-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, HN+S8t3hlSHawtmnSI9Gksm8yohTSMPyMV8Zz9AVbLHGA0e9ZIg8H1nA2phk/b3t zSOP6mRKLAYMIx5H+RrLnA== 0000950131-95-000695.txt : 19950616 0000950131-95-000695.hdr.sgml : 19950616 ACCESSION NUMBER: 0000950131-95-000695 CONFORMED SUBMISSION TYPE: SC 14D9 PUBLIC DOCUMENT COUNT: 11 FILED AS OF DATE: 19950323 SROS: AMEX SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: RESOURCE RECYCLING TECHNOLOGIES INC CENTRAL INDEX KEY: 0000051519 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-MISC DURABLE GOODS [5090] IRS NUMBER: 161352980 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D9 SEC ACT: 1934 Act SEC FILE NUMBER: 005-31651 FILM NUMBER: 95522648 BUSINESS ADDRESS: STREET 1: 300 PLAZA DR CITY: VESTAL STATE: NY ZIP: 13850 BUSINESS PHONE: 6077987137 MAIL ADDRESS: STREET 1: 300 PLAZA DRIVE CITY: VESTAL STATE: NY ZIP: 13850 FORMER COMPANY: FORMER CONFORMED NAME: RESOURCE RECOVERY TECHNOLOGIES INC DATE OF NAME CHANGE: 19881205 FORMER COMPANY: FORMER CONFORMED NAME: INTERNATIONAL SEAWAY TRADING CORP DATE OF NAME CHANGE: 19880609 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: RESOURCE RECYCLING TECHNOLOGIES INC CENTRAL INDEX KEY: 0000051519 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-MISC DURABLE GOODS [5090] IRS NUMBER: 161352980 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D9 BUSINESS ADDRESS: STREET 1: 300 PLAZA DR CITY: VESTAL STATE: NY ZIP: 13850 BUSINESS PHONE: 6077987137 MAIL ADDRESS: STREET 1: 300 PLAZA DRIVE CITY: VESTAL STATE: NY ZIP: 13850 FORMER COMPANY: FORMER CONFORMED NAME: RESOURCE RECOVERY TECHNOLOGIES INC DATE OF NAME CHANGE: 19881205 FORMER COMPANY: FORMER CONFORMED NAME: INTERNATIONAL SEAWAY TRADING CORP DATE OF NAME CHANGE: 19880609 SC 14D9 1 SCHEDULE 14D-9 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _________________ SCHEDULE 14D-9 SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO SECTION 14(D)(4) OF THE SECURITIES EXCHANGE ACT OF 1934 _________________ RESOURCE RECYCLING TECHNOLOGIES, INC. (NAME OF SUBJECT COMPANY) RESOURCE RECYCLING TECHNOLOGIES, INC. (NAME OF PERSON(S) FILING STATEMENT) COMMON STOCK, PAR VALUE $1.00 PER SHARE (TITLE OF CLASS OF SECURITIES) 760930 10 7 (CUSIP NUMBER OF CLASS OF SECURITIES) LAWRENCE J. SCHORR PRESIDENT AND CHIEF EXECUTIVE OFFICER 300 PLAZA DRIVE VESTAL, NEW YORK 13850 (607) 798-7137 (NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICE AND COMMUNICATIONS ON BEHALF OF THE PERSON(S) FILING STATEMENT). WITH A COPY TO: DEAN H. CANNON, ESQUIRE BEVERIDGE & DIAMOND, P.C. 1350 I STREET, N.W. SUITE 700 WASHINGTON, D.C. 20005 (202) 789-6000 ================================================================================ ITEM 1. SECURITY AND SUBJECT COMPANY. The name of the subject company is Resource Recycling Technologies, Inc., a Delaware corporation (the "Company"), and the address of the Company is 300 Plaza Drive, Vestal, New York 13850. The title of the class of equity securities to which this statement relates is the Common Stock, $1.00 par value (the "Shares"). ITEM 2. TENDER OFFER OF BIDDER. This Statement relates to a tender offer from WMI Acquisition Sub, Inc., a Delaware corporation ("Purchaser"), and a wholly owned subsidiary of Waste Management, Inc. ("Parent"), disclosed in a Tender Offer Statement on Schedule 14D-1, dated March 23, 1995 (the "Schedule 14D-1") to purchase all the outstanding Shares, at a price of $11.50 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated March 23, 1995 (the "Offer to Purchase") and the related Letter of Transmittal (which together constitute the "Offer" and are contained within the Schedule 14D-1). Parent is controlled by WMX Technologies, Inc. ("WMX"). The Offer is being made pursuant to an Agreement and Plan of Merger, dated March 17, 1995 (the "Merger Agreement"), among Parent, Purchaser and the Company. The Merger Agreement provides, among other things, that as soon as practicable after the consummation of the Offer and verification or waiver of all remaining conditions, Purchaser will be merged with and into the Company (the "Merger") and the Company will continue as the surviving corporation (the "Surviving Corporation"). A copy of the Merger Agreement has been filed as Exhibit 1 and is incorporated herein by reference. Based on information in the Schedule 14D-1, the principal executive offices of Purchaser and Parent are located at 3003 Butterfield Road, Oak Brook, Illinois 60521. ITEM 3. IDENTITY AND BACKGROUND. (a) The name and address of the Company, which is the person filing this statement, are set forth in Item 1 above. (b) Each material contract, agreement, arrangement and understanding and actual or potential conflict of interest between the Company or its affiliates and (i) the Company, its executive officers, directors or affiliates or (ii) Purchaser, its executive officers, directors or affiliates, is described in the attached Schedule I or set forth below. THE MERGER AGREEMENT The summary of the Merger Agreement contained in the Offer to Purchase which has been filed with the Securities and Exchange Commission (the "Commission") as an exhibit to the Schedule 14D-1, a copy of which is enclosed with this Schedule 14D-9, is incorporated herein by reference. Such summary should be read in its entirety for a more complete description of the terms and provisions of the Merger Agreement. The following is a summary of certain portions of the Merger Agreement which relate to arrangements among the Company, Parent and the Company's executive officers and directors. BOARD REPRESENTATION. The Merger Agreement provides that promptly upon the purchase by Parent or Purchaser of at least a majority of the outstanding Shares, Purchaser and Parent shall be entitled to designate such number of directors (but in no event more than one less than the total number of directors) on the Board of Directors (the "Board") of the Company, rounded up to the next whole number (the "Purchaser Designees") such that Purchaser and Parent, subject to compliance with Section 14(f) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), will have representation on the Board equal to the product of (i) the number of directors on the Board and (ii) the percentage that the number of Shares so purchased bears to the total number of Shares outstanding, and the Company and its Board shall, at such time, take any and all such action as Purchaser may -2- reasonably request (including increasing the size of the Board) to cause the Purchaser's Designees to be elected to the Company's Board. AGREEMENT WITH RESPECT TO DIRECTOR AND OFFICER INDEMNIFICATION AND INSURANCE. The Merger Agreement provides that Parent acknowledges that all rights to indemnification or limitations on liability currently existing in favor of the present or former employees, agents, directors or officers of the Company as provided in its certificate of incorporation, by-laws, agreements or pursuant to applicable law in effect on the date of the Merger Agreement shall survive the Merger and shall continue in full force and effect for a period of not less than the applicable statutes of limitations; however, in the event any claim or claims are asserted or made within such applicable period, all rights to indemnification in respect of such claim or claims shall continue until disposition of any and all such claims. If any action, suit, proceeding or other investigation relating to the Merger Agreement or to the transactions contemplated thereby is commenced, whether before or after the Merger becomes effective, the parties shall cooperate with each other and use all reasonable efforts to defend against and respond to any such action, suit, proceeding or investigation. The Merger Agreement also provides that Purchaser and Parent will maintain in effect the Company's current directors' and officers' insurance policy for the remainder of its term and purchase a policy providing continued coverage relating to actions, alleged actions, omissions and alleged omissions occurring at or prior to the time of the Merger (the "Effective Time") for a period of at least three years from and after the Effective Time, provided that the total amount Parent and Purchaser are required to expend for such coverage shall not exceed 250% of the 1994 premium for such current policy. STOCK TENDER AGREEMENTS Upon the execution of the Merger Agreement, three stockholders of the Company entered into Stock Tender Agreements (the "Stock Tender Agreements") with Parent and Purchaser. The three stockholders are Allen & Company Incorporated ("Allen & Co."), Paul A. Gould and Andrew T. Dwyer. Allen & Co. is the Company's largest stockholder, Paul A. Gould is a director of the Company and a Managing Director of Allen & Co., and Andrew Dwyer is Chairman of the Company's Board of Directors. Pursuant to the Stock Tender Agreements, so long as the Board of Directors of the Company has not withdrawn its recommendation of the Offer in accordance with the Merger Agreement, those stockholders will validly tender (and not thereafter withdraw) the Shares beneficially owned by each of them pursuant to and in accordance with the terms of the Offer. As of March 20, 1995, these stockholders (with members of their families) beneficially owned a total of 1,082,506 Shares, representing approximately 33% of the then outstanding Shares, on a fully diluted basis. See "Security Ownership" in Schedule I hereto. These stockholders may decline to tender, or withdraw, their Shares only if: (1) the amount or form of consideration to be paid for their Shares is less than cash in the amount of $11.50 per Share, net to the stockholder in cash, (ii) the Merger Agreement is terminated, or (iii) the Board of Directors of the Company withdraws its recommendation of the Offer in accordance with the Merger Agreement, provided, that if the Company's Board subsequently recommends an offer by Purchaser or an affiliate of Purchaser for a consideration per Share greater than $11.50 per Share, the stockholders have agreed to re-tender any Shares that were withdrawn. In connection with the Stock Tender Agreements, the parties thereto have made certain customary representations, warranties and covenants, including with respect to (i) ownership of the Shares, (ii) their authority to enter into and perform their obligations under the Stock Tender Agreements, (iii) the ability of the parties to enter into the Stock Tender Agreements without violating other agreements to which they are party, (iv) the absence of liens and encumbrances on and in respect of the stockholder parties' Shares and (v) restrictions on the transfer of the stockholder parties' Shares. -3- CERTAIN CONFLICTS STOCK OPTIONS. As of the date of filing of this Schedule 14D-9, the current directors and executive officers of the Company as a group hold stock options granted under the Company's Incentive Stock Option Plan As Amended and Restated June 8, 1990 and under the Company's Non-Qualified Stock Option Plan (collectively, the "Option Plans") to purchase an aggregate of 406,500 Shares at exercise prices ranging from $3.42 to $8.50 per Share. In accordance with the terms of the Merger Agreement, prior to consummation of the Merger, the Company will have made arrangements with each holder of a stock option the effect of which shall be that a stock option granted under the Option Plans which is outstanding immediately prior to the consummation of the Offer will be cancelled and the holder thereof will receive an amount in cash equal to the excess, if any, of the price paid for each Share pursuant to the Merger over the per share exercise price of such option multiplied by the number of Shares issuable pursuant to any such option, net of any income tax withholding and payroll taxes applicable to such payment. EMPLOYMENT AND CONSULTING AGREEMENTS. The Company maintains an employment agreement (the "Schorr Agreement") with Lawrence Schorr, its President and Chief Executive Officer, described under the section captioned "Compensation of Executive Officers and Directors" in Schedule I hereto. The Schorr Agreement contains provisions allowing Mr. Schorr to terminate the agreement in exchange for a lump sum payment equal to all salary payments owed to him for the balance of the agreement term, in the event of a change of control (as defined therein), unless the new controlling entity (i) has a net worth equal to or greater than the net worth of the Company immediately prior to the change of control and (ii) guarantees the Company's obligations under the agreement. The acquisition of Shares pursuant to the Offer and Merger will constitute a change of control for purpose of the Schorr Agreement. The lump sum amount that would be payable to Mr. Schorr if the Schorr Agreement were terminated in accordance with this provision at March 31, 1995 is approximately $384,000. Mr. Schorr and Purchaser have agreed to new employment arrangements (the "New Schorr Agreement") between Mr. Schorr and the Company that will be effective upon consummation of the Merger to replace the existing Schorr Agreement. The New Schorr Agreement provides that Mr. Schorr will be employed by the Company for a period of two years after the Effective Time, and thereafter on an at-will basis, for an annual base salary of $280,000. The New Schorr Agreement also provides that Mr. Schorr will be granted options to purchase WMX common stock during 1995 and 1996 with a value equal to 100% of his base salary, prorated for 1995. If the Merger is not consummated, the New Schorr Agreement will not become effective. The Company also maintains employment agreements (the "Koffman Agreements") with Burton Koffman, a director of the Company, and Richard Koffman, a former director and the brother of Burton Koffman, described under the section captioned "Compensation of Executive Officers and Directors" in Schedule I hereto. The Koffman Agreements contain provisions identical to the provisions in the Schorr Agreement regarding a change of control of the Company. The lump sum amounts that would be payable to Burton Koffman and Richard Koffman if the Koffman Agreements were terminated in accordance with these provisions at March 31, 1995 are approximately $413,000 and $78,000, respectively. The Company has entered into a Consulting Agreement with Andrew Dwyer, Chairman of the Board of Directors, that is described under the section captioned "Compensation of Executive Officers and Directors" in Schedule I hereto. Purchaser has informed the Company that it expects to propose an extension by the Company of this Consulting Agreement, for a period of one year after the Merger, at its current rate of $100,000 per annum. Parent has indicated that it may wish to seek employment agreements with other Company employees. LADENBURG WARRANT. There is presently outstanding a warrant (the "Warrant") to purchase an aggregate of 113,363 Shares for $9.13 per share, issued to Ladenburg, Thalmann & Co. Inc. ("Ladenburg"), exercisable through 5:00 P.M., New York City time, on April 10, 1995. Jay Petschek, a director of the Company, is a Managing Director of Ladenburg. The Company and Ladenburg, with the consent of Purchaser, have agreed that (i) in full -4- settlement of the Warrant, Ladenburg will be entitled to receive immediately after the Effective Time a cash payment from the Company in an amount equal to the excess of the price paid for each Share pursuant to the Merger over the per share exercise price of the Warrant, multiplied by 113,363 (the number of Shares issuable upon exercise of the Warrant), and (ii) if the Merger is not consummated, the Warrant will be extended for sixty days beyond the date on which a registration statement filed by the Company covering the Shares issuable upon exercise of the Warrant becomes effective. Assuming the consideration paid for each Share pursuant to the Offer and Merger is $11.50 per Share, net to the seller in cash, the cash payment to be paid to Ladenburg for settlement of the Warrant pursuant to the Merger would be $268,670. FINANCIAL ADVISOR. The Company retained Allen & Co. to act as one of its financial advisors in connection with the Offer and Merger, and to evaluate and render an opinion regarding the fairness, from a financial point of view, of the consideration to be paid pursuant to the Offer and Merger to the Company's stockholders. As indicated previously, Paul A. Gould, a director of the Company, is a Managing Director of Allen & Co., and Allen & Co. is the Company's largest stockholder. See "Information Concerning Members of the Board of Directors," "Security Ownership" and "1994 Change of Control of the Company" in Schedule I hereto. Allen & Co. will be paid a fee of $300,000 for its services to the Company in connection with the Offer and Merger, such fee to be paid by the Company upon the acquisition by Purchaser of a majority of the Shares. In the event of the consummation of any alternative transaction which would entail financial advisory services for the Company other than those contemplated in connection with the Offer and Merger, Allen & Co. will be paid such consideration as may be agreed by Allen & Co. and the Company. The Company has also agreed to reimburse Allen & Co. for certain out-of-pocket expenses, and to indemnify Allen & Co. for certain liabilities that may arise as a result of the engagement. See "Item 5. Persons Retained, Employed or to be Compensated." The Company has been informed that Allen & Co. has not been previously retained by and does not have any other contract, agreement, arrangement, understanding or actual or potential conflict of interest, with the Company, Purchaser, Parent, or any of their respective directors, executive officers or affiliates. LEGAL COUNSEL. Beveridge & Diamond, P.C. ("B&D") has served as corporate legal counsel to the Company for various matters since 1983, and was retained by the Company to provide legal services on behalf of the Company in connection with the Offer and Merger. Dean H. Cannon, a principal of B&D, is a director of the Company. B&D also provides legal services to Parent and to other subsidiaries of WMX in connection with various environmental matters unrelated to the Offer and Merger. The Board of Directors of the Company also retained Skadden, Arps, Slate, Meagher & Flom ("Skadden, Arps") to advise it regarding certain legal matters relating to the Offer and Merger. Skadden, Arps has represented from time to time subsidiaries of WMX in matters unrelated to the Offer and Merger. OTHER MATTERS. Certain other transactions have occurred, or relationships exist, between the Company and its directors, executive officers or affiliates. See "Transactions with Executive Officers and Directors" in Schedule I hereto. ITEM 4. SOLICITATION OR RECOMMENDATION. (A) RECOMMENDATION OF THE BOARD OF DIRECTORS. The Board of Directors has unanimously approved the Merger Agreement and the transactions contemplated thereby and unanimously recommends that all holders of Shares tender such Shares pursuant to the Offer. -5- (B) BACKGROUND; REASONS FOR THE RECOMMENDATION. In late spring 1994, Andrew T. Dwyer, Chairman of the Company, contacted Phillip B. Rooney, President of Parent, to discuss jointly pursuing certain project opportunities using the Company's technology and experience in designing, constructing and operating material recycling facilities and Parent's operating and capital resources. This discussion led to a meeting on June 1, 1994 among Mr. Dwyer, Mr. Rooney and Joseph M. Holsten, Chief Financial Officer of Parent, at which these possible cooperative efforts were further explored. At this meeting, Mr. Rooney also expressed an interest in having Parent acquire the Company, indicating that on the basis of a preliminary valuation analysis of publicly available information regarding the Company which Parent had performed, Parent might be willing to consider paying a price of $7.50 per Share in such an acquisition. Noting the recent improvement in the Company's financial performance, Mr. Dwyer declined to discuss a possible acquisition of the Company at that price. He did, however, suggest that a price of at least $10.00 per Share might be of interest to him personally. Parent's representatives indicated their view that such a higher price was not warranted and the discussion of a possible acquisition terminated. Although Messrs. Dwyer and Rooney had continuing dialogue from time to time regarding possible project opportunities or joint ventures, there were no further discussions between Messrs. Dwyer and Rooney regarding Parent's possible acquisition of the Company until the discussions in March 1995 described below. In October 1994, the Company and Parent entered into a confidentiality agreement pursuant to which Parent would have access to technical information to determine whether there was interest in Parent retaining the Company to render technical advisory services in connection with Parent's material recovery facility operations. On October 27, 1994, William A. Rodgers, Jr., then Vice President-Business Development of Parent's Mid-Atlantic Group and two other representatives of Parent, toured the Company's Ocean County, New Jersey material recycling facility. Accompanying these officials at various times were Mr. Dwyer, Lawrence J. Schorr, the Company's President and Chief Executive Officer, and the Ocean County facility manager. During this tour, Mr. Rodgers again broached the subject of a possible acquisition of the Company by Parent, but Mr. Dwyer indicated that there was no interest from his standpoint in discussing such a transaction at that time. On January 24, 1995, the Company publicly released its financial results for the year ended December 31, 1994. Subsequently, Mr. Rooney contacted Mr. Dwyer's office and Paul A. Gould, a director of the Company and a Managing Director of Allen & Co., the Company's largest stockholder, and arranged for a meeting on March 2, 1995, for the principal purpose of discussing a possible acquisition of the Company by the Parent or considering another form of business combination between them. After it was scheduled but prior to this meeting, Mr. Dwyer furnished Parent's representatives with certain information regarding the Company's results of operations and financial position, cash position and a summary of the Company's "best case" operating budget for 1995. See "Certain 1995 Financial and Budget Information" in Section 8 of the Offer to Purchase that is enclosed with this Schedule 14D-9. This meeting was attended by Messrs. Rooney, Holsten and Rodgers, from Parent, and by Messrs. Dwyer and Gould. At the March 2 meeting, the Company's management and its ongoing projects were discussed and the budget and underlying assumptions were reviewed. Parent's representatives proposed an acquisition of the Company by the Parent on the basis of a cash price of $10.00 per Share. Mr. Dwyer initially indicated an interest in a cash price of $14.00 per share, but after negotiations among the Parent representatives, Mr. Dwyer and Mr. Gould, it was generally agreed that a per share price of $11.50 would be mutually acceptable to the meeting participants. The participants further generally agreed that the Parent would offer to acquire all of the Company's outstanding shares for a cash price of $11.50 per share, and Messrs. Dwyer and Gould, and Allen & Co., would tender their Shares to Parent upon such offer, subject to negotiation and execution of a definitive acquisition agreement containing typical terms and conditions, and in the case of Messrs. Dwyer and Gould, and Allen, to the approval of the Company's Board, and in the case of Parent, to its completion of due diligence. A break-up fee was also discussed and Messrs. Dwyer and Gould indicated that they were amenable to such a fee if a definitive agreement could be reached and approved by the Company's Board. -6- On March 3, 1995, Mr. Dwyer informed Mr. Schorr of the proposed Parent offer, and between March 3 and March 8, Mr. Schorr informed Company Board members and retained legal counsel. On March 9, 1995, the Company retained Allen & Co. and Gilford Securities Incorporated ("Gilford") to act as financial advisors (the "Financial Advisors"), and the Financial Advisors began conducting their reviews of the Company. During the two weeks beginning March 6, as representatives of Parent conducted various due diligence activities, representatives of Parent and the Company (including outside counsel for all parties) negotiated the terms of the Merger Agreement and the Stock Tender Agreements. On March 14, 1995, the Company's Board of Directors held an informational meeting with the Financial Advisors and the Company's legal counsel in New York City. At this meeting, the Board was informed of the background leading up to the Parent's proposed offer and current status of the negotiations and due diligence. The Company's legal counsel summarized the terms and conditions of the proposed Merger Agreement and the Stock Tender Agreements, and provided advice to the Board members with respect to certain legal matters, including their fiduciary obligations in connection with a sale of the Company. Representatives of the Financial Advisors provided a preliminary report to the Board based on their review of the Company, summarizing the items reviewed and analyzed. The Financial Advisors indicated at that time that their preliminary views were that the consideration for the Shares to be paid pursuant to the Offer and Merger was fair, from a financial point of view, to the Company's stockholders. During this meeting, the Board discussed the Offer and Merger in detail. The Company's management and counsel generally were authorized to continue their negotiations with Parent and a second Board meeting was scheduled for March 17. On March 17, 1995, the Company's Board of Directors met by telephone conference call to consider the final terms of the proposed transaction and receive the final report of the Financial Advisors. The written analysis prepared by Allen & Co. had been provided to the Board members on March 16, and drafts of the various agreements were provided as well. The Company's legal counsel summarized the changes to the Merger Agreement that had been agreed to since the previous meeting, and reviewed the terms of the Stock Tender Agreements and the New Schorr Agreement. Counsel also described certain modifications to outstanding options, the Ladenburg Warrant and the Company's convertible preferred stock that needed to be made in connection with the Offer and Merger. Representatives of the Financial Advisors then made a presentation to the Board of Directors and delivered the oral opinions of Allen & Co. and Gilford that, as of March 17, 1995 and based upon and subject to the matters reviewed with the Board, the $11.50 per Share cash consideration to be received by the holders of the Shares in the Offer and the Merger was fair to such holders from a financial point of view. The Board then analyzed and discussed the Offer, the Merger Agreement, the Stock Tender Agreements, the New Schorr Agreement, and the modifications to be made to the options, the Ladenburg Warrant and the preferred stock. The Board of Directors unanimously approved the Merger Agreement, the Stock Tender Agreements, and the transactions contemplated thereby, as well as the New Schorr Agreement, and the modifications to the options, the Ladenburg Warrant, and the preferred stock. The Board also unanimously resolved to recommend acceptance of the Offer and approval and adoption of the Merger and the Merger Agreement by the Company's stockholders. In approving the Merger Agreement and the transactions contemplated thereby and recommending that all holders of Shares tender such Shares pursuant to the Offer, the Board of Directors considered a number of factors, including: (i) the terms of the Merger; (ii) presentations by management and the Financial Advisors regarding, among other things, the financial condition, results of operations, business and prospects of the Company, including consideration of commodity price fluctuations, the declining number of municipal projects, the -7- amount of capital that may be needed to expand the Company's operations in the future, particularly for privately financed projects, the potential negative effects on recycling because of the inability of municipal governments to enforce flow control, and the increase in competition arising from high commodity pricing; (iii) that the $11.50 per Share price in the Offer represented (a) a premium of approximately 51% over the closing price of the Shares on March 13, 1995 (three days prior to the meeting), (b) a premium of approximately 156% over the closing price of the shares on December 30, 1994, and (c) a price higher than the Shares have traded in the last five years; (iv) the oral opinions of Allen & Co. and Gilford delivered at the meeting on March 17, and subsequently confirmed in writing and attached hereto as Exhibits 8 and 9, respectively, to the effect that, as of such date and based upon and subject to the matters reviewed with the Board, the $11.50 per Share cash consideration to be received by the holders of the Shares pursuant to the Offer and the Merger was fair to such