SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 28, 1998
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KTI, INC.
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(Exact name of Registrant as specified in Charter)
New Jersey 33-85234 22-2665282
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(State or other juris- (Commission (IRS Employer
diction of incorporation) File Number) Identification
Number)
7000 Boulevard East, Guttenberg, New Jersey 07093
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(Address of principal executive office) (Zip Code)
(201) 854-7777
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(Registrant's telephone number including area code)
Not Applicable
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Former name and former address, as changed since last report)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On August 28, 1998, FCR, Inc., a Delaware corporation ("FCR"), was merged
(the "Merger") with and into KTI Acquisition Sub, Inc., a Delaware corporation
and a wholly owned subsidiary of the Registrant ("Merger Sub"), pursuant to an
Agreement and Plan of Merger, dated July 22, 1998 (the "Merger Agreement"), by
and among the Registrant, Merger Sub, FCR and the securityholders of FCR (the
"Holders"). Pursuant to the Merger Agreement, at the closing of the Merger, the
securities of FCR held by the Holders were converted into the right to receive
an aggregate of (i) $30.0 million in cash (the "Initial Cash Consideration"),
(ii) 1,714,285 shares of common stock, no par value (the "Common Stock"), of the
Registrant (the "Initial Stock Consideration"), and (iii) an additional payment
of up to $30.0 million (the "Earnout"), based upon the earnings from the
operations of FCR for the period from July 1, 1998 through December 31, 1998,
payable in a combination of cash and Common Stock, which Common Stock shall be
valued at the greater of the market value of the Common Stock on the date the
Earnout is determined and $23 per share; provided, that if the market value of
the Common Stock on the date the Earnout is determined is less than $18 per
share, the FCR Holders shall be entitled to an additional payment equal to the
difference between $18 and such market value (the "Makeup Payment," and together
with the Earnout, the Initial Cash Consideration and the Initial Stock
Consideration, the "Merger Consideration"). The Merger Consideration is payable
in a combination of Cash and Common Stock, and the value of the Common Stock
portion of the Merger Consideration shall be equal to at least 40% of the
aggregate Merger Consideration. As a result of the Merger, FCR became a wholly
owned subsidiary of the Registrant.
FCR is a diversified recycling company that provides residential and
commercial recycling processing and marketing services and manufactures
products, in particular, cellulose insulation, using recycled materials. FCR
owns or operates twenty-three material recovery facilities, five cellulose
insulation manufacturing facilities and three plastic reprocessing facilities in
twelve states.
The Registrant utilized its $150.0 million line of credit with KeyBank
National Association to fund the $30.0 million Initial Cash Consideration.
Effective as of the closing of the Merger, Mr. Paul A. Garrett, Chief
Executive Officer of FCR, was named the Vice-Chairman of the Board of Directors
of the Registrant and was elected to the Board of Directors of the Registrant.
Mr. Brian J. Noonan, Chief Financial Officer of FCR, was named Chief Financial
Officer of the Registrant. Each of Messrs. Garrett and Noonan entered into three
year Employment Agreements with the Registrant, pursuant to which each one
receives a base salary of $250,000 and $140,000, respectively. The Employment
Agreements provide for severance benefits in the event the employee is
terminated, except if the employee is terminated for cause. Also effective the
closing of the Merger, two former directors of FCR, W. Chris Hegele and Carlos
Aguero, were elected to the Board of Directors of the Registrant.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Exhibits.
Exhibit Number Description
4.1 Agreement and Plan of Merger, dated July 22, 1998, between
KTI, Inc., KTI Acquisition Sub, Inc., FCR, Inc. and certain
securityholders of FCR, Inc. (Incorporated by reference to
Exhibit 4.1 to the Registrant's Current Report on Form 8-K,
dated July 22, 1998.)
4.2 Pro forma financial statements.*
4.3 Employment Agreement, dated August 28, 1998, between the
Registrant and Paul A. Garrett.
4.4 Employment Agreement, dated August 28, 1998, between the
Registrant and Brian J. Noonan.
99.1 News Release dated August 31, 1998.
* To be filed by amendment.
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.
KTI, INC.
Dated: September 7, 1999 By: /s/ Martin J. Sergi
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Name: Martin J. Sergi
Title: President