KTI INC
8-K, 1999-09-29
COGENERATION SERVICES & SMALL POWER PRODUCERS
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                      SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

                       Pursuant to Section 13 or 15(d) of
                      the Securities Exchange Act of 1934


      Date of Report (Date of earliest event reported): September 23, 1999
- --------------------------------------------------------------------------------

                                   KTI, INC.
- --------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)

                                   New Jersey
- --------------------------------------------------------------------------------
                 (State or Other Jurisdiction of Incorporation)


              33-85234                                    22-2665282
     ------------------------                -----------------------------------
     (Commission File Number)                 (IRS Employer Identification No.)

                                 (201) 854-7777
              ----------------------------------------------------
              (Registrant's Telephone Number, Including Area Code)

                                 Not Applicable
          ------------------------------------------------------------
          (Former Name or Former Address, if Changed Since Last Report)

<PAGE>

Item 5.   Other Events.

On September 23, 1999, the Registrant entered into an amendment to the Agreement
and Plan of Merger with Casella  Waste  Systems,  Inc.  ("Casella"),  a Delaware
corporation,  and  Rutland  Acquisition  Sub,  Inc.,  a New Jersey  corporation.
Pursuant  to the  amendment,  the  merger  will be  allowed  to be  treated as a
purchase for accounting purposes rather than as a pooling of interests.

     The Registrant  issued a press release dated September 23, 1999, describing
the amendment to the merger agreement.

Item 7.   Financial Statements and Exhibits

     (c)  Exhibits

Exhibit No.    Description
- -----------    -----------

  99.1         Press Release of the Registrant, dated September 23, 1999
  99.2         Amendment No. 3 to Agreement and Plan of Merger




                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.


Date:      September 29, 1999            KTI, INC.
                                        (Registrant)


                                        By:  /s/ Martin J. Sergi
                                             ----------------------------------
                                             Martin J. Sergi
                                             President



                                                                    Exhibit 99.1
FOR IMMEDIATE RELEASE


CASELLA  WASTE SYSTEMS WILL COMPLETE KTI  TRANSACTION  AS PURCHASE,  RATHER THAN
POOLING OF INTERESTS

RUTLAND, Vt., Sept. 23 /PRNewswire/ -- Casella Waste Systems, Inc. (Nasdaq: CWST
- - news) announced today that it will complete its merger with KTI (Nasdaq:  KTIE
- - news) as a tax-free  stock  purchase,  rather than a pooling of  interests  as
originally planned.

The boards of  directors  of both  companies  have  approved an amendment to the
terms of the merger agreement reflecting the change.

"Over both the short- and long-term,  completing the merger under purchase rules
of  accounting  gives us greater  strategic  flexibility  to deliver the overall
performance we expect for our  shareholders,"  John Casella,  chairman and chief
executive officer of Casella Waste Systems, said.

Because of the change in accounting treatment,  KTI's results of operations will
consolidate  only with  Casella  Waste  Systems'  results  from the point of the
merger forward.

In  addition,  the  company  also said it expects  the change  will not have any
negative impact on earnings per share on a post-merger basis.

Casella  Waste  Systems,  headquartered  in  Rutland,  Vermont,  is a  regional,
integrated, non-hazardous solid waste services company that provides collection,
transfer,  disposal and recycling  services in Vermont,  New  Hampshire,  Maine,
Massachusetts,   upstate  New  York,  and  northern  Pennsylvania.  For  further
information,  contact  Joseph  Fusco,  Vice  President;  Jerry  Cifor,  Sr. Vice
President and Chief Financial Officer at (802) 775-0325;  or visit the company's
website at www.casella.com.

