<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(Pursuant to Section 13(e) of the
Securities Exchange Act of 1934)
ENVIRITE CORPORATION
--------------------
(Name of Issuer)
ENVIRITE CORPORATION
--------------------
(Name of Person(s) Filing Statement)
Common Stock, Par Value $1.00 Per Share
---------------------------------------
(Title of Class Securities)
Common Stock - None
-------------------
(CUSIP Number of Class of Securities)
On Behalf of
Envirite Corporation
Gil C. Tily, Esquire
Dechert Price & Rhoads
Princeton Pike Corporate Center
P.O. Box 5218
Princeton, NJ 08543
(609) 520-3224
_______________________________________________________________________________
(Name, Address and Telephone Number of Persons Authorized to Receive Notices and
Communications on Behalf of Person(s) Filing Statement)
Calculation of Filing Fee
Transaction Amount of Filing Fee
Valuation*
$9,500,000 $1,900
______________________________________________________________________
*Based upon the aggregate maximum amount of cash to be paid
to shareholders pursuant to the offer.
[ ] Check box if any part of the fee is offset as provided by Rule 0-11 (a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid: _______________________________________
Form or Registration No.: _____________________________________
Filing Party: _________________________________________________
Date Filed: ___________________________________________________
<PAGE>
This Rule 13e-4 Transaction Statement (the "Statement") relates to
the offer by Envirite Corporation, a Pennsylvania corporation (the "Company")
to purchase up to $9,500,000 of its outstanding shares of Common Stock, par
value $1.00 per share (the "Shares"), at a price between $8.01 and $8.65 per
Share, net to the seller in cash, upon the terms and subject to the conditions
set forth in the Offer to Purchase being delivered to shareholders on the date
hereof, (the "Offer to Purchase"), and in the related Letter of Transmittal
(which together constitute the "Offer").
ITEM 1. SECURITY AND ISSUER.
(a) The name of the issuer is Envirite Corporation, a Pennsylvania corporation
(the "Company"), which has its principal executive offices at Suite 250, 620
West Germantown Pike, Plymouth Meeting, PA 19462, (telephone number (610)
828-8655).
(b) The class of equity securities to which this Statement relates is the
Common Stock, par value $1.00 per Share. Reference is hereby made to the
information set forth on the cover page and the "Introduction and Summary" of
the Offer to Purchase, which is incorporated herein by reference.
(c) Reference is hereby made to the information set forth in "Purchase Price
for Shares; Special Dividend" and "Purpose of Offer; Certain Effects of the
Offer" of the Offer to Purchase, which is incorporated herein by reference.
(d) Not applicable.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) Reference is hereby made to the information set forth in "Source and
Amount of Funds" of the Offer to Purchase, which is incorporated herein by
reference.
(b) Not applicable.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
(a)-(j) Reference is hereby made to the information set forth in "Purchase
Price for Shares; Special Dividend" and "Purpose of the Offer; Certain Effects
of the Offer" of the Offer to Purchase, which is incorporated herein by
reference. Except as set forth in the Offer to Purchase, the Company has no
present plans or proposals which would relate to, or would result in, any
transaction, change or other occurrence with respect to the
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<PAGE>
Company or any class of its equity securities as is listed in paragraphs (a)
through (j) of Item 3 of Schedule 13E-4.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
Reference is hereby made to the information set forth in "Transactions and
Agreements Concerning the Shares" of the Offer to Purchase, which is
incorporated herein by reference.
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE ISSUER'S SECURITIES.
Reference is hereby made to the information set forth in "Information
Concerning the Company" and "Transactions and Agreements Concerning the
Shares" of the Offer to Purchase, which is incorporated herein by reference.
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
the Company does not intend to hire or compensate any borker, dealer or other
person to make solicitations or recommendations in connection with the Offer.
ITEM 7. FINANCIAL INFORMATION.
(a)-(b) Reference is hereby made to the information set forth in "Certain
Information Concerning the Company" of the Offer to Purchase and Appendix I -
"Financial Information", which is incorporated herein by reference.
ITEM 8. ADDITIONAL INFORMATION.
(a) None.
(b) None.
(c) Not applicable.
(d) None.
(e) Reference is hereby made to the entire text of the Offer to Purchase and
the related Letter of Transmittal, which are incorporated herein by reference.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) -- Form of Offer to Purchase
(a)(2) -- Form of Letter of Transmittal, together with
Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.
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<PAGE>
(b) -- None.
(c) -- None.
(d) -- None.
(e) -- None.
(f) -- None.
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
ENVIRITE CORPORATION
By: /s/ Ron Pirollo
---------------------------
Treasurer
Dated: December 22, 1995
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE*
----------- ----------- -----
(a)(1) -- Offer to Purchase
(a)(2) -- Form of Letter of Transmittal, together with Guidelines for
Certification of Taxpayer Identification Number on Substitute Form
W-9.
(a)(3) -- Form of Notice of Guaranteed Delivery
(b) -- None
(c) -- None
(d) -- None
(e) -- None
(f) -- None
*Page references are to sequentially numbered copy.
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<PAGE>
COMMON STOCK
ENVIRITE CORPORATION
OFFER TO PURCHASE FOR CASH
UP TO $9,500,000 OF ITS OUTSTANDING
SHARES OF COMMON STOCK
------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT,
PHILADELPHIA TIME, ON WEDNESDAY, JANUARY 31, 1996, UNLESS THE
OFFER IS EXTENDED (THE "EXPIRATION DATE")
-------------------------------------------
Envirite Corporation ("Envirite" or the "Company") hereby offers to
purchase from holders of the Company's Common Stock, par value $1.00 per share
(the "Shares") up to $9,500,000 of its outstanding Shares, upon the terms and
subject to the conditions (including the terms and conditions for proration) set
forth in this Offer to Purchase and in the related Letter of Transmittal (which
together constitute the "Offer"). The purchase price to be paid for each Share
purchased by the Company in the Offer (the "Purchase Price") will be between
$8.01 and $8.65 per Share, net to the seller in cash, as calculated by the
Company based upon the actual number of issued and outstanding Shares on the
Expiration Date (after taking into account the issuance of any Shares pursuant
to the conversion of any outstanding Convertible Subordinated Debentures and the
exercise of any stock options).
On December 1, 1995, there were 4,119,263 Shares issued and
outstanding, 1,280,000 Shares reserved for issuance upon conversion of the
Company's $8,000,000 outstanding principal amount of Convertible Subordinated
Debentures (the "Debentures"), and 137,000 Shares reserved for issuance upon
exercise of outstanding stock options (the "Stock Options"). Assuming that all
of the Debentures are converted and the Stock Options are exercised for Shares,
the final Purchase Price would be $8.01 per Share and the Company would be able
to purchase up to 1,186,017 of its outstanding Shares (or 21.4% of the Shares
then outstanding) for the $9,500,000 being offered hereby. If, however, no
Debentures are converted and no Stock Options are exercised, the final Purchase
Price would be $8.65 per Share and the Company would be able to purchase up to
1,098,266 of its outstanding Shares (or 26.7% of the Shares then outstanding).
THE OFFER IS NOT BEING MADE FOR (NOR WILL TENDERS BE ACCEPTED OF) EITHER
THE DEBENTURES OR THE STOCK OPTIONS. HOLDERS OF DEBENTURES OR STOCK OPTIONS WHO
WISH TO PARTICIPATE IN THE OFFER MAY CONVERT SOME OR ALL OF THEIR DEBENTURES OR
EXERCISE SOME OR ALL OF THEIR STOCK OPTIONS FOR SHARES IN ACCORDANCE WITH THEIR
RESPECTIVE TERMS AND THEN CONCURRENTLY TENDER SOME OR ALL OF SUCH SHARES IN
ACCORDANCE WITH THE TERMS OF THIS OFFER. HOLDERS OF DEBENTURES OR STOCK OPTIONS
ARE NOT REQUIRED TO OBTAIN CERTIFICATES FOR SHARES ISSUED UPON CONVERSION OR
EXERCISE BUT MAY INSTEAD MAKE A SINGLE DELIVERY TO THE COMPANY OF THE REQUISITE
NOTICE OF CONVERSION, NOTICE OF EXERCISE, PAYMENT OF THE AGGREGATE EXERCISE
PRICE FOR THE STOCK OPTIONS BEING EXERCISED, DEBENTURE CERTIFICATES, AND LETTER
OF TRANSMITTAL. HOLDERS WHO CONVERT THEIR DEBENTURES INTO SHARES WILL LOSE ALL
PREFERENTIAL RIGHTS AS A SUBORDINATED CREDITOR OF THE COMPANY WITH RESPECT TO
THE DEBENTURES SO CONVERTED, INCLUDING THE RIGHT TO RECEIVE INTEREST AT 8% PER
ANNUM AND THE REPAYMENT OF PRINCIPAL. NO PAYMENT OF INTEREST WILL BE MADE UPON
THE CONVERSION OF ANY DEBENTURES, AND THE HOLDER WILL LOSE ANY RIGHT TO PAYMENT
OF INTEREST ON DEBENTURES SURRENDERED FOR CONVERSION. A CONVERSION OF
DEBENTURES OR EXERCISE OF STOCK OPTIONS FOR SHARES CANNOT BE REVOKED UNDER ANY
CIRCUMSTANCES.
<PAGE>
------------------------------------------
THE OFFER IS NOT CONDITIONED UPON ANY
MINIMUM AGGREGATE NUMBER OF SHARES BEING TENDERED.
------------------------------------------
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION AS
TO WHETHER TO CONVERT ANY DEBENTURES, EXERCISE ANY STOCK OPTIONS OR TO TENDER OR
TO REFRAIN FROM TENDERING SHARES IN THE OFFER. THE COMPANY HAS BEEN ADVISED
THAT ITS DIRECTORS AND EXECUTIVE OFFICERS INTEND TO PARTICIPATE IN THE OFFER
ALTHOUGH NONE OF THEM HAS MADE ANY FINAL DETERMINATION AS TO THE NUMBER OF
SHARES THEY EXPECT TO TENDER PURSUANT TO THE OFFER. EACH HOLDER SHOULD MAKE HIS
OR HER OWN DECISION WHETHER TO TENDER ANY SHARES AND, IF SO, HOW MANY SHARES TO
TENDER.
------------------------------------------
IMPORTANT
Any shareholder desiring to tender all or any portion of his or her Shares
should either (1) complete and sign the Letter of Transmittal (or a facsimile
thereof) in accordance with the instructions in the Letter of Transmittal, mail
or deliver it with the certificates for the Shares and all other required
documents to the Company or (2) request his or her broker, dealer, commercial
bank, trust company or other nominee to effect the transaction. A shareholder
whose Shares are registered in the name of a broker, dealer, commercial bank,
trust company or other nominee should contact such person or institution if he
or she desires to tender such Shares. Any shareholder who desires to tender
Shares and whose certificates for such Shares are not immediately available
should tender such Shares by following the procedures for guaranteed delivery
set forth in the Offer.
Questions and requests for assistance or for additional copies of this
Offer to Purchase and the Letter of Transmittal may be directed to the Company
at the address or numbers set forth below:
Attention: Geoffrey Stengel, Jr. or Robert E. Croner
Envirite Corporation
Suite 250
620 West Germantown Pike
Plymouth Meeting, PA 19462
Toll free telephone (voice mail): (800) 816-1747
Telephone: (610) 828-8655 (Ext. 221 or 208)
Fax: (610) 828-8892
Internet: [email protected]
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------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE
COMPANY AS TO WHETHER SHAREHOLDERS SHOULD TENDER SHARES PURSUANT TO THE OFFER.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF THE COMPANY NOT CONTAINED IN THIS OFFER TO PURCHASE
OR IN THE LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH RECOMMENDATION AND SUCH
INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY.
