<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
SCHEDULE TO
TENDER OFFER STATEMENT UNDER SECTION 14(D)(1) OR
SECTION 13(E)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
--------------------------
(AMENDMENT NO. 1)
KTI, INC.
(Name of Subject Company (issuer))
KTI, INC. (ISSUER)
CASELLA WASTE SYSTEMS, INC. (AFFILIATE OF ISSUER)
(Name of Person(s) Filing Statement)
8 3/4% CONVERTIBLE SUBORDINATED NOTES DUE 2004
(Title of Class of Securities)
8 3/4% CONVERTIBLE SUBORDINATED NOTES DUE 2004: 482689 AA 4
(CUSIP Number of Class of Securities)
JOHN W. CASELLA
CHIEF EXECUTIVE OFFICER
CASELLA WASTE SYSTEMS, INC.
25 GREENS HILL LANE
RUTLAND, VERMONT
(802) 775-0325
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications on Behalf of the Person(s) Filing Statement)
COPY TO:
JEFFREY A. STEIN, ESQ.
HALE AND DORR LLP
60 STATE STREET
BOSTON, MA 02109
JANUARY 24, 2000
(Date Tender Offer First Published, Sent or Given to Security Holders)
CALCULATION OF FILING FEE
<TABLE>
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TRANSACTION VALUATION* AMOUNT OF FILING FEE
$6,830,883 $1,366
</TABLE>
* The transaction value shown is only for the purpose of calculating the
filing fee. The amount shown reflects the cost of purchasing $6,770,000
principal amount of Notes at the purchase price (100% of the principal
amount of the Notes, plus accrued and unpaid interest up to but excluding
the date of payment) as of March 8, 2000 (the expected date of payment). The
amount of the filing fee is calculated in accordance with Section 13(e)(3)
of the Securities Exchange Act of 1934, as amended.
/X/ Check the 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: $1,366
Form or Registration No.: 005-52063
Filing Party: KTI, Inc.
Date Filed: January 24, 2000
/ / Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
third-party tender offer subject to Rule 14d-1. / /
issuer tender offer subject to Rule 13e-4. / /
going-private transaction subject to Rule 13e-3. / /
amendment to Schedule 13D under Rule 13d-2. / /
Check the following box if the filing is a final amendment reporting the
results of the tender offer. / /
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<PAGE>
INTRODUCTORY STATEMENT
This Schedule TO relates to a change of control offer (the "Offer") by KTI,
Inc., a New Jersey corporation (the "Company"), to purchase for cash, on the
terms and subject to the conditions set forth in the attached Offer to Purchase
dated March 2, 2000 (the "Offer to Purchase") and the related Letter of
Transmittal (the "Letter of Transmittal"), all of the outstanding 8 3/4%
Convertible Subordinated Notes due 2004 of the Company (the "Notes"). Prior to
the Effective Time (as defined in the Offer to Purchase), the Notes were
convertible into shares of common stock, par value $.01 per share, of the
Company (the "Company Common Stock"), at a conversion price of $11.75 per share
of Company Common Stock. Since the Effective Time, the Notes have been
convertible into shares of Class A Common Stock of Casella Waste Systems, Inc.
at a conversion price of $23.04 per share. Copies of the Offer to Purchase and
the Letter of Transmittal are filed as exhibits (a)(1) and (a)(2) hereto.
ITEM 1. SUMMARY TERM SHEET
The information set forth in the section of the Offer to Purchase entitled
"Summary" is incorporated herein by reference.
ITEM 2. SUBJECT COMPANY INFORMATION
(a) The name of the Company is KTI, Inc. The address of its principal
executive office is 25 Greens Hill Lane, Rutland, Vermont 05702. The Company is
a wholly owned subsidiary of Casella Waste Systems, Inc., a Delaware corporation
("Casella"). Casella's principal executive office is 25 Greens Hill Lane,
Rutland, Vermont 05702. The telephone number for both Casella and the Company is
(802) 775-0325.
(b) The securities which are the subject of the Offer are the 8 3/4%
Convertible Subordinated Notes due 2004 issued by the Company. The Notes are
convertible into shares of Casella Class A Common Stock at a conversion price of
$23.04 per share. As of January 20, 2000, there was $6,770,000 aggregate
principal amount of Notes outstanding. The Offer is for any and all Notes, in
denominations of $1,000 or integral multiples thereof, at 100% of the principal
amount of the Notes, plus accrued and unpaid interest up to but excluding the
date of payment.
(c) The information set forth in the section of the Offer to Purchase
entitled "Market Price Information" is incorporated herein by reference.
(d) The Notes bear interest at 8 3/4% per annum. Interest has been paid in
arrears on February 1, May 1, August 1 and November 1 of each year since the
Notes were issued on July 31, 1998.
(e) Not applicable.
(f) In November 1998, $14,329,000 of the Notes were exchanged for 1,219,489
shares of KTI Common Stock at $11.75 per share. The conversion included a
premium equal to 3.0% of the face value of the Notes and nine months forward
interest at 8 3/4%, paid to the noteholders in the form of 63,910 shares of KTI
common stock valued at $21.44 per share.
ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON
The Company and Casella are filing this statement. The information required
by this item is set forth in item 2(a) above.
ITEM 4. TERMS OF THE TRANSACTION
The information set forth in the Offer to Purchase is incorporated herein by
reference. To the best knowledge of the Company, no Notes are being purchased
from any officer, director or affiliate of the Company.
<PAGE>
ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS
The Notes are governed by the Indenture dated as of July 31, 1998 between
the Company and SunTrust Bank, Central Florida, National Association, as
trustee, and by the First Supplemental Indenture dated as of December 14, 1999
between the Company and SunTrust Bank, Central Florida, National Association, as
trustee.
ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS
The information set forth in the section of the Offer to Purchase entitled
"Purpose and Effects of the Offer" is incorporated herein by reference.
ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The information set forth in the section of the Offer to Purchase entitled
"Sources and Amount of Funds" is incorporated herein by reference.
ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY
To the best knowledge of the Company and Casella, no Notes are owned by any
person whose ownership would be required to be disclosed by this item. In
addition, to the knowledge of the Company, none of such persons engaged in any
transactions in the Notes during the 60 days preceding the date of this
Schedule.
ITEM 9. PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED
The information set forth in the section of the Offer to Purchase entitled
"The Depositary" is incorporated herein by reference.
ITEM 10. FINANCIAL STATEMENT
Not applicable.
ITEM 11. ADDITIONAL INFORMATION
Not applicable.
ITEM 12. MATERIAL TO BE FILED AS EXHIBITS
(a)(1) Offer to Purchase, dated March 2, 2000.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to clients.
(a)(5) Letter to brokers, dealers, commercial banks, trust companies and
other nominees.
(b) Amended and Restated Revolving Credit and Term Loan Agreement between
Casella and various financial institutions named therein, dated as of December
14, 1999.
(d)(1) Indenture, dated as of July 31, 1998, between the Company, as
issuer, and SunTrust Bank, Central Florida, National Association, as trustee.
(2) First Supplemental Indenture, dated as of December 14, 1999, between
the Company, as issuer, and SunTrust Bank, Central Florida, National
Association, as trustee.
(g) Not applicable.
(h) Not applicable.
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
Dated: March 2, 2000
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KTI, INC.
By: /s/ JOHN W. CASELLA
-----------------------------------------
John W. Casella
PRESIDENT
CASELLA WASTE SYSTEMS, INC.
By: /s/ JOHN W. CASELLA
-----------------------------------------
John W. Casella
CHIEF EXECUTIVE OFFICER
</TABLE>
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
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<S> <C>
(a)(1) Offer to Purchase, dated March 2, 2000
(a)(2) Letter of Transmittal
(a)(3) Notice of Guaranteed Delivery
(a)(4) Letter to clients
(a)(5) Letter to brokers, dealers, commercial banks, trust
companies and other nominees
(b) Amended and Restated Revolving Credit and Term Loan
Agreement between Casella and various financial institutions
named therein, dated as of December 14, 1999*
(d)(1) Indenture, dated as of July 31, 1998, between the Company,
as issuer, and SunTrust Bank, Central Florida, National
Association, as trustee*
(d)(2) First Supplemental Indenture, dated as of December 14, 1999,
between the Company, as issuer, and SunTrust Bank, Central
Florida, National Association, as trustee*
(g) Not applicable
(h) Not applicable
</TABLE>
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* Previously filed
<PAGE>
EXHIBIT 99.(A)(1)
KTI, INC.
OFFER TO PURCHASE
FOR CASH ANY AND ALL OF THE OUTSTANDING
8 3/4% CONVERTIBLE SUBORDINATED NOTES DUE 2004
OF KTI, INC.
AT
100% OF THE PRINCIPAL AMOUNT
OF THE NOTES
SUMMARY OF THE OFFER
The attached materials relate to an offer being made by KTI, Inc. to
purchase the 8 3/4% Convertible Subordinated Notes due 2004 held by you. We are
making this offer because it is required under the terms of the indenture
relating to the notes. The indenture is the document which sets forth KTI's
obligations with respect to the Notes.
The offer was previously made pursuant to an Offer to Purchase dated
January 24, 2000. The offer is being extended until March 10, 2000.
The following is a summary of the most material terms of the offer. The
offer is not subject to any material conditions other than compliance with the
procedures described in the attached materials.
- WHAT PRICE WILL YOU RECEIVE FOR YOUR NOTES IF YOU TENDER THEM TO US? We
are offering to repurchase your notes for a price, in cash, equal to 100%
of the principal amount of the notes plus accrued and unpaid interest up
to the date of repurchase. See "Certain Offer Matters--Purpose and Effects
of the Offer".
- WHAT ARE OUR REASONS FOR THE OFFER? The indenture relating to the notes
requires us to offer to repurchase your notes following a change of
control of KTI. A change of control took place on December 14, 1999, when
KTI became a wholly-owned subsidiary of Casella Waste Systems, Inc. See
"Certain Offer Matters--Purpose and Effects of the Offer".
- WHEN DOES THE OFFER EXPIRE? In order to tender your notes, you must
deliver them, along with the documents described in the attached
materials, on or prior to March 10, 2000, unless we extend the offer. We
will make a public announcement if we choose to extend the offer. See
"Certain Offer Matters--Expiration Date; Extensions; Amendments;
Termination".
- WHEN WILL YOU RECEIVE PAYMENT FOR TENDERED NOTES? If we accept your
tender, we will make the payment for the tendered notes on March 15, 2000
or three business days after your right to tender them expires, if the
offer is extended. See "Certain Offer Matters--Acceptance for Payment."
- MAY YOU WITHDRAW YOUR TENDER? You may withdraw your decision to tender at
any time prior to the close of business on March 13, 2000. If we extend
the offer as described above, you may withdraw your tender at any time
prior to the close of business on the business day following the date to
which the offer has been extended. Your tender may also be withdrawn if
not accepted for payment prior to the close of business on March 21, 2000.
To withdraw your tender, you must follow the procedures described in the
attached materials. See "Procedures for Tendering Notes--Withdrawal
Rights".
- WHAT HAPPENS TO YOUR NOTES IF YOU DO NOT TENDER THEM? If you do not tender
your notes, they will remain outstanding pursuant to their terms and will
continue to accrue interest. You will continue to have the right to
convert the notes into shares of Casella Class A Common Stock. The
conversion price is approximately $23.04 per share. This means that every
$1,000 principal amount of the notes is convertible into approximately
43.4 shares of Casella Class A Common Stock. The market price of Casella
Class A Common Stock was $6.75 per share at the close of trading on
February 29, 2000. We advise you to obtain current market price quotes.
See the introductory paragraphs of this Offer to Purchase immediately
following this summary. However, because KTI is no longer subject to the
reporting requirements of the Securities Exchange Act of 1934, the amount
of information available as to KTI will be substantially reduced. See
"Available Information".
