1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 27, 1997.
Registration No.FEBRUARY 20, 1998
REGISTRATION NO. 333-____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington,WASHINGTON, D.C. 20549
-----------------------------------------------------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
--------------------
INTERNATIONAL ALLIANCE---------------------------------------------
CENTURY BUSINESS SERVICES, INC.
(Exact nameName of Registrant as specifiedSpecified in its charter)Its Charter)
DELAWARE 22-2769024
(State or other jurisdictionOther Jurisdiction of (I.R.S. Employer of incorporationIdentification
Incorporation or organization) Identification No.)
--------------------Organization) Number)
10055 SWEET VALLEY DRIVE
VALLEY VIEW, OHIO 44125
(216) 447-9000
(Address, including zip code,Including Zip Code,
and telephone number, including area code,Telephone Number, Including
Area Code, of Registrant's principal executive offices)
--------------------
EDWARD F. FEIGHAN
INTERNATIONAL ALLIANCE SERVICES, INC.Principal Executive Offices)
---------------------------------------------
GREGORY J. SKODA
EXECUTIVE VICE PRESIDENT
10055 SWEET VALLEY DRIVE
VALLEY VIEW, OHIO 44125
(216) 447-9000
(Name, address, including zip code,Address, Including Zip Code,
and telephone number, including area code,Telephone Number, Including Area Code,
of agentAgent for service)
--------------------Service)
------------------------------------
With Copiesa copy to:
RICK L. BURDICK,SETH R. MOLAY, P.C.
AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.
1900 PENNZOIL PLACE-SOUTH TOWER
711 LOUISIANA STREET
HOUSTON,1700 PACIFIC AVENUE, SUITE 4100
DALLAS, TEXAS 77002
(713) 220-5800
--------------------75201
(214) 969-2800
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.registration statement.
If the only securities being registered on this Formform are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [ ]box. | |
If any of the securities being registered on this Formform are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box: [x]box. |X|
If this Formform is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [ ]offering. | |
--------------------
If this Formform is a post-effective amendment filed pursuant to Rule 462(d)462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [ ]offering. | |
--------------------
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]box. |_|
CALCULATION OF REGISTRATION FEE
===========================================================================================================================================================================================================================================================
TITLE OF EACH CLASS OFSHARES TO BE REGISTERED AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED OFFERING PRICE(1)(1) AGGREGATE PRICE PER AGGREGATE OFFERING REGISTRATION FEE
REGISTERED PRICE(1)SHARE (1) PRICE
- -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value 5,366,139 shares $9.75625 $52,353,393 $15,865
$.01$0.01 per share ==========================================================================================================================5,723,922 shares $16.75 $95,875,694 $28,284
=================================================================================================================================
(1) Estimated pursuant to Rulerule 457(c) solely for the purpose of calculating the
amount of the registration fee based on the average of the high and low
prices of the Common Stock reported by the Nasdaq National Market on
May 21, 1997.February 18, 1998
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRAITONREGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a)8(A) OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a)8(A), MAY DETERMINE.
================================================================================
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION DATEDTO AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY 27, 1997NEITHER BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS 5,366,139SHALL NEITHER CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF ANY OFFER TO BUY NOR SHALL THERE BY ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY
SUCH STATE.
Subject To Completion, Dated February 20, 1998
PROSPECTUS
5,723,922 SHARES
INTERNATIONAL ALLIANCECENTURY BUSINESS SERVICES, INC.
COMMON STOCK
--------------------Common Stock
------------------------
This Prospectus relates to an aggregate of 5,366,1395,723,922 shares (the
"Shares") of common stock, par value $.01$0.01 per share ("Common Stock"), of
International AllianceCentury Business Services, Inc. ("Century" or the "Company"), a Delaware
corporation (formerlyformerly known as Republic Environmental Systems,International Alliance Services, Inc., the "Company"), which may
be offered from time to time (the "Offering") by persons (the "Selling
Stockholders") who have acquired such Shares in certain private equity offerings
and certain acquisitions of businesses by the Company not involving a public
offering
including 1,210,611 shares which may be offered for sale by certain of the
Selling Stockholders who may acquire such shares pursuant to the exercise of
certain warrants.offering. The Shares are being registered under the Securities Act of 1933, as
amended (the "Securities Act"), on behalf of the Selling Stockholders
in order to permit
the public sale or other distribution of the Shares.
