......................................................... (19,693) (24,742) (4,312)
Materials and supply inventory...................................... (3,216) (426) (1,193)
Prepaid expenses and other assets................................... (1,704) (85) 1,230
Refundable income taxes and other................................... (114) 1,079 219
Accounts payable.................................................... 5,263 20,549 1,973
Billings on contracts in process in excess of costs and estimated
earnings.......................................................... (669) (439) 130
Accrued compensation and related taxes.............................. 715 227 (792)
Federal, state and local income taxes............................... (195) (410) 662
Other accrued liabilities........................................... 795 (5,432) 1,715
------- -------- --------
Net cash flows provided by (used in) operating activities....... (46,277) (8,902) 5,243
------- -------- --------
Cash flows from investing activities:
Purchases of property and equipment................................. (13,354) (15,783) (8,859)
Proceeds from sale of property and equipment........................ 1,847 126 2,458
Increase in other noncurrent assets................................. (1,835) (6,163) (2,450)
Proceeds from (advances to) affiliated companies, net............... -- 14,850 (14,109)
Investment in discontinued operations, net.......................... -- (146) (1,430)
Proceeds (adjustments) from sale of discontinued operations......... -- 14,613 (405)
------- -------- --------
Net cash provided by (used in) investing activities............. (13,342) 7,497 (24,795)
------- -------- --------
Cash flows from financing activities:
Increase in long-term debt.......................................... 8,900 5,663 --
Payments on long-term debt and capital leases....................... (1,782) (212) (96)
Proceeds from borrowing under revolving credit agreement............ 147,200 99,500 109,000
Payments on revolving credit agreement.............................. (96,500) (135,500) (90,000)
Payments on pension agreement....................................... (109) (105) (111)
Proceeds from public offering of common stock....................... 797 34,258 --
Reissuance of treasury stock........................................ 1,004 273 --
------- -------- --------
Net cash provided by financing activities....................... 59,510 3,877 18,793
------- -------- --------
Net increase (decrease) in cash and cash equivalents............ (109) 2,472 (759)
Cash and cash equivalents at beginning of year........................ 5,039 2,567 3,326
------- -------- --------
Cash and cash equivalents at end of year.............................. $ 4,930 $ 5,039 $ 2,567
======== ========= =========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-5
<PAGE> 83

OHM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1994

NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION The accompanying
consolidated financial statements include the accounts of OHM Corporation (the
"Company") and its subsidiaries. The Company also includes its proportionate
share of joint ventures, in which the Company's ownership is less than 50%,
which were entered into for the purpose of performing large remediation
projects. The Company's investment in 40% of the outstanding common stock of NSC
Corporation ("NSC") is carried on the equity basis. All material intercompany
transactions and balances among the consolidated group have been eliminated in
consolidation.

REVENUES AND COST RECOGNITION The Company primarily derives its revenues
from providing environmental services under cost plus fee, time and materials,
fixed price and unit price contracts. The Company records revenues and related
income from its fixed and unit price contracts in process using the
percentage-of-completion method of accounting. Provisions for estimated losses
on uncompleted contracts are made in the period in which such losses are
determined. Changes in project performance, project conditions, and estimated
profitability may result in revisions to costs and income and are recognized in
the period in which the revisions are determined. An amount equal to contract
costs attributable to claims is included in revenues when realization is
probable and the amount can be reliably estimated. Revenues from time and
materials and cost plus fee type contracts are recorded based on performance and
efforts expended. Contract costs include all direct labor, material, per diem,
subcontract and other direct and indirect project costs related to contract
performance. Revenues derived from non-contract activities are recorded as the
services are performed.

DIRECT SUBCONTRACT COSTS The Company incurs a substantial amount of direct
subcontract costs which are passed through to its clients. These costs result
from the use of subcontractors on projects principally for transportation and
disposal of hazardous wastes, and in some cases for analytical and remediation
services, where contracts or other business conditions require the use of
subcontractors. The Company believes that net revenues, excluding direct
subcontract costs, more accurately reflect the amounts earned for activities
performed by the Company. Accordingly, the Company reports direct subcontract
costs as a reduction of gross revenues to arrive at net revenues.

PROPERTY AND EQUIPMENT Property and equipment are carried at cost and
include expenditures which substantially increase the useful lives of the
assets. Maintenance, repairs, and minor renewals are expensed as incurred.
Depreciation and amortization, including amortization of assets under capital
leases, are provided on a specific item basis net of salvage value over the
estimated useful lives of the respective assets, using primarily the
straight-line method.

CAPITALIZED INTEREST Interest expense incurred on capital expenditures for
assets constructed by the Company is capitalized and is included in the cost of
such assets. Total interest expense incurred by the Company was $10,127,000,
$8,447,000, and $7,191,000 for the years ended December 31, 1994, 1993 and 1992,
respectively. Total interest capitalized was $950,000, $699,000, and $85,000 for
the years ended December 31, 1994, 1993 and 1992, respectively.

OTHER ASSETS Other assets include goodwill and other intangible assets of
$370,000 and $460,000 at December 31, 1994 and 1993, respectively, resulting
primarily from acquisitions accounted for using the purchase method of
accounting. Goodwill is amortized using the straight-line method over forty
years. Other intangible assets relating to acquired businesses consist
principally of proprietary processes, and other deferred costs, and are
amortized on a straight-line basis over nine to ten years. The accumulated
amortization of intangible assets, including goodwill, relating to acquired
businesses was $919,000 and $828,000 at December 31, 1994 and 1993,
respectively.

F-6
<PAGE> 84

OHM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

GAIN RECOGNITION ON SALE OF SUBSIDIARIES' STOCK It is the Company's policy
to record gains and losses from sale or issuance of previously unissued stock by
its subsidiaries. The Company recorded losses of $185,000 and $650,000 for the
issuance of stock by NSC for the years ended December 31, 1993 and 1992,
respectively.

INCOME TAXES The Company accounts for income taxes under the liability
method pursuant to Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes." Under the liability method, deferred tax assets
and liabilities are determined based on differences between the financial
reporting and tax basis of assets and liabilities using the enacted tax rates
and laws that will be in effect when the differences are expected to reverse.

STATEMENT OF CASH FLOWS The Company considers all short-term deposits and
highly liquid investments purchased with an original maturity of three months or
less to be cash equivalents. Cash paid for income taxes for the years ended
December 31, 1994, 1993 and 1992 was $550,000, $381,000 and $141,000,
respectively. Cash paid for interest was $9,171,000, $7,940,000 and $7,720,000
for each of the years ended December 31, 1994, 1993 and 1992, respectively.

With respect to non-cash investing and financing activities, the Company
acquired $91,000, $2,019,000 and $702,000 of fixed assets under financial
obligations for the years ended December 31, 1994, 1993 and 1992, respectively.

NET INCOME (LOSS) PER SHARE Net income (loss) per share amounts are based
on the weighted average common and common equivalent shares outstanding during
the respective periods. Shares of common stock issuable upon conversion of the
8% Convertible Subordinated Debentures due 2006 are not considered to be common
stock equivalents and were antidilutive in each of the years presented;
therefore, they were excluded from the calculation of net income per share.

RECLASSIFICATION Certain amounts presented for the years ended December
31, 1993 and 1992 have been reclassified to conform to the 1994 presentation.

NOTE 2 -- DISCONTINUED OPERATIONS

In 1990, the Company adopted a plan to pursue the divestiture of its three
commercial testing laboratories and its fixed-base hazardous waste treatment
facility. These service areas of the Company's business have been accounted for
as discontinued operations and, accordingly, the accompanying consolidated
statements of operations for the years ended December 31, 1993 and 1992 have
been presented to report such businesses as discontinued operations. The Company
sold its three commercial testing laboratories in 1991. On February 22, 1993,
the Company completed the sale of all of the common stock of the Company's
fixed-base hazardous waste treatment facility for $14,613,000 in cash.

On December 23, 1992, NSC entered into a Purchase Agreement among the
Company, NSC and its wholly-owned subsidiary NSC Industrial Services Corp.
("NSCIS"), The Brand Companies, Inc. ("Brand") and Waste Management, Inc. to
acquire the asbestos abatement operations of Brand in exchange for 4,010,000
shares of NSC's common stock and the common stock of NSCIS which in turn owns
all of the common stock of Combined Plant Services Corp. and its affiliate
Gundersen/Viking Corp. (collectively, "CPS") acquired on February 5, 1992 and
Miami Valley Pressure Cleaning, Inc. and its affiliate M.V. Industrial Services,
Inc. (collectively, "MVIS") acquired on April 17, 1992 (see Note 18 -- Brand
Agreement). Accordingly, NSC's environmental cleaning and industrial maintenance
services business was accounted for as discontinued operations. The provision
for loss on disposition recorded by NSC at December 31, 1992 consisted of
estimated costs associated with the disposal and expected operating losses
through the date of disposition of CPS and MVIS. The Company's equity interest
in such provision for loss on disposition was $420,000.

F-7
<PAGE> 85

OHM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE 3 -- ACCOUNTS RECEIVABLE AND COSTS AND ESTIMATED EARNINGS ON CONTRACTS IN
PROCESS

Accounts receivable are summarized as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1994 1993
-------- -------
(IN THOUSANDS)
<S> <C> <C>
Accounts billed and due currently............................. $ 49,560 $42,693
Unbilled receivables.......................................... 56,334 17,391
Retained...................................................... 6,832 7,076
-------- -------
112,726 67,160
Allowance for uncollectible accounts.......................... (26,063) (2,776)
-------- -------
$ 86,663 $64,384
======== =======
</TABLE>

The consolidated balance sheets include the following amounts:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
1994 1993
--------- ---------
(IN THOUSANDS)
<S> <C> <C>
Costs incurred on contracts in process..................... $ 203,742 $ 129,767
Estimated earnings......................................... 42,032 26,410
--------- ---------
245,774 156,177
Less billings to date...................................... (180,377) (111,142)
--------- ---------
$ 65,397 $ 45,035
========= =========
Costs and estimated earnings on contracts in process in
excess of billings....................................... $ 65,437 $ 45,744
Billings on contracts in process in excess of costs and
estimated earnings....................................... (40) (709)
--------- ---------
$ 65,397 $ 45,035
========= =========
</TABLE>

During the fourth quarter of 1994, the Company recorded a $25,000,000
reserve for accounts receivable, primarily where such accounts are in litigation
(see Note 15 -- Litigation and Contingencies).

Unbilled receivables and costs and estimated earnings on contracts in
process typically represent amounts earned under the Company's contracts but not
yet billable to clients according to contract terms, which usually consider
passage of time, achievement of certain project milestones or completion of the
project, and amounts equal to contract costs attributable to claims included in
revenues. In addition, unbilled receivables and costs and estimated earnings on
contracts in process include amounts relating to contracts with federal
government agencies which require services performed by the Company's
subcontractors to be paid prior to billing. The Company believes that its
accounts receivable at December 31, 1994 will be collected within one year.

The Company provides a broad range of environmental and hazardous waste
remediation services to industrial, federal government agencies, and state and
local government agencies located primarily in the United States and Canada. The
Company's industrial, federal government, and state and local government clients
constituted 34%, 56%, and 10%, respectively, of total accounts receivable and
costs and estimated earnings on contracts in process at December 31, 1994.

F-8
<PAGE> 86

OHM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE 4 -- PROPERTY AND EQUIPMENT

Property and equipment is summarized as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1994 1993
-------- -------
(IN THOUSANDS)
<S> <C> <C>
Land.......................................................... $ 257 $ 257
Buildings and improvements.................................... 17,179 17,075
Machinery and equipment....................................... 74,270 62,413
Construction in progress...................................... 4,190 12,473
-------- -------
95,896 92,218
Less accumulated depreciation and amortization................ (38,656) (38,960)
-------- -------
$ 57,240 $53,258
======== =======
</TABLE>

NOTE 5 -- INVESTMENTS IN AND ADVANCES TO AFFILIATED COMPANY

On May 4, 1993, NSC, then a 70% owned subsidiary, acquired all the assets
and certain liabilities of the asbestos abatement division of Brand in exchange
for 4,010,000 shares of NSC's common stock and the common stock of NSCIS, NSC's
industrial maintenance subsidiary (see Note 18 -- Brand Agreement). As a result
of this transaction the Company's ownership interest in NSC was reduced to 40%.

The combined summarized financial information for NSC is set forth below:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1994 1993
------- -------
(IN THOUSANDS)
<S> <C> <C>
Current assets................................................. $40,648 $44,876
Noncurrent assets.............................................. 47,639 50,293
Total assets................................................... 88,287 95,169
Current liabilities............................................ 18,505 22,608
Noncurrent liabilities......................................... 11,720 15,569
</TABLE>

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------
1994 1993 1992
-------- -------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Gross revenues..................................... $132,218 $110,254 $62,220
Gross profit....................................... 21,716 20,901 7,525
Operating income (loss)............................ 5,101 6,356 (2,420)
Income (loss) from continuing operations........... 2,566 3,373 (1,604)
Net income (loss).................................. 2,566 3,373 (3,030)
Company's interest in net income (loss)............ 1,032 1,600 (2,119)
</TABLE>

The Company's accumulated equity in the undistributed earnings of NSC
included in consolidated retained earnings was $6,169,000 at December 31, 1994.
The Company received cash dividends from NSC aggregating $602,000 and $4,812,000
for the years ended December 31, 1994 and 1993, respectively.

F-9
<PAGE> 87

OHM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

As a result of the Brand Agreement, NSC obtained a senior credit facility
and paid all of its indebtedness to the Company, which totaled $12,958,000 on
May 4, 1993, and replaced $16,697,000 of outstanding letters of credit issued on
behalf of NSC under the Company's revolving credit agreement.

NOTE 6 -- OTHER ACCRUED LIABILITIES

Other accrued liabilities are summarized as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------
1994 1993
------ ------
(IN THOUSANDS)
<S> <C> <C>
Accrued interest................................................. $1,701 $1,439
Accrued insurance................................................ 2,041 2,057
Reserves for self-insurance...................................... 3,227 2,146
Other............................................................ 2,683 3,215
------ ------
$9,652 $8,857
====== ======
</TABLE>

NOTE 7 -- LONG-TERM DEBT

The long-term debt of the Company is summarized below:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1994 1993
-------- -------
(IN THOUSANDS)
<S> <C> <C>
8% Convertible Subordinated Debentures due October 1, 2006.... $ 57,500 $57,500
Revolving credit facility..................................... 57,700 7,000
Notes payable to financial institutions....................... 14,732 7,361
Notes payable................................................. 560 725
-------- -------
130,492 72,586
Less current portion.......................................... (3,213) (1,473)
-------- -------
$127,279 $71,113
======== =======
</TABLE>

The convertible subordinated debentures are convertible into 41.67 shares
of common stock per $1,000 unit with interest payable semiannually on April 1
and October 1, and are redeemable at the option of the Company. The convertible
subordinated debentures require annual mandatory sinking fund payments of 7.5%
of the principal amount which commence on October 1, 1996, and continue through
October 1, 2005. The fair value of the convertible subordinated debentures is
based on a quoted market price and approximates $45,138,000 at December 31,
1994. The amortization of debt issuance costs related to the convertible
subordinated debentures was $108,000 for each of the years ended December 31,
1994, 1993, and 1992.

On May 11, 1993, the Company entered into a $135,000,000 revolving credit
agreement, which was subsequently amended on January 18, 1995, with a group of
banks to provide letters of credit and cash borrowings. The agreement has a
three year term and is scheduled to expire on May 11, 1996. Under the terms of
the agreement, cash borrowings may not exceed $95,000,000 and bear interest at
either the prime rate plus a percentage ranging from .75% to 1.875% or, at the
Company's option, the Eurodollar market rate plus a percentage ranging from
1.75% to 2.875%. The percentage over the prime rate or the Eurodollar market
rate is based on the aggregate amount borrowed under the facility as well as the
Company's financial performance as measured by an interest coverage ratio and a
total funded debt ratio. The agreement provides the participating banks a
security interest in the Company's equipment, inventories, accounts receivable,
general intangibles

F-10
<PAGE> 88

OHM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

and in the Company's investment in the common stock of NSC as well as the
Company's other subsidiaries. The agreement also imposes, among other covenants,
a minimum tangible net worth covenant and a restriction on all of the Company's
retained earnings which precludes the declaration and payment of cash dividends.

The Company had $34,771,000 and $40,327,000 of letters of credit
outstanding under its revolving credit facility at December 31, 1994 and 1993,
respectively.

Notes payable to financial institutions consist of: (i) a $6,057,000 note
payable bearing interest at 7.24% payable in equal monthly installments of
$146,000 with the final payment due in May 1996, (ii) a $1,425,000 note payable
bearing interest at 9.25% payable in equal monthly installments of $35,000 with
the final payment due in May 1996, (iii) a $5,902,000 note payable bearing
interest at 8.58% payable in quarterly installments of $356,000 with the final
payment of $957,000 due in August 1999, and (iv) a $1,348,000 note payable
bearing interest at 8.72% payable in equal monthly installments of $43,000 with
the final payment due in January 1998. Each of the above agreements provides the
respective financial institution with a security interest in the equipment
financed with the proceeds from such notes.

Notes payable include: (i) a $457,000 interest bearing note at a rate of
8.75% payable in monthly installments of $14,000 with a final payment of
$320,000 due in December 1995, (ii) a $103,000 interest bearing note at a rate
of 9% payable in monthly installments of $4,000 with a final payment of $50,000
due in March 1996. Both notes are secured by certain machinery and equipment of
the Company.

The aggregate maturity of long-term debt for the five years ending December
31 is: 1995, $3,213,000; 1996, $65,658,000; 1997, $7,855,000; 1998, $7,617,000;
1999, $5,899,000; 1999 and thereafter, $40,250,000.

NOTE 8 -- LEASES

Future minimum lease payments under noncancelable operating leases total
$6,183,000, $5,190,000, $4,844,000, $4,233,000, and $2,974,000 for the years
ended December 31, 1995, 1996, 1997, 1998 and 1999, respectively. Lease payments
under noncancelable operating leases subsequent to the year ended December 31,
1999 aggregate $3,406,000.

Rental expense under operating leases totaled $5,906,000, $4,235,000, and
$2,791,000 for the years ended December 31, 1994, 1993 and 1992, respectively.

NOTE 9 -- INCOME TAXES

Effective January 1, 1992, the Company elected to adopt SFAS No. 109. As
permitted by SFAS No. 109, prior year financial statements were not restated to
reflect the change in accounting method. The cumulative effect as of January 1,
1992 of adopting SFAS No. 109 decreased net income by $857,000, of which
$700,000 represents the Company's equity interest in NSC's adoption of SFAS No.
109.

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes.

F-11
<PAGE> 89

OHM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

Significant components of the Company's deferred tax liabilities and assets as
of December 31, 1994 and 1993, are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1994 1993
------- -------
(IN THOUSANDS)
<S> <C> <C>
Long-term deferred tax liabilities:
Property and equipment............................................. $ 5,256 $ 7,048
Intangible assets.................................................. 1,768 2,008
Investments........................................................ 2,821 2,695
------- -------
Total long-term deferred tax liabilities........................ 9,845 11,751
Long-term deferred tax assets:
Net operating loss ("NOL") carryforwards........................... 3,156 5,612
Separate return limitation year ("SRLY") NOLs...................... -- 1,493
Research and development tax credits............................... 1,433 --
Other, net......................................................... 3,652 3,464
------- -------
Total long-term deferred tax assets............................. 8,241 10,569
Valuation allowance for deferred tax assets........................ (879) (1,633)
------- -------
Net long-term deferred tax asset................................ 7,362 8,936
------- -------
Net long-term deferred tax liabilities............................... $ 2,483 $ 2,815
======= =======
Long-term deferred tax assets:
Foreign tax NOLs................................................... $ 366 $ 693
Valuation allowance for deferred tax assets........................ (30) (76)
------- -------
Total long-term deferred tax assets............................. $ 336 $ 617
======= =======
Current deferred tax liabilities:
Revenue recognition................................................ $ 2,544 $ 3,244
Prepaid expenses................................................... 1,079 1,056
Tax reserves....................................................... 526 419
------- -------
Total current deferred tax liabilities.......................... 4,149 4,719
Current deferred tax assets:
Bad debt reserves.................................................. 10,049 --
Capital loss carryforwards......................................... -- --
NOL carryforwards.................................................. 1,928 2,892
Other, net......................................................... 155 1,260
------- -------
Total current deferred tax assets............................... 12,132 4,152
Valuation allowance for deferred tax assets.......................... (1,239) (439)
------- -------
Net current deferred tax assets................................. 10,893 3,713
------- -------
Net current deferred tax liabilities................................. $ 1,006
=======
Net current deferred tax assets...................................... $ 6,744
=======
</TABLE>

The net long-term deferred tax assets of $336,000 and $617,000 at December
31, 1994 and 1993, respectively, are attributable to the foreign operations of
the Company and cannot be offset with the net long-term deferred tax liabilities
resulting from the Company's domestic operations.

F-12
<PAGE> 90

OHM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

For financial reporting purposes, income (loss) from continuing operations
before income taxes (benefit) includes the following components:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------
1994 1993 1992
-------- ------ -------
(IN THOUSANDS)
<S> <C> <C> <C>
United States........................................ $(14,074) $6,489 $(4,813)
Foreign.............................................. -- -- 469
-------- ------ -------
$(14,074) $6,489 $(4,344)
======== ====== =======
</TABLE>

The provisions for income taxes (benefit) consist of the following:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------
1994 1993 1992
------- ------ -------
(IN THOUSANDS)
<S> <C> <C> <C>
Current:
Federal...................................................... $ 244 $ 199 --
Foreign...................................................... -- -- $ 35
State........................................................ -- 75 --
------- ------ -------
244 274 35
Benefit of loss carryforwards.................................. (5,380) (3,816) --
Deferred:
Federal...................................................... (1,161) 5,189 (1,235)
Foreign...................................................... -- -- 200
State........................................................ (161) 435 (230)
------- ------ -------
(1,322) 5,624 (1,265)
------- ------ -------
$(6,458) $2,082 $(1,230)
======= ====== =======
</TABLE>

The reasons for differences between the provisions for income taxes and the
amount computed by applying the statutory federal income tax rate to income
(loss) from operations before income taxes are as follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER
31,
----------------------
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Federal statutory rate................................................ 34.0% 34.0% 34.0%
Add (deduct):
State income taxes, net of federal benefit.......................... 3.7 3.0 3.4
Research and development tax credits................................ 3.6 -- --
Equity in net earnings of affiliates................................ 2.0 (6.4) (8.8)
Other, net.......................................................... 2.6 1.5 (0.3)
---- ---- ----
45.9% 32.1% 28.3%
==== ==== ====
</TABLE>

F-13
<PAGE> 91

OHM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

Net operating loss, capital loss and tax credit carryforward amounts and
their respective expiration dates for income tax purposes are as follows (in
thousands):

<TABLE>
<CAPTION>
EXPIRATION
AMOUNT DATES
------- ------------------
<S> <C> <C>
Net operating loss............................................. $12,616 1997 through 2007
Foreign tax net operating loss................................. 949 1997 through 1998
State net operating losses in excess of federal................ 15,817 1997 through 2007
Research and development tax credits........................... 1,433 2005 through 2009
Alternative minimum tax credits................................ 1,209 Indefinite
Miscellaneous credits.......................................... 600 1997 through 2005
</TABLE>

The valuation allowance for deferred tax assets is $2,148,000 at December
31, 1994 and 1993. No change in the valuation allowance was recorded in 1994.

NOTE 10 -- RELATED PARTY TRANSACTIONS

The Company has a policy whereby transactions with directors, executive
officers and related parties require the approval of a disinterested majority of
the Board of Directors.

Prior to NSC's acquisition of the asbestos abatement division of Brand in
May 1993, the Company had an intercompany loan and management services
arrangement with NSC. Under the intercompany loan arrangement, the Company would
borrow from NSC its excess cash and advance to NSC funds for working capital
requirements and expansion of NSC's business. The Company charged NSC net
interest expense of $275,000 and $310,000 for the years ended December 31, 1993
and 1992, respectively. In addition, the Company and its subsidiaries furnished
to NSC management services for financial, administrative, legal and certain
other staff functions. The Company charged NSC $149,000 and $281,000 for the
years ended December 31, 1993 and 1992, respectively, for such services. The
Company believes the charges for such services have been made on a reasonable
basis and approximate what it would have cost NSC to obtain such services on its
own. Upon completion of the Brand asbestos abatement division acquisition, such
intercompany loan and management services agreements were terminated.

The Company has been reimbursed by NSC for certain third party charges paid
on NSC's behalf, such as letter of credit fees, insurance and bonding costs and
legal fees. The costs charged to NSC for general liability and other insurance
coverages were $363,000, $93,000 and $475,000 for the years ended December 31,
1994, 1993 and 1992, respectively. In addition, prior to NSC's acquisition of
Brand's asbestos abatement division, NSC employees were eligible to participate
in OHM's group insurance and other employee benefit plans. The costs charged to
NSC for such employee benefits were $242,000 and $540,000 for the years ended
December 31, 1993 and 1992, respectively.

In the normal course of business, NSC has provided the Company with
subcontract services on certain of its projects for asbestos abatement and
industrial maintenance services. The costs for such services were $689,000,
$3,469,000 and $3,961,000 for the years ended December 31, 1994, 1993 and 1992,
respectively.

The Company rents certain buildings and prior to 1993 rented aircraft from
an affiliated partnership. Rental expenses for these facilities and aircraft
totaled $38,000, $33,000 and $134,000 for the years ended December 31, 1994,
1993 and 1992, respectively.

The Company has purchased general contractor services and equipment from a
company which totaled $24,000, $166,000 and $460,000 for the years ended
December 31, 1994, 1993 and 1992, respectively. The principal shareholder of the
company is directly related to certain directors of the Company.

F-14
<PAGE> 92

OHM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

In the normal course of business, the Company has purchased subcontractor
services on certain of its projects from a company which totaled $2,055,000 for
the year ended December 31, 1994. The principal shareholder of the company is
directly related to certain directors of the Company.

NOTE 11 -- AGREEMENT WITH FORMER SHAREHOLDER

During 1985, the Company executed a pension agreement with a former
officer, directly related to certain directors of the Company, for an annual
pension commencing on June 1, 1990, of $96,000, subject to cost of living
adjustments, for the remainder of his life and that of his spouse if she
survives him. The Company made pension payments totaling $109,000, $105,000 and
$111,000 pursuant to this agreement during the years ended December 31, 1994,
1993 and 1992, respectively.

NOTE 12 -- CAPITAL STOCK

The Company has authorized 2,000,000 shares of preferred stock at a $10.00
par value. No shares of preferred stock have been issued at December 31, 1994.
The rights and preferences of the preferred stock will be fixed by the Board of
Directors at the time such shares are issued. The preferred stock, when issued,
will have dividend and liquidation preferences over those of the common
shareholders.

In December 1993, the Company completed a public offering of 3,365,000
shares of common stock at $11.00 per share. Total net proceeds to the Company
from such offering were $34,963,000, less issuance expenses of $705,000, and
were used to reduce the outstanding amounts under the Company's revolving credit
agreement. If the offering had occurred at the beginning of 1993, pro forma
income per share would have been $0.37. This pro forma per share data is
unaudited and not necessarily indicative of the results that would have been
obtained had this event actually occurred at the assumed date. In January 1994,
the Company issued an additional 85,000 shares of common stock at $11.00 per
share which resulted in $883,000 of net proceeds, less issuance expenses of
$86,000, to the Company.

NOTE 13 -- STOCK OPTION PLAN

In 1986, the Company adopted and the shareholders approved the 1986 Stock
Option Plan (the "1986 Plan") which provides for the granting of stock options
to directors, officers and key employees at prices not less than the fair market
value of the Company's common stock on the date of grant. A total of 1,850,000
shares of the Company's common stock had been reserved for issuance upon the
exercise of options granted under the 1986 Plan at December 31, 1993. The total
amount of shares reserved for issuance was subsequently increased to 2,850,000
by vote of the shareholders at the 1994 Annual Meeting. Substantially all
options presently issued under the 1986 Plan are exercisable in cumulative
annual installments ranging up to 20 percent commencing on the date of grant and
expiring ten years thereafter. The number of shares available for grants of
additional options under the 1986 Plan were 752,859 and 137,834 at December 31,
1994 and 1993, respectively.

On August 6, 1992, the Company's Board of Directors approved a stock option
plan for the Board of Directors (the "Directors' Plan"), which was subsequently
approved by the Company's shareholders at the 1993 Annual Meeting. The
Directors' Stock Option Plan provides for the immediate grant to each non-
employee director a stock option for 15,000 shares of the Company's common
stock, less the number of shares held by any such director under the 1986 Stock
Option Plan. Additionally, the Directors' Plan provides for additional grants of
stock options for 5,000 shares of the Company's common stock, at prices not less
than the fair value, to each non-employee director annually. Options granted
under the Directors' Plan may not be exercised for a period of six months
following the date of grant and terminate ten years after the date of grant or
eighteen months after the holder ceases to be a member of the Board of
Directors, whichever occurs earlier. The total number of shares available for
grants of additional options under the Directors' Plan at December 31, 1994 and
1993 was 915,000 and 940,000, respectively.

F-15
<PAGE> 93

<TABLE>
OHM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

The following summarizes stock option activity in 1994:

<CAPTION>
NUMBER OF PRICE RANGE
SHARES PER SHARE
--------- ---------------
<S> <C> <C>
1986 PLAN
Outstanding at December 31, 1993................................. 1,485,800 $6.38 to $11.88
Granted........................................................ 477,350 $9.75 to $16.25
Exercised...................................................... (105,425) $7.00 to $11.88
Cancelled...................................................... (92,375) $7.00 to $11.88
--------- ---------------
Outstanding at December 31, 1994................................. 1,765,350 $6.38 to $16.25
--------- ---------------
Exercisable at December 31, 1994................................. 907,725 $6.38 to $16.25
======== =============
DIRECTORS' PLAN
Outstanding at December 31, 1993................................. 60,000 $7.63 to $8.25
Granted........................................................ 25,000 $15.63
Exercised...................................................... -- --
Cancelled...................................................... -- --
--------- ---------------
Outstanding at December 31, 1994................................. 85,000 $7.63 to $15.63
--------- ---------------
Exercisable at December 31, 1994................................. 85,000 $7.63 to $15.63
======== =============
</TABLE>

NOTE 14 -- RETIREMENT AND PROFIT-SHARING PLANS

The Company has a Retirement Savings Plan (the "Plan") which allows each of
its eligible employees to make contributions, up to a certain limit, to the Plan
on a tax-deferred basis under Section 401(k) of the Internal Revenue Code of
1986, as amended. Eligible employees are those who are employed full-time, are
over twenty-one years of age, and have one year of service with the Company. The
Company may, at its discretion, make matching contributions and profit sharing
contributions to the Plan out of its profits for the plan year. The Company made
matching contributions of $1,225,000, $743,000 and $609,000 to the Plan for the
years ended December 31, 1994, 1993 and 1992, respectively.