- HOW DO YOU TENDER YOUR NOTES? To tender your notes, you must carefully
follow the instructions in the attached materials. Persons holding notes
through DTC will need to follow a different process than those persons who
are themselves record holders of the notes. See "Procedures for Tendering
Notes--Tendering Notes."
- WHO SHOULD YOU CALL IF YOU NEED MORE INFORMATION? If you have any
questions regarding the attached materials, please call the trustee named
in the indenture, as follows:
SUNTRUST BANK
225 EAST ROBINSON STREET, SUITE 250
ORLANDO, FLORIDA 32801
TELECOPY: (407) 237-5299
ATTENTION: MS. LISA DERRYBERRY
TELEPHONE: (407) 237-4791
<PAGE>
KTI, INC.
AMENDED OFFER TO PURCHASE
FOR CASH ANY AND ALL OF THE OUTSTANDING
8 3/4% CONVERTIBLE SUBORDINATED NOTES DUE 2004
OF KTI, INC.
AT
100% OF THE PRINCIPAL AMOUNT
OF THE NOTES
SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THIS OFFER TO PURCHASE, THE
OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
MARCH 10, 2000, UNLESS EXTENDED (THE "EXPIRATION DATE"). NOTES TENDERED IN THE
OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE CLOSE OF BUSINESS ON THE
BUSINESS DAY FOLLOWING THE EXPIRATION DATE.
KTI, Inc. (the "Company") hereby offers (the "Offer") to purchase for cash
at the Repurchase Price (as defined below), and upon the terms and subject to
the conditions set forth in this Offer to Purchase (the "Offer to Purchase") and
in the accompanying Letter of Transmittal (the "Letter of Transmittal"), any and
all of the outstanding 8 3/4% Convertible Subordinated Notes due 2004 of the
Company (the "Notes"). The Offer is not subject to any material conditions other
than compliance with the procedures described below. As a result of the Merger
(as defined below), each $1,000 principal amount of Notes is convertible into
shares of Class A common stock of Casella Waste Systems, Inc. as described
below. The "Repurchase Price" equals 100% of the principal amount of the Notes,
plus accrued and unpaid interest up to but excluding March 15, 2000 (the
"Repurchase Date"), unless the Expiration Date is extended as set forth herein
under "Certain Offer Matters--Expiration Date; Extensions; Amendments;
Termination." Unless the Company fails to pay the Repurchase Price, any Notes
properly tendered pursuant to the Offer and accepted for payment will cease to
accrue interest on the Repurchase Date. Any Notes not tendered in the Offer (or
tendered and withdrawn prior to the Expiration Date) will remain obligations of
the Company and will continue to accrue interest and have all of the benefits of
the Indenture.
Any holder of Notes (a "Holder") desiring to tender all or any portion of
such Holder's Notes must comply with the procedures for tendering Notes set
forth herein in "Procedures for Tendering Notes" and in the Letter of
Transmittal. Tenders of Notes may be withdrawn at any time prior to the
Expiration Date. In the event of a withdrawal of Notes, the Notes so withdrawn
will be returned to the Holder promptly.
The date of this Amended Offer to Purchase is March 2, 2000
<PAGE>
The Offer is being made pursuant to the Indenture, dated as of July 31,
1998, between the Company, as issuer, and SunTrust Bank, Central Florida,
National Association (now known as SunTrust Bank), as trustee, as supplemented
by a supplemental Indenture, dated as of December 14, 1999, between the Company,
as issuer, and SunTrust Bank, as trustee (the indenture, as supplemented by the
Supplemental Indenture, is referred to herein as the "Indenture") which provides
that, following a Change of Control (as defined below), each Holder will have
the right, at such Holder's option, to require the Company to purchase all or
any part of such Holder's Notes at the Repurchase Price (a "Change of Control
Right"). A Change of Control occurred on December 14, 1999 as a result of the
consummation of the merger (the "Merger") of Rutland Acquisition Sub, a New
Jersey corporation ("Acquisition Sub") and wholly-owned subsidiary of Casella,
with and into the Company. As a result of the Merger, the Company as the
surviving entity, became a wholly-owned subsidiary of Casella.
The Merger was consummated on December 14, 1999 (the "Effective Time")
pursuant to an Agreement and Plan of Merger, dated as of January 12, 1999, as
amended, by and among the Company, Casella and Acquisition Sub (the "Merger
Agreement") which provided for the Merger of Acquisition Sub with and into the
Company. Upon the consummation of the Merger, stockholders of the Company
received the right to receive .51 of one share of Casella Class A common stock
for each share of the Company's common stock held by them (the "Exchange
Ratio").
Prior to the Effective Time, the Notes were convertible into shares of the
Company's common stock at a conversion price of $11.75 per share. As a result of
the Merger and pursuant to the Supplemental Indenture, the Notes are no longer
convertible into shares of the Company's common stock. Instead, each Holder has
the right (during the period the Notes are convertible as specified in Article
11 of the Indenture) to convert such Notes only into Casella Class A common
stock. Based on the Exchange Ratio, each $1,000 principal amount of Notes is now
convertible into approximately 43.4 shares of Casella Class A common stock,
reflecting a conversion price of approximately $23.04 per share, subject to
adjustment as provided in the Indenture. Information with respect to historical
and recent stock prices of Casella Class A common stock is set forth below under
"Market Price Information--Casella Common Stock."
In November 1998, $14,329,000 of the Notes were exchanged for 1,219,489
shares of KTI Common Stock at $11.75 per share. The conversion included a
premium equal to 3.0% of the face value of the Notes and nine months forward
interest at 8 3/4%, paid to the noteholders in the form of 63,910 shares of KTI
common stock valued at $21.44 per share.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment) and applicable law, the Company will purchase, by accepting for
payment, and will pay for all Notes validly tendered (and not properly
withdrawn) pursuant to the Offer promptly after the Expiration Date, such
payment to be made by the deposit of immediately available funds by the Company
with SunTrust Bank (the "Depositary").
No person has been authorized to give any information or to make any
representations other than those contained in this Offer to Purchase and, if
given or made, such information or representations must not be relied upon as
having been authorized. This Offer to Purchase and related documents do not
constitute an offer to buy or the solicitation of an offer to sell securities in
any circumstances in which such offer or solicitation is unlawful. The delivery
of this Offer to Purchase shall not, under any circumstances, create any
implication that the information contained herein is current as of any time
subsequent to the date of such information.
Neither the Company nor Casella makes any recommendation as to whether or
not Holders should exercise their Change of Control Right and tender Notes
pursuant to this Offer.
Any questions or requests for assistance or for additional copies of this
Offer to Purchase or related documents may be directed to the Depositary at its
telephone number set forth below under "Depositary." Any beneficial owner owning
interests in Notes may also contact such beneficial owner's broker, dealer,
commercial bank, trust company or other nominee for assistance concerning this
Offer.
ii
<PAGE>
AVAILABLE INFORMATION
Casella is, and prior to December 14, 1999, the Company was, subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith each has filed reports, proxy
statements and other information with the Securities and Exchange Commission
(the "Commission"). Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at
the Commission's Regional Office at Seven World Trade Center, Suite 1300, New
York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511. Copies of such material also can be obtained, at
prescribed rates, from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549. The Commission maintains a website
at http://www.sec.gov. that contains reports, proxy and information statements
and other information regarding registrants that file electronically with the
Commission.
Casella's Registration Statement on Form S-4, filed on November 12, 1999, as
amended by Forms S-4/A-1 and S-4/A-2, both of which were filed on November 15,
1999, and Casella's Quarterly Report on Form 10-Q for the quarter ended October
31, 1999 are incorporated in this offer to purchase by reference. In addition,
KTI's Quarterly Report on Form 10-Q for the quarter ended September 30, 1999 is
incorporated in this offer to purchase by reference.
Any future filings by Casella under Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of this offer to purchase and prior to the
date on which tenders may be withdrawn will be deemed to be incorporated in this
offer to purchase by reference. Any such filings will automatically update and
replace the information that appears, or is incorporated in this offer to
purchase.
The common stock of the Company has been delisted from the Nasdaq National
Market and application has been made pursuant to the Exchange Act to terminate
the registration of the Company's common stock under the Exchange Act. Such
termination will substantially reduce the information required to be furnished
by the Company to the Commission.
This Offer to Purchase constitutes a part of an Issuer Tender Offer
Statement on Schedule TO (the "Schedule TO") filed with the Commission by the
Company and Casella pursuant to Section 13(e) of the Exchange Act and the rules
and regulations promulgated thereunder. The Schedule TO and all exhibits thereto
are incorporated in this Offer to Purchase by reference.
iii
<PAGE>
CAUTIONARY STATEMENT CONCERNING FORWARD LOOKING STATEMENTS
Certain statements in this Offer to Purchase, including the information
incorporated by reference herein, constitute "forward-looking statements".
Among these statements are those included in Casella's Form S-4 filed on
November 12, 1999 (the "Casella S-4"), including under the following captions:
- "Risk Factors";
- "The Merger--Reasons for the merger";
- "The Companies";
- "Combined Unaudited Pro Forma Financial Information"; and
- "Notes to Combined Unaudited Pro Forma Financial Information".
Casella may also be making forward-looking statements when it makes
statements that include the words "believes", "expects", "anticipates" or
similar expressions. Additionally, the discussion in the Casella S-4 of
anticipated operational efficiencies from the Merger appearing in "Risk Factors"
and "The Merger--Reasons for the merger" and the projected operating results for
the current fiscal year and future fiscal years appearing in "The
Merger--Reasons for the merger", including projected operating results for the
combined company and for each company as a stand alone entity, constitute
forward-looking statements. These differences could arise as a result of many
factors, including those set forth in the Casella S-4 under "Risk Factors".
Many of the foregoing risks and factors have been discussed in the
Company's and Casella's prior filings with the Securities and Exchange
Commission. Forward looking statements in this Offer to Purchase are not
protected under the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995.
iv
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
AVAILABLE INFORMATION....................................... iii
CAUTIONARY STATEMENT CONCERNING FORWARD LOOKING
STATEMENTS................................................ iv
CERTAIN OFFER MATTERS....................................... 1
Purpose and Effects of the Offer.......................... 1
Expiration Date; Extensions; Amendments; Termination...... 1
Acceptance for Payment.................................... 2
PROCEDURES FOR TENDERING NOTES.............................. 2
Tendering Notes........................................... 2
Guaranteed Delivery Procedures............................ 5
Withdrawal Rights......................................... 6
CERTAIN INFORMATION CONCERNING THE COMPANY AND CASELLA...... 7
SOURCES AND AMOUNT OF FUNDS................................. 11
MARKET PRICE INFORMATION.................................... 12
CERTAIN FEDERAL INCOME TAX CONSEQUENCES..................... 17
General................................................... 17
Sale of Notes Pursuant to the Offer....................... 17
THE DEPOSITARY.............................................. 19
MISCELLANEOUS............................................... 19
</TABLE>
v
<PAGE>
CERTAIN OFFER MATTERS
PURPOSE AND EFFECTS OF THE OFFER
The Offer is being made pursuant to the Indenture, which provides that,
following a Change of Control, each Holder of Notes will have the right, at such
Holder's option, to require the Company to repurchase all or a portion of such
Holder's Notes, in integral multiples of $1,000, at a purchase price equal to
100% of the principal amount thereof plus accrued and unpaid interest up to but
excluding the Repurchase Date. A "Change of Control" as defined in the Indenture
occurs when, among other things, there shall be consummated any consolidation or
merger of the Company pursuant to which the Company's common stock would be
converted into cash, securities or other property other than a consolidation or
merger of the Company in which the holders of the Company's common stock
immediately prior to the consolidation or merger have, directly or indirectly,
at least a majority of the total voting power of all classes of capital stock
entitled to vote generally in the election of directors of the continuing or
surviving corporation immediately after such consolidation or merger in
substantially the same proportion as their ownership of the Company's common
stock immediately before such transaction.