The Shares may be sold or distributed from time to time by or for the
account of the Selling Stockholders, or by their pledgees on behalf of the
Selling Stockholders, in transactions (which may involve crosses and block
transactions) on the Nasdaq National Market ("Nasdaq") or any national
securities exchange or U.S. inter-dealer quotation system of a registered
national securities association on which the Shares are then listed, in the
over-the- counterover-the-counter market, in one or more privately negotiated transactions
(including sales pursuant to pledges), through the writing of options on the
Shares, in a combination of such methods of distribution or by any other legally
available means. This Prospectus also may be used, with the Company's consent,
by donees of the Selling Stockholders, or by other persons acquiring Shares and who
wish to offer and sell such Shares under circumstances requiring or making
desirable its use. Such methods of sale may be conducted by the Selling
Stockholders at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at prices otherwise negotiated. The Selling
Stockholders may effect such transactions directly, or indirectly through
broker-dealers or agents acting on their behalf and, in connection with such
sales, such broker-dealers or agents may receive compensation in the form of
commissions or discounts from the Selling Stockholders and/or the purchasers of
the Shares for whom they may act as agent or to whom they sell Shares as
principal or both (which commissions or discounts might be in excess of
customary commissions). To the extent required, the Company will file, during
any period in which offers or sales are being made, one or more supplements to
this Prospectus to set forth the names of donees of Selling Stockholders and any
other material information with respect to the plan of distribution not
previously disclosed. See "Plan of Distribution."
The Company will not receive any of the proceeds from the sale of the
Shares offered hereby, buthereby. The Company will bear all expenses incident to the
registration of the Shares under federal and state securities laws and the sale
of the Shares hereunder other than expenses incident to the delivery of the
Shares to be sold by the Selling Stockholders, including anyStockholders. Any transfer taxes payable on any
Shares and any commissions and discounts payable to underwriters, agents or
dealers.dealers shall be paid by the Selling Stockholders.
The Common Stock is quoted on Nasdaq under the symbol "IASI."CBIZ." On
May
15, 1997,February 18, 1998, the last reported sale price for the Common Stock as reported
by Nasdaq was $10.00$17.00 per share. The Company had 35,969,37947,408,618 shares of Common
Stock issued and outstanding as of May 15, 1997.February 19, 1998.
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE MATTERS SET FORTH
UNDER THE CAPTION "RISK FACTORS" LOCATEDBEGINNING ON PAGE 56 OF THIS PROSPECTUS.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is May___________ ___, 1997.
21998
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TABLE OF CONTENTS
Available Information ................................................. 2
Incorporation of Certain Documents by Reference ....................... 3
The Company ........................................................... 4
Risk Factors .......................................................... 6
Use of Proceeds ....................................................... 11
Selling Stockholders .................................................. 12
Plan of Distribution .................................................. 14
Legal Matters ......................................................... 15
Experts ............................................................... 15
Uncertainty of Forward Looking Statements ............................. 15
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (the "Exchange Act"), and, in accordance therewith, files
reports, proxy and information statements and other information with the
Securities and Exchange Commission (the "SEC"). The reports, proxy and
information statements and other information concerning the Company can be
inspected and copied at the public reference facilities maintained by the SEC at
Judiciary Plaza, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and
at the SEC's regional offices located at Citicorp Center, Suite 1400, 500 West
Madison Street, Room 3190, Chicago, Illinois 60661 and at Seven World Trade
Center, 13th Floor, New York, New York 10048. Copies of such material can also
be obtained from the SEC at prescribed rates through the Public Reference
Section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. Such
documents also may be obtained through the website maintained by the SEC at
http://www.sec.gov. Century Common Stock is listed on Nasdaq. Such reports,
proxy statements and other information relating to CBIZ may also be inspected at
the offices of Nasdaq at 1735 K Street, N.W., Washington, D.C. 20006.