This press release,  especially  with respect to the  consummation of the merger
and its  financial  and  operational  impact and  projected  financial  results,
contains  forward-looking   statements  that  involve  a  number  of  risks  and
uncertainties.  Among the important  factors that could cause actual  results to
differ materially from those indicated by such forward-looking  statements are a
substantial  delay in the expected closing of the  transaction,  KTI's operating
results,  the combined  company's ability to realize expected synergies from the
transaction,  the  ability  to  successfully  integrate  the two  companies  and
otherwise  to manage  growth,  a history of  losses,  the  ability to  identify,
acquire  and  integrate  acquisition  targets,  dependence  on  management,  the
uncertain  ability to finance  the  company's  growth,  limitations  on landfill
permitting  and  expansion  and  geographic  concentration,  a general  economic
downturn,  changes  in the  law and  regulations  relating  to the  environment,
competition,  and the risk factors  detailed  from time to time in Casella Waste
Systems' and KTI's periodic reports and  registration  statements filed with the
Securities and Exchange Commission.



                                                                    Exhibit 99.2

                                 Amendment No. 3

                                  To Agreement

                               and Plan of Merger




       The  Agreement  and Plan of  Merger  dated as of  January  12,  1999 (the
"Agreement"),  by and among Casella Waste Systems,  Inc., a Delaware corporation
("Buyer"), Rutland Acquisition Sub, Inc., a New Jersey corporation and a direct,
wholly-owned subsidiary of Buyer ("Sub") and KTI, Inc., a New Jersey corporation
("Seller"),  as amended by Amendment No. 1 to Agreement and Plan of Merger dated
May 12, 1999 ("Amendment No. 1") and by Amendment No. 2 to Agreement and Plan of
Merger dated September 8, 1999 ("Amendment No. 2"), is hereby amended as follows
as of this 23rd day of September,  1999. Capitalized terms not otherwise defined
herein shall have the meanings set forth in the Agreement.

       1. The sixth  "WHEREAS"  clause  of the  Agreement,  which  refers to the
pooling of interests accounting of the Merger, is hereby deleted.

       2. Section 3.14 is hereby deleted, and the following shall be inserted in
lieu thereof:

            "Section 3.14 Tax Matters.  To its knowledge,  after consulting with
       its legal  counsel,  neither Seller nor any of its Affiliates (as defined
       in  Section  6.10) has taken or agreed  to take any  action  which  would
       prevent  the Merger  from  constituting  a  transaction  qualifying  as a
       reorganization under 368(a) of the Code."

       3. Section 4.14 is hereby deleted, and the following shall be inserted in
lieu thereof:

            "Section 4.14 Tax Matters.  To its knowledge,  after consulting with
       its legal  counsel,  neither Buyer nor any of its Affiliates has taken or
       agreed  to  take  any  action   which  would   prevent  the  Merger  from
       constituting a transaction qualifying as a reorganization under 368(a) of
       the Code."

       4. Section 6.09 is hereby deleted, and the following shall be inserted in
lieu thereof: "Intentionally omitted."

       5. Section 6.10 is hereby deleted, and the following shall be inserted in
lieu thereof:

            "Section  6.10  Affiliate  Agreements.  Upon the  execution  of this
       Agreement,  Seller will  provide  Buyer with a list of those  persons who
       are, in Seller's reasonable  judgment,  "affiliates" of Seller within the
       meaning of Rule 145 (each such  person  who is an  "affiliate"  of Seller
       within  the  meaning  of  Rule  145  is  referred  to as an  "Affiliate")
       promulgated  under the Securities Act ("Rule 145").  Seller shall provide
       Buyer such  information and documents as Buyer shall  reasonably  request
       for  purposes of  reviewing  such list and shall  notify Buyer in writing
       regarding  any  change in the  identity  of its  Affiliates  prior to the
       Closing  Date.  Seller has  delivered or caused to be delivered to Buyer,
       prior to the execution of this Agreement, from each of its Affiliates, an
       executed Affiliate  Agreement,  in substantially the form appended hereto
       as  Exhibit  C-3 (in the case of Seller  Affiliates)  (collectively,  the
       "Affiliate  Agreements").  Buyer shall be  entitled to place  appropriate
       legends  on the  certificates  evidencing  any Buyer  Common  Stock to be
       received  by such  Affiliates  of  Seller  pursuant  to the terms of this
       Agreement,  and to issue  appropriate  stop transfer  instructions to the
       transfer agent for the Buyer Common Stock,  consistent  with the terms of
       the  Affiliate  Agreements  (provided  that such legends or stop transfer
       instructions  shall be removed,  two years after the Effective Date, upon
       the request of any  stockholder  that is not then an Affiliate of Buyer).
       Seller agrees that any Affiliate Agreements signed by affiliates of Buyer
       in connection with the Agreement are hereby terminated.