A "Change of Control" occurred on December 14, 1999 as a result of the
consummation of the Merger, pursuant to which the Company, as the surviving
entity, became a wholly-owned subsidiary of Casella. This Offer to Purchase
serves as the Offer to Purchase required by Section 4.8 of the Indenture.
The Notes purchased in the Offer will cease to be outstanding and will be
delivered to the Trustee for cancellation immediately after such purchase.
Holders of Notes that are not tendered pursuant to the Offer will not have
the right after the Expiration Date to exercise their Change of Control Rights
in respect of such Notes in connection with the Merger.
If less than all the principal amount of Notes held by a Holder is tendered
and accepted pursuant to the Offer, the Company will issue, and the Trustee will
authenticate and deliver to or on the order of the Holder thereof, at the
expense of the Company, new Notes of authorized denominations, in a principal
amount equal to the portion of the Notes not tendered or not accepted, as the
case may be, as promptly as practicable after the Expiration Date.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS; TERMINATION
The Offer will expire on March 10, 2000, unless extended (the "Expiration
Date"). During any extension of the Offer, all Notes previously tendered
pursuant to the Offer (and not properly withdrawn) will remain subject to the
Offer and may be accepted for payment by the Company, subject to the
withdrawal rights of Holders.
The Company also expressly reserves the right, subject to the requirements
of the Indenture, to amend the terms of the Offer in any respect.
Any extension, termination or amendment of the Offer will be followed as
promptly as practicable by a public announcement thereof or, if required by
the rules of the Securities and Exchange Act, the delivery of notice of such
change in the same manner in which original offering materials were
disseminated to each Holder of Notes. Without limiting the manner in which
the Company may choose to make a public announcement of any extension,
termination or amendment of the Offer, the Company shall have no obligation
to publish, advertise or otherwise communicate any such public announcement,
other than by issuing a release to the Business Wire, except in the case of
an announcement of an extension of the Offer, in which case the Company shall
have no obligation to publish, advertise or otherwise communicate such
announcement other than by issuing a notice of such extension by press
release or other public announcement, which notice shall be issued no later
than 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date.
1
<PAGE>
ACCEPTANCE FOR PAYMENT
For purposes of the Offer, the Company shall be deemed to have accepted
for payment (and thereby to have purchased) tendered Notes as, if and when
the Company gives oral or written notice to the Depositary of the Company's
acceptance of such Notes for payment. Subject to the terms and conditions of
the Offer, payment for Notes so accepted will be made by deposit of the
consideration therefor with the Depositary. The Depositary will act as agent
for tendering Holders for the purpose of receiving payment from the Company
and then transmitting payment to such tendering Holders. The Company will
deposit the consideration with the Depositary on March 15, 2000 or three
business days after the Expiration Date, if extended.
PROCEDURES FOR TENDERING NOTES
TENDERING NOTES
The tender of Notes pursuant to any of the procedures set forth in this
Offer to Purchase and in the Letter of Transmittal will constitute a binding
agreement between the tendering Holder and the Company upon the terms and
subject to the conditions of the Offer. The tender of Notes will constitute an
agreement to deliver good and marketable title to all tendered Notes prior to
the Expiration Date free and clear of all liens, charges, claims, encumbrances,
interests and restrictions of any kind.
EXCEPT AS PROVIDED IN "--GUARANTEED DELIVERY PROCEDURES", UNLESS THE NOTES
BEING TENDERED ARE DEPOSITED BY THE HOLDER WITH THE DEPOSITARY PRIOR TO THE
EXPIRATION DATE (ACCOMPANIED BY A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF
TRANSMITTAL), THE COMPANY MAY, AT ITS OPTION, REJECT SUCH TENDER. PAYMENT FOR
NOTES WILL BE MADE ONLY AGAINST DEPOSIT OF TENDERED NOTES AND DELIVERY OF ALL
OTHER REQUIRED DOCUMENTS.
Only record Holders of Notes are authorized to exercise a Change of Control
Right and tender their Notes pursuant to the Offer. Accordingly, to properly
exercise a Change of Control Right and tender Notes or cause Notes to be
tendered, the following procedures must be followed:
NOTES HELD THROUGH DTC. Each beneficial owner of Notes held through a
participant (a "DTC Participant") of The Depository Trust Company ("DTC") (i.e.,
a custodian bank, depositary, broker, trust company or other nominee) must
instruct such DTC Participant to cause its Notes to be tendered in accordance
with the procedures set forth in this Offer to Purchase.
Pursuant to an authorization given by DTC to the DTC Participants, each DTC
Participant that holds Notes through DTC must (i) transmit its acceptance
through the DTC Automated Tender Offer Program ("ATOP") (for which the
transaction will be eligible), and DTC will then edit and verify the acceptance,
execute a book-entry delivery to the Depositary's account at DTC and send an
Agent's Message (as defined below) to the Depositary for its acceptance, or (ii)
comply with the guaranteed delivery procedures set forth in this Offer to
Purchase. The Depositary will (promptly after the date of this Offer to
Purchase) establish accounts at DTC for purposes of the Offer with respect to
Notes held through DTC, and any financial institution that is a DTC Participant
may make book-entry delivery of interests in Notes into the Depositary's account
through ATOP. However, although delivery of interests in the Notes may be
effected through book-entry transfer into the Depositary's account through ATOP,
an Agent's Message in connection with such book-entry transfer and any other
required documents must be, in any case, transmitted to and received by the
Depositary at its address set forth on the back cover of this Offer to Purchase,
or the guaranteed delivery procedures set forth below must be complied with, in
each case, prior to the Expiration Date. Delivery of documents to DTC does not
constitute delivery to the Depositary. The confirmation of a book-entry transfer
into the Depositary's account at DTC as described above is referred to herein as
a "Book-Entry Confirmation."
2
<PAGE>
The term "Agent's Message" means a message transmitted by DTC to, and
received by, the Depositary and forming a part of the Book-Entry Confirmation,
which states that DTC has received an express acknowledgment from each DTC
Participant tendering through ATOP that such DTC Participants have received a
Letter of Transmittal and agree to be bound by the terms of the Letter of
Transmittal and that the Company may enforce such agreement against such DTC
Participants.
All of the Notes currently held through DTC have been issued in the form of
a global note registered in the name of Cede & Co. ("Cede"), DTC's nominee (the
"Global Note"). At or as of the close of business on the second business day
after the Expiration Date, DTC will deliver to the Depositary the Global Note
(with the form entitled "Option of Holder to Elect Purchase" on the reverse of
the certificate completed). At or as of the close of business on the second
business day after the Expiration Date, DTC will deliver the aggregate principal
amount of Notes as to which it has delivered Agent's Messages in respect of
Notices of Guaranteed Delivery as described under "--Guaranteed Delivery
Procedures." Thereafter, the aggregate principal amount of the Global Note will
be reduced to represent the aggregate principal amount of Notes held through DTC
and not tendered pursuant to the Offer and the Global Note will be returned to
Cede.
NOTES HELD BY RECORD HOLDERS. Each record Holder must complete and sign a
Letter of Transmittal, and mail or deliver such Letter of Transmittal, and any
other documents required by the Letter of Transmittal, together with
certificate(s) representing all tendered Notes (with the form entitled "Option
of Holder to Elect Purchase" on the reverse of the certificate completed), to
the Depositary at its address set forth below under "The Depositary", or the
Holder must comply with the guaranteed delivery procedures set forth in this
Offer to Purchase.
All signatures on a Letter of Transmittal must be guaranteed by a recognized
participant in the Securities Transfer Agents Medallion Program, the NYSE
Medallion Signature Program or the Stock Exchange Medallion Program; provided,
however, that signatures on a Letter of Transmittal need not be guaranteed if
such Notes are tendered for the account of an Eligible Institution (as defined
below). If a Letter of Transmittal or any Note is signed by a trustee, executor,
administrator, guardian, attorney-in-fact, agent, officer of a corporation or
other person acting in a fiduciary or representative capacity, such person must
so indicate when signing, and proper evidence satisfactory to the Company of the
authority of such person so to act must be submitted.
No alternative, conditional, irregular or contingent tenders will be
accepted (unless waived). By executing a Letter of Transmittal or transmitting
an acceptance through ATOP, each tendering Holder waives any right to receive
any notice of the acceptance for purchase of its Notes.
LOST OR MISSING CERTIFICATES. If a record Holder desires to tender Notes
pursuant to the Offer, but the certificates representing such Notes have been
mutilated, lost, stolen or destroyed, such Holder should write to or telephone
the Depositary about procedures in accordance with the provision of the
Indenture for obtaining replacement certificates representing such Notes.
BACKUP FEDERAL INCOME TAX WITHHOLDING. Under the "backup withholding"
provisions of Federal income tax law, unless a tendering Holder, or his or her
assignee (in either case, the "Payee"), satisfies the conditions described in
Instruction 5 of the Letter of Transmittal or is otherwise exempt, the aggregate
purchase price may be subject to backup withholding tax at a rate of 31%. To
prevent backup withholding, each Payee should complete and sign the Substitute
Form W-9 provided in the Letter of Transmittal. See Instruction 5 of the Letter
of Transmittal.
EFFECT OF LETTER OF TRANSMITTAL. Subject to and effective upon the
acceptance for payment of the Notes tendered thereby, by executing and
delivering a Letter of Transmittal a tendering Holder of Notes (i) irrevocably
sells, assigns and transfers to the Company all right, title and interest in and
to all the Notes tendered thereby, (ii) waives any and all rights with respect
to the Notes (including without limitation any existing or past defaults and
their consequences in respect of the Notes and the
3
<PAGE>
Indenture under which the Notes were issued), (iii) releases and discharges the
Company from any and all claims such Holder may have now, or may have in the
future arising out of, or related to, the Notes including without limitation any
claims that such Holder is entitled to receive additional principal or interest
payments with respect to the Notes or to participate in any redemption or
defeasance of the Notes and (iv) irrevocably constitutes and appoints the
Depositary the true and lawful agent and attorney-in-fact of such Holder with
respect to any such tendered Notes, with full power of substitution and
resubstitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest) to (a) deliver certificates representing such Notes,
or transfer ownership of such Notes on the account books maintained by DTC,
together, in any such case, with all accompanying evidences of transfer and
authenticity, to the Company, (b) present such Notes for transfer on the
relevant security register and (c) receive all benefits or otherwise exercise
all rights of beneficial ownership of such Notes (except that the Depositary
will have no rights to, or control over, funds from the Company, except as agent
for the Company, for the Repurchase Price for any tendered Notes that are
purchased by the Company), all in accordance with the terms of the Offer.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of tendered Notes will be resolved by the Company, whose
determination will be final and binding. The Company reserves the absolute right
to reject any or all tenders that are not in proper form or the acceptance of
which may, in the opinion of counsel for the Company, be unlawful. The Company
also reserves the absolute right to waive any condition to the Offer and any
irregularities or conditions of tender as to particular Notes. The Company's
interpretation of the terms and conditions of the Offer (including the
instructions in the Letter of Transmittal) will be final and binding. Unless
waived, any irregularities in connection with tenders must be cured within such
time as the Company shall determine. The Company and the Depositary shall not be
under any duty to give notification of defects in such tenders and shall not
incur liabilities for failure to give such notification. Tenders of Notes will
not be deemed to have been made until such irregularities have been cured or
waived. Any Notes received by the Depositary that are not properly tendered and
as to which the irregularities have not been cured or waived will be returned by
the Depositary to the tendering Holder, unless otherwise provided in the Letter
of Transmittal, as soon as practicable following the Expiration Date.
LETTERS OF TRANSMITTAL AND NOTES MUST BE SENT ONLY TO THE DEPOSITARY.
DO NOT SEND LETTERS OF TRANSMITTAL OR NOTES TO THE COMPANY.