NOTE 15 -- LITIGATION AND CONTINGENCIES

The Company's financial statements at December 31, 1994 include a claim
receivable aggregating approximately $22,829,000 in direct costs relating to a
major remediation project being performed by the Company for Citgo Petroleum
Corporation ("Citgo") at its Lake Charles, Louisiana refinery. This claim
receivable represents direct costs to date for activities which the Company's
management believes exceeded the scope of the existing contract due to deficient
project specifications provided by Citgo as well as other unplanned events
controlled by Citgo. In addition, at December 31, 1994, the Company has recorded
in its financial statements approximately $5,381,000 of accounts receivable that
are in dispute for work performed under the terms of the Company's base contract
with Citgo. During April 1994, the Company submitted to Citgo a request for
equitable adjustment and Citgo responded by filing an action in the U.S.
District Court for the Western District of Louisiana seeking a declaratory
judgment that the Company is not entitled to additional compensation under the
contract and certain other relief. The Company's answer to the declaratory
judgment action was filed in July 1994, together with counterclaims against
Citgo for negligent misrepresentation, breach of contract and quantum meruit
seeking damages in excess of $35,000,000. In August 1994, Citgo amended its
complaint seeking damages under the contract. In December, 1994 Citgo filed a
motion to allow it to file, and in January 1995, Citgo filed, a third party
complaint against Occidental Oil and Gas Corporation and OXY USA, Inc. as third
party defendants in such litigation because of their prior involvement with the
Citgo site and its contract specifications.

F-16
<PAGE> 94

OHM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

The Company has also become involved in litigation with Occidental Chemical
Corporation ("Occidental") relating to a separate project it performed in 1993
and 1994 for Occidental. The Company's financial statements at December 31, 1994
include a claim receivable of $8,114,000 in direct costs relating to this
project. The litigation arises from an October 1993 contract between the Company
and Occidental for work at a contaminated site in North Tonawanda, New York. The
Company's work was substantially delayed and its costs of performance were
substantially increased as a result of conditions at the site which the
Company's management believes were materially different than as represented by
Occidental. The Company believes that Occidental has implicitly acknowledged the
existence of differing conditions at the site through its previous execution and
partial payment of a change order relating to the Company's position. In October
1994, Occidental issued a deductive change order deleting substantially all
remaining work from the Company's contract. On December 30, 1994, while the
Company was in the process of developing a comprehensive claim document,
Occidental filed suit against the Company in the U.S. District Court for the
Western District of New York alleging damages in excess of $50,000, the
jurisdictional minimum. The Company will oppose Occidental's position vigorously
and will assert a counterclaim in excess of its direct costs relating to the
project.

During the fourth quarter of 1994, the Company recorded a $25,000,000
pre-tax charge, $15,000,000 after-tax or $0.96 per share, to establish a reserve
for accounts receivable, primarily where such accounts are in litigation.
Management believes that it has established adequate reserves should the
resolution of such accounts receivable be lower than the amounts recorded and
such resolution should not have a material adverse impact upon the Company's
consolidated results of future operations or financial condition.

The Company was named in April 1994 as one of 33 third party defendants in
a case titled United States of America v. American Cyanamid Company, Inc., et
al., pending in the United States District Court for the Southern District of
West Virginia. This litigation arises out of claims made against several
potentially responsible parties ("PRPs") by the Environmental Protection Agency
("EPA") for amounts in excess of $24,000,000 for response costs arising out of
releases and threatened releases of hazardous wastes at the Fike Chemical, Inc.
Superfund site (the "Site") in Nitro, West Virginia. The Company was retained as
a response action contractor for the Site under contracts with the United States
Army Corps of Engineers ("USACE") and the EPA. The third party complaint alleges
that the Company was an operator of the Site during the remediation and that the
Company caused releases or threatened releases of hazardous substances at the
Site as a result of its negligent conduct, grossly negligent conduct or
intentional misconduct. The third party complaint seeks damages and contribution
from the Company and the other third party defendants. The Company has submitted
claims for indemnification related to this lawsuit under its contract with the
USACE and the EPA and has notified its contractor's pollution liability
insurance carrier. The Company believes the lawsuit is without merit, intends to
vigorously defend against it and does not believe that it will have a material
adverse effect on the results of future operations and financial condition of
the Company. The Company has learned a criminal and civil investigation has been
commenced by the government relating to the Company's billings to the EPA and
USACE and for its work at the Site. The Company believes the investigation
followed certain allegations made by the PRPs in defense of the main cost
recovery action. The Company is cooperating with the investigation.

In addition to the above, the Company is subject to a number of claims and
lawsuits in the ordinary course of its business. In the opinion of management,
the outcome of these actions, which are not clearly determinable at the present
time, are either adequately covered by insurance, or if not insured, will not,
in the aggregate, have a material adverse impact upon the Company's consolidated
financial position or the results of future operations.

The Company is self-insured for the initial $1,000,000 of certain
comprehensive general and automobile liability risks through its wholly-owned
insurance company subsidiary and through deductible programs. The Company is
insured through commercial sources for certain environmental impairment risks as
well as for

F-17
<PAGE> 95

OHM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

certain general and automobile liability umbrella coverages in excess of primary
coverages. The Company provides for losses when identified and evaluated.

NOTE 16 -- MAJOR CUSTOMERS

Revenues from federal government agencies accounted for 55%, 40%, and 25%
of gross revenues from continuing operations for the years ended December 31,
1994, 1993 and 1992, respectively. Revenues from state and local government
agencies accounted for 10%, 7% and 4% of gross revenues from continuing
operations for the years ended December 31, 1994, 1993 and 1992, respectively.
There were no industrial customers which accounted for more than 10% of gross
revenues for the years ended December 31, 1994, 1993 and 1992.

NOTE 17 -- SPECIAL CHARGES

The Company's loss from continuing operations for the year ended December
31, 1992 included special charges of $2,550,000 (net of $1,600,000 income tax
benefit) or $0.21 per share recorded by the Company and $2,162,000 or $0.18 per
share, which represents the Company's interest in special charges recorded by
NSC. Such special charges primarily relate to the restructuring of the Company
and NSC's asbestos abatement operations in anticipation of the acquisition of
the asbestos abatement division of Brand (see Note 18 -- Brand Agreement),
provisions for legal and insurance reserves, and certain other matters.

As discussed in Note 15, the Company's loss from continuing operations
included a special charge of $15,000,000 (net of $10,000,000 income tax benefit)
or $0.96 per share, to establish a reserve for accounts receivable, primarily
where such accounts are in litigation.

NOTE 18 -- BRAND AGREEMENT

On May 4, 1993, NSC completed the acquisition of all the assets and certain
liabilities of the asbestos abatement division of Brand in exchange for
4,010,000 shares of NSC's common stock and the common stock of NSCIS which in
turn owns all of the common stock of CPS and MVIS (the "Brand Transaction").
Pursuant to the Brand Agreement, Brand guaranteed a minimum gross margin on
certain asbestos abatement contracts to be assumed by NSC and will provide NSC
with access to certain asbestos disposal facilities on favorable terms. As part
of the Brand Transaction, Brand has negotiated settlements of the agreements
which provided for contingent payments to the former shareholders of CPS and
MVIS and NSC has revised the exercise price of the warrant to purchase 150,000
shares of NSC's common stock which was issued in connection with the acquisition
of CPS from $10.00 per share to $6.00 per share. In addition, NSC received
bonding support and a $25,000,000 subordinated working capital facility from an
affiliate of Brand. The Company and Brand each own 4,010,000 shares or
approximately 40% of NSC's outstanding common stock. See "Note 5 -- Investments
in and Advances to Affiliated Company."

NOTE 19 -- ACQUISITION

F-18
<PAGE> 96

OHM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE 20 -- QUARTERLY FINANCIAL INFORMATION AND MARKET PRICE INFORMATION
(UNAUDITED)

The following table sets forth the Company's condensed consolidated
statements of operations by quarter for 1994 and 1993.

<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
------- ------- ------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
1994
Gross revenues (1)................................. $75,031 $94,686 $91,308 $ 62,356
Net revenues....................................... 51,811 65,027 69,333 34,096
Gross profit (loss)................................ 10,384 13,691 15,033 (11,886)
Selling, general and administrative expenses....... 7,287 8,316 8,419 8,259
Operating income (loss)............................ 3,097 5,375 6,614 (20,145)
Net income (loss).................................. $ 805 $2,069 $2,615 $(13,105)
======= ======= ======= ========
Net income (loss) per share........................ $ 0.05 $ 0.13 $ 0.16 $ (0.84)
======= ======= ======= ========
Stock price range: (2)
High............................................. 17 1/4 18 1/2 13 1/2 11 3/8
Low.............................................. 11 3/8 10 5/8 11 6 7/8
1993
Gross revenues..................................... $43,840 $58,087 $62,063 $ 78,411
Net revenues....................................... 34,374 41,164 46,773 53,429
Gross profit....................................... 7,398 9,958 11,730 10,974
Selling, general and administrative expenses....... 5,977 6,593 7,351 7,189
Operating income................................... 1,421 3,365 4,379 3,785
Net income......................................... $ 331 $1,227 $1,749 $ 1,100
======= ======= ======= ========
Net income per share............................... $ 0.03 $ 0.10 $ 0.14 $ 0.08
======= ======= ======= ========
Stock price range: (2)
High............................................. 9 3/8 9 12 12 1/8
Low.............................................. 7 1/4 7 1/2 9 10 3/4
<FN>

- - - ---------------

NOTE:

(1) During the fourth quarter of 1994, the Company recorded a $25,000,000
pre-tax charge, $15,000,000 after-tax or $0.96 per share, to establish a
reserve for accounts receivable, primarily where such accounts are in
litigation.

(2) Reflects the high and low closing prices of the Company's common stock on
the New York Stock Exchange as reported by The Wall Street Journal. As of
December 31, 1994, the Company has approximately 869 shareholders of record.
The Company has not declared any cash dividends on its common stock and does
not intend to pay cash dividends in the foreseeable future.

</TABLE>

F-19
<PAGE> 97

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

Board of Directors and Stockholders
NSC Corporation

We have audited the accompanying consolidated balance sheets of NSC
Corporation and subsidiaries as of December 31, 1994 and 1993, and the related
consolidated statements of operations, changes in stockholders' equity, and cash
flows for each of the three years in the period ended December 31, 1994. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
NSC Corporation and subsidiaries at December 31, 1994 and 1993, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1994, in conformity with generally
accepted accounting principles.

ERNST & YOUNG LLP

Boston, Massachusetts
February 1, 1995

F-20
<PAGE> 98

<TABLE>
NSC CORPORATION
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<CAPTION>
DECEMBER 31,
-------------------
1994 1993
------- -------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................................ $ 8,818 $ 5,775
Accounts receivable, net............................................. 23,188 26,131
Costs and estimated earnings on contracts in process in excess of
billings.......................................................... 5,537 4,489
Inventories.......................................................... 1,735 2,151
Prepaid expenses and other current assets............................ 1,245 2,604
Refundable income taxes.............................................. 125 2,234
Deferred income taxes................................................ -- 1,492
------- -------
40,648 44,876
Property and equipment:
Land................................................................. 998 998
Buildings and improvements........................................... 5,591 5,624
Machinery and equipment.............................................. 12,137 12,006
Construction-in-process.............................................. -- 4
------- -------
18,726 18,632
Less accumulated depreciation........................................ (9,063) (7,396)
------- -------
9,663 11,236
Other noncurrent assets:
Goodwill, net of accumulated amortization of $4,721 and $3,654 in
1994 and 1993, respectively....................................... 37,938 39,005
Other assets......................................................... 38 52
------- -------
37,976 39,057
------- -------
Total Assets......................................................... $88,287 $95,169
======= =======
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-21
<PAGE> 99

<TABLE>
NSC CORPORATION
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<CAPTION>
DECEMBER 31,
-------------------
1994 1993
------- -------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable..................................................... $ 2,901 $ 4,578
Billings in excess of costs and estimated earnings on contracts in
process........................................................... 4,987 5,458
Accrued compensation and related costs............................... 4,674 2,937
Federal, state and local taxes....................................... 477 183
Other accrued liabilities............................................ 2,263 6,265
Current portion of noncurrent liabilities............................ 3,203 3,187
------- -------
18,505 22,608
Noncurrent liabilities:
Long-term debt....................................................... 7,385 10,588
Deferred income taxes................................................ 4,335 4,981
Commitments and Contingencies -- Note 12
Stockholders' equity:
Preferred stock $.01 par value, 10,000,000 shares authorized, none
issued and outstanding............................................ -- --
Common stock $.01 par value, 20,000,000 shares authorized; 9,971,175
shares issued and outstanding in both 1994 and 1993............... 100 100
Additional paid-in capital........................................... 56,079 56,079
Retained earnings.................................................... 1,883 813
------- -------
58,062 56,992
------- -------
Total Liabilities and Stockholders' Equity........................... $88,287 $95,169
======= =======
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-22
<PAGE> 100

<TABLE>
NSC CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------
1994 1993 1992
-------- -------- -------
<S> <C> <C> <C>
Gross revenues............................................ $132,218 $110,254 $62,220
Less direct subcontract costs............................. 23,672 23,751 14,987
-------- -------- -------
Net Revenues............................................ 108,546 86,503 47,233
Cost of services.......................................... 86,830 65,602 39,708
-------- -------- -------
Gross Profit............................................ 21,716 20,901 7,525
Selling, general and administrative expenses.............. 15,548 13,687 9,405
Goodwill amortization..................................... 1,067 858 540
-------- -------- -------
Operating Income (Loss)................................. 5,101 6,356 (2,420)
-------- -------- -------
Other:
Interest expense........................................ 804 807 831
Other................................................... (386) (397) (973)
-------- -------- -------
418 410 (142)
-------- -------- -------
Income (Loss) from Continuing Operations Before Income
Taxes (Benefit)...................................... 4,683 5,946 (2,278)
Income taxes (benefit).................................... 2,117 2,573 (674)
-------- -------- -------
Income (Loss) from Continuing Operations................ 2,566 3,373 (1,604)
-------- -------- -------
Discontinued operations, net of income tax effects:
Income from operations.................................. -- -- 174
Provision for loss on disposition....................... -- -- (600)
-------- -------- -------
Income (Loss) Before Cumulative Effect of Accounting
Change............................................... 2,566 3,373 (2,030)
Cumulative effect of accounting change.................. -- -- (1,000)
-------- -------- -------
Net Income (Loss)....................................... $ 2,566 $ 3,373 $(3,030)
======== ======== =======
Net income (loss) per share:
Continuing operations................................... $ 0.26 $ 0.40 $ (0.28)
Discontinued operations:
From operations...................................... -- -- 0.03
From disposition..................................... -- -- (0.10)
Cumulative effect of accounting change.................... -- -- (0.18)
-------- -------- -------
$ 0.26 $ 0.40 $ (0.53)
======== ======== =======
Weighted-average number of common and common-equivalent
shares outstanding...................................... 9,971 8,504 5,735
======== ======== =======
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-23
<PAGE> 101

<TABLE>

NSC CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<CAPTION>
COMMON STOCK
---------------------- ADDITIONAL TOTAL
NUMBER OF PAID-IN RETAINED STOCKHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS EQUITY
--------- -------- --------- -------- ----------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1992..... 5,735 $ 57 $29,114 $12,435 $ 41,606
Net loss....................... (3,030 ) (3,030)
Contingently issuable common
stock........................ 970 970
--------- -------- --------- -------- ----------
Balance at December 31, 1992... 5,735 57 30,084 9,405 39,546
Net income..................... 3,373 3,373
Cash dividend declared ($1.20
per share)................... (11,965 ) (11,965)
Issuance of common stock for
acquisition.................. 4,082 41 25,373 25,414
Stock options exercised........ 154 2 622 624
--------- -------- --------- -------- ----------
Balance at December 31, 1993... 9,971 100 56,079 813 56,992
Net income..................... 2,566 2,566
Cash dividend declared ($0.15
per share)................... (1,496 ) (1,496)
--------- -------- --------- -------- ----------
Balance at December 31, 1994... 9,971 $ 100 $56,079 $ 1,883 $ 58,062
========= ======== ========= ======== ==========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-24
<PAGE> 102

<TABLE>
NSC CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------
1994 1993 1992
------- -------- --------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)....................................... $ 2,566 $ 3,373 $ (3,030)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation....................................... 2,160 2,132 1,643
Goodwill amortization.............................. 1,067 858 540
Deferred income taxes.............................. 1,072 3,457 (1,966)
(Gain)/loss on disposition of property and
equipment....................................... (123) (5) 42
Provision for loss on disposition of discontinued
operations, including deferred income tax
benefit......................................... -- -- 600
Cumulative effect of accounting change............. -- -- 1,000
CHANGES IN ASSETS AND LIABILITIES, NET OF EFFECTS OF
ACQUIRED BUSINESS:
Accounts receivable, net................................ 2,943 15,912 (3,941)
Costs and estimated earnings on contracts in process in
excess of billings................................... (1,048) 188 1,234
Other current assets.................................... 3,884 (2,964) (3,316)
Accounts payable........................................ (1,677) (749) 422
Billings in excess of costs and estimated earnings on
contracts in process................................. (471) 3,827 135
Other current liabilities............................... (2,197) (1,284) 6,920
Other................................................... 14 6 (3)
------- -------- --------
Net cash provided by operating activities.......... 8,190 24,751 280
------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment..................... (814) (891) (4,549)
Proceeds from sale of property and equipment............ 350 49 --
Purchase of Brand, net of cash acquired................. -- (767) --
Net investment in and advances to discontinued
operations........................................... -- (4,228) (12,086)
Net cash used in investing activities.............. (464) (5,837) (16,635)
------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Due to and from OHM Corporation......................... -- (14,850) 14,109
Proceeds from issuance of long-term debt................ -- 15,000 1,013
Payments on long-term debt.............................. (3,187) (2,223) (15)
Proceeds from issuance of common stock upon exercise of
stock options........................................ -- 624 --
Cash dividend paid...................................... (1,496) (11,965) --
------- -------- --------
Net cash provided by (used in) financing
activities...................................... (4,683) (13,414) 15,107
------- -------- --------
Net increase (decrease) in cash and cash
equivalents..................................... 3,043 5,500 (1,248)
Cash and cash equivalents at beginning of periods....... 5,775 275 1,523
------- -------- --------
Cash and cash equivalents at end of periods............. $ 8,818 $ 5,775 $ 275
======= ======== ========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-25
<PAGE> 103

NSC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1994

NOTE 1 -- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND BASIS OF PRESENTATION The accompanying consolidated
financial statements include the accounts of NSC Corporation (the "Company") and
its wholly-owned subsidiaries, National Surface Cleaning, Inc. ("NSC") and
National Service Cleaning Corp. ("NSCC"), NSC Industrial Services Corp.
("Industrial") through May 4, 1993 (date of disposition); and since February 5,
1992 (date of acquisition) through May 4, 1993 (date of disposition), Combined
Plant Services Corp. and its affiliate, Gundersen/Viking (collectively, "CPS");
and since April 17, 1992 (date of acquisition) through May 4, 1993 (date of
disposition) Miami Valley Pressure Cleaning, Inc. and its affiliate, M.V.
Industrial Services Inc. (collectively, "MVIS"). All intercompany transactions
have been eliminated in consolidation. The Company is a Delaware corporation and
was a seventy percent-owned subsidiary of OHM Corporation ("OHM") through May 3,
1993. On May 4, 1993, pursuant to a Purchase Agreement among the Company,
Industrial, OHM, The Brand Companies, Inc. ("Brand") and Waste Management, Inc.
("WMI"), now known as WMX Technologies, Inc., the Company acquired the asbestos
abatement division of Brand (the "Division") in exchange for 4,010,000 shares of
the Company's common stock and all the common stock of Industrial. As of
December 31, 1993 and 1994, OHM and Rust International Inc. (a successor company
to Brand and hereinafter referred to as "Rust") each owned approximately forty
percent of the Company's common stock.

REVENUE AND COST RECOGNITION The Company primarily derives its revenues
from providing asbestos abatement and related services under fixed price, time
and materials and unit price contracts. The Company recognizes revenues and
related income from its fixed and unit price contracts in process using the
percentage-of-completion method of accounting. Revenues from time and
material-type contracts are recorded based on cost incurred. Provisions for
estimated losses on uncompleted contracts are made in the period in which such
losses are determined. Revenues are recognized for amounts under pending claims
when management believes it is probable the claim will result in additional
contract revenues and the amount can be reliably estimated. Contract costs
include all direct labor, material, per diem, subcontract and other direct and
indirect costs related to the contract performance. Selling, general and
administrative expenses are charged to expense as incurred. The asset, "costs
and estimated earnings on contracts in process in excess of billings,"
represents revenues recognized in excess of amounts billed. The liability,
"billings on contracts in process in excess of costs and estimated earnings,"
represents billings in excess of revenues recognized.

DIRECT SUBCONTRACT COSTS The Company incurs a substantial amount of direct
subcontract costs which are passed through to its clients. These costs result
from the use of subcontractors on projects for labor, transportation and
disposal of asbestos materials, analytical and restoration services, and other
removal-related services. The Company believes that net revenues, excluding
direct subcontract costs, more accurately reflect the amounts earned for
activities performed by the Company. Accordingly, the Company reports direct
subcontract costs as a reduction of gross revenues to arrive at net revenues.

INVENTORIES Inventories primarily are comprised of operating supplies and
are stated at the lower of cost or market. Cost is determined using the
first-in, first-out (FIFO) method.

PROPERTY AND EQUIPMENT Property and equipment are stated at cost.
Depreciation is provided over the estimated useful lives of the respective
assets using the straight-line method.

GOODWILL Goodwill is amortized over a 40-year life and is reviewed on an
ongoing basis by the Company's management based on several factors including,
among others, the Company's projection of future operations and their related
impact on cash flows. If an impairment of the carrying value were to be
indicated by this review, the Company would adjust the carrying value of
goodwill to its estimated fair value.

F-26
<PAGE> 104

NSC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

INCOME TAXES Effective January 1, 1992, the Company adopted Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS No.
109"), which changed its method of accounting for income taxes from the deferred
method to the liability method. The cumulative effect of the adoption of SFAS
No. 109 resulted in the recognition of a deferred tax liability of $1,000,000.
Under the liability method, deferred tax assets and liabilities are determined
based on differences between the financial reporting and tax bases of assets and
liabilities using the enacted tax rates and laws that will be in effect when the
differences are expected to reverse.

ALLOCATION OF CORPORATE EXPENSES Prior to May 4, 1993, the Company
received certain administrative and other services from OHM and its other
subsidiaries, which included financial, legal, certain senior executive
management, insurance, employee benefits, and other services. For such services,
the Company was charged a proportional share of the total costs. The Company
believes that such transactions with OHM and its affiliates were made on terms
no less favorable than could have been obtained in arms-length transactions with
independent third parties. A summary of significant transactions with affiliates
of the Company is presented in Note 10.

CASH EQUIVALENTS AND CASH FLOW INFORMATION The Company considers all
investments having a maturity of three months or less when purchased to be cash
equivalents. Cash equivalents are stated at cost which approximates fair market
value. Cash paid for income taxes was $263,000, $1,063,000, and $1,597,000 for
1994, 1993, and 1992, respectively. Cash paid for interest was $802,000,
$945,000, and $1,886,000 for 1994, 1993, and 1992, respectively.

NET INCOME PER SHARE The net income (loss) per share amounts for 1994,
1993, and 1992, have been computed by dividing net income (loss) by the
weighted-average number of common and common equivalent shares, if dilutive,
outstanding during the respective periods.

RECLASSIFICATIONS Certain reclassifications have been made to prior year
financial statements to conform with the current year presentation.

NOTE 2 -- ACQUISITION OF THE DIVISION

On December 23, 1992, the Company entered into a Purchase Agreement among
the Company, Industrial, OHM, Brand and WMI, pursuant to which the Company
purchased, on May 4, 1993, the Division in exchange for 4,010,000 shares of the
Company's common stock and the capital stock of Industrial. The acquisition of
the Division has been accounted for using the purchase method and, accordingly,
the acquired assets and assumed liabilities have been recorded at their
estimated fair values as of May 4, 1993. The accompanying consolidated financial
statements include the results of operations for the Division since May 4, 1993.
Pursuant to the Purchase Agreement, Brand guaranteed to the Company that, except
for certain contracts, the contracts assumed by the Company from Brand to
provide asbestos abatement and other related services would yield certain
minimum gross margins depending on the type of contract. Gross margin is defined
as revenues derived from these contracts less certain specified costs of
performing such contracts divided by such revenues. Brand paid the Company
$3,775,000 pursuant to this provision of the Purchase Agreement for the year
ended December 31, 1993. In addition, pursuant to the Purchase Agreement, Brand
guaranteed the collection of the full amount of all the Division's billed and
unbilled accounts receivables which were acquired by the Company. Pursuant to
this provision of the Purchase Agreement, Brand paid the Company $7,620,000
during the year ended December 31, 1993. As a condition of the Purchase
Agreement, on May 4, 1993, the Company entered into a $50,000,000 revolving
credit facility (see Note 7 - Long-Term Debt), repaid all of its indebtedness to
OHM, and terminated the Cash Management Agreement and Management Services
Agreement with OHM.

F-27
<PAGE> 105

NSC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

The following table sets forth the unaudited combined pro forma results of
operations for the years ended December 31, 1993 and 1992, using the purchase
method of accounting as if such transaction had occurred on January 1, 1992:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1993 1992
-------- --------
(IN THOUSANDS, EXCEPT
PER SHARE DATA)
<S> <C> <C>
Gross revenues.......................................... $141,669 $187,981
Net revenues............................................ 113,656 158,462
Operating income (loss)................................. 7,511 (3,785)
Income (loss) from continuing operations................ 3,546 (3,288)
Income (loss) per share from continuing operation....... 0.42 (0.34)
</TABLE>

The pro forma combined results of operations for the years ended December
31, 1993 and 1992, are based upon certain assumptions and estimates which the
Company believes are reasonable. These pro forma combined results of operations
do not include the benefits of the synergies related to combining the two
companies. The pro forma combined results of operations for the year ended
December 31, 1992, exclude the impact of certain special charges aggregating
$12,203,000, net of income tax effects, recorded by the Division during 1992.
The pro forma combined results of operations for the years ended December 31,
1993 and 1992, may not be indicative of the operating results that actually
would have been reported had the transactions been consummated on January 1,
1992, nor are they necessarily indicative of the results which will be reported
in the future.

NOTE 3 -- DISCONTINUED OPERATIONS

On May 4, 1993, the Company exchanged the capital stock of Industrial (the
Company's environmental cleaning and industrial maintenance services business)
together with 4,010,000 shares of its common stock to Brand for the assets and
liabilities of the Division pursuant to a Purchase Agreement among the Company,
Industrial, Brand, and WMI. Therefore, Industrial is being accounted for as
discontinued operations for the years ended December 31, 1993 and 1992.

The provision for loss on disposition recorded in 1992, consisted of
estimated costs associated with the disposal and expected operating losses
through the date of disposition of the Company's environmental cleaning and
industrial maintenance services business. Gross revenues from CPS and MVIS for
the years ended December 31, 1993 and 1992, were $5,121,000 and $12,627,000,
respectively. The income from operations and provision for loss on disposition
of discontinued operations, which have been reflected in the consolidated
statement of operations for the year ended December 31, 1992, are presented net
of income taxes of $188,000 and an income tax benefit of $400,000, respectively.
Interest expense has been allocated to discontinued operations based on the
funds advanced to the Company by OHM for the acquisitions of CPS and MVIS.
Interest expense allocated to discontinued operations during the years ended
December 31, 1993 and 1992, amounted to $241,000 and $542,000, respectively.

F-28
<PAGE> 106

NSC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE 4 -- ACCOUNTS RECEIVABLE

Accounts receivable are summarized as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1994 1993
------- -------
(IN THOUSANDS)
<S> <C> <C>
Accounts billed and due currently......................... $20,381 $23,150
Retained.................................................. 3,589 4,146
------- -------
23,970 27,296
Allowance for uncollectible accounts...................... (782) (1,165)
------- -------
$23,188 $26,131
======= =======
</TABLE>

The retained receivables at December 31, 1994, are expected to be collected
within one year.

NOTE 5 -- COSTS AND ESTIMATED EARNINGS ON CONTRACTS IN PROCESS

The consolidated balance sheets include the following amounts:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1994 1993
------- -------
(IN THOUSANDS)
<S> <C> <C>
Costs incurred on contracts in process.................... $85,822 $58,631
Estimated earnings........................................ 17,138 14,662
------- -------
102,960 73,293
Less billing to date...................................... 102,410 74,262
------- -------
$ 550 $ (969)
======= =======
Costs and estimated earnings on contracts in process in
excess of billings...................................... $ 5,537 $ 4,489
Billings on contracts in process in excess of costs and
estimated earnings...................................... (4,987) (5,458)
------- -------
$ 550 $ (969)
======= =======
</TABLE>

Costs and estimated earnings on contract in process in excess of billings
included reserves for contract revenue adjustments of $530,000 and $1,546,000 at
December 31, 1994 and 1993, respectively.

NOTE 6 -- INCOME TAXES

Effective January 1, 1992, the Company elected to adopt SFAS No. 109. The
cumulative effect of adopting SFAS No. 109 as of January 1, 1992, decreased net
income by $1,000,000, or $0.18 per share.

At December 31, 1994, the Company has an alternative minimum tax ("AMT")
credit carryforward of $573,000. This carryforward resulted from the Company
generating AMT in 1990.

F-29
<PAGE> 107

NSC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

Significant components of the Company's deferred tax liabilities and assets as
of December 31, 1994 and 1993, are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------
1994 1993
------ ------
(IN THOUSANDS)
<S> <C> <C>
Deferred tax assets:
AMT credit carryforward................................... $ 573 $ 148
Other accrued liabilities................................. 533 2,521
Allowance for uncollectible accounts...................... 313 718
State net operating loss carryforward..................... -- 108
------ ------
Total deferred tax assets.............................. 1,419 3,495
Deferred tax liabilities:
Tax over book depreciation................................ 1,041 1,497
Goodwill.................................................. 3,391 3,235
Contract revenue recognition.............................. 574 1,406
Prepaid expenses and other assets......................... 498 837
Other, net................................................ 476 9
------ ------
Total deferred tax liabilities......................... 5,980 6,984
------ ------
Net deferred tax liabilities......................... $4,561 $3,489
====== ======
</TABLE>

Significant components of the provision for income taxes (benefit) are as
follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------
1994 1993 1992
------ ------ -------
(IN THOUSANDS)
-----------------------------
<S> <C> <C> <C>
Current:
Federal......................................... $ 768 $ (685) $ 1,001
State........................................... 277 (199) 291
------ ------ -------
Total current................................ 1,045 (884) 1,292
------ ------ -------
Deferred:
Federal......................................... 831 2,678 (1,521)
State........................................... 241 779 (445)
------ ------ -------
Total deferred............................... 1,072 3,457 (1,966)
------ ------ -------
$2,117 $2,573 $ (674)
====== ====== =======
</TABLE>

In 1992, a tax benefit of $212,000 was recorded as a component of the
results of discontinued operations.