The Company has filed with the SEC a Registration Statement on Form S-3
under the Securities Act with respect to the Shares (such registration
statement, including all amendments and supplements thereto, is hereinafter
referred to as the "Registration Statement"). This Prospectus, which forms a
part of the Registration Statement, does not contain all of the information set
forth in the Registration Statement, certain parts of which have been omitted in
accordance with the rules and regulations of the SEC. Statements contained in
this Prospectus as to the contents of any contract, agreement or other document
are not necessarily complete and in each instance reference is made to the copy
of such contract, agreement or other document filed as an exhibit to the
Registration Statement or incorporated herein by reference, and each such
statement is deemed qualified in its entirety by such reference. The
Registration Statement and exhibits thereto may be inspected without charge at
the public reference facilities maintained by the SEC, regional offices of the
SEC and offices of the SEC and Nasdaq referred to above, and copies thereof may
be obtained from the SEC at prescribed rates.
3No person has been authorized to give any information or to make any
representations other than those contained in or incorporated by reference in
this Prospectus in connection with the offer made by this Prospectus and, if
given or made, such information or representation must not be relied upon as
having been authorized by the Company or the Selling Stockholders. Neither the
delivery of this Prospectus nor any sale made hereunder shall under any
circumstances create an implication that there has been no change in the affairs
of the Company since the date hereof. This Prospectus does not constitute an
offer to sell or the solicitation of an offer to buy any security other than the
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shares of Common Stock offered hereby, nor does it constitute an offer to sell
or a solicitation of an offer to buy any shares of Common Stock by anyone in any
jurisdiction in which such offer or solicitation is not authorized, or in which
the person making such offer or solicitation is not qualified to do so, or to
any person to whom it is unlawful to make such offer or solicitation.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, filed by the Company (File No. 0-25890) with
the SEC pursuant to the Exchange Act, are incorporated herein by reference and
made a part of this Prospectus:
(i) the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996;1997;
(ii) the Company's Current Report on Form 8-K dated January 7,
1997;
(iii) the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1997;
(iv) the Company's Schedule 14A Proxy Statement dated April 1, 1997
relating to the 1997 Annual Meeting of Stockholders held May
6, 1997;
(v)1997.
(iii) the Company's Current Report on Form 8-K dated April 3, 1997;
and
(vi)February 20,
1998.
Also incorporated by reference into this Prospectus are the following
documents filed by CBIZ with the SEC pursuant to the Securities Act:
(a) the Company's Current ReportRegistration Statement on Form 8-K dated April 21,S-4 filed with
the SEC on November 14, 1997, as amended by Amendment No. 1
thereto filed with the SEC on December 9, 1997.
All reports and other documents filed by the Company with the SEC
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date
of this Prospectus and prior to the termination of the Offering shall be deemed
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in this Prospectus or
in a document incorporated or deemed to be incorporated by reference in this
Prospectus shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained in this Prospectus or in any
other subsequently filed document that also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company undertakes to provide without charge to each person to whom
a copy of this Prospectus has been delivered, upon the written or oral request
of such person, a copy of any or all of the documents incorporated by reference
herein, other than the exhibits to such documents, unless such exhibits are
specifically incorporated by reference into the information that this Prospectus
incorporates. Written or oral requests for such copies should be directed to
International AllianceCentury Business Services, Inc., 10055 Sweet Valley Drive,
Valley View,6480 Rockside Woods Blvd., South, Suite 330,
Cleveland, Ohio 44125,44131, Attention: Investor Relations, telephone number (216)
447-9000.