------------------------------------------
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Section Page
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<S> <C> <C>
1. Terms of the Offer; Proration.......................... 7
2. Procedure for Tendering Shares......................... 8
3. Withdrawal Rights...................................... 11
4. Acceptance for Purchase and Payment.................... 12
5. Certain Conditions of the Offer........................ 12
6. Purchase Price for Shares; Special Dividend............ 13
7. Purpose of the Offer; Certain Effects of the Offer..... 14
8. Source and Amount of Funds............................. 15
9. Certain Information Concerning the Company............. 15
10. Information for Holders of Debentures and Stock Options 26
11. Transaction and Agreements Concerning the Shares....... 28
12. Certain Federal Income Tax Consequences................ 28
13. Extension of Tender Period; Termination; Amendments.... 30
14. Miscellaneous.......................................... 31
</TABLE>
Appendix I (Financial Statements)
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<PAGE>
TO ENVIRITE SHAREHOLDERS:
INTRODUCTION AND SUMMARY
Following the successful completion of the sale by the Company of its
Municipal Services Group in November 1995, the Board of Directors of Envirite
unanimously approved the distribution to shareholders of $19 million of the
proceeds from the sale. The Board has determined that the $19 million
distribution is to be split evenly so that $9.5 million will be used to purchase
outstanding Shares in the Offer described below and $9.5 million will be paid as
a special cash dividend to holders of the Company's Shares after the purchase is
completed.
Accordingly, Envirite hereby offers to purchase from Shareholders up to
$9,500,000 of its outstanding Shares. Envirite invites shareholders to tender
their Shares to the Company at a price of between $8.01 and $8.65 per Share, net
to the seller in cash, upon the terms and subject to the conditions set forth in
this Offer to Purchase and in the related Letter of Transmittal, including the
provisions thereof relating to proration described below. The final Purchase
Price to be paid for each Share properly tendered and accepted for purchase by
the Company in the Offer will be calculated by the Company based upon the actual
number of issued and outstanding Shares on the Expiration Date (after taking
into account the issuance of any Shares pursuant to the conversion of any
outstanding Debentures, or the exercise of any Stock Options).
On December 1, 1995, there were 4,119,263 Shares outstanding, 1,280,000
Shares reserved for issuance upon conversion of the Company's Debentures, and
137,000 Shares reserved for issuance upon exercise of outstanding Stock Options.
Assuming that all of the outstanding Debentures and Stock Options are exchanged
for Shares, the Purchase Price will be $8.01 per Share and an aggregate of
1,186,017 Shares (21.4% of the Shares then outstanding) can be purchased by the
Company. In the alternative, if no Debentures or Stock Options are exchanged
for Shares, the Purchase Price will be $8.65 per Share and an aggregate of
1,098,266 Shares (26.7% of the Shares then outstanding) can be purchased by the
Company.
If the aggregate number of Shares properly tendered and accepted for
purchase by the Company in the Offer is less than or equal to the number of
Shares that may be purchased for $9,500,000 at the final Purchase Price, the
Company will purchase at the final Purchase Price all Shares so tendered.
In the event the aggregate number of Shares properly tendered in the Offer
(and not withdrawn in accordance with the terms hereof) is greater than the
number of Shares that may be purchased for $9,500,000 at the final Purchase
Price, the Company will accept Shares for purchase at the final Purchase Price
in the following order of priority:
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<PAGE>
(a) first, 100% of the Shares properly tendered by shareholders who owned
beneficially in the aggregate 500 or fewer Shares on December 11, 1995 (the
"Record Date"); provided that for shareholders who owned beneficially in the
aggregate 250 or fewer Shares on the Record Date, such shareholders must tender
100% of their Shares if they wish to have any of their Shares purchased by the
Company in the Offer;
(b) second, the first 500 Shares properly tendered by shareholders who
owned beneficially in the aggregate more than 500 Shares on the Record Date; and
(c) third, a pro rata portion of all remaining Shares (not otherwise
purchased pursuant to the foregoing) properly tendered by shareholders. The
proration factor will be calculated based upon the relationship of (1) the
number of Shares which can be purchased by the Company at the final Purchase
Price with the cash remaining after the purchase of Shares under paragraphs (a)
and (b) above, to (2) the total number of remaining Shares properly tendered by
all shareholders not otherwise purchased under paragraphs (a) and (b) above.
Upon the terms and subject to the conditions of the Offer (including
proration), all shareholders who have properly tendered Shares which are
accepted for purchase by the Company will receive the Purchase Price in cash for
all Shares purchased. Any remaining Shares tendered in the Offer which are not
purchased by the Company will be returned to the tendering shareholders.
Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in the Letter of Transmittal, transfer taxes
on the purchase of Shares by the Company pursuant to the Offer.
THE OFFER IS NOT BEING MADE FOR (NOR WILL TENDERS BE ACCEPTED OF) EITHER
THE DEBENTURES OR THE STOCK OPTIONS. HOLDERS OF DEBENTURES OR STOCK OPTIONS WHO
WISH TO PARTICIPATE IN THE OFFER MAY CONVERT SOME OR ALL OF THEIR DEBENTURES OR
EXERCISE SOME OR ALL OF THEIR STOCK OPTIONS FOR SHARES IN ACCORDANCE WITH THEIR
RESPECTIVE TERMS AND THEN CONCURRENTLY TENDER SOME OR ALL OF SUCH SHARES IN
ACCORDANCE WITH THE TERMS OF THIS OFFER. HOLDERS OF DEBENTURES OR STOCK OPTIONS
ARE NOT REQUIRED TO OBTAIN CERTIFICATES FOR SHARES ISSUED UPON CONVERSION OR
EXERCISE BUT MAY INSTEAD MAKE A SINGLE DELIVERY TO THE COMPANY OF THE REQUISITE
NOTICE OF CONVERSION, NOTICE OF EXERCISE, PAYMENT OF THE AGGREGATE EXERCISE
PRICE FOR THE STOCK OPTIONS BEING EXERCISED, DEBENTURE CERTIFICATES, AND LETTER
OF TRANSMITTAL. HOLDERS WHO CONVERT THEIR DEBENTURES INTO SHARES WILL LOSE ALL
PREFERENTIAL RIGHTS AS A SUBORDINATED CREDITOR OF THE COMPANY WITH RESPECT TO
THE DEBENTURES SO CONVERTED, INCLUDING THE RIGHT TO RECEIVE INTEREST AT 8% PER
ANNUM AND THE REPAYMENT OF PRINCIPAL. NO PAYMENT OF INTEREST WILL BE MADE UPON
THE CONVERSION OF ANY DEBENTURES, AND THE HOLDER WILL LOSE ANY RIGHT TO PAYMENT
OF INTEREST ON DEBENTURES SURRENDERED FOR CONVERSION. A CONVERSION OF
DEBENTURES OR EXERCISE OF STOCK OPTIONS FOR SHARES CANNOT BE REVOKED UNDER ANY
CIRCUMSTANCES.
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<PAGE>
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM AGGREGATE NUMBER OF SHARES
BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS
(PLEASE SEE SECTION 5).
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION AS
TO WHETHER TO CONVERT ANY DEBENTURES, EXERCISE ANY STOCK OPTIONS OR TO TENDER OR
TO REFRAIN FROM TENDERING SHARES IN THE OFFER. THE COMPANY HAS BEEN ADVISED
THAT ITS DIRECTORS AND EXECUTIVE OFFICERS INTEND TO PARTICIPATE IN THE OFFER
ALTHOUGH NONE OF THEM HAS MADE ANY FINAL DETERMINATION AS TO THE NUMBER OF
SHARES THEY EXPECT TO TENDER PURSUANT TO THE OFFER. EACH HOLDER SHOULD MAKE HIS
OR HER OWN DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO
TENDER.
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<PAGE>
OFFER
1. TERMS OF THE OFFER; PRORATION.
The Company will, upon the terms and subject to the conditions of the
Offer, purchase up to $9,500,000 of its outstanding Shares as are properly
tendered by the Expiration Date and not withdrawn. The term "Expiration Date"
shall mean 12:00 midnight, Philadelphia time, on Wednesday, January 31, 1996,
unless and until the Company shall have extended the period of time for which
the Offer is open, in which event the term "Expiration Date" shall mean the
latest time and date at which the Offer, as so extended by the Company, shall
expire. For a description of the Company's right to extend the period of time
during which the Offer is open and to terminate or amend the Offer, please see
Section 13.
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM AGGREGATE NUMBER OF SHARES
BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS
(PLEASE SEE SECTION 5).
The Purchase Price to be paid for each Share tendered and purchased in the
Offer will be between $8.01 and $8.65 per Share, net to the seller in cash. The
final Purchase Price within the foregoing range will be calculated by the
Company based upon the actual number of issued and outstanding Shares on the
Expiration Date, after taking into account the issuance of any Shares pursuant
to the conversion of Debentures or exercise of Stock Options. As promptly as
practicable following the Expiration Date, the Company will determine the final
Purchase Price and the number of Shares to be purchased from each tendering
shareholder.
If the aggregate number of Shares properly tendered and accepted for
purchase by the Company in the Offer is less than or equal to the number of
Shares that may be purchased for $9,500,000 at the final Purchase Price, the
Company will purchase at the final Purchase Price all Shares so tendered.
In the event the aggregate number of Shares properly tendered in the Offer
(and not withdrawn in accordance with the terms hereof) is greater than the
number of Shares that may be purchased for $9,500,000 at the final Purchase
Price, the Company will accept Shares for purchase at the final Purchase Price
in the following order of priority:
(a) first, 100% of the Shares properly tendered by shareholders who owned
beneficially in the aggregate 500 or fewer Shares on the Record Date; provided
that for shareholders who owned beneficially in the aggregate 250 or fewer
Shares on the Record Date, such shareholders must tender 100% of their Shares if
they wish to have any of their Shares purchased by the Company in the Offer;
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<PAGE>
(b) second, the first 500 Shares properly tendered by shareholders who
owned beneficially in the aggregate more than 500 Shares on the Record Date; and
(c) third, a pro rata portion of all remaining Shares (not otherwise
purchased pursuant to the foregoing) properly tendered by shareholders. The
proration factor will be calculated based upon the relationship of (1) the
number of Shares which can be purchased by the Company at the final Purchase
Price with the cash remaining after the purchase of Shares under paragraphs (a)
and (b) above, to (2) the total number of remaining Shares properly tendered by
all shareholders not otherwise purchased under paragraphs (a) and (b) above.
For example, assuming that 50% of the outstanding Debentures and Stock
Options are exchanged for Shares and 100% (or 4,827,763) of the then outstanding
Shares are properly tendered on the Expiration Date, a shareholder who tenders
5,000 Shares will receive the final Purchase Price for (a) the initial 500
Shares tendered and (b) a pro rata portion of the remaining 4,500 Shares
tendered.
Any Shares tendered in the Offer which were issued upon the conversion of
Debentures or the exercise of Stock Options held on the Record Date will be
added to a holder's aggregate Shares for purposes of making the foregoing
calculations. In the event that proration of tendered Shares is required, the
Company may delay determination of the final proration factor for ten business
days after the Expiration Date.
2. PROCEDURE FOR TENDERING SHARES.
(a) Proper Tender of Shares. To tender Shares pursuant to the Offer, a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) and any other documents required by the Letter of Transmittal must be
received by the Company at the address set forth on the back cover of this Offer
to Purchase. Also, either the certificates for the Shares to be tendered must
be received by the Company at such address by the Expiration Date, or the
guaranteed delivery procedure described below in (d) must be followed.
In accordance with the Letter of Transmittal, each shareholder desiring to
tender Shares pursuant to the Offer must indicate the total number of Shares
being tendered and deliver stock certificates representing at least the number
of Shares being tendered for purchase.
(b) Signature Guarantees. No signature guarantee is required on the Letter
of Transmittal if the Letter of Transmittal is signed by the registered holder
of the Shares exactly as the name of the registered holder appears on the
certificate (which term, for purposes of this Section 2 includes any participant
in a Book Entry Transfer Facility whose name appears on a security position
listing as the owner of Shares) tendered
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<PAGE>
therewith, and payment is to be made directly to such registered holder, or if
Shares are tendered for the account of a member firm of a registered national
securities exchange, or a commercial bank or trust company having an office,
branch or agency in the United States (each such entity, an "Eligible
Institution"). In all other cases, all signatures on the Letter of Transmittal
must be guaranteed by an Eligible Institution. See Instruction 1 of the Letter
of Transmittal. If a certificate representing Shares is registered in the name
of a person other than the signer of a Letter of Transmittal, or if payment is
to be made, or Shares not purchased or tendered are to be issued, to a person
other than the registered holder, the certificate must be endorsed or
accompanied by an appropriate stock power, in either case signed exactly as the
name of the registered holder appears on the certificate with the signature on
the certificate or stock power guaranteed by an Eligible Institution.