The reasons for differences between income taxes (benefits) attributable to
continuing operations and the amount computed by applying the federal statutory
tax rate (34% is the statutory tax rate for companies that

F-30
<PAGE> 108

NSC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

have less than $10 million of taxable income) to income (loss) from continuing
operations before income taxes are:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------
LIABILITY METHOD
------------------------
1994 1993 1992
---- ---- ------
(IN THOUSANDS)
------------------------
<S> <C> <C> <C>
Federal statutory rate.............................. 34.0% 34.0% (34.0)%
Add (deduct):
State income taxes, net of federal tax benefit.... 7.1 6.5 (5.9)
Goodwill amortization............................. 3.9 3.0 8.1
Other............................................. 0.2 (0.2) 2.2
---- ---- ------
45.2% 43.3% (29.6)%
==== ==== ======
</TABLE>

NOTE 7 - LONG-TERM DEBT

Long-term debt consists of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1994 1993
------- -------
(IN THOUSANDS)
<S> <C> <C>
7.36% notes, due 1997..................................... $ 207 $ 272
8.21% notes, due 1997..................................... 431 553
Variable-rate revolving credit facility................... 9,950 12,950
------- -------
10,588 13,775
Less current portion...................................... 3,203 3,187
------- -------
$ 7,385 $10,588
======= =======
</TABLE>

The Company has a $50,000,000 revolving credit facility (the "Facility"),
with two banks that expires on June 5, 1996. Under the terms of the Facility,
the Company may borrow up to $15,000,000 on a term loan basis, up to $8,000,000
on a revolving basis, and the remaining unused balance is available for letters
of credit. Amounts outstanding under the Facility bear interest at 150 to 225
basis points above LIBOR and are secured by substantially all the Company's
assets. In addition, the Facility contains current ratio, leverage and interest
coverage covenants.

In connection with the acquisition of the Division, Rust (successor to
Brand) has provided the Company with a $25 million revolving credit facility.
Under this revolving credit agreement, Rust will make available revolving loans
to the Company until May 3, 1996, in amounts not to exceed $25 million. Such
loans will be subordinate to the senior bank financing described above, be
unsecured, bear interest at the prime rate as announced by a certain bank plus
1%, and be utilized for working capital purposes. Interest on such loans will be
payable on a quarterly basis, and the aggregate principal amount of such loans
will mature on May 31, 1996. No amounts were outstanding under this revolving
credit agreement at December 31, 1994 or 1993.

The aggregate amounts of long-term debt maturing in the three years
following December 31, 1994 are: $3,203,000 in 1995; $7,169,000 in 1996; and
$216,000 in 1997.

F-31
<PAGE> 109

NSC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE 8 -- CAPITAL STOCK

The Company's Certificate of Incorporation authorizes the Board of
Directors to issue up to 10,000,000 shares of preferred stock, $0.01 par value,
without any further vote or action by the stockholders. As of December 31, 1994,
no preferred stock has been issued.

Pursuant to an agreement among the Company, Rust and OHM dated May 4, 1993,
each of Rust and OHM has the right to demand registration, at their own expense,
of all or a portion of the common stock of the Company held by it. In the event
either Rust or OHM demands such registration, the other entity has the right to
participate. This agreement is subject to certain conditions and limitations,
including limitations as to the frequency of exercise and Rust's and OHM's right
to participate in other registrations of the Company.

NOTE 9 -- STOCK OPTION PLAN

The Company has a stock option plan (the "1990 Plan") which provides for
the granting of options to acquire up to 860,000 shares of the Company's common
stock. The options are issuable to directors, officers, and key employees at an
exercise price not less than the fair market value of the Company's common stock
on the date of grant. The stock options granted under the 1990 Plan are
exercisable in either cumulative annual installments ranging up to 25% or
immediately commencing on the date of grant and expire ten years thereafter. At
December 31, 1994, 478,680 shares were available for grants of additional stock
options under the 1990 Plan.

The following summarizes stock option activity during 1994, 1993 and 1992:

<TABLE>
<CAPTION>
1990 PLAN
--------------------------------
NUMBER OF OPTION PRICE RANGE
OPTIONS PER SHARE
--------- ------------------
<S> <C> <C>
Outstanding at January 1, 1992.................... 580,920 $ 4.00 - $6.00
Granted......................................... 153,500 5.75 - 9.00
Canceled........................................ (23,000) 4.00 - 9.00
--------- ------------------
Outstanding at December 31, 1992.................. 711,420 $ 4.00 - $9.00
Granted......................................... 10,000 4.50
Exercised....................................... (156,000) 4.00
Canceled........................................ (116,000) 4.00 - 9.00
--------- ------------------
Outstanding at December 31, 1993.................. 449,420 $ 4.00 - $8.75
Canceled........................................ (224,100) 4.00 - 8.75
--------- ------------------
Outstanding at December 31, 1994.................. 225,320 $ 4.00 - $8.75
--------- ------------------
Exercisable at December 31, 1994.................. 221,070 $ 4.00 - $8.75
--------- ------------------
</TABLE>

NOTE 10 -- TRANSACTIONS WITH AFFILIATES

The Company has, from time to time, provided asbestos abatement and related
services to affiliates of OHM on a subcontract basis. Revenues recognized from
these affiliates for such services were $1,377,000, $3,469,000, and $2,090,000
for 1994, 1993, and 1992, respectively. In addition, the Company also provided
environmental cleaning and industrial maintenance services to a subsidiary of
OHM during 1992. Revenues recognized from this affiliate were $1,871,000 and are
included in discontinued operations in the accompanying 1992 consolidated
statement of operations.

In addition, the Company has, from time to time, provided asbestos
abatement and related services to Rust and certain of their affiliates on a
subcontract basis. Revenues recognized for such services were $4,509,000 and
$1,751,000 for the years ended December 31, 1994 and 1993, respectively. Also,
Rust and

F-32
<PAGE> 110

NSC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

certain of its affiliates provided scaffolding, disposal, demolition, and other
related services to the Company on a subcontract basis. The cost for such
services provided by Rust was $530,000 and $2,525,000 for the years ended
December 31, 1994 and 1993, respectively.

From time to time in the normal course of business, the Company will seek
to recover amounts from customers in excess of the agreed-upon contract price,
based on customer-caused delays, errors in specifications and changes in design,
among other items. Revenues are recognized for amounts under pending claims when
management believes it is probable the claim will result in additional contract
revenues and the amount can be reliably estimated. At December 31, 1994, the
Company has a claim of $3.2 million outstanding against Rust on which it has
recognized a portion of the amount as revenue, based on management's anticipated
settlement.

During the years ended December 31, 1994, 1993, and 1992, OHM charged the
Company $363,000, $93,000, and $475,000, respectively, for general liability and
other insurance coverages. The Company's employees were eligible to participate
in OHM's group insurance and other employee benefit plans prior to the Company's
acquisition in 1993 of the asbestos abatement division of Brand. The costs
charged to the Company by OHM for these employee benefits were $242,000 and
$540,000 for the years ended December 31, 1993, and 1992, respectively.

Prior to the termination of the Cash Management Agreement with OHM on May
4, 1993, the Company advanced its excess cash to OHM and borrowed from OHM to
finance the expansion of its business. The Company was charged interest of
$591,000 and $1,384,000, for 1993, and 1992, respectively. The Company had
interest income of $316,000 and $1,074,000, for 1993, and 1992, respectively.

OHM and its other subsidiaries also furnished to the Company financial,
administrative, legal and certain other staff functions and services prior to
the termination of the Management Services Agreement with OHM on May 4, 1993.
The Company believes that the charges for such services were made on a
reasonable basis and approximated what it would have incurred to obtain such
services on its own. The Company was charged $149,000, and $281,000 by OHM for
such services during the years ended December 31, 1993, and 1992, respectively.
In addition, the Company has reimbursed OHM for certain third-party charges paid
by OHM on the Company's behalf, such as letter of credit fees, insurance and
bonding costs, and legal fees.

NOTE 11 -- EMPLOYEE BENEFIT PLANS

Effective October 1, 1992, the Company adopted the NSC Corporation
Retirement Savings Plan (the "Plan"). The Plan allows eligible employees to make
contributions, up to a certain limit, to a trust, on a tax-deferred basis under
Section 401(k) of the Internal Revenue Code. The Company may, at its discretion,
make profit-sharing contributions to the Plan out of its profits for the plan
years. Prior to October 1, 1992, the Company was a participating employer in the
OHM Corporation Retirement Savings Plan. The Company made matching contributions
of $21,000, and $28,000 to the plans described above during 1993, and 1992.
During 1994, no contributions were made.

The Company's subsidiary, NSC, has certain union employees which are
covered by union-sponsored, collectively bargained, multi-employer retirement
plans. Contributions to the plans were $2,379,000, $1,500,000, and $1,002,000
for 1994, 1993, and 1992 respectively.

NOTE 12 -- LITIGATION, COMMITMENTS AND CONTINGENCIES

The nature and scope of the Company's business bring it into regular
contact with the general public, a variety of businesses and government
agencies. Such activities inherently subject the Company to the hazards of
litigation, which are defended in the normal course of business. While the
outcomes of all claims are not clearly determinable at the present time,
management has recorded an estimate of any losses it expects to incur in
connection with the resolution of the claims.

F-33
<PAGE> 111

NSC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

Effective November 1, 1992, the Company's primary auto liability,
commercial general liability, and, in most states, its workers' compensation
liability insurance coverages were issued under an arrangement with an insurance
carrier pursuant to which the Company effectively self-insures such primary
coverages. Above the respective primary policy limits, the Company has obtained
commercial excess/umbrella and excess workers' compensation liability stop loss
coverages on a fully insured basis. Prior to November 1, 1992, the Company
obtained insurance coverages through its participation in OHM's general
insurance program pursuant to the Management Services Agreement (see Note 10-
Transactions with Affiliates), with OHM dated May 1, 1990, and through other
external sources. The Company has recorded an estimate of the loss it expects to
ultimately incur under its insurance arrangements.

The Company occupies office space and utilizes equipment in various
locations under operating leases. Rental expense under operating leases amounted
to $730,000, $455,000, and $193,000 for 1994, 1993, and 1992, respectively. The
lease agreements generally contain renewal provisions and escalation clauses.
Future minimum lease payments under noncancelable operating leases as of
December 31, 1994 are: 1995, $505,000; 1996, $186,000; 1997, $58,000; and 1998,
$9,000.

The Company had $19,017,000 and $18,267,000 letters of credit outstanding
at December 31, 1994 and 1993, respectively. These letters of credit were issued
primarily in support of the Company's insurance programs.

NOTE 13 -- MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK

During 1994 and 1993, no single customer accounted for more than 10% of the
Company's consolidated gross revenues. During 1992, the Company performed
various projects for Swig, Weiler & Arnow Management Co., Inc. which accounted
for approximately 14% of the Company's consolidated gross revenues.

The Company provides asbestos abatement and related services to commercial,
institutional, and industrial clients with properties located throughout the
United States. The Company's commercial, institutional, and industrial clients
constituted 48%, 22%, and 30% of gross revenues as of December 31, 1994. The
Company generally invoices its customers as the work is being performed and does
not require collateral.

F-34
<PAGE> 112

NSC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE 14 -- QUARTERLY FINANCIAL DATA (UNAUDITED)

The following is an analysis of certain items in the consolidated
statements of operations by quarter for 1994 and 1993:

<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
1994 QUARTER QUARTER QUARTER QUARTER
------- ------- ------- -------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Gross revenues....................... $34,203 $35,150 $32,076 $30,789
Net revenues......................... 27,638 29,252 26,579 25,077
Gross profit......................... 4,518 5,382 6,075 5,741
Operating income..................... 379 1,494 1,764 1,464
Net income........................... 168 731 892 775
Net income per share................. 0.02 0.07 0.09 0.08
</TABLE>

<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
1993 QUARTER QUARTER QUARTER QUARTER
------- ------- ------- -------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Gross revenues....................... $14,135 $26,156 $35,047 $34,916
Net revenues......................... 9,654 20,650 27,539 28,660
Gross profit......................... 3,104 4,946 6,833 6,018
Operating income..................... 1,135 1,438 2,147 1,636
Net income........................... 583 803 1,153 834
Net income per share................. 0.10 0.10 0.12 0.08
</TABLE>

F-35
<PAGE> 113

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors of
Rust Environmental Services Inc.:

We have audited the accompanying statements of certain assets and
liabilities of RUST ENVIRONMENTAL SERVICES INC. (a Delaware corporation) as of
December 31, 1994 and 1993, and the related statements of revenues and expenses
(excluding income taxes), equity and cash flows for each of the three years in
the period ended December 31, 1994. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

The statements of certain assets and liabilities, revenues and expenses
(excluding income taxes), equity and cash flows were prepared for the purpose of
complying with the rules and regulations of the Securities and Exchange
Commission (for filings pursuant to the Securities Act of 1933 and the
Securities Exchange Act of 1934) as described in Note 1 and are not intended to
be a complete presentation of Rust Environmental Services Inc.'s financial
position or results of operations.

In our opinion, the financial statements referred to above present fairly,
in all material respects, certain assets and liabilities of Rust Environmental
Services Inc. as of December 31, 1994 and 1993, and its revenues and expenses
(excluding income taxes) and its cash flows for each of the three years in the
period ended December 31, 1994, in conformity with generally accepted accounting
principles.

ARTHUR ANDERSEN LLP

Chicago, Illinois,
February 10, 1995

F-36
<PAGE> 114

<TABLE>
RUST ENVIRONMENTAL SERVICES INC.
STATEMENTS OF CERTAIN ASSETS AND LIABILITIES
AS OF DECEMBER 31, 1994 AND 1993
(IN THOUSANDS)
<CAPTION>
1994 1993
-------- --------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Accounts receivable, less reserves of $359 in 1994 and $400 in
1993............................................................ $ 41,934 $ 43,692
Costs and estimated earnings in excess of billings on uncompleted
contracts....................................................... 23,212 28,907
Prepaid expenses and other assets.................................. 493 5,451
-------- --------
Total current assets....................................... 65,639 78,050
-------- --------
PROPERTY AND EQUIPMENT, at cost:
Land............................................................... 117 307
Buildings.......................................................... 98 223
Vehicles and equipment............................................. 65,646 61,939
Furniture.......................................................... 6,937 6,215
Leasehold improvements............................................. 542 468
-------- --------
73,340 69,152
Less -- Accumulated depreciation and amortization.................. 26,130 22,216
-------- --------
Property and equipment, net................................ 47,210 46,936
-------- --------
OTHER ASSETS:
Intangible assets relating to acquired business, net............... 6,117 4,909
Deferred costs, net................................................ 6,818 4,075
Sundry............................................................. -- 21
-------- --------
Total other assets......................................... 12,935 9,005
-------- --------
$125,784 $133,991
======== ========
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Bank overdrafts.................................................... $ 1,168 $ 6,276
Accounts payable................................................... 12,275 16,647
Accrued expenses --
Project costs................................................... 4,646 5,844
Future contract losses.......................................... 3,437 13,028
Other........................................................... 3,140 2,675
Billings in excess of costs and estimated earnings on uncompleted
contracts....................................................... 2,920 59
-------- --------
Total current liabilities.................................. 27,586 44,529
-------- --------
DEFERRED OTHER....................................................... 720 400
COMMITMENTS AND CONTINGENCIES........................................
EQUITY--Advances from Rust International Inc......................... 97,478 89,062
-------- --------
$125,784 $133,991
======== ========
</TABLE>

The accompanying notes to financial statements are an integral part of these
statements.

F-37
<PAGE> 115

<TABLE>

RUST ENVIRONMENTAL SERVICES INC.
STATEMENTS OF REVENUES AND EXPENSES (EXCLUDING INCOME TAXES)
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
(IN THOUSANDS)
<CAPTION>
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
REVENUE.................................................. $231,058 $228,457 $317,660
COSTS AND EXPENSES:
Operating.............................................. 209,408 206,568 312,428
Selling and administrative expenses.................... 15,673 21,825 21,638
Interest income........................................ (379) (351) (4)
Interest expense....................................... 4,832 2,913 3,746
-------- -------- --------
Income (loss) before income taxes.............. $ 1,524 $ (2,498) $(20,148)
======== ======== ========
</TABLE>

The accompanying notes to financial statements are an integral part of these
statements.

F-38
<PAGE> 116

<TABLE>

RUST ENVIRONMENTAL SERVICES INC.

STATEMENTS OF EQUITY

FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992

(IN THOUSANDS)
<CAPTION>
1994 1993 1992
------- ------- -------
<S> <C> <C> <C>
EQUITY--ADVANCES FROM RUST INTERNATIONAL INC.:
Beginning balance...................................... $89,062 $96,772 $69,451
Income (loss) before income taxes...................... 1,524 (2,498) (20,148)
Advances from (payments to) Rust International Inc.,
net.................................................. 6,892 (5,212) 47,469
------- ------- -------
Ending balance......................................... $97,478 $89,062 $96,772
======= ======= =======
</TABLE>

The accompanying notes to financial statements are an integral part of these
statements.

F-39
<PAGE> 117

<TABLE>

RUST ENVIRONMENTAL SERVICES INC.

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992

(IN THOUSANDS)
<CAPTION>
1994 1993 1992
------- ------- --------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Income (loss) before income taxes........................ $ 1,524 $(2,498) $(20,148)
Adjustments to reconcile income (loss) before income
taxes to net cash provided by (used for) operating
activities --
Depreciation and amortization......................... 8,749 6,405 6,421
Loss (gain) on the sale of property and equipment..... (93) (90) 144
Changes in certain assets and liabilities, net of
effects of acquired companies --
Accounts receivable................................. 1,758 3,963 (2,210)
Costs and estimated earnings in excess of
billings......................................... 5,695 1,551 (10,298)
Prepaid expenses and other current assets........... 4,956 2,025 (3,625)
Deferred costs...................................... (3,397) (4,072) 1,399
Other non-current assets............................ 21 320 (82)
Bank overdrafts and accounts payable................ (9,590) 220 2,549
Accrued expenses.................................... (10,944) 15,087 (11,758)
Billings in excess of costs......................... 2,861 (1) 60
Deferred and other non-current liabilities.......... 320 400 (534)
------- ------- --------
Net cash provided by (used for) operating
activities..................................... 1,860 23,310 (38,082)
------- ------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment....................... (9,606) (11,522) (9,875)
Proceeds from sale of property and equipment............. 854 420 273
Cost of acquisitions, net of cash acquired............... -- (2,256) --
------- ------- --------
Net cash used for investing activities........... (8,752) (13,358) (9,602)
------- ------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Advances from (payments to) Rust International Inc.,
net................................................... 6,892 (5,212) 47,469
Payment of debt to affiliate............................. -- (4,740) --
------- ------- --------
Net cash provided by (used for) financing
activities..................................... 6,892 (9,952) 47,469
------- ------- --------
NET DECREASE IN CASH....................................... -- -- (215)
CASH, beginning of year.................................... -- -- 215
------- ------- --------
CASH, end of year.......................................... $ -- $ -- $ --
======= ======= ========
Additional disclosures:
Interest paid, net of amounts capitalized................ $ 4,832 $ 2,913 $ 3,746
======= ======= ========
</TABLE>

The accompanying notes to financial statements are an integral part of these
statements.

F-40
<PAGE> 118

RUST ENVIRONMENTAL SERVICES INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1994, 1993 AND 1992

(ALL TABLES IN THOUSANDS)

1. ORGANIZATION AND BASIS OF PRESENTATION:

Rust Environmental Services Inc. (the "Company") is a wholly-owned indirect
subsidiary of Rust International Inc. ("RII"), a Delaware corporation which is
itself a majority-owned subsidiary of Chemical Waste Management, Inc. ("CWM"),
itself a wholly-owned subsidiary of WMX Technologies, Inc. ("WMX"). Prior to
January 25, 1995, CWM was a majority-owned subsidiary of WMX. The Company
operates within a single industry segment providing a broad range of hazardous
substance remediation services.

RII was formed January 1, 1993, when CWM and Wheelabrator Technologies Inc.
("WTI"), another majority-owned subsidiary of WMX, contributed certain of their
businesses, assets and liabilities to RII in exchange for all of the then
outstanding shares of RII's common stock. The Company was formed on November 22,
1994, in connection with the proposed transaction with OHM Corporation ("OHM")
described below. Pursuant to that transaction, three wholly-owned subsidiaries
of RII will contribute certain of their businesses, assets and liabilities to
the Company in exchange for all of the outstanding shares of the Company's
common stock. Certain assets and liabilities associated with the businesses
contributed to the Company will be retained by the contributing subsidiaries and
therefore are not reflected in the accompanying financial statements. These
financial statements have been prepared as if the contribution of assets and
liabilities had occurred as of January 1, 1991. The Company's operations were
managed as a line of business within RII in 1994 and 1993 while in 1992 and
prior they were managed as a line of business within CWM. RII provides
engineering, construction, environmental and infrastructure consulting,
environmental remediation and on-site industrial related services. CWM provides
hazardous waste collection, transportation, treatment and disposal services to
various customers. All operations of the entities to be contributed have been
included in the statements of revenues and expenses (excluding income taxes).
The formation of the Company through the contribution of certain assets and
liabilities was accounted for as a reorganization of entities under common
control, in a manner similar to a pooling of interests. The accompanying
financial statements are based on historical cost as if the Company had been in
existence throughout the years presented. All significant intercompany
transactions have been eliminated.

In addition, the accompanying financial statements include certain RII
overhead expenses that have been allocated to the Company and are included in
the accompanying statements of revenues and expenses (excluding income taxes).
Management believes that the method of allocating costs is reasonable.

As a result of the Company's relationships with its affiliates, the
financial information included herein does not necessarily reflect what the
financial position and results of operations would have been had it operated as
a stand-alone taxable entity during the years covered. Additionally, the
accompanying financial statements may not be indicative of future operations or
financial position.

These financial statements and the related footnotes have been prepared for
the purpose of complying with the rules and regulations of the Securities and
Exchange Commission for filings pursuant to the Securities Act of 1933 and the
Securities Exchange Act of 1934.

The Board of Directors of RII has approved a plan to sell the Company to
OHM immediately following the contribution of certain assets and liabilities by
the RII subsidiaries pursuant to an Agreement and Plan of Reorganization dated
December 5, 1994. The Agreement and Plan of Reorganization and the Proxy
Statement for the 1995 Annual Meeting of the Shareholders of OHM Corporation to
be filed by OHM describe the planned transaction with OHM (anticipated to be
completed during May, 1995). Generally, the transaction contemplates that the
stockholders of the Company will receive approximately 10.4 million shares

F-41
<PAGE> 119

RUST ENVIRONMENTAL SERVICES INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

of OHM's common stock (representing approximately 40% of the outstanding common
stock of OHM) in exchange for the Company. If OHM's average stock price for a
twenty trading day period ending immediately
prior to closing (the "Closing Price") falls below $8.00 per share, the
stockholders will reduce the value of the assets to be contributed to the
Company proportionately by up to $20.0 million. RII may terminate the
transaction if the Closing Price is less than $6.00 per share. If the Closing
Price increases above $9.65 per share, RII will cause the stockholders to
contribute additional assets proportionately to the Company up to $20.0 million.
As part of the transaction, OHM will have the right, upon satisfaction of
certain conditions, to obtain a guarantee by WMX in the amount of $75.0 million
over a five year period.

2. SUMMARY OF ACCOUNTING POLICIES:

REVENUE RECOGNITION

The Company recognizes revenue from long-term remediation contracts on the
percentage-of-completion method as measured primarily by a ratio of expended
costs to anticipated final costs. Revisions in revenue, cost and profit
estimates occurring during the course of the contracts are reflected at the time
the revisions are determined. At the time a loss on a contract becomes probable,
the amount of the estimated loss is recognized. Billings are based upon specific
terms of each contract. All other revenues are recognized when services are
rendered.

SIGNIFICANT CUSTOMERS

Various departments and agencies of the U.S. Government accounted for 11.5%
of revenues in 1994, 7.3% in 1993 and 6.8% in 1992. Because of the nature of the
Company's business, individual contracts and hence individual customers may,
from time to time, account for over 10% of revenues in a given year. In
addition, contracts with departments and agencies of the U.S. Government are
typically bid for and awarded by the particular department or agency. The
Company does not consider its business to be dependent on any single customer or
group of customers.

PROPERTY AND EQUIPMENT

Property and equipment expenditures (including major repairs and
improvements) are capitalized and stated at cost. The cost, less the estimated
salvage value, is depreciated or amortized over the estimated useful lives on
the straight-line method as follows:

<TABLE>
<CAPTION>
ASSET DESCRIPTION LIFE
-------------------------------------------- ------------------------------------
<S> <C>
Furniture, vehicles and equipment........... 3 to 25 years
Leasehold improvements...................... Over the shorter of the life of the
lease or the improvement
</TABLE>

Items of an ordinary maintenance or repair nature are charged directly to
operations.

OTHER ASSETS

Intangible assets relating to acquired businesses consist primarily of the
cost of purchased businesses in excess of the market value of net assets
acquired ("goodwill"). Goodwill is amortized on a straight-line basis over a
period not exceeding 40 years. The accumulated amortization of goodwill amounted
to approximately $620,000 and $436,000 at December 31, 1994 and 1993,
respectively. The provisions charged to costs and expenses in 1994, 1993 and
1992 amounted to approximately $184,000, $78,000 and $33,000, respectively.

On an ongoing basis, the Company measures realizability of goodwill by the
ability of the acquired business to generate current and expected future
operating income in excess of annual amortization. If such

F-42
<PAGE> 120

RUST ENVIRONMENTAL SERVICES INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

realizability is in doubt, an adjustment is made to reduce the carrying value of
the goodwill. Such adjustments have not yet been required.

Deferred costs are recorded net of amortization of $1,486,000 and $832,000
in 1994 and 1993, respectively. The provisions charged to costs and expenses
amounted to approximately $654,000 in 1994 and $302,000 in both 1993 and 1992.

POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS

Postretirement and postemployment benefits provided by the Company are
immaterial.

EQUITY

Advances in the accompanying financial statements have been treated as
equity because of RII's intention for these to be permanent advances.

3. INCOME TAXES:

The results of operations of the Company were included in the consolidated
income tax return of RII. Accordingly, income taxes on a separate-company basis
have not been presented.

4. CONTRACTS IN PROCESS:

Information with respect to contracts in process at December 31, 1994 and
1993, is as follows:

<TABLE>
<CAPTION>
1994 1993
--------- ---------
<S> <C> <C>
Costs and estimated earnings on uncompleted
contracts......................................... $ 358,928 $ 250,464
Less -- Billings on uncompleted contracts......... (338,636) (221,616)
--------- ---------
Total contracts in process..................... $ 20,292 $ 28,848
========= =========
</TABLE>

Contracts in process are included in the accompanying consolidated balance
sheets under the following captions:

<TABLE>
<CAPTION>
1994 1993
--------- ---------
<S> <C> <C>
Costs and estimated earnings in excess of billings
on uncompleted contracts.......................... $ 23,212 $ 28,907
Billings in excess of costs and estimated earnings
on uncompleted contracts.......................... (2,920) (59)
--------- ---------
Total contracts in process..................... $ 20,292 $ 28,848
========= =========
</TABLE>

All contracts in process are expected to be billed and collected within two
years.

Accounts receivable include retainages which have been billed, but which
are not due until completion pursuant to contract provisions. Such retainage at
December 31, 1994, is $ 9,299,000 and is all expected to be collected after one
year. At December 31, 1993, retainage was $ 12,717,000.

5. PENSION AND PROFIT SHARING PLANS:

The Company is a participant in the Wheelabrator-Rust Savings and
Retirement Plan (the "Plan"), which is a qualified defined contribution plan
consisting of a savings account component (the "Savings Account") and a
retirement account component (the "Retirement Account"). Under the terms of the
Savings Account, participants of the Plan may elect to contribute a portion of
their annual compensation not

F-43
<PAGE> 121

RUST ENVIRONMENTAL SERVICES INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

to exceed 16%. The Company is required to match 30% of the first 6% of salary
contributed by an employee. Under the terms of the Retirement Account,
participants of the Plan receive an annual contribution, at the Company's
discretion, equal to a maximum of 3% of their eligible earnings. Participants
vest in Company contributions and the associated earnings in the Savings Account
at 20% per year and in the Retirement Account after five years. Company
contributions were approximately $1,349,000 and $1,120,000 in 1994 and 1993,
respectively. The Company did not participate in the Plan prior to 1993. Many of
the Company's employees, however, were participants in plans maintained by their
predecessor employers. Pension expense attributable to the employees of the
Company under the predecessor plans was approximately $465,000 in 1992.

6. COMMITMENTS AND CONTINGENCIES:

ENVIRONMENTAL LIABILITIES

The Company has significant operations in the environmental services area,
including remediation services involving hazardous substances. As a result, the
Company must comply with numerous Federal and state laws and regulations,
including the Resource Conservation and Recovery Act and the Comprehensive
Environmental Response, Compensation and Liability Act.

The Company does not believe that there are currently any material
environmental liabilities to which it is party. However, it is reasonably
possible that technological, regulatory or enforcement developments, the results
of environmental studies or other factors could alter this expectation and
necessitate the recording of liabilities which could be material. The impact of
such possible future events cannot be estimated at the current time.

LEGAL MATTERS

In the ordinary course of conducting its business, the Company becomes
involved in lawsuits, administrative proceedings and governmental investigations
including personal injury and environmental matters. Some of these proceedings
may result in fines, penalties or judgments being assessed against the Company
which, from time to time, may have an impact on earnings for a particular
quarter or year. The Company does not believe that pending proceedings,
individually or in the aggregate, are material to its business or its financial
condition.

RENTAL OBLIGATIONS

The Company leases certain equipment as well as a portion of its operating
and office facilities. Rents charged to costs and expenses in the statements of
revenues and expenses amount to $16,866,000 for 1994, $10,447,000 for 1993 and
$12,699,000 for 1992. These amounts include rents under long-term and short-term
leases.

The long-term rental obligations as of December 31, 1994, are due as
follows:

<TABLE>
<S> <C>
First year........................................... $2,161
Second year.......................................... 1,634
Third year........................................... 1,470
Fourth year.......................................... 1,355
Fifth year........................................... 873
Sixth year and thereafter............................ 716
------
$8,209
======
</TABLE>

F-44
<PAGE> 122

RUST ENVIRONMENTAL SERVICES INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

RII has issued or is a party to approximately 35 bank letters of credit,
performance bonds and other direct or indirect guarantees on behalf of the
Company for which the Company is ultimately responsible. Such guarantees
(averaging approximately $2,719,000 each), are given in the ordinary course of
the Company's business. Management does not expect that the Company's obligation
to RII under these guarantees will have a material adverse effect on the
consolidated financial position or results of operations of the Company.