holders from a financial point of view; (v) that the Merger Agreement permits the Company to furnish information to (pursuant to appropriate confidentiality agreements), and negotiate or participate in discussions with, any third party if required by the fiduciary duties of its directors after consulting with outside counsel to the Company; (vi) the fact that the Company and its representatives did not solicit possible acquisition interest from third parties, including the following considerations (among other things) that led to the Board decision that a "public" auction of the Company was not the appropriate course: (1) the uncertainties and potential adverse effect that a "public" auction of the Company could have on the business, employees and prospects of the Company, including its relationships with third parties, (2) the Board's belief, after considering the preliminary presentations of the Financial Advisors, that the price per Share in the Offer and Merger was sufficiently attractive that it did not need to solicit other offers, (3) the terms of the Merger Agreement, described above, that permit the Company, if required by the fiduciary duties of its directors, to negotiate or participate in discussions with third parties, (4) the size of the break-up fee (referred to below) and the Board's belief that it would not deter alternative bidders, and (5) the limited number of possible alternative third party bidders that would be willing and able to pay a higher price for the Shares than the consideration offered in the Offer and Merger, without additional conditions to consummation, in light of current recycling industry conditions and activities; (vii) the termination provisions of the Merger Agreement, which were a condition to the Offer, providing that Parent would be entitled to a fee of $1,000,000 if (a) any person, corporation, partnership or other entity (other than Parent, Purchaser or any of their affiliates) ("Third Person") acquires more than 33% of the outstanding Shares, (b) a Third Person acquires more than 50% of the Company's total assets, (c) the Company consummates a plan of liquidation relating to more than 50% of its total assets, (d) the Company repurchases more than 50% of the outstanding Shares, (e) the Company consummates a merger of the Company with, the sale of all or substantially all of the assets of the Company to, or any other business combination involving the Company with, a Third Person, or (f) Parent and Purchaser terminate the Merger Agreement because more than 50.1% of the shares (assuming exercise and conversion of all outstanding options and convertible securities) have not been validly tendered and not withdrawn, and within one year from the date of such termination a transaction contemplated by (a), (b) or (e) is consummated with a Third Person, so long as such transaction is accomplished so as to provide a yield to holders of Company Common Stock of at least the equivalent of $11.50 per share, and there was a public announcement or written proposal to effect such transaction by or with such Third Person while the Merger Agreement was in effect, or (g) the Board withdraws or amends in -8- any material respect adverse to consummation of the Offer its recommendation that the Offer be accepted by the Company's stockholders and that stockholders tender their Shares in the Offer, unless such withdrawal or amendment results from a material breach by Parent or Purchaser of any representations or warranties in the Merger Agreement or a failure by Parent or Purchaser to fulfill any material covenant in the Merger Agreement; (viii) the limited number of conditions to the obligations of Parent and Purchaser to consummate the Offer and the Merger, including the fact that the Offer is not conditioned on financing; (ix) the request by Purchaser and Parent for the Stock Tender Agreements, which were executed upon the execution of the Merger Agreement, and the fact that the Shares owned by the selling stockholders thereunder could only be purchased by Purchaser pursuant to the terms of the Offer whereby all stockholders of the Company have the same right to participate, it being recognized by the Board of Directors that the Stock Tender Agreements did not preclude an alternative offer for the Company or its outstanding Shares; and (x) the anticipated benefits of the Merger to the employees and management of the Company. The Board of Directors did not assign relative weights to the foregoing factors or determine that any factor was of particular importance. Rather, the Board of Directors viewed its position and recommendations as being based on the totality of the information presented to and considered by it. Copies of the written opinions of Allen & Co. and Gilford are attached hereto as Exhibits 8 and 9, respectively, and incorporated herein by reference. STOCKHOLDERS ARE URGED TO READ THE OPINIONS OF ALLEN & CO. AND GILFORD IN THEIR ENTIRETY. ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED. The Company has retained Allen & Co. by letter agreement dated March 9, 1995 to act as financial advisor to assist it in evaluating the fairness to the stockholders of the Company from a financial point of view of the Proposed Transaction (as defined in the letter agreement), including a potential business combination pursuant to which the Company would be acquired by Purchaser, and to assist it in negotiations between the Company and any potential acquirors, investors, or other interested parties. The engagement will last for the shorter of one year from its inception unless extended for certain specified reasons, consummation of the Proposed Transaction, or abandonment thereof. The Company has agreed to pay Allen & Co. $300,000 upon acquisition by Purchaser of a majority of the Shares. In the event of the consummation of an alternative transaction that would entail financial advisory services for the Company, Allen & Co. will receive such compensation as may be agreed between the parties. The Company has also agreed to pay out-of-pocket expenses, including the expenses of counsel for Allen & Co., and to indemnify Allen & Co. for certain liabilities arising out of the Proposed Transaction or the retention of Allen & Co. pursuant to, or its performance under, the letter agreement, including liabilities arising under the federal securities laws. Allen & Co. owns 664,806 shares of the Company and Paul A. Gould, a director of the Company and a Managing Director of Allen & Co. owns an additional 150,000 shares. Allen & Co. and Mr. Gould agreed on March 17, 1995 to tender their Shares to the Purchaser and not to withdraw the Shares except as set forth in their respective Stock Tender Agreements. See "Item 3. Identity and Background." In the ordinary course of its business, Allen & Co. may actively trade the securities of the Company and WMX for the accounts of its customers and, accordingly, may at any time hold a long or short position in such securities. -9- By letter agreement dated March 9, 1995, the Company engaged Gilford to provide it with an opinion whether or not the proposed consideration to be received in connection with the Offer and Merger is fair to the Company's stockholders from a financial point of view. The Company has agreed to pay Gilford $62,500, one-half of which was paid by the Company upon delivery of the opinion and the balance of which is payable upon consummation of the Merger. In addition, the Company has agreed to pay Gilford's reasonable out-of-pocket expenses, including the reasonable fees and expenses of its counsel, and to indemnify Gilford for certain liabilities arising out of Gilford's engagement pursuant to the letter agreement, including liabilities arising under the federal securities laws. In the ordinary course of its business, Gilford may actively trade the securities of the Company and WMX for its own account and for the accounts of its customers and, accordingly, may at any time hold a long or short position in such securities. The Company has been informed that Gilford has not been previously retained by and does not have any other contract, agreement, arrangement, understanding or actual or potential conflict of interest, with the Company, Purchaser, Parent, or any of their respective directors, executives officers or affiliates. ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES. (a) Except as set forth in Schedule II hereto, no transactions in the Shares have been effected during the past 60 days by the Company or, to the best of the Company's knowledge, by any executive officer, director, affiliate or subsidiary of the Company. (b) To the best of the Company's knowledge, to the extent permitted by applicable securities laws, rules or regulations, each executive officer, director, affiliate and subsidiary of the Company currently intends to tender all Shares to the Purchaser which are held of record or beneficially by such person or over which he, she or it has sole dispositive power. ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY. (a) Except as set forth in this Schedule 14D-9, no negotiation is being undertaken or is underway by the Company in response to the Offer which relates to or would result in (i) an extraordinary transaction, such as a merger or reorganization, involving the Company or any subsidiary of the Company; (ii) a purchase, sale or transfer of a material amount of assets by the Company or any subsidiary of the Company; (iii) a tender offer for or other acquisition of securities by or of the Company; or (iv) any material change in the present capitalization or dividend policy of the Company. (b) None. ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED. (A) DGCL 203. Section 203 of the General Corporation Law of Delaware ("DGCL") purports to regulate certain business combinations of a corporation organized under Delaware law, such as the Company, with a stockholder beneficially owning 15% or more of the voting stock of such corporation after the date the relevant person or entity first becomes a 15% stockholder. Section 203 provides that the corporation shall not engage for a period of three years in any business combination with such a stockholder without approval of the holders of two- thirds of the outstanding shares (other than the shares owned by the 15% stockholder), with certain exceptions, including (i) prior approval by the board of directors of the corporation, either of the business combination or the transaction which results in a stockholder becoming a 15% stockholder, or (ii) the ownership by the 15% stockholder of at least 85% of the outstanding voting shares of the corporation, exclusive of shares acquired in a transaction not approved by the board of directors. The Company's Board of Directors has approved the Merger Agreement and the transactions -10- contemplated thereby, including the Offer, the Stock Tender Agreements, and the Merger, and, therefore, Section 203 of the DGCL is inapplicable to the Offer and the Merger. (B) INFORMATION STATEMENT. The Information Statement attached as Schedule I hereto is being furnished in connection with the possible designation by Purchaser, pursuant to the Merger Agreement, of certain persons to be appointed to the Board of Directors of the Company other than at a meeting of the Company's stockholders. ITEM 9. MATERIAL TO BE FILED AS EXHIBITS. Exhibit No. - ----------- Exhibit 1 Agreement and Plan of Merger dated March 17, 1995 among Waste Management, Inc., WMI Acquisition Sub, Inc. and Resource Recycling Technologies, Inc. Exhibit 2 Stock Tender Agreement dated March 17, 1995 among Allen & Company Incorporated, Waste Management, Inc. and WMI Acquisition Sub, Inc. Exhibit 3 Stock Tender Agreement dated March 17, 1995 among Paul A. Gould, Waste Management, Inc. and WMI Acquisition Sub, Inc. Exhibit 4 Stock Tender Agreement dated March 17, 1995 among Andrew T. Dwyer, Waste Management, Inc. and WMI Acquisition Sub, Inc. Exhibit 5 Employment Agreement dated March 17, 1995 between Resource Recycling Technologies, Inc. and Lawrence J. Schorr. Exhibit 6 Press Release issued jointly by Waste Management, Inc. and Resource Recycling Technologies, Inc. dated March 17, 1995. Exhibit 7 Letter to Stockholders of Andrew T. Dwyer and Lawrence J. Schorr dated March 23, 1995.* Exhibit 8 Opinion of Allen & Company Incorporated dated March 17, 1995.* Exhibit 9 Opinion of Gilford Securities Incorporated dated March 17, 1995.* Exhibit 10 Press Release issued jointly by Waste Management, Inc. and Resource Recycling Technologies, Inc. dated March 23, 1995. - ----------------- * Included in copies mailed to stockholders. SIGNATURE After reasonable 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 23, 1995 RESOURCE RECYCLING TECHNOLOGIES, INC. By: /s/ LAWRENCE J. SCHORR --------------------------------- Name: Lawrence J. Schorr Title: President and Chief Executive Officer -11- SCHEDULE I RESOURCE RECYCLING TECHNOLOGIES, INC. 300 PLAZA DRIVE VESTAL, NEW YORK 13850 INFORMATION STATEMENT PURSUANT TO SECTION 14(F) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE 14F-1 THEREUNDER This Information Statement is being mailed on or about March 23, 1995 as part of the Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9") of Resource Recycling Technologies, Inc. (the "Company") to the holders of record of shares of Common Stock, par value $1.00 per share, of the Company (the "Shares"). You are receiving this Information Statement in connection with the possible election of persons designated by the Purchaser (as defined below) to a majority of the seats on the Board of Directors of the Company. On March 17, 1995, the Company, WMI Acquisition Sub, Inc., a Delaware corporation ("Purchaser"), and Waste Management, Inc., an Illinois corporation ("Parent"), entered into an Agreement and Plan of Merger (the "Merger Agreement") in accordance with the terms and subject to the conditions of which (i) Parent will cause the Purchaser to commence a tender offer (the "Offer") for all outstanding Shares, at a price of $11.50 per Share net to the seller in cash, and (ii) Purchaser will be merged with and into the Company (the "Merger"). As a result of the Offer and the Merger, the Company will become a wholly owned subsidiary of Parent. Parent is controlled by WMX Technologies, Inc. The Merger Agreement requires the Company to take such action as Purchaser may reasonably request to cause Purchaser's designees to be elected to the Board of Directors under the circumstances described therein. See "Board of Directors and Executive Officers--Right to Designate Directors; Purchaser Designees." You are urged to read this Information Statement carefully. You are not, however, required to take any action. Capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in the Schedule 14D-9. Pursuant to the Merger Agreement, Purchaser commenced the Offer on March 23, 1995. The Offer is scheduled to expire at 12:00 midnight, New York City Time, on Wednesday, April 19, 1995, unless the Offer is extended. The information contained in this Information Statement concerning Purchaser and Parent has been furnished to the Company by Purchaser and Parent, and the Company assumes no responsibility for the accuracy or completeness of such information. I-1 BOARD OF DIRECTORS AND EXECUTIVE OFFICERS GENERAL The Shares are the only class of voting securities of the Company outstanding. Each Share has one vote. As of March 20, 1995, there were 2,675,773 Shares outstanding. The Board of Directors currently consists of six members. At each annual meeting of stockholders, directors are elected to hold office for one year terms, until the next annual meeting of stockholders. RIGHT TO DESIGNATE DIRECTORS; PURCHASER DESIGNEES The Merger Agreement provides that promptly upon the purchase by Parent or Purchaser of at least a majority of the outstanding Shares, Purchaser and Parent shall be entitled to designate such number of directors (but in no event more than one less than the total number of directors) on the Board of Directors (the "Board") of the Company, rounded up to the next whole number (the "Purchaser Designees") such that Purchaser and Parent, subject to compliance with Section 14(f) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), will have representation on the Board equal to the product of (i) the number of directors on the Board and (ii) the percentage that the number of Shares so purchased bears to the total number of Shares outstanding, and the Company and its Board shall, at such time, take any and all such action as Purchaser may reasonably request (including increasing the size of the Board) to cause the Purchaser Designees to be elected to the Company's Board. Purchaser has informed the Company that it will choose the Purchaser Designees from the executive officers listed on Schedule I to the Offer to Purchase, a copy of which is being mailed to the Company's stockholders together with this Information Statement. The information on such Schedule I is incorporated herein by reference. No determination has yet been made as to which of the current directors of the Company who are not officers of the Company will continue as directors following the purchase of Shares pursuant to the Offer. None of the Purchaser Designees (i) is currently a director of, or holds any position with, the Company, (ii) has a familial relationship with any directors or executive officers of the Company, or (iii) to the best knowledge of the Purchaser, beneficially owns any securities (or rights to acquire such securities) of the Company. The Company has been advised by Purchaser that, to the best of Purchaser's knowledge, none of the Purchaser Designees has been involved in any transactions with the Company or any of its directors, executive officers or affiliates which are required to be disclosed pursuant to the rules and regulations of the Commission, except as may be disclosed herein or in the Schedule 14D-9. It is expected that the Purchaser Designees may assume office at any time following the acceptance for payment of, and payment for, any Shares pursuant to the Offer, and that, upon assuming office, the Purchaser Designees will thereafter constitute at least a majority of the Board of Directors. Biographical information concerning each of the Company's current directors and executive officers is presented on the following pages. I-2 INFORMATION CONCERNING MEMBERS OF THE BOARD OF DIRECTORS CERTAIN BACKGROUND AND OTHER INFORMATION CONCERNING DIRECTORS AND NOMINEES Unless otherwise indicated, each person listed below has been employed at his or her present principal occupation for the past five years or prior thereto. Each individual listed below is a citizen of the United States. There are no family relationships among directors, nominees for election as directors or executive officers of the Company. Andrew T. Dwyer, 46, has been a director of the Company since October 1991 and has been Chairman of the Board of Directors since May 1993. Mr. Dwyer is a consultant, and has entered into a Consulting Agreement with the Company. See "Executive Compensation." Mr. Dwyer was Chairman of the Board of Directors of JWP INC. (now known as EMCOR Group, Inc., referred to herein as "JWP") from April 1987 until July 1993. Mr. Dwyer also served as Chief Executive Officer of JWP from 1987 until April 1993 and as President of JWP from 1985 until January 1992. On December 21, 1993, an involuntary petition under Chapter 11 of the U.S. Bankruptcy Code was filed against JWP. This proceeding was converted to a voluntary action on February 14, 1994, when JWP consented to the entry of an order for relief under Chapter 11. JWP was discharged from bankruptcy in approximately December 1994 and its name was changed to EMCOR Group, Inc. Mr. Dwyer was a director of JWP at the time of the filings. Mr. Dwyer has also received a letter from the staff of the Securities and Exchange Commission (the "SEC") indicating that an enforcement action is being recommended against him in connection with certain alleged financial irregularities involving JWP occurring prior to the bankruptcy. The Company has been informed that enforcement actions are being recommended against JWP, Mr. Dwyer and other individuals who are or were officers or directors of JWP. JWP, Mr. Dwyer and other officers and directors of JWP are also defendants in lawsuits brought by JWP shareholders and bondholders alleging violations of the federal securities laws, breaches of fiduciary duty under state law and related matters. None of the alleged financial irregularities, shareholder or bondholder litigation, or potential SEC enforcement actions involve the Company. However, the SEC indicated in its letter to Mr. Dwyer that an order barring Mr. Dwyer from serving as an officer or director of any publicly held company may be sought. Mr. Dwyer has denied any wrongdoing in connection with the matters involving JWP. Lawrence J. Schorr, 40, is President and Chief Executive Officer of the Company. Mr. Schorr was elected Chief Executive Officer effective May 4, 1993 and has served as President and Chief Operating Officer since October 1988. He has been a director of the Company since November 1988. He also serves as an officer and/or director of various subsidiaries of the Company. Paul A. Gould, 49, has been a director of the Company since June 16, 1994. Mr. Gould is a Managing Director of Allen & Company Incorporated ("Allen & Co."), an investment banking firm that is the largest stockholder of the Company. He also serves as a member of the Board of Directors of National Patent Development Corp. Burton I. Koffman, 68, has been a director of the Company since May 1986. Between May 1986 and October 1991, Mr. Koffman served as Chief Executive Officer and Chairman of the Board of Directors of the Company. He is also Chairman and President of PLC Enterprises, Inc. ("PLC") and Great American Industries, Inc. ("Great American"), companies headquartered in Vestal, New York, that engage, through subsidiaries, in the manufacture and distribution of foam and related products and building materials. PLC and Great American are owned and controlled by members of the Koffman family. Mr. Koffman also serves as Chairman of Apparel America, Inc. ("Apparel"), Senior Vice President and a director of Poloron Products, Inc. ("Poloron") and Centuri, Inc. ("Centuri"), the principal stockholder of Poloron. Apparel, Poloron and Centuri are publicly held companies in which members of the Koffman family and affiliated companies hold substantial ownership interests. During 1991, Centuri, its then wholly owned subsidiary, Outdoor Sports Headquarters, Inc. ("OSHI"), and Poloron Homes of Pennsylvania, Inc. ("Poloron Homes"), a wholly owned subsidiary of Poloron, filed voluntary petitions for I-3 reorganization under Chapter 11 of the U.S. Bankruptcy Code. Mr. Koffman was an officer and/or director of such companies at the time of such filings. The Chapter 11 case of Poloron Homes is pending at the present time. Plans of reorganization for OSHI and Centuri were approved by the bankruptcy court in June 1992 and November 1993, respectively. Jay R. Petschek, 36, has been a director of the Company since 1990. Mr. Petschek is a Managing Director, Corporate Finance of Ladenburg, Thalmann & Co. Inc. ("Ladenburg"), an investment banking firm. Dean H. Cannon, 37, has been a director of the Company since February 1994. Ms. Cannon is a principal of the law firm of Beveridge & Diamond, P.C., Washington, D.C. Beveridge & Diamond, P.C. serves as corporate counsel to the Company. Jeffrey M. Young, 44, is Senior Vice President-Operations of the Company and has served as a Vice President of the Company since June 1991. He has served as an officer and director of RRT Empire Returns Corporation ("RRT Empire," a subsidiary of the Company) for more than five years and also serves as an officer and/or director of other subsidiaries of the Company. David H. Weitzman, 44, is Senior Vice President-Marketing and has been a Vice President of the Company since June 1991. He has served as an officer of RRT Empire for more than five years and also serves as an officer of other subsidiaries of the Company. Nathiel G. Egosi, 36, is Vice President-Engineering of the Company and has served in such capacity since June 1991. He has been President of RRT Design & Construction Corp. ("RRT Design," a subsidiary of the Company) since 1989. Robert C. Nolt, 47, has been Vice President-Finance since June 1994, Secretary since January 1995 and Treasurer and Controller of the Company since March 1993. Mr. Nolt was Controller of U.S. Commstruct Inc., Vestal, New York, for approximately one year prior to March 1993, and Vice President-Finance of Ozalid Corporation, Vestal, New York, for more than two years prior to such time. Mr. Nolt also serves as an officer and director of certain of the Company's subsidiaries. Jake Vigoda, 31, has been Vice President-Business Development since January 1995 and was the Company's Director of Business Development from January 1994 until January 1995. Mr. Vigoda was a Director of NK Intercon and its affiliates for more than four years prior to December 1993. COMMITTEES AND MEETINGS The Board of Directors has established three standing committees to assist in the discharge of its responsibilities. These are the Executive, Audit, and Compensation and Incentive Stock Option Committees. The Board as a whole nominates directors for election. During the year ended December 31, 1994, the Board of Directors held four meetings. The Audit Committee held one meeting (by telephone conference call), and the Incentive Stock Option Committee (which became the Compensation and Incentive Stock Option Committee on June 16, 1994) held two meetings. All incumbent directors attended seventy-five percent (75%) or more of the Board and Committee meetings held during the period during which they were directors or Committee members. Jay Petschek and Alan Jablon served as the Audit Committee from January 1, 1994 until Mr. Jablon's resignation from the Board effective March 7, 1994. Jay Petschek and Dean H. Cannon served as the Audit Committee from March 15, 1994 through June 16, 1994, at which time Burton Koffman was added to the Committee for the balance of the year. The Audit Committee meets with the Company's independent accountants and reviews the results of their audit and management's response thereto, inquires into various financial accounting I-4 matters affecting the Company and reviews the non-audit services performed by the independent auditors, considering the effect, if any, on their independence. Andrew Dwyer, Alan Jablon, and Jay Petschek served as the members of the Compensation Committee and as the members of the Incentive Stock Option Committee for 1994 until Mr. Jablon's resignation from the Board effective March 7, 1994 (after which the membership of these Committees was Andrew Dwyer and Jay Petschek). On June 16, 1994, these two committees were merged and Andrew Dwyer, Paul Gould and Jay Petschek were elected as the members of the Compensation and Incentive Stock Option Committee. The Compensation and Incentive Stock Option Committee periodically reviews the compensation, including fringe benefits, of officers and management personnel of the Company. This Committee also administers the Incentive Stock Option Plan and, subject to the provisions of the Plan and applicable law, has full authority to interpret the Plan, determine the terms and provisions of the respective option agreements and make all other determinations necessary or advisable for the administration of the Plan. The Company did not have an Executive Committee until September 27, 1994, when Andrew Dwyer, Paul Gould and Lawrence Schorr were elected as the members of the Executive Committee. The Executive Committee generally has the authority to exercise all powers of the Board, to the extent permitted by law, in the management of the Company between Board meetings. Although the Executive Committee held no formal meetings during the balance of 1994, it consulted informally on several occasions. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION No member of the 1994 Compensation and Incentive Stock Option Committee (or of the previous Compensation Committee) was, during 1994 or previously, an officer or employee of the Company or any of its subsidiaries, and no member had any relationship with the Company other than as a director, except that Andrew Dwyer, who is the Chairman of the Board, has a Consulting Agreement with the Company. See "Compensation of Executive Officers and Directors." No executive officer of the Company served as a member of the compensation committee (or other board committee performing equivalent functions) of any other entity during 1994. I-5 SECURITY OWNERSHIP The following table sets forth, as of March 20, 1995 (except as set forth in Notes 6 and 7), certain information with respect to each stockholder known by the Company to be the beneficial owner of more than 5% of its Common Stock, each director, each executive officer and all executive officers and directors as a group. Unless otherwise indicated, the stockholders have sole voting and investment power with respect to Shares beneficially owned by them.