4447- 9000.
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RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION SET FORTH IN THIS PROSPECTUS, PROSPECTIVE
PURCHASERS OF THE SHARES SHOULD CONSIDER CAREFULLY THE FOLLOWING RISK FACTORS
IN EVALUATING AN INVESTMENT IN THE COMPANY.
RISKS RELATED TO THE COMPANY
Strategy for Future Acquisitions; Limited Operating History; Need for
Substantial Additional CapitalCentury is a diversified services company which, acting through its
subsidiaries, provides outsourced business services, including specialty
insurance services, to small and medium sized commercial enterprises throughout
the United States.
The Company's current business strategy is to act aggressively in
making acquisitionsCompany provides integrated services in the following areas:
accounting systems, advisory and tax; employee benefits design and
administration; human resources; information technology systems; payroll;
specialty insurance industryinsurance; valuation; and workers' compensation. These services are
provided through a network of 82 Company offices in 26 states, as well as
through its subsidiary Comprehensive Business Services, Inc. ("Comprehensive"),
a franchisor of accounting services with approximately 250 franchisee offices
located in 40 states. As of December 31, 1997, the business
outsourcing services industry.Company served approximately
60,000 clients, of which approximately 24,000 were served through the
Comprehensive franchisee network. Management estimates that the Company's
clients employ over one million employees, including 240,000 employed by clients
of the Comprehensive franchisee network.
In October 1996, the CompanyCentury completed two acquisitions (the "Merger Transactions") pursuant to which
it acquired, through a reverse merger, Century Surety Company ("CSC") and its
subsidiaries (together with CSC, the "CSC Group"), which includes three
insurance companies, and Commercial Surety Agency, Inc. d/b/a Century Surety
Underwriters ("CSU"), an insurance agency that markets surety bonds.
In addition,December 1996, the Company acquired Environmental &
Commercial Insurance Agency, Inc. ("ECI") in November 1996, SMR & Co. Business Services
Inc. (formerly known as("SMR"). Through SMR, & Co., "SMR")Century provides a wide range of outsourced business
services, including information technology consulting, tax return preparation
and compliance, tax planning, business valuation, human resource management,
succession and estate planning, personal financial planning and employee benefit
program design and administration to individuals and small and medium sized
commercial enterprises primarily in December 1996, Midwest
Indemnity Corporation ("Midwest") in January 1997, Midland Consultants, Inc. in
February 1997, M&N Risk Management, Inc., M&N Enterprises, Inc. and Millisor
Firmco, Inc. (collectively, the "M&N Companies") in March 1997 and The Benefits
Group Agency, Inc., Network Plus, Inc., Next, Inc. and Surety Associates Ltd.
in April 1997. Accordingly,Ohio. Pursuant to a strategic redirection of
the Company initiated in November 1996, the Company began its acquisition
program to expand its operations rapidly in the outsourced business services
industry from its existing specialty insurance platform.
During 1997, the Company acquired the businesses of 39 companies
representing over $134 million in annualized revenues at the time of
acquisition. The majority of these acquisitions have been accounted for under
the purchase method of accounting. The Company anticipates future significant
acquisitions will be accounted for, when possible, under the pooling of
interests method of accounting. During 1997, the Company's acquisitions resulted
in significant increases in goodwill, and the Company anticipates that such
increases will continue as a result of future acquisitions. The excess of cost
over the fair value of net assets of businesses acquired (goodwill) was
approximately $89.9 million at December 31, 1997, representing approximately 31%
of the Company's total assets. The Company amortizes goodwill on a straight line
basis over periods not exceeding 30 years.
The Company has no operating history with regard
to a significant portion of its current operations. The financial position andcompleted from December 31, 1997 through February 17,
1998, or has publicly announced as pending, an additional seven acquisitions
representing over $46 million in annualized revenues. These acquisitions are not
included in the results of operations offor the period ended December 31, 1997.