(c) Federal Income Tax Withholding. To prevent United States Federal
income tax backup withholding equal to 31% of the gross payments made to
shareholders pursuant to the Offer, each tendering shareholder must provide the
Company with his or her correct social security or other taxpayer identification
number by completing the Substitute Form W-9 included in the Letter of
Transmittal or provide evidence satisfactory to the Company that such
shareholder is exempt from such backup withholding requirements. Foreign
shareholders are required to submit Form W-8 in order to avoid backup
withholding and will in any event be subject to withholding at varying rates
under other provisions of the Internal Revenue Code and regulations promulgated
thereunder. For a discussion of certain other federal income tax consequences
to tendering shareholders, please see Section 12. Each shareholder is urged to
consult with his or her own tax advisor regarding this qualification for
exemption from backup withholding and the procedure for obtaining any applicable
exemption.
(d) Guaranteed Delivery. If a shareholder desires to tender Shares
pursuant to the Offer and cannot deliver such Shares and all other required
documents to the Company by the Expiration Date, such Shares may nevertheless be
tendered if all of the following conditions are met:
(i) such tender is made by or through an Eligible
Institution; and
(ii) a properly completed and duly executed Notice
of Guaranteed Delivery substantially in the form provided by the Company
(indicating the number of Shares being tendered) is received by the Company
(as provided below) by the Expiration Date; and
(iii) the certificates for such Shares, together with a properly
completed and duly executed Letter of Transmittal (or facsimile thereof)
and any other documents required by the Letter of Transmittal, are received
by the Company
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<PAGE>
within eight business days after the date of execution of the Notice of
Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
telegram, telex, facsimile transmission or mail to the Company and must include
a guarantee by an Eligible Institution in the form set forth in such Notice.
(e) METHOD OF DELIVERY. THE METHOD OF DELIVERY OF SHARES AND ALL OTHER
REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING SHAREHOLDER. IF
CERTIFICATES FOR SHARES ARE TO BE SENT BY MAIL, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will be made only after timely receipt by the
Company of certificates for such Shares, a properly completed and duly executed
Letter of Transmittal (or facsimile thereof) and any other required documents.
(f) Determination of Validity; Rejection of Shares; Waiver of Defects; No
Obligation to Give Notice of Defects. All questions as to Purchase Price, the
number of Shares to be accepted, the form of documents and the validity,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares will be determined by the Company, in its sole discretion, and its
determination shall be final and binding. The Company reserves the right to
reject any or all tenders of Shares determined by it not to be in proper form or
the acceptance for payment of or payment for which may be unlawful. The Company
also reserves the right to waive any of the conditions of the Offer or any
defect or irregularity in any tender of Shares. Neither the Company, nor any
other person will be under any duty to give notification of any defect or
irregularity in tenders or incur any liability for failure to give any such
notification.
(g) Tender Constitutes an Agreement. The tender of Shares pursuant to any
one of the procedures described above will constitute an agreement between the
tendering shareholder and the Company upon the terms and subject to the
conditions of the Offer.
It is a violation of Rule 14e-4 promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), for a person to tender Shares for
his or her own account unless the person so tendering (i) has a net long
position equal to or greater than the amount of (x) Shares tendered or (y) other
securities immediately convertible into, or exercisable for the amount of Shares
tendered and will acquire such Shares for tender by conversion or exercise of
such other securities and (ii) will cause such Shares to be delivered in
accordance with the terms of the Offer. Rule 14e-4 provides a similar
restriction applicable to the tender or guarantee of a tender on behalf of
another person. The tender of Shares pursuant to any one of the procedures
described above will
-10-
<PAGE>
constitute the tendering shareholder's representation and warranty that, within
the meaning of Rule 14e-4 promulgated under the Exchange Act, the tender of such
Shares complies with Rule 14e-4. The Company's acceptance for payment of Shares
tendered pursuant to the Offer will constitute a binding agreement between the
tendering shareholder and the Company upon the terms and subject to the
conditions of the offer.
3. WITHDRAWAL RIGHTS.
Tenders of Shares made pursuant to the Offer may be withdrawn at any time
prior to the Expiration Date. If the Company (a) extends the period of time
during which the Offer is open, (b) is delayed in accepting for payment or
paying for Shares or (c) is unable to accept for payment or pay for Shares
pursuant to the Offer for any reason, then the Company may retain all Shares
tendered, and such Shares may not be withdrawn, subject to Rule 13e-4(f)(5)
under the Exchange Act which provides that the issuer making the tender offer
shall either pay the consideration offered, or return the tendered securities
promptly after the termination or withdrawal of the tender offer. Under no
circumstances will interest be paid by the Company by reason of any delay in
paying for any Shares or otherwise.
For a withdrawal to be effective, a written or facsimile notice of
withdrawal must be timely received by the Company at the address set forth on
the back cover of this Offer to Purchase. A notice of withdrawal must specify
the name of the person who tendered the Shares, the number of Shares to be
withdrawn and the name of the registered owner, if different from that of the
person who tendered such Shares. If the Shares to be withdrawn have been
delivered or otherwise identified to the Company, a signed notice of withdrawal
with signatures guaranteed by an Eligible Institution, except in the case of
Shares tendered by an Eligible Institution, must be submitted prior to the
release of such Shares. In addition, such notice must specify (a) in the case
of Shares tendered by delivery of certificates, the name of the registered
holder (if different from that of the tendering shareholder) and the serial
numbers shown on the particular certificates evidencing the Shares to be
withdrawn or (b) in the case of Shares tendered by book-entry transfer, the name
and number of the account at one of the Book-Entry Transfer Facilities to be
credited with the withdrawn Shares. Withdrawals may not be rescinded, and
Shares withdrawn will thereafter be deemed not properly tendered for purposes of
the Offer. However, withdrawn Shares may be re-tendered by following one of the
procedures described in Section 2 at any time prior to the Expiration Date.
All questions as to the form and validity (including time of receipt) of
any notice of withdrawal will be determined by the Company, in its sole
discretion, and its determination shall be final and binding. Neither the
Company nor any other person will be under any duty to give notification of any
defect or irregularity in any notice of withdrawal or incur any liability for
failure to give any such notification.
-11-
<PAGE>
4. ACCEPTANCE FOR PURCHASE AND PAYMENT.
Upon the terms and subject to the conditions of the Offer, the Company will
pay for Shares properly tendered and accepted for purchase by the Company. In
all cases, payment for Shares accepted for payment pursuant to the Offer will be
made only after timely receipt by the Company of certificates for such Shares, a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) and any other required documents. The Company will mail a check for
the aggregate Purchase Price for the Shares purchased in the Offer together with
a certificate for any Shares tendered and not purchased to the tendering
shareholder in accordance with such holder's instructions for delivery set forth
in the Letter of Transmittal. The mailing to tendering shareholders will also
include a written summary of the determination of the final Purchase Price and a
calculation of the number of Shares being purchased from such holder.
If certain events occur, the Company may not be obligated to purchase
Shares pursuant to the Offer (please see Section 5).
If any tendered Shares are not purchased pursuant to the Offer for any
reason, or if certificates are submitted for more Shares than are tendered,
certificates for all such Shares will be returned, without expense to the
tendering shareholder (or, in the case of Shares tendered by book-entry
transfer, such Shares will be credited to an account maintained at one of the
Book-Entry Transfer Facilities) as promptly as practicable following the
expiration or termination of the Offer.
5. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, the Company shall not be
required to accept for payment any Shares not theretofore so accepted and may
terminate or amend the Offer as provided in Section 13, if prior to the
acceptance for payment of such Shares, any of the following conditions exist:
(a) there shall have been threatened, instituted or pending any action
or proceeding by any government or governmental authority or agency,
domestic or foreign, or by any other person, domestic or foreign, before
any court or governmental authority or agency, domestic or foreign, (i)
challenging or seeking to make illegal, or delay or otherwise directly or
indirectly to restrain or prohibit the making of the Offer, the acceptance
for payment of or payment for some or all of the Shares by the Company or
otherwise directly or indirectly relating in any manner to or affecting the
Offer, or (ii) that otherwise, in the sole judgment of the Company, has or
may have material adverse significance with respect to the Company or its
subsidiaries; or
-12-
<PAGE>
(b) there shall have been any action taken or any statute, rule,
regulation or order proposed, enacted, enforced, promulgated, issued or
deemed applicable to the Offer by any court, government or governmental
authority or agency, domestic or foreign, that, in the sole judgment of the
Company might, directly or indirectly, result in any of the consequences
referred to in clauses (i) and (ii) of paragraph (a) above; or
(c) a tender or exchange offer for some or all of the Shares or a
proposal with respect to a merger, consolidation or other business
combination with or involving the Company shall have been publicly proposed
to be made or shall have been made by another person; or
(d) any change or changes shall have occurred (or any development
shall have occurred involving any prospective change or changes) in the
business, assets, liabilities, condition (financial or otherwise),
operations, results of operations or prospects of the Company or its
subsidiaries that, in the sole judgment of the Company, have or may have
material adverse significance with respect to the Company or its
subsidiaries;
which, in the sole judgment of the Company, in any such case, and regardless of
the circumstances (including any action or omission by the Company) giving rise
to any such condition, makes it inadvisable to proceed with such acceptance for
payment.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company in its sole discretion regardless of the circumstances
(including any action or inaction by the Company) giving rise to any such
conditions, or may be waived by the Company in its sole discretion in whole at
any time or in part from time to time. The failure by the Company at any time
to exercise its rights under any of the foregoing conditions shall not be deemed
a waiver of any such right; the waiver of any such right with respect to
particular facts and other circumstances shall not be deemed a waiver with
respect to any other facts and circumstances; and each such right shall be
deemed an ongoing right which may be asserted at any time or from time to time.
Any determination by the Company concerning the events described in this Section
shall be final and binding on all parties.
6. PURCHASE PRICE FOR SHARES; SPECIAL DIVIDEND.
Purchase Price
--------------
On December 11, 1995 the Board of Directors of Envirite unanimously
approved the distribution of $19 million to the Company's shareholders from the
proceeds of the sale of the Municipal Services Group. The distribution of $19
million is being split evenly so that $9.5 million will be used to purchase
outstanding Shares pursuant to the
-13-
<PAGE>
Offer and $9.5 million will be paid as a special cash dividend to holders of the
Company's Shares after the purchase is completed.
The Board of Directors believes that the terms of the Offer, including the
Purchase Price range of between $8.01 and $8.65 per Share and the method for its
calculation, are fair and reasonable to shareholders. In reaching this
conclusion, the Board considered a number of factors including, without
limitation, the Company's historical business performance, its recent results
and prospects, the fact that the Company has never paid a dividend, the absence
of a market for the Company's Shares, and the advice from its financial advisor,
Alex. Brown & Sons, Inc. ("ABS"), with respect to the methodology utilized by
the Company in valuing companies such as Envirite. The Board did not quantify
or otherwise assign relative weights to these factors.
The valuation method used by the Board included a comparison and analysis
of the historical operating and stock market performance of publicly traded
environmental services companies considered comparable to the Company. In
performing its analysis, the Board examined both market value of the total
outstanding equity ("Equity Market Value") and Equity Market Value plus cash net
of debt value ("Enterprise Value") of the comparable companies. Calculations
were made of the multiples of (a) earnings and (b) earnings before interest,
taxes, depreciation and amortization ("EBITDA") for each company. After making
an adjustment for the lack of a public market for the Company's Shares, an
average multiple was applied to the Company's earnings and EBITDA.
ABS has advised the Board of Directors that the valuation method used by
the Board in determining the Purchase Price is widely used and generally
recognized by the financial community as a reasonable basis for determining
indicative values for companies such as Envirite.
Special Dividend
----------------
Following the purchase of Shares, Envirite will pay a special cash dividend
to holders of remaining Shares of $9.5 million. The dividend will range from
$2.18 to $3.15 per Share depending the number of Shares outstanding after the
purchase is completed.
7. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER.
The purpose of the Offer is to give shareholders the opportunity to receive
a portion of the proceeds from the sale of the Municipal Services Group.
There has never been any trading market for the Shares since the Company's
inception. The Board of Directors believes that the purchase of Shares pursuant
to the Offer constitutes a prudent use of the Company's existing cash by
providing shareholders who desire to sell some or all of their Shares the
opportunity to do so, particularly since
-14-
<PAGE>
there is no existing market for the Shares. No dividends have ever been paid by
the Company on the Shares and, other than the Special Dividend described above,
the Company does not intend to begin paying regular dividends unless and until
the Company's earnings become stronger and more consistent.
