SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d)
Of the Securities Exchange Act of 1934.
Date of Report (Date of earliest event reported) February 2, 1998
RTI INC.
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(Exact name of registrant as specified in its charter)
NEW YORK
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(State or other Jurisdiction of incorporation)
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0-5887 11-2163152
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(Commission File Number) (I.R.S. Employer Identification No.)
301 Antone Street, Sunland Park, NM 88063
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(Address of principal executive offices) (Zip Code)
(505) 589-5431
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Registrant's telephone number, including area code.
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ITEM 6. Resignations of Registrant's Directors.
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The registrant had seven directors, three of whom were deemed to be
outside directors. The operating management had asked the Chairman and
CEO and the outside directors to resign so that operating management
could move the Company forward. On January 26, 1998, Theo W. Muller, a
Director, Chairman and Chief Executive Officer of the Company resigned
as a result of philosophical differences with operating management. On
January 28, 1998, Mr. Sanders Davies also resigned for the same
reasons. On January 29, 1998, C. W. McMillan also resigned for the same
reasons and on February 2, 1998, George M. Whitmore, Jr. resigned for
the same reasons. In February 1997 the Company acquired the business of
Quality Air which changed the business emphasis of the Company and
disagreements have occurred between the operating management and the
outside directors as to the direction of the Company and the manner in
which the Company is to be financed.
On January 31, 1998, Dr. Lanny Snodgrass was elected as director of the
Company to fill the vacancy created by the resignation of one of the
outside directors. Dr. Snodgrass is a practicing psychiatrist and
psychologist currently on the staff of VA Puget Sound Health Care
System, Faculty of the University of Washington School of Medicine,
Department of Behavioral Sciences. Prior to that time he was in private
practice in Seattle, Washington.
ITEM 7. Financial Statements and Exhibits.
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Exhibits
1. Copy of Letter from Theo W. Muller.
2. Copy of Letter from Sanders Davies.
3. Copy of Letter from M.W. McMillan.
4. Copy of Letter from George M. Whitmore, Jr.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
RTI INC.
(Registrant)
By: /s/ Rick E. Bacchus, President
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Rick E. Bacchus, President
Dated February 2, 1998
THEO W. MULLER
20 Peach Hill Road
Darien, CT 06820
BY FAX AND CERTIFIED MAIL
January 26, 1998
The Board of Directors,
RTI Inc.
Gentlemen:
It is with extreme reluctance that I am tendering herewith, effective
immediately. my resignation as and Chief Executive Officer of RTI and of its
subsidiary, Refrigeration Technology.
As you know, I have been CEO for several years and have fulfilled such position,
with whatever time has been necessary for minimal compensation. In the beginning
such position was full-time. However, after the sale of RTI's irradiation
business and the acquisition of its air conditioning manufacturing business, I
had reasonably anticipated that, in time, Rick Bacchus would take over as CEO of
RTI and that I would then be able to devote most my time to my other pursuits.
Unfortunately, my earlier anticipation was incorrect and, rather than being able
to spend less time with RTI, more time is needed, which I am not able to devote.
During the past several months, It has become increasingly difficult to monitor
operating management. There have been no financial and operating statements
since September 30; 1997 and it has become impossible to control the activities
of Messrs. Rick and Rocky Bacchus due to, among other things, their intentional
lack of meaningful communication with me, their disregard of my position as
RTI's CEO and their view that, irrespective of their binding written agreements
with RTI they are entitled to significantly greater compensation as an incentive
for them to perform their responsibilities.
In order to permit the Board to maintain its flexibility in its search for a
replacement CEO, and despite my substantial equity position in RTI, I also am
tendering my resignation as a director of RTI; effective immediately.
Yours truly,
/s/ T.W. MULLER
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T.W. Muller
cc. Terry Johnson, Esq., El Paso (fax only)
Dean Hester, esq., El Paso (fax only)
David Sass, Esq., New York (fax only)
222 Old Kings Highway North
Darien, CT 06820
January 28, 1998
BY FAX AND CERTIFIED MAIL
The Board of Directors
RTI, Inc.
301 Antone Street
Sunland Park. NM 88063
Gentlemen:
I have come to the conclusion that there exist irreconcilable differences of
opinion between the current senior management of the company, all of whom are
directors, and me. These differences, when coupled with the intractability of
management thereon and their apparent inability to recognize their very real
conflict of interest, have made it impossible for me to act effectively as a
director of the company.
Senior management has, for some time, raised their own demands as a roadblock to
the successful refinancing of the company. They have indicated that they will
not confirm to customers and potential investors their personal commitment to
the future of the company without, as QUID PR QUO, the unanimous agreement of
the independent directors, including me, to their terms. This is in direct
breach of their existing agreements with the company and their fiduciary
responsibilities as directors. Further, among their demands is a plan for the
company to acquire assets which I believe are of questionable title, utility and
value from an entity owned by them.
RTI has great potential. If properly financed and effectively managed and
governed it has the ability to become a success and provide a long awaited
benefit to its shareholders. Unfortunately I am not prepared to continue down
the only path that management is dictating.
Therefore, it is with great regret that I hereby tender my resignation as a
director of RTI, Inc., effective immediately. I also request, pursuant to SEC
regulations, that my resignation and the contents of this letter be disclosed to
the shareholders of the company.