The Company believes that substantial additional acquisition opportunities exist
in the outsourced business services industry.
The Company's strategy is to grow aggressively as a diversified
services company by expanding its recently acquired outsourced business services
and specialty insurance operations through internal growth and additional
acquisitions in such industries.
Century was formed as a Delaware corporation in 1987 under the name
Stout Associates, Inc. and primarily supplied hazardous waste services. In 1992,
the Company will dependwas acquired by Republic Industries, Inc. ("RII"). In April 1995,
RII effected a spin-off of its hazardous waste operations through a distribution
of common stock to a large extentthe stockholders of record of RII. At such time, the Company
was named "Republic Environmental Services, Inc." and
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was traded on the Company's ability to integrate these and subsequently acquired operations
effectively. AsNasdaq National Market under the Company continues to pursue its acquisition strategy in
the future, its financial position and results of operations may fluctuate
significantly from period to period.symbol "RESI". In DecemberJune 1996,
the Company received approximately $27.6 millionchanged its name to "International Alliance Services, Inc." and
began trading under the symbol "IASI" in net proceeds from the offering (the "December Private Placement") of 3,251,888
unitsanticipation of the Company (the "Units"). Each Unit consisted of one share of Common
Stock ofmerger with the CSC
Group and CSU. The name change signaled a new direction for the Company and one warrant to purchase one shareaway
from its hazardous waste business. In furtherance of Common Stock ofits strategic redirection
towards business services, the Company at an exercise price of $11.00 per share. In Aprilsuccessfully divested its hazardous waste
operations in two separate transactions completed in July and September 1997. On
December 23, 1997, the Company received an additional estimated $5.2 million in net proceeds, fromchanged its name to Century Business Services,
Inc. and began trading under the private placement of an additional 616,611 Units (the "April Private Placement"
and, together with the December Private Placement, the "Private Placement")symbol "CBIZ".
The proceeds received fromprincipal executive office of Century is located at 10055 Sweet
Valley Drive, Valley View, Ohio, 44125, and its telephone number is (216)
447-9000. In March 1998, the Private Placement have been andCompany's principal executive office will be
usedrelocated to finance acquisitions. Future acquisitions, however, may require additional
equity and debt financing, although neither form of financing is contemplated
at this time.6480 Rockside Woods Blvd., South, Suite 330, Cleveland, Ohio 44131.
Its telephone number will remain the same.
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RISK FACTORS
In the event the Company is required to seek additional
financing, there is no assurance that such additional financing will be
available or, if it is available, that it will be available on terms acceptableaddition to the other information set forth and incorporated by reference in
this Prospectus, prospective purchasers of the Shares should consider carefully
the following risk factors in evaluating an investment in the Company.
Risks Related to Growth Through Acquisitions; Failure to Manage GrowthACQUISITION STRATEGY RISKS
The Company intends to continue to grow significantly through the
acquisition of additional strategic and complementary businesses. However, there
can be no assurance that the Company will be able to identify appropriate
acquisition candidates or, to the extent identified, acquire such additional
businesses on terms favorable to the Company or at all. In addition, the Company
expects to face competition for acquisition candidates, which may limit the
number of appropriate acquisition opportunities and may lead to higher
acquisition prices. Furthermore, acquisitions involve a number of special risks,
including possible adverse effects on the Company's operating results, diversion
of management's attention, failure to retain key personnel of the acquired
business and risks associated with unanticipated events or liabilities, some or
all of which could have a material adverse effect on the Company's business,
financial condition and results of operations. As a result, there can be no
assurance that businesses acquired in the future will achieve anticipated
revenues and earnings.