THE METHOD OF DELIVERY OF NOTES AND LETTERS OF TRANSMITTAL, ANY REQUIRED
SIGNATURE GUARANTEES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY
THROUGH DTC AND ANY ACCEPTANCE THROUGH ATOP, IS AT THE ELECTION AND RISK OF THE
PERSONS TENDERING AND DELIVERING ACCEPTANCES OR LETTERS OF TRANSMITTAL AND,
EXCEPT AS OTHERWISE PROVIDED IN THE LETTER OF TRANSMITTAL, DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY
MAIL, IT IS SUGGESTED THAT THE HOLDER USE PROPERLY INSURED, REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED, AND THAT THE MAILING BE MADE SUFFICIENTLY IN ADVANCE
OF THE EXPIRATION DATE TO PERMIT DELIVERY TO THE DEPOSITARY PRIOR TO THE
EXPIRATION DATE.
GUARANTEED DELIVERY PROCEDURES
DTC PARTICIPANTS. A DTC Participant who wishes to cause its Notes to be
tendered, but who cannot transmit its acceptance through ATOP prior to the
Expiration Date, may cause a tender to be effected if:
(a) guaranteed delivery is made by or through a firm or other entity
identified in Rule 17Ad-15 under the Exchange Act (an "Eligible
Institution"), including (as such terms are defined
4
<PAGE>
therein): (i) a bank; (ii) a broker, dealer, municipal securities
dealer, municipal securities broker, government securities dealer
or government securities broker, (iii) a credit union; (iv) a national
securities exchange, registered securities association or clearing
agency; or (v) a savings institution that is a participant in a
Securities Transfer Association recognized program;
(b) prior to the close of business, New York City time, on the Expiration
Date, the Depositary receives from such Eligible Institution a properly
completed and duly executed Notice of Guaranteed Delivery (by mail,
hand delivery, facsimile transmission or overnight courier)
substantially in the form provided herewith; and
(c) Book-Entry Confirmation of the transfer into the Depositary's account at
DTC, and all other documents required by the Letter of Transmittal, are
received by the Depositary within three NYSE trading days after the date
of receipt by the Depositary of such Notice of Guaranteed Delivery.
RECORD HOLDERS. A record Holder who wishes to tender its Notes but (i) whose
Notes are not immediately available and will not be available for tendering
prior to the Expiration Date, or (ii) who cannot deliver its Notes, the Letter
of Transmittal or any other required documents to the Depositary prior to the
Expiration Date, may effect a tender if:
(a) the tender is made by or through an Eligible Institution;
(b) prior to the close of business, New York City time, on the Expiration
Date, the Depositary receives from such Eligible Institution a properly
completed and duly executed Notice of Guaranteed Delivery (by mail, hand
delivery, facsimile transmission or overnight courier) substantially in
the form provided herewith; and
(c) a properly completed and executed Letter of Transmittal, as well as the
certificate(s) representing all tendered Notes in proper form for
transfer, and all other documents required by the Letter of Transmittal,
are received by the Depositary within three NYSE trading days after the
date of receipt by the Depositary of such Notice of Guaranteed Delivery.
Under no circumstances will interest be paid by the Company by reason of any
delay in making payment to any person using the guaranteed delivery procedures
described above.
WITHDRAWAL RIGHTS
Tenders of Notes (or any portion of such Notes in integral multiples of
$1,000) may be withdrawn at any time prior to the close of business on the
business day following the Expiration Date. If the offer is extended as
described above, tenders of Notes may be withdrawn at any time prior to the
close of business on the business day following the date to which the offer has
been extended. Additionally, tenders of Notes may be withdrawn if not yet
accepted for payment prior to the close of business on March 21, 2000.
NOTES HELD THROUGH DTC. A DTC Participant who has transmitted its acceptance
through ATOP in respect of Notes held through DTC may, prior to the Expiration
Date, withdraw the instruction given thereby by (i) withdrawing its acceptance
through ATOP, or (ii) delivering to the Depositary by mail, hand delivery or
facsimile transmission a notice of withdrawal of such instruction. Such notice
of withdrawal must contain the name and number of the DTC Participant, the
principal amount of Notes to which such withdrawal relates and the signature of
the DTC Participant. Withdrawal of such an instruction will be effective upon
receipt of such notice of withdrawal by the Depositary.
NOTES HELD BY RECORD HOLDERS. A Holder may withdraw its tender of Notes
prior to the Expiration Date by delivering to the Depositary by mail, hand
delivery or facsimile transmission a notice of withdrawal. Any such notice of
withdrawal must (i) specify the name of the person who tendered the Notes to be
withdrawn, (ii) contain a description of the Notes to be withdrawn and identify
the certificate number or numbers shown on the particular certificates
evidencing such Notes and the aggregate principal amount represented by such
Notes and (iii) be signed by the Holder of such Notes
5
<PAGE>
in the same manner as the original signature on the Letter of Transmittal by
which such Notes were tendered (including any required signature guarantees), or
be accompanied by (x) documents of transfer in a form acceptable to the Company,
in its sole discretion, and (y) a properly completed irrevocable proxy that
authorized such person to effect such revocation on behalf of such Holder. If
the Notes to be withdrawn have been delivered or otherwise identified to the
Depositary, a signed notice of withdrawal is effective immediately upon receipt
by the Depositary even if physical release is not yet effected. Any Notes
properly withdrawn will be deemed to be not validly tendered for purposes of the
Offer.
All signatures on a notice of withdrawal must be guaranteed by a recognized
participant in the Securities Transfer Agents Medallion Program, the NYSE
Medallion Signature Program or the Stock Exchange Medallion Program; provided,
however, that signatures on the notice of withdrawal need not be guaranteed if
the Notes being withdrawn are held for the account of an Eligible Institution.
A withdrawal of an instruction or a withdrawal of a tender must be executed
by a DTC Participant or a Holder, as the case may be, in the same manner as the
person's name appears on its transmission through ATOP or Letter of Transmittal,
as the case may be, to which such withdrawal relates. If a notice of withdrawal
is signed by a trustee, partner, executor, administrator, guardian,
attorney-in-fact, agent, officer of a corporation or other person acting in a
fiduciary or representative capacity, such person must so indicate when signing
and must submit with the revocation appropriate evidence of authority to execute
the notice of withdrawal. A Holder or DTC Participant may withdraw a tender only
if such withdrawal complies with the provisions of this Offer to Purchase.
A withdrawal of an instruction previously given pursuant to the transmission
of an acceptance through ATOP or a withdrawal of a tender by a Holder may be
rescinded only by (i) a new transmission of acceptance through ATOP, or (ii)
execution and delivery of a new Letter of Transmittal, as the case may be, in
accordance with the procedures described herein.
CERTAIN INFORMATION CONCERNING
THE COMPANY AND CASELLA
Casella Waste Systems, Inc.
25 Greens Hill Lane
Rutland, Vermont 05701
(802) 775-0325
Casella is a regional, integrated, non-hazardous solid waste services
company that provides collection, transfer, disposal and recycling services in
Vermont, New Hampshire, Maine, upstate New York, northern Pennsylvania and
Massachusetts. At September 1, 1999, Casella owned and/or operated five Subtitle
D landfills and two permitted construction and demolition debris landfills, 54
transfer stations, 24 recycling processing facilities and 38 collection
operations which together serve over 500,000 commercial, municipal and
residential customers.
KTI, Inc.
25 Greens Hill Lane
Rutland, Vermont 05701
(802) 775-0325
KTI is an integrated solid waste processing company serving commercial,
industrial and residential customers primarily in the eastern United States. At
September 1, 1999, KTI processed solid waste through a network of 50 facilities
in 19 states, including six waste-to-energy plants, 22 material recycling
facilities and 11 finished products facilities. KTI is a wholly-owned subsidiary
of Casella.
6
<PAGE>
Specific reference is made to the Casella S-4, including for a summary of
the terms of and reasons for the Merger and risk factors relating to Casella
following the Merger.
SOURCES AND AMOUNT OF FUNDS
The precise amount of funds required by the Company to purchase Notes
tendered pursuant to the Offer and to pay the fees and expenses related to the
Offer will not be known until the Expiration Date. If all outstanding Notes were
tendered and purchased, the aggregate amount of funds required to pay the
Repurchase Price would be approximately $6,830,883. Such funds are expected to
be provided through a capital contribution by Casella.
Casella intends to provide such capital contribution from cash on hand and
cash borrowed under its existing credit facility. There are no conditions to
Casella's use of the credit facility for purposes of repurchasing the Notes.
Casella's credit facility provides Casella with revolving credit loans of up to
$300,000,000, plus a term loan in the maximum amount of $150,000,000. The loans
are secured by a pledge of stock of all of Casella's subsidiaries, and by a
security interest in all assets other than real estate and motor vehicles. The
interest rates on the loans is BankBoston, N.A.'s base rate or, if higher, 1
1/2% above the overnight federal funds effective rate, plus in either case an
additional amount between 0.125% and 0.750% per annum. The maturity date of the
term loan is December 14, 2006. The maturity date of the revolving credit loans
is December 14, 2004. The credit facility is between Casella and BankBoston,
N.A. as administrative agent, KeyBank National Association as documentation
agent, Bank of America, N.A., as syndication agent and Canadian Imperial Bank of
Commerce as Canadian agent, along with the following participating banks:
Comerica Bank, Lasalle Bank National Association, Credit Lyonnais, First Vermont
Bank and Trust Company and CIBC, Inc.
The Company estimates that its expenses incurred in connection with the
offer will be approximately as follows:
<TABLE>
<S> <C>
SEC Filing Fee.............................................. $ 1,366
Legal Fees and Expenses..................................... 10,000
Printing Fees............................................... 5,000
Miscellaneous Expenses...................................... 3,634
-------
Total....................................................... $20,000
</TABLE>
MARKET PRICE INFORMATION
THE NOTES
The Notes are not traded in an established market. To the extent that the
Notes are traded, prices of the Notes may fluctuate widely depending on the
trading volume and the balance between buy and sell orders.
HOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE NOTES PRIOR TO
MAKING ANY DECISION WITH RESPECT TO THE OFFER.
7
<PAGE>
CASELLA CLASS A COMMON STOCK
Casella Class A common stock is traded on the Nasdaq National Market under
the symbol "CWST". The table below sets forth, for the quarterly periods
indicated, the range of high and low sale prices of Casella Class A common stock
as reported on the Nasdaq National Market.
<TABLE>
<CAPTION>
HIGH LOW
-------- --------
<S> <C> <C>
Quarter ended October 31, 1997*............................. 22.750 20.250
Quarter ended January 31, 1998.............................. 26.375 19.000
Quarter ended April 30, 1998................................ 34.000 23.750
Quarter ended July 31, 1998................................. 31.500 24.375
Quarter ended October 31, 1998.............................. 34.000 24.000
Quarter ended January 31, 1999.............................. 39.000 25.000
Quarter ended April 30, 1999................................ 27.000 17.250
Quarter ended July 31, 1999................................. 26.875 19.063
Quarter ended October 31, 1999.............................. 26.625 12.750
Quarter ended January 31, 2000+............................. 19.250 13.125
Quarter ended April 30, 2000................................ 15.125 6.500
</TABLE>
- ------------------------
* Casella Class A common stock was not publicly traded until October 29, 1997.
+ Through March 1, 2000.
8
<PAGE>
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
GENERAL
The following discussion is for general information only and is based on the
federal income tax law now in effect, which is subject to change, possibly
retroactively. This summary does not discuss all aspects of federal income
taxation which may be relevant to any particular Holder of the Notes in light of
such Holder's individual investment circumstances or to certain types of Holders
subject to special tax rules (e.g., financial institutions, broker-dealers,
pass-through entities, insurance companies, tax-exempt organizations and Holders
who hold their Notes as part of a hedge, straddle, conversion, or other
integrated transaction, and Holders who are not citizens or residents of the
United States or who are foreign corporations or foreign estates or trusts as to
the United States), nor does it address specific state, local or foreign tax
consequences. This summary assumes that the Holders of the Notes have held their
Notes as "capital assets" as defined under the Internal Revenue Code of 1986, as
amended.