NAME OF PERSON OR ENTITY COMMON AND ADDRESS OF 5% OR MORE STOCK PERCENT OF BENEFICIAL OWNER OWNED OUTSTANDING (1) - -------------------------------------- ------- --------------- Allen & Company Incorporated 664,806 24.8 % 711 Fifth Avenue New York, New York 10022 Paul A. Gould (2) 150,000 5.6 % c/o Allen & Company Incorporated 711 Fifth Avenue New York, New York 10022 Andrew T. Dwyer (3)(4)(5) 267,700 9.7 % c/o Airlie Group 115 E. Putnam Street Greenwich, Connecticut 06830 Kennedy Capital Management, Inc. (6) 233,400 8.7 % 425 N. New Ballas Road., #181 St. Louis, Missouri 63141 Dimensional Fund Advisors Inc. (7) 135,623 5.1 % 1299 Ocean Avenue, 11th Floor Santa Monica, California 90401 Lawrence J. Schorr (4)(5)(8) 182,218 6.3 % Burton I. Koffman (4) 5,000 (9) Jay R. Petschek (4)(10) 16,000 (9) Dean H. Cannon (4) 2,500 (9) Nathiel G. Egosi (4)(5) 36,000 1.3 % Jeffrey M. Young (4)(5) 40,675 1.3 % David H. Weitzman (4)(5) 44,583 1.3 % All Directors and Executive Officers as a Group (11 persons) (2)(3)(4)(5)(8)(10) 1,429,482 43.4 % __________________________
I-6 (1) Percent of outstanding Shares is computed on the basis of 2,675,773 Shares of Common Stock outstanding as of March 20, 1995. (2) The Shares listed do not include 664,806 Shares owned by Allen & Co. Mr. Gould is a Managing Director of Allen & Co. Mr. Gould disclaims beneficial ownership of the Shares owned by Allen & Co. (3) The Shares listed include (1) 13,600 Shares owned by Mr. Dwyer's wife, (2) 18,000 Shares owned by each of Mr. Dwyer's three minor children (for a total of 54,000 Shares), and (3) 3,300 Shares owned by a family trust of which Mr. Dwyer is a trustee and beneficiary. Mr. Dwyer disclaims beneficial ownership of the Shares owned by his wife and minor children. (4) The number of Shares listed as beneficially owned by the directors, executive officers and All Directors and Executive Officers as a Group includes the following number of Shares not presently owned but as to which such listed beneficial owner has the right to acquire beneficial ownership by exercise of stock options that are exercisable on March 20, 1995 (or within 60 days of such date): Andrew T. Dwyer--40,000 Shares; Lawrence J. Schorr--125,920 Shares; Burton I. Koffman--5,000 Shares; Jay R. Petschek-- 15,000 Shares; Dean H. Cannon--2,500 Shares; Nathiel G. Egosi--27,740 Shares; Jeffrey M. Young--27,830 Shares; David Weitzman--26,920 Shares; and All Directors and Executive Officers as a Group (11 persons)--284,110 Shares. (5) The number of Shares listed as beneficially owned by the directors, executive officers and All Directors and Executive Officers as a Group includes the following number of Shares not presently owned but as to which such listed beneficial owner has the right to acquire beneficial ownership by exercise of stock options that are not exercisable on March 20, 1995 (or within 60 days of such date), but which become exercisable upon consummation of the Offer: Andrew T. Dwyer--40,000 Shares; Lawrence J. Schorr--52,580 Shares; Nathiel G. Egosi--8,260 Shares; Jeffrey M. Young-- 7,670 Shares; David Weitzman--7,080 Shares; and All Directors and Executive Officers as a Group (11 persons)--122,390 Shares. (6) Kennedy Asset Management, Inc., a registered investment advisor, is deemed to have beneficial ownership of 233,400 Shares as of December 31, 1994, all of which Shares are held in discretionary accounts for investment purposes. (7) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment advisor, is deemed to have beneficial ownership of 135,623 Shares as of December 31, 1994, all of which Shares are held in portfolios of DFA Investment Dimensions Group Inc., a registered open-end investment company, or in series of the DFA Investment Trust Company, a Delaware business trust, or the DFA Group Trust and DFA Participation Group Trust, investment vehicles for qualified employee benefit plans, for all of which Dimensional Fund Advisors Inc. serves as investment manager. Dimensional disclaims beneficial ownership of all such Shares. (8) The Shares listed include 3,718 Shares owned by the Levene, Gouldin & Thompson Retirement Plan for the benefit of Lawrence J. Schorr. (9) The percentage constitutes less than one percent of the total outstanding Shares. (10) The Shares listed include 1,000 Shares owned by the wife of Jay R. Petschek. The Shares listed do not include 113,363 Shares that may be issued upon the exercise of a stock warrant granted to Ladenburg. Mr. Petschek is a Managing Director, Corporate Finance of Ladenburg. I-7 COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS COMPENSATION OF EXECUTIVE OFFICERS The following table sets forth the compensation of the Company's President and Chief Executive Officer and the Company's four most highly compensated executive officers other than the President and Chief Executive Officer who were serving as executive officers as of December 31, 1994. In each case, compensation for services rendered in all capacities to the Company and its subsidiaries is included for the specified time periods. SUMMARY COMPENSATION TABLE
LONG-TERM ANNUAL COMPENSATION (1) COMPENSATION ------------------------- -------------- Awards of All Other Salary Options Compensation Name and Principal Position Year ($) (2) Bonus($) (Shares) (3) ($) (4) - --------------------------- ----- ------- ------- ------------ ------------ Lawrence J. Schorr, 1994 266,405 109,646 137,000 3,642 President and Chief Executive Officer (5) 1993 225,000 0 0 3,374 1992 229,326 6,000 0 3,323 David C. Jones, 1994 146,875 20,000 22,500 2,838 Executive Vice President & Secretary (6) 1993 163,578 0 0 3,066 1992 170,723 5,000 0 3,032 Nathiel G. Egosi, 1994 146,909 27,000 21,000 2,288 Vice President--Engineering (7) 1993 140,000 22,803 0 2,565 1992 136,346 46,232 0 2,381 Jeffrey M. Young, 1994 125,481 30,108 19,500 2,309 Vice President--Operations (8) 1993 100,000 0 0 2,000 1992 101,923 0 0 1,957 David H. Weitzman, 1994 108,847 23,000 18,000 2,077 Vice President--Marketing (8) 1993 100,000 0 0 2,000 1992 101,923 0 0 2,035 - --------------------
(1) Does not include the value of certain non-cash compensation to the named individuals which did not exceed the lesser of $50,000 or 10% of such individuals' total annual salary and bonus shown in the Table. The Company provides an automobile to each of the named executives for use in connection with Company business but does not believe the value of such automobiles and other non-cash compensation (if any) exceeds the lesser of $50,000 or 10% of the executive's total annual salary and bonus. (2) Includes salary and/or bonus deferred pursuant to Section 401(k) of the Internal Revenue Code. (3) The numbers shown in the table represent options for the purchase of Shares granted to the named persons under the Company's Incentive Stock Option Plan As Amended and Restated June 8, 1990 (the "Incentive Plan") and under the Non-Qualified Stock Option Plan (the "Non-Qualified Plan"). There were no long-term incentive payouts during any of the three years covered in the table. I-8 (4) Reflects nondiscretionary contributions made on behalf of the named executive officer pursuant to the provisions of the Company's 401(k) Plan. (5) Mr. Schorr was elected Chief Executive Officer on May 4, 1993. Between October 1988 and May 4, 1993, Mr. Schorr served as the Company's President and Chief Operating Officer and, as Chief Operating Officer, acted in a capacity similar to that of a Chief Executive Officer. The Company entered into an Employment Agreement with Lawrence J. Schorr effective October 3, 1988. The agreement was amended effective May 6, 1991 and expires on October 1, 1996. The agreement, as amended, provides for an annual base salary of $225,000 for the twelve months ended September 30, 1992, with annual five percent (5%) increases thereafter, and for additional cash bonuses in the discretion of the Board of Directors. The agreement also provides that in the event of a change of control of the Company during the term of the agreement, Mr. Schorr has the right to terminate the agreement in exchange for a lump sum payment by the Company of an amount equal to the balance of all salary payments due to him until the regular termination date, unless the new controlling entity has a net worth equal to or greater than the net worth of the Company immediately prior to the change of control and guarantees the Company's performance of its obligations under the employment agreement. The acquisition by JWP on October 1, 1991 of 34% of the outstanding Shares, as well as the acquisition by Allen & Co. on January 6, 1994 of 29% of the outstanding Shares, triggered these change of control provisions; however, no JWP or Allen & Co. guarantee was provided. (6) The Company entered into an Employment Agreement with David C. Jones effective November 28, 1988. The agreement was amended effective November 15, 1993 with an expiration date of October 31, 1995. The agreement, as amended, provided for an annual base salary at the rate of $133,500 per annum for the period November 15, 1993 through October 31, 1994, and an annual base salary at the rate of $125,000 per annum for the period November 1, 1994 through October 31, 1995. The agreement also provided for additional cash bonuses in the discretion of the Board of Directors. In 1994, the Company also made a lump sum payment of $8,500 to Mr. Jones for compensation earned during the period November 1, 1992 through December 31, 1993 that had previously been deferred. Mr. Jones' employment agreement could be terminated voluntarily by the Company or Mr. Jones upon 30 days' notice and, if so terminated, Mr. Jones was entitled to payment of six months salary or the balance due under the employment agreement, whichever was less. In the event the agreement was terminated by the Company with an effective termination date that was prior to November 1, 1994, termination payments were to be paid at the rate of $181,912.50 per annum for any months remaining under the agreement prior to November 1, 1994 (up to 6 months), with the balance (if any) of the termination payments at the rate payable under the agreement. The agreement was terminated effective January 2, 1995, when Mr. Jones resigned as an officer, director and employee of the Company. The agreement also contained change of control provisions identical to those contained in Mr. Schorr's employment agreement (described in note 5, above). Neither JWP nor Allen & Co. guaranteed Mr. Jones' agreement. (7) RRT Design, a subsidiary of the Company, entered into an Employment Agreement with Nathiel G. Egosi effective June 1, 1989. Upon termination of that agreement, RRT Design entered into a new agreement with Mr. Egosi effective June 1, 1992 and expiring on May 31, 1995. The agreement provides for an annual base salary of $140,000, for an incentive bonus annually equal to five percent (5%) of RRT Design's net income before taxes and bonuses or pursuant to a new bonus program to be adopted by the Company, and for additional compensation in the discretion of RRT Design's Board of Directors. (The bonus amounts shown in the Table reflect amounts actually paid each year as a result of RRT Design's net income for the prior year.) (8) Effective July 31, 1991, the Company entered into Employment Agreements that expired on July 1, 1994 with Jeffrey M. Young and David H. Weitzman. Messrs. Young and Weitzman previously had been employees of RRT Empire pursuant to agreements effective August 1, 1988. The agreements with the I-9 Company provided for annual base salaries of $100,000 each and for additional compensation in the discretion of the Board of Directors. Messrs. Young and Weitzman have remained officers and employees although their employment agreements have terminated. The Company has also entered into Employment Agreements with Burton I. Koffman and Richard E. Koffman expiring on January 1, 2001 and January 1, 1996, respectively. Each agreement provides for a base annual salary of $50,000 for the 12 months ended January 1, 1992, with annual five percent increases thereafter, and each agreement contains change of control provisions identical to those in Mr. Schorr's employment agreement (described in note 5, above). Neither JWP nor Allen & Co. guaranteed the agreements with Messrs. Koffman. In connection with the sale of stock to JWP in October 1991, the Company's interest in a certain promissory note was sold to a company affiliated with the Koffman family. Payments due to the Company in connection with that transaction were delinquent and were offset against payments owed Messrs. Koffman under the employment agreements during 1992, 1993 and 1994. See "Transactions With Executive Officers and Directors." Effective March 1, 1994, the Company entered into a Consulting Agreement with Andrew T. Dwyer, Chairman of the Board, pursuant to which Mr. Dwyer will provide specified consulting services to the Company. The Consulting Agreement is for an initial term of six months, and is automatically renewed on a month-to-month basis at the end of the term. The Consulting Agreement can be terminated by the Company or Mr. Dwyer on 30 days' written notice. Compensation under the Consulting Agreement is paid to Mr. Dwyer on a monthly basis at the rate of $100,000 per annum. DIRECTOR COMPENSATION Cash directors' fees were not paid for service in 1994, but stock options under the Non-Qualified Plan were granted to the non-employee directors in early 1994. Non-qualified stock options to purchase 5,000 Shares were granted to Alan Jablon, Innis O'Rourke, Jay Petschek and Burton Koffman, and non-qualified stock options to purchase 2,500 Shares were granted to Dean H. Cannon. Messrs. Jablon and O'Rourke served as members of the Board of Directors during 1993 but resigned in 1994. The exercise price for all such options is $3.42 per share, which was in excess of the market price of $2.75 of the Company's Common Stock on the date of the grants. All of such options vested in full on August 23, 1994. Officers and employees who serve as directors are not compensated for their service as directors. All directors are reimbursed for expenses incurred in attending Board and committee meetings. I-10 OPTION GRANTS IN 1994 The following table sets forth certain information concerning individual grants of stock options during the year ended December 31, 1994 under the Incentive Plan and under the Non-Qualified Plan to the executive officers named in the table under the caption "Summary Compensation Table." There were no grants of free standing stock appreciation rights during the year ended December 31, 1994.
POTENTIAL REALIZABLE VALUE AT ASSUMED ANNUAL RATES OF STOCK PRICE APPRECIATION FOR INDIVIDUAL GRANTS OPTION TERM (3) ----------------------------------------------------------------------- -------------------------------- % OF TOTAL OPTIONS NUMBER OF SHARES GRANTED TO EMPLOYEES EXERCISE UNDERLYING IN YEAR ENDED PRICE EXPIRATION NAME OPTIONS GRANTED (1) DECEMBER 31, 1994 ($/SHARE) DATE (2) 0% ($) 5% ($) 10% ($) - ---- ------------------- -------------------- --------- ----------- ------ ---------- -------- Lawrence J. Schorr 37,000 (4) 15.2% $3.42 2/23/04 0 $ 39,200 $137,373 35,000 (5) 14.4% $3.45 3/15/04 0 $ 43,157 $140,245 25,000 (5) 10.3% $4.00 3/15/04 0 $ 17,090 $ 86,425 20,000 (5) 8.2% $4.60 3/15/04 0 $ 1,661 $ 57,140 20,000 (5) 8.2% $5.25 3/15/04 0 $ (11,339) $ 44,140 David C. Jones 15,000 (4) 6.2% $3.42 2/23/04 (6) 0 $ 15,892 $ 55,692 7,500 (5) 3.1% $3.45 3/15/04 (6) 0 $ 9,248 $ 30,052 Nathiel G. Egosi 14,000 (4) 5.8% $3.42 2/23/04 0 $ 14,832 $ 51,979 7,000 (5) 2.9% $3.45 3/15/04 0 $ 8,631 $ 28,049 Jeffrey M. Young 13,000 (4) 5.3% $3.42 2/23/04 0 $ 13,773 $ 48,266 6,500 (5) 2.7% $3.45 3/15/04 0 $ 8,015 $ 26,046 David H. Weitzman 12,000 (4) 4.9% $3.42 2/23/04 0 $ 12,713 $ 44,553 6,000 (5) 2.5% $3.45 3/15/04 0 $ 7,398 $ 24,042
(1) Options granted during 1994 become exercisable upon a change of control of the Company, as defined in the option plans and option agreements. Options are non-transferrable other than by will or the laws of descent and distribution. (2) Options were granted for a term of ten years, subject to earlier termination in certain events related to termination of employment. (3) The amounts under the columns labeled "5%" and "10%" are included by the Company pursuant to certain rules promulgated by the Securities and Exchange Commission and are not intended to forecast future appreciation, if any, in the price of the Company's stock. Such amounts are based on the assumption that the named persons hold the options granted for their full ten year term. The actual value of the options will vary in accordance with the market price of the Shares. The column headed "0%" is included to demonstrate that the options were granted at prices in excess of the fair market value at the time of the grants and optionees will not recognize any gain without an increase in the stock price, which increase benefits all stockholders commensurately. The Company did not use an alternative formula to attempt to I-11 value options at the date of grant, as management is not aware of any formula that determines with reasonable accuracy a present value of options of the type granted to the optionees. (4) Options became exercisable as to 33% of the Shares covered thereby on and after August 23, 1994 (six months from the date of the grant), as to an additional 33% of the Shares covered thereby on and after January 1, 1995, and become exercisable as to the full amount of the Shares on and after January 1, 1996. (5) Options became exercisable as to 25% of the Shares covered thereby on and after September 15, 1994 (six months from the date of the grant), and become exercisable as to an additional 25% on each March 15 thereafter. (6) Mr. Jones resigned as an officer and employee of the Company effective January 2, 1995. Options to purchase an aggregate of 10,625 Shares had not vested on such date and were terminated, and the expiration date for the remaining options was accelerated to April 2, 1995. Mr. Jones exercised options to purchase 41,875 Shares and 1,500 Shares on approximately March 3 and 20, 1995, respectively. UNEXERCISED STOCK OPTIONS AT DECEMBER 31, 1994 The following table sets forth certain information concerning unexercised options granted prior to December 31, 1994 under the Incentive Stock Option Plan and the Non-Qualified Stock Option Plan to the executive officers named in the table under the caption "Summary Compensation Table." There were no employee stock options or stand alone stock appreciation rights exercised during the year ended December 31, 1994. There were no stand alone stock appreciation rights outstanding as of December 31, 1994.
NUMBER OF SHARES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED STOCK OPTIONS AT IN-THE-MONEY OPTIONS AT DECEMBER 31, 1994 DECEMBER 31, 1994 (1) ---------------------- ----------------------- EXERCISABLE/ EXERCISABLE/ NAME UNEXERCISABLE UNEXERCISABLE - ---- ---------------------- ----------------------- Lawrence J. Schorr 88,710/89,790 $49,937/$39,273 David C. Jones 38,375/15,625 $ 7,369/$16,706 Nathiel G. Egosi 21,370/14,630 $ 6,827/$15,643 Jeffrey M. Young 21,915/13,585 $ 6,339/$14,526 David H. Weitzman 21,460/12,540 $ 5,852/$13,408
(1) In-the-money stock options are options for which the exercise price is less than the market price of the underlying stock on a particular date. These values are based on a price of $4.50 per Share, the closing price of the Shares on the American Stock Exchange on December 30, 1994. Such values were determined by subtracting the applicable exercise price in each case. TRANSACTIONS WITH EXECUTIVE OFFICERS AND DIRECTORS Reference is made to Item 3 of the Schedule 14D-9, the foregoing discussion, the discussion set forth below and Schedule II. I-12 In October 1991, six stockholders of the Company who owned in the aggregate 914,806 Shares, representing 34.7% of the then-outstanding Shares, sold their Shares to JWP in a private transaction. Pursuant to the agreement with JWP covering the sale, Richard Koffman, Milton Koffman and David Koffman, each of whom was a seller or affiliated with the sellers, resigned from their respective positions as officers and/or directors of the Company upon the closing of the transaction. Burton Koffman, upon the closing, resigned as Chairman and Chief Executive Officer but continued as a director of the Company. Burton and Richard Koffman also continue to be employed by the Company pursuant to the terms of the Koffman Agreements. In connection with the sale, the Company entered into an agreement with JWP that required the Company to elect certain JWP designees to the Company's Board of Directors upon the resignations of Messrs. Koffman, to cause the JWP designees to be nominated to be elected to the Board at annual Company stockholders' meetings, to elect JWP designees to Board committees and subsidiary boards of directors, and to take related actions. In January 1994, JWP sold all Shares owned by it to Allen & Co. and Paul Gould. The Company's obligations to JWP regarding directors and committee members terminated upon such sale, and there are no similar obligations to Allen & Co. or Mr. Gould. In connection with the October 1991 sale of stock to JWP, Milbar Consultants Corp. ("Milbar"), a company affiliated with the selling stockholders, agreed to purchase from the Company, the Company's interest in a promissory note (the "Chase Eastern Note") evidencing a loan made by the Company to Chase Eastern Co., Inc., for cash of $181,585 and a promissory note payable by Milbar in the principal amount of $544,755 (the "Milbar Note"), which amounts aggregated the then unpaid principal balance on the Company's interest in the Chase Eastern Note, plus accrued and unpaid interest. The Company was entitled to monthly payments from Milbar on the Milbar Note in an amount equal to the greater of (a) $30,000, or (b) the aggregate of all sums actually received during such month by Milbar on the Chase Eastern Note, until the Milbar Note was paid in full. All obligations of Milbar under the Milbar Note and related Purchase Agreement were guaranteed by Burton Koffman, Richard Koffman and affiliated corporations. As of December 31, 1992, the balance due under the Milbar Note was $310,000, all of which was delinquent. Interest of $23,000 accrued during 1993, and $100,000 was paid in cash on the Milbar Note during 1993. In addition, payments aggregating $233,000 owed by the Company to Burton and Richard Koffman under their employment agreements were withheld during 1992, 1993, and 1994, as a result of this delinquency. Pursuant to an agreement among the parties, the amount was offset against the amounts owed under the Milbar Note and no amounts remained outstanding under the Milbar Note at December 31, 1994. The Company leases from two members of the Koffman family the facilities used by the Company as its executive offices in Vestal, New York pursuant to a Lease Agreement, as amended, expiring December 31, 1998. Effective January 1, 1994, the Lease Agreement was amended to require fixed rental payments of $28,800 and $36,000 for the years ended December 31, 1994 and 1995, respectively, and increased fixed payments for future years, and the Company agreed to pay fifty percent (50%) of the cost of utilities and trash collection expenses for the building. The Lease Agreement may be terminated by the Company or the landlords at any time on 30 days' written notice, so long as the date of termination is on or after January 1, 1996. In April 1990, the Company sold 1,000,000 Shares in an underwritten public offering in which Ladenburg acted as managing underwriter, and granted to Ladenburg a stock Warrant. The Warrant is exercisable through April 10, 1995 for 113,363 shares at an exercise price of $9.13 per share. Jay Petschek, a director of the Company, is a Managing Director of Ladenburg. If the Merger is consummated, Ladenburg will receive a cash payment in settlement of the Warrant. See "Item 3. Identity and Background" in the Schedule 14D-9. In December 1994, the Company engaged Ladenburg as exclusive placement agent in connection with the proposed offer and private placement by the Company of approximately $10,500,000 of debt securities of the Company for the financing (the "Financing") of a material recycling facility in Lake County, Illinois. If the Financing is consummated within thirty six months after Ladenburg was engaged with an investor introduced to the Company by Ladenburg, or contacted by Ladenburg or the Company within a year after Ladenburg was engaged, the Company will pay to Ladenburg a fee equal to the greater of (i) 3% of the purchase price paid by the purchaser of the securities issued in connection with the Financing, or (ii) $250,000. The Company also agreed to reimburse Ladenburg for reasonable out-of-pocket expenses incurred in connection with the engagement, and to indemnify I-13 Ladenburg for certain liabilities that could arise as a result of the engagement, including liabilities arising under the federal securities laws. As of the date of this Statement, no sales of securities under the engagement have occurred. 1994 CHANGE OF CONTROL OF THE COMPANY Pursuant to an Agreement dated as of December 30, 1993 (the "Agreement"), JWP, the then-owner of 914,806 Shares, sold its Shares to Allen & Co. and Paul A. Gould. The transaction closed on January 6, 1994. The Shares sold to Allen & Co. and to Mr. Gould constituted in the aggregate 34.7% of the then- outstanding Shares. Allen & Co. acquired 764,806 Shares (29.0%) and Mr. Gould acquired 150,000 Shares (5.7%). The aggregate purchase price paid by Allen & Co. and Mr. Gould for the Shares that were sold by JWP was $2,391,365.75. This amount was equal to $2.625 per Share, less a $10,000 allowance for costs. Allen & Co. funded the purchase from working capital and Mr. Gould funded the purchase from personal funds. In connection with the sale of the Shares, rights previously granted by the Company to JWP to nominate certain members of the Company's Board of Directors and committees of the Board, and certain related rights, were terminated. In consideration of the termination of such rights, and the payment by JWP to the Company of an expense allowance of $91,481 ($.10 per share), the Company agreed to register the Shares purchased from JWP on behalf of Allen & Co. and Mr. Gould in a shelf registration statement. On February 22, 1994, Andrew Dwyer, the Company's Chairman, and members of his family purchased an aggregate of 100,000 Shares from Allen & Co. for $2.625 per share. Funds for the purchase came from personal funds of Mr. Dwyer and his family. The registration rights for those Shares were transferred to Mr. Dwyer upon the sale. Andrew Dwyer is the former Chairman and Chief Executive Officer of JWP. Innis O'Rourke, a director of the Company at the time of the sale by JWP, was also a director of JWP. COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT Effective May 1, 1991, the Commission promulgated new rules under Section 16 of the Exchange Act. The Company believes that during the year ended December 31, 1994, its executive officers and directors have complied with all Section 16 filing requirements. I-14 SCHEDULE II CERTAIN TRANSACTIONS IN SHARES OF COMMON STOCK OF RESOURCE RECYCLING TECHNOLOGIES, INC. DURING THE PAST 60 DAYS A former director and executive officer of the Company exercised outstanding stock options previously granted under the Incentive Plan and the Non-Qualified Plan to purchase an aggregate of 41,875 Shares and an aggregate of 1,500 Shares on approximately March 3 and 20, 1995, respectively. The Company used Shares held in its treasury to fund such option exercises. The Shares were purchased at exercise prices of $3.42 for 10,000 Shares, $3.45 for 1,875 Shares, $5.75 for 30,000 Shares and $8.50 for 1,500 Shares. II-1 EX-99.1 2 AGREE & PLAN OF MERGE Exhibit 1 AGREEMENT AND PLAN OF MERGER March 17, 1995 WASTE MANAGEMENT, INC. WMI ACQUISITION SUB, INC. RESOURCE RECYCLING TECHNOLOGIES, INC. TABLE OF CONTENTS Page ---- 1. The Offer................................................................ 1 1.1 General............................................................. 1 1.2 Company Actions..................................................... 3 1.3 Directors; Section 14(f)............................................ 4 2. The Merger and Related Matters........................................... 4 2.1 The Merger.......................................................... 4 2.2 Conversion of Stock................................................. 5 2.3 Dissenting Shares................................................... 5 2.4 Payment............................................................. 6 2.5 No Further Rights or Transfers...................................... 7 2.6 Certificate of Incorporation of the Surviving Corporation........... 8 2.7 By-Laws of the Surviving Corporation................................ 8 2.8 Directors and Officers of the Surviving Corporation................. 8 2.9 Closing............................................................. 8 2.10 Stock Options, Warrants and Convertible Securities.................. 8 2.11 Special Meeting..................................................... 9 2.12 Merger Without Meeting of Stockholders.............................. 9 3. Representations and Warranties........................................... 9 3.1 Representations and Warranties of the Company....................... 9 3.2 Representations and Warranties of the Parent and the Sub............ 9 4. Covenants................................................................ 11 4.1 Disclosure Documents................................................ 11 4.2 Access to Information Concerning Properties and Records............. 11 4.3 Confidentiality..................................................... 11 4.4 Interim Operations of the Company................................... 12 4.5 Consents............................................................ 13 4.6 No Solicitation..................................................... 13 4.7 Filings............................................................. 14 4.8 All Reasonable Efforts.............................................. 14 4.9 Public Announcements................................................ 14 4.10 Notification of Certain Matters..................................... 14 4.11 Directors' and Officers' Indemnification............................ 14 4.12 Expenses............................................................ 15 5. Conditions to Consummation of the Merger................................. 15 5.1 Conditions to Each Party's Obligation to Effect the Merger.......... 15 5.2 Additional Condition to Obligations of the Parent and the Sub to Effect the Merger.......................................... 15 i 6. Termination.............................................................. 16 6.1 Termination......................................................... 16 6.2 Notice and Effect of Termination.................................... 17 6.3 Extension; Waiver................................................... 17 6.4 Amendment and Modification.......................................... 17 7. Miscellaneous............................................................ 17 7.1 Fees................................................................ 17 7.2 Survival of Representations and Warranties.......................... 18 7.3 Notices............................................................. 18 7.4 Entire Agreement; Assignment........................................ 19 7.5 Binding Effect; Benefit............................................. 19 7.6 Headings............................................................ 19 7.7 Counterparts........................................................ 19 7.8 Governing Law....................................................... 20 7.9 Severability........................................................ 20 7.10 Certain Definitions................................................. 20 ANNEX A......................................................................A-1 ANNEX B......................................................................B-1 ii AGREEMENT AND PLAN OF MERGER March 17, 1995 The parties to this Agreement and Plan of Merger are Waste Management, Inc., an Illinois corporation (the "Parent"), WMI Acquisition Sub, Inc., a Delaware corporation, and a wholly-owned subsidiary of the Parent (the "Sub"), and Resource Recycling Technologies, Inc., a Delaware corporation (the "Company"). The parties wish to provide for the merger of the Sub with and into the Company on the terms and conditions set forth in this agreement. Accordingly, the parties agree as follows: 1. The Offer. 