FINANCING OF ACQUISITIONS
The timing, size and success of the Company's acquisition efforts and
the associated capital commitments cannot be readily predicted. The Company
currently intends to finance future acquisitions by using shares of its internal growth and to pursue an
aggressive acquisition strategy. Internal growth may placeCommon
Stock for a significant strainportion of the consideration to be paid. In the event
that the Common Stock does not maintain a sufficient market value, or potential
acquisition candidates are otherwise unwilling to accept Common Stock as part of
the consideration for the sale of their businesses, the Company may be required
to utilize more of its cash resources, if available, to maintain its acquisition
program. If the Company does not have sufficient cash resources, its growth
could be limited unless it is able to obtain additional capital through debt or
equity financing. The Company has established a bank line of credit and
maintains a universal shelf registration to fund its working capital and
acquisition needs; however, there can be no assurance that the Company will be
able to maintain the line of credit, access the public securities markets or
obtain other financing for its acquisition program at such times and on such
terms that the Company deems acceptable.
ABILITY TO MANAGE GROWTH AND INTEGRATE RECENTLY ACQUIRED BUSINESSES
The Company's business has grown significantly in size and complexity
over the past year, placing significant demands on the Company's management,
operatingsystems, internal controls and technical resources, while growth
through acquisitionsfinancial and physical resources. In order to
meet such demands, the Company intends to continue to hire new employees and
invest in new equipment and make other capital expenditures. In addition, the
Company expects that it will involve substantial risks, including the risk of
improper valuationneed to further develop its financial and
managerial controls and reporting systems and procedures to accommodate any
future growth. Failure to expand any of the acquired businessesforegoing areas in an efficient
manner could have a material adverse effect on the Company's business, financial
condition and results of operations. The Company is currently in the risks inherent inprocess of
integrating such businessesrecent acquisitions with the Company's business and, in doing so,
will need to manage various businesses and their employees in geographically
diverse areas. There can be no assurance that the Company can successfully
integrate any acquired business into the Company without substantial costs,
delays or other operational or financial problems. Moreover, any inability to
manage growth effectively could have a material adverse effect on the Company's
business, financial condition and results of operations.
RISKS RELATED TO INTANGIBLE ASSETS
Recent acquisitions have resulted in significant increases in goodwill,
and the Company anticipates that such increases will continue as a result of
future acquisitions. The excess of cost over the fair value of net assets of
businesses acquired (goodwill) was approximately $89.9 at December 31, 1997,
representing approximately 31% of the
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Company's total assets. The Company amortizes goodwill on a straight line basis
for periods not exceeding 30 years. There can be no assurance that the value of
intangible assets will ever be realized by the Company. On an ongoing basis, the
Company makes an evaluation of whether events and circumstances indicate that
all or a portion of the carrying value of intangible assets may no longer be
recoverable, in which case an additional charge to earnings may be necessary.
Although at December 31, 1997, the net unamortized balance of intangible assets
is not considered to be impaired, any future determination requiring the
write-off of a significant portion of unamortized intangible assets could have a
material adverse effect on the Company's business, financial condition and
results of operations.
RISKS ASSOCIATED WITH PROFESSIONAL SERVICE PROVIDERS
The Company's acquisition strategy dependsemployee benefits and pension administration and tax
services are subject to various risks resulting from errors and omissions in
processing and filing benefit and pension plan forms and tax returns in
accordance with governmental regulations and the respective plans. The Company
processes data received from employees and employers and may be subject to
liability for any late or misfiled plan forms or tax returns. There can be no
assurance that the Company's insurance will cover all such liabilities or, if it
does, that the coverage for such liabilities will be adequate. In addition,
failure to properly file plan forms or tax returns could have a material adverse
effect on the Company's reputation and adversely affect its relationships with
existing clients and its ability to identifygain new clients. The Company's employee
benefits and acquire appropriatepension administration and tax services are also dependent upon
government regulations, which are subject to continuous change that could reduce
or eliminate the need for such services. In addition, the Company's other
professional business services, including accounting, valuation and financial
planning, entail an inherent risk of professional malpractice and other similar
claims.