The Company is subject to the informational requirements of Section 15(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files periodic reports and certain other information with
the Securities and Exchange Commission (the "Commission"). On December 1, 1995
the Company had approximately 460 shareholders of record. If the number of
shareholders of record falls below 300 as a result of the Offer, the Company
would have the right to terminate its obligation to file such periodic reports
with the Commission.
8. SOURCE AND AMOUNT OF FUNDS.
The $9,500,000 of funds for the purchase of Shares pursuant to the Offer
will be provided from the Company's assets.
9. CERTAIN INFORMATION CONCERNING THE COMPANY.
Envirite was organized under the laws of the Commonwealth of Pennsylvania
in 1973. Envirite is engaged in the business of providing environmental
services for the treatment, management and analysis of hazardous and
nonhazardous wastes primarily for commercial and industrial customers as well as
governmental and municipal authorities. The Company's principal environmental
services include the transportation, treatment and conversion of liquid and
solid inorganic wastes into nonhazardous residual materials, and laboratory
analysis.
The Company is a Pennsylvania corporation with its principal executive
office located at Suite 250, 620 West Germantown Pike, Plymouth Meeting,
Pennsylvania 19462 (telephone number (610) 828-8655).
-15-
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL DATA
The following summary of selected financial data are derived from the audited
financial statements contained in the Company's Annual Report on Form 10-K for
the year ended December 31, 1994 and from the unaudited financial statements
contained in the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1995. More comprehensive financial information is included in
such Annual Report and Quarterly Report and the summary financial data set forth
below are qualified in their entirety by reference to such reports including the
financial statements and related notes contained therein.
-16-
<PAGE>
<TABLE>
<CAPTION>
Year Ended
-----------------------------------------------------
1994(b) 1993 1992(d) 1991(g) 1990(c)(f)
<S> <C> <C> <C> <C> <C>
(dollars in thousands, except per Share amounts)
INCOME STATEMENT DATA(E)
Sales............................................... 33,622 32,698 29,689 32,191 31,253
Operating profit (loss)............................. 843 1,182 2,048 2,345 (577)
Income (loss) from
continuing operations
before income taxes
and cumulative effect
of change in accounting
principle.......................................... 172 490 1,280 1,854 (638)
Income (loss) from
continuing operations
before cumulative
effect of change in
accounting principle............................... 91 278 833 1,029 (658)
Cumulative effect of change in
accounting principle............................... -- -- -- -- 366
Loss from discontinued
operations(b)...................................... (443) (180) (694) (112) (284)
Net income (loss)................................... (352) 98 139 917 (576)
Income (loss) from continuing
operations before cumulative
effect of change in
accounting principle
per Share(a)....................................... .02 .07 .20 .25 (.16)
Loss from discontinued operations
per Share(a)....................................... (.11) (.05) (.17) (.03) (.07)
Net income (loss) per Share(a)...................... (.09) .02 .03 .22 (.14)
BALANCE SHEET DATA(E)
Working capital..................................... 1,668 6,072 5,601 377 1,439
Total assets........................................ 56,035 55,153 51,327 42,773 35,827
Long-term debt(d)(g)................................ 27,530 33,265 28,522 18,990 13,834
Shareholders' equity................................ 12,371 12,726 12,639 12,485 11,639
</TABLE>
-17-
<PAGE>
NOTES TO FINANCIAL DATA
(a) Per Share data are computed using the weighted average number of Shares and
common stock equivalents outstanding for the respective periods.
(b) In December 1994 the Board of Directors of the Company adopted a plan to
dispose of the Company's solid waste landfill business. The Company sold
this segment of its business in November 1995. The disposition of the
landfill business has been accounted for as a discontinued operation and,
accordingly, the operating results, net assets and other information
relating thereto have been segregated and reported as discontinued
operations.
(c) The Company recorded a pre-tax charge of $3,100,000 for site investigation
and possible remediation at its Thomaston, Connecticut facility.
(d) The Company entered into a $28,000,000 revolving credit facility with three
commercial banks in April 1992.
(e) The Company has never paid a cash dividend.
(f) The Company adopted Statement of Financial Accounting Standards No. 96
(Accounting for Income Taxes) in 1990. The cumulative effect of the change
reduced the 1990 loss by $366,000 or $.09 per Share. Financial Accounting
Standards No. 96 was superseded by Financial Accounting Standards No. 109
which was adopted by the Company December 27, 1992. The Company's adoption
of Financial Accounting Standards No. 109 did not have a material effect on
the Company in fiscal 1993.
(g) The Company issued $8,000,000 aggregate principal amount of 8% convertible
subordinated debentures in 1991.
-18-
<PAGE>
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
-------------- -------------
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 3,012,000 $ 1,827,000
Accounts receivable, net of allowances for
doubtful accounts of $451,000 and $450,000
in 1995 and 1994, respectively 5,325,000 8,542,000
Prepaid expenses 896,000 851,000
Deferred income tax benefit 448,000 448,000
Other 215,000 261,000
Discontinued operations 14,895,000 4,246,000
------------ ------------
Total current assets 24,791,000 16,175,000
Property, plant, and equipment, at cost:
Land 3,339,000 3,299,000
Buildings 8,137,000 8,135,000
Machinery and equipment 20,534,000 20,046,000
------------ ------------
32,010,000 31,480,000
Less accumulated depreciation (19,964,000) (18,795,000)
------------ ------------
Net property, plant, and equipment 12,046,000 12,685,000
Deferred income tax benefit 492,000 492,000
Other assets 786,000 1,810,000
Discontinued operations -- 24,873,000
------------ ----------
$38,115,000 $56,035,000
=========== ===========
</TABLE>
-19-
<PAGE>
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
------------- ------------
(unaudited)
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $ 354,000 $ 225,000
Current portion of long-term debt 4,020,000 4,486,000
Accounts payable 2,863,000 4,212,000
Income taxes payable 676,000 231,000
Waste fees payable 316,000 691,000
Accrued compensation 1,122,000 1,325,000
Remediation liability 41,000 645,000
Accrued interest 461,000 669,000
Accrued liabilities 2,466,000 2,023,000
----------- -----------
Total current liabilities 12,319,000 14,507,000
Long-term debt 1,162,000 19,530,000
Convertible subordinated debentures 8,000,000 8,000,000
Remediation liability 1,271,000 1,331,000
Deferred income taxes 1,786,000 -
Other liabilities 296,000 296,000
Shareholders' equity
Common stock, $1 par value; 10,000,000 shares
authorized; 4,272,000 shares issued 4,272,000 4,272,000
Additional paid-in capital 9,297,000 9,296,000
Retained earnings 446,000 (463,000)
Less 152,629 shares held in treasury, at cost (734,000) (734,000)
----------- -----------
Total shareholders' equity 13,281,000 12,371,000
----------- -----------
$38,115,000 $56,035,000
=========== ===========
</TABLE>
-20-
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(unaudited)
Nine Months
Ended
----------------------------
September 30, October 1,
1995 1994
------------- -----------
<S> <C> <C>
Sales $25,880,000 $24,956,000
Operating costs and expenses:
Cost of sales 17,842,000 17,812,000
Selling and administrative 5,838,000 6,445,000
Restructuring charge 194,000 --
----------- -----------
Operating profit 2,006,000 699,000
Interest income 121,000 20,000
Interest expense (557,000) (528,000)
----------- -----------
Income from continuing operations
before provision for income taxes 1,570,000 191,000
Provision for income taxes 659,000 81,000
----------- -----------
Income from continuing operations 911,000 110,000
Loss from discontinued operations, net
of income tax benefit of $107,000
for the nine months ended
October 1, 1994 -- (330,000)
----------- -----------
Net income (loss) $ 911,000 ($220,000)
=========== ===========
Per share data:
Income from continuing operations $ .22 $ .03
Loss from discontinued operations -- (.08)
----------- -----------
Net income (loss) $ .22 $ (.05)
=========== ===========
Weighted average number of shares
and common stock equivalents
outstanding 4,119,000 4,120,000
=========== ===========
</TABLE>
-21-
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
September 30, 1995, as adjusted to reflect (1) the sale of the Municipal
Services Group and repayment of long-term debt, (2) the purchase by the Company
of $9,500,000 of Shares in the Offer, (3) an assumption that 50% (or $4 million
principal amount) of the Debentures will be converted into Shares, and (4) the
Special Dividend to shareholders of $9,500,000.
<TABLE>
<CAPTION>
Actual As Adjusted
-------- -------------
<S> <C> <C>
(in thousands)
Long-term debt (less current maturities).. $ 1,162 $ 0
8% Convertible Subordinated Debentures
due 2006................................ 8,000 4,000
Shareholders' equity
Common stock, $1 par value, 10,000,000
shares authorized; 4,272,000 shares
issued and outstanding at
September 30, 1995...................... 4,272 4,912
Additional paid-in capital............... 9,297 12,657
Retained earnings........................ 446 3,446
Treasury stock, at cost.................. (734) (10,234)
------- --------
Total shareholders' equity.............. 13,281 10,781
------- --------
Total capitalization...................... $22,443 $ 14,781
======= ========
</TABLE>
______________________________________
The pro forma financial data are not intended to be, and should not be construed
as, a prediction of future results of operations.
-22-
<PAGE>
Security Ownership of Certain Beneficial Owners and Management
- --------------------------------------------------------------
The following table sets forth information as of December 1, 1995 as to (i)
each stockholder who owns of record, or is known by the Company to own
beneficially, more than 5% of the outstanding common stock of the Company and
(ii) the number and percentage of the Company's common stock owned by each of
the Company's directors and executive officers and by all directors and
executive officers as a group:
<TABLE>
<CAPTION>
Name of Beneficial Shares of Common Stock Percent of
Owner Beneficially Owned/1/ Class Outstanding
- ---------------------------- ---------------------- ------------------
<S> <C> <C>
Vincent G. Bell, Jr. 43,500/2 12/ 1.05%
Robert D. Hedberg 59,294/3 12/ 1.43%
Thomas B. Morris, Jr./4/ 212,525/4 12/ 5.15%
Theodore B. Palmer 3rd 58,660/5 12/ 1.42%
Geoffrey Stengel, Jr. 200,136/6 11/ 4.83%
John S. Stokes, Jr./10/ 1,427,331/7 12/ 32.13%
George I. Tyndall 58,071/8 12/ 1.41%
D. Robert Yarnall, Jr./10/ 1,083,987/9 11/ 24.22%
James A. Cassidy, Jr. 12,491/11/ .30%
All Directors
and Executive Officers
as a Group/14/ 3,155,995/11 12 13/ 64.05%
- ------------------------------------------------------------------------
</TABLE>
1. For purposes of this table, a beneficial owner is one who, directly or
indirectly, has or shares with others (a) the power to vote or direct the voting
of common stock, or (b) the power to dispose or direct the disposition of common
stock. Except as indicated in footnotes 2-9 below, each director has sole
voting and investment power with respect to the Shares shown opposite his name.
-23-
<PAGE>
2. Consists of 25,000 Shares owned jointly by Mr. Bell and his wife.
Includes 16,000 Shares issuable upon conversion of $100,000 principal amount of
8% convertible subordinated debentures owned by Mr. Bell.
3. Includes 28,800 Shares issuable upon conversion of $180,000 principal
amount of 8% convertible subordinated debentures owned by Mr. Hedberg.
4. Includes 180,191 Shares held by various trusts of which Mr. Morris is a
co-trustee and with respect to which Mr. Morris shares voting and investment
power and 5,600 Shares issuable upon conversion of $35,000 principal amount of
8% convertible subordinated debentures owned by Mr. Morris. The address of the
shareholder is c/o Dechert Price & Rhoads, 1717 Arch Street, Philadelphia,
Pennsylvania 19103-2793.
5. Includes 8,684 Shares which are owned by Mr. Palmer's wife and 17,760
Shares issuable upon conversion of $111,000 principal amount of 8% convertible
subordinated debentures owned by Mr. Palmer or his wife.
6. Includes 4,000 Shares issuable upon conversion of $25,000 principal
amount of 8% convertible subordinated debentures owned by Mr. Stengel.
7. Includes 320,000 Shares issuable upon conversion of $2,000,000 principal
amount of 8% convertible subordinated debentures owned by Mr. Stokes. PNC Bank,
John S. Price and Mr. Stokes share the voting and investment power over
1,104,831 Shares which are held by two trusts of which they are co-trustees.
8. Includes 9,600 Shares issuable upon conversion of $60,000 principal
amount of 8% convertible subordinated debentures owned by Mr. Tyndall.
