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
February 29, 1996
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(Date of Report; Date of Earliest Event Reported)
EMCON
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(Exact name of registrant as specified in its charter)
California
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(State or other jurisdiction of incorporation)
0-16225 94-1738964
(Commission File Number) (IRS Employer Identification No.)
400 South El Camino Real, San Mateo, California 94402
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(Address of principal executive offices) (Zip Code)
(415) 375-1522
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(Registrant's telephone number, including area code)
Page 1 of 151 pages
Exhibit Index appears on Page 5
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INFORMATION TO BE INCLUDED IN THE REPORT
Item 2. Acquisition or Disposition of Assets.
EMCON (the "Company" or "EMCON") has completed a transaction with Organic
Waste Technologies, Inc. ("OWT"), the holders of OWT's common and preferred
stock ("OWT Stock") and the holders of options to acquire common stock of OWT
(the "OWT Options"; collectively, the OWT Stock and the OWT Options being
referred to herein as the "OWT Securities" and the holders thereof, the
"Sellers"). There were 34 Sellers in the Acquisition. As a result of the
transaction (the "Acquisition"), OWT has become a wholly-owned subsidiary of
EMCON.
The Acquisition, which was announced on January 30, 1996, was consummated
on February 29, 1996. To complete the Acquisition, OWT issued notes to certain
Sellers who are part of OWT's management, in an aggregate amount of $1,824,649
(the "OWT Notes"), in exchange for such Sellers' OWT Securities; EMCON paid an
aggregate of $13,754,351 in cash to the other Sellers in exchange for such
Sellers' OWT Securities; and EMCON paid certain fees and expenses incurred by
OWT and the Sellers with respect to the transaction (the pro rata share of which
was deducted from the consideration received by each Seller for his, her or its
OWT Securities). The OWT Notes are convertible into common stock of OWT upon an
underwritten public offering of OWT's common stock in an amount in excess of $10
million. In the event that the OWT Notes have not been converted into shares of
OWT common stock they may, at the election of the holder, instead be converted
into shares of EMCON common stock for a period of ninety days after November 30,
2000 at a conversion price of $6.50 per share. The OWT Securities acquired by
OWT and the OWT Options acquired have been canceled.
The amount of consideration was determined based upon OWT' projected
earnings and as a result of a competitive bidding process and arm's length
negotiations between management teams of both companies with input from their
respective boards of directors.
The only material relationship between (a) EMCON, its affiliates, its
directors and officers or any associate of its directors or officers and (b) the
Sellers, is that John Pacey, a director of EMCON is a Seller and was, prior to
the Acquisition, a director of OWT. Mr. Pacey will remain a director of OWT
after the Acquisition.
The Acquisition was partially financed through a $10 million term loan from
The Bank of California, N.A., with the remainder financed from the Company's
working capital.
A copy of the press release announcing the consummation of the Acquisition
is attached as Exhibit 99.1, and is incorporated herein by reference.
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Item 7. Financial Statements and Exhibits.
(a) Financial Statements of business acquired:
It is impracticable to provide the required OWT financial
statements at this time. Such financial statements will be filed within 60 days
of the date this Form 8-K is filed.
(b) Pro forma financial information:
It is impracticable to provide the required pro forma
financial information relative to the Acquisition at this time. Such financial
information will be filed within 60 days of the date this Form 8-K is filed.
(c) Exhibits:
Exhibit No. Description
2.1 Stock Purchase Agreement dated January 30,
1996, among EMCON, OWT and the Sellers (the
"Stock Purchase Agreement").
10.1 Note Agreement dated February 29, 1996 among
EMCON, OWT and certain Sellers.
10.2 Credit Agreement dated February 29, 1996
between EMCON and the Bank of California, N.A.
(the "Bank").
10.3 Security Agreement dated February 29, 1996 by
EMCON in favor of the Bank.
10.4 Pledge Agreement dated February 29, 1996 by
EMCON in favor of the Bank.
10.5 Eurodollar Rate Option Agreement dated February
29, 1996 between EMCON and the Bank.
10.6 Fixed Rate Amortizing Option Agreement dated
February 29, 1996 between EMCON and the Bank.
99.1 Press Release dated February 29, 1996
announcing the consummation of the Acquisition.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
EMCON
Date: March 12, 1996 By: /s/ R. Michael Momboisse
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R. Michael Momboisse
Chief Financial Officer and
Vice President - Legal
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EXHIBIT INDEX
Sequentially Numbered
Exhibit No. Description Page
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2.1 Stock Purchase Agreement 6
dated January 30, 1996,
among EMCON, OWT and the
Sellers (the "Stock
Purchase Agreement").
10.1 Note Agreement dated 77
February 29, 1996
among EMCON, OWT and
certain Sellers.
10.2 Credit Agreement dated 89
February 29, 1996
between EMCON and the
Bank of California, N.A.
(the "Bank").
10.3 Security Agreement dated 116
February 29, 1996
by EMCON in favor of the Bank.
10.4 Pledge Agreement dated 131
February 29, 1996 by EMCON
in favor of the Bank.
10.5 Eurodollar Rate Option Agreement 139
dated February 29, 1996 between
EMCON and the Bank.
10.6 Fixed Rate Amortizing Option 145
Agreement dated February 29, 1996
between EMCON and the Bank.
99.1 Press Release dated February 29, 151
1996 announcing the consummation
of the Acquisition.
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