EACH HOLDER IS URGED TO CONSULT SUCH HOLDER'S TAX ADVISOR REGARDING THE
SPECIFIC FEDERAL, STATE, LOCAL AND FOREIGN INCOME AND OTHER TAX CONSEQUENCES
OF THE OFFER.
SALE OF NOTES PURSUANT TO THE OFFER
The receipt of cash by a Holder in exchange for the Notes will be a taxable
transaction for federal income tax purposes and may also be a taxable
transaction under applicable state, local or foreign tax laws. Such Holder will
recognize gain or loss in an amount equal to the difference between (i) the
amount of cash received (other than in respect of accrued interest) and (ii)
such Holder's adjusted tax basis in the Notes. Subject to the rules discussed
below, such gain or loss will be capital gain or loss and will be long-term gain
or loss if such Holder has held such Notes for more than one year.
The payment of interest or amounts treated as interest for tax purposes with
respect to a Note generally will be treated as ordinary income to the extent not
previously included in income.
An exception to the capital gain treatment described above applies to a
Holder who holds a Note with a "market discount." Market discount is the amount
by which the stated redemption price of the Note at maturity exceeds the
Holder's basis in the Note immediately after its acquisition. (However, a Note
will be considered to have no market discount if such excess is less than 1/4 of
1% of the stated redemption price of the Note at maturity multiplied by the
number of complete years from the Holder's acquisition date of the Note to its
maturity date.) The gain realized by the Holder of a Note with a market discount
will be treated as ordinary income to the extent that market discount has
accrued (on a straight line basis or, at the election of the Holder, on a
constant interest basis) from the Holder's acquisition date to the date of sale,
unless the Holder has elected to include market discount in income currently as
it accrues. Gain in excess of such accrued market discount will be subject to
the capital gains rules described above.
The receipt by a Holder of cash in exchange for the Notes may be subject to
backup withholding at the rate of 31% with respect to the gross proceeds from
the sale of such Notes unless such Holder (a) is a corporation or comes within
certain other exempt categories and, when required, demonstrates this fact or
(b) provides a correct taxpayer identification number, certifies as to no loss
of exemption from backup withholding and otherwise complies with applicable
requirements of the backup withholding rules. A Holder of Notes who does not
provide his correct taxpayer identification number may be subject to penalties
imposed by the IRS. Any amount withheld under these rules will be creditable
against the Holder's federal income tax liability.
The Company will provide information statements to the IRS and to tendering
Holders reporting the cash payments, as required by law.
8
<PAGE>
THE DEPOSITARY
The Depositary for the Offer is SunTrust Bank. All deliveries and
correspondence sent or presented to the Depositary relating to the Offer should
be directed to the following address:
SunTrust Bank
225 East Robinson Street, Suite 250
Orlando, FL 32801
Telecopier No: (407)237-5299
Attention: Ms. Lisa Derryberry
Telephone: (407) 237-4791
Requests for information or additional copies of the Offer to Purchase and the
related Letter of Transmittal should be directed to the Depositary. The Company
will reimburse the Depositary for reasonable out-of-pocket expenses incurred in
connection with the Offer.
Brokers, dealers, commercial banks and trust companies will be reimbursed by
the Company for customary mailing and handling expenses incurred by them in
forwarding material to their customers. The Company will not pay any fees or
commissions to any broker, dealer or other person in connection with the
solicitation of tenders of Notes pursuant to the Offer.
MISCELLANEOUS
Neither the Company nor Casella is aware of any jurisdiction where the
making of this Offer is not in compliance with the laws of such jurisdiction. If
the Company becomes aware of any jurisdiction where the making of this Offer
would not be in compliance with such laws, the Company will make a good faith
effort to comply with any such laws or seek to have such laws declared
inapplicable to this Offer. If, after such good faith effort, the Company cannot
comply with any such applicable laws, this Offer will not be made to (nor will
tenders be accepted from or on behalf of) the Holders of the Notes residing in
such jurisdiction.
9
<PAGE>
EXHIBIT 99.(A)(2)
LETTER OF TRANSMITTAL
TO TENDER
8 3/4% CONVERTIBLE SUBORDINATED NOTES DUE 2004
OF KTI, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED MARCH 2, 2000
SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THE OFFER TO PURCHASE, THE
OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
MARCH 10, 2000, UNLESS EXTENDED (THE "EXPIRATION DATE"). NOTES TENDERED IN THE
OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE CLOSE OF BUSINESS ON THE
BUSINESS DAY FOLLOWING THE EXPIRATION DATE.
THE DEPOSITARY FOR THE OFFER IS:
SUNTRUST BANK
225 EAST ROBINSON STREET, SUITE 250
ORLANDO, FLORIDA 32801
TELECOPY: (407)237-5299
ATTENTION: MS. LISA DERRYBERRY
TELEPHONE: (407) 237-4791
Delivery of this Letter of Transmittal to an address, or transmission of
instructions via facsimile, other than as set forth above will not constitute
valid delivery. THE INSTRUCTIONS CONTAINED HEREIN AND IN THE OFFER TO PURCHASE
(AS DEFINED BELOW) SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS
COMPLETED.
By execution hereof, the undersigned acknowledges receipt of the Offer to
Purchase, dated March 2, 2000 (as the same may be amended from time to time,
the "Offer to Purchase"), of KTI, Inc. (the "Company") and this Letter of
Transmittal and instructions hereto (the "Letter of Transmittal"), which
together constitute the Company's offer to purchase (the "Offer") all of the
outstanding 8 3/4% Convertible Subordinated Notes due 2004 of the Company (the
"Notes"), upon the terms and subject to the conditions set forth in the Offer to
Purchase.
HOLDERS WHO WISH TO BE ELIGIBLE TO RECEIVE PAYMENT FOR NOTES TO BE PURCHASED
PURSUANT TO THE OFFER MUST VALIDLY TENDER (AND NOT WITHDRAW) THEIR NOTES TO THE
DEPOSITARY PRIOR TO THE EXPIRATION DATE.
This Letter of Transmittal is to be used by holders of Notes if certificates
representing Notes are to be physically delivered to the Depositary herewith by
holders of Notes. This Letter of Transmittal is also being supplied for
informational purposes only to persons who hold notes in book-entry form through
the facilities of The Depository Trust Company ("DTC"). Tender of Notes held
through DTC must be made pursuant to the procedures described under "Procedures
for Tendering Notes--Tendering Notes--Notes held through DTC" in the Offer to
Purchase.
In order to properly complete this Letter of Transmittal, a holder of Notes
must (i) complete the box entitled "Description of Notes"; (ii) if appropriate,
check and complete the boxes relating to Guaranteed Delivery, Special Issuance
Instructions and Special Delivery Instructions; (iii) sign the Letter of
Transmittal; and (iv) complete Substitute Form W-9. Each holder of Notes should
carefully read the detailed Instructions contained herein prior to completing
this Letter of Transmittal.
The undersigned has completed, executed and delivered this Letter of
Transmittal to indicate the action the undersigned desires to take with respect
to the Offer.
<PAGE>
If holders desire to tender Notes pursuant to the Offer and (i) certificates
representing such holder's Notes are not lost but are not immediately available
or time will not permit this Letter of Transmittal, certificates representing
such Notes or other required documents to reach the Depositary prior to the
Expiration Date, or (ii) the procedures for book-entry transfer cannot be
completed prior to the Expiration Date, such holders may effect a tender of such
Notes in accordance with the guaranteed delivery procedures described under
"Procedure for Tendering Notes --Guaranteed Delivery Procedures" in the Offer to
Purchase. See Instruction 1 below.
All capitalized terms used herein and not defined herein shall have the
meaning ascribed to them in the Offer to Purchase.
Your bank or broker can assist you in completing this form. The instructions
included with this Letter of Transmittal must be followed. Questions and
requests for assistance or for additional copies of the Offer to Purchase, this
Letter of Transmittal and the Notice of Guaranteed Delivery may be directed to
SunTrust Bank, the Depositary for the Offer. See Instruction 9 below.
The Company is not aware of any jurisdiction where the making of the Offer
would not be in compliance with applicable laws. If the Company becomes aware of
any jurisdiction where the making of the Offer would not be in compliance with
such laws, the Company will make a good faith effort to comply with any such
laws or seek to have such laws declared inapplicable to the Offer. If after such
good faith effort, the Company cannot comply with any such applicable laws, the
Offer will not be made to, nor will tenders be accepted from or on behalf of,
the holders of Notes residing in such jurisdiction.
2
<PAGE>
PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL CAREFULLY
BEFORE CHECKING ANY BOX BELOW
List below the Notes to which this Letter of Transmittal relates. If the
space provided below is inadequate, list the certificate numbers and principal
amounts on a separately executed schedule and affix the schedule to this Letter
of Transmittal.
<TABLE>
<S> <C> <C> <C>
DESCRIPTION OF NOTES
AGGREGATE
PRINCIPAL PRINCIPAL
NAME(S) AND ADDRESS(ES) OF HOLDER(S) CERTIFICATE AMOUNT AMOUNT
(PLEASE FILL IN, IF BLANK) NUMBERS* REPRESENTED** TENDERED**
<S> <C> <C> <C>
</TABLE>
* Need not be completed by Holders tendering by book-entry transfer (see
below).
** Unless otherwise indicated in the column labeled "Principal Amount Tendered"
and subject to the terms and conditions of the Offer to Purchase, a Holder
will be deemed to have tendered the entire aggregate principal amount
represented by the Notes indicated in the column labeled "Aggregate
Principal Amount Represented." See Instruction 2.
/ / CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Holder:
- --------------------------------------------------------------------------------
Window Ticket Number (if any):
- --------------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
- --------------------------------------------------------------------------------
Name of Eligible Institution which Guaranteed Delivery:
- --------------------------------------------------------------------------------
3
<PAGE>
LADIES AND GENTLEMEN:
Upon the terms and subject to the conditions of the Offer, the undersigned
hereby tenders to the Company the principal amount of Notes indicated above.
Subject to and effective upon the acceptance for payment of Notes tendered
hereby, by executing and delivering a Letter of Transmittal a tendering holder
of Notes (i) irrevocably sells, assigns and transfers to the Company, all right,
title and interest in and to all the Notes tendered thereby, (ii) waives any and
all rights with respect to the Notes (including without limitation any existing
or past defaults and their consequences in respect of the Note and the Indenture
under which the Notes were issued), (iii) releases and discharges the Company
from any and all claims such holder may have now, or may have in the future
arising out of, or related to, the Notes including without limitation any claims
that such holder is entitled to receive additional principal or interest
payments with respect to the Notes or to participate in any repurchase,
redemption or defeasance of the Notes and (iv) irrevocably constitutes and
appoints the Depositary the true and lawful agent and attorney-in-fact of such
holder with respect to any such tendered Notes, with full power of substitution
and resubstitution (such power of attorney being deemed to be an irrevocable
power coupled with an interest) to (a) deliver certificates representing such
Notes, or transfer ownership of such Notes, on the account books maintained by
DTC, together, in any such case, with all accompanying evidences of transfer and
authenticity, to the Company, (b) present such Notes for transfer on the
relevant security register and (c) receive all benefits or otherwise exercise
all rights of beneficial ownership of such Notes (except that the Depositary
will have no rights to, or control over, funds from the Company, except as agent
for the Company, for the purchase price for any tendered Notes that are
purchased by the Company), all in accordance with the terms of the Offer.
The undersigned understands that tenders of Notes may be withdrawn by
written notice of withdrawal received by the Depositary at any time prior to the
close of business on the business day following the Expiration Date. See
Instruction 1.