       6. Section 7.01(f) is hereby deleted, and the following shall be inserted
in lieu thereof: "Intentionally omitted."

       7. Section 8.03(a) is hereby deleted, and the following shall be inserted
in lieu thereof:

           "(a) If the Merger is  consummated  as provided for herein,  all fees
and expenses  incurred in connection  with this  Agreement and the  transactions
contemplated  hereby  shall be paid by the  Buyer.  Except  as set forth in this
Section  8.03, in the event that the Merger is not  consummated  as provided for
herein, all fees and expenses incurred in connection with this Agreement and the
transactions  contemplated  hereby  shall be paid by the  party  incurring  such
expenses;  provided,  however, Seller and Buyer shall share equally all fees and
expenses,  other than attorneys' fees, incurred with respect to the printing and
filing  of  the  Joint  Proxy  Statement   (including  any  related  preliminary
materials) and the Registration  Statement  (including  financial statements and
exhibits) and any amendments or supplements."

       8. In all other  respects,  the Agreement  shall remain in full force and
effect,  and all references in the Agreement to "this  Agreement" shall mean the
Agreement as amended hereby.

                  [remainder of page intentionally left blank]


<PAGE>




      IN WITNESS WHEREOF, Buyer, Sub and Seller have caused this Agreement to be
signed by their  respective  officers  thereunto duly  authorized as of the date
first written above.

                                       CASELLA WASTE SYSTEMS, INC.

                                       By:  /s/ John W. Casella
                                           ------------------------------------
                                          John W. Casella, Chairman and CEO



                                       RUTLAND ACQUISITION SUB, INC.

                                       By: /s/ John W. Casella
                                           ------------------------------------
                                          John W. Casella, President



                                       KTI, INC.

                                       By:  /s/ Ross Pirasteh
                                            ------------------------------------
                                            Ross Pirasteh, Chairman


     [Signature page to Amendment No. 3 to Agreement and Plan of Merger]


<PAGE>



                                                                     Exhibit C-3
                Amended and Restated Seller Affiliate Agreement


                               AFFILIATE AGREEMENT

                               September ___, 1999

Casella Waste Systems, Inc.
25 Green Hills Lane
Rutland, VT  05701

KTI, Inc.
7000 Boulevard East
Guttenberg, NJ  07093

Ladies and Gentlemen:

       An  Agreement  and Plan of  Merger  dated as of  January  12,  1999  (the
"Agreement"),  as amended as of May 12, 1999,  September  8, 1999 and  September
___,  1999,  has  been  entered  into  by and  among  KTI,  Inc.,  a New  Jersey
corporation  ("Seller"),  Casella Waste  Systems,  Inc., a Delaware  corporation
("Buyer"),  and Rutland  Acquisition  Sub, Inc., a New Jersey  corporation and a
wholly-owned  subsidiary of Buyer (the "Merger Sub"). The Agreement provides for
the merger of the Merger Sub with and into Seller (the "Merger").  In accordance
with the Agreement,  shares of common stock,  no par value per share,  of Seller
(the "Seller Common Stock") shall be converted into shares of common stock, $.01
par value per share,  of Buyer (the "Buyer Common  Stock"),  as described in the
Agreement.

