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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): September 10, 1999
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CASELLA WASTE SYSTEMS, INC.
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(Exact Name of Registrant as Specified in its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
0-911177 03-338873
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(Commission File Number) (IRS Employer Identification No.)
25 Greens Hill Lane, Rutland, Vermont 05701
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(Address of principal executive offices) (Zip Code)
(802) 775-0325
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
On September 9, 1999, Casella Waste Systems, Inc. ("Casella") announced
that it had entered into a second amendment to the Agreement and Plan of
Merger by and among Casella, KTI, Inc., a New Jersey corporation ("KTI"), and
Rutland Acquisition Sub, Inc., a New Jersey corporation and a direct,
wholly-owned subsidiary of Casella. Under the terms of the amended merger
agreement, KTI shareholders will receive 0.51 of a share of Casella Class A
Common Stock for each share of KTI common stock they hold.
Casella issued a press release dated September 9, 1999, describing,
among other things, the second amendment to the Agreement and Plan of Merger.
The foregoing description is qualified in its entirety by reference to
the press release attached hereto as Exhibit 99.1 and the second amendment to
the Agreement and Plan of Merger attached hereto as Exhibit 99.2.
(c) The following exhibits are incorporated herein by reference:
Exhibit
Number
99.1 Press Release dated September 9, 1999
99.2 Amendment No. 2 to Agreement and Plan of Merger
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.
Date: September 10, 1999 CASELLA WASTE SYSTEMS, INC.
(Registrant)
By: /s/ John W. Casella
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John W. Casella
President, Chief Executive
Officer and Chairman of
the Board
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EXHIBIT 99.1
CASELLA WASTE SYSTEMS AND KTI REVISE TERMS OF MERGER AGREEMENT; TRANSACTION
REMAINS ACCRETIVE; EXPECTED TO CLOSE WITHIN 60 DAYS
RUTLAND, Vt., Sept.9/PRNewswire/-- Casella Waste Systems, Inc. (Nasdaq: CWST
- -- news) and KIT, Inc. (Nasdaq: KTIE-news) announced today that the companies
have revised the terms of their merger agreement.
Under the terms of the revised merger agreement, KTI shareholders will
receive 0.51 share of Casella Waste Systems stock for every share of KTI
stock.
Additionally, the revised agreement calls for Casella Waste Systems to gain
an additional seat on the combined company's board of directors.
The boards of directors of both companies have approved the revised merger
agreement; the closing of the merger is contingent upon, among other things,
shareholder approval from both companies.
"Given the difficult and bumpy road certain of KTI's businesses have traveled
over the last several months, both companies believe a revision in the terms
of the merger agreement, particularly the exchange ratio, is appropriate,"
John Casella, chairman and chief executive officer of Casella Waste Systems,
said.
"Management's focus is solely on the post-merger performance of Casella Waste
Systems and on taking the necessary steps, including this revision, to
deliver that performance and growth in shareholder value," Casella said.
"Now that this restructuring removes a number of uncertainties and gives us a
higher degree of confidence that the merger will be successfully completed,
let me reemphasize some important points," Casella said.
"First, given the opportunities to leverage disposal capacity and build
integrated platforms through accretive acquisitions in our market, the
strategic rationale for the merger has never been stronger," Casella said.
"Second, we look forward to bringing Casella Waste Systems' operational and
financial discipline to all of KTI's assets, and taking the necessary steps
to remedy underperforming businesses. Third, we have great confidence in
KTI's operating managers and the contribution they can make to the value
we're creating. And, finally, we're confident Casella will now be uniquely
positioned to create additional paths to shareholder value, growth and market
leadership in the future.
"Our primary goal has always been to ensure that this transaction be
meaningfully accretive both 'out-of-the-box' and in future fiscal years,"
Casella said. "We believe this transaction will meet those criteria."
Since the transaction will close well past the date originally intended, the
company has revised its projections for the combined company's current fiscal
year (ending April 30, 2000) as follows: revenues of approximately $505
million; EBITDA of approximately $127 million; and earnings per share of
approximately $1.04.
For the first full fiscal year post-merger (ending April 30, 2001) Casella
Waste Systems projects that the combined company's revenues will be
approximately $601 million; EBITDA will be approximately $161 million; and
earnings per share will be approximately $1.55.