1.1 General. (a) As promptly as practicable (but in no event later than five business days after the date of this Agreement), the Parent shall cause the Sub to commence (within the meaning of Rule 14d-2 under the Securities Exchange Act of 1934, as amended (the "Exchange Act") an offer (the "Offer") to purchase all the outstanding shares of common stock, par value $1.00 per share (the "Company Common Stock"), of the Company at a price of $11.50 per share, net to the seller in cash (the "Offer Price"), and, subject to the conditions of the Offer, shall use all reasonable efforts to consummate the Offer as promptly as permitted by law. The obligation of the Parent and the Sub to consummate the Offer and to accept for payment and to pay for any shares of Company Common Stock tendered pursuant to the Offer (i) shall be subject to the condition that such number of shares of Company Common Stock shall have been validly tendered and not withdrawn prior to the expiration date of the Offer that, together with the shares of Company Common Stock beneficially owned by the Parent and any affiliate of the Parent on that date, constitute more than 50.1% of Company Common Stock, assuming exercise and conversion of all outstanding options and convertible securities of the Company (the "Minimum Condition") and (ii) shall be subject to the other conditions set forth in Annex A to this Agreement. (b) Neither the Parent nor the Sub shall, without the consent of the Company, waive the Minimum Condition. Otherwise, the conditions of the Offer are for the sole benefit of the Sub and the Parent regardless of the circumstances giving rise to the non-fulfillment of any such conditions and may be waived by the Sub and the Parent in whole or in part. The Company agrees that no shares of Company Common Stock held by the Company shall be tendered pursuant to the Offer. Parent and Sub may modify the terms of the Offer, except that, without the consent of the Company, they shall not (i) reduce the number of shares of Company Common Stock to be purchased in the Offer, (ii) reduce the Offer Price, (iii) modify or add to the conditions set forth in Annex A, (iv) except as provided in the next sentence, extend the Offer, (v) change the form of consideration payable in the Offer, or (vi) amend any other term of the Offer in a manner adverse to the holders of Company Common Stock. Notwithstanding the foregoing, Parent and Sub may, without the consent of the Company, (i) extend the Offer beyond any scheduled expiration date (the initial scheduled expiration date being 20 business days following commencement of the Offer) for a period not to exceed 20 business days, if at any scheduled expiration date of the Offer, any of the conditions to Sub's obligation to accept for payment, and pay for, shares of Company Common Stock shall not be satisfied or waived, until such time as such conditions are satisfied or waived, (ii) extend the Offer for any period required by any rule, regulation, interpretation or position of the Securities and Exchange Commission (the "SEC") or the staff thereof applicable to the Offer, and (iii) extend the Offer for an aggregate period of not more than 15 business days beyond the latest expiration date that would otherwise be permitted under clause (i) or (ii) of this sentence if there shall not have been tendered sufficient shares of Company Common Stock so that the Merger could be effected as provided in Section 2.12. Subject to the terms and conditions of the Offer and this Agreement, Sub shall, and Parent shall cause Sub to, accept for payment, and pay for, all shares of Company Common Stock validly tendered and not withdrawn pursuant to the Offer that Sub becomes obligated to accept for payment, and pay for, pursuant to the Offer as soon as practicable after expiration of the Offer. (c) As soon as practicable on the date of commencement of the Offer, the Sub shall file with the SEC a Tender Offer Statement on Schedule 14D-1 with respect to the Offer, which will contain the offer to purchase and form of the related letter of transmittal (which, together with any supplements or amendments to those documents, are collectively referred to as the "Offer Documents"). The Sub and the Parent shall cause the Offer Documents to comply in all material respects with the provisions of applicable federal securities laws and, on the date filed with the SEC and on the date first published, sent or given to the Company's stockholders, not to contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading (except that neither the Parent nor the Sub shall be responsible with respect to information supplied by the Company in writing for inclusion in the Offer Documents). Each of the Parent, the Sub and the Company shall promptly correct any information provided by it for use or used in the Offer Documents, if and to the extent such information shall have become false or misleading in any material respect, and the Sub and the Parent shall take all steps necessary to cause the Offer Documents as so corrected to be filed with the SEC and to be disseminated to holders of shares of Company Common Stock, in each case as and to the extent required by applicable federal securities laws. The Company and its counsel shall be given a reasonable opportunity to review and comment upon the Offer Documents and all amendments and supplements thereto prior to their filing with the SEC or dissemination to stockholders of the Company. Parent and Sub agree to provide the Company and its counsel any comments Parent, Sub or their counsel may receive from the SEC or its staff with respect to the Offer Documents promptly after the receipt of such comments and shall provide the Company and its counsel an opportunity to participate, including by way of discussion with the SEC or its staff, in the response of Parent and/or Sub to such comments. 2 (d) Parent shall provide or cause to be provided to Sub on a timely basis the funds necessary to accept for payment, and pay for, any shares of Company Common Stock that Sub accepts for payment, and becomes obligated to pay for, pursuant to the Offer. 1.2 Company Actions. The Company hereby consents to the Offer and represents and warrants to the Parent and the Sub that its board of directors (at a meeting duly called and held) has unanimously (i) determined that as of the date of such meeting the Offer and the Merger (as defined in Section 2.1(a)) are fair to, and in the best interests of, the Company's stockholders, (ii) approved this Agreement and the transactions contemplated by this Agreement, including the Offer, the Stock Tender Agreements (as defined in Section 21 of Annex A) and the Merger, and (iii) resolved, subject to its fiduciary duties under applicable law, to recommend acceptance of the Offer and approval and adoption of this Agreement and the Merger by the stockholders of the Company. The Company shall file with the SEC contemporaneously with the commencement of the Offer a Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9") containing that recommendation in favor of the Offer and the Merger. The Company shall cause the Schedule 14D-9 to comply in all material respects with the provisions of applicable federal securities laws. The Company shall cause the Schedule 14D-9, on the date filed with the SEC and on the date first published, sent or given to the Company's stockholders, not to contain any untrue statement of a material fact or to omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading (except that the Company shall not be responsible with respect to information supplied by the Parent or the Sub in writing for inclusion in the Schedule 14D- 9). The Company shall take all steps necessary to cause the Schedule 14D-9 to be filed with the SEC and mailed to the Company's stockholders to the extent required by applicable federal securities laws. The Company shall include in the Schedule 14D-9, on the date first published, sent or given to the Company's stockholders, such information with respect to the Company's officers and directors as is required under Section 14(f) of the Exchange Act and Rule 14f-1 thereunder in order to fulfill its obligations under Section 1.3. The Parent and the Sub shall supply the Company with, and be solely responsible for, any information with respect to themselves and their nominees, officers, directors and affiliates required by Section 14(f) and Rule 14f-1. Each of the Company, Parent and Sub agrees promptly to correct any information provided by it for use in the Schedule 14D-9 if and to the extent that such information shall have become false or misleading in any material respect, and the Company further agrees to take all steps necessary to amend or supplement the Schedule 14D-9 and to cause the Schedule 14D-9 as so amended or supplemented to be filed with the SEC and disseminated to the Company's stockholders, in each case as and to the extent required by applicable federal securities laws. Parent and its counsel shall be given a reasonable opportunity to review and comment upon the Schedule 14D-9 and all amendments and supplements thereto prior to their filing with the SEC or dissemination to stockholders of the Company. The Company agrees to provide Parent and its counsel with any comments the Company or its counsel may receive from the SEC or its staff with respect to the Schedule 14D-9 promptly after the receipt of such comments and shall provide Parent and its counsel an opportunity to participate, including by way of discussions with the SEC or its staff, in the response of the Company to such comments. In connection with the Offer, the Company shall promptly furnish the Sub with mailing labels, security position listings and any available listing or computer file containing the names and addresses of the record 3 holders of the Company Common Stock as of a recent date, and shall furnish the Sub with such information and assistance as the Sub or its agents may reasonably request in communicating the Offer to the stockholders of the Company. Subject to the requirements of law, and except for such steps as are necessary to disseminate the documents constituting the Offer and any other documents necessary to consummate the Merger, the Parent and the Sub shall, and shall cause each of their affiliates and associates to, hold in confidence the information contained in any such labels, lists and other documents, to use such information only in connection with the Offer and the Merger, and, if this Agreement is terminated, to deliver to the Company all copies of such information then in their possession. 1.3 Directors; Section 14(f). Promptly upon the purchase by the Parent or the Sub of at least a majority of the outstanding shares of Company Common Stock and from time to time thereafter, the Parent and the Sub shall be entitled to designate such number of directors, rounded up to the next whole number but in no event more than one less than the total number directors of the board of directors of the Company as will give the Parent and the Sub, subject to compliance with Section 14(f) of the Exchange Act, representation on the board of directors of the Company equal to the product of the number of directors on the board of directors of the Company and the percentage that such number of shares of Company Common Stock so purchased bears to the number of shares of Company Common Stock outstanding, and the Company shall, upon request by the Parent and the Sub, promptly increase the size of the board of directors of the Company or exercise all reasonable efforts to secure the resignations of such number of directors as is necessary to enable the Parent's and the Sub's designees to be elected to the board of directors of the Company and shall cause such designees to be so elected. At the request of the Parent and the Sub, the Company shall take, at its expense, all action necessary to effect any such election, including mailing to its stockholders the information required by Section 14(f) of the Exchange Act and Rule 14f-1 thereunder. From and after the date that such designees to the board of directors of the Company constitute a majority of the board of directors of the Company, any action taken by the Company under Section 5 or 6 of this Agreement shall require the approval of a majority of the members of the board of directors, if any, who are not designees or affiliates of the Parent and the Sub. 2. The Merger and Related Matters. 2.1 The Merger. (a) Upon the terms and conditions of this Agreement, at the Effective Time (as defined in Section 2.1(b)), the Sub shall be merged with and into the Company (the "Merger") in accordance with the provisions of the General Corporation Law of the State of Delaware (the "GCL") and the separate corporate existence of the Sub shall cease, and the Company shall continue as the surviving corporation under the laws of the State of Delaware with its current corporate name (the "Surviving Corporation"). (b) The Merger shall become effective at the time of filing of a certificate of merger with the Secretary of State of the State of Delaware in accordance with the provisions of Section 251 of the GCL (the "Certificate of Merger"), or at the time specified as the effective 4 time in the Certificate of Merger (it being understood that such specified effective time shall be within a reasonable period, not to exceed five business days, after the date the Certificate of Merger is filed). The Certificate of Merger shall be filed at the time of the Closing Date (as defined in Section 2.9). The date and time when the Merger shall become effective is referred to as the "Effective Time." (c) The separate corporate existence of the Company, as the Surviving Corporation, with all its purposes, objects, rights, privileges, powers, certificates and franchises, shall continue unimpaired by the Merger. At the Effective Time, the separate corporate existence of the Sub shall cease and the Surviving Corporation shall succeed to all the properties and assets of the Company and the Sub and to all the debts, choses in action and other interests due or belonging to the Company and the Sub and shall be subject to, and responsible for, all the debts, liabilities and duties of the Company with the effect set forth under the GCL. 2.2 Conversion of Stock. At the Effective Time: (a) Each share of Company Common Stock then issued and outstanding (other than Dissenting Shares (as defined in Section 2.3) and any shares of Company Common Stock held by the Parent or the Sub or any corporate affiliate of either of them) shall, by virtue of the Merger and without any action on the part of the holder thereof, be converted into and represent the right to receive, and shall be exchangeable for, the highest price paid pursuant to the Offer, subject to applicable withholding or back-up withholding taxes, if any, payable to the holder thereof, without any interest thereon (the "Merger Consideration"), upon surrender of the certificates representing such shares of Company Common Stock. (b) Each share of common stock of the Sub (the "Sub Common Stock") then issued and outstanding shall, by virtue of the Merger and without any action on the part of the holder thereof, be converted into and become one fully paid and nonassessable share of common stock of the Surviving Corporation, which thereafter will constitute all of the issued and outstanding shares of common stock of the Surviving Corporation. (c) Each share of Company Common Stock then held in the treasury of the Company shall, by virtue of the Merger, be cancelled without payment of any consideration therefor and without any conversion thereof. (d) Each share of Company Common Stock then held by the Sub or the Parent (or any corporate affiliate of either of them) shall, by virtue of the Merger and without any action on the part of the holder thereof, be cancelled without payment of any consideration therefor and without any conversion thereof. 2.3 Dissenting Shares. Notwithstanding anything in this Agreement to the contrary, none of the shares of Company Common Stock that are outstanding immediately prior to the Effective Time and that are held by stockholders (other than the Parent or the Sub or any corporate affiliate of either of them) who shall not have voted those shares of Company Common Stock in favor of the Merger and who are entitled by applicable Delaware law to appraisal rights, and who shall have delivered a written demand for appraisal of those shares of Company 5 Common Stock in the manner provided in Section 262 of the GCL ("Dissenting Shares") shall be converted into the right to receive, or be exchangeable for, the Merger Consideration; however, (a) if any holder of Dissenting Shares shall subsequently deliver a written withdrawal of his demand for appraisal of those shares of Company Common Stock (with the written approval of the Company, if such withdrawal is not tendered within 60 days after the Effective Time), or (b) if any holder fails to establish his entitlement to appraisal rights as provided in Section 262 of the GCL or (c) if neither any holder of Dissenting Shares nor the Surviving Corporation has filed a petition demanding a determination of the value of all Dissenting Shares within the time provided in Section 262 of the GCL, such holder or holders shall forfeit the right to appraisal of those shares of Company Common Stock and each such share shall thereupon be deemed to have been converted into the right to receive, and to have become exchangeable for, as of the Effective Time, the Merger Consideration. 2.4 Payment. (a) Prior to the Effective Time, the Parent and the Sub shall designate a bank or trust company reasonably acceptable to the Company to act as exchange agent in the Merger (the "Exchange Agent"). At or immediately prior to the Effective Time, the Parent and the Sub shall take all steps necessary to provide the Exchange Agent with funds necessary to make the payments contemplated by Section 2.2. (b) Promptly after the Effective Time, the Surviving Corporation shall cause the Exchange Agent to mail to each record holder, as of the Effective Time, of a certificate or certificates that, immediately prior to the Effective Time, represented outstanding shares of Company Common Stock (each, a "Certificate"), a form of letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to a Certificate shall pass, only upon proper delivery of a Certificate to the Exchange Agent) and instructions for use in effecting the surrender of the Certificate and payment therefor. Upon surrender to the Exchange Agent of a Certificate, together with the letter of transmittal duly executed, the holder of the Certificate shall be entitled to receive in exchange therefor an amount equal to the product of the number of shares of Company Common Stock represented by the Certificate multiplied by the amount of the Merger Consideration and the Certificate shall then be cancelled. No interest will be paid or accrued on the cash payable upon the surrender of the Certificate. If payment is to be made to a person other than a person in whose name the surrendered Certificate is registered, it shall be a condition of payment that the Certificate so surrendered shall be properly endorsed or otherwise in proper form for transfer and that the person requesting payment shall pay any transfer or other taxes required by reason of the payment to a person other than the registered holder of the surrendered Certificate or establish to the satisfaction of the Surviving Corporation that the tax has been paid or is not applicable. The Exchange Agent may invest any cash deposited with it as the Surviving Corporation directs; however, substantially all such investments shall be in obligations of or guaranteed by the United States of America, in commercial paper obligations receiving the highest rating from either Moody's Investors Service, Inc. or Standard and Poor's Corporation, or in certificates of deposit, bank repurchase agreements or bankers' acceptances of commercial banks with capital exceeding $100,000,000 (collectively, "Permitted Investments") or in money market funds invested solely in Permitted Investments, and the maturities of 6 Permitted Investments shall be such as to permit the Exchange Agent to make prompt payment of the Merger Consideration to former stockholders of the Company entitled thereto. Any net profit resulting from, or interest or income produced by, Permitted Investments shall be payable to the Surviving Corporation. In the event that at any time there shall be a net loss from such investments, the Surviving Corporation shall immediately pay over to the Exchange Agent additional funds in an amount sufficient to make all payments contemplated by Section 2.2 of this Agreement. At any time after the 180th day following the Effective Time, the Surviving Corporation shall be entitled to require the Exchange Agent to deliver to it any funds (including any interest received with respect thereto) that have been made available to the Exchange Agent for the purpose of paying the Merger Consideration to holders of Company Common Stock and that have not been disbursed to holders of Certificates, and thereafter those holders shall be entitled to look to the Surviving Corporation (subject to abandoned property, escheat or other similar laws) only as general creditors of the Surviving Corporation with respect to the cash payable upon due surrender of their Certificates. The Surviving Corporation shall pay all charges and expenses, including those of the Exchange Agent, in connection with the exchange of cash for shares of Company Common Stock. Until surrendered in accordance with the provisions of this Section 2.4(b), each Certificate (other than Certificates representing shares of Company Common Stock held by the Parent, the Sub, the Company or any corporate affiliate of any of them and Dissenting Shares) shall represent for all purposes the right to receive the Merger Consideration in cash multiplied by the number of shares of Company Common Stock evidenced by that Certificate, without any interest thereon. (c) From and after the Effective Time, there shall be no transfers on the stock transfer books of the Surviving Corporation of the shares of Company Common Stock that were outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates are presented to the Surviving Corporation, they shall be cancelled and exchanged for cash as provided in this Section 2.4. (d) In the event any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the Certificate to be lost, stolen or destroyed, the Surviving Corporation shall issue in exchange for the lost, stolen or destroyed Certificate, the Merger Consideration deliverable in respect thereof as determined in accordance with this Section 2. When authorizing the delivery of the Merger Consideration in exchange therefor, the board of directors of the Surviving Corporation may, in its discretion and as a condition to the delivery thereof, require the owner of the lost, stolen or destroyed Certificate to give the Surviving Corporation a bond in such sum as it may direct (not greater than the product of the number of Shares represented by such certificate and the Merger Consideration) as indemnity against any claim that may be made against the Surviving Corporation with respect to the Certificate alleged to have been lost, stolen or destroyed. 2.5 No Further Rights or Transfers. At and after the Effective Time, the holder of a Certificate or of Dissenting Shares shall cease to have any rights as a stockholder of the Company, except for, in the case of the holder of a Certificate, the right to surrender his Certificate in exchange for payment of the Merger Consideration, or, in the case of the holder of Dissenting Shares, to perfect his right to receive payment for his Dissenting Shares pursuant to 7 Section 262 of the GCL, if the holder has validly exercised and not withdrawn his right to receive payment for his shares, and no transfer of those shares shall be made on the stock transfer books of the Surviving Corporation. 2.6 Certificate of Incorporation of the Surviving Corporation. The certificate of incorporation of the Company, as in effect immediately prior to the Effective Time, shall be the certificate of incorporation of the Surviving Corporation from and after the Effective Time, with Article Fourth amended to read in its entirety that the authorized capital stock of the Surviving Corporation shall consist of 1,000 shares of common stock, $1.00 par value. 2.7 By-Laws of the Surviving Corporation. The by-laws of the Sub, as in effect immediately prior to the Effective Time, shall be the by-laws of the Surviving Corporation until thereafter amended as provided in those by-laws or by law. 2.8 Directors and Officers of the Surviving Corporation. At the Effective Time, the directors of the Sub immediately prior to the Effective Time shall be the directors of the Surviving Corporation, each to hold office, subject to the provisions of the certificate of incorporation and by-laws of the Surviving Corporation, until their respective successors shall be duly elected or appointed. At the Effective Time, the officers of the Company immediately prior to the Effective Time shall, subject to the provisions of the certificate of incorporation and by-laws of the Surviving Corporation, be the officers of the Surviving Corporation, until their respective successors shall be duly elected or appointed. 2.9 Closing. The closing of the Merger shall take place (a) at the offices of Beveridge & Diamond, P.C., 1350 I Street, N.W., Washington, D.C., at 10:00 am., local time, on the later of (i) the day of the Special Meeting provided for in Section 2.11, if required by law, or (ii) the day on which the last of the conditions set forth in Sections 5.1 and 5.2 is fulfilled or waived (subject to applicable law), or (b) at such other time and place and on such other date as the Parent, the Sub and the Company shall agree (the "Closing Date"). 2.10 Stock Options, Warrants and Convertible Securities. At or prior to the consummation of the Offer, the Company shall have made arrangements the effect of which shall be that no shares of Company Common Stock or capital stock of the Surviving Corporation shall be issuable after the Effective Time pursuant to options or warrants to purchase shares, or securities convertible into shares, of Company Common Stock. The Company will cause any outstanding shares of its 8.25% cumulative convertible redeemable preferred stock to be redeemed or converted prior to consummation of the Offer. In full settlement of all options and warrants, each holder thereof shall receive or be entitled to receive immediately after the Effective Time a cash payment from the Company in an amount equal to the excess, if any, of the price paid for each share of Company Common Stock pursuant to the Merger over the per share exercise price of such option or warrant multiplied by the number of shares of Company Common Stock issuable pursuant to any such option or warrant, net, in the case of stock options, of any income tax withholding and payroll taxes applicable to such payment. Prior to consummation of the 8 Offer, the Company shall have furnished to the Parent and the Sub evidence satisfactory to the Parent confirming compliance by the Company with its obligations under the first and second sentences of this Section 2.10. 2.11 Special Meeting. If required by applicable law in order to consummate the Merger, the Company, acting through its board of directors, shall, in accordance with applicable law: (a) duly call, give notice of, convene and hold a special meeting (the "Special Meeting") of its stockholders as soon as practicable following the expiration of the Offer for the purpose of approving and adopting this Agreement; (b) subject to its fiduciary duties under applicable law, include in the proxy statement for, or any information statement with respect to, the Special Meeting the recommendation of its board of directors that stockholders of the Company vote in favor of the approval and adoption of this Agreement; and (c) use all reasonable efforts (i) to obtain and furnish the information required to be included by it in the proxy statement or the information statement, and, after consultation with the Sub and the Parent, respond promptly to any comments made by the SEC with respect to the proxy statement or the information statement and any preliminary version of the proxy statement or the information statement and cause the proxy statement or the information statement to be mailed to its stockholders at the earliest practicable time following the expiration of the Offer, and (ii) subject to the fiduciary duties of the board of directors under applicable law, to obtain the necessary approval of the Merger by its stockholders. The Parent and the Sub shall cause all the shares of Company Common Stock acquired pursuant to the Offer or otherwise by the Parent, the Sub or any other subsidiary of the Parent to be voted in favor of the Merger. 2.12 Merger Without Meeting of Stockholders. Notwithstanding anything to the contrary in this Agreement, in the event that the Sub, or any other direct or indirect subsidiary of the Parent, acquires at least 90% of the outstanding shares of each class of capital stock of the Company, at the request of the Parent or the Sub, the parties shall take all necessary and appropriate action to cause the Merger to become effective, as soon as practicable after the expiration of the Offer, without a meeting of stockholders of the Company in accordance with Section 253 of the GCL. 3. Representations and Warranties. 3.1 Representations and Warranties of the Company. The Company represents and warrants to the Parent and the Sub as set forth in Annex B to this Agreement. 3.2 Representations and Warranties of the Parent and the Sub. The Parent and the Sub jointly and severally represent and warrant to the Company as follows: 9 (a) Due Organization; Good Standing and Corporate Power. Each of the Parent and the Sub is a corporation duly incorporated, validly existing and in good standing under the law of the state of its incorporation and has all requisite corporate power and authority to own, lease and operate its properties and to conduct its business as now being conducted. (b) Authorization and Validity of Agreement. Each of the Parent and the Sub has full corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated by this Agreement. The execution, delivery and performance by each of the Parent and the Sub of this Agreement, and the consummation of the transactions contemplated by this Agreement, have been duly authorized by the board of directors of the Parent and the board of directors of the Sub, and this Agreement has been duly approved and adopted by the sole stockholder of the Sub. No other corporate action on the part of the Parent or the Sub is necessary to authorize the execution and delivery of this Agreement by the Sub or the Parent, or the consummation by the Parent and the Sub of the transactions contemplated by this Agreement. This Agreement has been duly executed and delivered by the Parent and the Sub and is a valid and binding obligation of the Parent and the Sub enforceable against the Parent and the Sub in accordance with its terms. (c) Brokers and Finders. Neither the Parent nor the Sub, nor any of their officers, directors or employees, on behalf of the Company or any of its subsidiaries, has incurred any financial advisory, brokerage or finders' fees, commissions or other similar obligations or liabilities in connection with the transactions contemplated by this Agreement. (d) No Contravention. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, conflict with or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to loss of a material benefit under, any provision of the certificate of incorporation or by-laws of the Parent or the Sub or any loan or credit agreement, note, bond, mortgage, indenture, lease, or other agreement, instrument, permit, concession, franchise, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to the Parent or the Sub or their respective properties or assets, other than any such conflicts, violations, defaults, terminations, cancellations, accelerations or losses which individually or in the aggregate do not have a material adverse effect on the Parent or the Sub taken as a whole together with the other subsidiaries of the Parent. No consent, approval, order or authorization of, or registration, declaration or filing with, any court, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign, is required by or with respect to the Parent or the Sub in connection with the execution and delivery of this Agreement by the Parent and the Sub or the consummation by the Parent and the Sub of the transactions contemplated hereby, except for (a) the filing of a notification and report form by or on behalf of the Parent under the Hart-Scott- Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), (b) the filing with the SEC of a Tender Offer Statement on Schedule 14D-1 relating to the Offer and (c) the filing of such other documents with, and the obtaining of such orders from, the SEC and various state securities or "blue sky" authorities as may be required in connection with the transactions contemplated by this Agreement, (d) the filing of the Certificate of Merger with the Secretary of State of the State 10 of Delaware and (e) such consents, approvals, orders, authorizations, registrations, declarations and filings as may be required under the law of any foreign country in which the Company or any of its Subsidiaries conducts any business or owns any property or assets. (e) Availability of Funds. The Parent currently has and will continue to have through the Effective Time sufficient available cash, cash equivalents or immediately available financing through existing unsecured financing arrangements with sufficient currently available borrowing capacity in order to pay all amounts which may be payable to stockholders of the Company pursuant to the Offer and the Merger. 4. Covenants. 4.1 Disclosure Documents. The Company shall supply to the Parent and the Sub the necessary information in writing, or cause the necessary information to be supplied in writing (other than the information supplied in writing by the Parent or the Sub), for inclusion in the Offer Documents and any other documents to be filed with the SEC or any regulatory agency in connection with the transactions contemplated by this Agreement. 4.2 Access to Information Concerning Properties and Records. During the period prior to the Closing Date, the Company shall, upon reasonable notice, afford the Parent and the Sub and their counsel, accountants and other authorized representatives, full access during normal business hours to the properties, books and records of the Company in order that they may have the opportunity to make such reasonable investigation as they wish of the affairs of the Company, and the Company shall cause its officers and employees to furnish such additional financial and operating data and other information and respond to such inquiries as the Parent and the Sub and other persons shall from time to time reasonably request. 4.3 Confidentiality. (a) Except as may be reasonably necessary to carry out this Agreement and the transactions contemplated by this Agreement, the Parent and the Sub shall, and shall require their respective officers, directors, employees and authorized representatives to, hold in confidence prior to the Effective Time and for two years from any termination of this Agreement all data and information obtained by them from the Company (unless required to disclose such information by judicial or administrative process, as otherwise required by law, or unless such information (i) is or becomes generally available to the public other than as a result of a disclosure by the Parent, any subsidiary of the Parent or any of their representatives, (ii) is independently acquired or developed by, the Parent, any subsidiary of the Parent or any of their representatives without violating any confidentiality agreement between any such person and the Company or any of its representatives, or (iii) is, or becomes, available to the Parent, any subsidiary of the Parent or any of their representatives from a source other than the Company or its representatives, provided that such source is not known by the Parent, any subsidiary of the Parent or any of their representatives to be bound by a confidentiality agreement with the Company or any of its representatives or by any other legal, contractual or fiduciary duty not to 11 disclose such information) and shall not, and shall use all reasonable efforts to cause such officers, directors, employees and authorized representatives not to, disclose such information to others without the prior written consent of the Company. (b) If this Agreement is terminated, the Parent and the Sub shall, if so requested by the Company, promptly return every document furnished to them or their affiliates in connection with the transactions contemplated by this Agreement and any copies of such documents that may have been made and shall use all reasonable efforts to cause the representatives to whom such documents were furnished promptly to return such documents and any copies of such documents, other than documents filed with the SEC or otherwise publicly available. 4.4 Interim Operations of the Company. During the period from the date of this Agreement and continuing until the Effective Time, the Company agrees (except as expressly contemplated by this Agreement or to the extent that the Parent and the Sub shall otherwise consent in writing) that: (a) Ordinary Course. The Company shall carry on its business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted and, to the extent consistent with such business, use all reasonable efforts to preserve intact its present business organization, keep available the services of its present officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that their goodwill and on-going businesses shall be unimpaired at the Effective Time. (b) Dividends; Changes in Stock. The Company shall not and shall not propose to (i) declare or pay any dividend on, or make other distributions in respect of, any of its capital stock (except regular dividends on the Preferred Stock), (ii) split, combine or reclassify any of its capital stock or issue, authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company or (iii) repurchase or otherwise acquire any shares of capital stock of the Company (other than pursuant to the terms of its Preferred Stock). (c) Issuance of Securities. The Company shall not sell, issue, authorize or propose the sale or issuance of, or purchase or propose the purchase of, any shares of its capital stock of any class or securities convertible into, or rights, warrants or options to acquire, any such shares or other convertible securities (other than the issuance of Common Stock upon the exercise or conversion of currently outstanding stock options or warrants or convertible securities). (d) Governing Documents. The Company shall not amend its certificate of incorporation or by-laws. 12 (e) No Acquisition. The Company shall not acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the Company. (f) No Dispositions. The Company shall not sell, lease or otherwise dispose of, or agree to sell, lease or otherwise dispose of, any of its assets, which are material, individually or in the aggregate, to the Company, except in the ordinary course of business consistent with prior practice. (g) Indebtedness. The Company shall not incur any indebtedness for borrowed money or guarantee any such indebtedness or issue or sell any debt securities of the Company or guarantee any debt securities of others other than in the ordinary course of business consistent with prior practice. (h) Benefit Plans, Etc. The Company shall not adopt or amend in any material respect any collective bargaining agreement or Employee Benefit Plan (as that term is defined in Annex B) other than in the ordinary course of business consistent with prior practice. (i) Executive Compensation. The Company shall not grant to any executive officer any increase in compensation or in severance or termination pay, or enter into any employment agreement with any executive officer, except as may be required under employment or termination agreements in effect on the date of this Agreement or in the ordinary course of business consistent with prior practice. 4.5 Consents. The Company, the Parent and the Sub shall cooperate and use all reasonable efforts to obtain, prior to the Closing Date, all licenses, permits, consents, approvals, authorizations, qualifications and orders of governmental authorities and parties to contracts with the Company as are necessary for the consummation of the transactions contemplated by this Agreement; however, no loan agreement or contract for borrowed money shall be repaid and no contract shall be amended materially to increase the amount payable thereunder or otherwise to be materially more burdensome to the Company in order to obtain any such consent, approval or authorization without first obtaining the written approval of the Parent. 4.6 No Solicitation. The Company shall not, and shall use all reasonable efforts to cause its affiliates, officers, directors, employees, representatives and agents not to, directly or indirectly, solicit, initiate, or knowingly promote discussions or negotiations with, any corporation, partnership, person or other entity or group (other than the Parent or any of its affiliates or representatives) concerning any merger, tender offer, sale of any material assets, sale of shares of capital stock or similar transaction involving the Company or any division of the Company. Notwithstanding the foregoing, the Company may, if required by the fiduciary duties of its directors after consulting with outside counsel to the Company, (i) furnish information to any corporation, partnership, person or other entity or group pursuant to appropriate confidentiality agreements, and (ii) negotiate or participate in discussions with such entity or 13 group. The Company shall immediately advise the Parent of the terms of any proposal, the fact of any negotiation, discussion or inquiry and the identity of the party making such proposal or inquiry or involved in such discussion or negotiation. 4.7 Filings. The Parent, the Sub and the Company shall as promptly as practicable make any required filings, and the Parent, the Sub and the Company shall promptly make any other required submissions, under any law, statute, order, rule or regulation with respect to the Merger and shall cooperate with each other with respect to the foregoing. 4.8 All Reasonable Efforts. Subject to the terms and conditions of this Agreement and to the fiduciary duties and obligations of the board of directors of the Company, each of the parties to this Agreement shall use all reasonable efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations, or to remove any injunctions or other impediments or delays, legal or otherwise, to consummate the Merger and the other transactions contemplated by this Agreement. 4.9 Public Announcements. The Company, the Parent and the Sub shall consult with each other before issuing any press release or otherwise making any public statements with respect to the Offer and the Merger, this Agreement or the other transactions contemplated by this Agreement and shall not issue any other press release or make any other public statement without prior consultation with the other parties, except as may be required by law or by obligations pursuant to any listing agreement with any national securities exchange. 4.10 Notification of Certain Matters. The Company shall give prompt notice to the Parent, and the Parent and the Sub shall give prompt notice to the Company, of (a) the occurrence, or non-occurrence, of any event the occurrence, or non-occurrence, of which would cause any of its representations or warranties in this Agreement to be untrue or inaccurate in any material respect at or prior to the Effective Time and (b) any material failure of the Company, on the one hand, or the Parent or the Sub, on the other hand, as the case may be, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it under this Agreement; however, the delivery of any notice pursuant to this Section 4.10 shall not limit or otherwise affect the remedies available to the party receiving such notice under this Agreement. 4.11 Directors' and Officers' Indemnification. (a) The Parent acknowledges that all rights to indemnification or limitations on liability now existing in favor of the present or former employees, agents, directors or officers of the Company as provided in its certificate of incorporation, by-laws, agreements or pursuant to applicable law in effect on this date shall survive the Merger and shall continue in full force and effect for a period of not less than the applicable statutes of limitations; however, in the event any claim or claims are asserted or made within such applicable period, all rights to indemnification in respect of any such claim or claims shall continue until disposition of any and all such claims. 14 (b) If any action, suit, proceeding or investigation relating to this Agreement or to the transactions contemplated by this Agreement is commenced, whether before or after the Effective Time, the parties shall cooperate with each other and use all reasonable efforts to defend against and respond to any such action, suit, proceeding or investigation. (c) The Parent and the Surviving Corporation agree to maintain in effect the Company's current directors' and officers' insurance policy for the remainder of its term and to purchase a policy providing continued coverage relating to actions, alleged actions, omissions and alleged omissions occurring at or prior to the Effective Time for a period of at least three years from and after the Effective Time; provided that the total amount the Parent and the Surviving Corporation are required to expend for such coverage shall not exceed 250% of the premium for such current policy. 4.12 Expenses. Except as otherwise provided herein, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses whether or not the Offer or the Merger is consummated. 5. Conditions to Consummation of the Merger. 5.1 Conditions to Each Party's Obligation to Effect the Merger. The respective obligations of each party to effect the Merger are subject to the satisfaction or waiver at or prior to the Effective Time of each of the following conditions: (a) If required by the GCL, this Agreement shall have been approved and adopted by the affirmative vote of the stockholders of the Company by the requisite vote in accordance with the GCL. (b) No statute, rule, regulation, executive order, decree, injunction or restraining order shall have been enacted, entered, promulgated or enforced by any court of competent jurisdiction or governmental authority that prohibits or restricts the consummation of the Merger. (c) Any waiting period applicable to the Merger under the HSR Act shall have expired or been terminated. 5.2 Additional Condition to Obligations of the Parent and the Sub to Effect the Merger. The obligations of the Parent and the Sub to consummate the transactions contemplated by this Agreement are also subject to the satisfaction, at or prior to the Effective Time, of the condition that the Sub shall have accepted for payment and paid for shares of Company Common Stock tendered pursuant to the Offer; however, this condition shall be deemed satisfied if the Sub fails to accept for payment and pay for shares of Company Common Stock pursuant to the Offer in violation of the terms of the Offer. 15 6. Termination. 6.1 Termination. This Agreement may be terminated and the Merger may be abandoned at any time prior to the Effective Time, whether before or after stockholder approval of the Merger: (a) by mutual written consent of the boards of directors of the Company, the Parent and the Sub; (b) by any of the Company, the Parent or the Sub: (i) if a purchase of shares of Company Common Stock pursuant to the Offer shall not have occurred on or before June 30, 1995; however, the right to terminate this Agreement under this Section 6.1(b) shall not be available to any party whose failure to fulfill any obligation under this Agreement has been the cause of, or resulted in, the failure of a purchase of shares of Company Common Stock pursuant to the Offer to occur on or before that date; or (ii) if any court of competent jurisdiction, or any governmental body, regulatory or administrative agency or commission having appropriate jurisdiction shall have issued an order, decree or ruling or taken any other action restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement and such order, decree, ruling or other action shall have become final and non-appealable; (c) by the Company: (i) if the Sub shall have (A) failed to commence the Offer within five business days following the date of this Agreement, (B) terminated the Offer or (C) failed to pay (by deposit with the depository for the Offer) for shares of Company Common Stock pursuant to the Offer within five business days following the expiration of the Offer; or (ii) if, prior to the purchase of shares of Company Common Stock pursuant to the Offer, the board of directors of the Company shall have (A) withdrawn (or modified in a manner adverse to the Sub) its recommendation to the Company's stockholders to accept the Offer in order to permit the Company, in response to an offer as to which the Company has not contravened Section 4.6 hereof, to execute a definitive agreement providing for the acquisition of the Company, or to approve a tender offer for all the outstanding Company Common Stock, in either case on terms determined by the Company's board of directors, after consultation with outside legal and financial advisors, to be more favorable to the stockholders of the Company than the acquisition of the Company contemplated by this Agreement, or (B) recommended another such offer; or (d) by the Parent and the Sub: (i) if due to an occurrence that would result in a failure to satisfy any of the conditions set forth in Annex A, the Sub shall have (A) failed to commence the Offer within five business days following the date of this Agreement, or (B) terminated the Offer; or 16 (ii) if, prior to the purchase of shares of Company Common Stock pursuant to the Offer, the board of directors of the Company shall have withdrawn (or modified in a manner adverse to the Sub) its approval or recommendation of the Offer, this Agreement or the Merger, or shall have recommended another offer; or (iii) if the Company deliberately fails to perform in any material respect any of its obligations under this Agreement, and, at the time of such failure, the Parent's and the Sub's designees on the board of directors of the Company do not constitute a majority of the members of the board of directors of the Company. 6.2 Notice and Effect of Termination. In the event of the termination and abandonment of this Agreement pursuant to Section 6.1, written notice thereof shall forthwith be given to the other party or parties specifying the provision pursuant to which such termination is made, and this Agreement shall forthwith become void and have no effect, without any liability on the part of any party or its directors, officers or stockholders, except for the provisions of this Section 6.2 and Sections 4.3, 4.11(b), 4.12 and 7. Nothing contained in this Section 6.2 shall relieve any party from liability for any breach of this Agreement. Sections 4.3, 4.11(b), 4.12 and 7 shall survive any termination of this Agreement. 6.3 Extension; Waiver. Any time prior to the Effective Time, the parties may (a) extend the time for the performance of any of the obligations or other acts of any other party, (b) waive any inaccuracies in the representations and warranties by any other party or (c) waive compliance with any of the agreements of any other party or with any conditions to its own obligations. Any agreement on the part of any other party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. 6.4 Amendment and Modification. This Agreement may be amended, whether before or after the vote of the stockholders of the Company contemplated by Section 2.11, by written agreement of the Company, the Parent and the Sub; however, after the approval of this Agreement by the stockholders of the Company, no such amendment shall reduce or change the Merger Consideration to be delivered to the stockholders pursuant to Sections 2.2 and 2.4 or shall otherwise adversely affect the rights under this Agreement of the Company's stockholders without the approval of such stockholders. This Agreement may not be amended except by an instrument in writing signed on behalf of all the parties. 7. Miscellaneous. 7.1 Fees. If at any time while this Agreement is in effect (a) any person, corporation, partnership or other entity (other than the Parent, the Sub or any of their affiliates) ("Third Person") acquires more than 33% of the outstanding shares of Common Stock, (b) a Third Person acquires more than 50% of the Company's total assets, (c) the Company consummates a plan of liquidation relating to more than 50% of its total assets, (d) the Company repurchases more than 50% of the outstanding shares of the Company's Common Stock, (e) the Company consummates a merger of the Company with, the sale of all or substantially all of the assets of the Company to, or any other business combination involving the Company with a Third Person, or (f) Parent and Sub terminate this Agreement because of the failure to satisfy the Minimum Condition and 17 within one year from the date of such termination a transaction contemplated by Subsections (a), (b) or (e) of this Section 7.1 is consummated with a Third Person, provided (i) that such transaction is accomplished so as to provide a yield to holders of Company Common Stock of at least the equivalent of $11.50 per share, and (ii) there was a public announcement or written proposal to effect such transaction by or with such Third Person while this Agreement is in effect, or (g) the board of directors of the Company withdraws or amends in any material respect adverse to consummation of the Offer its recommendation that the Offer be accepted by the Company's stockholders and that stockholders tender their shares of Company Common Stock in the Offer, unless such withdrawal or amendment results from a material breach by Parent or Sub of any representations or warranties herein or a failure by Parent or Sub to fulfill any material covenant herein, then the Company shall, within five days after the first of such events has occurred, pay the Parent a fee of $1,000,000. Nothing in this Section 7.1 shall relieve the Company from its obligation (subject to the fiduciary responsibility of its directors) to recommend that the Company's stockholders accept the Offer and approve this Agreement pursuant to Section 1.2 of this Agreement. 7.2 Survival of Representations and Warranties. The respective representations and warranties of the Company, the Parent and the Sub shall not be deemed waived or otherwise affected by any investigation made by any party. Each representation and warranty in this Agreement and each covenant of the Company in Annex B shall expire with, and be terminated and extinguished by, the first purchase of shares of Company Common Stock under the Offer and thereafter the Company, the Parent and the Sub shall have no liability with respect to any such representation or warranty. This Section 7.2 shall have no effect upon any other obligation of the parties, whether to be performed before or after the first purchase of shares of Company Common Stock under the Offer. 7.3 Notices. All notices, requests, demands, waivers and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if delivered personally or mailed, certified or registered mail with postage prepaid, or when received by telex, telegram or telecopier, as follows: (a) if to the Company, to it at: Resource Recycling Technologies, Inc. 200 Plaza Drive Vestal, New York 13850 Attention: Lawrence J. Schorr, President Facsimile: 607-798-0503 18 with a copy to: Beveridge & Diamond, P.C. 1350 I Street, N.W. Washington, D.C. 20005 Attention: Dean H. Cannon, Esq. Facsimile: 202-789-6190 (b) if to the Parent or the Sub, to it at: Waste Management, Inc. 3003 Butterfield Road Oak Brook, Illinois 60529 Attention: General Counsel Facsimile: 708-684-7050 with a copy to: Bell, Boyd & Lloyd Three First National Plaza, Room 3300 Chicago, Illinois 60602 Attention: John H. Bitner, Esq. Facsimile: 312-372-2098 7.4 Entire Agreement; Assignment. This Agreement, including all Annexes, exhibits and schedules hereto, (a) constitutes the entire agreement among the parties with respect to its subject matter and supersedes all prior agreements and understandings, both written and oral, among the parties or any of them with respect to such subject matter and (b) shall not be assigned by operation of law or otherwise, provided that, subject to any approvals required by applicable law, the Parent or the Sub may assign its respective rights and obligations to any majority-owning or owned, direct or indirect, parent, subsidiary or subsidiaries of the Parent, but no such assignment shall relieve the Parent or the Sub of its obligations under this Agreement. 7.5 Binding Effect; Benefit. This Agreement shall inure to the benefit of and be binding upon the parties and their respective successors and assigns. Nothing in this Agreement is intended to confer on any person other than the parties to this Agreement or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement. 7.6 Headings. The descriptive headings of the sections of this Agreement are inserted for convenience only, do not constitute a part of this Agreement and shall not affect in any way the meaning or interpretation of this Agreement. 7.7 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, and all of which together shall be deemed to be one and the same instrument. 19 7.8 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the state of Delaware, without regard to the conflicts of laws rules of Delaware. 7.9 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void, unenforceable or against its regulatory policy, the remainder of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. 7.10 Certain Definitions. As used herein: (a) "affiliate" shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations under the Exchange Act; (b) "Company," when used in the context of a covenant, undertaking, representation or warranty made by the Company, unless the context otherwise requires, shall also be deemed to be made by the Company with respect to its subsidiaries, provided that materiality shall in all cases be measured with respect to the Company and its subsidiaries considered as a whole. For example, a representation that the Company is duly incorporated shall be deemed to be a representation that each of the Company's subsidiaries is also duly incorporated, but the materiality of the failure of a subsidiary to be so incorporated shall be measured with respect to the Company and its subsidiaries taken as a whole (and not with respect to that subsidiary alone); (c) "Material Adverse Effect" shall mean any adverse effect on the business, financial condition or results of operations of the Company and its subsidiaries which is material to the Company and its subsidiaries taken as a whole, excluding any change which generally affects the recycling industry as a whole in the United States (such as changes in commodity prices and changes in legal requirements); and (d) "subsidiary" shall mean, when used with reference to an entity, any corporation, a majority of the outstanding voting securities of which is owned directly or indirectly, or a majority of the board of directors of which may be elected, by such entity. 20 IN WITNESS WHEREOF, Parent, Sub and the Company have caused this Agreement to be signed by their respective officers thereunto duly authorized, all as of the date first written above. RESOURCE RECYCLING TECHNOLOGIES, INC. /s/ LAWRENCE J. SCHORR By:___________________________ Title: President and Chief Executive Officer WASTE MANAGEMENT, INC. /s/ JOSEPH M. HOLSTEN By:___________________________ Title: Executive Vice President WMI ACQUISITION SUB, INC. /s/ JOSEPH M. HOLSTEN By:___________________________ Title: Vice President 21 ANNEX A TO AGREEMENT AND PLAN OF MERGER Conditions of the Offer. Notwithstanding any other provisions of the Offer, and in addition to (and not in limitation of) the Sub's right to amend the Offer at any time in its sole discretion, but nevertheless subject to the provisions of the Agreement (capitalized terms used herein and not otherwise defined herein having the meanings ascribed to such terms in the Agreement) the Sub shall not be required to accept for payment, or pay for, and may delay the acceptance for payment, or the payment, of, any tendered shares of Company Common Stock, if (i) the Minimum Condition shall not have been satisfied, or (ii) at any time on or after the date of the Agreement and at or before the time of payment for any such shares of Company Common Stock (whether or not any shares of Company Common Stock have theretofore been accepted for payment or paid for pursuant to the Offer), any of the following events shall occur: (a) any Material Adverse Effect shall have occurred or be threatened; or (b) there shall have occurred (1) any general suspension of trading in, or limitation on prices for, securities on the New York Stock Exchange or the American Stock Exchange (excluding any coordinated trading halt triggered solely as a result of a specified decrease in a market index), (2) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States (whether or not mandatory), (3) any material limitation (whether or not mandatory) imposed by any governmental authority on the extension of credit by banks or other lending institutions in the United States that materially and adversely affects the ability of the Parent and the Sub to obtain extensions of credit, or (4) from the date of the Agreement through the date of termination or expiration of the Offer, a decline of at least 33% in either the Dow Jones Average of Industrial Stocks or the Standard & Poor's 500 Index; or (c) any of the representations and warranties made by the Company in the Agreement shall not be true and correct in any material respect, or the Company shall have breached in any material respect any covenant contained in the Agreement or the Agreement shall have been terminated in accordance with its terms; or (d) there shall have been any action taken, or any statute, rule, regulation, judgment, order or injunction promulgated, enacted, entered or enforced, by any state, federal or foreign government or governmental authority or by any court, domestic or foreign, that could reasonably be expected to (i) make the acceptance for payment of, or the payment for, some or all of the shares of Company Common Stock illegal or otherwise prohibited, (ii) impose material limitations on the ability of the Parent or the Sub to acquire or hold or to exercise effectively all rights of ownership of Company Common Stock, including, without limitation, the right to vote any shares of Company Common Stock purchased by either of them on all matters properly presented to the stockholders of the Company, or (iii) prohibit or impose any material limitation on the Parent's or the Sub's ownership or operation of all or a material portion of the assets or business of the Company or any of its subsidiaries or affiliates; or A-1 (e) the Company, the Parent or the Sub shall have failed to receive any or all governmental consents and approvals to consummation of the Offer, which, if not received, could reasonably be expected to have a Material Adverse Effect; or (f) the board of directors of the Company shall have publicly (including by amendment of its Schedule 14D-9) withdrawn or amended in any respect its recommendation of the Offer or shall have resolved to do so, unless such withdrawal or amendment results from a material breach by Parent or Sub of any representations or warranties herein or a failure by Parent or Sub to fulfill any material covenant herein. The foregoing conditions are for the sole benefit of the Parent and the Sub and may be asserted by the Parent or the Sub regardless of the circumstance giving rise to such condition and, subject to the terms of the Agreement, may be waived by the Parent and the Sub, in whole or in part at any time and from time to time, in their sole discretion (except that the Minimum Condition may not be waived by the Purchaser without the consent of the Company). The failure by the Parent and the Sub at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and each such right shall be deemed an ongoing right, which may be asserted at any time and from time to time. Any determination by the Parent and the Sub shall be final and binding upon all parties, including tendering stockholders. A-2 ANNEX B TO AGREEMENT AND PLAN OF MERGER For purposes hereof, capitalized terms used herein and not otherwise defined herein have the meanings ascribed to such terms in the Agreement. Any representations and warranties contained herein shall be qualified by the contents of a writing delivered by the Company to the Parent prior to the date of this Agreement which specifically references the Sections of this Annex B intended to be so qualified (the "Writing"). SECTION 1. Corporate Existence and Power. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation, and has all corporate powers and, except for such the absence of which would not have a Material Adverse Effect, all governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted. The Company is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction where the character of the property owned or leased by it or the nature of its activities makes such qualification necessary, except for those jurisdictions where the failure to be so qualified would not, individually or in the aggregate, have a Material Adverse Effect. The Company has heretofore delivered to the Parent true and complete copies of the Company's certificate of incorporation and by-laws as currently in effect. SECTION 2. Corporate Authorization. The execution, delivery and performance by the Company of the Agreement and the consummation by the Company of the transactions contemplated thereby are within the Company's corporate powers and, except for any required approval by the Company's stockholders in connection with the consummation of the Merger, have been duly authorized by all necessary corporate action. The Agreement constitutes a valid and binding Agreement of the Company, enforceable in accordance with its terms. SECTION 3. No Contravention. The execution and delivery of the Agreement does not, and the consummation of the transactions contemplated thereby will not, conflict with or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any right or obligation or to loss of a material benefit under, any provision of the certificate of incorporation or by-laws of the Company or any loan or credit agreement, note, bond, mortgage, indenture, lease, or other agreement, instrument, permit, concession, franchise, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to the Company or its properties or assets, except for agreements, contracts or instruments which do not provide for a payment to or from the Company in excess of $100,000, or result in the creation or imposition of any mortgage, lien, pledge, charge, security interest or encumbrance of any kind ("Lien") on any asset of the Company. No consent, approval, order or authorization of, or registration, declaration or filing with, any court, administrative agency or commission or other governmental authority or B-1 instrumentality, domestic or foreign, is required by or with respect to the Company in connection with the execution and delivery of the Agreement by the Company or the consummation by the Company of the transactions contemplated thereby, except for (a) the filing of a notification and report form by or on behalf of the Company under the HSR Act, (b) the filing with the SEC of a Solicitation/Recommendation Statement on Schedule 14D-9 relating to the Offer (the "Schedule 14D-9") and (c) the filing with the SEC and the distribution to stockholders of a proxy statement relating to any meeting of the Company's stockholders required in connection with the Merger (as that term is defined in the Agreement) (the "Proxy Statement") or any information statement required in connection with the Merger (the "Information Statement"), as the case may be, (d) the filing of such other documents with, and the obtaining of such orders from, the SEC and various state securities or "blue sky" authorities as may be required in connection with the transactions contemplated by the Agreement, and (e) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware. SECTION 4. Capitalization. The authorized capital stock of the Company consists of 5,000,000 shares of Common Stock of the Company (the "Shares") and 500,000 preferred shares. As of March 9, 1995, there were outstanding (i) 2,675,773 Shares, (ii) 7,813 shares of 8.25% cumulative convertible redeemable preferred stock, no par value, convertible into an aggregate of 6,509 Shares ("Preferred Stock"), (iii) employee and director stock options to purchase an aggregate of 435,500 Shares (all of which options are or by virtue of the Merger, will be exercisable), (iv) a warrant dated April 11, 1990 to purchase 113,363 Shares at an adjusted exercise price of $9.13 per share, and (v) an option dated August 26, 1992 to purchase 25,000 Shares at an exercise price of $3.00 per share. All outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and nonassessable. Except as set forth in this Section 4 and except for changes since March 9, 1995, resulting from the exercise of employee or other stock options and warrants and the conversion of Preferred Stock outstanding on such date, there are outstanding (A) no shares of capital stock or other voting securities of the Company, (B) no securities of the Company convertible into or exchangeable for shares of capital stock or voting securities of the Company, and (C) no options or other rights to acquire from the Company, and no obligation of the Company to issue, any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of the Company (the items in clauses (i), (ii), (iii), (iv) and (v) being referred to collectively as the "Company Securities"). There are no outstanding obligations of the Company to repurchase, redeem or otherwise acquire any Company Securities, other than Preferred Stock. Except for the subsidiaries identified in the Writing, the Company does not own any stock of any corporation or other entity. SECTION 5. SEC Filings. (a) The Company has delivered to the Parent (i) its annual reports on Form 10-K for its fiscal years ended December 31, 1991, 1992 and 1993, (ii) its quarterly reports on Form 10-Q for its fiscal quarters ended March 31, June 30 and September 30, 1994, (iii) its proxy or information statements relating to meetings of, or actions taken without a meeting by, the stockholders of the Company held since January 1, 1991 and (iv) all of its other reports, statements, schedules and registration statements filed by the Company with the SEC since January 1, 1991, but including only such pre-effective amendments to such registration statements as contain material information not fully reflected in any subsequent B-2 amendment to such registration statements (or to any prospectus included therein) delivered to the Parent pursuant to this Section 5. The Company will file with SEC by not later than March 31, 1995 (or such later date as is in compliance with SEC Rule 12b-25) its annual report on Form 10-K for the year ended December 31, 1994, and deliver a copy thereof to Parent at or before such filing. (b) As of its filing date, each such report or statement filed pursuant to the Exchange Act did not (or will not) contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. (c) Each such registration statement, as amended or supplemented if applicable, filed pursuant to the Securities Act of 1933, as amended (the "Securities Act"), as of the date such statement or amendment became effective, did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading. SECTION 6. Financial Statements. The audited consolidated financial statements at and for the year ended December 31, 1994 delivered to the Parent and the audited consolidated financial statements and unaudited consolidated interim financial statements of the Company included in its annual reports on Form 10-K and its quarterly reports on Form 10-Q referred to in Section 5 fairly present, in conformity with generally accepted accounting principles applied on a consistent basis, the consolidated financial position of the Company as of the dates thereof and its consolidated results of operations and changes in financial position or cash flows, as the case may be, for the periods then ended (subject to normal year-end adjustments in the case of any unaudited interim financial statements). SECTION 7. Disclosure Documents. Each document required to be filed by the Company with the SEC in connection with the transactions contemplated by this Agreement (the "Company Disclosure Documents") and any amendment or supplements thereto will, when filed, comply as to form in all material respects with the applicable requirements of the Exchange Act. SECTION 8. Absence of Certain Changes. Except for transactions contemplated by the Agreement, since December 31, 1994 (the "Balance Sheet Date"), the Company has conducted its business in the ordinary course consistent with past practice and there has not been: (a) any event, occurrence or development of a state of circumstances or facts which has had or reasonably could be expected to have a Material Adverse Effect; (b) any declaration, setting aside or payment of any dividend (except for any regular dividends on the Preferred Stock) or other distribution with respect to any shares of capital stock of the Company or any repurchase, redemption or other acquisition by the Company of any outstanding shares of capital stock or other securities of, or other ownership interests in, the Company; (c) any amendment of any term of any outstanding security of the Company; B-3 (d) any incurrence, assumption or guarantee by the Company of any indebtedness for borrowed money other than in the ordinary course of business consistent with past practice; (e) any creation or assumption by the Company of any Lien on any material asset other than in the ordinary course of business consistent with past practice; (f) any making of any loan, advance or capital contribution to or investment in any Person other than loans or advances made in the ordinary course of business consistent with past practice; (g) any damage, destruction or other casualty loss (whether or not covered by insurance) affecting the business or assets of the Company which, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect; (h) any transaction or commitment made, or any contract or agreement entered into, by the Company relating to its assets or business (including the acquisition or disposition of any assets) or any relinquishment by the Company of any contract or other right, in either case, material to the Company, other than transactions and commitments in the ordinary course of business consistent with past practice and those contemplated by the Agreement; (i) any change in any method of accounting or accounting practice by the Company, except for any such change required by reason of a concurrent change in generally accepted accounting principles; (j) other than in the ordinary course of business consistent with past practice, any (i) grant of any severance or termination pay to any director, officer or employee of the Company, (ii) entering into of any employment, deferred compensation or other similar agreement (or any amendment to any such existing Agreement) with any director, officer or employee of the Company, (iii) increase in benefits payable under any existing severance or termination pay policies or employment agreements or (iv) increase in compensation, bonus or other benefits payable to directors, officers or employees of the Company; (k) any (i) labor dispute (other than routine individual grievances), lockout, strike, slowdown, work stoppage or threat thereof by or with respect to any employees of the Company, or (ii) activity or proceeding by a labor union or representative thereof to organize any such employees. SECTION 9. Properties. (a) The Company has good and marketable title to, or in the case of leased property has valid leasehold interests in, all properties and assets (whether real, personal, tangible or intangible) reflected on the December 31, 1994 balance sheet or in the notes thereto (the "December Balance Sheet") or acquired after the Balance Sheet Date, except for properties and assets sold since the Balance Sheet Date in the ordinary course of business consistent with past practice. None of such owned properties or assets is subject to any Liens and, to the best knowledge of the Company, no leased property is subject to any Liens incurred by the Company, except: B-4 (i) Liens disclosed in the December Balance Sheet; (ii) Liens for taxes not yet due or being contested in good faith (and for which adequate reserves have been established on the December Balance Sheet); (iii) Liens arising under financing agreements of the Company identified in the December Balance Sheet; (iv) Statutory or common law Liens relating to obligations of the Company that are not delinquent or are being contested in good faith; (v) Purchase money security interests securing obligations of the Company that are not delinquent for the purchase of goods in the ordinary course of business consistent with past practice; or (vi) Liens which do not materially detract from the value of such property or assets as now used, or materially interfere with any present or intended use of such property or assets. (b) No violation of any law, regulation or ordinance (including, without limitation, laws, regulations or ordinances relating to zoning, city planning or similar matters) relating to any of the properties or assets of the Company exists or has existed at any time since January 1, 1989 other than for violations which have not had and could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. There are no developments affecting any of such properties or assets pending or, to the knowledge of the Company, threatened, which could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. SECTION 10. No Undisclosed Material Liabilities. There are no material liabilities of the Company of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, and there is no existing condition, situation or set of circumstances known to the Company which could reasonably be expected to result in such a liability, other than: (i) liabilities disclosed or provided for in the December Balance Sheet; (ii) liabilities incurred in the ordinary course of business consistent with past practice since the Balance Sheet Date, which in the aggregate are not materially greater than those reflected in the December Balance Sheet; (iii) liabilities arising under or in connection with the Agreement. SECTION 11. Litigation. There is no action, suit, investigation or proceeding (or to the Company's knowledge, any basis therefor) pending against, or to the knowledge of the Company threatened against or affecting, the Company, its subsidiaries or any of their properties before any court or arbitrator or any governmental body, agency or official which, if determined B-5 or resolved adversely to the Company or a subsidiary, could reasonably be expected to have a Material Adverse Effect or which in any manner challenges or seeks to prevent, enjoin, alter or materially delay the Offer or Merger or any of the other transactions contemplated hereby. SECTION 12. Taxes. The Company and its subsidiaries have filed all federal income and other tax returns required to be filed by any of them and have paid (or the Company has paid on behalf of its subsidiaries), or have set up an adequate reserve (in accordance with generally accepted accounting principles) for the payment of, all taxes shown to be due on such returns and the December Balance Sheet reflects an adequate reserve for all taxes payable by the Company accrued through December 31, 1994. The Company is not delinquent in the payment of any material tax, assessment or governmental charge. No material deficiencies for any taxes have been proposed, asserted or assessed in writing against the Company or its subsidiaries. For the purposes of this Agreement, the term "tax" shall include all federal, state, local and foreign income, property, sales, excise and other taxes of any nature whatsoever. Neither the Company nor any member of any affiliated or combined group of which the Company is or has been a member has granted any extension or waiver of the limitation period applicable to any tax returns. There are no Liens for taxes upon the assets of the Company, except Liens for current taxes not yet due. The Company will not be required under Section 481(c) of the Internal Revenue Code of 1986, as amended (the "Code"), to include any adjustment in taxable income for any period subsequent to the Merger. The Company has delivered to the Parent copies of its federal, state and local income and franchise tax returns for the years ended December 31, 1991, 1992 and 1993. The Company has not been a United States real property holding corporation within the meaning of Code Sec. 897(c)(2) during the applicable period specified in Code Sec. 897(c)(1)(A)(ii). Each of the Company and its subsidiaries has disclosed on its federal income tax returns all positions taken therein that could give rise to a substantial understatement of federal income tax within the meaning of Code Sec. 6662. None of the Company or its subsidiaries is a party to any tax allocation or sharing agreement. None of the Company or its subsidiaries (A) has been a member of an affiliated group filing a consolidated federal income tax return (other than a group the common parent of which was the Company or a subsidiary of the Company) or (B) has any liability for the taxes of any person (other than any of the Company and its subsidiaries) under Treas. Reg. (S) 1.1502-6 (or any similar provision of state, local, or foreign law), as a transferee or successor, by contract, or otherwise. SECTION 13. ERISA. (a) The Writing identifies each "employee benefit plan," as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), which (i) is subject to any provision of ERISA, (ii) is maintained, administered or contributed to by the Company or any affiliate (as defined below) and (iii) covers any employee or former employee of the Company or any affiliate or under which the Company or any affiliate has any liability. Copies of such plans (and, if applicable, related trust agreements) and all amendments thereto and any written interpretations thereof have been furnished to the Parent together, if applicable, with (x) the three most recent annual reports (Form 5500 including, if applicable, Schedule B thereto) prepared in connection with any such plan and (y) the most recent actuarial valuation report prepared in connection with any such plan. Such plans are referred to collectively herein as the "Employee Plans." For purposes of this Section, "affiliate" of any Person means any other Person which, together with such Person, would be treated as a B-6 single employer under Section 414 of the Code. For purposes of this Annex B, "Person" means any individual, corporation, partnership, association, trust, or other entity or organization, including a governmental or political subdivision or an agency or institution thereof. (b) There are no Employee Plans subject to Title IV of ERISA, other than multiemployer plans as defined in Section 4001(a)(3) of ERISA ("Multiemployer Plans"). The Company has provided the Parent with a list of all Multiemployer Plans to which the Company or any active subsidiary presently has any obligation to contribute. Neither the Company nor any affiliate has any outstanding liability to any Multiemployer Plan for delinquent contributions, or for withdrawal liability pursuant to Section 4201 of ERISA. (c) There are no Employee Plans which are intended to be qualified under Section 401(a) of the Code. Each Employee Plan has been maintained in all material respects in compliance with its terms and with the requirements prescribed by any and all statutes, orders, rules and regulations, which are applicable to such Plan. (d) There is no contract, agreement, plan or arrangement covering any employee or former employee of the Company or any affiliate that, individually or collectively, could give rise to the payment of any amounts that would not be deductible pursuant to the provisions of Section 280G of the Code. (e) The Writing contains a list of each employment, severance or other similar contract, arrangement or policy and each plan or arrangement (written or oral) providing for insurance coverage (including any self-insured arrangements), workers' compensation, disability benefits, supplemental unemployment benefits, vacation benefits, retirement benefits or for deferred compensation, profit-sharing, bonuses, stock options, stock appreciation rights or other forms of incentive compensation or post-retirement insurance, compensation or benefits which (i) is not an Employee Plan, (ii) is entered into, maintained or contributed to, as the case may be, by the Company or any of its affiliates and (iii) covers any employee or former employee of the Company or any of its affiliates. Such contracts, plans and arrangements as are described above, copies or descriptions of all of which have been furnished previously to the Parent, are referred to collectively herein as the "Benefit Arrangements." Each Benefit Arrangement has been maintained in substantial compliance with its terms and with the requirements prescribed by any and all statutes, orders, rules and regulations that are applicable to such Benefit Arrangement. (f) Neither the Company nor any affiliate has or maintains or has maintained any Employee Plan or Benefit Arrangement providing post-retirement health or medical benefits in respect of any active or former employee of the Company or any affiliate or former affiliate. (g) There has been no amendment to, written interpretation or announcement (whether or not written) by the Company or any of its affiliates relating to, or change in employee participation or coverage under, any Employee Plan or Benefit Arrangement which would increase materially the expense of maintaining such Employee Plan or Benefit Arrangement above the level of the expense incurred in respect thereof for the fiscal year ended on the Balance Sheet Date. B-7 (h) The Company is not a party to or subject to any union contract or any express employment contract or arrangement providing for annual future compensation of, or benefits or other similar payments to, any officer, consultant, director or employee in excess of $50,000. SECTION 14. Material Contracts. (a) Except for agreements, contracts, plans, leases, arrangements or commitments disclosed in the Company's SEC filings referred to in Section 5 or as previously disclosed in the Writing, the Company is not a party to or subject to: (i) any lease relating to real property or any other lease providing for annual rentals in excess of $100,000; (ii) any agreement for the purchase of materials, supplies, goods, services, equipment or other assets providing for annual payments by the Company in excess of $100,000, other than in the ordinary course of business consistent with past practice; (iii) any sales, distribution or other similar agreement providing for the sale by the Company of materials, supplies, goods, services, equipment or other assets that provides for annual payments to the Company in excess of $100,000, other than in the ordinary course of business consistent with past practice; (iv) any partnership, joint venture, or other similar contract, arrangement or agreement; (v) any contract relating to indebtedness for borrowed money or the deferred purchase price of property (whether incurred, assumed, guaranteed or secured by any asset) in excess of $100,000, except in the ordinary course of business consistent with past practice; (vi) any license agreements, franchise agreements or agreements in respect of similar rights granted to or held by the Company; (vii) any agency, dealer, sales representative or other similar agreement; (viii) any contract or other document that substantially limits the freedom of the Company to compete in any line of business or with any Person or in any area or which would so limit the freedom of the Company after the Effective Time (as that term is defined in the Agreement); or (ix) any other contract or commitment not made in the ordinary course of business which is material to the Company. (b) All agreements, contracts, plans, leases, arrangements and commitments disclosed in the Company's SEC filings referred to in Section 5 or disclosed or required to be disclosed pursuant to this Annex (the "Material Contracts") are valid and binding agreements of the Company, are in full force and effect, and neither the Company nor, to the knowledge of the B-8 Company, any other party thereto is in default in any respect under the terms of any such agreement, contract, plan, lease, arrangement or commitment, except, in all cases, such as could not reasonably be expected to have a Material Adverse Effect. SECTION 15. Insurance Coverage. The Company has made available to the Parent true and complete copies of, all insurance policies and fidelity bonds covering the assets, business, equipment, properties, operations, employees, officers and directors of the Company. There is no claim by the Company pending under any of such policies or bonds as to which coverage has been questioned, denied or disputed by the underwriters of such policies or bonds. All premiums due and payable under all such policies and bonds have been paid and the Company is otherwise in full compliance with the terms and conditions of all such policies and bonds. Such policies of insurance and bonds (or other policies and bonds providing substantially similar insurance coverage) are in full force and effect. Except as previously disclosed by the Company to the Parent in writing, the Company does not know of any threatened termination of, or premium increase with respect to, any of such policies or bonds. SECTION 16. Compliance with Laws. The Company is not in violation of, and has not materially violated, any applicable provisions of any laws, statutes, ordinances or regulations material to the conduct of the business of the Company as currently conducted, except in all cases, such as could not reasonably be expected to have a Material Adverse Effect. SECTION 17. Investment Banking Fees. There is no investment banker, broker, finder or other similar intermediary which has been retained by, or is authorized by, the Company to act on behalf of the Company who might be entitled to any fee or commission from the Company, the Parent and the Sub or any of their respective affiliates upon consummation of the transactions contemplated by this Agreement, except Allen & Company Incorporated and Guilford Securities, Inc. Copies of the Company's agreements with these firms have been furnished to Parent. SECTION 18. Intellectual Property. (a) The Company has listed in the Writing all inventions which are the subject of issued letters patent or an application therefor, all trade and service marks which have been registered or for which an application for registration is pending and all writings for which a claim for copyright has been recorded or is pending, in each case which are owned by and used or held for use by the Company (collectively, the "Intellectual Property Rights"), specifying as to each, as applicable: (i) the nature of such Intellectual Property Right; (ii) the owner of such Intellectual Property Right; (iii) the jurisdictions by or in which such Intellectual Property Right has been issued or registered or in which an application for such issuance or registration has been filed, including the respective registration or application numbers; and (iv) material licenses, sublicenses and other agreements as to which the Company or any of its affiliates is a party and pursuant to which any Person is authorized to use such Intellectual Property Right including the identity of all parties thereto, a description of the nature and subject matter thereof, the applicable royalty and the term thereof. B-9 (b) The Company holds all licenses for Intellectual Property Rights owned by another Person materially necessary to the conduct of its business as currently conducted, except such as could not reasonably be expected to have a Material Adverse Effect. (c) The Company (i) during the three years preceding the date of this Agreement has not been sued or charged in writing with or been a defendant in any claim, suit, action or proceeding relating to its business which has not been finally terminated prior to the date hereof and which involves a claim of infringement of any patents, trademarks, service marks or copyrights, (ii) has no knowledge of any other claim or infringement by the Company or (iii) has no knowledge of any continuing infringement by any other Person of any Intellectual Property Rights. No Intellectual Property Right is subject to any outstanding order, judgment, decree, stipulation or agreement restricting the use thereof by the Company or restricting the licensing thereof by the Company to any Person. The Company has not entered into any agreement to indemnify any other Person against any charge of infringement of any patent, trademark, service mark or copyright. SECTION 19. Environmental Compliance. Except in all cases as in the aggregate have not had and could not reasonably be expected to have a Material Adverse Effect, the Company and each of its subsidiaries (i) have obtained all permits, licenses and other authorizations which are required under Federal, state or local laws relating to pollution or protection of the environment, including laws relating to emissions, discharges, releases or threatened releases of pollutants, contaminants, or hazardous or toxic materials or wastes into ambient air, surface water, ground water, or land or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of pollutants, contaminants or hazardous or toxic materials or wastes; (ii) are in compliance with all terms and conditions of such required permits, licenses and authorizations, and also are in compliance with other limitations, restrictions, conditions, standards, prohibitions, requirements, obligations, schedules and timetables contained in such laws or contained in any regulation, code, order, decree or judgment, issued, entered or promulgated thereunder; (iii) as of the date of the Agreement, are not aware of nor have received notice of any event, condition, circumstance, activity, practice, incident, action or plan which is reasonably likely to interfere with or prevent continued compliance or which would give rise to any common law or statutory liability, or otherwise form the basis of any claim, action, suit or proceeding, based on or resulting from the Company's or any of its subsidiary's manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling, or the emission, discharge, or release into the environment, of any pollutant, contaminant, or hazardous or toxic material or waste; and (iv) have taken all actions necessary under applicable requirements of Federal, state or local laws, rules or regulations to register any products or materials required to be registered thereunder. SECTION 20. Information Supplied. None of the information supplied or to be supplied by the Company for inclusion in (i) the Schedule 14D-9 and (ii), insofar as it relates to the Company, the Offer, will contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. B-10 SECTION 21. Delaware Corporation Law, etc. The board of directors of the Company has unanimously approved the Offer, the Merger, the agreements of any stockholders to tender Shares (the "Stock Tender Agreements") and the consummation of the transactions contemplated hereby and thereby and such approval is sufficient to render inapplicable the prohibitions of Section 203 of the General Corporation Law of the State of Delaware with respect to the Offer and the Merger. To the best of the Company's knowledge, no other state takeover statute applies to the Offer, the Merger or the Stock Tender Agreements (and the Company covenants to use all reasonable efforts to take all action necessary to ensure that the same are inapplicable to the Offer, the Merger and the Stock Tender Agreements and the transactions contemplated thereby). SECTION 22. Real Estate. Except as disclosed in the Writing, (a) The real estate owned ("Real Estate") or leased (the "Leasehold Premises") by the Company is as described in the Company's Annual Report on Form 10-K for the year ended December 31, 1993. (b) The buildings located on the Real Estate and the Leasehold Premises are each in good operating condition, normal wear, tear and maintenance down-time excepted, and are in the aggregate sufficient to satisfy the Company's current operating levels. (c) Each parcel of the Real Estate and the Leasehold Premises: (i) has direct access to public roads or access to public roads by means of a perpetual access easement, such access being sufficient to satisfy the current and reasonably anticipated normal transportation requirements of the Company's business as presently conducted at such parcel; and (ii) is served by all utilities, including but not limited to water, electricity, natural gas, sewer and telephone, in such quantity and quality as are sufficient to satisfy the current normal production levels and business activities of the Company's business as conducted at such parcel. (d) The Company has received no notice of: (i) any condemnation proceeding with respect to any portion of the Real Estate or the Leasehold Premises, and to the best of its knowledge no proceeding is contemplated by any governmental authority; or (ii) any special assessment which may affect the Real Estate or the Leasehold Premises, and to the best of its knowledge no such special assessment is contemplated by any governmental authority. B-11 EX-99.2 3 AGREE & ALLEN & CO. Exhibit 2 STOCK TENDER AGREEMENT STOCK TENDER AGREEMENT, dated as of March 17, 1995 (the "Agreement"), among Allen & Company Incorporated, a New York corporation (the "Stockholder"), Waste Management, Inc., an Illinois corporation ("Parent") and WMI Acquisition Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent ("Buyer"). WHEREAS, Buyer, and Resource Recycling Technologies, Inc., a Delaware corporation (the "Company") propose to enter into an Agreement and Plan of Merger dated the date hereof (the "Acquisition Agreement") which provides, among other things, that Buyer shall commence an all cash tender offer to purchase any and all shares of common stock of the Company at a purchase price of $11.50 per share (the "Offer", which term shall include any amendment thereof not in violation of the Acquisition Agreement), to purchase any and all of the issued and outstanding shares of Company's Common Stock, par value $1.00 per share ("Common Stock"), and shall merge Buyer with and into the Company (the "Merger"), in each case upon the terms and subject to the conditions set forth in the Acquisition Agreement (any term used herein without definition shall have the definition ascribed thereto in the Acquisition Agreement); WHEREAS, as of the date hereof, the Stockholder beneficially owns 664,806 shares of Common Stock (the "Stockholder's Shares"); WHEREAS, as a condition to the willingness of the Company and Buyer to enter into the Acquisition Agreement, and as an inducement to them to do so, the Stockholder has agreed for the benefit of the Company and Buyer to tender the Stockholder's Shares, and any other shares of Common Stock at any time during the term of this Agreement held by Stockholder, in response to the Offer on the terms and conditions contained in this Agreement; and WHEREAS, the Board of Directors of the Company has approved the Acquisition Agreement, the Offer, the Merger and this Agreement. NOW THEREFORE, in consideration of the representations, warranties, covenants and agreements contained in this Agreement the parties hereby agree as follows: ARTICLE 1 TENDER OFFER SECTION 1.1. Tender of Shares. (a) Within five (5) business days of the commencement by the Buyer of the Offer the Stockholder shall tender to the depositary (the "Depositary") designated in the Offer to Purchase (the "Offer to Purchase") distributed by the Buyer in connection with the Offer (i) a letter of transmittal with respect to the Stockholder's Shares and any other shares of Common Stock held by the Stockholder (such shares being referred to herein as the "Shares"), complying with the terms of the Offer to Purchase, together with instructions directing the Depositary to make payment for such Shares directly to the Stockholder (but if such Shares are not accepted for payment and are to be returned pursuant to the Offer to Purchase, to return such Shares to Stockholder), (ii) the certificates representing the Shares and/or (iii) all other documents or instruments required to be delivered pursuant to the terms of the Offer to Purchase (such documents in clauses (i) through (iii) collectively being hereinafter referred to as the "Tender Documents"). (b) The Stockholder will not, subject to applicable law, withdraw the tender effected in accordance with Section 1.1.