9. Includes 485,723 Shares held by various trusts of which Mr. Yarnall is a
co-trustee and with respect to which Mr. Yarnall shares voting and investment
power and includes 25,000 Shares owned by Mr. Yarnall's wife and 344,000 Shares
issuable upon conversion of $2,150,000 principal amount of 8% convertible
subordinated debentures owned by Mr. Yarnall.
10. The address of the shareholder is c/o Envirite Corporation, 620 West
Germantown Pike, Plymouth Meeting, Pennsylvania 19462.
11. Includes Shares that may be acquired upon exercise of outstanding
stock options which are currently exercisable by Mr. Stengel (23,000), Mr.
Yarnall (11,500), Mr. Cassidy (10,250), and the directors and executive officers
as a group (62,250).
-24-
<PAGE>
12. Includes Shares that may be acquired upon exercise of outstanding
stock options by non-employee directors (2,500 each; 15,000 as a group) granted
pursuant to the Directors' Plan.
13. Includes 745,760 Shares issuable upon conversion of 8% convertible
subordinated debentures owned by the directors and executive officers as a
group.
14. For purposes of this table, the "Executive Officers" in the group
include the Company's President, Chairman and Senior Vice President.
-25-
<PAGE>
ADDITIONAL INFORMATION
The Company is subject to the informational requirements of the Exchange
Act and in accordance therewith files periodic reports, and other information
with the Commission relating to its business, financial condition and other
matters. Reference is made to the Company's 1994 Annual Report on Form 10-K and
its Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 1995,
June 30, 1995 and September 30, 1995 for additional information about the
Company. Such reports and other information may be inspected at the public
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549; and should be available for
inspection and copying at the regional offices of the Commission in New York
(Room 1028, Jacob K. Javits Federal Building, 26 Federal Plaza, New York, New
York 10278) and Chicago (Room 1242, Everett McKinley Dirksen Building, 219 South
Dearborn Street, Chicago, Illinois 60604). Copies of such material can also be
obtained from the Public Reference Section of the Commission in Washington, D.C.
20549, at prescribed rates.
10. INFORMATION FOR HOLDERS OF DEBENTURES AND STOCK OPTIONS.
Debentures
- ----------
On December 1, 1995, the Company had $8 million aggregate principal amount
of its Debentures outstanding. Holders of the Debentures may participate in the
proposed Offer to purchase Shares and the special cash dividend by making an
election to convert some or all of their Debentures into Shares. Under the
terms of the Debenture, a holder has the right to convert the principal amount
thereof (or any portion thereof that is an integral multiple of $1,000) into
Shares at the conversion price of $6.25 per Share. DEBENTURE HOLDERS WILL
SHORTLY RECEIVE A SEPARATE LETTER DESCRIBING THE PROCEDURES FOR CONVERSION.
An owner of a $1,000 Debenture may convert the Debenture into Shares at the
rate of $6.25 per Share, and thereby receive 160 common Shares in exchange for
the Debenture. The Shares issued upon conversion will be added to any other
Shares owned by such holder for purposes of the Offer.
THE OFFER IS NOT BEING MADE FOR (NOR WILL TENDERS BE ACCEPTED OF) EITHER
THE DEBENTURES OR THE STOCK OPTIONS. HOLDERS OF DEBENTURES OR STOCK OPTIONS WHO
WISH TO PARTICIPATE IN THE OFFER MAY CONVERT SOME OR ALL OF THEIR DEBENTURES OR
EXERCISE SOME OR ALL OF THEIR STOCK OPTIONS FOR SHARES IN ACCORDANCE WITH THEIR
RESPECTIVE TERMS AND THEN CONCURRENTLY TENDER SOME OR ALL OF SUCH SHARES IN
ACCORDANCE WITH THE TERMS OF THIS OFFER. HOLDERS OF DEBENTURES OR STOCK OPTIONS
ARE NOT REQUIRED TO OBTAIN CERTIFICATES FOR SHARES ISSUED UPON CONVERSION OR
EXERCISE BUT MAY INSTEAD MAKE A SINGLE DELIVERY TO THE COMPANY OF THE REQUISITE
NOTICE OF CONVERSION, NOTICE OF EXERCISE, PAYMENT OF THE
-26-
<PAGE>
AGGREGATE EXERCISE PRICE FOR THE STOCK OPTIONS BEING EXERCISED, DEBENTURE
CERTIFICATES, AND LETTER OF TRANSMITTAL. HOLDERS WHO CONVERT THEIR DEBENTURES
INTO SHARES WILL LOSE ALL PREFERENTIAL RIGHTS AS A SUBORDINATED CREDITOR OF THE
COMPANY WITH RESPECT TO THE DEBENTURES SO CONVERTED, INCLUDING THE RIGHT TO
RECEIVE INTEREST AT 8% PER ANNUM AND THE REPAYMENT OF PRINCIPAL. NO PAYMENT OF
INTEREST WILL BE MADE UPON THE CONVERSION OF ANY DEBENTURES, AND THE HOLDER WILL
LOSE ANY RIGHT TO PAYMENT OF INTEREST ON DEBENTURES SURRENDERED FOR CONVERSION.
A CONVERSION OF DEBENTURES INTO SHARES CANNOT BE REVOKED UNDER ANY
CIRCUMSTANCES.
Any holder of Debentures who wishes to convert his or her Shares and
participate in the Offer may take advantage of the procedures set forth below.
To convert all or any portion of Debentures and concurrently tender some or all
of the Shares issuable upon conversion of such Debentures, a holder must deliver
all of the following to the Company on or before the Expiration Date: (a) a
properly completed and duly executed applicable Notice of Conversion, or
manually executed facsimile thereof, with any required signature guarantees and
any other documents required by such Notice of Conversion, (b) certificates for
the Debentures to be converted and (c) a properly completed and duly executed
Letter of Transmittal (or manually executed facsimile thereof) with any required
signature guarantees and any other documents required by the Letter of
Transmittal with respect to the Shares to be issued upon conversion of the
Debentures.
By properly completing and delivering the Notice of Conversion and Letter
of Transmittal to the Company, a holder of Debentures will be deemed to have
tendered all of the Shares issuable upon conversion of the principal amount of
Debentures specified for conversion in the Notice of Conversion. If the
applicable Notice of Conversion and the Letter of Transmittal are properly
completed and duly executed, a Debenture holder who desires to convert his or
her Debentures and participate in the Offer need not obtain stock certificates
for the Shares or follow the procedure for book entry delivery to tender Shares
pursuant to the Offer. Debenture holders who execute and deliver the applicable
Notice of Conversion must, however, properly complete the Letter of Transmittal,
in order to effect a valid tender of such Shares. Questions and requests for
assistance with the conversion of Debentures and concurrent tender of Shares
issuable upon conversion may be directed to the Company at (800) 816-1747.
HOLDERS OF DEBENTURES WHO DESIRE TO CONVERT THEIR DEBENTURES AND
PARTICIPATE IN THE OFFER ARE URGED TO CAREFULLY READ THIS OFFER TO PURCHASE IN
ITS ENTIRETY IN CONNECTION WITH THEIR TENDER OF THE SHARES ISSUABLE UPON
CONVERSION.
-27-
<PAGE>
Stock Options
- -------------
On December 1, 1995 there were 137,000 Shares reserved for issuance upon
the exercise of outstanding Stock Options. Holders of Stock Options who wish to
participate in the Offer may exercise some or all of their Stock Options for
Shares and tender some or all of such Shares to the Company in accordance with
the terms of this Offer. Holders of Stock Options are not required to obtain
certificates for the Shares issued upon exercise but may instead make a single
delivery to the Company of the requisite notice of exercise, payment of the
aggregate exercise price for the Stock Options being exercised, and a properly
completed Letter of Transmittal. AN EXERCISE OF A STOCK OPTION FOR SHARES
CANNOT BE REVOKED UNDER ANY CIRCUMSTANCES.
11. TRANSACTIONS AND AGREEMENTS CONCERNING THE SHARES.
Except for certain gifts of Shares in immaterial amounts, neither the
Company nor any subsidiary of the Company, nor, to the Company's knowledge, any
of the Company's executive officers or directors or associates of any of the
foregoing, has engaged in any transaction involving Shares during the period of
forty business days prior to the date hereof.
Except for the Debentures and Stock Options described herein, neither the
Company nor, to the Company's knowledge, any of its executive officers or
directors is a party to any contract, arrangement, understanding or relationship
relating, directly or indirectly to the Offer (whether or not legally
enforceable) with any other person with respect to any securities of the
Company.
12. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The discussion below is a summary of the federal income tax consequences of
a sale of Shares pursuant to the Offer by a United States person (a United
States citizen or resident alien). This discussion does not reflect any tax
laws of any jurisdiction other than the federal income tax laws of the United
States nor does it address the tax consequences of a conversion of Debentures or
exercise of Stock Options. Each shareholder should consult his or her own tax
advisor for a complete description of the tax consequences to him or her of a
sale of Shares pursuant to the Offer.
General
- -------
A sale of Shares pursuant to the Offer will be a taxable transaction for
federal income tax purposes. Under Section 302 of the Internal Revenue Code of
1986, as amended ("Code"), a sale of Shares pursuant to the Offer will, as a
general rule, be treated as a "sale or exchange" if the receipt of cash (a) is
"substantially disproportionate"
-28-
<PAGE>
with respect to the shareholder, (b) results in a "complete redemption" of the
shareholder's interest in the Company or (c) is "not essentially equivalent to a
dividend" with respect to the shareholder.
In general, the receipt of cash will be "substantially disproportionate" if
the percentage of the outstanding Shares actually and constructively owned by
the shareholder immediately following the purchase of Shares pursuant to the
Offer is less than 80% of the percentage of the outstanding Shares actually and
constructively owned by such shareholder immediately before the purchase of
Shares in the Offer. The receipt of cash will be deemed to result in a
"complete redemption" if either (a) all the Shares actually and constructively
owned by a shareholder are sold pursuant to the Offer or (b) all the Shares
actually owned by a shareholder are sold pursuant to the Offer and the
shareholder is eligible to waive (and effectively waives) constructive ownership
of Shares under procedures described in Section 302 of the Code.
The receipt of cash may be "not essentially equivalent to a dividend" if
the sale of Shares pursuant to the Offer results in a "meaningful reduction" of
a shareholder's proportionate interest in the Company. Whether the receipt of
cash by a shareholder will be "not essentially equivalent to a dividend" depends
on the particular shareholder's facts and circumstances. Any shareholder hoping
to rely upon the "not essentially equivalent to a dividend" test should consult
his or her own tax advisor as to its application in the shareholder's particular
situation. PRORATION OF THE OFFER, PURSUANT TO WHICH FEWER THAN ALL OF THE
SHARES TENDERED MAY BE PURCHASED BY THE COMPANY, COULD ADVERSELY AFFECT A
SHAREHOLDER'S ABILITY TO SATISFY THE ABOVE TESTS. SEE SECTION 1 FOR INFORMATION
REGARDING PRORATION.
Constructive Ownership
- ----------------------
In determining whether any of the above tests are satisfied, a shareholder
must take into account not only Shares which are actually owned by the
shareholder, but also Shares which are constructively owned by the shareholder
within the meaning of Section 318 of the Code (including Shares owned by certain
related individuals or entities and Shares which the shareholder has the right
to acquire by exercise of a Stock Option or conversion of Debentures). Each
shareholder should consult his or her own tax advisor with respect to the
application of the constructive ownership rules.
Gain or Loss
- ------------
If any of the above tests is satisfied, the shareholder will recognize a
gain (or loss) in the amount by which the proceeds from the sale of Shares
received by the shareholder pursuant to the Offer is greater (or less) than the
shareholder's tax basis in the Shares sold. Recognized gain or loss will be
capital gain or loss assuming the Shares are held as a capital asset, and will
be long-term capital gain or loss if the shareholder has held the
-29-
<PAGE>
Shares for more than one year at the time of sale. If none of the above tests
is satisfied, the shareholder will be treated as having received a dividend in
an amount equal to the purchase price for the Shares sold pursuant to the Offer.
This amount will not be reduced by the holder's basis in the Shares sold
pursuant to the Offer, and the holder's basis in those Shares will be added to
the holder's basis in the holder's remaining Shares. No assurance can be given
that either of the Section 302 tests will be satisfied as to any particular
holder of Shares, and thus no assurance can be given that any particular holder
will not be treated as having received a dividend taxable as ordinary income.