"This significant, meaningful accretion in post-merger earnings over what the
company would have generated on a stand-alone basis, validates our confidence
that this transaction is in the long-term interests of our shareholders,"
Casella said.
Casella Waste Systems, headquartered in Rutland, Vermont, is a regional,
integrated, non-hazardous solid waste services company that provides
collection, transfer, disposal and recycling services in Vermont, New
Hampshire, Maine, Massachusetts, upstate New York, and northern Pennsylvania.
Casella Waste Systems will host a telephone conference call with investors at
10 a.m. (EST) on Thursday, September 9, 1999; participants should dial
719-457-2642. A replay of the call will be available until 11:59 p.m. (EST)
on Wednesday, September 15, 1999 by dialing 719-457-0820; the conference
number is 776281.
For further information, contact Joseph Fusco, Vice President; Jerry Cifor,
Sr. Vice President and Chief Financial Officer at (802)775-0325; or visit the
company's website at www.cosella.com.
This press release, especially with respect to the consummation of the merger
and its financial and operational impact and projected financial results,
contains forward-looking statements that involve a number of risks and
uncertainties. Among the important factors that could cause actual results to
differ materially from those indicated by such forward-looking statements are
a substantial delay in the expected closing of the transaction, KTI's operating
results, the combined company's ability to realize expected synergies from
the transaction, the ability to successfully integrate the two companies and
otherwise to manage growth, a history of losses, the ability to identify,
acquire and integrate acquisition targets, dependence on management, the
uncertain ability to finance the company's growth, limitations on landfill
permitting and expansion and geographic concentration, a general economic
downturn, changes in the law and regulations relating to the environment,
competition, and the risk factors detailed from time to time in Casella Waste
Systems' and KTI's periodic reports and registration statements filed with
the Securities and Exchange Commission.
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EXHIBIT 99.2
Amendment No. 2
To
Agreement and Plan of Merger
The Agreement and Plan of Merger dated as of January 12, 1999 (the
"Agreement"), by and among Casella Waste Systems, Inc., a Delaware corporation
("Buyer"), Rutland Acquisition Sub, Inc., a New Jersey corporation and a direct,
wholly-owned subsidiary of Buyer ("Sub") and KTI, Inc., a New Jersey corporation
("Seller'), as amended by Amendment No. 1 to Agreement and Plan of Merger dated
May 12, 1999 ("Amendment No. 1"), is hereby amended as follows as of this 8th
day of September, 1999. Capitalized terms not otherwise defined herein shall
have the meanings set forth in the Agreement.
1. The reference to "0.59 shares" in Section 2.01(c) is hereby deleted and
"0.51 shares" is hereby substituted in lieu thereof.
2. Section 3.06 is hereby deleted, and the following shall be inserted in
lieu thereof:
"Section 3.06 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed
in the Seller SEC Reports filed prior to the date hereof, since the date of the
Seller Balance Sheet, Seller and its Subsidiaries have conducted their business
only in the ordinary course and in a manner consistent with past practice and,
since such date, there has not been (i) any damage, destruction or loss (whether
or not covered by insurance) with respect to Seller's or any of its
Subsidiaries' assets having a Seller Material Adverse Effect, or (ii) any other
action or event that would have required the consent of Buyer pursuant to
Section 5.01 of this Agreement had such action or event occurred after the date
of this Agreement.
3. Section 3.18 is hereby deleted, and the following shall be inserted in
lieu thereof: "Intentionally omitted."
4. Section 4.17 is hereby deleted, and the following shall be inserted in
lieu thereof: "Intentionally omitted."
5. Section 7.01(c) is hereby deleted, and the following shall be inserted
in lieu thereof: "Intentionally omitted."
6. Section 7.02(c) is hereby deleted, and the following shall be inserted
in lieu thereof:
"(c) LOCK-UP AGREEMENTS. Each of Messrs. Ross Pirasteh, Martin
Sergi and Paul Garrett shall have entered into an agreement with the Buyer
pursuant to which they agree that, during the period beginning on the Closing
Date and continuing to and
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including the date 365 days after the Closing Date, they will not offer, sell or
contract to sell or otherwise dispose of any of the shares of Buyer Common Stock
received by them pursuant to the Agreement (provided that the same shall not
preclude any such person from borrowing against any such shares, and following
the Closing Date, any such restriction may be waived by the board of directors
of the Buyer)."