7. TRANSACTIONS WITH AFFILIATES:

RII participates in a centralized cash management program administered by
WMX. Cash is remitted to WMX and advances are made by WMX, as needed, to cover
RII's expenses. Cash remitted to WMX and advances made by WMX attributable to
the Company have been treated as an adjustment to the "Equity-Advances From
(Payments To) Rust International Inc." account in the accompanying financial
statements. RII allocates a portion of its interest expense to the Company based
on the ratio which cumulative net cash advances to the Company bears to RII's
cumulative net cash advances to all of its subsidiaries and the value of net
tangible assets. Management believes that the allocation of interest expense is
representative of financing costs attributable to the Company and that the
methodology used to allocate interest expense is reasonable.

WMX has furnished the services of financial, administrative, legal and
certain other corporate staff personnel to the Company. The Company believes
that the charges for such services have been calculated on a reasonable basis
and that such charges approximate their actual costs. Such charges were
$1,352,000 in 1994, $871,000 in 1993, and $1,124,000 for 1992 and are included
in selling and administrative expenses on the statements of revenues and
expenses (excluding income taxes). In addition, the Company has reimbursed RII
for third-party charges incurred by RII for the benefit of the Company such as
letter-of-credit fees, insurance and bonding costs, legal fees and office rental
charges.

The Company has from time to time provided remediation and other services
to various subsidiaries of WMX. Revenues earned for such services were
$33,254,000 in 1994, $12,599,000 in 1993 and $13,445,000 in 1992. The Company
has also received engineering, construction management, transportation and
disposal and other services from RII, CWM and certain of their subsidiaries.
Charges by affiliates for such services were $30,826,000 in 1994, $44,986,000 in
1993 and $109,887,000 in 1992. The terms of these transactions between the
Company and RII and its affiliates have generally been the same as the terms of
comparable transactions with unaffiliated third parties.

8. INDEMNIFICATIONS:

In connection with the formation of RII, a predecessor of the Company
agreed to assume responsibility for the performance of certain CWM contracts
related to environmental remediation services. At the same time, RII and CWM
entered into a continuing agreement for CWM to indemnify RII with respect to
certain matters related to the businesses contributed by CWM, including
indemnity against potential losses on such CWM contracts. Pursuant to this
agreement, in 1993 CWM transferred to RII assets totaling $26.2 million relating
to the potential losses on such contracts. Upon the transfer from CWM, RII
accrued a corresponding reserve to which losses from such contracts are charged.
RII, in turn, transferred the foregoing indemnifications and assets to the
Company. The reserve is in Accrued Expenses and had a balance of $3.4 million
and $13.0 million as of December 31, 1994 and 1993, respectively.

In connection with the OHM transaction, RII will guarantee the
realizability of approximately $20.0 million in assets to be transferred to OHM.
Management expects all of these amounts to be realized. Additionally, RII has
agreed to indemnify OHM with respect to potential losses on designated projects
and certain pre-closing contingent liabilities.

F-45
<PAGE> 123

APPENDIX A

ALEX. BROWN & SONS
INCORPORATED
ESTABLISHED 1800 . AMERICA'S OLDEST INVESTMENT BANKING FIRM
MEMBERS: NEW YORK STOCK EXCHANGE, INC. AND OTHER LEADING EXCHANGES

REPLY TO: P.O. BOX 515
BALTIMORE, MD 21203

December 5, 1994

Board of Directors
OHM Corporation
16406 U.S. Route 224 East
Findlay, Ohio 45839

Dear Sirs:

OHM Corporation ("OHM"), Rust Remedial Services Inc., Enclean
Environmental Services Group, Inc., Rust Environmental, Inc. and Rust
International Inc. ("Rust") have entered into an Agreement and Plan of
Reorganization dated as of December 5, 1994 (the "Agreement"). Pursuant to the
Agreement, Rust Environmental Services, Inc. ("REI") a newly-formed corporation
to which will be contributed certain businesses and assets (the "Transferred
Business") of Rust Remedial Services Inc., Enclean Environmental Services
Group, Inc., and the Nuclear Services Division of Rust Environmental, Inc.
(together the "Contributing Subsidiaries") will be merged into a wholly-owned
subsidiary of OHM in exchange for the issuance to Rust or the Contributing
Subsidiaries of 10,368,000 shares of common stock, par value $0.10 per share of
OHM (the "OHM Common Stock") (the "Consideration"). The Transferred Business
will be reduced to the extent the average closing price for the OHM Common
Stock for the ten trading days prior to the day before the closing date (the
"Closing Price") is less than $8.00 but more than $6.00 by a maximum of
$20,000,000. The Transferred Business will be increased to the extent the
Closing Price is greater than $9.65 by a maximum of $20,000,000. You have
requested our opinion as to whether the Consideration to be paid by OHM
pursuant to the Agreement is fair, from a financial point of view, to the
shareholders of OHM.

Alex. Brown & Sons Incorporated, as a customary part of its investment
banking business, is engaged in the valuation of businesses and their
securities in connection with mergers and acquisitions, negotiated
underwritings, private placements and valuations for estate, corporate and
other purposes. Alex. Brown & Sons Incorporated regularly publishes research
reports regarding the environmental remediation, engineering and construction
industry and the businesses and securities of publicly owned companies in that
industry.

In connection with our opinion, we have reviewed certain internal
financial information concerning the Transferred Business and OHM and certain
publicly available information regarding Rust and OHM. We have also held
discussions with members of the senior management of REI, the Contributing
Subsidiaries, Rust and OHM regarding the

ONE THIRTY-FIVE EAST BALTIMORE STREET, BALTIMORE, MARYLAND 21202
TELEPHONE: 410-727-1700 / TELEX: 198186

<PAGE> 124
OHM Corporation
December 5, 1994
Page Two

business and prospects of the Transferred Business and OHM, as well as the
strategic, financial and operating benefits anticipated from the proposed
transaction. In addition, we have (i) compared certain financial information
for the Transferred Business and OHM with similar information for selected
companies within the environmental remediation, engineering and construction
industry whose securities are publicly traded, (ii) reviewed the financial
terms of certain recent business combinations which we deemed comparable in
whole or in part, (iii) reviewed the potential pro forma financial impact of
the transaction on OHM and (iv) performed such other studies and analyses and
considered such other factors as we deemed appropriate. We have also reviewed
the Agreement.

We have not independently verified the information described above and
for purposes of this opinion have assumed the accuracy, completeness and
fairness thereof. With respect to information relating to the prospects of the
Transferred Business and OHM, we have assumed that such information reflects
the best currently available estimates and judgments of management of REI, the
Contributing Subsidiaries, Rust and OHM as to the likely future financial
performance of the Transferred Business and OHM. In addition, we have not made
an independent evaluation or appraisal of the assets of the Transferred
Business or OHM, nor have we been furnished with any such evaluation or
appraisal. Our opinion is based on market, economic and other conditions as
they exist and can be evaluated as of the date of this letter. We express no
opinion as to the price or trading range at which the OHM Common Stock will
trade following the transaction.

Alex. Brown & Sons has provided investment banking services to OHM in
the past. Alex. Brown & Sons is currently acting as financial advisor to OHM
in connection with this transaction. A portion of our fee is payable upon
delivery of this opinion and the remainder is payable upon consummation of this
transaction. Alex. Brown & Sons in the normal course of business may trade the
debt and/or equity securities of OHM, Rust and affiliates of Rust for its own
account and for the account of customers and, accordingly, may at any time hold
a long or short position in such securities.

It is understood that this letter is for the information of the Board of
Directors of OHM only for the sole purpose of evaluating the proposed
transaction and may not be used for any other purpose without the prior written
consent of Alex. Brown & Sons; provided, however, this letter may be
reproduced in full in the proxy statement/prospectus to be issued in connection
with this transaction.
<PAGE> 125
OHM Corporation
December 5, 1994
Page Three

Based upon and subject to the foregoing, it is our opinion that, as of
the date of this letter, the Consideration to be paid by OHM pursuant to the
Agreement is fair, from a financial point of view, to the shareholders of OHM.

Very truly yours,

/s/ David M. Gray
Managing Director
Alex. Brown & Sons Incorporated
<PAGE> 126

APPENDIX B

================================================================================

AGREEMENT AND PLAN OF REORGANIZATION

among

OHM CORPORATION,

RUST REMEDIAL SERVICES INC.,

ENCLEAN ENVIRONMENTAL SERVICES GROUP, INC.,

RUST ENVIRONMENTAL, INC.

and

RUST INTERNATIONAL INC.

Dated December 5, 1994

================================================================================
<PAGE> 127
TABLE OF CONTENTS
Page

<TABLE>
<S> <C> <C>
1.0 Transfer of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Transferred Assets . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Assumed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Excluded Liabilities . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

2.0 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Constituent, Surviving Corporations . . . . . . . . . . . . . . . . 3
2.2 Conversion of Acquisition Common Stock . . . . . . . . . . . . . . 4
2.3 Certificate of Incorporation and Regulations of Surviving
Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.4 Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.5 Rights Prior to Exchange . . . . . . . . . . . . . . . . . . . . . 4
2.6 Conversion of Environmental Common Stock . . . . . . . . . . . . . 4

3.0 Post-Closing Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.1 Post-Closing Adjustments . . . . . . . . . . . . . . . . . . . . . 4

4.0 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.1 Time and Place of the Closing . . . . . . . . . . . . . . . . . . . 5
4.2 Procedure at the Closing . . . . . . . . . . . . . . . . . . . . . 5

5.0 Representations and Warranties of OHM . . . . . . . . . . . . . . . . . . 6
5.1 Corporate Existence, Due Authorization, and Execution of OHM . . . 6
5.2 No Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.3 Government Approvals . . . . . . . . . . . . . . . . . . . . . . . 7
5.4 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.5 Capitalization of OHM . . . . . . . . . . . . . . . . . . . . . . . 7
5.6 Disclosure; Financial Statements . . . . . . . . . . . . . . . . . 8
5.7 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . 9
5.8 Patents, Trademarks; Copyrights and Franchises . . . . . . . . . . 9

6.0 Representations and Warranties of Rust, Environmental and the Contributing
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.1 Corporate Existence, Due Authorization, and Execution of Rust . . . 10
6.2 No Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.3 Government Approvals . . . . . . . . . . . . . . . . . . . . . . . 11
6.4 Disclosure; Financial Statements; Undisclosed Liabilities . . . . . 11
6.5 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . 12
6.6 Authority to Own and Lease Property . . . . . . . . . . . . . . . . 12
6.7 Patents, Trademarks; Copyrights and Franchises . . . . . . . . . . 12
6.8 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.9 Business in the Ordinary Course . . . . . . . . . . . . . . . . . . 13
6.10 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.11 No Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.12 Compliance with Law; Court and Governmental Orders 14
</TABLE>

i
<PAGE> 128
<TABLE>
<S> <C>
6.13 Government Contracting Representation . . . . . . . . . . . . . . . 16
6.14 Title to the Assets . . . . . . . . . . . . . . . . . . . . . . . . 17
6.15 Contracts and Commitments . . . . . . . . . . . . . . . . . . . . . 18
6.16 No-Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.17 All Assets Used in the Business . . . . . . . . . . . . . . . . . . 19
6.18 Third-Party Options . . . . . . . . . . . . . . . . . . . . . . . . 19
6.19 Unlawful Payments . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.20 Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . 19
6.21 Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.22 Interests in Real Property . . . . . . . . . . . . . . . . . . . . 20
6.23 Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.24 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.25 Customers and Suppliers . . . . . . . . . . . . . . . . . . . . . . 21
6.26 Purchase for Investment . . . . . . . . . . . . . . . . . . . . . . 21
6.27 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.28 Accuracy of Information Furnished . . . . . . . . . . . . . . . . . 22

7.0 Additional Covenants of OHM . . . . . . . . . . . . . . . . . . . . . . . 22
7.1 Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.2 Conduct of Business Pending the Closing . . . . . . . . . . . . . . 22
7.3 Access to OHM's Plants, Properties, and Records . . . . . . . . . . 23

8.0 Additional Covenants of Rust . . . . . . . . . . . . . . . . . . . . . . . 23
8.1 Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.2 Conduct of Business Pending the Closing . . . . . . . . . . . . . . 24
8.3 Access to the Division's Plants, Properties, and Records . . . . . 24
8.4 No Other Discussions . . . . . . . . . . . . . . . . . . . . . . . 25
8.6 Assignment of Contracts and Leases . . . . . . . . . . . . . . . . 25
8.7 Termination Expenses . . . . . . . . . . . . . . . . . . . . . . . 25

9.0 Conditions to the Obligation of OHM . . . . . . . . . . . . . . . . . . . 26
9.1 Accuracy of Representations and Warranties and Compliance with
Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.2 Certified Resolutions . . . . . . . . . . . . . . . . . . . . . . . 26
9.3 Receipt of Necessary Consents . . . . . . . . . . . . . . . . . . . 27
9.4 HSR Act Waiting Period . . . . . . . . . . . . . . . . . . . . . . 27
9.5 Adverse Changes . . . . . . . . . . . . . . . . . . . . . . . . . . 27
9.6 Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
9.7 Fairness Opinion . . . . . . . . . . . . . . . . . . . . . . . . . 28
9.8 Ownership of Assets . . . . . . . . . . . . . . . . . . . . . . . . 28
9.9 Standstill and Noncompete Agreement . . . . . . . . . . . . . . . . 28
9.10 Merger Agreement . . . . . . . . . . . . . . . . . . . . . . . . . 28

10.0 Conditions to the Obligation of Rust . . . . . . . . . . . . . . . . . . . 28
10.1 Accuracy of OHM's Representations and Warranties and Compliance by
OHM with Its Obligations . . . . . . . . . . . . . . . . . . . . . 29
10.2 Certified Resolutions . . . . . . . . . . . . . . . . . . . . . . . 29
10.3 Receipt of Necessary Consents . . . . . . . . . . . . . . . . . . . 29
10.4 HSR Act Waiting Period . . . . . . . . . . . . . . . . . . . . . . 29
10.5 Adverse Changes . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.6 Merger Agreement . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.7 Waiver by Certain Employees . . . . . . . . . . . . . . . . . . . . 29
10.8 Closing Price . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
</TABLE>
ii
<PAGE> 129

<TABLE>
<S> <C>
11.0 Certain Actions After the Closing . . . . . . . . . . . . . . . . . . . . 30
11.1 Execution of Further Documents . . . . . . . . . . . . . . . . . . 30
11.2 Employment by OHM of the Division's Employees . . . . . . . . . . . 30

12.0 Certain Business Agreements. . . . . . . . . . . . . . . . . . . . . . . 30
12.1 TERCS Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . 30
12.2 Bonding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
12.3 Other Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . 31
12.4 Use of Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

13.0 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
13.1 Agreement by OHM to Indemnify . . . . . . . . . . . . . . . . . . . 31
13.2 Agreement by Rust and the Contributing Subsidiaries to Indemnify . 31

14.0 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
14.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
14.2 Modification; Waiver . . . . . . . . . . . . . . . . . . . . . . . 33
14.3 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
14.4 Brokers' Commission . . . . . . . . . . . . . . . . . . . . . . . . 33
14.5 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
14.6 Parties in Interest; Assignment . . . . . . . . . . . . . . . . . . 34
14.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
14.8 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
14.9 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
14.10 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

</TABLE>

iii

<PAGE> 130
AGREEMENT AND PLAN OF REORGANIZATION

This agreement and plan of reorganization (the "Agreement") is made and
entered into this 5th day of December, 1994 by and among OHM Corporation, an
Ohio corporation ("OHM"), Rust Remedial Services Inc., a Delaware corporation
("Remedial"), Enclean Environmental Services Group, Inc., a Delaware
corporation ("Enclean"), Rust Environmental, Inc., a Delaware corporation
("Environmental"), and Rust International Inc., a Delaware corporation
("Rust").

WHEREAS, Rust has incorporated under the General Corporation Law of
Delaware, a newly-formed corporation, Environmental, owned by Remedial, Enclean
and the Nuclear Services Division of Rust Federal Services, Inc. ("Nuclear")
(Remedial, Enclean and Nuclear are sometimes hereinafter referred to as the
"Contributing Subsidiaries"); and

WHEREAS, Environmental will own prior to Closing (as hereinafter defined),
the assets described in Section 1.1 and will have assumed those liabilities
described in Section 1.3 hereof; and

WHEREAS, Rust and OHM desire Environmental to be merged with and into a
wholly-owned subsidiary of OHM ("Acquisition") in exchange for the issuance to
Rust or the Contributing Subsidiaries of shares of common stock, par value $.10
per share, of OHM (the "OHM Common Stock") in a transaction which is intended
to comply with the provisions of Section 368 of the Internal Revenue Code of
1986, as amended (the "Code");

NOW, THEREFORE, in consideration of the agreements, rights, obligations,
and covenants contained herein, OHM, Rust, the Contributing Subsidiaries and
Environmental hereby agree as follows:

1.0 TRANSFER OF ASSETS

1.1 TRANSFERRED ASSETS. Rust agrees, prior to Closing, to and will, or
will cause its Contributing Subsidiaries to, sell, convey, transfer, assign,
and deliver to Environmental prior to the Closing (as hereinafter defined),
free and clear of all liens, mortgages, pledges, encumbrances, and charges of
every kind other than Permitted Encumbrances (as hereinafter defined), all
right, title and interest of the Contributing Subsidiaries including, without
limitation, H.S. Sizemore & Son Co., a subsidiary of Enclean ("Sizemore") in
and to the properties, business, and assets reflected on the Division Balance
Sheet (as hereinafter defined) of the environmental remediation services
division of Rust as presently conducted by the Contributing Subsidiaries
(collectively, the "Division"), and such other assets, of every kind and
description, real, personal, and mixed, tangible and intangible, wherever
located as are presently used solely by the Division or otherwise solely by
Rust in the
<PAGE> 131
environmental remediation services business of the Division whether owned by
the Division, the Contributing Subsidiaries or any affiliate of Rust and which
are all the assets necessary or presently used to conduct that business as it
is currently being conducted, other than Excluded Assets and assets, if any,
excluded pursuant to the adjustment in Section 1.5(a) hereof (collectively, the
"Transferred Assets") subject to the liabilities described in Section 1.3
hereto. The parties agree that the Transferred Assets shall include the rights
with respect to intellectual property set forth on Schedule 1.1 attached hereto
and the exclusive, fully paid right to use the equipment described on item 7 of
Schedule 1.2 hereof.

1.2 EXCLUDED ASSETS. Anything to the contrary in Section 1.1
notwithstanding, the Transferred Assets shall exclude the following assets of
Rust, the Division and the Contributing Subsidiaries: (i) any assets or
properties as set forth on Schedule 1.2, (ii) assets with respect to projects
covered by Section 1 of Schedule 8.5, but not the "Rust Receivables" referred
to therein, (iii) the right to the use of the name "Rust" other than for a
transitional period following the Closing as set forth in Section 12.4 hereto,
and (iv) any assets excluded pursuant to the adjustment in Sections 1.5(a) and
1.5(c) hereof to the extent that OHM exercises its right to not have such
assets in the Transferred Assets.

1.3 ASSUMED LIABILITIES. Immediately prior to the Merger, Environmental
shall assume all liabilities and obligations other than Excluded Liabilities of
the Division (whether known or unknown, whether asserted or unasserted, whether
absolute or contingent, whether accrued or unaccrued, whether liquidated or
unliquidated, and whether due or to become due), including (a) all liabilities
and obligations of the Division under the agreements, contracts, leases,
licenses, and other arrangements referred to in the definition of Transferred
Assets and which are not Excluded Assets, (b) all other liabilities and
obligations of the Division reflected on the Division Balance Sheet or
otherwise disclosed in Schedules to this Agreement, and (c) one-half of all
transfer, sales, or other taxes, fees, or levies (including motor vehicle sales
taxes) imposed by any state or other governmental entity on or arising out of
the consummation of the transaction contemplated hereby.

1.4 EXCLUDED LIABILITIES. Anything to the contrary in the Agreement
notwithstanding, the following liabilities, contracts, commitments, and other
obligations of the Division, Rust, the Contributing Subsidiaries or affiliates
shall be Excluded Liabilities: (a) obligations and any liabilities arising
under this Agreement; (b) one-half of all transfer, sales, or other taxes,
fees, or levies (including motor vehicle sales taxes) imposed by any state or
other governmental entity on or arising out of the consummation of the
transactions contemplated hereby; (c) any obligation for expenses incurred by
Rust or the Contributing Subsidiaries in connection with the transactions

2
<PAGE> 132
contemplated by this Agreement, including without limitation the fees and
expenses of its counsel, independent auditors (including the costs of auditing
the Division for Securities and Exchange Commission (the "SEC") filing purposes
by Rust or OHM), and investment bankers retained by Rust; (d) liabilities
arising out of or resulting from the projects listed on Schedule 8.5, except as
expressly stated therein; and (e) liabilities arising out of or resulting from
Excluded Assets.

1.5 ADJUSTMENTS. The Transferred Assets transferred or to be transferred
to Environmental pursuant to this Agreement shall be adjusted immediately prior
to Closing as follows:

(a) In the event that the average closing price for the OHM Common
Stock for the twenty trading days prior to the second day before the
Closing Date (the "Closing Price") is less than $8.00 but more than $6.00,
the Contributing Subsidiaries at their option shall retain one or more, or
any portion thereof, of the Rust Receivables described on Schedule 8.5
hereto with a book value (as determined by the Division Balance Sheet)
equal to the amount of the product of (i) the amount by which the Closing
Price is less than $8.00 times (ii) 10,368,000, but not more than
$20,000,000. To the extent the Rust Receivables are less than the amount
of the adjustment, Rust shall have the right to add other receivables in
an amount sufficient to equal $20,000,000 in the aggregate.

(b) To the extent the Closing Price is greater than $9.65, Rust
shall contribute to Environmental immediately prior to Closing by wire
transfer in immediately available funds an amount equal to the product of
(i) the amount by which the Closing Price exceeds $9.65, times (ii)
10,368,000, but not more than $20,000,000, which amount shall be deemed a
Transferred Asset.

(c) Prior to the Closing, OHM may conduct an environmental
inspection of the real property described on Schedule 1.5(c) hereof and,
if such inspection is not satisfactory to OHM, OHM may require that such
property not be included in the Transferred Assets.

2.0 THE MERGER

2.1 CONSTITUENT, SURVIVING CORPORATIONS. Environmental and Acquisition
shall be the constituent corporations to the Merger. The Merger shall be
consummated at such time (the "Time of Merger") as all documents necessary to
effect the merger in accordance with the General Corporation Law of the State
of Delaware and the Ohio General Corporation Law have been filed with the
Secretaries of State of Delaware and Ohio. At the time of Merger,
Environmental shall be merged with and into Acquisition in accordance with such
laws. Acquisition shall be the surviving corporation of the Merger (herein
sometimes called

3
<PAGE> 133
the "Surviving Corporation"). The name, identity, existence, rights,
privileges, powers, franchises, properties and assets of Acquisition shall
continue unaffected and unimpaired by the Merger. At the Time of Merger, the
identity and separate existence of Environmental shall cease, and all of the
rights, privileges, powers, franchises, properties and assets of Environmental
shall be vested in Acquisition.

2.2 CONVERSION OF ACQUISITION COMMON STOCK. At the Time of Merger, the
shares of Acquisition Common Stock outstanding immediately prior to the Time of
Merger shall, by virtue of the Merger and without any action on the part of the
holder thereof, continue as shares of Common Stock of the Surviving
Corporation.

2.3 CERTIFICATE OF INCORPORATION AND REGULATIONS OF SURVIVING
CORPORATION. The Articles of Incorporation and Regulations of Acquisition, as
in effect immediately prior to the Time of Merger, shall be the Articles of
Incorporation and Regulations of the Surviving Corporation until the same shall
be amended.

2.4 DIRECTORS. Each director of Acquisition immediately prior to the
Time of Merger shall remain as a director of the Surviving Corporation and,
subject to the Regulations of the Surviving Corporation and the laws of the
State of Ohio, shall serve until his successor is elected and appointed or
qualified or until his earlier death, resignation or removal.

2.5 RIGHTS PRIOR TO EXCHANGE. From and after the Time of Merger, until
so surrendered, the certificates theretofore representing shares of issued and
outstanding Environmental Common Stock shall be deemed for all corporate
purposes to evidence the right to receive the Merger Consideration into which
such shares of Environmental Common Stock are converted pursuant to Section
2.6.

2.6 CONVERSION OF ENVIRONMENTAL COMMON STOCK. At the Time of Merger,
each share of Environmental Common Stock issued and outstanding immediately
prior to the Time of Merger shall, by virtue of the Merger and without any
action on the part of the holder thereof, be converted into the right to
receive 10,368,000 shares of OHM Common Stock (the "Shares") as allocated by
Rust among the Contributing Subsidiaries.

3.0 POST-CLOSING ADJUSTMENTS

3.1 POST-CLOSING ADJUSTMENTS.

(a) Within 60 days after the Closing Date, OHM shall prepare and
deliver a statement of current assets and current liabilities of
Environmental as of the end of the month preceding the Closing Date (the
"Closing Statement"), which shall be prepared on a basis consistent with
the Division Balance Sheet (each, as hereinafter defined).

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(b) If, within 30 days after the date such Closing Statement is
delivered to Rust, Rust shall not have given written notice to OHM setting
forth in detail any objection of Rust to such Closing Statement, then such
Closing Statement shall constitute the "Division Closing Statement" and
the current assets shown thereon less the current liabilities shown
thereon shall constitute the "Division Closing Net Current Assets." In
the event Rust, within such 30-day period, shall give written notice of
any objection to such Closing Statement, OHM and Rust shall endeavor to
reach agreement on all differences within the 30-day period following the
giving of notice by Rust of its objections. If the parties are unable to
reach agreement within such 30-day period, the matter shall be submitted
to a firm of independent certified public accountants as may be agreed to
by OHM and Rust (the "Independent Accountants"), the decision of which
shall be final and binding upon the OHM and Rust. The Closing Statement
agreed upon by OHM and Rust or as determined by the Independent
Accountants pursuant to this Section 3.1 shall constitute the "Division
Closing Statement" and the net current assets shown thereon shall
constitute the "Division Closing Net Current Assets". OHM and Rust shall
bear equally the expenses of the Independent Accountants.

(c) Rust shall pay to OHM by wire transfer or certified or cashier's
check, the amount, if any, on a dollar for dollar basis, by which the
Division Closing Net Current Assets falls short of $36,948,232 (the "Net
Current Assets") not including the shortfall resulting from any adjustment
pursuant to Section 1.5(a) hereof. In the event the Division Closing Net
Current Assets exceeds the Net Current Assets, Rust shall offset against
any amount due and owing to OHM pursuant to Section 8.5 hereof, the amount
by which the Division Closing Net Current Assets exceeds the Net Current
Assets not including the excess resulting from any adjustment pursuant to
Section 1.5(b) hereof.

4.0 CLOSING

4.1 TIME AND PLACE OF THE CLOSING. If this Agreement has not been
terminated pursuant to Section 14.1, the closing of the Merger shall take place
at the offices of Jones, Day, Reavis & Pogue, Columbus, Ohio, at 10:00 a.m.,
local time, on the next business day following the satisfaction of or waiver of
all of the conditions which are set forth in Articles 9 and 10 hereof, or on a
subsequent date, which shall be determined by the mutual agreement of OHM and
Rust. Throughout this Agreement, such event is referred to as the "Closing" and
such date and time are referred to as the "Closing Date."

4.2 PROCEDURE AT THE CLOSING. At the Closing, the parties agree to take
the following steps (provided that upon their

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completion all such steps shall be deemed to have occurred simultaneously):

(a) Rust shall deliver to OHM evidence, in such form as in each case
is satisfactory to OHM, that each of the conditions to the obligation of
OHM to consummate the transactions contemplated herein, which is set forth
in Article 9 of this Agreement has been satisfied.

(b) OHM shall deliver to Rust evidence, in such form as in each case
is satisfactory to Rust, that each of the conditions to the obligations of
Rust to consummate the transactions contemplated herein, which is set
forth in Article 10 of this Agreement has been satisfied.

(c) OHM and Rust shall cause such documents necessary to effect the
merger in accordance with the General Corporation Law of the State of
Delaware and the Ohio General Corporation Law to be filed with the
Secretaries of State of Delaware and Ohio.

(d) OHM shall deliver to the Contributing Subsidiaries as directed by
Rust duly executed certificates in valid form evidencing the Shares and
registered in the name of such Contributing Subsidiaries.

5.0 REPRESENTATIONS AND WARRANTIES OF OHM

OHM represents and warrants to Rust and the Contributing Subsidiaries and
Environmental as follows:

5.1 CORPORATE EXISTENCE, DUE AUTHORIZATION, AND EXECUTION OF OHM. OHM is
a corporation duly organized, validly existing, and in good standing under the
laws of the State of Ohio, with full corporate power and authority to execute
and deliver this Agreement and all other agreements to be delivered by OHM, to
perform OHM's obligations hereunder and thereunder, and to consummate the
transactions contemplated hereby and thereby. OHM is legally qualified to
transact business as a foreign corporation in each of the jurisdictions in
which its business or property is such as to require that it be thus qualified,
except where the failure to be so qualified would not have a material and
adverse effect on the financial condition or results of operations (a "Material
Adverse Effect") of OHM and its subsidiaries, considered as a whole. A list of
jurisdictions in which OHM is so qualified is attached hereto as Schedule 5.1,
and OHM is in good standing in each of such jurisdictions. This Agreement and
each of the other agreements contemplated hereby and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action of OHM. This Agreement has been duly executed and
delivered by OHM and will, after approval by OHM's shareholders, constitute a
legal, valid, and binding obligation of OHM, enforceable against OHM in
accordance with its terms. As of the

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Closing Date, each of the other agreements contemplated hereby to which OHM is
a party shall have been duly executed and delivered by OHM and will constitute
a legal, valid, and binding obligation of OHM, enforceable against OHM in
accordance with its terms.

5.2 NO CONFLICTS. The execution and delivery of this Agreement and each
of the other agreements contemplated hereby and the consummation of the
transactions contemplated hereby and thereby will not conflict in any material
respect with, or result in any material violation of or material default under,
any provision of the Restated Articles of Incorporation or Regulations of OHM,
or of any agreement or instrument, other than as set forth in Schedule 5.2, the
effect of which would be the loss of any material rights or benefits thereunder
to, or which would otherwise have a Material Adverse Effect on OHM and its
subsidiaries considered as a whole following the Closing Date.