(a); provided, however, that the Stockholder may decline to tender, or may withdraw, any and all Shares if (A) the amount or form of consideration to be paid for such Shares is less than cash in the amount of $11.50 per Share, net to the Stockholder in cash, (B) the Acquisition Agreement is terminated, or (C) the Board of Directors of the Company has withdrawn its recommendation of the Offer pursuant to Section 6.1(c)(ii) of the Acquisition Agreement, provided that if such withdrawal of a recommendation occurs and the Board of Directors subsequently recommends an offer by Buyer or an affiliate of Buyer for a consideration per Share greater than $11.50 per Share, the Stockholder agrees to re-tender any Shares it has withdrawn, whereupon all the terms of this Agreement shall be revived and applicable to such Shares. SECTION 1.2. Additional Shares. Any Shares of Common Stock acquired by the Stockholder after the date hereof and prior to the termination of this Agreement, whether upon the exercise of options or by means of purchase, distribution, dividend or otherwise, shall be immediately tendered by the Stockholder and shall constitute "Shares" subject to the terms of this Agreement. SECTION 1.3. No Purchase. Buyer may allow the Offer to expire without accepting for payment or paying for any Shares, as set forth in the Offer to Purchase, without purchasing all or any Shares pursuant thereto. If any Shares are not accepted for payment in accordance with the terms of the Offer to Purchase, they shall be returned to Stockholder, whereupon they shall continue to be held by Stockholder subject to the terms and conditions of this Agreement. SECTION 1.4. Restrictions. Except as contemplated by Section 1.1 hereof and so long as the Board of Directors of the Company has not withdrawn its recommendation of the Offer pursuant to Section 6.1(c)(ii) of the Acquisition Agreement, Stockholder shall not, directly or indirectly: (i) offer for sale, sell, transfer, tender, pledge, encumber, assign or otherwise dispose of, or enter into any contract, option or other arrangement or understanding with respect to or consent to the offer for sale, sale, transfer, tender, pledge, encumbrance, assignment or other disposition of, any or all of Stockholder's Shares or any interest therein; (ii) grant any proxies or powers of attorney, deposit any Shares into a voting trust or enter into a voting agreement with respect to any Shares; or (iii) other than as may be permitted to the Company by Section 4.6 of the Acquisition Agreement, solicit, initiate or knowingly promote any party other than Buyer or an affiliate of Buyer to acquire or offer to acquire the Company, any of its Common Stock or a material portion of the assets or business of the Company or any of its subsidiaries. 2 ARTICLE 2 REPRESENTATIONS, WARRANTIES AND COVENANTS OF STOCKHOLDER Stockholder represents, warrants and covenants to the Buyer that: SECTION 2.1. Ownership. The Stockholder is the sole, true, lawful and beneficial owner of the Stockholder's Shares with no restriction on voting rights or rights of disposition pertaining to the Shares, and does not currently beneficially own any other Shares. Stockholder will convey good and valid title to the Shares being purchased pursuant to the Offer or the Merger, as the case may be, free and clear of any and all claims, liens, charges, encumbrances and security interests. Except as contemplated hereby, none of the Shares is subject to any voting trust or other agreement or arrangement with respect to the voting of such Shares. SECTION 2.2. Non-Contravention. The execution, delivery and performance by Stockholder of this Agreement and the consummation of the transactions contemplated hereby (i) is within Stockholder's powers, have been duly authorized by all necessary action (including any consultation, approval or other action by or with any other person), (ii) require no action in respect of, or filing with, any governmental body, agency, official or authority (except as may be required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 or the Securities Exchange Act of 1934), and (iii) do not and will not contravene or constitute a default under, or give rise to a right of termination, cancellation or acceleration of any right or obligation of the Stockholder or to a loss of any benefit of Stockholder under any provision of applicable law or regulation or of any agreement, judgment, injunction, order, decree, or other instrument binding on Stockholder or result in the imposition of any lien on any asset of Stockholder. SECTION 2.3. Binding Effect. This Agreement has been duly executed and delivered by Stockholder and is the valid and binding agreement of Stockholder, enforceable against Stockholder in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, moratorium or other similar laws relating to creditors' rights generally. ARTICLE 3 REPRESENTATIONS, WARRANTIES AND COVENANTS OF BUYER Buyer represents, warrants and covenants to Stockholder that: SECTION 3.1. Corporate Power and Authority. Buyer has all requisite corporate power and authority to enter into this Agreement and to perform its obligations hereunder. The execution, delivery and performance by Buyer of this Agreement and the consummation by Buyer of the transactions contemplated hereby have been duly authorized by the Board of Directors of Buyer and no other corporate action on the part of Buyer is necessary to authorize the execution, delivery and performance by Buyer of this Agreement and the consummation by Buyer of the transactions contemplated hereby. 3 SECTION 3.2. Binding Effect. This Agreement has been duly executed and delivered by Buyer and is a valid and binding agreement of Buyer, enforceable against Buyer in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, moratorium or other similar laws relating to creditors' rights generally. SECTION 3.3. Acquisition for Buyer's Account. Any Shares to be acquired upon consummation of the Offer will be acquired by Buyer for its own account and not with a view to the public distribution thereof and will not be transferred except in compliance with the Securities Act of 1933. ARTICLE 4 MISCELLANEOUS SECTION 4.1. Expenses. Each party will pay its own costs and expenses incurred in connection with this Agreement. SECTION 4.2. Additional Agreements. Subject to the terms and conditions of this Agreement, each of the parties hereto agrees to use all reasonable efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations and which may be required under any agreements, contracts, commitments, instruments, understandings, arrangements or restrictions of any kind to which such party is a party or by which such party is governed or bound, to consummate and make effective the transactions contemplated by this Agreement. SECTION 4.3. Notice. All notices, requests, claims, demands and other communications hereunder shall be deemed to have been duly given when delivered in person, by telecopy, or by registered or certified mail (postage prepaid, return receipt requested) to such party at its address set forth on the signature page hereto. SECTION 4.4. Amendments; Termination. This Agreement may not be modified, amended, altered or supplemented, except upon the execution and delivery of a written agreement executed by the parties thereto. This Agreement will terminate upon the termination of the Acquisition Agreement in accordance with its terms. SECTION 4.5. Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, provided, however, that Buyer may assign its rights and obligations to another wholly owned subsidiary of Buyer who is the assignee of Buyer's rights under the Acquisition Agreement, and provided, further, that except as set forth in the prior clause, a party may not assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of the other parties hereto. SECTION 4.6. Governing Law. This Agreement shall be construed in accordance with and governed by the law of Delaware without giving effect to the principles of conflicts of laws thereof. 4 SECTION 4.7. Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. WASTE MANAGEMENT, INC. /s/ JOSEPH M. HOLSTEN By:____________________________________ Name: Joseph M. Holsten Title: Executive Vice President 3003 Butterfield Road Oak Brook, Illinois 60521 Attention: General Counsel WMI ACQUISITION SUB, INC. /s/ JOSEPH M. HOLSTEN By:____________________________________ Name: Joseph M. Holsten Title: Vice President c/o Waste Management, Inc. 3003 Butterfield Road Oak Brook, Illinois 60521 Attention: General Counsel ALLEN & COMPANY INCORPORATED /s/ STEVEN J. GREENFIELD By:____________________________________ Name: Steven J. Greenfield Title: Vice President 711 Fifth Avenue New York, New York 10022 5 EX-99.3 4 AGREE PAUL GOULD Exhibit 3 STOCK TENDER AGREEMENT STOCK TENDER AGREEMENT, dated as of March 17, 1995 (the "Agreement"), among Paul A. Gould (the "Stockholder"), Waste Management, Inc., an Illinois corporation ("Parent") and WMI Acquisition Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent ("Buyer"). WHEREAS, Buyer, and Resource Recycling Technologies, Inc., a Delaware corporation (the "Company") propose to enter into an Agreement and Plan of Merger dated the date hereof (the "Acquisition Agreement") which provides, among other things, that Buyer shall commence an all cash tender offer to purchase any and all shares of common stock of the Company at a purchase price of $11.50 per share (the "Offer", which term shall include any amendment thereof not in violation of the Acquisition Agreement), to purchase any and all of the issued and outstanding shares of Company's Common Stock, par value $1.00 per share ("Common Stock"), and shall merge Buyer with and into the Company (the "Merger"), in each case upon the terms and subject to the conditions set forth in the Acquisition Agreement (any term used herein without definition shall have the definition ascribed thereto in the Acquisition Agreement); WHEREAS, as of the date hereof, the Stockholder beneficially owns 150,000 shares of Common Stock (the "Stockholder's Shares"); WHEREAS, as a condition to the willingness of the Company and Buyer to enter into the Acquisition Agreement, and as an inducement to them to do so, the Stockholder has agreed for the benefit of the Company and Buyer to tender the Stockholder's Shares, and any other shares of Common Stock at any time during the term of this Agreement held by Stockholder, in response to the Offer on the terms and conditions contained in this Agreement; and WHEREAS, the Board of Directors of the Company has approved the Acquisition Agreement, the Offer, the Merger and this Agreement. NOW THEREFORE, in consideration of the representations, warranties, covenants and agreements contained in this Agreement the parties hereby agree as follows: ARTICLE 1 TENDER OFFER SECTION 1.1. Tender of Shares. (a) Within five (5) business days of the commencement by the Buyer of the Offer the Stockholder shall tender to the depositary (the "Depositary") designated in the Offer to Purchase (the "Offer to Purchase") distributed by the Buyer in connection with the Offer (i) a letter of transmittal with respect to the Stockholder's Shares and any other shares of Common Stock held by the Stockholder (such shares being referred to herein as the "Shares"), complying with the terms of the Offer to Purchase, together with instructions directing the Depositary to make payment for such Shares directly to the Stockholder (but if such Shares are not accepted for payment and are to be returned pursuant to the Offer to Purchase, to return such Shares to Stockholder), (ii) the certificates representing the Shares and/or (iii) all other documents or instruments required to be delivered pursuant to the terms of the Offer to Purchase (such documents in clauses (i) through (iii) collectively being hereinafter referred to as the "Tender Documents"). (b) The Stockholder will not, subject to applicable law, withdraw the tender effected in accordance with Section 1.1.(a); provided, however, that the Stockholder may decline to tender, or may withdraw, any and all Shares if (A) the amount or form of consideration to be paid for such Shares is less than cash in the amount of $11.50 per Share, net to the Stockholder in cash, (B) the Acquisition Agreement is terminated, or (C) the Board of Directors of the Company has withdrawn its recommendation of the Offer pursuant to Section 6.1(c)(ii) of the Acquisition Agreement, provided that if such withdrawal of a recommendation occurs and the Board of Directors subsequently recommends an offer by Buyer or an affiliate of Buyer for a consideration per Share greater than $11.50 per Share, the Stockholder agrees to re-tender any Shares it has withdrawn, whereupon all the terms of this Agreement shall be revived and applicable to such Shares. SECTION 1.2. Additional Shares. Any Shares of Common Stock acquired by the Stockholder after the date hereof and prior to the termination of this Agreement, whether upon the exercise of options or by means of purchase, distribution, dividend or otherwise, shall be immediately tendered by the Stockholder and shall constitute "Shares" subject to the terms of this Agreement. SECTION 1.3. No Purchase. Buyer may allow the Offer to expire without accepting for payment or paying for any Shares, as set forth in the Offer to Purchase, without purchasing all or any Shares pursuant thereto. If any Shares are not accepted for payment in accordance with the terms of the Offer to Purchase, they shall be returned to Stockholder, whereupon they shall continue to be held by Stockholder subject to the terms and conditions of this Agreement. SECTION 1.4. Restrictions. Except as contemplated by Section 1.1 hereof and so long as the Board of Directors of the Company has not withdrawn its recommendation of the Offer pursuant to Section 6.1(c)(ii) of the Acquisition Agreement, Stockholder shall not, directly or indirectly: (i) offer for sale, sell, transfer, tender, pledge, encumber, assign or otherwise dispose of, or enter into any contract, option or other arrangement or understanding with respect to or consent to the offer for sale, sale, transfer, tender, pledge, encumbrance, assignment or other disposition of, any or all of Stockholder's Shares or any interest therein; (ii) grant any proxies or powers of attorney, deposit any Shares into a voting trust or enter into a voting agreement with respect to any Shares; or (iii) other than as may be permitted to the Company by Section 4.6 of the Acquisition Agreement, solicit, initiate or knowingly promote any party other than Buyer or an affiliate of Buyer to acquire or offer to acquire the Company, any of its Common Stock or a material portion of the assets or business of the Company or any of its subsidiaries. 2 ARTICLE 2 REPRESENTATIONS, WARRANTIES AND COVENANTS OF STOCKHOLDER Stockholder represents, warrants and covenants to the Buyer that: SECTION 2.1. Ownership. The Stockholder is the sole, true, lawful and beneficial owner of the Stockholder's Shares with no restriction on voting rights or rights of disposition pertaining to the Shares, and does not currently beneficially own any other Shares. Stockholder will convey good and valid title to the Shares being purchased pursuant to the Offer or the Merger, as the case may be, free and clear of any and all claims, liens, charges, encumbrances and security interests. Except as contemplated hereby, none of the Shares is subject to any voting trust or other agreement or arrangement with respect to the voting of such Shares. SECTION 2.2. Non-Contravention. The execution, delivery and performance by Stockholder of this Agreement and the consummation of the transactions contemplated hereby (i) is within Stockholder's powers, have been duly authorized by all necessary action (including any consultation, approval or other action by or with any other person), (ii) require no action in respect of, or filing with, any governmental body, agency, official or authority (except as may be required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 or the Securities Exchange Act of 1934), and (iii) do not and will not contravene or constitute a default under, or give rise to a right of termination, cancellation or acceleration of any right or obligation of the Stockholder or to a loss of any benefit of Stockholder under any provision of applicable law or regulation or of any agreement, judgment, injunction, order, decree, or other instrument binding on Stockholder or result in the imposition of any lien on any asset of Stockholder. SECTION 2.3. Binding Effect. This Agreement has been duly executed and delivered by Stockholder and is the valid and binding agreement of Stockholder, enforceable against Stockholder in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, moratorium or other similar laws relating to creditors' rights generally. ARTICLE 3 REPRESENTATIONS, WARRANTIES AND COVENANTS OF BUYER Buyer represents, warrants and covenants to Stockholder that: SECTION 3.1. Corporate Power and Authority. Buyer has all requisite corporate power and authority to enter into this Agreement and to perform its obligations hereunder. The execution, delivery and performance by Buyer of this Agreement and the consummation by Buyer of the transactions contemplated hereby have been duly authorized by the Board of Directors of Buyer and no other corporate action on the part of Buyer is necessary to authorize the execution, delivery and performance by Buyer of this Agreement and the consummation by Buyer of the transactions contemplated hereby. 3 SECTION 3.2. Binding Effect. This Agreement has been duly executed and delivered by Buyer and is a valid and binding agreement of Buyer, enforceable against Buyer in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, moratorium or other similar laws relating to creditors' rights generally. SECTION 3.3. Acquisition for Buyer's Account. Any Shares to be acquired upon consummation of the Offer will be acquired by Buyer for its own account and not with a view to the public distribution thereof and will not be transferred except in compliance with the Securities Act of 1933. ARTICLE 4 MISCELLANEOUS SECTION 4.1. Expenses. Each party will pay its own costs and expenses incurred in connection with this Agreement. SECTION 4.2. Additional Agreements. Subject to the terms and conditions of this Agreement, each of the parties hereto agrees to use all reasonable efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations and which may be required under any agreements, contracts, commitments, instruments, understandings, arrangements or restrictions of any kind to which such party is a party or by which such party is governed or bound, to consummate and make effective the transactions contemplated by this Agreement. SECTION 4.3. Notice. All notices, requests, claims, demands and other communications hereunder shall be deemed to have been duly given when delivered in person, by telecopy, or by registered or certified mail (postage prepaid, return receipt requested) to such party at its address set forth on the signature page hereto. SECTION 4.4. Amendments; Termination. This Agreement may not be modified, amended, altered or supplemented, except upon the execution and delivery of a written agreement executed by the parties thereto. This Agreement will terminate upon the termination of the Acquisition Agreement in accordance with its terms. SECTION 4.5. Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, provided, however, that Buyer may assign its rights and obligations to another wholly owned subsidiary of Buyer who is the assignee of Buyer's rights under the Acquisition Agreement, and provided, further, that except as set forth in the prior clause, a party may not assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of the other parties hereto. SECTION 4.6. Governing Law. This Agreement shall be construed in accordance with and governed by the law of Delaware without giving effect to the principles of conflicts of laws thereof. 4 SECTION 4.7. Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. WASTE MANAGEMENT, INC. /s/ JOSEPH M. HOLSTEN By:____________________________________ Name: Joseph M. Holsten Title: Executive Vice President 3003 Butterfield Road Oak Brook, Illinois 60521 Attention: General Counsel WMI ACQUISITION SUB, INC. /s/ JOSEPH M. HOLSTEN By:____________________________________ Name: Joseph M. Holsten Title: Vice President 3003 Butterfield Road Oak Brook, Illinois 60521 Attention: General Counsel STOCKHOLDER /s/ PAUL A. GOULD By:____________________________________ Name: Paul A. Gould Allen & Company Incorporated 711 Fifth Avenue New York, New York 10022 5 EX-99.4 5 AGREE ANDREW DWYER Exhibit 4 STOCK TENDER AGREEMENT STOCK TENDER AGREEMENT, dated as of March 17, 1995 (the "Agreement"), among Andrew T. Dwyer (the "Stockholder"), Waste Management, Inc., an Illinois corporation ("Parent") and WMI Acquisition Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent ("Buyer"). WHEREAS, Buyer, and Resource Recycling Technologies, Inc., a Delaware corporation (the "Company") propose to enter into an Agreement and Plan of Merger dated the date hereof (the "Acquisition Agreement") which provides, among other things, that Buyer shall commence an all cash tender offer to purchase any and all shares of common stock of the Company at a purchase price of $11.50 per share (the "Offer", which term shall include any amendment thereof not in violation of the Acquisition Agreement), to purchase any and all of the issued and outstanding shares of Company's Common Stock, par value $1.00 per share ("Common Stock"), and shall merge Buyer with and into the Company (the "Merger"), in each case upon the terms and subject to the conditions set forth in the Acquisition Agreement (any term used herein without definition shall have the definition ascribed thereto in the Acquisition Agreement); WHEREAS, as of the date hereof, the Stockholder beneficially owns 267,700/1/ shares of Common Stock (the "Stockholder's Shares"); WHEREAS, as a condition to the willingness of the Company and Buyer to enter into the Acquisition Agreement, and as an inducement to them to do so, the Stockholder has agreed for the benefit of the Company and Buyer to tender the Stockholder's Shares, and any other shares of Common Stock at any time during the term of this Agreement held by Stockholder, in response to the Offer on the terms and conditions contained in this Agreement; and WHEREAS, the Board of Directors of the Company has approved the Acquisition Agreement, the Offer, the Merger and this Agreement. NOW THEREFORE, in consideration of the representations, warranties, covenants and agreements contained in this Agreement the parties hereby agree as follows: - ------------------- /1/ Consists of 116,800 Shares owned directly, 13,600 Shares owned by Stockholder's wife, 18,000 Shares owned by each of his three minor children, 3,300 Shares owned by a family trust of which he is a trustee and beneficiary and 80,000 Shares subject to stock options (40,000 of which are currently exercisable and 40,000 of which will be exercisable on consummation of the Offer). Stockholder need only initially tender the non-option Shares. ARTICLE 1 TENDER OFFER SECTION 1.1. Tender of Shares. (a) Within five (5) business days of the commencement by the Buyer of the Offer the Stockholder shall tender to the depositary (the "Depositary") designated in the Offer to Purchase (the "Offer to Purchase") distributed by the Buyer in connection with the Offer (i) a letter of transmittal with respect to the Stockholder's Shares and any other shares of Common Stock held by the Stockholder (such shares being referred to herein as the "Shares"), complying with the terms of the Offer to Purchase, together with instructions directing the Depositary to make payment for such Shares directly to the Stockholder (but if such Shares are not accepted for payment and are to be returned pursuant to the Offer to Purchase, to return such Shares to Stockholder), (ii) the certificates representing the Shares and/or (iii) all other documents or instruments required to be delivered pursuant to the terms of the Offer to Purchase (such documents in clauses (i) through (iii) collectively being hereinafter referred to as the "Tender Documents"). (b) The Stockholder will not, subject to applicable law, withdraw the tender effected in accordance with Section 1.1.(a); provided, however, that the Stockholder may decline to tender, or may withdraw, any and all Shares if (A) the amount or form of consideration to be paid for such Shares is less than cash in the amount of $11.50 per Share, net to the Stockholder in cash, (B) the Acquisition Agreement is terminated, or (C) the Board of Directors of the Company has withdrawn its recommendation of the Offer pursuant to Section 6.1(c)(ii) of the Acquisition Agreement, provided that if such withdrawal of a recommendation occurs and the Board of Directors subsequently recommends an offer by Buyer or an affiliate of Buyer for a consideration per Share greater than $11.50 per Share, the Stockholder agrees to re-tender any Shares it has withdrawn, whereupon all the terms of this Agreement shall be revived and applicable to such Shares. SECTION 1.2. Additional Shares. Any Shares of Common Stock acquired by the Stockholder after the date hereof and prior to the termination of this Agreement, whether upon the exercise of options or by means of purchase, distribution, dividend or otherwise, shall be immediately tendered by the Stockholder and shall constitute "Shares" subject to the terms of this Agreement. SECTION 1.3. No Purchase. Buyer may allow the Offer to expire without accepting for payment or paying for any Shares, as set forth in the Offer to Purchase, without purchasing all or any Shares pursuant thereto. If any Shares are not accepted for payment in accordance with the terms of the Offer to Purchase, they shall be returned to Stockholder, whereupon they shall continue to be held by Stockholder subject to the terms and conditions of this Agreement. SECTION 1.4. Restrictions. Except as contemplated by Section 1.1 hereof and so long as the Board of Directors of the Company has not withdrawn its recommendation of the Offer pursuant to Section 6.1(c)(ii) of the Acquisition Agreement, Stockholder shall not, directly or indirectly: (i) offer for sale, sell, transfer, tender, pledge, encumber, assign or otherwise dispose of, or enter into any contract, option or other arrangement or understanding with respect to or 2 consent to the offer for sale, sale, transfer, tender, pledge, encumbrance, assignment or other disposition of, any or all of Stockholder's Shares or any interest therein; (ii) grant any proxies or powers of attorney, deposit any Shares into a voting trust or enter into a voting agreement with respect to any Shares; or (iii) other than as may be permitted to the Company by Section 4.6 of the Acquisition Agreement, solicit, initiate or knowingly promote any party other than Buyer or an affiliate of Buyer to acquire or offer to acquire the Company, any of its Common Stock or a material portion of the assets or business of the Company or any of its subsidiaries. ARTICLE 2 REPRESENTATIONS, WARRANTIES AND COVENANTS OF STOCKHOLDER Stockholder represents, warrants and covenants to the Buyer that: SECTION 2.1. Ownership. The Stockholder is the sole, true, lawful and beneficial owner of the Stockholder's Shares with no restriction on voting rights or rights of disposition pertaining to the Shares, and does not currently beneficially own any other Shares. Stockholder will convey good and valid title to the Shares being purchased pursuant to the Offer or the Merger, as the case may be, free and clear of any and all claims, liens, charges, encumbrances and security interests. Except as contemplated hereby, none of the Shares is subject to any voting trust or other agreement or arrangement with respect to the voting of such Shares. SECTION 2.2. Non-Contravention. The execution, delivery and performance by Stockholder of this Agreement and the consummation of the transactions contemplated hereby (i) is within Stockholder's powers, have been duly authorized by all necessary action (including any consultation, approval or other action by or with any other person), (ii) require no action in respect of, or filing with, any governmental body, agency, official or authority (except as may be required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 or the Securities Exchange Act of 1934), and (iii) do not and will not contravene or constitute a default under, or give rise to a right of termination, cancellation or acceleration of any right or obligation of the Stockholder or to a loss of any benefit of Stockholder under any provision of applicable law or regulation or of any agreement, judgment, injunction, order, decree, or other instrument binding on Stockholder or result in the imposition of any lien on any asset of Stockholder. SECTION 2.3. Binding Effect. This Agreement has been duly executed and delivered by Stockholder and is the valid and binding agreement of Stockholder, enforceable against Stockholder in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, moratorium or other similar laws relating to creditors' rights generally. 