Sincerely,
/s/ Sanders Davies
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Sanders Davies
C.W. MCMILLAN
4003 Pine Brook Road
Alexandria, Virginia 29310
(703) 960-1982
Fax (703) 960-4976
January 29, 1998
The Board of Directors
RTI, Inc. BY FAX AND CERTIFIED MAIL
301 Antone Street
Sunland Park, NM 88063
Attn: Rick Bacchus, President and Director
After agonizing about the question for some time, I have concluded in that I can
no longer effectively serve as an Independent Director of RTI and am tendering
herewith my resignation as a member of the Board of Directors of RTI and all of
its subsidiaries effective immediately.
As a non-management Director representing and with fiduciary responsibilities to
the RTI shareholders, I no longer can accept the direction that has and is being
taken by the management directors of RTI (consisting of Richard Bacchus, Rockney
Bacchus and Ronald Bacchus), which management directors represent the senior
officers of RTI and control the daily operations of RTI. There recently has been
and continues to be a lack of full, timely and continuous communication with the
non-management Directors dealing with what I consider to be various critical
issues primarily with respect to the financial conditions of RTI. A Board of
Directors meeting to be held on January 29, 1998 was called by two of the other
independent directors of RTI to discuss these matters and to my dismay, none of
the management directors appeared or offered a reason for non-attendance.
Combined with all of the above is the lack of understanding by such senior
management about how a publicly held company should operate. In my opinion,
there also has bee a persistent effort on the part of such senior management to
insist on enhancing their personal financial well-being to the detriment of the
public shareholders. This self interest, in my view, currently dominates all
other considerations of senior management. This seems to be the current rule
rather than the exception. Instant examples have been the insistence by senior
management to substantially increase their incentive compensation in spite of
their existing employment agreements, as well as insistence that RTI purchase
substantial assets belonging to their private corporation at a value
substantially in excess of $250,000, which was represented to be the maximum
purchase price. This was contained in the most recent Annual Report on Form
10-KSB filed by RTI and signed by such persons. These demands have conflicted
with other actions which, I believe, urgently need to be taken by the RTI Board
of Directors, and which have not been taken due to the ability of such
management directors to block any Board action with which they do not approve.
Furthermore, such persons have stated that if there personal demands are not
met, they will leave RTI, which would then not have any senior management, they
have also implied that they might even go so far as to form a competing venture,
in my view, meeting their demands would not be in the interests of the other
shareholders. Consequently without meeting such demands the Board is not able to
conduct other business.
Under the foregoing circumstances, I find it impossible to continue to fulfill
my fiduciary responsibilities to the RTI shareholders.
I request that my resignation and the contents of the resignation letter be
disclosed in a Form 8-K to be filed by RTI.
Sincerely,
/s/ C.W. McMillan
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C.W. McMillan
cc: Sanders Davies
George M. Whitmore, Jr.
Arthur A. Katz, Esq.
GEORGE M. WHITMORE, JR.
4 Cedarwood Drive
Greenwich, Connecticut 06630
February 2, 1998
BY FAX AND CERTIFIED MAIL
The Board of Directors
RTI Inc.
301 Antone Street
Sunland Park, NM 88063
Gentlemen:
It is with mixed emotions that I hereby tender my resignation as a director of
the company effective immediately.
While I have great admiration for the company's technological capabilities and
for its products, which attributes formed the basis of my support of the
acquisition of Quality Air, Inc. In February of last year, I have since
developed strong reservations concerning the ethical conduct and personal
integrity of the members of the senior management who joined us with that
acquisition and now control the Board. The excessive demands for personal
financial aggrandizement of these management directors, for which they sought
Board approval as the price of their continued service to the company, lie at
the root of these concerns and contributed to the resignations of three
directors within the past week.
At the telephone Board meeting on January 31 (attended, in addition to myself,
by Messrs. Richard, Rockney and Ronald Bacchus and Dr. Lanny L. Snodgrass, newly
elected to the Board at the outset of the meeting despite my abstention, based
upon my introduction to Dr. Snodgrass first occurring at such meeting), I was
gratified to learn from David Sass, Esq., recently appointed counsel (in
attendance by invitation), that management now has accepted his advice to submit
certain of their demands, with the necessary disclosure, for shareholder
approval at the next Annual Meeting. Realistically, this will have the effect of
deferring the prospect of longer-term financing of which the Company is in dire
need.
In view of the current, precarious financial condition of the company, it is
clear to me that the new few months will be fraught with uncertainty as the
company seeks to secure interim financing to enable it continue operations. Were
I to remain as a director, I can envision the need to receive and interpret a
very considerable amount of information concerning operations, financing
arrangements and the like in order to act in accordance with my fiduciary
responsiblilities to the public shareholders. Since much of this information
will emanate from management, who have not engendered my confidence as to the
completeness and timeliness of their disclosures in the past. I foresee
considerable personal effort and anguish entailed in fulfilling these
responsibilities.
As I am currently under medical treatment for the recurrence of a serious
ailment. I have been advised by my physicians to avoid undue stress. Under all
of these circumstances and with due consideration for my personal well being. I
do not believe I can responsibly continue to serve.
I wish the company and its shareholders well.
Very truly yours,
/s/ George M. Whitestone, Jr.
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George M. Whitestone, Jr.