5.3 GOVERNMENT APPROVALS. No registration, declaration, or filing with,
or consent, approval, order, or authorization of, or other action by, any
governmental authority is required on the part of OHM or any of its
subsidiaries in connection with the execution and delivery of this Agreement
and each of the other agreements contemplated hereby or the consummation of the
transactions contemplated hereby or thereby other than (a) filings required to
be made under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), as to which all waiting periods shall have expired or
terminated prior to the Closing Date, (b) registrations and filings with, and
consents, approvals, orders, and authorizations of, the SEC necessary to effect
the transactions contemplated by this Agreement and each of the other
agreements contemplated hereby, all of which registrations, filings, consents,
approvals, orders, and authorizations shall have been made or obtained prior to
the Closing Date, (c) filings with the Secretaries of State of Delaware and
Ohio to effect the Merger, (d) any thereof the absence of which individually or
in the aggregate will not (i) result in a loss of any material rights or
benefits of OHM, or any subsidiaries of OHM or (ii) otherwise have a Material
Adverse Effect on OHM, or the subsidiaries of OHM, taken as a whole, following
the Closing Date.

5.4 LITIGATION. There is no claim, action, suit, litigation, proceeding,
or investigation pending or, to the best of OHM's knowledge, threatened against
OHM or any of its affiliates concerning this Agreement or any of the other
agreements contemplated hereby or any of the transactions contemplated hereby
or thereby.

5.5 CAPITALIZATION OF OHM. The authorized capital stock of OHM consists
of 52,000,000 shares, of which 50,000,000 are shares of OHM Common Stock and
2,000,000 are shares of OHM preferred stock. As of the date hereof, 15,604,465
shares of OHM Common Stock are validly issued and outstanding, fully paid, and
non-assessable, and no shares of OHM preferred stock are issued or

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outstanding. Except for 2,850,000, 1,000,000, 100,000 and 2,395,833 shares of
OHM Common Stock issuable pursuant to the OHM Corporation 1986 Stock Option
Plan, as amended (the "1986 Stock Option Plan"), the OHM Corporation
Nonqualified Stock Option Plan for Directors (the "Directors' Option Plan"),
the Deferred Fee Plan for Directors (the "Deferred Fee Plan") and pursuant to
conversion of the OHM 8% Convertible Subordinated Debentures due 2004 (the
"Convertible Debentures"), respectively as of the date hereof and as of the
Closing Date, no other shares of OHM Common Stock or OHM preferred stock or any
rights, agreements, or commitments of any kind obligating OHM to issue or sell
any other shares of OHM Common Stock or OHM preferred stock are or will be
outstanding or have been or will be authorized. Delivery of the OHM Shares by
OHM to the Contributing Subsidiaries will vest title to all of the OHM Shares
in the Contributing Subsidiaries, free and clear of all liens, mortgages,
pledges, encumbrances and charges of every kind (other than such as are placed
thereon by Rust or the Contributing Subsidiaries). Upon delivery of the OHM
Shares such OHM Shares shall be validly issued and outstanding, fully paid, and
non-assessable shares of OHM Common Stock.

5.6 DISCLOSURE; FINANCIAL STATEMENTS.

(a) OHM has delivered to Rust a copy of its Annual Report to the SEC
on Form 10-K for the fiscal year ended December 31, 1993 (the "OHM Form
10-K") and will deliver to Rust copies of any of its other Annual Reports
on Form 10-K filed with the SEC subsequent to the date hereof and prior to
the Closing Date (the OHM Form 10-K and such other Forms 10-K being
referred to herein collectively as the "OHM Forms 10-K"), which contain or
incorporate audited consolidated balance sheets as of December 31 in each
of the two fiscal years preceding such filing and audited statements of
income, stockholders' equity, and changes in financial position for each
of the three fiscal years preceding such filing, together with notes to
such financial statements and supporting schedules, for OHM and its
consolidated subsidiaries. OHM has delivered to Rust copies of its
Quarterly Report on Form 10-Q for the fiscal quarters ended March 31,
1994, June 30, 1994, and September 30, 1994 (and will deliver a copy of
its Form 10-Q for the fiscal quarter ending March 31, 1995, if the Closing
has not occurred before such report is due) (collectively, the "OHM Forms
10-Q"), which contain or will contain unaudited consolidated balance
sheets as of the last day of each of the fiscal quarters covered thereby
and unaudited statements of income, stockholders' equity, and changes in
financial position for each of such fiscal quarters for OHM and its
consolidated subsidiaries.

(b) All such financial statements included in the OHM Forms 10-K,
including the related notes thereto, and the OHM Forms 10-Q have been or
will be prepared in conformity with generally accepted accounting
principles ("GAAP")

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consistently applied (except to the extent that any such financial
statements which are unaudited are subject to nonrecurring audit
adjustments and do not contain all required footnote disclosures) and
present or will present fairly the consolidated financial position of OHM
and its consolidated subsidiaries as of the dates of such financial
statements and for the respective periods indicated. The OHM Forms 10-K,
the OHM Forms 10-Q, and all Current Reports on Form 8-K filed by OHM with
the SEC from the date hereof to the Closing Date, and any amendments
thereto, will not, at their respective times of filing, contain any untrue
statement of material fact or omit to state a material fact necessary in
order to make the statements therein not misleading in light of the
circumstances under which they were made.

(c) The Proxy Statement (the "OHM Proxy") to be filed by OHM with
the SEC prior to the Closing Date in connection with the consummation of
this Agreement will comply as to form in all material respects with the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
rules and regulations of the SEC thereunder and will not contain any
untrue statement of a material fact with respect to OHM or any of its
subsidiaries or affiliates or omit to state a material fact with respect
to OHM or any of its subsidiaries or affiliates necessary in order to make
the statements therein not misleading in light of the circumstances under
which they were made.

5.7 ABSENCE OF CERTAIN CHANGES. Since the date of the most recent OHM
Form 10-Q, there has been no event or development having a Material Adverse
Effect on OHM and its subsidiaries, taken as a whole.

5.8 PATENTS, TRADEMARKS; COPYRIGHTS AND FRANCHISES.

(a) Set forth on Schedule 5.8(a) is a list, true, correct and
complete in all material respects of all patents, patent licenses,
copyrights, trademarks and trade names and franchises, and applications
therefor used in the business of OHM currently or within the last
twenty-four (24) months and owned by or licensed to OHM. Except as set
forth on Schedule 5.8(b) hereto, OHM and its subsidiaries are not in
receipt of any notice, and have no knowledge of, any infringement or
conflict by OHM, its subsidiaries or affiliates with the rights of others
in any patents, copyrights, trademarks, trade names or franchises, or any
applications therefor, or any trade secrets or proprietary rights in the
United States or elsewhere.

(b) With respect to any pending patent applications set forth on
Schedule 5.8(a), there are no interferences or other contested
proceedings, either pending or, to the knowledge of OHM, in the process of
being instituted, in the

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United States Patent Office or in any federal, state or municipal court.
No director, officer or employee of OHM, its subsidiaries or affiliates
owns in whole or in part, any patents, copyrights, trademarks, trade
names, franchises or applications therefor, or any trade secrets or
proprietary information, which are being used at present or have been used
within the last twenty-four (24) months in the business of OHM.

6.0 REPRESENTATIONS AND WARRANTIES OF RUST, ENVIRONMENTAL AND THE CONTRIBUTING
SUBSIDIARIES

Rust, Environmental and the Contributing Subsidiaries represent and
warrant to OHM as follows:

6.1 CORPORATE EXISTENCE, DUE AUTHORIZATION, AND EXECUTION OF RUST,
ENVIRONMENTAL AND THE CONTRIBUTING SUBSIDIARIES. Rust, Environmental and the
Contributing Subsidiaries are corporations duly organized, validly existing,
and in good standing under the laws of the State of Delaware, with full
corporate power and authority to execute and deliver this Agreement and all
other agreements to be delivered by them, to perform their obligations
hereunder and thereunder, and to consummate the transactions contemplated
hereby and thereby. This Agreement and each of the other agreements
contemplated hereby and the consummation of the transactions contemplated
hereby and thereby have been duly authorized by all necessary corporate action
of Rust, Environmental and the Contributing Subsidiaries. This Agreement has
been duly authorized, executed and delivered by Rust, Environmental and the
Contributing Subsidiaries and constitutes the legal, valid, and binding
obligation of each of them, enforceable against them in accordance with its
terms. As of the Closing Date, each of the other agreements contemplated
hereby to which Rust or Environmental or the Contributing Subsidiaries is a
party shall have been duly executed and delivered by each of them and will
constitute a legal, valid, and binding obligation of each of them, enforceable
against each of them in accordance with its terms.

6.2 NO CONFLICTS. The execution and delivery of this Agreement and each
of the other agreements contemplated hereby and the consummation of the
transactions contemplated hereby and thereby do not and will not conflict in
any material respect with, or result in any material violation of or material
default under, any provision of the Certificate of Incorporation or By-Laws of
Rust, Environmental or the Contributing Subsidiaries, or of any agreement or
instrument of Rust, Environmental or the Contributing Subsidiaries the effect
of which would be the loss of any material rights or benefits thereunder to
Rust, Environmental or the Contributing Subsidiaries or which would otherwise
have a Material Adverse Effect on Rust, Environmental, the Contributing
Subsidiaries or the Division following the Closing Date.

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6.3 GOVERNMENT APPROVALS. No registration, declaration, or filing with,
or consent, approval, order, or authorization of, or other action by, any
governmental authority is required on the part of Rust, Environmental or the
Contributing Subsidiaries in connection with the execution and delivery of this
Agreement and each of the other agreements contemplated hereby or the
consummation of the transactions contemplated hereby or thereby other than (a)
filings required to be made under the HSR Act, as to which all waiting periods
shall have expired or terminated prior to the Closing Date, (b) registrations
and filings with, and consents, approvals, orders, and authorizations of, the
SEC necessary to effect the transactions contemplated by this Agreement and
each of the other agreements contemplated hereby, all of which registrations,
filings, consents, approvals, orders, and authorizations shall have been made
or obtained prior to the Closing Date, (c) filings with the Secretary of State
of Delaware necessary for the incorporation and organization of Environmental,
(d) filings with the Secretaries of State of Delaware and Ohio necessary to
effect the Merger, (e) novations of the Government Contracts (as hereinafter
defined), and (f) any thereof the absence of which individually or in the
aggregate will not (i) result in a loss of any material rights or benefits
relating to or affecting Environmental or the Division or (ii) otherwise have a
Material Adverse Effect on the Division following the Closing Date.

6.4 DISCLOSURE; FINANCIAL STATEMENTS; UNDISCLOSED LIABILITIES.

(a) Rust has delivered to OHM unaudited financial statements of the
Division for the nine months ended September 30, 1994, including a balance
sheet of the Division dated as of September 30, 1994, which balance sheet
is attached hereto as Schedule 6.4(a) (the "Division Balance Sheet") and a
statement of current assets and liabilities derived therefrom and which is
attached hereto as Exhibit 6.4(a) (the "Net Current Asset Statement").
The Division Balance Sheet shall (i) exclude intercompany accounts for
treasury purposes or which represent investments in entities ("Investment
Accounts"), which Investment Accounts shall be converted to equity at
Closing, and (ii) separately identify the receivables set forth on
Schedule 8.5 hereof. Such financial statements have been prepared in
accordance with GAAP consistently applied (except to the extent that they
are subject to nonrecurring audit adjustments and do not contain all
required footnotes) and present or will present fairly the consolidated
financial position of the Division as of the date of such financial
statements and for the period indicated.

(b) Rust will deliver to OHM as soon as practicable, but in any
event prior to the filing of the OHM Proxy, audited financial statements
for the Division for the three fiscal years ended December 31, 1992, 1993
and 1994 and

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footnotes thereto (the "Division Financial Statements"). Such financial
statements have been or will be prepared in conformity with GAAP
consistently applied and present or will present fairly the financial
position of the Division as of the dates specified and the results of its
operations and changes in financial position for the respective periods
specified and do not and will not contain any untrue statement of material
fact or omit to state a material fact necessary in order to make the
statements therein not misleading in light of the circumstances under
which they were made.

(c) The information to be provided to OHM for use in the OHM Proxy
will not contain any untrue statement of a material fact with respect to
the Division, Rust, or any of Rust's subsidiaries or affiliates or omit to
state a material fact with respect to the Division, Rust, or any of Rust's
subsidiaries or affiliates necessary in order to make the statements
therein not misleading in light of the circumstances under which they will
be made.

6.5 ABSENCE OF CERTAIN CHANGES. Since the date of the Division Balance
Sheet, there has been no event or development having a Material Adverse Effect
on the Division.

6.6 AUTHORITY TO OWN AND LEASE PROPERTY. The Contributing Subsidiaries
have all necessary corporate power and authority to own or to hold under lease
the properties of the Division.

6.7 PATENTS, TRADEMARKS; COPYRIGHTS AND FRANCHISES.

(a) Set forth on Schedule 6.7(a) is a list, true, correct and
complete in all material respects of all patents, patent licenses,
copyrights, trademarks and trade names and franchises, and applications
therefor used in the business of the Division currently or within the last
twenty-four (24) months and owned by or licensed to Rust or the
Contributing Subsidiaries for use in the Division (the "Intellectual
Property"). Except as set forth on Schedule 6.7(b) hereto, Rust and the
Contributing Subsidiaries are not in receipt of any notice, and after due
inquiry have no knowledge of, any infringement or conflict by the Division
and the Intellectual Property with the rights of others in any patents,
copyrights, trademarks, trade names or franchises, or any applications
therefor, or any trade secrets or proprietary rights in the United States
or elsewhere.

(b) With respect to any pending patent applications set forth on
Schedule 6.7(a), there are no interferences or other contested proceedings,
either pending or, to the knowledge of Rust, in the process of being
instituted, in the United States Patent Office or in any federal, state or
municipal court. Except as set forth in Schedule 6.7(c), no

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director, officer or employee of Rust, its subsidiaries or affiliates owns
in whole or in part, any patents, copyrights, trademarks, trade names,
franchises or applications therefor, or any trade secrets or proprietary
information, which are being used at present or have been used within the
last twenty-four (24) months in the Division.

6.8 INSURANCE. Set forth on Schedule 6.8 is a true, correct and complete
schedule of all insurance policies or binders of insurance or programs of self-
insurance which relate to the Division. No notice of cancellation or
nonrenewal with respect to, or disallowance of any material claim under, any
such policy or binder has been received by Rust or the Contributing
Subsidiaries with respect to the Division. Neither Rust nor the Contributing
Subsidiaries have knowledge of any facts or the occurrence of any event which
reasonably might form the basis of any claim against Rust relating to the
Division or any assets or properties covered by any of the policies or binders
listed on Schedule 6.8, which claims Rust or the Contributing Subsidiaries have
reason to believe will materially increase the insurance premiums payable under
any such policy or binder or which are uninsurable by reputable insurance
companies at regular rates.

6.9 BUSINESS IN THE ORDINARY COURSE. Since the date of the Division
Balance Sheet, the business of the Division has been conducted only in the
ordinary course. Except as set forth on Schedule 6.9 hereto, since the date of
the Division Balance Sheet, Rust or the Contributing Subsidiaries have not:

(a) mortgaged, pledged, or subjected to any lien any of the assets
reflected on the Division Balance Sheet or any other Transferred Asset
other than Permitted Encumbrances;

(b) disposed of any properties or assets (other than inventories)
reflected on the Division Balance Sheet and having a book value of greater
than Ten Thousand Dollars ($10,000) for any single asset, or greater than
Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate, or any
other Transferred Asset, except in the ordinary course of business of the
Division;

(d) materially increased the rate of compensation or benefits of any
of the employees of the Division, except for merit or progressive
increases in the ordinary course of business of the Division;

(e) conducted the Division in any material respect other than in the
ordinary course of business; or

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(f) suffered any material and adverse effect relating to any of the
Transferred Assets as the result of fire, explosion, earthquakes, flood,
drought, accident, act of God, riot or activity of armed forces or of the
public enemy, requisition or taking of property by any governmental
authority or any other casualty or event (whether or not covered by
insurance).

6.10 TAX MATTERS. All tax returns required to be filed by Rust or its
subsidiaries or affiliates relating to the Division on or before the date
hereof in respect of the Division have been filed and all taxes indicated as
due and payable on such returns have been or will be paid by Rust when required
by law.

6.11 NO LITIGATION. Except as described on Schedule 6.11 (i) there is no
legal action or other proceeding pending, or to the knowledge of Rust
threatened against or affecting Rust or its subsidiaries or affiliates with
respect to the Division and (ii) Rust or its subsidiaries or affiliates is not
subject to any judgment, decree or order entered in any lawsuit or proceeding
brought against it that adversely affects the Division in any material respect.

6.12 COMPLIANCE WITH LAW; COURT AND GOVERNMENTAL ORDERS. Except as set
forth on Schedule 6.12:

(a) To the best knowledge of Rust, Rust and its subsidiaries and
affiliates have, in all material respects, complied with and made all
filings required pursuant to all federal, state, municipal or local laws,
ordinances, rules, regulations and orders in connection with the conduct
of the business of the Division, including without limitation, all rules,
regulations and orders of any federal or state environmental agency
applicable thereto. To the best knowledge of Rust, Rust and its
subsidiaries and affiliates have all governmental licenses, permits and
authorizations necessary, in all material respects, for the conduct of the
business of the Division as currently conducted (the "Permits") and all
such Permits are in full force and effect, and no material violations
exist in respect of any such Permits, and no proceeding is pending or, to
Rust's knowledge, threatened, to revoke or limit any thereof. Rust and
its subsidiaries and affiliates have not violated, in any material
respect, and have no knowledge of any alleged violation in any material
respect of, any such laws, ordinances, rules, regulations or orders, or
any injunction or governmental order or decree with respect to the
business of the Division;

(b) Since January 1, 1993 (except with respect to Transferred Assets
from Enclean since August 1, 1993), neither Rust nor any of its
subsidiaries or affiliates has buried, dumped, stored, spilled, released
or otherwise disposed of any chemical substances, including, without

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limitation, any waste materials, mixed waste petroleum, crude oil, PCB's,
asbestos, radioactive materials or any "Hazardous Substances,"
"Pollutants" or "Contaminants," (collectively, the "Contaminants") as such
terms are defined in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA"), on, beneath
or about any of the real properties, whether owned or leased, of the
Division which are part of the Transferred Assets, except in compliance in
all material respects with all applicable laws, rules and regulations; and

(c) Except as set forth on Schedule 6.12(c), the Division does not
(i) have pending or on file any application to treat, incinerate or
dispose of contaminants on property owned or leased by the Division and
which are part of the Transferred Assets, (ii) hold any permit, license or
right to treat, incinerate or dispose of contaminants on property owned or
leased by the Division and which constitute part of the Transferred
Assets, or (iii) engage (and has not engaged) in the incineration,
treatment or disposal of contaminants on property owned or leased by the
Division and which constitute part of the Transferred Assets.

(d) Except as set forth on Schedule 6.12(d), to the best knowledge
of Rust, there has not occurred, nor is there presently occurring, any
release (as such term is defined in CERCLA) of contaminants on, into or
beneath the surface of any parcel of real estate owned or leased by the
Division, except as has been reported and remediated in accordance with
all applicable laws and regulations.

(e) Since January 1, 1993 (except since August 1, 1993 with respect
to Enclean), the Division has not transported or disposed of, nor has the
Division, to the best knowledge of Rust, arranged for any third parties to
transport or dispose of, any contaminants to or at a site which, pursuant
to CERCLA or any similar state law, (i) has been placed on the National
Priorities List or its state equivalent, or (ii) the Environmental
Protection Agency or the relevant state agency has proposed or, to the
best knowledge of Rust, is proposing (as reflected by the CERLIS List) to
place on the National Priorities List or its state equivalent. Neither
Rust nor the Division has received any notice pursuant to CERCLA (or its
state equivalent) advising it that it is potentially responsible for
response costs with respect to a release or threatened release of
Hazardous Substances as such are defined in CERCLA (or its state
equivalent) with respect to the operation of the Division.

(f) The Division does not use any underground storage tanks on
property leased by the Division, and, except as set forth on Schedule
6.12(f), there are not now underground storage tanks on real estate owned
by the Division.

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(g) Schedule 6.12(g) identifies (i) all environmental audits,
assessments or occupational health studies relating to the assets,
properties or business of the Division undertaken by governmental agencies
to the best of Rust's knowledge, Rust or the Division or any of their
agents, which include the results of any ground, water, soil, air,
radioactivity or asbestos monitoring undertaken with respect to real
estate owned or leased by or the operations of the Division; and (ii) all
citations issued to the Division within the past two years under the
Occupational Safety and Health Act (29 U.S.C. Sections 651 et seq.).

(h) With respect to the facility listed on Schedule 6.12(h) hereof,
neither Rust nor its subsidiaries or affiliates have buried, dumped,
spilled or released any Contaminants on or about any of the real
properties which are a part of such facility.

6.13 GOVERNMENT CONTRACTING REPRESENTATION. Except as arising out of
activities conducted prior to January 1, 1993 and with respect to Transferred
Assets:

(a) to the best of Rust's knowledge, the Division has complied in
all material respects with all statutory and regulatory requirements with
respect to each certification executed, acknowledged or set forth by the
Division with respect to each Government Contract (as hereinafter defined)
awarded to or performed by the Division and each bid, quotation or
proposal submitted by the Division to the Government or any prospective
prime contractor of the Government (as hereinafter defined); and has
complied in all material respects with each representation executed,
acknowledged or set forth by the Division with respect to each Government
Contract awarded to or performed by the Division and each bid, quotation
or proposal submitted by the Division to the Government or any prospective
prime contractor of the Government;

(b) neither the Government nor any prime contractor has notified the
Division, either orally or in writing, that the Division has breached or
violated in any material respect (which breach or violation has not been
cured) any regulation, statute, certification, representation or contract
clause, provision or requirement with respect to any Government Contract
awarded to or performed by the Division or with respect to any bid,
quotation or proposal submitted by the Division to the Government or any
prospective prime contractor of the Government;

(c) the Division is not currently debarred or suspended from doing
business with the Government and the Division knows of no circumstances
that would warrant the institution of debarment or suspension proceedings
in the future;

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(d) to the best of Rust's knowledge, there are no pending show cause
notices or cure notices that have been issued against the Division on any
Government Contract or on any of its contracts relating to a Government
Contract;

(e) no default termination has ever been issued against the Division
on any Government Contract or on any contract relating to a Government
Contract and no negative determinations of responsibility have ever been
issued against the Division with respect to any bid, quotation or proposal
submitted by the Division to the Government or any prospective prime
contractor of the Government;

(f) Rust does not know of any irregularities, misstatements or
omissions relating to any Government Contract or any bid, quotation or
proposal submitted by the Division to the Government or any prospective
prime contractor of the Government that have led to or could lead to,
either before or after the consummation of the transactions contemplated
hereby, (i) any administrative, civil or criminal investigation or
indictment of the Division, (ii) the questioning or disallowance of any
costs, in any material amount, submitted for payment by the Division,
(iii) the recoupment of any payments, in any material amount, previously
made to the Division or (iv) the assessment of any penalties or civil
damages of any kind against the Division, arising out of such
irregularities, misstatements or omissions;

(g) to the best of Rust's knowledge, the Division is not currently
under administrative, civil or criminal investigation or indictment with
respect to any alleged irregularity, misstatement or omission arising
under or in any way relating to any Government Contract or any bid,
quotation or proposal submitted by the Division to the Government or any
prospective prime contractor of the Government. "Government Contract"
shall mean any agreement, contract, commitment, prime contract,
subcontract, basic ordering agreement, letter contract, purchase order or
delivery order of any kind with the Government to which the Division is a
party or by which it is bound. "Government" means any authority, agency,
division, subdivision, audit group or procuring office of the federal
government, including, without limitation, the employees or agents
thereof.

6.14 TITLE TO THE ASSETS. Rust and the Contributing Subsidiaries have,
and Environmental will have at the Closing, good and marketable title to all
assets reflected on the Division Balance Sheet and to all Transferred Assets
(except for assets disposed of in the ordinary course of business subsequent to
the date of the Division Balance Sheet and the Excluded Assets) free and clear
of all liens other than (i) liens for taxes, assessments and other governmental
charges which are not due and

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payable, or which may thereafter be paid without penalty, or the validity of
which shall concurrently be contested in good faith; (ii) mechanics',
carriers', workmen's, repairmen's or other like liens (inchoate or otherwise)
arising or incurred in the ordinary course of business of the Division in
respect of obligations reflected on the Division Balance Sheet and which are
not overdue, and (iii) liens which are minor in amount and which do not
materially detract from the value, or interfere with the use, of the assets
affected thereby (collectively, the "Permitted Encumbrances").

6.15 CONTRACTS AND COMMITMENTS. Schedule 6.15(a) lists (i) all contracts
or agreements in effect as of October 31, 1994 pursuant to which the Division
is required to perform services, (ii) each personal property lease relating to
the Division, involving annual rentals in excess of $50,000, provided, however,
that annual rentals under personal property leases not included as aforesaid do
not amount in the aggregate to a sum greater than $120,000, (iii) all written
or oral employment contracts with salaried employees of the Division providing
for compensation in excess of $80,000 per year, and (iv) each collective
bargaining agreement, relating to the employees of the Division. Schedule
6.15(b) lists all agreements and contracts in effect at October 31, 1994
pursuant to which the Division is required to perform services entitling the
Division to receive $500,000 or more. To the knowledge of Rust and the
Contributing Subsidiaries and except for contracts relating to (x) the projects
listed on Schedule 8.5 hereof and (y) the Excluded Assets, (A) there is no
contract to which Rust, its subsidiaries and affiliates is a party which is
material to the conduct of the business of the Division, except those which are
listed or described on Exhibits hereto and (B) Rust, its subsidiaries and
affiliates are not in default of any agreement listed on Schedule 6.15(b), and
to the knowledge of Rust and the Contributing Subsidiaries, no other party to
any such agreement is in default thereof. All of the Contracts listed on
Schedule 6.15(b) are in full force and effect and are not subject to
cancellation, termination or modification for any reason related to the
consummation of the transactions contemplated in this Agreement other than the
need to receive consent to assignments. Rust has no knowledge that any other
party to any Contract listed on Schedule 6.15(b) intends to revoke, alter, or
not perform its obligations under such Contract.

6.16 NO-LIABILITIES. Except for (i) liabilities or obligations which are
disclosed or provided for in the Division Balance Sheet, (ii) liabilities or
obligations incurred in the ordinary course of the business of the Division
subsequent to the date of the Division Balance Sheet, and (iii) the Excluded
Liabilities, Rust and the Contributing Subsidiaries have no knowledge of any
material liabilities or obligations relating directly to the Division.

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6.17 ALL ASSETS USED IN THE BUSINESS. Except as set forth on Schedule
6.17, the Transferred Assets comprise all assets used currently in the business
of the Division, and there are no other assets necessary to the continued
operation of the business of the Division in the ordinary course consistent
with past practice.

6.18 THIRD-PARTY OPTIONS. There are no existing agreements, options,
commitments or rights with, to or in any third party to acquire any of the
properties, assets or rights included in the Division or any interest therein.

6.19 UNLAWFUL PAYMENTS. Neither Rust, the Contributing Subsidiaries nor
any officer, director, employee, agent or representative of them has made,
directly or indirectly, any bribes or kickbacks, illegal political
contributions, payments from corporate funds not recorded in the books and
records of Rust, or its subsidiaries, payments from corporate funds that were
falsely recorded on the books and records of Rust or its subsidiaries, payments
from corporate funds to governmental officials in their individual capacities
for the purpose of affecting their action or the action of the government they
represent to obtain favorable treatment in securing business or to obtain
special concessions or illegal payments from corporate funds to obtain or
retain business either within the United States or abroad.

6.20 ACCOUNTS RECEIVABLE. The accounts receivable and other receivables
of the Division shown on the Division Balance Sheet and the accounts receivable
and other receivables arising since the date thereof are valid and binding
obligations of the debtors requiring no further performance by the Division and
are fully collectible in the ordinary course of business in amounts not less
than the aggregate amount thereof carried on the books of the Division, subject
to the reserves carried on the books of the Division.

6.21 INVENTORIES. The values at which the inventories of the Division are
shown on the Division Balance Sheet have been determined in accordance with the
normal valuation policies of Rust. The inventories of the Division shown on
the Division Balance Sheet and thereafter acquired by the Division consist only
of items of a quality and quantity commercially usable or salable in the
ordinary course of business at the values reflected on the Division Balance
Sheet (in the case of inventories acquired prior to the date thereof) and on
the books of the Division (in the case of inventories acquired after the date
of the Division Balance Sheet), except for items of excess or obsolete
material, all of which have been written down to realizable market value as of
the date of the Division Balance Sheet or for which adequate reserves have been
reflected on the Division Balance Sheet or established since the date of the
Division Balance Sheet (with respect to inventory acquired since that date) in
accordance with past practices. Such inventories

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represent a reasonable distribution of the types of inventories utilized in the
conduct of businesses such as the Division's in accordance with good business
practices.

6.22 INTERESTS IN REAL PROPERTY. Schedule 6.22 constitutes a true and
complete list of each parcel of real property owned or leased by the Division.
Schedule 6.22 contains a true and complete list of the policies of title
insurance issued to the Division for such properties. A true and complete copy
of each lease, deed and title insurance policy listed on Schedule 6.22 has been
provided to OHM. All of such leases are valid and enforceable, and there does
not exist any default under any of such leases, or any event which, with the
giving of notice or passage of time, or both, would constitute a default under
any of such leases. All of such owned real property and the leasehold
interests are free and clear of any liens, mortgages, charges or encumbrances
of any nature whatsoever except for Permitted Encumbrances. Except as set
forth on Schedule 6.22, all buildings, structures and fixtures used by the
Division in the conduct of the business of the Division are located on the
parcels of real property listed in Schedule 6.22 and are in good operating
condition and repair, ordinary wear and tear excepted.

6.23 PERSONAL PROPERTY. Except as set forth on Schedule 6.23, all assets
used in the conduct of the business of the Division are either owned by the
Division, respectively, or leased or rented by the Division, respectively, (i)
in transactions with non-affiliates of Rust, or (ii) on terms no more or less
favorable than would have been obtained in arms length transactions. Schedule
6.23, is a list, current as of the date of the Division Balance Sheet, true,
complete and correct in all material respects of each of the assets (other than
land) included in "property and equipment" and "inventory" on the Division
Balance Sheet and each asset not reflected in the Division Balance Sheet, which
list sets forth each asset having a book value of $10,000 or more. The book
value of any assets that are not included on such list does not, in the
aggregate, exceed $5,000,000 as of the date hereof. All of the tangible assets
being transferred hereunder are in good working condition, used or usable in
the conduct of the business of the Division and are able to serve the function
which they are designed to serve.

6.24 LABOR RELATIONS. Except as described in Schedule 6.24 hereof, there
are no agreements with, or pending petitions for recognition of, any labor
union or association as the bargaining agent or representative for any or all
of the Division's employees; no such petitions have been pending at any time
within two (2) years of the date of this Agreement and there has been no
petition for recognition by any union or other group seeking to represent any
employees of the Division as their bargaining agent or representative at any
time within three (3) years of the date of this Agreement; no claim has been,
nor could be, made that any collective bargaining agreement set forth on
Schedule 6.24 should be applicable to any employees of the Division not
expressly

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covered by the terms of such agreements; and there are no labor strikes or work
stoppages, now pending, or threatened, against the Division, nor have there
been any such labor strikes or work stoppages or other labor troubles, at any
time within the three (3) years preceding the date of this Agreement. Except
as described on Schedule 6.24 hereof, there have been no grievances filed, nor
claims of unfair labor practices, made, against the Division at any time within
the past two (2) years.