Backup Withholding
- ------------------
To prevent United States Federal income tax backup withholding equal to 31%
of the gross payments made to shareholders pursuant to the Offer, each tendering
shareholder must provide the Company with his or her correct social security or
other taxpayer identification number by completing the Substitute Form W-9
included in the Letter of Transmittal or provide evidence satisfactory to the
Company that such shareholder is exempt from such backup withholding
requirements. Foreign shareholders are required to submit Form W-8 in order to
avoid backup withholding and will in any event be subject to withholding at
varying rates under other provisions of the Internal Revenue Code and
regulations promulgated thereunder. Each shareholder is urged to consult with
his or her own tax advisor regarding this qualification for exemption from
backup withholding and the procedure for obtaining any applicable exemption.
13. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS.
The Company reserves the right, at any time or from time to time, to extend
the period of time during which the Offer is open by giving notice of such
extension to the shareholders. During any such extension, all Shares previously
tendered and not accepted for payment or withdrawn will remain subject to the
Offer and may be accepted for payment by the Company.
The Company also reserves the right (a) to delay payment for any Shares not
theretofore paid for, (b) to terminate the Offer and not to accept for payment
or pay for any Shares not theretofore accepted for payment upon the occurrence
of any of the conditions specified in Section 5, or (c) at any time or from time
to time to amend the Offer in any respect. Any such extension, delay,
termination or amendment will be followed as promptly as practicable by a letter
to shareholders.
-30-
<PAGE>
14. MISCELLANEOUS.
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of such
jurisdiction. However, the Company may, in its discretion, take such action as
it may deem necessary to make the Offer in any such jurisdiction and extend the
Offer to holders of Shares in such jurisdiction.
The Company has filed with the Commission a Schedule 13E-4, together with
exhibits, pursuant to Rule 13e-4 of the General Rules and Regulations under the
Exchange Act, furnishing certain additional information with respect to the
Offer. The Schedule 13E-4 and any amendments thereto, including exhibits, may
be examined and copies may be obtained from the offices of the Commission in the
manner set forth in Section 9 of this Offer to Purchase (except that such
information will not be available at the regional offices of the Commission).
-31-
<PAGE>
ENVIRITE CORPORATION
Facsimile copies of the Letter of Transmittal will be accepted. The Letter
of Transmittal and certificates for Shares and any other required documents
should be sent by each shareholder of the Company, bank or other nominee to the
Company at the address set forth below:
Attention: Geoffrey Stengel, Jr. or Robert E. Croner
Envirite Corporation
Suite 250
620 West Germantown Pike
Plymouth Meeting, PA 19462
Toll free telephone (voice mail): (800) 816-1747
Telephone: (610) 828-8655 (Ext. 221 or 208)
Fax: (610) 828-8892
Internet: [email protected]
Any questions or requests for assistance or additional copies of this Offer
to Purchase and the Letter of Transmittal may be directed to the Company at the
address or numbers set forth above.
-32-
<PAGE>
APPENDIX I
ENVIRITE CORPORATION
FINANCIAL STATEMENTS
<PAGE>
ENVIRITE CORPORATION
FINANCIAL INFORMATION
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
1. Audited Annual Financial F-1
Statements.
2. Unaudited Interim Financial A-1
Statement
</TABLE>
<PAGE>
LETTER OF TRANSMITTAL
To Tender Shares of Common Stock
of
ENVIRITE CORPORATION
PURSUANT TO THE OFFER TO PURCHASE UP TO
$9,500,000 OF ITS OUTSTANDING COMMON STOCK
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
PHILADELPHIA TIME, ON WEDNESDAY, JANUARY 31, 1996, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
TO: ENVIRITE CORPORATION
By Hand, Mail or Overnight Courier: By Facsimile Transmission:
Envirite Corporation (610) 828-8892
620 West Germantown Pike Confirm by Telephone:
Plymouth Meeting Executive Campus (610) 828-8655
Plymouth Meeting, PA 19462
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE WILL NOT
CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used if certificates are to be forwarded
herewith. Shareholders whose certificates for Shares are not immediately
available or who cannot deliver either the certificates for their Shares or all
other documents required hereby to the Company prior to the Expiration Date (as
defined in Section 1 of the Offer to Purchase) must tender their Shares in
accordance with the guaranteed delivery procedures set forth in Section 2 of the
Offer to Purchase. See Instruction 2.
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE COMPANY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Owner(s)
--------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
-----------------------
Name of Institution Which Guaranteed Delivery
----------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- ---------------------------------------------------|-------------------------------------------------------------------------------
Name(s) and Address(es) of Registered Holder(s) | Certificates Tendered
(Please fill in, if blank) | (Attach additional signed list if necessary)
|
- ---------------------------------------------------|-------------------------|-----------------------------|-----------------------
| | Total Number |
| | of Shares |
| Certificate | Represented by | Number of Shares
| Number(s) | Certificate(s) | Tendered*
- ---------------------------------------------------|-------------------------|-----------------------------|-----------------------
- ---------------------------------------------------|-------------------------|-----------------------------|-----------------------
- ---------------------------------------------------|-------------------------|-----------------------------|-----------------------
- ---------------------------------------------------|-------------------------|-----------------------------|-----------------------
- ---------------------------------------------------|-------------------------|-----------------------------|-----------------------
- ---------------------------------------------------|-------------------------|-----------------------------|-----------------------
- ---------------------------------------------------|-------------------------|-----------------------------|-----------------------
</TABLE>
<PAGE>
Total Shares
* Unless otherwise indicated, it will be assumed that all Shares evidenced by
any certificate(s) delivered to the Company are being tendered. See
Instruction 4.
2
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Envirite Corporation:
The undersigned hereby tenders to Envirite Corporation, a Pennsylvania
corporation (the "Company"), the above-described shares of common stock,
par value $1.00 per share (the "Shares"), of the Company pursuant to the
Company's offer to purchase up to $9,500,000 of its outstanding Shares in
accordance with the terms and conditions of the Company's Offer to Purchase
(the "Offer to Purchase"), and this Letter of Transmittal (which,
together with any amendments or supplements thereto or hereto, collectively
constitute the "Offer"), receipt of which is hereby acknowledged.
Upon the terms of the Offer, subject to, and effective upon, acceptance
for payment of, and payment for, the Shares tendered herewith in accordance
with the terms of the Offer (including, if the Offer is extended or
amended, the terms or conditions of any such extension or amendment), the
undersigned hereby sells, assigns and transfers to, or upon the order of,
the Company all right, title and interest in and to all the Shares that are
being tendered hereby.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the tendered
Shares, and, when the same are accepted for payment by the Company, the
Company will acquire good title thereto, free and clear of all liens,
restrictions, claims and encumbrances. The undersigned will, upon request,
execute any additional documents deemed by the Company to be necessary or
desirable to complete the sale, assignment and transfer of the tendered
Shares.
All authority conferred or agreed to be conferred pursuant to this Letter
of Transmittal shall be binding upon the successors, assigns, heirs,
executors, administrators, trustees in bankruptcy and legal representatives
of the undersigned and shall not be affected by, and shall survive, the
death or incapacity of the undersigned. Except as stated in the Offer to
Purchase, this tender is irrevocable.
The undersigned understands that the valid tender of Shares pursuant to
the procedures described in Section 2 of the Offer to Purchase and in the
Instructions hereto will constitute a binding agreement between the
undersigned and the Company upon the terms and subject to the conditions of
the Offer.
Unless otherwise indicated herein under "Special Payment Instructions",
please issue the check for the purchase price and/or return any
certificates for Shares not tendered or accepted for payment in the name(s)
of the registered holder(s) appearing under "Description of Shares
Tendered". Similarly, unless otherwise indicated under "Special Delivery
Instructions", please mail the check for the purchase price and/or return
any certificates for Shares not tendered or accepted for payment (and
accompanying documents, as appropriate) to the address(es) of the
registered holder(s) appearing under "Description of Shares Tendered". In
the event that both the Special Delivery Instructions and the Special
Payment Instructions are completed, please issue the check for the purchase
price and/or return any certificates for Shares not tendered or accepted
for payment (and any accompanying documents, as appropriate) in the name
of, and deliver such check and/or return such certificates (and any
accompanying documents, as appropriate) to the person or persons so
indicated. The undersigned recognizes that the Company has no obligation
pursuant to the Special Payment Instructions to transfer any Shares from
the name of the registered holder thereof if the Company does not accept
for payment any of the Shares so tendered.
3
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the certificate for Shares not tendered or not
accepted for payment and/or the check for the purchase price of Shares accepted
for payment are to be issued in the name of someone other than the undersigned.
Issue and deliver certificate(s) and/or check to:
Name____________________________________________________________________________
(Please Type or Print)
Address_________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Include Zip Code)
________________________________________________________________________________
(Taxpayer Identification or Social Security Number)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the certificate for Shares not tendered or not
accepted for payment and/or the check for the purchase price of Shares accepted
for payment are to be sent to someone other than the undersigned or to the
undersigned at an address other than that indicated above.
Mail check and/or certificate(s) to:
Name____________________________________________________________________________
(Please Type or Print)
Address_________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Include Zip Code)
________________________________________________________________________________
(Taxpayer Identification or Social Security Number)
4
<PAGE>
SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
________________________________________________________________________________
________________________________________________________________________________
(Signature(s) of Shareholder(s))
Dated: , 1996
(Must be signed by registered holder(s) exactly as name(s) appear(s) on the
certificate(s) for the Shares or on a security position listing or by
person(s) authorized to become registered holder(s) by certificates and
documents transmitted herewith. If signature is by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or
others acting in a fiduciary or representative capacity, please provide the
following information and see Instruction 5).
Name(s):___________________________________________________________________
(Please Type or Print)
Capacity (full title):_____________________________________________________
Address:___________________________________________________________________
___________________________________________________________________
(Include Zip Code)
Area Code and Tel. No.:_______________________
Tax Identification or Social Security No.:_________________________________
(Also complete Substitute Form W-9)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED--SEE INSTRUCTIONS 1 AND 5)
Authorized Signature:______________________________________________________
Name:______________________________________________________________________
(Please Type or Print)
Name of Firm:______________________________________________________________
Address:___________________________________________________________________
___________________________________________________________________
(Include Zip Code)
Area Code and Tel. No.:_________________
Dated:_____________________, 1996
5
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURE. No signature guarantee is required on this Letter
of Transmittal (a) if this Letter of Transmittal is signed by the registered
holder(s) of Shares tendered herewith, unless such holder(s) has completed
either the box entitled "Special Delivery Instructions" or the box entitled
"Special Payment Instructions" on the reverse hereof, or (b) if such Shares
are tendered for the account of a firm that is a member of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.
or a commercial bank or trust company having an office or correspondent in the
United States or by any other "eligible guarantor institution", as such term
is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended
(each, an "Eligible Institution"). In all other cases, all signatures on this
Letter of Transmittal must be guaranteed by an Eligible Institution. See
Instruction 5.
2. REQUIREMENTS OF TENDER. This Letter of Transmittal is to be completed by
Shareholders if certificates are to be forwarded herewith. For a Shareholder
validly to tender Shares pursuant to the Offer, either (a) a properly completed
and duly executed Letter of Transmittal (or facsimile thereof), together with
any required signature guarantees and any other required documents, must be
received by the Company at its address set forth herein prior to the Expiration
Date and certificates for tendered Shares must be received by the Company at
such address prior to the Expiration Date or (b) the tendering Shareholder must
comply with the guaranteed delivery procedures set forth below and in Section 2
of the Offer to Purchase.
Shareholders whose certificates for Shares are not immediately available or
who cannot deliver their certificates and all other required documents to the
Company prior to the Expiration Date may tender their Shares by properly
completing and duly executing the Notice of Guaranteed Delivery pursuant to the
guaranteed delivery procedures set forth in Section 2 of the Offer to Purchase.
Pursuant to such procedures, (a) such tender must be made by or through an
Eligible Institution, (b) a properly completed and duly executed Notice of
Guaranteed Delivery substantially in the form provided by the Company must be
received by the Company prior to the Expiration Date and (c) the certificates
for all physically delivered Shares, as well as a properly completed and duly
executed Letter of Transmittal (or facsimile thereof) with any required
signature guarantees and any other documents required by this Letter of
Transmittal, must be received by the Company within eight business days after
the date of execution of the Notice of Guaranteed Delivery.