3 ARTICLE 3 REPRESENTATIONS, WARRANTIES AND COVENANTS OF BUYER Buyer represents, warrants and covenants to Stockholder that: SECTION 3.1. Corporate Power and Authority. Buyer has all requisite corporate power and authority to enter into this Agreement and to perform its obligations hereunder. The execution, delivery and performance by Buyer of this Agreement and the consummation by Buyer of the transactions contemplated hereby have been duly authorized by the Board of Directors of Buyer and no other corporate action on the part of Buyer is necessary to authorize the execution, delivery and performance by Buyer of this Agreement and the consummation by Buyer of the transactions contemplated hereby. SECTION 3.2. Binding Effect. This Agreement has been duly executed and delivered by Buyer and is a valid and binding agreement of Buyer, enforceable against Buyer in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, moratorium or other similar laws relating to creditors' rights generally. SECTION 3.3. Acquisition for Buyer's Account. Any Shares to be acquired upon consummation of the Offer will be acquired by Buyer for its own account and not with a view to the public distribution thereof and will not be transferred except in compliance with the Securities Act of 1933. ARTICLE 4 MISCELLANEOUS SECTION 4.1. Expenses. Each party will pay its own costs and expenses incurred in connection with this Agreement. SECTION 4.2. Additional Agreements. Subject to the terms and conditions of this Agreement, each of the parties hereto agrees to use all reasonable efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations and which may be required under any agreements, contracts, commitments, instruments, understandings, arrangements or restrictions of any kind to which such party is a party or by which such party is governed or bound, to consummate and make effective the transactions contemplated by this Agreement. SECTION 4.3. Notice. All notices, requests, claims, demands and other communications hereunder shall be deemed to have been duly given when delivered in person, by telecopy, or by registered or certified mail (postage prepaid, return receipt requested) to such party at its address set forth on the signature page hereto. 4 SECTION 4.4. Amendments; Termination. This Agreement may not be modified, amended, altered or supplemented, except upon the execution and delivery of a written agreement executed by the parties thereto. This Agreement will terminate upon the termination of the Acquisition Agreement in accordance with its terms. SECTION 4.5. Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, provided, however, that Buyer may assign its rights and obligations to another wholly owned subsidiary of Buyer who is the assignee of Buyer's rights under the Acquisition Agreement, and provided, further, that except as set forth in the prior clause, a party may not assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of the other parties hereto. SECTION 4.6. Governing Law. This Agreement shall be construed in accordance with and governed by the law of Delaware without giving effect to the principles of conflicts of laws thereof. SECTION 4.7. Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto. 5 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. WASTE MANAGEMENT, INC. /s/ JOSEPH M. HOLSTEN By:____________________________________ Name: Joseph M. Holsten Title: Executive Vice President 3003 Butterfield Road Oak Brook, Illinois 60521 Attention: General Counsel WMI ACQUISITION SUB, INC. /s/ JOSEPH M. HOLSTEN By:____________________________________ Name: Joseph M. Holsten Title: Vice President 3003 Butterfield Road Oak Brook, Illinois 60521 Attention: General Counsel STOCKHOLDER /s/ ANDREW T. DWYER By:____________________________________ Name: Andrew T. Dwyer c/o Airlie Group 115 E. Putnam Street Greenwich, CT 06830 6 EX-99.5 6 EMPLOYMENT AGREEMENT Exhibit 5 EMPLOYMENT AGREEMENT -------------------- THIS EMPLOYMENT AGREEMENT is entered into as of March 17, 1995 between Resource Recycling Technologies, Inc., a Delaware corporation (the "Employer"), and Lawrence J. Schorr, a resident of the State of New York (the "Employee"). 1. On the terms and conditions hereinafter set forth, Employer employs Employee and Employee accepts such employment. 2. The term of this Agreement shall be for a period of two (2) years beginning at the Effective Time as such term is defined in the Agreement and Plan of Merger dated March 17, 1995 (the "Merger Agreement") among Waste Management, Inc., WMI Acqusition Sub, Inc., and Employer ("Initial Period of Employment") and shall continue on an at-will basis thereafter (collectively the "Term of Employment"), subject to the provisions of Paragraph 6. If the Merger Agreement is terminated for any reason, this Agreement shall not become effective and shall be deemed to be null and void. Upon the effectiveness of this Agreement at the Effective Time, the Employment Agreement dated as of October 3, 1988, as amended by amendment No. 1 thereto dated as of May 6, 1991, between the Employer (formerly known as Resource Recovery Technologies, Inc.) and the Employee shall be terminated. 3. The general scope of Employee's employment shall be to serve in a management capacity for Employer and to perform such other duties in accordance therewith as Employer may request. 4. During the Term of Employment, Employee shall devote his full time and use his best efforts to advance the business and welfare of Employer, its subsidiaries and affiliates, and to discharge any other management duties assigned to him hereafter. He shall not intentionally take any action against the best interests of Employer or of any subsidiary or affiliate of Employer. He shall perform faithfully and competently such management duties as may be assigned to him hereunder. 5. Employer agrees to pay or cause to be paid to Employee for his services hereunder during the Term of Employment a salary at the rate of two hundred eighty thousand dollars ($280,000) per year (the "Base Salary") so long as Employee continues in the employment of Employer hereunder, payable in installments at least as frequently as monthly and subject to the usual payroll deductions. Employee shall be entitled to the same employee benefits as other similarly situated management employees of Waste Management, Inc. and its subsidiaries in the Philadelphia metropolitan area, except that Employee shall be entitled to the grant of options to purchase common stock of WMX Technologies, Inc. with a value equal, for the 1995 and 1996 calendar years (prorated for 1995), to 100 percent of the Base Salary, in accordance with the option program in which employees of Waste Management, Inc. participate. 6. (a) During the Initial Period of Employment, this Agreement may be terminated by Employer only as follows: (1) Upon the death of Employee; (2) If Employee for any reason becomes unable to carry out all or substantially all of his duties and remains so incapacitated for a period of six months or more; or (3) For cause, upon (a) (i) any fraud or felonious conduct by the Employee, or (ii) embezzlement or misappropriation of funds or property of the Employer by the Employee, in the case of each of (a)(i) and (ii), upon written notice to the Employee specifying the cause for termination; or (b) (i) any material breach of this Agreement by the Employee, (ii) gross negligence by the Employee, or (iii) the Employee's material failure to discharge the duties required hereunder or consistent refusal to perform, or willful misconduct in the performance of his duties and obligations, in the case of each of (b)(i), (ii), and (iii), after written notice to the Employee specifying the cause for termination and the passage of not less than thirty (30) days after such notice, during which time the Employee shall have the right to respond to the Employer's notice and cure the breach or other event giving rise to the termination. (b) After the Initial Period of Employment, this Agreement may be terminated by either party with or without cause upon 90 days notice. 7. Employer may not relocate the Employee to a geographic location other than Binghamton (Vestal), New York during the Term of Employment without the Employee's prior written consent unless any such relocation has a legitimate business purpose and Employer pays in the first instance or reimburses Employee for all of Employee's reasonable relocation expenses. 8. Employer may direct that Employee's duties hereunder be performed for and the compensation of Employee hereunder be paid by, and Employer may assign this Agreement in its entirety to, one or more of Employer's subsidiaries or affiliates. If Employer is consolidated with or merged into, or if all or a part of its assets are transferred to, another corporation carrying on all or a substantial part of the business of Employer, this Agreement may be assigned to such successor. Neither the Guarantee of this Agreement provided by Waste Management, Inc., nor the provisions of Paragraph 7 of this Agreement prohibiting the relocation of the Employee, shall be modified or affected by any such assignment. 2 9. Employee acknowledges that his promised services hereunder are of special, unique, unusual and extraordinary character which gives them peculiar value, the loss of which cannot adequately be compensated in damages in an action at law, and Employee further acknowledges that in his employment hereunder he will be making use of, acquiring and adding to confidential information of special and unique value relating to such matters as lists of customers of Employer, its subsidiaries and affiliates and costs of providing the offered services. In addition to and not in limitation of any other restrictive covenants which may be binding upon Employee, Employee agrees that he will not (except for the benefit of or with the written consent of Employer, its successors or assigns): (a) During or after the Term of Employment, disclose any of said information to any person, firm or corporation for any purpose whatsoever, unless disclosure is required by law; or (b) During the Term of Employment, or within two years thereafter in any geographical area in which duties have at any time been assigned to him hereunder during the Term of Employment, engage (as an individual or as a stockholder, trustee, partner, financier, agent, employee or representative of any person, firm, corporation or association), or have any interest, direct or indirect, in any business in competition with the business of Employer; provided that this paragraph shall not prevent the Employee from acquiring and holding shares of stock of WMX Technologies, Inc. and not to exceed two percent (2%) of the outstanding shares of stock of any other corporation which engages in such a competitive business if such shares are available to the general public on a national securities exchange. 10. In the event of a breach of any covenant contained in Paragraph 9 of this Agreement, Employer shall be entitled to an injunction restraining such breach in addition to any other remedies provided by law or equity. 11. Employee agrees that: (a) He will assign to Employer any improvements, inventions or discoveries conceived or reduced to practice by him during the Term of Employment and related to the business of Employer or any of its subsidiaries or affiliates; (b) He will execute all papers and perform all acts which Employer deems necessary or advisable for the preparation, prosecution, issuance, procurement or maintenance of patent applications and patents of the United States or foreign countries for said improvements, inventions or discoveries; (c) He will execute any and all papers and documents which shall be required or necessary to vest title in Employer to said improvements, inventions, discoveries, patent applications and patents; and 3 (d) All models, drawings, memoranda and other materials or records made or used by Employee in connection with his duties shall be the property of Employer and shall be left with Employer at the termination of the Term of Employment. 12. The provisions of paragraphs 9, 10 and 11 hereof shall survive the termination of this Agreement. 13. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity and enforceability of the other provisions hereof. If any provision of this Agreement is unenforceable for any reason whatsoever, such provision shall be appropriately limited and given effect to the extent that it may be enforceable. RESOURCE RECYCLING TECHNOLOGIES, INC. EMPLOYEE By: /s/ Andrew T. Dwyer ________________________________ [Name] Andrew T. Dwyer __________________________ /s/ Lawrence J.Schorr Chairman ________________________________ 4 EX-99.6 7 PRESS RELEASE Exhibit 6 WASTE MANAGEMENT, INC. 3003 Butterfield Road Oak Brook, Illinois 60521 (708) 572-8800 for further information contact: Analyst Contact: Media Contact: RRT Contact: Jim Koenig Chris Combs Lawrence J. Schorr 708-572-8822 708-572-3074 607-798-7137, ext. 223 WASTE MANAGEMENT, INC. AGREES TO ACQUIRE RESOURCE RECYCLING TECHNOLOGIES, INC. Oak Brook, Illinois, and Vestal, New York, March 17, 1995 -- Waste Management, Inc. and Resource Recycling Technologies, Inc. jointly announced today that they have signed a definitive agreement pursuant to which WMI has agreed to commence a tender offer for any and all outstanding shares of common stock of RRT at a price of $11.50 net per share in cash. On March 16, 1995, the closing sale price for RRT on the American Stock Exchange composite tape was $8.375 per share. The offer will be subject to certain conditions including, among other things, the tender of a minimum of 50.1 percent of the outstanding shares of RRT (assuming the exercise of all outstanding stock options and warrants and the conversion of all convertible securities) and the termination or expiration of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act. If the conditions to the offer are met, the tender offer will be followed by a merger in which non-tendering stockholders will receive the right to obtain $11.50 net per share in cash. RRT has approximately 2,675,773 shares, options and warrants to purchase 573,863 shares, and securities convertible into 6,509 shares outstanding. Stockholders beneficially owning approximately 33 percent of the shares on a fully diluted basis have agreed to tender their shares. WMI said the offer would be made only by an Offer to Purchase and related Letter of Transmittal, copies of which will first be mailed to RRT's stockholders on or about March 23, 1995. RRT owns and/or operates several material recycling facilities primarily in the northeast and one in Florida. The company also designs and manages construction of solid waste recycling facilities and systems and provides processing and administrative services to regional retailers and beverage wholesalers subject to the New York State Bottle Bill. For 1994, RRT reported revenues of $41,793.000. Waste Management, Inc., a subsidiary of WMX Technologies, Inc., is the nation's leading provider of recycling and integrated solid waste management services in North America. The Company provides recycling services to 6.4 million households in 860 communities and serves more than 119,000 commercial customers. WMI also operates 120 material recovery facilities. #### EX-99.7 8 LETTER TO STOCKHOLDERS Exhibit 7 [LOGO] Letter to Stockholders March 23, 1995 Dear Stockholder: We are pleased to inform you that Resource Recycling Technologies, Inc. ("RRT") has entered into an Agreement and Plan of Merger (the "Merger Agreement") with Waste Management, Inc. ("Parent") and WMI Acquisition Sub, Inc. ("Purchaser"). Pursuant to the Merger Agreement, Purchaser today commenced a tender offer to purchase all outstanding shares of RRT at $11.50 per share in cash. Under the Merger Agreement, the tender offer will be followed by a merger of Purchaser and RRT. In the merger, each common share outstanding will be converted into $11.50 in cash (other than shares held by dissenting stockholders). Your Board of Directors has unanimously approved the Merger Agreement, the tender offer and the merger and determined that the tender offer and merger are fair to, and in the best interest of, the stockholders, Accordingly, the Board of Directors recommends that stockholders accept the offer and tender their shares. In arriving at its recommendation, the Board of Directors gave careful consideration to a number of factors which are described in the enclosed Schedule 14D-9, including the opinions of Allen & Company Incorporated and Gilford Securities Incorporated, that the cash consideration of $11.50 per share to be received by stockholders pursuant to the offer and the merger is fair to such stockholders from a financial point of view. Additional information with respect to the transaction is contained in the enclosed Schedule 14D-9, and we urge you to consider this information carefully. Sincerely, [Sig of Andrew T. Dwyer] [Sig of Lawrence J. Schorr] Andrew T. Dwyer Lawrence J. Schorr Chairman of the Board President and Chief Executive Officer [Recycled Paper LOGO] EX-99.8 9 OPINION OF ALLEN & CO. Exhibit 8 March 17, 1995 The Members of the Board of Directors Resource Recycling Technologies, Inc. 300 Plaza Drive Vestal, New York 13850 Gentlemen: You have requested our opinion, as of this date, as to the fairness, from a financial point of view, to the holders of the outstanding shares of Common Stock, par value $1.00 per share (the "Company's Common Stock"), of Resource Recycling Technologies, Inc., a Delaware corporation (the "Company"), of the consideration to be received by such holders in connection with the proposed Offer and Merger hereinafter referred to. Pursuant to the draft Agreement and Plan of Merger (the "Merger Agreement"), dated as of March 17, 1995 among the Company, Waste Management, Inc., an Illinois corporation, and Acquisition Sub, Inc. a Delaware corporation and wholly owned subsidiary of Acquiror ("MergerCo"), the Company and MergerCo will enter into a business combination transaction pursuant to which, on the terms and subject to the conditions contained in the Merger Agreement, MergerCo will commence a tender offer (the "Offer") to purchase for cash any and all shares of the Company's Common Stock. Pursuant to the Offer, among other things, MergerCo will offer to pay net to the seller in cash and without interest, $11.50 per share of the Company's Common Stock. The Merger Agreement provides that following the successful completion of the Offer, MergerCo will be merged with and into the Company (the "Merger") in accordance with the applicable provisions of Delaware law and the terms of the Merger Agreement. Pursuant to the Merger Agreement, the Company's Common Stock not tendered to MergerCo pursuant to the Offer that remains issued and outstanding immediately prior to the effective time of the Merger would be converted into the right to receive the same consideration payable pursuant to the Offer for the Company's Common Stock. Members of the Board of Directors March 17, 1995 Page 2 As you know, (i) Allen & Company Incorporated, the owner of 664,806 shares of the Company's Common Stock (or approximately 23% of the Company's fully diluted shares of outstanding Common Stock), has acted as financial advisor to the Company in connection with the Offer and Merger and will receive a fee for its services to the Company pursuant to the Engagement Letter Agreement dated March 9, 1995 by and between the Company and Allen & Company Incorporated; and (ii) Mr. Paul A. Gould, who owns 150,000 shares of the Company's Common Stock (or approximately 5% of the Company's fully diluted shares outstanding) and serves as a Director of the Company, is also a Managing Director of Allen & Company Incorporated. At the Company's request, each of Allen and Mr. Gould will execute an Agreement with Acquiror and MergerCo pursuant to which they have agreed to tender their Company Common Stock pursuant to the Offer. In arriving at our opinion, we have among other things: (i) reviewed the terms and conditions of the Merger Agreement and related agreements; (ii) analyzed certain historical business and financial information relating to the Company, including all publicly available documents filed with the Securities and Exchange Commission over the last five years; (iii) reviewed certain internal management reports since 1990 and recent presentations to the Board of Directors regarding the financial performance and condition of the Company; (iv) reviewed certain budgetary data provided to us by the Company relating to its business, earnings, assets and financial forecasts for 1995; (v) conducted discussions with members of the senior management of the Company with respect to the financial condition, business, operations, strategic objectives and prospects of the Company, including the effect of commodity prices on the Company's financial results; Members of the Board of Directors March 17, 1995 Page 3 (vi) reviewed and analyzed public information, including certain stock market data and financial information relating to selected public companies which we deemed generally comparable to the Company; (vii) reviewed the liquidity of the Company's Common Stock, including the market reaction to public announcements regarding the Company; (viii) reviewed the trading history of the Company's Common Stock, including its performance in comparison to market indices, commodity prices, and to selected companies in comparable businesses; (ix) reviewed public financial and transaction information relating to merger and acquisition transactions we deemed to be comparable to the Offer and Merger; and (x) conducted such other financial analyses and investigations as we deemed necessary or appropriate for the purposes of the opinion expressed herein. In rendering our opinion, we have assumed and relied upon the accuracy and completeness of the financial and other information provided by the Company to us and the representations contained in the Merger Agreement, and we have not undertaken any independent verification of such information or any independent valuation or appraisal of any of the assets of the Company. With respect to the financial forecasts referred to above, we have assumed that they have been reasonably prepared on a basis reflecting the best currently available judgments of the management of the Company as to the future financial performance of the Company. We understand that the Board of Directors of the Company is to receive, in addition to but independent of the opinion expressed herein, the opinion of Gilford Securities, Inc. as to the fairness to the holders of the Company's Common Stock, from a financial point of view, of the consideration to be received in the Offer and the Merger. Members of the Board of Directors March 17, 1995 Page 4 In addition to our review and analysis of the specific information sent forth above, our opinion herein reflects and gives effect to our assessment of general economic, monetary and market conditions existing as of the date hereof as they may affect the business and prospects of the Company. In connection with the preparation of this opinion, we have not been authorized by the Company or its Board of Directors to solicit, nor have we solicited, third party indications of interest for the acquisition of all or any part of the Company. The opinion rendered herein does not constitute a recommendation of the Offer and Merger over any other alternative transactions which may be available to the Company. Furthermore, the opinion rendered herein does not constitute a recommendation by our firm that any stockholder of the Company accept the offer. Based on and subject to the foregoing, we are of the opinion that, as of this date, the consideration to be received by the holders of the Company's Common Stock pursuant to the Offer and the Merger is fair to such holders from a financial point of view. Very truly yours, ALLEN & COMPANY INCORPORATED By: /s/ JOHN A. SCHNEIDER ----------------------- John A. Schneider Managing Director EX-99.9 10 OPINION OF GILFORD SEC. Exhibit 9 March 17, 1995 The Board of Directors Resource Recycling Technologies, Inc. 300 Plaza Drive Vestal, NY 13850 Ladies & Gentlemen: Resource Recycling Technologies, Inc. (the "Company"), Waste Management, Inc. (the "Acquiror"), and WMI Acquisition Sub, Inc., a wholly-owned subsidiary of the Acquiror (the "Acquisition Sub"), propose to enter into an Agreement and Plan of Merger (the "Agreement") pursuant to which the Acquisition Sub will make a tender offer (the "Offer") to purchase all the outstanding shares of common stock, par value $1.00 per share (the "Company Common Stock"), at a price of $11.50 per share (the "Consideration"), net to the seller in cash. The Agreement also provides that, following consummation of the Offer, Acquisition Sub will be merged with and into the Company (the "Merger") in accordance with the applicable provisions of Delaware law and terms of the Agreement. Pursuant to the Agreement, the Company's Common Stock not tendered to Acquisition Sub pursuant to the Offer that remains issued and outstanding immediately prior to the effective time of the Merger would be converted into the right to receive the same consideration payable pursuant to the Offer for the Company's Common Stock. You have asked our opinion, as investment bankers, as to the fairness from a financial point of view, on March 17, 1995, of the consideration to be received by the Company's stockholders in connection with the sale of shares of the Company's Common Stock at a per share price of $11.50. In preparing this letter, we have relied solely upon information provided by or on behalf of the Company. We have not independently verified any of such information and have relied on it being complete and accurate in all material respects. This Opinion is based on the business and operations of the Company as represented to us as of March 16, 1995, and does not purport to take into consideration any information or event arising subsequent to such date. The information contained in this Opinion may not be used for any other purpose, or reproduced, disseminated, quoted, referred to or disclosed or otherwise made available to, or relied upon by any other party nor may reference be made hereto or to Gilford, without the prior consent of Gilford; provided, however, that although the Opinion is The Board of Directors March 17, 1995 Page 2 solely for the use of the Board of Directors of the Company, it is acknowledged that such Opinion will be included in filings required by the Securities and Exchange Commission and other applicable regulatory agencies approving the Offer and Merger, and mailed to the Company's stockholders. The Opinion will be reproduced in such documents in full, and any description of or reference to Gilford or summary of the Opinion in such documents will be in the form reasonably satisfactory to Gilford and its counsel. In connection with the Opinion, to date we have, among other things: (i) reviewed certain financial and operating data of the business and operations of the Company, including publicly available documents filed with the Securities and Exchange Commission over the last five years; (ii) reviewed certain information, including financial forecasts, relating to the business, earnings, cash flow, and prospects of the Company furnished to us by the Company; (iii) conducted discussions with members of senior management of the Company concerning its businesses and prospects; (iv) compared the financial position and operating results of the Company with companies we deemed comparable; (v) Reviewed a draft dated March 13, 1995 of the Agreement; (vi) Reviewed such other financial studies, analyses and investigations as we deemed necessary to prepare this Opinion. We have not appraised nor undertaken any valuation of any assets, property, plant and equipment, owned by or used in the Company's operations nor made any solvency analysis of the Company. Our opinion necessarily is based upon regulatory, economic, market and other conditions as they exist, and the information made available to us, as of the date hereof. Subsequent developments may affect this opinion, and we do not have any obligation to update, revise or reaffirm this opinion. Gilford will receive a fee for its services to the Company in connection with rendering this opinion pursuant to a March 9, 1995 engagement letter entered into between Gilford and the Company. In addition, the Company has agreed to reimburse Gilford for certain out-of-pocket expenses, and to indemnify Gilford for certain liabilities that could arise from the delivery of this opinion. The Board of Directors March 17, 1995 Page 3 Based upon and subject to the foregoing, it is our opinion as investment bankers that the proposed cash consideration to be received by the holders of the Company's Common Stock pursuant to the Offer and the Merger is fair from a financial point of view. In connection with the preparation of this opinion, we have not been authorized by the Company or its Board of Directors to solicit, nor have we solicited, third party indications of interest for the acquisition of all or any part of the Company. The opinion rendered herein does not constitute a recommendation of the Offer and Merger over any other alternative transactions which may be available to the Company. Furthermore, the opinion rendered herein does not constitute a recommendation by our firm that any stockholder of the Company accept the Offer. Very truly yours, GILFORD SECURITIES INCORPORATED By: /s/ N. SCOTT FINE ------------------------------ N. Scott Fine Managing Director EX-99.10 11 NEWS RELEASE EXHIBIT 10 WASTE MANAGEMENT, INC. 3003 Butterfield Road Oak Brook, Illinois 60521 (708) 572-8800 for further information contact: Analyst Contact: Media Contact: RRT Contact: Bruce Tobecksen Chris Combs Lawrence J. Schorr 708-572-8968 708-572-3074 607-798-7137, ext. 223 WMX TECHNOLOGIES' WASTE MANAGEMENT UNIT COMMENCES TENDER OFFER FOR RESOURCE RECYCLING TECHNOLOGIES, INC. Oak Brook, Illinois, and Vestal, New York, March 23, 1995 -- Waste Management, Inc., the North American solid waste services unit of WMX Technologies, Inc., and Resource Recycling Technologies, Inc. jointly announced today that a wholly owned Waste Management subsidiary has commenced a tender offer for any and all outstanding shares of common stock of RRT at a price of $11.50 net per share in cash. On March 22, 1995, the closing sale price for RRT on the American Stock Exchange composite tape was $11.25 per share. The offer will be subject to certain conditions including, among other things, the tender of a minimum of 50.1 percent of the outstanding shares of RRT (assuming the exercise of all outstanding rights to acquire common stock) and the termination or expiration of applicable waiting periods under the Hart- Scott-Rodino Antitrust Improvements Act. Unless extended, the tender offer will expire at 12:00 midnight, New York City time, on April 19, 1995. If the conditions to the offer are met, the tender offer will be followed by a merger in which non-tendering stockholders will receive the right to obtain $11.50 net per share in cash. RRT has approximately 2,675,773 shares, and rights to acquire an additional 580,372 shares, outstanding. Stockholders beneficially owning approximately 33 percent of the shares on a fully diluted basis have agreed to tender their shares. WMI said the offer would be made only by an Offer to Purchase and related Letter of Transmittal, copies of which will first be mailed to RRT's stockholders on or about March 23, 1995. Morrow & Co., Inc. is acting as the Information Agent for the offer. Copies of the Offer to Purchase and the Letter of Transmittal can be obtained from, and questions concerning the offer can be directed to, Morrow & Co., Inc. RRT owns and/or operates several material recycling facilities primarily in the northeast and one in Florida. The company also designs and manages construction of solid waste recycling facilities and systems and provides processing and administrative services to regional retailers and beverage wholesalers subject to the New York State Bottle Bill. Waste Management, Inc. is the leading provider of recycling and integrated solid waste management services in North America. #### -----END PRIVACY-ENHANCED MESSAGE-----