6.25 CUSTOMERS AND SUPPLIERS. Schedule 6.25 lists each customer of the
Division, respectively, which accounted for more than 5% of the Division's
revenues for the 12 months ended September 30, 1994. Since September 30, 1993,
and except with respect to the projects listed on Schedule 8.5, there has not
been any material adverse change in the business relationship of the Division
with any of its respective customers or suppliers nor have the Division been
involved in any material disputes or controversies with any of their respective
customers or suppliers nor is there any event or circumstance which could form
the basis for any such dispute or controversy.

6.26 PURCHASE FOR INVESTMENT. Rust and/or the Contributing Subsidiaries
are acquiring the Shares for investment and not with a view to any distribution
thereof and are accredited investors as such term is defined in Regulation D
under the Securities Act of 1933 and agree that they will not make a
distribution of Shares in violation of the Securities Act of 1933, as amended.

6.27 ERISA.

(a) The term "Rust Controlled Group" means Rust and all other
entities who are affiliated with Rust pursuant to the provisions of
414(b),(c),(m) and (o) of the Code and Title IV of ERISA.

(b) Neither Rust nor any member of the Rust Controlled Group has
terminated any employee pension benefit plan subject to Title IV of ERISA which
did not satisfy the requirements of ERISA Section 4041(a) and (b). Rust has no
knowledge of any event or occurrence which would cause the Pension Benefit
Guaranty Corporation ("PBGC") to institute proceedings under ERISA to terminate
any employee pension benefit plan or assert any liability with respect to any
employee pension benefit plan sponsored by Rust or any member of the Rust
Controlled Group.

(c) To the best knowledge of Rust, neither Rust nor any member of
the Rust Controlled Group nor any disqualified person or party in interest (as
those terms are defined in Section 4975 of the Code and subsection 3(14) of
ERISA) have engaged in any nonexempt prohibited transaction within the meaning
of Section 406 of ERISA and Section 4975 of the Code.

(d) To the best knowledge of Rust, neither Rust nor any member of the
Rust Controlled Group have breached any of the

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duties imposed on fiduciaries (within the meaning of Section 3(21) of ERISA) by
ERISA that would result in any excise tax being imposed on Rust or any member
of the Rust Controlled Group under ERISA or the Code.

(e) No employee pension benefit plan sponsored by Rust or by any
member of the Rust Controlled Group that is subject to Title IV of ERISA has
incurred an accumulated funding deficiency within the meaning of ERISA Section
302 or Code Section 412, nor has any waiver of the funding standards of ERISA
Section 302 and Code Section 412 been requested of or granted by the IRS with
respect to any plan, nor has any lien arisen under Code Section 412(n) or ERISA
Section 302(f).

(f) Neither Rust nor any member of the Rust Controlled Group has any
obligation to contribute to a multiemployer plan within the meaning of ERISA
Section 3(37) or 4001(a), or Code Section 414(f).

6.28 ACCURACY OF INFORMATION FURNISHED. No representation or warranty
contained in this Agreement or in respect of the Exhibits or Schedules, and no
statement contained in any certificate furnished or to be furnished by or on
behalf of Rust, its subsidiaries or affiliates pursuant hereto, or in
connection with the transactions contemplated hereby, contains, or will contain
as at the date said representation or warranty is made or said certificate is
or will be furnished, any untrue statement of a material fact, or omits, or
will omit to state as at the date said representation or warranty is made or
said certificate is or will be furnished, any material fact which is necessary
to make the statements contained herein or therein not misleading.

7.0 ADDITIONAL COVENANTS OF OHM

7.1 BEST EFFORTS. OHM will use its best efforts to cause to be satisfied
as soon as practicable and prior to the Closing Date all of the conditions set
forth in Article 10 to the obligation of Rust to consummate the Merger and
shall cooperate with all other parties hereto to (i) make all necessary and
appropriate regulatory filings, including HSR and SEC filings, as soon as
possible and (ii) to obtain all necessary and appropriate consents and
approvals as soon as possible, except that if it is necessary to sell or
dispose of any assets outside of the ordinary course of business in order to
obtain a consent or approval, OHM and Rust will take such reasonable steps as
they may mutually agree to secure such consent or approval.

7.2 CONDUCT OF BUSINESS PENDING THE CLOSING. From and after the
execution and delivery of this Agreement and until the Closing Date, except as
otherwise contemplated by this Agreement or with the prior written consent of
Rust:

(a) OHM will conduct its business and operations in substantially the
manner in which the same have heretofore

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been conducted, and it will use all reasonable efforts to (i) preserve its
business organization intact, (ii) keep available the services of its
officers, employees, agents, and distributors, and (iii) preserve its
relationships with customers, suppliers, and others having dealings with
such company;

(b) OHM will maintain all of its properties in customary repair,
order, and condition, reasonable wear and use and damage by unavoidable
casualty excepted, and will maintain insurance of such types and in such
amounts upon all of its properties and with respect to the conduct of its
business as are in effect on the date of this Agreement;

(c) Except as set forth in Schedule 7.2(c) hereof, OHM will not: (i)
authorize or issue any shares of its capital stock (including any held in
its treasury) or any other securities other than the issuance of OHM
Shares pursuant to the exercise of options under the Stock Option Plans or
pursuant to conversions of the Convertible Debentures; (ii) declare or pay
any dividend or make any other distribution of or with respect to its
shares of capital stock or other securities or purchase or redeem any
shares of its capital stock or other securities; (iii) incur any material
obligations or liabilities or enter into any material transaction outside
the ordinary course of business; or (iv) amend its articles of
incorporation or regulations.

7.3 ACCESS TO OHM'S PLANTS, PROPERTIES, AND RECORDS. From and after the
execution and delivery of this Agreement and until Closing, OHM will afford to
the representatives of Rust, on a need to know basis and for purposes of
evaluating compliance by OHM with its representations and warranties and
covenants herein and not for competitive purposes, access, during normal
business hours and upon reasonable notice, to such of OHM's premises as are
sufficient to enable Rust to inspect OHM's assets, plants, properties,
employees, customers, and records and OHM will furnish to such representatives
during such period all such information relating to the foregoing investigation
as Rust may reasonably request; provided, however, that any furnishing of such
information to Rust and any investigation by Rust shall not affect the right of
Rust to rely on the representations and warranties made by OHM in or pursuant
to this Agreement, and provided further that Rust will hold in strict
confidence all documents and information concerning OHM so furnished to the
extent provided in the confidentiality agreement between Rust and OHM dated
October 14, 1994.

8.0 ADDITIONAL COVENANTS OF RUST

8.1 BEST EFFORTS. Rust will use its best efforts to cause to be
satisfied as soon as practicable and prior to the Closing Date all of the
conditions set forth in Article 9 to the

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obligation of OHM to effect the Merger and shall cooperate with all other
parties hereto to (i) make all necessary and appropriate regulatory filings,
including HSR and SEC filings, as soon as possible and (ii) to obtain all
necessary and appropriate consents and approvals as soon as possible, except
that if it is necessary to sell or dispose of any assets outside of the
ordinary course of business in order to obtain a consent or approval, OHM and
Rust will take such reasonable steps as they may mutually agree to secure such
consent or approval.

8.2 CONDUCT OF BUSINESS PENDING THE CLOSING. From and after the
execution and delivery of this Agreement and until the Closing Date, except as
otherwise contemplated by this Agreement or with the prior written consent of
OHM:

(a) Rust will conduct the Division's business and operations in
substantially the manner in which the same have heretofore been conducted,
and it will use all reasonable efforts to (i) preserve the Division's
business organization intact, (ii) keep available to OHM the services of
the Division's officers, employees, agents, and distributors, and (iii)
preserve the Division's relationships with customers, suppliers, and
others having dealings with it;

(b) Rust will maintain all of the Division's properties in customary
repair, order, and condition, reasonable wear and use and damage by
unavoidable casualty excepted, and will maintain insurance of such types
and in such amounts upon all of the Division's properties and with respect
to the conduct of the Division's business as are in effect on the date of
this Agreement;

(c) with respect to the Division, Rust will not: (i) pay any bonus
or increase the rate of compensation of any of its employees other than
substantially in accordance with past practices or enter into any new
employment agreement or amend any existing employment agreement; (ii) sell
or transfer any of its assets other than in the ordinary course of
business; (iii) make or obligate itself to make capital expenditures of
more than $250,000 individually, except for capital expenditures,
consisting of reasonable direct costs and expenses necessary for the
construction of the incineration unit, for the Drake project; or (iv)
incur any material obligations or liabilities or enter into any material
transaction outside the ordinary course of business.

8.3 ACCESS TO THE DIVISION'S PLANTS, PROPERTIES, AND RECORDS. From and
after the execution and delivery of this Agreement, Rust and the Contributing
Subsidiaries will afford to the representatives of OHM access on a need to know
basis and for purposes of evaluating compliance by Rust and the Contributing
Subsidiaries with their representations and warranties and

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covenants herein and not for competitive purposes, during normal business hours
and upon reasonable notice, to such of the Division's premises, records,
employees, and customers as are sufficient to enable OHM to inspect the
Transferred Assets and review the Division's operations and Rust and the
Contributing Subsidiaries will furnish to such representatives during such
period all such information relating to the foregoing investigation as OHM may
reasonably request; provided, however, that any furnishing of such information
to OHM and any investigation by OHM shall not affect the right of OHM to rely
on the representations and warranties made by Rust and the Contributing
Subsidiaries in or pursuant to this Agreement, and, provided further that OHM
will hold in strict confidence all documents and information concerning Rust
and the Contributing Subsidiaries so furnished to the extent provided in a
confidentiality agreement between OHM and Rust dated October 14, 1994.

8.4 NO OTHER DISCUSSIONS. Neither Rust, the Contributing Subsidiaries,
nor any of their affiliates will, prior to the Closing Date, enter into
discussions or negotiate with or entertain or accept the unsolicited offer of
any other party concerning the potential sale of, or sell or contract to sell,
all or any part of the assets of the Division to, or the merger or
consolidation of any of the Division with, any person other than OHM.

8.5 AGREEMENT WITH RESPECT TO CERTAIN CONTRACTS. With respect to the
projects and contracts identified on Schedule 8.5, Rust shall provide to OHM
the financial and other assurances as are identified on Schedule 8.5.

8.6 ASSIGNMENT OF CONTRACTS AND LEASES. With respect to all contracts,
agreements and real and personal property leases of the Division, at the
Closing, such contracts and leases will be assignable to and assigned to
Environmental prior to the Closing pursuant to the terms and conditions of this
Agreement, and will be assignable to and assigned to Acquisition in connection
with the Merger or, to the extent not so assignable and assigned, Rust and the
Contributing Subsidiaries will use their best efforts to obtain the consent of
the other parties to the assignment of such contracts and leases to
Environmental and Acquisition, which efforts will include the Division's
remaining liable on such contracts and leases (or licenses) (or using OHM as a
subcontractor on such contracts) if appropriately indemnified by OHM for claims
which may be asserted against Rust for actions rendered under such contracts
and leases (or licenses) after the Closing.

8.7 TERMINATION EXPENSES. Rust agrees to pay one-half of all costs and
expenses incurred within 180 days after the Closing in connection with (i) the
closing of the Division's offices listed on Schedule 8.7 hereof and (ii)
severance and other

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expenses relating to employee terminations. Rust's share of the expenses
hereunder shall not exceed $500,000 in the aggregate.

8.8 DESIGNATED EMPLOYEES. Rust and the Contributing Subsidiaries agree
to assist OHM in obtaining employment agreements from such of the Division's
management employees as OHM shall designate (the "Designated Employees").

8.9 AMENDMENT. Rust may elect at any time to notify OHM of any
development causing a breach of any of its representations and warranties in
Article 6. Unless OHM has the right to terminate this Agreement pursuant to
Section 14.1(a) below by reason of a single development or the aggregate of all
developments and exercise that right prior to the Closing Date, the written
notice pursuant to this Section 8.9 will be deemed to have amended the
schedules to Article 6, to have qualified the representations and warranties
contained in Article 6 above, and to have cured any misrepresentation or breach
of warranty that otherwise might have existed hereunder by reason of the
development or developments.

9.0 CONDITIONS TO THE OBLIGATION OF OHM

The obligations of OHM to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment, at or prior to the Closing, of
each of the following conditions:

9.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH
OBLIGATIONS. The representations and warranties of Rust, the Contributing
Subsidiaries and Environmental contained in this Agreement shall have been true
and correct in all material respects at and as of the date hereof, and they
shall be true and correct in all material respects at and as of the Closing
Date with the same force and effect as though made at and as of that time.
Rust, the Contributing Subsidiaries and Environmental shall have performed and
complied in all material respects with all of their obligations required by
this Agreement to be performed or complied with at or prior to the Closing
Date. Rust, the Contributing Subsidiaries and Environmental shall have
delivered to OHM a certificate, dated as of the Closing Date and signed by
their Chief Executive Officers and by their Chief Financial Officers,
certifying that such representations and warranties are thus true and correct
in all material respects and that all such obligations have been thus performed
and complied with in all material respects.

9.2 CERTIFIED RESOLUTIONS. Rust, the Contributing Subsidiaries and
Environmental shall have delivered to OHM copies of resolutions adopted by
their board of directors and shareholders, if applicable, authorizing the
transactions contemplated by this Agreement, certified as of the Closing Date
by the secretary or assistant secretary.

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9.3 RECEIPT OF NECESSARY CONSENTS. The consent or approval of OHM's
stockholders and lenders listed on Schedule 5.2 hereof to any of the
transactions contemplated hereby, shall have been obtained and shown by written
evidence satisfactory to OHM. Rust shall deliver to OHM evidence satisfactory
to OHM that Rust has received all consents or approvals by governmental
agencies to permit OHM to perform the services contemplated by Section 12.1.

9.4 HSR ACT WAITING PERIOD. The waiting period imposed by the HSR Act
with respect to the transactions contemplated by this Agreement shall have
expired or been terminated and no injunction or other order prohibiting the
purchase by Rust and/or the Contributing Subsidiaries of all or any part of the
Shares or by OHM of all or any part of the Transferred Assets shall have been
entered by any court.

9.5 ADVERSE CHANGES. Since the date of execution of this Agreement, there
shall not have occurred any development or event having a Material Adverse
Effect on (i) the Division, or (ii) the Transferred Assets.

9.6 GUARANTEE. Prior to the closing of the transactions contemplated by
this Agreement, Rust shall have obtained from WMX Technologies, Inc. ("WMX")
and contributed to Environmental the right, which shall be a Transferred Asset,
to cause WMX to issue time to time, for a period of five years following the
Closing, at the direction of and for the benefit of OHM as determined by a
majority of the Other Directors (as defined in the Standstill and Noncompete
Agreement attached hereto as Schedule 9.9), a guaranty or guarantees, as the
case may be, of the indebtedness of OHM or its subsidiaries outstanding from
time to time in an aggregate amount not to exceed $75,000,000, upon the
satisfaction of the following conditions in each instance a guaranty is issued:

(i) the form of each such guarantee shall be reasonably
satisfactory to WMX and the Independent Directors (as defined in the
Standstill and Noncompete Agreement attached as Schedule 9.9 hereto);
provided, however, that the failure of the Independent Directors to
approve any such form of guarantee prior to the Closing shall not
constitute a failure by Rust to meet the condition to close the
transactions contemplated by this Agreement set forth in this Section
9.6;

(ii) OHM shall execute and deliver to WMX a reimbursement
agreement, in form and substance satisfactory to WMX, obligating OHM
to reimburse WMX for any and all payments made or obligations
incurred by WMX under any such guarantees (the "Reimbursement
Obligations");

(iii) if required by WMX in its sole discretion and subject
to clause (iv) below, OHM shall

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<PAGE> 157
grant WMX a perfected first priority mortgage, lien or security
interest in such collateral owned by OHM (the "Collateral") as WMX
shall request to secure OHM's Reimbursement Obligations;

(iv) OHM shall execute and deliver such mortgages, security
agreements and other documents, in form and substance reasonably
satisfactory to WMX, and shall take such other action, as WMX shall
reasonably request to perfect its mortgage, lien or security interest
in the Collateral;

(v) in the event any of the Collateral requested by WMX is
subject to a prior mortgage, lien, security interest or other
encumbrance (the "Prior Liens"), OHM shall cause the holders of the
indebtedness secured by such Prior Liens to execute and deliver to
WMX an intercreditor agreement, in form and substance reasonably
satisfactory to WMX, the effect of which is to provide WMX with a
security interest, lien or mortgage in any such Collateral pari passu
with such Prior Liens upon any payment made by WMX under any such
guaranty; and

(vi) OHM shall execute and deliver such other documents,
certificates and opinions relating to such Guaranty as WMX may
reasonably request.

9.7 FAIRNESS OPINION. OHM shall have received an opinion from a
recognized investment banking firm that the transactions contemplated by this
Agreement are fair to OHM's stockholders from a financial point of view.

9.8 OWNERSHIP OF ASSETS. Subject to Rust's failure to obtain consents to
assignment required by Section 8.6, the Transferred Assets shall have been
transferred to Environmental, and Environmental shall have good and marketable
title to such Transferred Assets free and clear of any lien, pledge, charge or
other encumbrance other than Permitted Encumbrances.

9.9 STANDSTILL AND NONCOMPETE AGREEMENT. WMX and Rust shall have
executed and delivered the Standstill and Noncompete Agreement in the form
attached hereto as Schedule 9.9.

9.10 MERGER AGREEMENT. Environmental shall have executed and delivered to
OHM the Merger Agreement in substantially the form attached hereto as Schedule
9.10 (the "Merger Agreement").

10.0 CONDITIONS TO THE OBLIGATION OF RUST

The obligations of Rust, the Contributing Subsidiaries and Environmental
to consummate the transactions contemplated by this Agreement shall be subject
to the fulfillment, at or prior to the Closing, of each of the following
conditions:

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<PAGE> 158
10.1 ACCURACY OF OHM'S REPRESENTATIONS AND WARRANTIES AND COMPLIANCE BY
OHM WITH ITS OBLIGATIONS. The representations and warranties of OHM, contained
in this Agreement shall have been true and correct in all material respects at
and as of the date hereof, and they shall be true and correct in all material
respects at and as of the Closing Date with the same force and effect as though
made at and as of that time. OHM shall have performed and complied, in all
material respects, with all of their obligations required by this Agreement to
be performed or complied with at or prior to the Closing Date. OHM shall have
delivered to Rust a certificate, dated as of the Closing Date and signed by
Chief Executive Officer and by its Chief Financial Officer, certifying that
such representations and warranties are true and correct in all material
respects and that all such obligations have been thus performed and complied
with in all material respects.

10.2 CERTIFIED RESOLUTIONS. OHM shall have delivered to Rust copies of
resolutions adopted by the board of directors and the shareholders of OHM
authorizing the transactions contemplated by this Agreement, certified in each
case as of the Closing Date by the Secretary or Assistant Secretary.

10.3 RECEIPT OF NECESSARY CONSENTS. The consent or approval of OHM's
stockholders and lenders to any of the transactions contemplated hereby, shall
have been obtained and shown by written evidence reasonably satisfactory to
Rust.

10.4 HSR ACT WAITING PERIOD. The waiting period imposed by the HSR Act
with respect to the transactions contemplated by this Agreement shall have
expired or been terminated and no injunction or other order prohibiting the
purchase by Rust of all or any part of the Shares or by OHM of all or any part
of the Transferred Assets shall have been entered by any court.

10.5 ADVERSE CHANGES. Since the date of execution of this Agreement,
there shall not have occurred any development or event having a Material
Adverse Effect with regard to OHM and its subsidiaries, taken as a whole.

10.6 MERGER AGREEMENT. OHM and Acquisition shall have executed and
delivered to Rust the Merger Agreement.

10.7 WAIVER BY CERTAIN EMPLOYEES. All employees who are the beneficiaries
of certain "Change in Control" Employment Agreements with OHM shall have
executed and delivered letter agreements to the effect that they agree that the
transactions contemplated by this Agreement do not constitute a "Change in
Control" or other triggering event under such Employment Agreements or, to the
extent any such letter agreement shall not have been received with respect to
any particular Employment Agreement, such Employment Agreement shall no longer
be in effect.

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<PAGE> 159
10.8 CLOSING PRICE. The Closing Price shall not be less than $6.00.

11.0 CERTAIN ACTIONS AFTER THE CLOSING

11.1 EXECUTION OF FURTHER DOCUMENTS. From and after the Closing, upon the
reasonable request of any of the parties hereto, each of the other parties
hereto shall execute, acknowledge, and deliver all such further acts, deeds,
bills of sale, certificates, assignments, transfers, conveyances, sales, use or
other transfer tax documentation, powers of attorney, and assurances as may be
required to convey and transfer to and vest in Acquisition and protect its
right, title, and interest in all of the Transferred Assets, or as may be
required to convey and transfer to and vest in Rust and/or the Contributing
Subsidiaries and protect its right, title, and interest in and to the Shares,
and as may be appropriate otherwise to carry out the transactions contemplated
by this Agreement.

11.2 EMPLOYMENT BY OHM OF THE DIVISION'S EMPLOYEES.

(a) Except as set forth on Schedule 11.2(a) hereof, OHM will agree
to offer to employ following the Closing such of the Division's active
employees as are actively employed on the Closing Date upon the same terms
and conditions and with the same benefits and other conditions of
employment as OHM employs its own employees at the Closing Date and with
substantially the same seniority with respect to compensation and benefits
as such employees will have with the Division immediately prior to
Closing.

(b) Except as set forth in Section 11.2(a) hereof, OHM shall have no
obligation to employ any of the persons currently employed by the Division
or assume any labor contract or to continue, or institute any replacement
or substitution for, any vacation, severance, incentive, bonus, profit
sharing, pension, or other employee benefit plan or program of the
Division or Rust.

12.0 CERTAIN BUSINESS AGREEMENTS.

12.1 TERCS CONTRACTS. With respect to the Total Environmental Restoration
Contracts listed on Schedule 12.1 (the "TERCS Contracts"), Rust agrees that OHM
will provide on an exclusive basis, subject to teaming agreements existing on
the date hereof, all environmental remediation services performed under such
contracts. On delivery orders not separated between environmental remediation
services and non- remediation services, Rust agrees to pay OHM from time to
time as received a proportion of all fees earned under the applicable delivery
order equal to the proportion of all cost amounts invoiced under the applicable
delivery order related to environmental remediation services to all cost
amounts invoiced under the applicable delivery order, subject to the Rust fee
being no lower than 7% of non-remediation

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services cost amounts invoiced and the OHM fee being no lower than 6% of
environmental remediation services cost amounts invoiced, except as otherwise
mutually agreed.

12.2 BONDING. Rust shall take all actions necessary to maintain, at its
cost, following the Closing all payment, performance and surety bonds
outstanding immediately prior to Closing on all projects of the Division and
shall deliver to OHM evidence satisfactory to OHM that such bonds shall remain
in full force and effect for the duration of such projects notwithstanding the
sale of the Transferred Assets pursuant to the Merger. OHM shall indemnify and
hold harmless Rust, its subsidiaries and affiliates from any loss, cost,
expense or damage incurred by them as a result of any payments made by a surety
under any such bonds from and after the Closing.

12.3 OTHER COOPERATION. Rust agrees to use its reasonable efforts to
assist OHM and its subsidiaries in securing such discounts and other favorable
pricing from vendors as are generally available to affiliates of WMX.

12.4 USE OF NAME. Rust agrees to permit OHM to use the name Rust Remedial
Services for a period of three years following the Closing and will execute and
deliver to OHM all consents of Rust and its subsidiaries and affiliates
necessary to permit OHM to use such name.

13.0 INDEMNIFICATION

13.1 AGREEMENT BY OHM TO INDEMNIFY. OHM agrees, that it will indemnify
and hold Rust and Rust's subsidiaries, divisions, affiliates, officers,
directors, employees, and agents harmless in respect of the aggregate of all
indemnifiable damages of Rust and the Contributing Subsidiaries. For this
purpose, "indemnifiable damages" of Rust and the Contributing Subsidiaries
means the aggregate of all expenses, losses, costs, deficiencies, liabilities,
and damages (including related counsel fees and expenses) incurred or suffered
by Rust and the Contributing Subsidiaries (i) resulting from any default in the
performance of any of the covenants or agreements made by OHM in this Agreement
or any of the other agreements contemplated herein or (ii) arising from the
Assumed Liabilities. Without limiting the generality of the foregoing, with
respect to the measurement of "indemnifiable damages", Rust and the
Contributing Subsidiaries shall have the right to be put in the same financial
position as it would have been in had each of the covenants of OHM been
performed in full. Rust agrees to use its best efforts to give prompt written
notice to OHM of each claim for indemnifiable damages which it believes it has
suffered; provided, however, that no delay in the giving of such notice shall
affect the rights of Rust to recover indemnifiable damages hereunder.

13.2 AGREEMENT BY RUST AND THE CONTRIBUTING SUBSIDIARIES TO INDEMNIFY.
Rust agrees that it will indemnify and hold OHM and

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<PAGE> 161
OHM's subsidiaries, divisions, affiliates, officers, directors, employees, and
agents harmless in respect of the aggregate of all indemnifiable damages of
OHM. For this purpose, "indemnifiable damages" of OHM means the aggregate of
all expenses, losses, costs, deficiencies, liabilities, and damages (including
related counsel fees and expenses) incurred or suffered by OHM (i) resulting
from any inaccurate representation or warranty made by Rust in or pursuant to
Sections 6.12(h) and 6.14 hereof, (ii) resulting from any default in the
performance of any of the covenants or agreements made by Rust (including any
of its affiliates) in this Agreement or any of the other agreements
contemplated herein, (iii) arising from the Excluded Liabilities, or (iv)
arising from, resulting from or relating to the activities of the Division or
ownership and use of the Transferred Assets prior to August 1, 1993 with
respect to the activities of the Division carried on by Enclean and Transferred
Assets previously owned by Enclean and January 1, 1993 otherwise, other than
losses incurred in the ordinary course of performance of projects commenced,
completed or bid prior to such date. Without limiting the generality of the
foregoing, with respect to the measurement of "indemnifiable damages", OHM
shall have the right to be put in the same financial position as it would have
been in had each of such representations and warranties of Rust been true and
correct and had each of the covenants of the Rust or any of their affiliates
been performed in full. OHM agrees to use its best efforts to give prompt
written notice to Rust of each claim for indemnifiable damages which it
believes it has suffered; provided, however, that no delay in the giving of
such notice shall affect the rights of OHM to recover indemnifiable damages
hereunder.

14.0 MISCELLANEOUS

14.1 TERMINATION.

(a) Subject to the provisions of Section 14.1(b) hereof, this
Agreement may, by written notice given at or prior to the Closing, be
terminated and abandoned:

(i) by either OHM or Rust if a material default or
material breach shall be made by the other with respect to the due
and timely performance of any of its covenants and agreements
contained herein or if any of the other's representations and
warranties contained in Articles 5 or 6, as the case may be, shall be
inaccurate in any material respect, and such default or inaccuracy
cannot be cured and has not been waived;

(ii) by the mutual consent and agreement of OHM and Rust; or

(iii) by either OHM or Rust if the Closing shall not have
occurred, other than through the failure of the terminating party to
fulfill its obligations

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hereunder, on or before September 30, 1995, or such later date as may be
agreed upon by the parties.

(b) In the event this Agreement is terminated pursuant to Section
14.1(a) hereof, all further obligations of the parties hereunder shall
terminate, provided that if this Agreement is so terminated by OHM, on the
one hand, or Rust on the other hand, because one or more of the conditions
to such group of parties' obligations hereunder is not satisfied as a
result of the other's failure to comply with its obligations under any
provision of this Agreement, the terminating party's right to pursue all
legal remedies for breach of contract and damages shall also survive such
termination unimpaired.

14.2 MODIFICATION; WAIVER. This Agreement may be modified in any manner
and at any time by written instrument executed by the parties hereto. Any of
the terms, covenants, and conditions of this Agreement may be waived at any
time by the party entitled to the benefit of such term, covenant, or condition.

14.3 EXPENSES. Whether or not the transactions contemplated hereby shall
be consummated, each of the parties hereto will bear its own costs and expenses
and will pay for all services rendered to it in facilitation of the
transactions contemplated hereby, including, without limitation, attorneys',
accountants', and investment bankers' fees.

14.4 BROKERS' COMMISSION. OHM will indemnify and hold harmless Rust from
the commission, fee, or claim of any person, firm, or corporation employed or
retained or claiming to be employed or retained by OHM to bring about, or to
represent it in, the transactions contemplated hereby. Rust will indemnify and
hold harmless OHM from the commission, fee, or claim of any person, firm, or
corporation employed or retained or claiming to be employed or retained by Rust
to bring about, or to represent it in, the transactions contemplated hereby.

14.5 NOTICES. All notices, requests, demands, claims, and other
communications hereunder shall be in writing and shall be delivered by
certified or registered mail (first class postage pre-paid), guaranteed
overnight delivery, or facsimile transmission:

(a) if to OHM or Acquisition to:
16406 U.S. Route 224 East
Findlay, Ohio 45840
Attention: General Counsel

Telecopy: (419) 424-4985

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<PAGE> 163
(b) if to Rust or the Contributing Subsidiaries or Environmental to:

100 Corporate Parkway
Birmingham, Alabama 35242
Attention: General Counsel

Telecopy: (205) 995-7914

14.6 PARTIES IN INTEREST; ASSIGNMENT. This Agreement and all the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, but neither this
Agreement nor any of the rights, interests, and obligations hereunder shall be
assigned by any of the parties hereto without the prior written consent of the
other parties hereto. Nothing in this Agreement, whether expressed or implied,
shall be construed to give any person other than the parties hereto any legal
or equitable right, remedy, or claim under or in respect of this Agreement.

14.7 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall constitute one and the same instrument.

14.8 HEADINGS. The article and section headings of this Agreement are for
convenience of reference only and shall not be deemed to alter or affect the
meaning or interpretation of any provisions hereof.

14.9 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Ohio applicable to contracts
made and to be performed therein.