THE METHOD OF DELIVERY OF SHARES, THIS LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER. IF
DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering Shareholders, by execution of
this Letter of Transmittal (or facsimile thereof), waive any right to receive
any notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
4. PARTIAL TENDERS. If fewer than all the Shares evidenced by any certificate
submitted are to be tendered, fill in the number of Shares that are to be
tendered in the box entitled "Number of Shares Tendered". In any such case,
new certificate(s) for the remainder of the Shares that were evidenced by the
old certificate(s) will be sent to the registered holder, unless otherwise
provided in the appropriate box on this Letter of Transmittal, as soon as
practicable after the expiration of the Offer. All Shares represented by
certificates delivered to the Company will be deemed to have been tendered
unless otherwise indicated.
5. SIGNATURES ON LETTERS OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder of the Shares
tendered hereby, the signature must correspond with the name as written on the
face of the certificate(s) without any change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more joint
owners, all such owners must sign this Letter of Transmittal.
If any tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal or any certificates or stock powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and proper evidence satisfactory to the
Company of their authority so to act must be submitted.
6
<PAGE>
When this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made to or
certificates for Shares not tendered or accepted for payment are to be issued to
a person other than the registered holder(s). Signatures on such certificates
or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the registered
holder(s) of certificates listed, the certificates must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name or names of the registered owner or owners appear on the certificates.
Signatures on such certificates or stock powers must be guaranteed by an
Eligible Institution.
6. STOCK TRANSFER TAXES. The Company will pay any stock transfer taxes with
respect to the transfer and sale of Shares to it or its order pursuant to the
Offer. If, however, payment of the purchase price is to be made to, or if
certificates for Shares not tendered or accepted for payment are to be
registered in the name of, any persons other than the registered holder(s), or
if tendered certificates are registered in the name of any person other than the
person(s) signing this Letter of Transmittal, the amount of any stock transfer
taxes (whether imposed on the registered holder(s) or such person) payable on
account of the transfer to such person will be deducted from the purchase price
unless satisfactory evidence of the payment of such taxes or exemption therefrom
is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATES LISTED IN THIS LETTER OF
TRANSMITTAL.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued in
the name of, and/or certificates for Shares not tendered or not accepted for
payment are to be returned to, a person other than the signer of this Letter of
Transmittal or if a check is to be sent and/or such certificates are to be
returned to a person other than the signer of this Letter of Transmittal or to
an address other than that shown above, the appropriate boxes on this Letter of
Transmittal should be completed.
8. WAIVER OF CONDITIONS. Subject to the terms of the Offer, the Company
reserves the absolute right in its sole discretion to waive any of the specified
conditions of the Offer, in whole or in part, in the case of any Shares
tendered.
9. 31% BACKUP WITHHOLDING. Under U.S. Federal income tax law, a Shareholder
whose tendered Shares are accepted for payment is required to provide the
Company with such Shareholder's correct taxpayer identification number ("TIN")
on Substitute Form W-9 below. If the Company is not provided with the correct
TIN, the Internal Revenue Service may subject the Shareholder or other payee to
a $50 penalty. In addition, payments that are made to such Shareholder or other
payee with respect to Shares purchased pursuant to the Offer may be subject to
31% backup withholding.
Certain Shareholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, the Shareholder must submit a Form W-8, signed under penalties of
perjury, attesting to that individual's exempt status. A Form W-8 can be
obtained from the Company. See the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for more instructions.
If backup withholding applies, the Company is required to withhold 31% of any
such payments made to the Shareholder or other payee. Backup withholding is not
an additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld, provided that the
required information is given to the Internal Revenue Service. If withholding
results in an overpayment of taxes, a refund may be obtained from the Internal
Revenue Service.
The box in Part 3 of the Substitute Form W-9 may be checked if the tendering
Shareholder has not been issued a TIN and has applied for a TIN or intends to
apply for a TIN in the near future. If the box in Part 3 is checked, the
Shareholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Company will withhold
31% on all payments made prior to the time a properly certified TIN is provided
to the Company. However, such amounts will be refunded to such Shareholder if a
TIN is provided to the Company within 60 days.
The Shareholder is required to give the Company the TIN (e.g., social security
number or employer identification number) of the record owner of the Shares or
of the last transferee appearing on the transfers attached to, or endorsed on,
the Shares. If the Shares are in more than one name or are not in the name of
the actual owner, consult the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for additional guidance
on which number to report.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for additional
copies of the Offer to Purchase, this Letter of Transmittal, the Notice of
Guaranteed Delivery and the Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 should be directed to the Company
at its address set forth herein. Questions or requests for assistance may be
directed to the Company.
7
<PAGE>
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A FACSIMILE COPY THEREOF (TOGETHER
WITH CERTIFICATES FOR TENDERED SHARES WITH ANY REQUIRED SIGNATURE GUARANTEES AND
ALL OTHER REQUIRED DOCUMENTS) MUST BE RECEIVED BY THE COMPANY, OR THE NOTICE OF
GUARANTEED DELIVERY MUST BE RECEIVED BY THE COMPANY, PRIOR TO THE EXPIRATION
DATE.
8
<PAGE>
NOTE: IF YOU HAVE COMPLETED THE SPECIAL PAYMENT INSTRUCTIONS BOX, YOU MUST
PROVIDE A SUBSTITUTE FORM W-9 FOR ALL PAYEES.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
PAYER'S NAME: ENVIRITE CORPORATION
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SUBSTITUTE PART 1--PLEASE PROVIDE YOUR TIN
FORM W-9 IN THE BOX AT RIGHT AND CERTIFY ________________________
BY SIGNING AND DATING BELOW Social Security Number(s)
or
Employer Identification Number
---------------------------------------------------------------------------------
DEPARTMENT OF THE TREASURY PART 2--CERTIFICATES-UNDER PENALTIES OF PERJURY, I CERTIFY THAT:
INTERNAL REVENUE SERVICE (1) The number shown on this form is my correct taxpayer
identification number (or I am waiting for a number to be issued
for me), and
PAYER'S REQUEST FOR (2) I am not subject to backup withholding because: (a) I am
TAXPAYER IDENTIFICATION exempt from backup withholding, or (b) I have not been notified by
NUMBER ("TIN") the Internal Revenue Service (the "IRS") that I am subject to
backup withholding as a result of a failure to report all interest
or dividends, or (c) the IRS has notified me that I am no longer
subject to backup withholding.
CERTIFICATION INSTRUCTIONS--YOU MUST CROSS OUT ITEM (2) ABOVE IF
YOU HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE CURRENTLY SUBJECT
TO BACKUP WITHHOLDING BECAUSE OF UNDERREPORTING INTEREST OR
DIVIDENDS ON YOUR TAX RETURN.
--------------------------------------------------------------------------------------
SIGNATURE___________________________________ DATE______________ Part 3--Awaiting TIN
[ ]
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY CASH PAYMENTS MADE TO YOU WITH RESPECT TO SHARES PURCHASED IN
THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL
DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3
OF THE SUBSTITUTE FORM W-9.
- -----------------------------------------------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (i) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(ii) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number by the
time of payment, 31% of all payments that I am otherwise entitled to
receive will be withheld, but that such amounts will be refunded to me if I
then provide a Taxpayer Identification Number within sixty (60) days.
- -----------------------------------------------------------------------------------------------------------------------
Signature______________________________________ Date______________________
</TABLE>
9
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give the Payer.--
Social Security numbers have nine digits separated by two hyphens: i.e. 000-00-
0000. Employer identification numbers have nine digits separated by only one
hyphen: i.e. 00-0000000. The table below will help determine the number to give
the payer.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------ ----------------------------------------------------------------
GIVE THE GIVE THE EMPLOYER
SOCIAL SECURITY IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF-- FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ------------------------------------------------------------------ ----------------------------------------------------------------
<S> <C> <C> <C>
1. An individual's account The individual 8. Sole proprietorship The Owner/4/
account
2. Two or more individuals The actual owner of the account 9. A valid trust, estate, or Legal entity (Do not furnish
(joint account) or, if combined funds, any one pension trust the identifying number of
of the individuals/1/ the personal representative
or trustee unless the
legal entity itself is not
designated in the account
title.)/5/
3. Husband and wife (joint The actual owner of the account 10. Corporate account The corporation
account) or, if joint funds, either
person/1/
4. Custodian account of a The minor/2/ 11. Religious, charitable, The organization
minor (Uniform Gift to Minors or educational organization
Act) account
5. Adult and minor (joint The adult or, if the minor is 12. Partnership account held The partnership
account) the only contributor, the in the name of the business
minor/1/
6. Account in the name of The ward, minor, or incompetent 13. Association, club, or The organization
guardian or committee for a person/3/ other tax-exempt organization
designated ward, minor, or
incompetent person
</TABLE>
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
<TABLE>
<CAPTION>
<S> <C> <C> <C>
7a. The usual revocable The grantor-trustee/1/ 14. A broker or registered The broker or nominee
savings trust account (grantor nominee
is also trustee)
b. So-called trust account The actual owner/1/ 15. Account with Department The public entity
that is not a legal or valid of Agriculture in the name
trust under State law a public entity (such
as a State or local
government,school
district, or prison) that
receives agricultural
program payments
- --------------------------------------------------------- ---------------------------------------------------------
</TABLE>
/1/ List first and circle the name of the person whose number you furnish.
/2/ Circle the minor's name and furnish the minor's social security
number.
/3/ Circle the ward's, minor's or incompetent person's name and furnish
such person's social security number.
/4/ Show the name of the owner.
/5/ List first and circle the name of the legal trust, estate, or pension
trust.
NOTE: If no name is circled when there is more than one name, the number
will be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Page 3
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
. A corporation
. A financial institution
. An organization exempt from tax under section 501(a) or an individual
retirement plan
. The United States or any agency or instrumentality thereof
. A State, the District of Columbia, a possession of the United States,
or any subdivision or instrumentality thereof
. A foreign government, a political subdivision of a foreign government,
or agency or instrumentality thereof
. An international organization or any agency, or instrumentality thereof
. A registered dealer in security or commodities registered in the U.S.
or a possession of the U.S.
. A real estate investment trust
. A common trust fund operated by a bank under section 584(a)
. An exempt charitable remainder trust or a non-profit trust described in
section 4947(a)(1)
. An entity registered at all times under the Investment Company Act of
1940
. A foreign central bank of issue
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
. Payments to nonresident aliens subject to withholding under Section
1441
. Payments to partnership not engaged in a trade or business in the U.S.
and which have at least one nonresident partner
. Payments of patronage dividends where the amount received is not paid
in money
. Payments made by certain foreign organizations
. Payments made to a nominee
Payments of interest not generally subject to backup withholding include the
following:
. Payment of interest on obligations issued by individuals
Note: You may be subject to backup withholding if this interest is $600 or more
and is paid in the course of the
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Page 4
payer's trade or business and you have not provided your correct taxpayer
identification number to the payer.
. Payments of tax-exempt interest (including exempt-interest dividends
under section 852)
. Payments described in section 6049(b)(5) to non-resident aliens
. Payments on tax-free covenant bonds under section 1451
. Payments made by certain foreign organizations
. Payments made to a nominee
Exempt payee described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045 and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend, interest
or other payments to give taxpayer identification numbers to payers who must
report the payments to IRS. IRS uses the numbers for identification purposes.
Payers must be given the numbers whether or not recipients are required to file
tax returns. Beginning January 1, 1993, payers must generally withhold 31% of
taxable interest, dividend, and certain other payments to a payee who does not
furnish a taxpayer identification number to a payer. Certain penalties may also
apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE>
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
UNAUDITED FINANCIAL STATEMENTS
Consolidated Condensed Balance
Sheets, September 30, 1995 and A-2
December 31, 1994
Consolidated Condensed Statements
of Income for the three months and A-4
nine months ended September 30,
1995 and October 1, 1994
Consolidated Condensed Statements
of Cash Flows for the nine months A-5
ended September 30, 1995 and
October 1, 1994
Notes to Consolidated Condensed A-6
Financial Statements
</TABLE>
A-1
<PAGE>
ENVIRITE CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
------------ ------------
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 3,012,000 $ 1,827,000
Accounts receivable, net of allowances for
doubtful accounts of $451,000 and $450,000
in 1995 and 1994, respectively 5,325,000 8,542,000
Prepaid expenses 896,000 851,000
Deferred income tax benefit 448,000 448,000
Other 215,000 261,000
Discontinued operations 14,895,000 4,246,000
------------ ------------
Total current assets 24,791,000 16,175,000
Property, plant, and equipment, at cost:
Land 3,339,000 3,299,000
Buildings 8,137,000 8,135,000
Machinery and equipment 20,534,000 20,046,000
------------ ------------
32,010,000 31,480,000
Less accumulated depreciation (19,964,000) (18,795,000)
------------ ------------
Net property, plant, and equipment 12,046,000 12,685,000
Deferred income tax benefit 492,000 492,000
Other assets 786,000 1,810,000
Discontinued operations -- 24,873,000
- -----------------------------------------------------------------------------
$ 38,115,000 $ 56,035,000
============ ============
</TABLE>
See accompanying notes.