7. Section 7.02(h) is hereby deleted, and the following shall be inserted
in lieu thereof: "Intentionally omitted."
8. A new Section 7.03(e) shall be added, which shall read as follows:
"(e) LOCK-UP AGREEMENTS. Each of Messrs. John Casella, Jim Bohlig
and Jerry Cifor shall have entered into an agreement with the Buyer pursuant to
which they agree that, during the period beginning on the Closing Date and
continuing to and including the date 365 days after the Closing Date, they will
not offer, sell or contract to sell or otherwise dispose of any of their shares
of Buyer Common Stock (provided that the same shall not preclude any such person
from borrowing against any such shares, and following the Closing Date, any such
restriction may be waived by the board of directors of the Buyer)."
9. The reference to "September 30, 1999" in Section 8.01(b) is hereby
deleted and "December 15, 1999" is hereby substituted in lieu thereof.
10. A new Section 8.01(g) shall be added, which shall read as follows:
(g) by Seller, if on or prior to September 30, 1999, it has not
received an opinion, satisfactory in form and substance to Seller in its
reasonable judgment, from a financial advisor to the effect that the Exchange
Ratio is fair to the holders of Seller Common Stock from a financial point of
view.
11. Schedule 6.15 is hereby deleted and Schedule 6.15 attached hereto shall
be substituted in lieu thereof.
12. The Seller Disclosure Schedule attached to Amendment No. 1 is hereby
deleted and the Seller Disclosure Schedule attached hereto shall be
inserted in lieu thereof.
13. The Buyer Disclosure Schedule attached to Amendment No. 1 is hereby
deleted and the Buyer Disclosure Schedule attached hereto shall be
inserted in lieu thereof.
14. The form of employment agreement referenced in Section 7.02(g) and
attached as Exhibit D to the Agreement is hereby amended by adding the
following sentence to the end of Section 16 thereof: "Without limiting
the generality of the foregoing, any employment agreement or other
arrangement between the Employee and KTI, Inc. or any subsidiary
thereof is hereby terminated and neither party shall have any further
obligation on account thereof."
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15. In all other respects, the Agreement shall remain in full force and
effect, and all references in the Agreement to "this Agreement" shall
mean the Agreement as amended hereby.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, Buyer, Sub and Seller have caused this Agreement to
be signed by their respective officers thereunto duly authorized as of the date
first written above.
CASELLA WASTE SYSTEMS, INC.
By: /s/ John W. Casella
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John W. Casella, Chairman
and CEO
RUTLAND ACQUISITION SUB, INC.
By: /s/ John W. Casella
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John W. Casella, President
KTI, INC.
By: /s/ Ross Pirasteh
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Ross Pirasteh, Chairman
[Signature page to Amendment No. 2 to Agreement and Plan of Merger]
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SCHEDULE 6.15
LIST OF BUYER'S DIRECTORS AND OFFICERS
AS OF THE EFFECTIVE TIME
President and Chief Executive Officer: John Casella
Senior Vice President - Chief Operating Officer: James Bohlig
Executive Vice President - Business Development: Martin Sergi
Chief Financial Officer: Jerry Cifor
Directors:
<TABLE>
<CAPTION>
<S> <C>
3 - Buyer: 2 - Seller:
1. John Casella 1. Martin Sergi
2. James Bohlig 2. Ross Pirasteh (Chairman of the Board)
3. Douglas Casella
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6 - Independent:
Four - designated by Buyer
Two - designated by Seller
<TABLE>
<CAPTION>
CLASS II (EXPIRES 1999) CLASS III (EXPIRES 2000) CLASS I (EXPIRES 2001)
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<S> <C> <C>
James Bohlig John Casella Douglas Casella
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Martin Sergi To be designated by Buyer Ross Pirasteh
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To be designated by Buyer To be designated by Buyer To be designated by Buyer
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To be designated by Seller To be designated by Seller
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</TABLE>