14.10 ARBITRATION. All disputes arising out of, or in connection with
this Agreement, which are not promptly settled by mutual agreement of the
parties hereto, shall be finally settled by arbitration in accordance with the
rules of the American Arbitration Association; provided, however, that this
shall not be construed as requiring disputes under the Standstill and
Noncompetition Agreement to be settled under arbitration. Such arbitration
shall be conducted by a single arbitrator appointed in accordance with such
rules unless such dispute involves an amount greater than $1,000,000, in which
case such arbitration shall be conducted by a panel of three arbitrators
appointed in accordance with such rules. Arbitration shall take place in
Columbus, Ohio. Such arbitration shall be governed by this Agreement and shall
be final and binding upon the parties hereto. The validity, construction,
performance or termination of any agreement by and between the parties
submitted to arbitration shall be determined on the basis of the contractual
obligations

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<PAGE> 164
of the parties. The arbitrator shall determine his jurisdiction over persons
and subject matter if such jurisdiction is challenged by one of the parties.
The award of the arbitrator shall: (a) be rendered in writing stating the
grounds on which the arbitrators base same, and how the costs of arbitration
shall be borne; the expenses of any party in defense of its interests shall be
borne by such party; (b) be dated and notified to the parties by registered
mail, return receipt requested; (c) be carried out voluntarily and without
delay, and failing this, be made enforceable through either party by entry of a
judgment in a competent court of any jurisdiction; and (d) be final and not
subject to appeal before any court, nor other jurisdiction nor any authority.

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<PAGE> 165
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.

OHM CORPORATION

By /s/ Daniel P. Buettin
----------------------------
Title: Vice President,
Finance and CFO

RUST REMEDIAL SERVICES INC.

By /s/ Harold W. Ingalls
----------------------------
Title: Vice President

ENCLEAN ENVIRONMENTAL SERVICES
GROUP, INC.

By /s/ Harold W. Ingalls
----------------------------
Title: Vice President

RUST ENVIRONMENTAL, INC.

By /s/ Harold W. Ingalls
----------------------------
Title: Vice President

RUST INTERNATIONAL INC.

By /s/ Harold W. Ingalls
----------------------------
Title: Vice President

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<PAGE> 166
SCHEDULE 9.9

STANDSTILL AND NON-COMPETITION AGREEMENT

This STANDSTILL AND NON-COMPETITION AGREEMENT ("Agreement") is made
and entered into this ____ day of _________, 1995 by and among OHM Corporation,
an Ohio corporation ("OHM"), WMX Technologies, Inc., a Delaware corporation
("WMX"), and Rust International Inc., a Delaware corporation ("Rust").

WHEREAS, Rust, Rust Remedial Services Inc. ("Remedial"), Enclean
Environmental Services Group, Inc. ("Enclean"), Rust Environmental Inc. and OHM
have entered into that certain Agreement and Plan of Reorganization dated as of
_______________, 1994 (the "Reorganization Agreement") whereby Rust
Environmental shall merge with and into a wholly-owned subsidiary of OHM
("Acquisition") with Acquisition being the surviving entity and OHM shall issue
to Rust or certain of its subsidiaries shares of its common stock (the "OHM
Common Stock");

WHEREAS, the parties desire to provide for certain agreements with
respect to the ownership and voting by WMX and its affiliates of OHM Common
Stock and other matters after such Merger; and

WHEREAS, in order to induce OHM to enter into the Reorganization
Agreement, WMX and certain of its affiliates are willing to enter into certain
agreements which define the rights of WMX and certain of its affiliates to
engage in the environmental remediation business after such Merger;

WHEREAS, the execution and delivery of this Agreement is a condition
of, and in consideration for, the consummation of the transactions contemplated
by the Reorganization Agreement.

NOW, THEREFORE, in consideration of the agreements, rights,
obligations, and covenants contained herein, OHM, Rust and WMX hereby agree as
follows:

1.0 AGREEMENTS REGARDING VOTING AND SHARES

The parties agree that during the Term of this Agreement:

1.1 ACQUISITION OF VOTING SECURITIES. No member of the WMX Group will,
directly or indirectly, acquire (including by conversion of securities
convertible into Voting Securities) any Voting Securities (all such securities
owned by members of the WMX Group being referred to herein as "Restricted
Securities"), other than (i) the acquisition by Rust and/or its subsidiaries of
Restricted Securities pursuant to the Reorganization Agreement, (ii)
acquisitions of Voting Securities which do not result in the
<PAGE> 167
beneficial ownership by the WMX Group of Restricted Securities constituting
more than 40% of the Voting Securities then outstanding (the "Ownership
Limit"); provided, however, that if the transaction resulting in the WMX
Group's having beneficial ownership of less than the Ownership Limit was a sale
or transfer by the WMX Group of Restricted Securities (the "Voluntary
Transaction"), the percentage ownership of Voting Securities then outstanding
resulting from the consummation of such Voluntary Transaction shall thereafter
be deemed to be the Ownership Limit. In the event that the WMX Group's
ownership of Restricted Securities exceeds the Ownership Limit, the WMX Group
will be obligated to dispose of Restricted Securities as promptly as
practicable in accordance with law in such amount so that the ownership by the
WMX Group of Restricted Securities following such disposition is equal to or
less than the Ownership Limit; provided, however, that the WMX Group shall not
be obligated to dispose of any Restricted Securities if the aggregate
percentage ownership of the WMX Group is increased as a result of (a) any
action taken by any person other than a member of the WMX Group, including
without limitation any recapitalization of OHM, repurchase of Voting Securities
by OHM or any similar transaction; or (b) stock dividends or other
distributions or offerings made available to holders of Voting Securities
generally.

1.2 VOTING. The WMX Group shall take such action as may be required so
that all Restricted Securities at any time entitled to vote are voted:

(a) for the election of the slate of nominees for election to the
Board of Directors of OHM selected by a majority of the directors of OHM
other than the designees of Rust pursuant to Section 2.5 hereof serving as
directors of OHM (such directors so designated by Rust being referred to
herein as the "Rust Directors" and the remaining directors being referred
to herein as the "Other Directors"), provided that such slate includes the
nominees designated by Rust pursuant to Section 2.5 hereof; and

(b) on all other matters to be voted on by the holders of Voting
Securities, (i) in accordance with the recommendation of a majority of the
Other Directors of OHM if any recommendation is made or, (ii) in the
absence of a recommendation, in the same proportion as other stockholders
of OHM shall vote on such matter.

1.3 QUORUM. A representative or representatives of the members of the
WMX Group, as holders of Restricted Securities, shall be present, in person or
by proxy, at any meeting of shareholders of OHM so that all Restricted
Securities may be counted for the purpose of determining the existence of a
quorum at such meeting.

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1.4 VOTING TRUST OR ARRANGEMENT. No member of the WMX Group shall
deposit any Restricted Securities in a voting trust or subject any Restricted
Securities to any arrangement or agreement with respect to the voting of such
Restricted Securities.

1.5 PROXY SOLICITATIONS. No member of the WMX Group shall solicit
proxies or initiate, propose or become a "participant" in a "solicitation" (as
such terms are defined in Regulation 14A under the Securities Exchange Act of
1934, as amended, or any similar successor statute (the "Exchange Act")), in
opposition to any matter which has been recommended by a majority of the Other
Directors or in favor of any matter which has not been approved by a majority
of the Other Directors or seek to advise, encourage or influence any Person
with respect to the voting of Voting Securities in such manner, or induce or
attempt to induce any Person to initiate any stockholder proposal.

1.6 GROUP PARTICIPATION. No member of the WMX Group shall join a
partnership, limited partnership, syndicate or other group, or otherwise act in
concert with any other person, for the purpose of acquiring, holding, voting or
disposing of Voting Securities (other than solely with members of the WMX Group
in a manner consistent with the purposes hereof).

1.7 SOLICITATIONS OF OFFERS. No director or executive officer of any
member of the WMX Group shall, and no member of the WMX Group shall permit any
of its other officers, employees or agents (including investment bankers) to,
induce or attempt to induce or give encouragement to any third person, or enter
into any serious substantive discussions or negotiations with any third person,
in furtherance of any tender offer or business combination transaction in which
shares of Voting Securities would be acquired; provided, however, that nothing
in this Section 1.7 shall, or shall be construed, directly or indirectly, to
limit any rights of the WMX Group to offer, sell or otherwise dispose of shares
of Voting Securities pursuant to any transaction effected in accordance with
Section 1.8 hereof.

1.8 DISPOSITIONS:

(a) WMX hereby agrees that, except as otherwise permitted by this
Agreement, no member of the WMX Group shall, directly or indirectly, offer,
sell, transfer or hypothecate shares of Restricted Securities other than as
follows:

(i) to other members of the WMX Group;

(ii) in a distribution registered under the Securities Act
in which such Restricted Securities are offered and sold to the
general public;

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<PAGE> 169
(iii) in compliance with Rule 144 of the General Rules and
Regulations under the Securities Act (or any similar successor rule);
provided, however, that WMX shall notify OHM at least three business
days prior to the date of entering any sale or transfer order in
respect of Restricted Securities pursuant to Rule 144 (or such
successor rule), and provided further that, if OHM shall thereupon
notify the WMX Group of the pendency of a sale or any public offering
by OHM of Voting Securities, no member of the WMX Group shall effect
any sales of Restricted Securities under such rule within 10 calendar
days prior to the commencement of or during such offering;

(iv) a merger or consolidation, approved by a majority of
the Other Directors, in which OHM is acquired;

(v) in a sale or sales to any person approved by a
majority of the Other Directors; or

(vi) in privately negotiated transactions in which
Restricted Securities are not sold or transferred to any other person
or group who or which would immediately thereafter, to the knowledge
of the WMX Group after reasonable inquiry, beneficially own or have
the right to acquire more than 5% of the Voting Securities then
outstanding, unless such other person agrees to execute and deliver
to OHM an agreement containing obligations similar to the obligations
of the WMX Group contained in this Article 1, which agreement shall
be approved by a majority of the Other Directors;

provided, however, that in any transaction or transactions described in clauses
(ii) or (iii), the WMX Group will use its reasonable efforts to effect the
transfer thereof in a manner which will effect the broadest possible
distribution with no sales or transfers of Restricted Securities to any person
or group of persons (within the meaning of Section 13(d) of the Exchange Act)
in excess of 5% of the then outstanding Voting Securities.

1.9 LEGENDS, STOP TRANSFER ORDERS AND NOTICE. The WMX Group agrees:

(a) to the placement on the certificate representing the Shares of
the following legend:

"The securities represented by this certificate have not been
registered under the Securities Act of 1933 and may not be sold or
transferred except in compliance with such Act. The securities
represented by this certificate are subject to the

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<PAGE> 170
provisions of an Agreement, dated ____________, 1995 among OHM
Corporation, Rust International Inc. and WMX Technologies, Inc., a
copy of which is on file at the office of the Secretary of OHM
Corporation.

(b) to the entry of stop transfer orders with the transfer agent (or
agents) and the registrar (or registrars) of OHM against the transfer
other than in compliance with the requirements of this Agreement of
legended securities of which the WMX Group from time to time is the
Beneficial Owner.

(c) OHM agrees to the removal of the legend required by Section
1.9(a) and the stop transfer orders in Section 1.9(b) hereof following the
later of three years from the date of Closing or the expiration of the
Term of the Agreement.

2.0 OTHER AGREEMENTS REGARDING VOTING STOCK

2.1 ANTI-DILUTION OPTIONS.

(a) In the event the beneficial ownership of the WMX Group of
Restricted Securities is less than 20% of all Voting Securities then
outstanding, OHM hereby grants to Rust a cumulative, continuing option
(the "Anti-Dilution Option") to purchase (or to have its affiliate or
nominee purchase) that number of shares as may be necessary, when added to
all other shares of which the WMX Group shall on the relevant date have
beneficial ownership, to enable the WMX Group to have beneficial ownership
of Restricted Securities constituting not less than 20% and not more than
21% of all Voting Securities outstanding after the exercise of the
Anti-Dilution Option. OHM agrees to notify Rust, as provided in Section
6.3 hereof, promptly upon becoming aware that the beneficial ownership by
the WMX Group of Restricted Securities is less than 20% of the then
outstanding Voting Securities (the "OHM Notice"). The Anti-Dilution
Option may be exercised by Rust by written notice to OHM and shall be
exercisable for a period commencing on the date that the beneficial
ownership by the WMX Group of Restricted Securities is less than 20% of
the then outstanding Voting Securities and continuing for a period of ten
business days following the date that Rust has received the OHM Notice
(the "Option Period") ; provided, however, that in the event that, during
the Option Period, OHM has not released to the public material information
which, in the reasonable judgment of OHM is reasonably likely to have a
material and adverse effect upon the price of the Voting Securities, OHM
will extend the Option Period until the date which is two business days
following the release of such material information to the public. The
Anti-Dilution Option shall be terminated if the transaction resulting in
the WMX

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Group's having beneficial ownership of less than 20% of all Voting
Securities was a sale or transfer of Voting Securities by the WMX Group or
if the WMX Group sells or transfers, and thereby reduces, any or all of
its beneficial ownership of Restricted Securities at a time when the WMX
Group had beneficial ownership of Restricted Securities constituting less
than 20% of all Voting Securities or any Option Period shall have expired
without Rust exercising such Anti-Dilution Option. It is the intention of
the parties hereto that the existence and exercise, from time to time, of
an Anti-Dilution Option, in combination with the WMX Group's right herein
to designate persons to OHM's Board of Directors shall assist the WMX
Group in accounting for its ownership in OHM on the equity method.

(b) The price per share payable upon each exercise of an
Anti-Dilution Option shall be an amount equal to the average closing price
per share of the Voting Securities for the five trading days prior to the
date that Rust notifies OHM that it is exercising the Anti-Dilution Option
on the New York Stock Exchange or other nationally recognized exchange or
over-the-counter market on which the Voting Securities primarily trade and
shall be payable by wire transfer in immediately available funds to an
account designated by OHM.

(c) The Voting Securities issued pursuant to an exercise of an Anti-
Dilution Option shall be duly authorized, validly issued and fully paid and
non-assessable.

(d) OHM shall reserve for issuance at all times during the period
any Anti-Dilution Option is exercisable that number of Voting Securities
equal to the number of Restricted Securities issuable upon exercise of
each Anti-Dilution Option.

2.2 INDEPENDENT DIRECTORS. For so long as the WMX Group owns at least
20% of the outstanding Voting Securities, WMX shall take such action as may be
reasonably within its control so that OHM's Board of Directors at all times
includes at least three directors not affiliated with the WMX Group or employed
by OHM or its subsidiaries (the "Independent Directors").

2.3 TRANSACTIONS WITH OHM. For so long as the WMX Group owns at least
20% of the outstanding Voting Securities, no member of the WMX Group shall
attempt to enter, or enter into any material transaction or agreement, out of
the ordinary course of business, other than transactions contemplated by
Section 2.4 hereof, with OHM or its subsidiaries unless such transaction or
agreement is approved by a majority of the Independent Directors or a committee
including only Independent Directors.

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2.4 WMX GROUP ACQUISITION OF ADDITIONAL VOTING SECURITIES. For so long
as the WMX Group owns at least 20% of the outstanding Voting Securities and
whether or not the Term of the Agreement for purposes of Article 1 hereof has
expired, no member of the WMX Group shall, directly or indirectly, propose to
purchase, attempt to purchase or purchase or otherwise acquire any Voting
Securities (including by conversion of securities convertible into Voting
Securities, by merger or by other business combination), or make any public
announcement with respect thereto, except acquisitions to the Ownership Limit
pursuant to Section 1.1 hereof, unless (i) such purchase or other acquisition
is pursuant to an offer for all of the outstanding Voting Securities at the
same price per share and (ii) such purchase or other acquisition is either (x)
approved by the Independent Directors or a committee including only Independent
Directors or (y) if not so approved, approved by a majority of the outstanding
Voting Securities (other than the Restricted Securities beneficially owned by
the WMX Group) at a meeting of shareholders called for that purpose pursuant to
the provisions of Article X of OHM's Amended and Restated Articles of
Incorporation in effect on the date hereof.

2.5 BOARD REPRESENTATION. Immediately following the Closing Date, OHM
will elect to its Board of Directors three qualified designees of the WMX Group
mutually acceptable to the WMX Group and OHM. Thereafter, for so long as the
WMX Group owns at least 20% of the outstanding Voting Securities or the
Anti-Dilution Option has not expired, OHM will include among its Board of
Directors' nominees for election a number of qualified designees acceptable to
the WMX Group and OHM such that the percentage of the Board of Directors
proposed to be composed of such designees is proportionately equal (to the
lowest corresponding whole directorship) to the percentage of outstanding
Voting Securities which the WMX Group then has Beneficial Ownership.

2.6 LISTING ON SECURITIES EXCHANGES. For so long as the WMX Group owns at
least 20% of the outstanding Voting Securities, OHM will list the Restricted
Securities, and will maintain the listing thereof, on each national securities
exchange on which any Common Stock may be listed, subject to official notice of
issuance, the Restricted Securities.

2.7 FILE REPORTS AND COOPERATE IN RULE 144 TRANSACTIONS. For as long as
the WMX Group shall continue to hold any Voting Securities, OHM shall use
reasonable efforts to file on a timely basis all annual, quarterly and other
reports required to be filed by it under Sections 13 and 15(d) of the Exchange
Act, and the Rules and Regulations of the Commission thereunder, as amended
from time to time. In the event of any proposed sale of Voting Securities by
any member of the WMX Group pursuant to Section 1.8(a)(iii) above, OHM shall
cooperate with the WMX Group so as to enable such sales to be made in
accordance with applicable laws, rules and regulations, the requirements of
OHM's

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transfer agent and the reasonable requirements of the broker through which the
sales are proposed to be executed, and shall, upon request, furnish unlegended
certificates representing Voting Securities in such numbers and denominations
as the transferor shall reasonably require for delivery pursuant to such sales.

2.8 DEFINITIONS. For purposes of Article 1 and Article 2 of this
Agreement, the following terms shall have the following meanings.

(a) AFFILIATE. "Affiliate" shall have the meaning ascribed to it in
Rule 12b-2 of the General Rules and Regulations under the Exchange Act, as
in effect on the date hereof.

(b) BENEFICIAL OWNER. A person shall be deemed a "Beneficial Owner"
of or to have "Beneficially Owned" any Voting Securities (i) in accordance
with the term "beneficial ownership" as defined in Rule 13d-3 under the
Exchange Act, as in effect on the date hereof, and (ii) shall also include
Voting Securities which such person or any Affiliate of such person has
the right to acquire (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights, exchange rights,
warrant or options, or otherwise.

(d) TERM OF THIS AGREEMENT. "Term of this Agreement" for purposes
of Article 1 hereof, but not for Article 2 hereof, shall mean a period
commencing with the date of this Agreement and ending on the first to
occur of (i) the failure of OHM to pay, on written demand, a copy of which
shall be sent to the Independent Directors, any of OHM's Reimbursement
Obligations as such term is defined in Section 9.6 of the Reorganization
Agreement following the payment by WMX of any amounts under the guarantee
or guarantees provided for in Section 9.6 of the Reorganization Agreement,
or (ii) the date that the beneficial ownership by the WMX Group of
Restricted Securities is less than 20% of the then outstanding Voting
Securities and the Option Period has expired without exercise of the
Anti-Dilution Option.

(e) VOTING SECURITIES. "Voting Securities" includes Common Stock
and any other securities of OHM entitled to vote generally for the
election of directors, in each case now or hereafter outstanding.

(f) WMX GROUP. "WMX Group" shall mean WMX, Rust and their
respective Affiliates (regardless of whether such person is an Affiliate
on the date hereof), both in their individual capacities and collectively.
An individual shall

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not be deemed to be an Affiliate for purposes of this definition if such
individual beneficially owns less than 50,000 shares of Voting Securities
solely for investment purposes and is not a member of a "group" which
includes the WMX Group as defined by Section 13(d) of the Exchange Act.

3.0 CERTAIN BUSINESS AGREEMENTS

3.1 WMX AND AFFILIATES RESTRICTIVE COVENANTS.

(a) Neither WMX nor Rust, or their respective wholly-owned (directly
or indirectly) subsidiaries, which do not include Wheelabrator
Technologies Inc. and Waste Management International plc and their
respective subsidiaries (collectively, the "WMX Affiliates") shall, for a
period of seven years from the Closing Date, engage in North America in
the business of providing field services for the on-site remediation of
hazardous waste, radioactive materials, mixed waste, waste contaminated
with petroleum, hydrocarbons, crude oil, PCBs, or any "Hazardous
Substances" as such term is defined in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 as amended ("CERCLA")
(individually and collectively, "Contaminants"), which services involve
the on-site treatment (in-situ, ex-situ, chemical, physical, thermal,
biological or otherwise), neutralization, destruction, recharacterization,
detoxifying, dewatering, excavation or staging (for removal, storage,
treatment, disposal or otherwise) of Contaminants, whether or not such
services (i) are provided on an emergency response, planned, on-going,
periodic, or other basis, or (ii) are provided for private sector or
governmental clients, including without limitation, state and local
governments and federal government agencies such as the Department of
Defense, the Department of Energy, Department of the Interior, and the
Environmental Protection Agency (the "Business"); provided, however, that
the Business shall not include (A) services for loading, removal and
transportation to an off-site treatment, storage or disposal facility of
Contaminants which have already been staged or prepared (in drum, bulk or
otherwise) for such removal and transportation, (B) services typically
performed in the industrial cleaning and maintenance services businesses
or nuclear service business at operating chemical, industrial,
manufacturing, refining, utility or other operating facilities in
connection with the servicing for, or support of such facilities (e.g.:
routine maintenance; industrial cleaning; special services such as filter
pressing, centrifuging and drying of various wastes; cleaning of lagoons
and tanks for re-use; packaging of wastes related to these services for
storage on-site or shipment off-site); (C) services performed in the
decontamination or decommissioning of nuclear power plants in the electric
utilities industry; (D) services provided in-plant for the analysis,
management and staging for

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transportation or disposal at an off-site treatment, or disposal facility
of Contaminants which are generated in the ordinary course of an on-going
manufacturing or industrial process; (E) services provided by a WMX
Affiliate incidental to the on-going operations of a treatment, storage or
disposal facility owned or operated by such WMX Affiliate in the ordinary
course of the business of such facility, (F) engineering, design, program
management, or construction management services typically performed in
connection with an environmental restoration program; (G) on-site
environmental remediation services which are provided by a contractor or
other person not directly or indirectly affiliated with a WMX Affiliate
under a subcontract or teaming arrangement with a WMX Affiliate, provided
that Rust has complied with its obligations under Section 3.3 hereof with
respect to such services; or (H) on site environmental remediation
services in connection with and incidental to services of the type
described in (A) and (B) above; provided that the price for such
remediation services (excluding the price of waste loading, removal,
transportation and disposal) does not exceed $100,000 per project.

(b) Notwithstanding anything in this Agreement to the contrary,
neither WMX nor any WMX Affiliate shall be prohibited from acquiring the
capital stock or assets of any other entity unless such entity's
predominate business is the Business and provided, further, that if WMX or
the WMX Affiliate shall acquire the capital stock or assets of any other
entity engaged in the Business, WMX or the WMX Affiliate shall promptly
offer to sell such Business to OHM at a price equal to the fair market
value thereof. WMX or the WMX Affiliate shall make such offer by giving
OHM prompt written notice of such offer, disclosing all material
information pertaining to such Business, the fair market value thereof,
and such other terms and conditions to such offer as may be reasonable.
OHM shall have a period of 60 days after receipt of such notice to elect
to purchase such Business at such price and on such terms and conditions,
which election shall be in writing and shall be signed by a duly
authorized officer of OHM. Should OHM fail to purchase such Business, WMX
or the WMX Affiliate shall nevertheless be required to dispose of such
Business.

(c) Notwithstanding the failure by OHM to purchase any Business
pursuant to the preceding paragraph, prior to selling any Business to any
third party, WMX or the WMX Affiliate shall give OHM prompt written notice
of any such proposed sale or other disposition of a Business, disclosing
all material information pertaining to such third party sale, including,
without limitation, the price and other terms and conditions of such sale,
and offering to sell such Business to OHM for such price and on such terms
and conditions. OHM may elect within 15 days following receipt

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of such notice (the "Option Period") to purchase such Business at such
price and on such terms and conditions as were contemplated in the third
party sale, which election shall be in writing and shall be signed by a
duly authorized officer of OHM. If OHM shall not have exercised its right
to purchase in accordance with the preceding sentence, WMX or the WMX
Affiliate may, within 90 days of the expiration of the Option Period,
enter into a binding agreement to sell or otherwise dispose of such
Business to (but only to) the person who was the subject of the third
party sale upon (but only upon) the material terms and conditions offered
to OHM pursuant to the preceding sentence. If for any reason such a
binding agreement shall not have been entered into within such 90-day
period or the transaction contemplated thereby shall not be consummated,
WMX or the WMX Affiliate shall be obligated to offer OHM the opportunity
to purchase such Business in accordance with the terms of this paragraph
before making any sale or disposition of such Business, whether to the
same third party or to a different third party and whether on the same
material terms and conditions or on different terms and conditions.

(d) Neither WMX nor the WMX Affiliates shall, for a period
commencing from the date of this Agreement and ending two years following
the Closing Date, solicit, employ or offer employment to or agree to
employ any employee of the Division other than an employee of the Division
who is not offered employment by OHM or its subsidiaries immediately
following the Closing.

3.2 BLUE PENCIL PROVISIONS. If any provision of Section 3.1, as applied
to any party or to any circumstances, is adjudged by a court to be invalid or
unenforceable, the same will in no way affect any other provision of the said
Section 3.1 or any other part of this Agreement, the application of such
provision in any other circumstances, or the validity or enforceability of this
Agreement. If any such provision, or any part thereof, is held to be
unenforceable because of the duration of such provision or the area covered
thereby, the parties agree that the court making such determination will have
the power to reduce the duration and/or area of such provision, and/or to
delete specific words or phrases, and in its reduced form such provision will
then be enforceable and will be enforced. Upon breach of any provision of
Section 3.1, the other party hereto will be entitled to injunctive relief,
since the remedy at law would be inadequate and insufficient. In addition,
such other party will be entitled to such damages as it can show it has
sustained by reason of such breach.

3.3 PREFERRED PROVIDER STATUS. For so long as the WMX Group owns at
least 20% of the outstanding Voting Securities, WMX, on behalf of itself and
the WMX Affiliates, agrees and agrees to cause the WMX Affiliates to agree that
OHM will be a Preferred Provider with respect to any and all services coming

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within the scope of the Business, as defined in Section 3.1 (whether as prime
contractor, subcontractor or otherwise) that WMX or the WMX Affiliates contract
for, control, direct, influence or subcontract, provided it is not violative of
law, rule, regulation or other contractual obligations. Rust shall provide OHM
and its subsidiaries access to and the services of its engineering, consulting,
design and project management services personnel on the same basis and at the
same cost as Rust provides them to the WMX Affiliates. For so long as the WMX
Group owns at least 20% of the outstanding Voting Securities, OHM, on behalf of
itself and its subsidiaries (the "OHM Affiliates"), agrees and agrees to cause
the OHM Affiliates to agree, that WMX Affiliates will be a Preferred Provider
with respect to all engineering, consulting and design, environmental and waste
management services commonly provided by the WMX Affiliates (whether as prime
contractor, subcontractor or otherwise) that OHM or the OHM Affiliates contract
for, control, direct, influence or subcontract, provided it is not violative of
law, rule, regulation or other contractual obligations. As used herein, the
term "Preferred Provider" means that the person purchasing or contracting for
such services (the "Purchaser") shall not purchase such services from any third
party unless the Purchaser has reasonably determined in good faith that the
overall value, in terms of price, terms and conditions, quality, documentation,
service and other matters, of such services from parties other than the
Preferred Provider significantly exceeds the value of such services available
from the Preferred Provider, provided that the Purchaser shall be excused from
the foregoing obligation with respect to any specific provision of services if
(i) the Preferred Provider has failed to respond within a reasonable period of
time to a request by the Purchaser for a price quotation or other terms or
information with respect to the services or has failed to commit to provide
such services within the time period in which the Purchaser shall have required
such services to be provided, which time period, in either case, shall not be
substantially shorter than the time period that the Purchaser would have
required from or allowed to a third party or, if the Preferred Provider shall
have made no such commitment, within a reasonable period of time after the
Purchaser has requested them, or (ii) in the Purchaser's reasonable, good faith
judgment, the particular project or product is not appropriate for the
Preferred Provider in light of the nature of the Preferred Provider's expertise
and experience with similar projects.

4.0 REPRESENTATIONS AND WARRANTIES OF OHM.

OHM represents and warrants to Rust and WMX as follows:

4.1 CORPORATE EXISTENCE, DUE AUTHORIZATION, AND EXECUTION OF OHM. OHM is
a corporation duly organized, validly existing, and in good standing under the
laws of the State of Ohio, with full corporate power and authority to execute
and deliver this Agreement and all other agreements to be delivered by OHM, to

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perform OHM's obligations hereunder and thereunder, and to consummate the
transactions contemplated hereby and thereby. This Agreement and each of the
other agreements contemplated hereby and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate action of OHM. This Agreement has been duly executed and delivered by
OHM and will, after approval by its shareholders, constitute a legal, valid,
and binding obligation of OHM, enforceable against OHM in accordance with its
terms.

4.2 NO CONFLICTS. The execution and delivery of this Agreement and each
of the other agreements contemplated hereby and the consummation of the
transactions contemplated hereby and thereby will not conflict with, or result
in any violation of or default under, any provision of the Restated Articles of
Incorporation or Regulations of OHM, or of any agreement or instrument binding
upon OHM.

5.0 REPRESENTATIONS AND WARRANTIES OF WMX AND RUST.

5.1 CORPORATE EXISTENCE, DUE AUTHORIZATION, AND EXECUTION OF RUST. Rust
and WMX are corporations duly organized, validly existing, and in good standing
under the laws of the State of Delaware, with full corporate power and
authority to execute and deliver this Agreement and all other agreements to be
delivered by them, to perform their obligations hereunder and thereunder, and
to consummate the transactions contemplated hereby and thereby. This Agreement
and each of the other agreements contemplated hereby and the consummation of
the transactions contemplated hereby and thereby will, at the Closing, have
been duly authorized by all necessary corporate action of Rust and WMX,
respectively. This Agreement has been duly executed and delivered by Rust and
WMX, respectively, and constitutes a legal, valid, and binding obligation of
each of them, enforceable against each of them in accordance with its terms.

5.2 NO CONFLICTS. The execution and delivery of this Agreement and each
of the other agreements contemplated hereby and the consummation of the
transactions contemplated hereby and thereby will not conflict with, or result
in any violation of or default under, any provision of the Certificate of
Incorporation or By-Laws of Rust or WMX, or of any agreement or instrument
binding upon Rust, WMX or their affiliates.

6.0 MISCELLANEOUS.

6.1 SPECIFIC ENFORCEMENT. The parties acknowledge and agree that OHM
would be irreparably damaged in the event any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that OHM shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to
specifically enforce this Agreement and the terms and provisions thereof in any
action instituted in any court of the United

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States or any state thereof having subject matter jurisdiction, in addition to
any other remedy to which OHM may be entitled, at law or in equity.

6.2 MODIFICATION; WAIVER. This Agreement may be modified in any manner
and at any time by written instrument executed by the parties hereto. Any of
the terms, covenants, and conditions of this Agreement may be waived at any
time by the party entitled to the benefit of such term, covenant, or condition.