A-2
<PAGE>
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
-------------- -------------
(unaudited)
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $ 354,000 $ 225,000
Current portion of long-term debt 4,020,000 4,486,000
Accounts payable 2,863,000 4,212,000
Income taxes payable 676,000 231,000
Waste fees payable 316,000 691,000
Accrued compensation 1,122,000 1,325,000
Remediation liability 41,000 645,000
Accrued interest 461,000 669,000
Accrued liabilities 2,466,000 2,023,000
----------- -----------
Total current liabilities 12,319,000 14,507,000
Long-term debt 1,162,000 19,530,000
Convertible subordinated debentures 8,000,000 8,000,000
Remediation liability 1,271,000 1,331,000
Deferred income taxes 1,786,000 -
Other liabilities 296,000 296,000
Shareholders' equity
Common stock, $1 par value; 10,000,000 shares
authorized; 4,272,000 shares issued 4,272,000 4,272,000
Additional paid-in capital 9,297,000 9,296,000
Retained earnings 446,000 (463,000)
Less 152,629 shares held in treasury, at cost (734,000) (734,000)
----------- -----------
Total shareholders' equity 13,281,000 12,371,000
----------- -----------
$38,115,000 $56,035,000
=========== ===========
</TABLE>
See accompanying notes.
A-3
<PAGE>
ENVIRITE CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(unaudited)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended Ended
--------------------------- ---------------------------
September 30, October 1, September 30, October 1,
1995 1994 1995 1994
------------- ---------- ------------- ----------
<S> <C> <C> <C> <C>
Sales $8,358,000 $8,842,000 $25,880,000 $24,956,000
Operating costs and expenses:
Cost of sales 5,633,000 6,075,000 17,842,000 17,812,000
Selling and administrative 1,932,000 2,082,000 5,838,000 6,445,000
Restructuring charge -- -- 194,000 --
---------- ---------- ----------- ----------
Operating profit 793,000 685,000 2,006,000 699,000
Interest income 53,000 4,000 121,000 20,000
Interest expense (184,000) (187,000) (557,000) (528,000)
---------- ---------- ----------- ----------
Income from continuing operations
before provision for income taxes 662,000 502,000 1,570,000 191,000
Provision for income taxes 278,000 211,000 659,000 81,000
---------- ---------- ----------- ----------
Income from continuing operations 384,000 291,000 911,000 110,000
Loss from discontinued operations, net
of income tax expense of $1,000
for the three months ended October 1,
1994 and income tax benefit of
$107,000 for the nine months ended
October 1, 1994 -- (61,000) -- (330,000)
---------- ---------- ----------- -----------
Net income (loss) $ 384,000 $ 230,000 $ 911,000 ($220,000)
========== ========== =========== ===========
Per share data:
Income from continuing operations $ .09 $ .07 $ .22 $ .03
Loss from discontinued operations -- (.01) -- (.08)
---------- ---------- ----------- -----------
Net income (loss) $ .09 $ .06 $ .22 $ (.05)
========== ========== =========== ===========
Weighted average number of shares
and common stock equivalents
outstanding 4,119,000 4,120,000 4,119,000 4,120,000
========== ========== =========== ===========
</TABLE>
See accompanying notes.
A-4
<PAGE>
ENVIRITE CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, October 1,
1995 1994
-------------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Income from continuing operations $ 911,000 $ 110,000
Adjustments to reconcile income from
continuing operations to net cash
provided by operating activities:
Depreciation and amortization 1,341,000 1,313,000
Bad debt provision (9,000) 21,000
Loss (gain) on disposal of fixed assets 4,000 (21,000)
Decrease in remediation liability (664,000) (321,000)
Decrease in deferred income taxes -- (26,000)
(Increase) decrease in accounts receivable 345,000 (1,624,000)
Increase in prepaid expenses (45,000) (348,000)
Increase in other assets (54,000) (242,000)
Increase (decrease) in accounts payable (1,350,000) 1,357,000
Increase in income taxes payable 445,000 --
(Increase) decrease in waste fees payable (375,000) 45,000
Increase (decrease) in accrued compensation (203,000) 459,000
Increase (decrease) in accrued interest (208,000) 265,000
Increase in accrued liabilities 441,000 375,000
------------ -----------
Net cash provided by continuing operations 579,000 1,363,000
Net cash provided by discontinued operations 855,000 2,053,000
------------ -----------
Net cash provided by operating activities 1,434,000 3,416,000
------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (586,000) (788,000)
Discontinued operations (2,004,000) (1,537,000)
Proceeds from the sale of discontinued operations 19,781,000 --
------------ -----------
Net cash provided by (used in) investing activities 17,191,000 (2,325,000)
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable 636,000 823,000
Payments on notes payable (507,000) (366,000)
Proceeds from long-term debt 723,000 2,679,000
Payments on long-term debt (18,292,000) (4,474,000)
Purchase of treasury stock -- (2,000)
------------ -----------
Net cash used in financing activities (17,440,000) (1,340,000)
------------ -----------
Net increase (decrease) in cash and cash equivalents 1,185,000 (249,000)
Cash and cash equivalents at beginning of period 1,827,000 780,000
------------ -----------
Cash and cash equivalents at end of period $ 3,012,000 $ 531,000
============ ===========
</TABLE>
See accompanying notes.
A-5
<PAGE>
ENVIRITE CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
(unaudited)
1. Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01
of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all adjustments
(consisting only of normal recurring adjustments) considered necessary for a
fair presentation have been included.
Quarterly results of operations are not necessarily indicative of results for
the full year. The Consolidated Condensed Financial Statements of Envirite
Corporation (the "Company"), which are unaudited and contain condensed
disclosures, should be read in conjunction with the audited Financial
Statements and related Notes in the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1994. The consolidated condensed balance
sheet at December 31, 1994 contained in this report is derived from the
audited Financial Statements.
2. Discontinued Operations
In December 1994, the Board of Directors of the Company adopted a formal plan
to dispose of its landfill operations (the "Municipal Services Group", or
"MSG"). The Company plans to sell this business in 1995, except for certain
assets which will be written off.
This segment of the Company's business is being accounted for as discontinued
operations and, accordingly, the consolidated financial statements of the
Company have been restated to report separately the net assets and operating
results of these discontinued operations.
In April 1995, the Company signed an agreement (the "Sale Agreement") to sell
substantially all of the assets of this business. In June 1995, the Company
sold its wholly-owned subsidiary, County Environmental Services, Inc.,
pursuant to the Sale Agreement for net proceeds of $7,406,000. In August
1995, the Company sold certain net assets of the MSG, pursuant to the Sale
Agreement for net proceeds of $12,375,000. The sale of the remaining assets
of this business, which is subject to regulatory approvals, is expected to be
completed by the end of 1995.
3. Long-Term Debt
The Company has a loan and security agreement with three banks providing for
a revolving credit facility for $7,877,000 including cash borrowings at the
prime rate plus 2% and letters of credit (the "Revolving Credit Facility").
Collateral includes a first priority security interest in the Company's cash,
accounts receivable, certain real property and a second priority interest in
certain other real property. In March 1995, the Company agreed to reduce the
aggregate amount of the Revolving Credit Facility by the amount of any long-
term financing raised in 1995 in excess of $1,000,000 and any letters of
credit returned for cancellation. The maturity date of the Revolving Credit
Facility is the earlier of 45 days after the sale of the landfill assets or
January 1996.
At September 30, 1995, the Company had no cash borrowings and $4,656,000 of
irrevocable letters of credit outstanding under the Revolving Credit
Facility.
A-6
<PAGE>
4. 8% Convertible Subordinated Debentures
The Company has outstanding $8,000,000 of 8% convertible subordinated
debentures due 2006. The debentures were issued at face amount and are
convertible into the common stock of the Company at $6.25 per share. The
debentures may be redeemed by the Company in whole or in part at any time on
or after April 1, 1995. Mandatory annual sinking fund payments of 20% of the
principal amount commence April 1, 2002.
5. Remediation Charge for Thomaston Facility
In March 1990, the U.S. Environmental Protection Agency ("EPA") issued an
administrative order to the Company pursuant to the Resource Conservation and
Recovery Act of 1976 ("RCRA"), which requires the Company to take corrective
action at its Thomaston, Connecticut facility. The order requires the
Company to conduct an extensive investigation of areas where hazardous
substances are believed to be present at the facility and, if necessary, to
develop and implement a plan to clean up the site. The full scope, nature,
and extent of the activities required of the Company pursuant to the order
are being negotiated with the EPA. At present, the Company estimates that it
will incur $3,100,000 of costs through the end of 1999 for the investigation
and remediation of the Thomaston site, and during the first quarter of 1990,
the Company established a reserve in that amount. There can be no assurance,
however, that no additional costs will be incurred for this matter.
6. Restructuring Charge
The Company incurred a restructuring charge of $194,000 in the first quarter
of 1995. This charge is composed of severance charges for staff reductions
instituted in the first quarter of 1995 as a result of a restructuring of the
Company's waste treatment business.
A-7
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
ENVIRITE CORPORATION
As set forth in Section 2 of the Offer to Purchase (as defined below), this
form or one substantially equivalent hereto must be used to accept the Offer (as
defined below) if certificates representing shares of common stock, par value
$1.00 per share (the ``Shares''), of Envirite Corporation, a Pennsylvania
corporation (the ``Company''), are not immediately available or time will not
permit all required documents to reach the Company prior to the Expiration Date
(as defined in Section 1 of the Offer to Purchase). Such form may be delivered
by hand or transmitted by telegram or facsimile transmission or mailed to the
Company and must include a guarantee by an Eligible Institution (as defined in
Section 2 of the Offer to Purchase). See Section 2 of the Offer to Purchase.
TO: ENVIRITE CORPORATION
By Hand, Mail or Overnight Courier: By Facsimile Transmission:
Envirite Corporation (610) 828-8892
620 West Germantown Pike Confirm by Telephone:
Plymouth Meeting Executive Campus (610) 828-8655
Plymouth Meeting, PA 19462
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE WILL NOT
CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an Eligible Institution
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE>
Envirite Corporation:
The undersigned hereby tenders to Envirite Corporation, a Pennsylvania
corporation (the ``Purchaser''). upon the terms and subject to the conditions
set forth in Purchaser's Offer to Purchase (the ``Offer to Purchase''), and in
the related Letter of Transmittal (which, together with any amendments or
supplements thereto, collectively constitute the ``Offer''), receipt of which is
hereby acknowledged, Shares pursuant to the guaranteed delivery procedures set
forth in Section 2 of the Offer to Purchase.
Number of Shares:____________________ Name(s) of Record Holder(s):___________
Certificate Nos. (if available):_____ _______________________________________
_____________________________________ _______________________________________
(Please Type or Print)
Address(es):____________________________
_______________________________________
(Zip Code)
Area Code and Tel. No.:________________
Signature(s):__________________________
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a member of a registered national securities exchange or of
the National Association of Securities Dealers, Inc., a commercial bank or trust
company having an office or correspondent in the United States or an ``eligible
guarantor institution'', as such term is defined in Rule 17Ad-15 under the
Securities Exchange Act of 1934, as amended, hereby guarantees to deliver to the
Company either the certificates representing the Shares tendered hereby, in
proper form for transfer, together with a properly completed and duly executed
Letter of Transmittal, or a manually signed facsimile thereof, with any required
signature guarantees, and any other documents required by the Letter of
Transmittal within eight business days after the date hereof.
Name of Firm:_______________________ ________________________________________
(Authorized Signature)
Address:____________________________ Name:___________________________________
____________________________________ Title:__________________________________
(Zip Code)
Area Code and Tel. No.:_____________ Date:____________________________, 1995
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. SHARE CERTIFICATES
SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
2