The undersigned hereby represents and warrants that the undersigned (i) owns
the Notes tendered and is entitled to tender such Notes and (ii) has full power
and authority to tender, sell, assign and transfer the Notes tendered hereby and
that when such Notes are accepted for purchase and payment by the Company, the
Company will acquire good title thereto, free and clear of all liens,
restrictions, charges and encumbrances and not subject to any adverse claim or
right. The undersigned will, upon request, execute and deliver any additional
documents deemed by the Depositary or the Company to be necessary or desirable
to complete the sale, assignment and transfer of the Notes tendered hereby.
For the purposes of the Offer, the undersigned understands that the Company
will be deemed to have accepted for purchase validly tendered Notes (or
defectively tendered Notes with respect to which the Company has waived such
defect) only if, as and when the Company gives oral or written notice thereof to
the Depositary. Payment for Notes purchased pursuant to the Offer will be made
by deposit of the purchase price for such Notes with the Depositary, which will
act as agent for tendering holders for the purpose of receiving payments from
the Company and transmitting such payments to such holders.
All authority conferred or agreed to be conferred by this Letter of
Transmittal shall survive the death or incapacity of the undersigned and every
obligation of the undersigned under this Letter of Transmittal shall be binding
upon the undersigned's heirs, personal representatives, executors,
administrators, successors, assigns, trustees in bankruptcy and other legal
representatives.
The undersigned understands that valid tender of Notes pursuant to any one
of the procedures described under "Procedures for Tendering Notes" in 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, including the undersigned's waiver of any existing
defaults
4
<PAGE>
and their consequences in respect of the Notes and the Indenture (including,
without limitation, a default in the payment of interest).
The undersigned understands that the delivery and surrender of the Notes is
not effective, and the risk of loss of the Notes does not pass to the
Depositary, until receipt by the Depositary of this Letter of Transmittal, or a
facsimile hereof, properly completed and duly executed, together with all
accompanying evidences of authority and any other required documents in form
satisfactory to the Company. All questions as to the validity, form, eligibility
(including time of receipt) and acceptance for payment of any tender of Notes
pursuant to the procedures described in the Offer to Purchase and the form and
validity (including time of receipt of notices of withdrawal) of all documents
will be determined by the Company, in its sole direction, which determination
shall be final and binding on all parties.
Unless otherwise indicated herein under "Special Issuance Instructions," the
undersigned hereby requests that any Notes representing principal amounts not
tendered be issued in the name(s) of the undersigned, and checks constituting
payments for Notes purchased in connection with the Offer be issued to the order
of the undersigned. Similarly, unless otherwise indicated herein under "Special
Delivery Instructions," the undersigned hereby requests that any Notes
representing principal amounts not tendered and checks constituting payments for
Notes to be purchased in connection with the Offer be delivered to the
undersigned at the address(es) shown herein. In the event that the "Special
Issuance Instructions" box or the "Special Delivery Instructions" box, or both,
are completed, the undersigned hereby requests that any Notes representing
principal amounts not tendered be issued in the name(s) of, certificates for
such Notes be delivered to, and checks constituting payments for Notes purchased
in connection with the Offer be issued in the name(s) of, and be delivered to,
the person(s) at the address(es) so indicated, as applicable.
5
<PAGE>
- --------------------------------------------------------------------------------
- -------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
To be completed ONLY if any checks and/or any certificates for Notes in
a principal amount not tendered are to be issued in the name of and sent to
someone other than the person(s) whose name(s) appear(s) in the "Description
of Notes above Tendered" box above.
Issue to: / / Notes / / Checks
(COMPLETE AS APPLICABLE)
Name _______________________________________________________________________
(PLEASE PRINT)
Address ____________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
__________________________________________________________________________
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NO.)
(SEE SUBSTITUTE FORM W-9 HEREIN)
- ------------------------------------------------------
- ------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
To be completed ONLY if any checks and/or any certificates for Notes in
a principal amount not tendered are to be sent to someone other than the
undersigned or to the undersigned at an address other than that shown in the
"Description of Notes above Tendered" box above.
Deliver: / / Notes / / Checks
(COMPLETE AS APPLICABLE)
Name _______________________________________________________________________
(PLEASE PRINT)
Address ____________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
__________________________________________________________________________
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NO.)
(SEE SUBSTITUTE FORM W-9 HEREIN)
- -----------------------------------------------------
6
<PAGE>
HOLDERS WHO WISH TO ACCEPT THE OFFER AND TENDER THEIR NOTES MUST COMPLETE THIS
LETTER OF TRANSMITTAL IN ITS ENTIRETY.
NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING
INSTRUCTIONS CAREFULLY.
- --------------------------------------------------------------------------------
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS OF NOTES PURSUANT TO THE OFFER
REGARDLESS OF WHETHER NOTES ARE BEING PHYSICALLY DELIVERED HEREWITH)
This Letter of Transmittal must be signed by the holder(s) of Notes
exactly as their name(s) appear(s) on certificate(s) for Notes or by
person(s) authorized to become holder(s) by endorsements and documents
transmitted with this Letter of Transmittal. If signature is by a trustee,
executor, administrator, guardian, attorney-in-fact, officer or other person
acting in a fiduciary or representative capacity, such person must set forth
his or her full title below under "Capacity" and submit evidence
satisfactory to the Company of such person's authority to so act. See
Instruction 3 below.
If the signature appearing below is not of the holder(s) of the Notes,
then the holder(s) must sign a valid power of attorney.
X __________________________________________________________________________
X __________________________________________________________________________
SIGNATURE(S) OF HOLDER(S) OR AUTHORIZED SIGNATORY
Date: ______________________________________________________________________
Name(s): ___________________________________________________________________
____________________________________________________________________________
(PLEASE PRINT)
Capacity ___________________________________________________________________
Address ____________________________________________________________________
____________________________________________________________________________
(INCLUDING ZIP CODE)
Area Code and Telephone No. ( )___________________________________________
SIGNATURE GUARANTEE
(See Instruction 3 Below)
Certain Signatures Must Be Guaranteed by an Eligible Institution.
____________________________________________________________________________
(NAME OF ELIGIBLE INSTITUTION GUARANTEEING SIGNATURES)
__________________________________________________________________________
(ADDRESS (INCLUDING ZIP CODE) AND TELEPHONE NUMBER
(INCLUDING AREA CODE) OF FIRM)
__________________________________________________________________________
(AUTHORIZED SIGNATURE)
__________________________________________________________________________
(PRINTED NAME)
__________________________________________________________________________
(TITLE)
Date: _________________________, 2000
- --------------------------------------------------------------------------------
7
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. PROCEDURES FOR TENDERING NOTES; GUARANTEED DELIVERY PROCEDURES;
WITHDRAWAL OF TENDERS. To tender the Notes in the Offer, certificates
representing such Notes, together with a properly completed and duly executed
copy (or facsimile) of this Letter of Transmittal, and any other documents
required by this Letter of Transmittal must be received by the Depositary at the
address set forth herein prior to the Expiration Date. The method of delivery of
this Letter of Transmittal, certificates for Notes and all other required
documents to the Depositary is at the election and risk of holders. If such
delivery is to be made by mail, it is suggested that holders use properly
insured registered mail, return receipt requested, and that the mailing be made
sufficiently in advance of the Expiration Date to permit delivery to the
Depositary prior to such date. Except as otherwise provided below, the delivery
will be deemed made when actually received or confirmed by the Depositary. THIS
LETTER OF TRANSMITTAL AND NOTES SHOULD BE SENT ONLY TO THE DEPOSITARY, AND NOT
TO THE COMPANY.
This Letter of Transmittal is also being supplied for informational purposes
only to persons who hold notes in book-entry form through the facilities of DTC.
Tender of Notes held through DTC must be made pursuant to the procedures
described under "Procedures for Tendering Notes --Tendering Notes-- Notes held
through DTC" in the Offer to Purchase.
Except as provided herein for the book-entry or guaranteed delivery
procedures, unless the Notes being tendered are deposited with the Depositary on
or prior to the Expiration Date (accompanied by the appropriate, properly
completed and duly executed Letter of Transmittal and any required signature
guarantees and other documents required by this Letter of Transmittal), the
Company may, in its sole discretion, reject such tender. Payment for Notes will
be made only against deposit of tendered Notes.
By executing this Letter of Transmittal (or a facsimile thereof), a
tendering holder waives any right to receive any notice of the acceptance for
payment of tendered Notes.
For a full description of the procedures for tendering Notes, see
"Procedures for Tendering Notes--Tendering Notes" in the Offer to Purchase.
If a holder desires to tender Notes pursuant to the Offer and (i)
certificates representing such holder's Notes are not lost but are not
immediately available or time will not permit this Letter of Transmittal,
certificates representing Notes or other required documents to reach the
Depositary on or prior to the Expiration Date or (ii) the procedures for
book-entry transfer cannot be completed on or prior to the Expiration Date, such
holder may effect a tender of such Notes in accordance with the guaranteed
delivery procedures described under "Procedures for Tendering Notes-- Guaranteed
Delivery Procedures" in the Offer to Purchase.
Tenders of Notes may be withdrawn at any time prior to the Expiration Date
pursuant to the procedures described under "Procedures For Tendering Notes
- --Withdrawal Rights" in the Offer to Purchase.
2. PARTIAL TENDERS. Tenders of Notes pursuant to the Offer will be accepted
only in principal amounts equal to $1,000 or integral multiples thereof. If less
than the entire principal amount of any Notes evidenced by a submitted
certificate is tendered, the tendering holder must fill in the principal amount
tendered in the last column of the box entitled "Description of Notes" herein.
The entire principal amount represented by the certificates for all Notes
delivered to the Depositary will be deemed to have been tendered unless
otherwise indicated. If the entire principal amount of all Notes is not
tendered, certificates for the principal amount of Notes not tendered will be
sent to the holder unless otherwise provided in the appropriate box on this
Letter of Transmittal (see Instruction 4), promptly after the Notes are accepted
for purchase.
8
<PAGE>
3. SIGNATURES ON THIS LETTER OF TRANSMITTAL, BOND POWERS AND ENDORSEMENT;
GUARANTEE OF SIGNATURES. If this Letter of Transmittal is signed by the
registered holder(s) of the Notes tendered hereby, the signature(s) must
correspond with the name(s) as written on the face of the certificate(s) without
alteration, enlargement or any change whatsoever.
IF THIS LETTER OF TRANSMITTAL IS EXECUTED BY A HOLDER OF NOTES WHO IS NOT
THE REGISTERED HOLDER, THEN THE REGISTERED HOLDER MUST SIGN A VALID POWER OF
ATTORNEY, WITH THE SIGNATURE OF SUCH REGISTERED HOLDER GUARANTEED BY AN ELIGIBLE
INSTITUTION.
If any of the Notes tendered hereby are owned of record by two or more joint
owners, all such owners must sign this Letter of Transmittal. If any tendered
Notes are registered in different names on several certificates, it will be
necessary to complete, sign and submit as many copies of this Letter of
Transmittal and any necessary accompanying documents as there are different
names in which certificates are held.
If this Letter of Transmittal is signed by the holder, and the certificates
for any principal amount of Notes not tendered for purchase are to be issued (or
if a principal amount of Notes that is not tendered for purchase is to be
reissued or returned) to the holder, and checks constituting payments for Notes
to be purchased in connection with the Offer are to be issued to the order of
the holder, then the holder need not endorse any certificates for tendered Notes
nor provide a separate bond power. In any other case (including if this Letter
of Transmittal is not signed by the holder), the holder must either properly
endorse the certificates for Notes tendered or transmit a separate properly
completed bond power with this Letter of Transmittal (in either case, executed
exactly as the name(s) of the registered holder(s) appear(s) on such Notes),
with the signature on the endorsement or bond power guaranteed by an Eligible
Institution, unless such certificates or bond powers are executed by an Eligible
Institution.
If this Letter of Transmittal or any certificates representing Notes or bond
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 with this Letter of Transmittal.
Endorsements on certificates for Notes and signatures on bond powers
provided in accordance with this Instruction 3 by registered holders not
executing this Letter of Transmittal must be guaranteed by an Eligible
Institution.