6.3 NOTICES. All notices, requests, demands, claims, and other
communications hereunder shall be in writing and shall be delivered by
certified or registered mail (first class postage pre-paid), guaranteed
overnight delivery, or facsimile transmission:

(a) if to OHM to:
16406 U.S. Route 224 East
Findlay, Ohio 45840
Attention: General Counsel

Telecopy: (419) 424-4985

(b) if to Rust to:

100 Corporate Parkway
Birmingham, Alabama 35242
Attention: General Counsel

Telecopy: (205) 995-7914

3003 Butterfield Road
Oak Brook, Illinois 60521
Attention: General Counsel

Telecopy: (708) 218-1553

(d) or, in each case, at such other address or to such other person
as may be specified in writing to the other party.

6.4 PARTIES IN INTEREST; ASSIGNMENT. This Agreement and all the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, but neither this
Agreement nor any of the rights, interests, and obligations hereunder shall be
assigned by any of the parties hereto without the prior written consent of the
other parties hereto. Nothing in this Agreement, whether expressed or implied,
shall be construed to give any person other than the parties hereto any legal
or equitable right, remedy, or claim under or in respect of this Agreement.

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6.5 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall constitute one and the same instrument.

6.6 HEADINGS. The article and section headings of this Agreement are for
convenience of reference only and shall not be deemed to alter or affect the
meaning or interpretation of any provisions hereof.

6.7 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Ohio applicable to contracts
made and to be performed therein.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.

OHM CORPORATION

By: __________________________
Title:

RUST INTERNATIONAL INC.

By: __________________________
Title:

WMX TECHNOLOGIES, INC.

By: __________________________
Title:

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SCHEDULE 9.10
MERGER AGREEMENT

THIS MERGER AGREEMENT ("Merger Agreement") dated as of
___________________, 1995 by and between Rust Environmental Inc., a Delaware
corporation ("Environmental") and ________________, a wholly-owned subsidiary
("Acquisition") of OHM Corporation, an Ohio corporation ("OHM") (Environmental
and Acquisition are hereinafter sometimes collectively referred to as the
"Constituent Corporations").

WHEREAS, Environmental is a newly formed corporation owned by Rust
Remedial Services Inc. a Delaware corporation ("Remedial"), Enclean
Environmental Services Group, Inc., a Delaware corporation ("Enclean"), and
Rust Federal Services Inc., a Delaware corporation ("RFS"). Acquisition is a
newly formed Ohio corporation and wholly-owned subsidiary of OHM.

WHEREAS, the authorized capital stock of Acquisition consists of 100
shares of common stock, par value $1.00 per share, and all shares issued and
outstanding are owned by OHM. The authorized capital stock of Environmental
consists of 1,000 shares of common stock, par value $1.00.

WHEREAS, In connection with the Agreement and Plan of Reorganization
dated as of December 5, 1994 among OHM, Remedial, Enclean, Environmental and
Rust International Inc., a Delaware corporation ("Rust") (the "Agreement"),
Remedial, Enclean, RFS and OHM desire to effect a merger of Environmental with
and into Acquisition pursuant to the provisions of the General Corporation Law
of the State of Delaware (the "DGCL") and the General Corporation Law of the
State of Ohio (the "OGCL").

WHEREAS, the respective Boards of Directors of Environmental and
Acquisition have determined that it is advisable and in the best interests of
each corporation that Environmental merge with and into Acquisition upon the
terms and subject to the conditions provided herein.

WHEREAS, the Board of Directors of Acquisition has, by resolution duly
adopted, approved this Merger Agreement and directed that it be executed by the
undersigned officers.

WHEREAS, the Board of Directors of Environmental has, by resolution
duly adopted, approved this Merger Agreement and directed that it be executed
by the undersigned officers and that it be submitted to a vote of
Environmental's stockholders.

WHEREAS, In consideration of the mutual agreements contained herein,
the parties agree that Environmental shall be merged with and into Acquisition
and that the terms and conditions of the merger, the mode of carrying the
merger into effect, the manner of
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converting the shares of the Constituent Corporations and certain other
provisions relating thereto shall be as hereinafter set forth.

ARTICLE I

THE MERGER

1.01 SURVIVING CORPORATION. Subject to the terms and provisions of
this Merger Agreement, and in accordance with the DGCL and the OGCL, at the
Time of Merger (as defined in Section 1.07 hereof) Environmental shall be
merged with and into Acquisition (the "Merger"). Acquisition shall be the
surviving corporation (hereinafter sometimes called the "Surviving
Corporation") of the Merger and shall continue its corporate existence under
the laws of the State of Ohio. The name, identity, existence, rights,
privileges, powers, franchises, properties and assets of Acquisition shall
continue unaffected and unimpaired by the Merger. At the Effective Time, the
identity and separate existence of Environmental shall cease, and all of the
rights, privileges, powers, franchises, properties and assets of Environmental
shall be vested in Acquisition.

1.02 EFFECT OF THE MERGER. At the Effective Time, the Merger shall
have the effects provided for herein and in Section 1701.82 of the OGCL and
Section 259 of the DGCL.

1.03 ARTICLES OF INCORPORATION. As of the Time of Merger, the
Articles of Incorporation of Acquisition, as in effect immediately prior to the
Time of Merger, shall be the Articles of Incorporation of the Surviving
Corporation until thereafter duly altered, amended or repealed in accordance
with the provisions thereof and applicable law.

1.04 REGULATIONS. As of the Time of Merger the Regulations of
Acquisition, as in effect immediately prior to the Time of Merger, shall be the
Regulations of the Surviving Corporation until thereafter duly altered, amended
or repealed in accordance with the provisions thereof, the Articles of
Incorporation of the Surviving Corporation and applicable law.

1.05 DIRECTORS OF THE SURVIVING CORPORATION. At the Time of
Merger, each person who is a director of Acquisition immediately prior to the
Time of Merger shall become a director of the Surviving Corporation and each
such person shall serve as a director of the Surviving Corporation for the
balance of the term for which such person was elected a director of Acquisition
and until his successor is duly elected and qualified or until his earlier
death, resignation or removal in the manner provided in the Regulations or
Articles of Incorporation of Surviving Corporation and the laws of the State of
Ohio.

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1.06 OFFICERS OF THE SURVIVING CORPORATION. At the Time of Merger,
each person who is an officer of Acquisition immediately prior to the Time of
Merger shall become an officer of the Surviving Corporation with each such
person to hold the same office in the Surviving Corporation as he held in
Acquisition immediately prior to the Time of Merger.

1.07 TIME OF MERGER. The Merger shall become effective in
accordance with the provisions of Section 1701.81 of the OGCL and Section 253
of the DGCL, upon the later to occur of (a) completion of the filing of a
certificate of merger with the Secretary of State of the State of Ohio, and (b)
the filing of a certificate of ownership and merger with the Secretary of State
of the State of Delaware. The date and time when the Merger shall become
effective is herein referred to as the "Time of Merger."

1.08 ADDITIONAL ACTIONS. If, at any time after the Time of Merger,
the Surviving Corporation shall consider or be advised that any further
assignments or assurances in law or any other acts are necessary or desirable
(a) to vest, perfect or confirm, of record or otherwise, in the Surviving
Corporation, title to and possession of any property or right of Environmental
acquired or to be acquired by reason of, or as a result of, the Merger, or (b)
otherwise to carry out the purpose of this Merger Agreement, Environmental and
its proper officers and directors shall be deemed to have granted hereby to the
Surviving Corporation an irrevocable power of attorney to execute and deliver
all such proper deeds, assignments and assurances in law and to do all acts
necessary or proper to vest, perfect or confirm title to and the possession of
such property or rights in the Surviving Corporation and otherwise to carry out
the purposes of this Merger Agreement; and the proper officers and directors of
the Surviving Corporation are hereby fully authorized in the name of
Acquisition or otherwise to take any and all such action.

ARTICLE II

MANNER, BASIS AND EFFECT OF CONVERTING SHARES

2.01 CONVERSION OF SHARES. At the Time of Merger:

(a) each share of Acquisition common stock ("Acquisition
Common Stock") issued and outstanding immediately prior to the Time of
Merger shall, by virtue of the Merger and without any action on the
part of the holder thereof, continue as shares of Common Stock of the
Surviving Corporation;

(b) each share of Environmental common stock ("Environmental
Common Stock") issued and outstanding immediately prior to the Time of
Merger shall be converted, by virtue of the Merger and without any
action on the part of the holder thereof, into the right to receive
106,380 shares of OHM Common Stock (the "Merger Consideration");

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2.02 EFFECT OF CONVERSION. At and after the Time of Merger, until
so surrendered, each share certificate that immediately prior to the Time of
Merger represented an outstanding share of Environmental Common Stock shall be
deemed for all corporate purposes to evidence the right to receive the Merger
Consideration into which such shares are converted pursuant to section 2.01(b)
of this Merger Agreement.

ARTICLE III

APPROVAL; AMENDMENT; TERMINATION; MISCELLANEOUS

3.01 APPROVAL. This Merger Agreement shall be submitted for
approval by the stockholders of Environmental.

3.02 AMENDMENT. Subject to applicable law, this Merger Agreement
may be amended, modified or supplemented by written agreement of the
Constituent Corporations at any time prior to the Time of Merger, except that
after the approval contemplated by Section 3.01 hereof, there shall be no
amendments that would (a) alter or change the amount or kind of shares to be
received by stockholders in the Merger, (b) alter or change any term of the
Articles of Incorporation or Regulations of Acquisition pursuant to Section
1.03 hereof, or (c) alter or change any of the terms and conditions of this
Merger Agreement if such alteration or change would adversely affect the
holders of any class of stock of either of the Constituent Corporations.

3.03 ABANDONMENT. At any time prior to the Effective Time, this
Merger Agreement may be terminated and the Merger may be abandoned by the Board
of Directors of either Acquisition or Environmental, or both, notwithstanding
approval of this Merger Agreement by the sole shareholder of Acquisition or the
stockholders of Environmental, or both.

3.04 COUNTERPARTS. This Merger Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original and the same
agreement.

3.05 STATUTORY AGENT IN OHIO. The name and address of the
statutory agent in Ohio upon whom any process, notice or demand against
Environmental or the Surviving Corporation may be served is:

Randall M. Walters
OHM CORPORATION
16406 U.S. Route 224 East
Findlay, Ohio 45840

3.06 DESIGNATED AGENT IN DELAWARE. The Surviving Corporation
agrees that it may be served with process in the State of Delaware in any
proceeding for enforcement of any obligation of Environmental, as well as for
enforcement of any obligation of the

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<PAGE> 185
Surviving Corporation arising from the Merger, and the Surviving Corporation
irrevocably appoints the Delaware Secretary of State as its agent to accept
service of process in any such suit or other proceedings; a copy of such
process shall be mailed by the Delaware Secretary of State to:

Randall M. Walters
OHM CORPORATION
16406 U.S. Route 224 East
Findlay, Ohio 45840

IN WITNESS WHEREOF, Acquisition and Environmental have caused this
Merger Agreement to be signed by their respective duly authorized officers as
of the date first above written.

[ACQUISITION]
ATTEST: (an Ohio corporation)

By: By:
-------------------- --------------------

RUST ENVIRONMENTAL INC.
ATTEST: (a Delaware corporation)

By: By:
-------------------- --------------------

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<PAGE> 186
APPENDIX C

OHM CORPORATION
DIRECTORS' DEFERRED FEE PLAN

ARTICLE I
PURPOSE

The purpose of the OHM Corporation Directors' Deferred Fee Plan (the
"Plan") is to provide benefits upon termination of service or death for
Directors of OHM Corporation or their beneficiaries. It is intended that the
Plan will assist in attracting and retaining qualified individuals to serve as
Directors.

ARTICLE II
DEFINITIONS

For the purposes of the Plan, the following words and phrases shall have
the meanings indicated:

2.1 BENEFICIARY. Beneficiary means the person or persons designated or
deemed to be designated by the Participant pursuant to Article VII to receive
benefits payable under the Plan in the event of the Participant's death.

2.2 BOARD. Board means the Board of Directors of the Company.

2.3 COMMITTEE. Committee has the meaning set forth in Section 8.1 hereof.

2.4 COMMON STOCK. Common Stock means the Company's common stock, par
value $.10 per share, or such other security as may at the applicable time be
represented by the Units.

2.5 COMPANY. Company means OHM Corporation, an Ohio corporation, and any
successor thereto.

2.6 DECLARED RATE. Declared Rate means the interest rate payable on
1-year U.S. Treasury Bills issued on the specified date or, if not then issued,
on the next date of issue, or such other rate as may from time to time be
established by the Committee; provided, however that in no event shall the
Declared Rate be more than five percent (5%) higher than the rate payable on
such Bills.

2.7 DEFERRAL BENEFIT. Deferral Benefit means the benefit payable to a
Participant or his or her Beneficiary pursuant to Article VI hereof.

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2.8 DEFERRED BENEFIT ACCOUNT. Deferred Benefit Account means the account
maintained on the books of the Company for each Participant pursuant to Article
V hereof.

2.9 DIRECTOR. Director means a member of the Board.

2.10 FEE. Fee or Fees means any compensation payable in cash to a
Director for his or her services as a member of the Board or any Committee
thereof.

2.11 MARKET VALUE. Market Value means the closing price of the Common
Stock on the New York Stock Exchange on the specified date (or, if Common Stock
was not traded on such date, on the next preceding date on which it was traded)
as reported in The Wall Street Journal.

2.12 PARTICIPANT. Participant means any eligible Director who elects to
participate by filing a Participation Agreement as provided in Section 3.2
hereof.

2.13 PARTICIPATION AGREEMENT. Participant Agreement means the agreement
filed by a Participant, in the form prescribed by the Committee, pursuant to
Section 3.2 hereof.

2.14 PLAN YEAR. Plan Year means a 12-month period commencing January 1 and
ending the following December 31, except that the first Plan Year shall
commence January 1, 1995 and end December 31, 1995.

2.15 RULE 16B-3. Rule 16b-3 means Rule 16b-3 under the Securities
Exchange Act of 1934 or any successor rule.

2.16 UNIT. Unit means an accounting unit equal in value to one share of
Common Stock. The maximum number of Units that may be allocated to the
Deferred Benefit Accounts of all participants under the Plan in the aggregate
shall be 100,000 Units. Such maximum number and the number of Units included
in any Deferred Benefit Account shall be adjusted as appropriate to reflect any
stock dividend, stock split, recapitalization, merger or other similar event
affecting the Common Stock.

ARTICLE III
ELIGIBILITY AND PARTICIPATION

3.1 ELIGIBILITY. Eligibility to participate in the Plan is limited to
those Directors who are not employees of the Company or any of its
subsidiaries.

3.2 PARTICIPATION. Participation in the Plan shall be limited to
eligible Directors who elect to participate in the Plan by filing a
Participation Agreement with the Committee. A properly completed and executed
Participation Agreement must be filed on or prior to the December 31
immediately preceding the Plan Year in which the Participant's participation in
the Plan

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<PAGE> 188
will commence, and the election to participate shall be effective on the first
day of the Plan Year following receipt by the Company of the Participation
Agreement. In the event that a Director first becomes eligible to participate
during the course of a Plan Year, such Participation Agreement must be filed no
later than 30 days following election or appointment to the Board, and such
Participation Agreement shall be effective only with regard to Fees earned or
payable following the filing of the Participation Agreement with the Committee.

3.3 TERMINATION OF PARTICIPATION. A Participant may elect to terminate
his or her participation in the Plan by filing a written notice thereof with
the Committee, which termination shall be effective at any time specified by
the Participant in the notice, but not earlier than the first day of the Plan
Year immediately succeeding the Plan Year in which such notice is filed with
the Committee. Amounts credited to such Participant's Deferred Benefit Account
with respect to periods prior to the effective date of such termination shall
continue to be payable pursuant to, and otherwise governed by, the terms of the
Plan.

ARTICLE IV
DEFERRAL OF FEES

4.1 DEFERRAL. A Participant may elect to defer all, or a specified
percentage of his or her Fees, and a Participant may elect to have his or her
deferred Fees credited to his or her Deferred Benefit Account either in dollar
amounts or Units. A Participant may not change the percentage of his or her
Fees to be deferred, or the form in which Fees are to be credited.

4.2 CREDITING OF DEFERRED FEES. Deferred Fees that a Participant elects
to have credited in dollar amounts shall be credited to the Participant's
Deferred Benefit Account as they become payable to the Director. Deferred Fees
payable to a Director during a Plan Year that a Participant elects to have
credited in Units, plus an amount equal to 25% of such Deferred Fees for such
calendar year, shall be credited to the Participant's Deferred Benefit Account
annually after the end of such Plan Year on the basis of the average of the
Market Values of the Common Stock on the last trading day in each calendar
month during such Plan Year.

ARTICLE V
DEFERRED BENEFIT ACCOUNT

5.1 DETERMINATION OF ACCOUNT. On any particular date, a Participant's
Deferred Benefit Account shall consist of the aggregate amount of dollars and
Units credited thereto pursuant to Section 4.2 hereof, plus any interest
credited pursuant to Section 5.2 hereof, plus any dividend equivalents credited
pursuant to Section 5.3 hereof, minus the aggregate amount of distributions, if
any, made from such Deferred Benefit Account.

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<PAGE> 189
5.2 CREDITING OF INTEREST. As of the last day of each Plan Year, each
Deferred Benefit Account to which Fees have been credited in dollar amounts
shall be increased by the amount of interest earned during the Plan Year.
Interest shall be credited at the Declared Rate as of the last day of the Plan
Year based on the average daily balance of the Participant's Deferred Benefit
Account since the beginning of the Plan Year, but after the Deferred Benefit
Account has been adjusted for any contributions or distributions to be credited
or deducted for such period. Until a Participant or his or her Beneficiary
receives his or her entire Deferred Benefit Account, the unpaid balance thereof
credited in dollar amounts shall bear interest as provided in this Section 5.2.

5.3 CREDITING OF DIVIDEND EQUIVALENTS. Each Deferred Benefit Account to
which Fees have been credited in Units shall be credited annually after the end
of each Plan Year with additional Units equal in value to the amount of cash
dividends paid by the Company during such Plan Year on Common Stock equivalent
to the average daily balance of Units in such Deferred Benefit Account during
such Plan Year. Such dividend equivalents shall be valued on the basis of the
average Market Value computed pursuant to Section 4.2 hereof. Until a
Participant or his or her Beneficiary receives his or her entire Deferred
Benefit Account, the unpaid balance thereof credited in Units shall earn
dividend equivalents as provided in this Section 5.3.

5.4 STATEMENT OF ACCOUNTS. The Committee shall provide to each
Participant, within 120 days after the close of each Plan Year, a statement
setting forth the balance of such Participant's Deferred Benefit Account as of
the last day of the preceding Plan Year and showing all adjustments made
thereto during such Plan Year.

5.5 VESTING OF DEFERRED BENEFIT ACCOUNT. A Participant shall be 100
percent vested in his or her Deferred Benefit Account at all times.

ARTICLE VI
PAYMENT OF BENEFITS

6.1 TERMINATION OF SERVICE AS A DIRECTOR OR DEATH. Upon (i) the
termination of service of the Participant as a Director of the Company, for any
reason or (ii) if the Participant shall so elect, only upon his or her death,
the Company shall pay to the Participant or his Beneficiary, as the case may
be, a Deferral Benefit equal to the balance of his or her Deferred Benefit
Account, less any amounts previously distributed.

6.2 FORM OF PAYMENT. Amounts credited to the Deferred Benefit Account of
a Participant in dollars shall be paid in cash, and amounts credited in Units
shall be paid in full shares of Common Stock (with any fractional share to be
paid in cash based on the then current Market Value). The Deferral Benefit

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<PAGE> 190
shall be paid in one of the following forms, as elected by the Participant in
his or her Participant Agreement:

(a) Equal annual installments over a period of 5 years (together, in
the case of deferred compensation credited in dollar amounts, with
interest thereon credited after the payment commencement date pursuant to
Section 5.2 hereof and, in the case of deferred compensation credited in
Units, with dividend equivalents thereon credited after the payment
commencement date pursuant to Section 5.3 hereof).

(b) A lump sum.

For the purposes of this Section 6.2, each distribution of Common Stock
from Deferred Benefit Accounts including Units shall be made on the basis of
one share of Common Stock for each Unit.

6.3 COMMENCEMENT OF PAYMENTS. Commencement of payments under Section 6.1
hereof shall begin within 60 days following receipt of notice by the Committee
of an event which entitles a Participant (or a Beneficiary) to payments under
the Plan, or at such earlier date as may be determined by the Committee;
provided, however, that payments to be made to a former Director in Common
Stock during his or her lifetime shall not commence until 6 months after he or
she has ceased to be a Director.

ARTICLE VII
BENEFICIARY DESIGNATION

7.1 BENEFICIARY DESIGNATION. Each Participant shall have the right, at
any time, to designate any person or persons as his Beneficiary to whom payment
under the Plan shall be made in the event of his or her death prior to complete
distribution to the Participant of his or her Deferral Benefit. Any
Beneficiary designation shall be made in a written instrument filed with the
Committee and shall be effective only when received in writing by the
Committee.

7.2 AMENDMENTS. Any Beneficiary designation may be changed by a
Participant by the filing of a new Beneficiary designation, which will cancel
all Beneficiary designations previously filed.

7.3 NO DESIGNATION. If a Participant fails to designate a Beneficiary as
provided above, or if all designated Beneficiaries predecease the Participant,
then the Participant's designated Beneficiary shall be deemed to be the
Participant's estate.

7.4 EFFECT OF PAYMENT. Payment to a Participant's Beneficiary (or, upon
the death of a Beneficiary, to his or her

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<PAGE> 191
estate) shall completely discharge the Company's obligations under the Plan.

ARTICLE VIII
ADMINISTRATION

8.1 COMMITTEE; DUTIES. The administrative committee for the Plan (the
"Committee") shall consist of the Chairman of the Board (provided he is not a
nonemployee Director) and two Company officers or Directors who are not
nonemployee Directors who shall be appointed by the Chairman of the Board. The
Committee shall supervise the administration of the Plan, may from time to time
adopt procedures governing the Plan and shall have authority to give
interpretive rulings with respect to the Plan.

8.2 AGENTS. The Committee may appoint an individual, who may be an
employee of the Company, to be the Committee's agent with respect to the
day-to-day administration of the Plan. In addition, the Committee may, from
time to time, employ other agents and delegate to them such administrative
duties as it sees fit, and may from time to time consult with counsel who may
be counsel to the Company.

8.3 BINDING EFFECT OF DECISIONS. Any decision or action of the Committee
with respect to any questions arising out of or in connection with the
administration, interpretation and application of the Plan shall be final and
binding upon all persons having any interest in the Plan.

8.4 INDEMNITY OF COMMITTEE. The Company shall indemnify the members of
the Committee against claims, loss, damage, expense and liability arising from
any action or failure to act with respect to the Plan to the extent provided in
the Regulations of the Company and any applicable indemnification agreement
between the Company and such member.

ARTICLE IX
AMENDMENT AND TERMINATION OF PLAN

The Board may at any time amend, suspend, terminate or reinstate any or
all of the provisions of the Plan, provided that no such amendment, suspension
or termination may adversely affect any Participant's Deferred Benefit Account
as it existed as of the effective date of such amendment, suspension or
termination without such Participant's consent and provided further that no
amendment or modification shall be made more than once every six months, other
than to comport with changes in the Internal Revenue Code, the Employment
Retirement Security Act, or the rules promulgated thereunder. No amendment
shall become effective without approval by all Participants if such amendment
would cause transactions under the Plan to cease to be exempt under Rule 16b-3.

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<PAGE> 192
ARTICLE X
MISCELLANEOUS

10.1 FUNDING. Neither Participants, nor their Beneficiaries, nor their
heirs, successors or assigns, shall have any secured interest or claim in any
property or assets of the Company. The Company's obligation under the Plan
shall be merely that of an unfunded and unsecured promise of the Company to pay
money in the future. It is the intention of the Company that the Plan be
unfunded for tax purposes and for purposes of Title I or ERISA. The Company
may create a trust to hold funds, Common Stock or other securities to be used
in payment of its obligations under the Plan, and may fund such trust;
provided, however, that any funds contained therein shall remain liable for the
claims of the Company's general creditors.

10.2 NON-ASSIGNABILITY. No right or interest under the Plan of a
Participant or his or her Beneficiary (or any person claiming through or under
any of them), shall be (i) assignable or transferable in any manner, (ii)
subject to alienation, anticipation, sale, pledge, encumbrance, attachment,
garnishment or other legal powers or (iii) in any manner liable for or subject
to the debts or liabilities of the Participant or Beneficiary. If any
Participant or Beneficiary (other than the surviving spouse of any deceased
Participant) shall attempt to or shall transfer, assign, alienate, anticipate,
sell, pledge or otherwise encumber his or her benefits hereunder or any part
thereof, or if by reason of his or her bankruptcy or other event happening at
any time such benefits would devolve upon anyone else or would not be enjoyed
by him or her, then the Committee, in its discretion, may terminate his or her
interest in any such benefit to the extent the Committee consider necessary or
advisable to prevent or limit the effects of such occurrence. Termination
shall be effected by filing a written "termination declaration" with the
Secretary of the Company and making reasonable efforts to deliver a copy to the
Participant or Beneficiary whose interest is adversely affected (the
"Terminated Participant").

As long as the Terminated Participant is alive, any benefits affected by
the termination shall be retained by the Company and, in the Committee's sole
and absolute judgment, may be paid to or expended for the benefit of the
Terminated Participant, his or her spouse, his or her children or any other
person or persons in fact dependent upon him or her in such a manner as the
Committee shall deem proper. Upon the death of the Terminated Participant, all
benefits withheld from him or her and not paid to others in accordance with the
preceding sentence shall be disposed of according to the provisions of the Plan
that would apply if he or she died prior to the time that all benefits to which
he or she was entitled were paid to him or her.

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<PAGE> 193
10.3 CAPTIONS. The captions contained herein are for convenience only and
shall not control or affect the meaning or construction hereof.

10.4 GOVERNING LAW. The provisions of the Plan shall be construed and
interpreted according to the internal substantive laws of the State of Ohio.

10.5 SUCCESSORS. The provisions of the Plan shall bind and inure to the
benefit of the Company and its successors and assigns. The term successors as
used herein shall include any corporate or other business entity which shall,
whether by merger, consolidation, purchase or otherwise, acquire all or
substantially all of the business and assets of the Company and successors of
any such corporation or other business entity.

10.6 EFFECTIVE DATE. The Plan shall be effective on the first day of the
first Plan Year, subject to approval by the shareholders of the Company.

10.7 RIGHT TO CONTINUED SERVICE. Nothing contained herein shall be
construed to confer upon any Director the right to continue to serve as a
Director of the Company or in any other capacity.

10.8 RULE 16B-3. This Plan is intended to comply with Rule 16b-3 as in
effect prior to May 1, 1991. If at any time Rule 16b-3 as effective on May 1,
1991 or at any later date shall become applicable to the Plan, (a) if necessary
for acquisition of Units under the Plan to continue to be exempt under Rule
16b-3, no election to have Deferred Fees credited to Units shall become
effective pursuant to Section 4.2 hereof until 6 months after such election is
made and (b) the Committee may make such other changes in the terms or
operation of the Plan as may then be necessary or appropriate to comply with
such Rule, including, without limitation, by eliminating any restriction
originally included in the Plan to comply with Rule 16b-3 that may no longer be
required.

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<PAGE> 194

Exhibit Index

Exhibits and Reports

(1) The following Exhibits are included herein:

--Exhibit 27. Financial Data Schedule

<PAGE> 195

OHM CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS, MAY 11, 1995

The undersigned hereby appoints each of Pamela K.M. Beall and
P Randall M. Walters as proxies with full power of substitution, and
hereby authorizes each of them to present and vote, as designated on
the reverse side of this card, all the shares of the Common Stock,
$0.10 par value, held of record on March 31, 1995 by the
R undersigned in OHM CORPORATION, at the Annual Meeting of
Shareholders to be held on May 11, 1995 and at any adjournments
thereof.
O
This proxy is solicited on behalf of the Board of Directors.
When properly executed, it will be voted in the manner directed
X on the reverse side of this card by the undersigned
shareholder; if no direction is made, this proxy will be voted for
Item #1, Item #2 and Item #3.
Y
Date: , 1995

------------------------------

------------------------------
Shareholder Signature

Please sign your name exactly
as it appears at left. In
signing as attorney, executor,
PLEASE MARK, SIGN, DATE AND MAIL THIS trustee or guardian, please
PROXY CARD PROMPTLY, USING THE give full title as such, and
ENCLOSED PREPAID ENVELOPE. if signing for a corporation,
please give your title. When
shares are in the name of more
than one person, each should
sign.

OHM CORPORATION

PROXY
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS #1, #2 AND #3.

1. Election of Directors:

/ / FOR all of the nominees, except vote withheld from those
whose names are entered on the line below:

NOMINEES: Ivan W. Gorr, Charles D. Hollister, Ph.D., James L.
Kirk, Joseph R. Kirk, Richard W. Pogue and Charles W. Schmidt

--------------------------------------------------------------------

/ / WITHHOLD authority to vote for all of the above nominees

2. Approve the issuance of an aggregate of 10,368,000 shares of
Common Stock par value $.10 per share, to Rust International
Inc., a majority-owned subsidiary of WMX Technologies, Inc.,
through the merger of a subsidiary of Rust International Inc.
with and into OHM Remediation Services Corp. pursuant to an
Agreement and Plan of Reorganization.

/ / FOR / / AGAINST / / ABSTAIN

3. Approve the adoption of the OHM Corporation Directors' Deferred
Fee Plan.

/ / FOR / / AGAINST / / ABSTAIN

4. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting or any
adjournment thereof.

BE SURE TO DATE AND SIGN THE REVERSE SIDE OF THIS CARD

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONSOLIDATED BALANCE SHEET AND THE UNAUDITED CONSOLIDATED STATEMENTS
OF INCOME AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<CIK> 0000788964
<NAME> OHM CORPORATION
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 4,930
<SECURITIES> 0
<RECEIVABLES> 178,123
<ALLOWANCES> 26,063
<INVENTORY> 10,099
<CURRENT-ASSETS> 181,330
<PP&E> 95,896
<DEPRECIATION> 38,656
<TOTAL-ASSETS> 272,546
<CURRENT-LIABILITIES> 64,866
<BONDS> 0
<COMMON> 1,584
0
0
<OTHER-SE> 77,892
<TOTAL-LIABILITY-AND-EQUITY> 272,546
<SALES> 0
<TOTAL-REVENUES> 323,381
<CGS> 0
<TOTAL-COSTS> 328,440
<OTHER-EXPENSES> 162
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,177
<INCOME-PRETAX> (14,074)
<INCOME-TAX> (6,458)
<INCOME-CONTINUING> (7,616)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,616)
<EPS-PRIMARY> (0.49)
<EPS-DILUTED> (0.49)

</TABLE>