       The  undersigned  has been advised that as of the date of this  agreement
the  undersigned  may be  deemed to be an  "affiliate"  of  Seller,  as the term
"affiliate" is defined for purposes of paragraphs (c) and (d) of Rule 145 of the
Rules  and   Regulations  of  the  Securities  and  Exchange   Commission   (the
"Commission")  under the  Securities  Act of 1933,  as amended (the  "Securities
Act").

       In consideration of the mutual  agreements,  provisions and covenants set
forth in the  Agreement  and  hereinafter  in this  agreement,  the  undersigned
represents and agree as follows:

       1.  Amendment  and  Restatement.  This  letter  amends and  restates  and
supersedes in its entirety the Affiliate  Agreement among Seller,  Buyer and the
undersigned  dated as of January 12, 1999, which shall be of no further force or
effect.

       2. Rule 145. The undersigned will not offer, sell,  pledge,  hypothecate,
transfer or otherwise dispose of, or reduce its interest in or risk relating to,
any of the shares of Buyer Common Stock issued to the  undersigned in the Merger
unless at such time either:  (i) such  transaction is permitted  pursuant to the
provisions of Rule 145 under the Securities Act; (ii) the undersigned shall have
furnished to Buyer an opinion of counsel,  reasonably  satisfactory  to Buyer to
the effect that such  transaction  is  otherwise  exempt  from the  registration
requirements of the Securities Act; or (iii) a registration  statement under the
Securities  Act  covering  the  proposed  offer,  sale,  pledge,  hypothecation,
transfer or other disposition shall be effective under the Securities Act.

       3. Legend.

       (a) The undersigned understands that all certificates  representing Buyer
Common Stock  delivered to the  undersigned  pursuant to the Merger shall bear a
legend in substantially the form set forth below,  until the earlier to occur of
(i) one of the events  referred  to in Section 2 above or (ii) the date on which
the undersigned  requests  removal of such legend,  provided,  that such request
occurs at least two years from the Effective  Time (as defined in the Agreement)
and that the  undersigned  is not at the time of such request,  and has not been
during the three months period preceding to such request, an affiliate of Buyer.

                "The shares  represented  by this  certificate  were issued in a
                transaction  to  which  Rule 145 of the  Securities  Act of 1933
                applies  and may  only be  transferred  in  accordance  with the
                provisions of such rule. In addition,  the shares represented by
                this  certificate may only be transferred in accordance with the
                terms  of an  affiliate  agreement  dated  September  ___,  1999
                between the  initial  holder  hereof and Buyer,  a copy of which
                agreement may be inspected by the holder of this  certificate at
                the  principal  offices of Buyer,  or  furnished by Buyer to the
                holder of this certificate upon written request without charge."

       (b) Buyer in its discretion  may cause stop transfer  orders to be placed
with its transfer agent with respect to the certificates for the shares of Buyer
Common Stock that are required to bear the foregoing legend.

       4. General Provisions.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE  WITH THE LAWS OF THE STATE OF DELAWARE,  WITHOUT GIVING EFFECT TO
PRINCIPLES  OF  CONFLICTS  OF  LAWS.  This  agreement  shall be  binding  on the
undersigned's successors and assigns,  including his or her heirs, executors and
administrators.

       Execution  of this letter  should not be  considered  an admission on the
part of the  undersigned  that the  undersigned  is an  "affiliate" of Seller as
described in the second  paragraph of this letter,  or as a waiver of any rights
the undersigned may have to object to, or any claim that the undersigned is such
an affiliate on or after the date of this letter.





<PAGE>



       The  undersigned  has  carefully  read this  agreement  and discussed its
requirements, to the extent the undersigned believed necessary, with its counsel
or counsel for Buyer.

                                              Very truly yours,


                                              __________________________________
                                              Signature


                                              __________________________________
                                              Print Name

Accepted:

KTI, INC.

By:_____________________________

Name:___________________________

Title:__________________________

Dated:__________________________



CASELLA WASTE SYSTEMS, INC.

By:_____________________________

Name:___________________________

Title:__________________________

Dated:__________________________






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