No signature guarantee is required if: (i) this Letter of Transmittal is
signed by the registered holder(s) of the Notes tendered herewith and the
payments for the Notes to be purchased are to be made, or any Notes for
principal amounts not tendered for purchase are to be issued, directly to such
registered holder(s) and neither the "Special Issuance Instructions" box nor the
"Special Delivery Instructions" box of this Letter of Transmittal has been
completed; or (ii) such Notes are tendered for the account of an Eligible
Institution. In all other cases, all signatures on Letters of Transmittal
accompanying Notes must be guaranteed by an Eligible Institution.
4. SPECIAL ISSUANCE AND SPECIAL DELIVERY INSTRUCTIONS. Tendering holders
should indicate in the applicable box or boxes the name and address to which
Notes for principal amounts not tendered or not accepted for purchase or checks
constituting payments for Notes to be purchased in connection with the Offer are
to be issued or sent, if different from the name and address of the holder
signing this Letter of Transmittal. In the case of issuance in a different name,
the taxpayer identification or social security number of the person named must
also be indicated. If no instructions are given, Notes not tendered or not
accepted for purchase will be returned to the holder of the Notes tendered.
9
<PAGE>
5. TAXPAYER IDENTIFICATION NUMBER AND SUBSTITUTE FORM W-9. Each tendering
holder is required to provide the Depositary with the holder's correct taxpayer
identification number ("TIN"), generally the holder's social security or federal
employer identification number, on Substitute Form W-9, which is provided under
"Important Tax Information" below, or, alternatively, to establish another basis
for exemption from backup withholding. A holder must cross out item (2) in the
Certification box on Substitute Form W-9 if such holder is subject to backup
withholding. Failure to provide the information on the form may subject the
tendering holder to 31% federal income tax backup withholding on the payments
made to the holder or other payee with respect to Notes purchased pursuant to
the Offer. The box in Part 3 of the form should be checked if the tendering
holder 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 and the Depositary
is not provided with a TIN within 60 days, thereafter the Depositary will
withhold 31% from all such payments with respect to the Notes to be purchased
until a TIN is provided to the Depositary.
6. TRANSFER TAXES. The Company will pay all transfer taxes, if any, payable
on the purchase and transfer of Notes purchased pursuant to the Offer, except in
the case of deliveries of certificates for Notes for principal amounts not
tendered for payment that are to be registered or issued in the name of any
person other than the holder of Notes tendered hereby, in which case the amount
of any transfer taxes (whether imposed on the registered holder or such other
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 stamps to be affixed to the certificates listed in this Letter of
Transmittal.
7. IRREGULARITIES. All questions as to the validity, form, eligibility
(including the time of receipt) and acceptance for payment of any tenders of
Notes pursuant to the procedures described in the Offer to Purchase and the form
and validity (including the time of receipt of notices of withdrawal) of all
documents will be determined by the Company, in its sole discretion, which
determination shall be final and binding on all parties. The Company reserves
the absolute right to reject any or all tenders determined by it not to be in
proper form or the acceptance of or payment for which may be unlawful. The
Company also reserves the absolute right to waive any of the conditions of the
Offer and any defect or irregularity in the tender of any particular Notes. The
Company's interpretations of the terms and conditions of the Offer (including
without limitation the instructions in this Letter of Transmittal) shall be
final and binding. No alternative, conditional or contingent tenders will be
accepted. Unless waived, any irregularities in connection with tenders must be
cured within such time as the Company shall determine. None of the Company, the
Depositary or any other person will be under any duty to give notification of
any defects or irregularities in such tenders or will incur any liability to
holders for failure to give such notification. Tenders of such Notes shall not
be deemed to have been made until such irregularities have been cured or waived.
Any Notes received by the Depositary that are not properly tendered and as to
which the irregularities have not been cured or waived will be returned by the
Depositary to the tendering holders, unless such holders have otherwise provided
herein, as promptly as practical following the Expiration Date.
8. MUTILATED, LOST, STOLEN OR DESTROYED CERTIFICATES FOR NOTES. Any holder
of Notes whose certificates for Notes have been mutilated, lost, stolen or
destroyed should contact the Depositary for further instruction at the address
or telephone numbers included herein.
9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions relating to the
procedure for tendering Notes and requests for assistance or additional copies
of the Offer to Purchase and this Letter of Transmittal may be directed to, and
additional information about the Offer may be obtained from, the Depositary,
whose address and telephone number appears on the first page of this Letter of
Transmittal.
10
<PAGE>
IMPORTANT TAX INFORMATION
Under federal income tax laws, a holder whose tendered Notes are accepted
for payment is required by law to provide the Depositary (as payer) with such
holder's correct TIN on Substitute Form W-9 included herein or otherwise
establish a basis for exemption from backup withholding. If such holder is an
individual, the TIN is his social security number. If the Depositary is not
provided with the correct TIN, a penalty may be imposed by the Internal Revenue
Service, and payments made with respect to Notes purchased pursuant to the Offer
may be subject to backup withholding. Failure to comply truthfully with the
backup withholding requirements also may result in the imposition of severe
criminal and/or civil fines and penalties.
Certain holders (including, among others, all corporations and certain
foreign persons) are not subject to these backup withholding and reporting
requirements. Exempt holders should furnish their TIN, write "Exempt" on the
face of the Substitute Form W-9, and sign, date and return the Substitute
Form W-9 to the Depositary. A foreign person, including a foreign entity, may
qualify as an exempt recipient by submitting to the Depositary a properly
completed Internal Revenue Service Form W-8 BEN or other appropriate Form W-8,
signed under penalties of perjury, attesting to that holder's foreign status. A
Form W-8 can be obtained from the Depositary. See the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any payments made to the holder or other payee. Backup withholding is not an
additional federal income tax. Rather, the federal income tax liability of
persons subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments made with respect to Notes
purchased pursuant to the Offer, the holder is required to provide the
Depositary with either: (i) the holder's correct TIN by completing the form
included herein, certifying that the TIN provided on Substitute Form W-9 is
correct (or that such holder is awaiting a TIN) and that (A) the holder has not
been notified by the Internal Revenue Service that the holder is subject to
backup withholding as a result of failure to report all interest or dividends or
(B) the Internal Revenue Service has notified the holder that the holder is no
longer subject to backup withholding; or (ii) an adequate basis for exemption.
11
<PAGE>
NUMBER TO GIVE THE DEPOSITARY
The holder is required to give the Depositary the TIN (e.g., social security
number or employer identification number) of the registered holder of the Notes.
If the Notes are held in more than one name or are held 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.
<TABLE>
<C> <S> <C>
- ------------------------------------------------------------------------------------------------------------
PAYER'S NAME: SUNTRUST BANK, CENTRAL FLORIDA, NATIONAL ASSOCIATION, AS DEPOSITARY
- ------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1: Please provide Social Security Number
FORM W-9 your TIN in the box at
right and certify by OR
signing and dating below Employer Identification Number
------------------------------------------------------------------
PART 2: For Payees NOT subject to backup withholding, see the
enclosed Guidelines for Certification of Taxpayer Identification
PAYER'S REQUEST FOR TAXPAYER Number on Substitute Form W-9 and complete as instructed therein
IDENTIFICATION NUMBER (TIN)
------------------------------------------------------------------
PART 3: Awaiting TIN / /
- ------------------------------------------------------------------------------------------------------------
CERTIFICATION. Under penalty of perjury, I certify that:
(1) the number above on this form is my correct Taxpayer Identification Number (or I am waiting for a
number to be issued to me) and
(2) I am not subject to backup withholding either because (a) I am exempt from backup withholding or (b) I
have not been notified by the IRS that I am subject to backup withholding as a result of a failure to
report all interest or dividends, or (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 subject to backup withholding because of underreporting of interest or dividends on your tax return.
However, if after being notified by the IRS that you were subject to backup withholding, you received
another notification from the IRS that you are no longer subject to backup withholding, do not cross out
item (2). (Also see the enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9)
- ------------------------------------------------------------------------------------------------------------
Signature Date
Name:
(PLEASE PRINT)
Address:
(INCLUDE ZIP CODE)
-----------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER AND THE
SOLICITATION. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL
DETAILS.
12
<PAGE>
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 3 OF 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 (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate IRS
Center or Social Security Administration Office or (b) I intend to mail or
deliver an application in the near future. I understand that if I do not provide
a taxpayer identification number within sixty (60) days, 31% of all reportable
payments made to me thereafter will be withheld until I provide a taxpayer
identification number.
_______________________________________________________________________________
SIGNATURE
_______________________________________________________________________________
DATE
_______________________________________________________________________________
NAME (PLEASE PRINT)
_______________________________________________________________________________
13
<PAGE>
Facsimile copies of this Letter of Transmittal, properly completed and duly
executed, will be accepted. This Letter of Transmittal, certificates for the
Notes and any other required documents should be sent or delivered by each
holder of Notes or such person's broker, dealer, commercial bank or other
nominee to the Depositary at the address set forth above.
14
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYOR. -- 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 payor.
<TABLE>
<CAPTION>
--------------------------------------------------------- -----------------------------------------------------------------
<S> <C> <C> <C>
GIVE THE GIVE THE EMPLOYER
SOCIAL SECURITY IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF-- FOR THIS TYPE OF ACCOUNT: NUMBER OF--
-------------------------------------------------------- --------------------------------------------------------
1. An individual's account The individual 9. A valid trust, estate, or pension The legal entity (Do not
trust
furnish the identifying
2. Two or more individuals The actual owner of the number of the personal
(joint account)
account or, if combined representative or
trustee
funds, any one of the unless the legal entity
individuals(1) itself is not designated
in
the account title.)(5)
3. Husband and wife (joint The actual owner of the
account)
account or, if joint 10. Corporate account The corporation
funds,
either person(1)
11. Religious, charitable, or The organization
educational
4. Custodian account of a minor The minor(2) organization account
(Uniform Gift to Minors Act)
12. Partnership account held in the
name of
5. Adult and minor (joint The adult or, if the the business The partnership
account) minor
is the only contributor,
the minor(1) 13. Association, club, or other The organization
tax-exempt
organization
6. Account in the name of The ward, minor, or
guardian or
committee for a designated incompetent person(3) 14. A broker or registered nominee The broker or nominee
ward,
minor, or incompetent person
15. Account with the Department of The public entity
7. a. The usual revocable The grantor-trustee(1) Agriculture in the name of a public
savings trust
account (grantor is also entity (such as a State or local
trustee)
b. So-called trust account The actual owner(1) government, school district, or prison)
that is not a
legal or valid trust under that receives agricultural program
State law
payments
8. Sole proprietorship account The owner(4)
--------------------------------------------------------- -----------------------------------------------------------------
</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 2
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 an Employer Identification Number, at the local
office of the Social Security Administration or the Internal Revenue Service
(the "IRS") 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 the tax under section 501(a), or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or any
agency or instrumentality thereof.
- An international organization or any agency, or instrumentality thereof.
- A registered dealer in securities or commodities registered in the United
States or a possession of the United States.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a) of the Internal
Revenue Code of 1986, as amended (the "Code").
- An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1) of the Code.
- 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 of
the Code.
- Payments to partnerships not engaged in a trade or business in the United
States and which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid in
the course of the payor's trade or business and you have not provided your
correct taxpayer identification number to the payor.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852 of the Code).
- Payments described in section 6049(b)(5) of the Code to nonresident aliens.
- Payments on tax-free covenant bonds under section 1451 of the Code.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Exempt payees described above should file a Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYOR, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYOR. 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 of the Code.
PRIVACY ACT NOTICE.--Section 6109 of the Code requires most recipients of
dividend, interest, or other payments to give taxpayer identification numbers to
payers who must report the payments to the IRS. The IRS uses the numbers for
identification purposes. Payors must be given the numbers whether or not
recipients are required to file tax returns. Beginning January 1, 1993, payors
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
payor. 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 payor, 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) PENALTY FOR FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If
you fail to include any portion of an includible payment for interest,
dividends, or patronage dividends in gross income and such failure is due to
negligence, a penalty of 20% is imposed on any portion of an underpayment
attributable to that failure.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4)CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE>
EXHIBIT 99.(A)(3)
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF CERTIFICATES FOR
8 3/4% CONVERTIBLE SUBORDINATED NOTES DUE 2004
OF
KTI, INC.
Capitalized terms used but not defined herein have the meanings given them
in the Offer to Purchase, dated March 2, 2000 (the "Offer to Purchase").
This Notice of Guaranteed Delivery may be used to cause a tender of 8 3/4%
Convertible Subordinated Debentures due 2004 of KTI, Inc. (the "Notes") by
(i) a record holder of Notes if certificates for the Notes are not immediately
available or time will not permit all required documents to reach the Depositary
on or prior to the Expiration Date or (ii) by a DTC Participant if the
procedures for book-entry transfer described in the Offer to Purchase cannot be
completed on a timely basis.
The Depositary for the Offer is:
SUNTRUST BANK
225 EAST ROBINSON STREET, SUITE 250
ORLANDO, FLORIDA 32801
TELECOPY: (407)237-5299
ATTENTION: MS. LISA DERRYBERRY
TELEPHONE: (407) 237-4791
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THE OFFER TO PURCHASE, THE
OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
MARCH 10, 2000, UNLESS EXTENDED (THE "EXPIRATION DATE"). NOTES TENDERED IN THE
OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE CLOSE OF BUSINESS ON THE
BUSINESS DAY FOLLOWING THE EXPIRATION DATE.
<PAGE>
LADIES AND GENTLEMEN:
By execution hereof, the undersigned acknowledges receipt of the Offer to
Purchase and the Letter of Transmittal. On the terms and subject to the
conditions of the Offer to Purchase and the Letter of Transmittal, the
undersigned hereby represents that it is the holder of the Notes (or the holder
of interests in the Global Note) being tendered (or caused to be tendered)
hereby and is entitled to tender (or cause to be tendered) such Notes as
contemplated by the Offer and, pursuant to the guaranteed delivery procedures
described in the Offer to Purchase and Letter of Transmittal, hereby tenders (or
causes a tender) to the Company the aggregate principal amount of Notes
indicated below.
Except as stated in the Offer to Purchase, all authority herein conferred or
agreed to be conferred shall survive the death or incapacity of the undersigned,
and any obligation of the undersigned hereunder shall be binding upon the heirs,
personal representatives, successors and assigns of the undersigned.
A record holder must execute this Notice of Guaranteed Delivery exactly as
its name appears on its Notes and a DTC Participant must execute this Notice of
Guaranteed Delivery exactly as its name is registered with DTC. If signature is
by a trustee, executor, administrator, guardian, attorney-in-fact, agent,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person must set forth his or her name, address and capacity as
indicated below and submit evidence to the Company of such person's authority so
to act.
Signed _________________________________________________________________________
Name(s): _______________________________________________________________________
(PLEASE TYPE OR PRINT)
Company: _______________________________________________________________________
Capacity: ______________________________________________________________________
Address: _______________________________________________________________________
Dated: _________________________________________________________________________
Aggregate Principal Amount of Notes Tendered: __________________________________
Certificate Nos. for Notes (if applicable):
If being executed by a DTC Participant:
DTC Participant's Number: ______________________________________________________
Account Number: ________________________________________________________________
Transaction Code Number: _______________________________________________________
THE GUARANTEE ON THE NEXT PAGE MUST BE COMPLETED
2
<PAGE>
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., or a commercial bank or
trust company having an office or correspondent in the United States or another
"Eligible Guarantor Institution" as defined in Rule 17Ad-15 under the Securities
Exchange Act of 1934, as amended, hereby guarantees that, within three New York
Stock Exchange trading days from the date of receipt by the Depositary of this
Notice of Guaranteed Delivery, a properly completed and validly executed Letter
of Transmittal (or a facsimile thereof), together with Notes tendered hereby in
proper form for transfer (or confirmation of the book-entry transfer of such
Notes into the Depositary's account at the Depositary Trust Company, pursuant to
the procedures for book-entry transfer set forth under "Procedure for Tendering
Notes" in the Offer to Purchase), and all other required documents will be
delivered by the undersigned to the Depositary.
<TABLE>
<S> <C>
Name of Firm:
AUTHORIZED SIGNATURE
Address: Name:
(PLEASE TYPE OR PRINT)
Title:
ZIP CODE
Date:
Area Code and Telephone No.:
</TABLE>
The institution which completes this form must deliver to the Depositary the
guarantee, the Letter of Transmittal (or facsimile thereof) and certificates for
Notes within the time periods specified herein. Failure to do so could result in
a financial loss to such institution.
DO NOT SEND CERTIFICATES FOR NOTES WITH THIS FORM--THEY SHOULD BE SENT WITH
THE LETTER OF TRANSMITTAL.
3
<PAGE>
EXHIBIT 99.(A)(4)
KTI, INC.
OFFER TO PURCHASE FOR CASH ANY AND ALL OF THE OUTSTANDING 8 3/4%
CONVERTIBLE SUBORDINATED NOTES DUE 2004 OF KTI, INC.
AT 100% OF THE PRINCIPAL AMOUNT OF THE NOTES
SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THE OFFER TO PURCHASE, THE
OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
MARCH 10, 2000 UNLESS EXTENDED (THE "EXPIRATION DATE"). NOTES TENDERED IN THE
OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE CLOSE OF BUSINESS ON THE
BUSINESS DAY FOLLOWING THE EXPIRATION DATE.
March 2, 2000
To Our Clients:
Enclosed for your consideration is an Offer to Purchase, dated March 2,
2000 (as the same may be amended from time to time, the "Offer to Purchase"),
and a Letter of Transmittal and instructions thereto (the "Letter of
Transmittal"), relating to the offer (the "Offer") by KTI, Inc. (the
"Company") to purchase for cash all of its outstanding 8 3/4% Convertible
Subordinated Debentures due 2004 (the "Notes") at 100% of the principal
amount thereof, plus accrued and unpaid interest thereon up to but excluding
the date of payment.
The materials are being forwarded to you as the beneficial owner of Notes
carried by us for your account or benefit but not registered in your name. A
tender of any Notes may only be made by us as the registered holder and pursuant
to your instructions.
Accordingly, we request instructions as to whether you wish us to tender any
or all such Notes held by us for your account or benefit pursuant to the terms
and conditions set forth in the Offer to Purchase and the Letter of Transmittal.
We urge you to read carefully the Offer to Purchase and Letter of Transmittal
before instructing us to tender your Notes.
Your instructions to us should be forwarded as promptly as possible in order
to permit us to tender Notes on your behalf in accordance with the provisions of
the Offer. Notes tendered pursuant to the Offer may be validly withdrawn,
subject to the procedures described in the Offer to Purchase, at any time prior
to the close of business on the business day following the Expiration Date.
Your attention is directed to the following:
1. The Offer is for all outstanding Notes.
2. The Offer will expire on the Expiration Date.
3. Any transfer taxes incident to the transfer of Notes from the tendering
holder to the Company will be paid by the Company, except as provided in
the Offer to Purchase and the instructions to the Letter of Transmittal.
If you wish to have us tender any or all of your Notes held by us for your
account or benefit, please so instruct us by completing, executing and returning
to us the instruction form that appears below. If you authorize the tender of
your Notes, all such Notes will be tendered unless otherwise specified below.
The accompanying Letter of Transmittal is furnished to you for informational
purposes only and may not be used by you to tender Notes held by us and
registered in our name for your account or benefit.
1
<PAGE>
INSTRUCTIONS
The undersigned acknowledge(s) receipt of your letter and the enclosed
material referred to therein relating to the Offer.
This will instruct you to tender the principal amount of Notes indicated
below held by you for the account or benefit of the undersigned pursuant to the
terms of and conditions set forth in the Offer to Purchase and the Letter of
Transmittal.
Box 1 / / Please tender ALL my Notes held by you for my account or benefit.
Box 2 / / Please tender LESS than all my Notes. I wish to tender $
principal amount of Notes (tenders must be in increments of $1,000 principal
amount).
Box 3 / / Please do not tender any Notes held by you for my account or benefit.
Date: __________________________________________________________________________
Signature: _____________________________________________________________________
Name (please print): ___________________________________________________________
UNLESS A SPECIFIC CONTRARY INSTRUCTION IS GIVEN, YOUR SIGNATURE(S) HEREON SHALL
CONSTITUTE AN INSTRUCTION TO US TO TENDER ALL OF YOUR NOTES.
2
<PAGE>
EXHIBIT (A)(5)
KTI, INC.
OFFER TO PURCHASE FOR CASH ANY AND ALL OF THE OUTSTANDING
8 3/4% CONVERTIBLE SUBORDINATED NOTES DUE 2004 OF KTI, INC.
AT 100% OF THE PRINCIPAL AMOUNT OF THE NOTES
SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THE OFFER TO PURCHASE, THE
OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
MARCH 10, 2000 UNLESS EXTENDED (THE "EXPIRATION DATE"). NOTES TENDERED IN THE
OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE CLOSE OF BUSINESS ON THE
BUSINESS DAY FOLLOWING THE EXPIRATION DATE.
MARCH 2, 2000
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
Enclosed for your consideration is an Offer to Purchase, dated March 2,
2000 (as the same may be amended from time to time, the "Offer to Purchase"),
and a form of Letter of Transmittal and instructions thereto (the "Letter of
Transmittal") relating to the offer (the "Offer") by KTI, Inc. (the "Company")
to purchase for cash all of the outstanding 8 3/4% Convertible Subordinated
Debentures due 2004 of the Company (the "Notes") at 100% of the principal amount
thereof, plus accrued and unpaid interest thereon up to but excluding the date
of payment.
We are asking you to contact your clients for whom you hold Notes registered
in your name or in the name of your nominee. In addition, we ask you to contact
your clients who, to your knowledge, hold Notes registered in their own name.
You will be reimbursed by the Company for customary mailing and handling
expenses incurred by you in forwarding any of the enclosed materials to your
clients. The Company will pay all transfer taxes, if any, applicable to the
tender of Notes, except as otherwise provided in the Offer to Purchase and the
Letter of Transmittal.
Enclosed is a copy of each of the following documents for forwarding to your
clients:
1. The Offer to Purchase.
2. A Letter of Transmittal, including Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9, for your use in
connection with the tender of Notes by record holders and for the information of
your clients.
3. A form of letter addressed "To Our Clients" that may be sent to your
clients for whose accounts you hold Notes registered in your name or the name of
your nominee, with space provided for obtaining the clients' instructions with
regard to the Offer.
4. A Notice of Guaranteed Delivery to be used to accept the Offer if
certificates for Notes are not lost but not immediately available, or if the
procedure for book-entry transfer cannot be completed on or prior to the
Expiration Date.
Your prompt action is requested. Notes tendered pursuant to the Offer may be
validly withdrawn, subject to the procedures described in the Offer to Purchase,
at any time prior to the Expiration Date.
Please refer to "Procedures for Tendering Notes" in the Offer to Purchase
for a description of the procedures which must be followed to tender Notes in
the Offer.
<PAGE>
Additional copies of the enclosed materials may be obtained from Lisa
Derryberry at SunTrust Bank, the Depositary for the Offer, at (407) 237-4791.
<TABLE>
<S> <C>
Very truly yours,
KTI, Inc.
</TABLE>
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
PERSON AS AN AGENT OF THE COMPANY, THE TRUSTEE, OR THE DEPOSITARY, OR AUTHORIZE
YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENTS ON BEHALF OF ANY OF THEM WITH
RESPECT TO THE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE IN THE OFFER TO
PURCHASE OR THE LETTER OF TRANSMITTAL.
2