The Company maintains errors and omissions insurance coverage that it
believes will be adequate both as to risks and amounts. Although management
believes that the Company's insurance coverage amounts are adequate, there can
be no assurance that the Company's actual future claims will not exceed the
coverage amounts. If the Company experiences a large claim on its insurance, the
rates for such insurance may increase. The Company's ability to incorporate such
increases into service fees to clients could be constrained by contractual
arrangement with clients. As a result, such insurance rate increases could have
a material adverse effect on the Company's business, financial condition and
results of operations.
COMPETITION
The outsourced business services industry has been highly competitive
in recent years. This has resulted in the consolidation of many companies and
strategic alliances across industry lines. Competition is particularly acute
among small and medium sized providers because larger providers or strategic
alliances with larger providers can create service and price distortions in the
market place. The Company competes with these large providers, in-house employee
services departments, local outsourcing companies and independent consultants.
In addition, the Company may also compete with marketers of related services and
products that may offer outsourced business services in the future. In recent
years, competition in the specialty insurance companiesindustry has lead to the
consolidation of some of the industries' largest companies. Competition is
particularly acute among smaller specialty carriers like the Company because the
market niches exploited by these carriers are small and can be penetrated by a
larger carrier that elects to cut prices or expand coverage.
The Company has also experienced, and expects to continue to
experience, competition from new entrants into its markets. Increased
competition could result in pricing pressures, loss of market share and loss of
clients, any of which could have a material adverse effect on the Company's
business, outsourcing services companies, to
integrate the acquired operations effectively,financial condition and to increase its market
share. A numberresults of operations. Many of the Company's
competitors for such acquisitions are larger,
better known companieshave longer operating histories and significantly greater financial,
technical, marketing and other resources than the Company, including name
recognition, with current and have significantly greater financial
resources.potential customers. Accordingly, new competitors
or alliances among competitors may emerge and rapidly acquire significant market
share. There can be no assurance that the Company will be able to locate
acquisition candidates in geographic marketscompete
successfully against current and future competitors, or on terms the Company deems
attractive, that any identified candidates will be acquired, thatcompetitive
pressure faced by the Company will be ablenot have a material adverse effect on its
business, financial condition and results of operations.
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NEED TO ATTRACT AND RETAIN EXPERIENCED PERSONNEL
The Company's success depends to profitably manage acquireda significant degree on its ability to
attract and retain experienced employees. There is substantial competition for
experienced personnel, which the Company expects to continue. Many of the
companies or thatwith which the Company competes for experienced personnel have greater
financial and other resources than the Company. In the future, acquisitions will produce financial returns that justify the investment or that
are comparableCompany may
experience difficulty in recruiting and retaining sufficient numbers of
qualified personnel. The inability of the Company to the Company's past returns. The completion of acquisitions
requires the expenditure of sizable amounts of capital, as well as management's
timeattract and attention, and the intense competition among companies pursuing
similar acquisition strategies may increase capital requirements. There can be
no assurance that
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management skills and systems currently in place will be adequate to implement
the Company's acquisition strategy. The failure to manage growth effectively,
or to implement its acquisition strategy,retain
experienced personnel could have a material adverse effect on the Company'sits business,
financial condition and results of operations and financial condition.
Risks Associated with Acquisitions
Although the Company investigates each business that it acquires,
there may be liabilities that the Company fails or is unable to discover. The
Company seeks to minimize the impact of any such liabilities by obtaining
indemnities and warranties from the seller of the business, which may be
supported by deferring payment of a portion of the purchase price. However,
these indemnities and warranties, if obtained, may not fully cover the
liabilities due to the limited scope of the indemnities, the amount or duration
of the indemnities, the financial limitations of the indemnitor or warrantor,
or other reasons.
Dependence on Key Personneloperations.
DEPENDENCE ON KEY PERSONNEL
The Company depends and will continue to depend in the foreseeable
future on the services of Messrs. Michael G. DeGroote, Edward F. Feighan,
Craig L. Stout, Roswell P. Ellis, Douglas R. Gowland and certain of its otherexecutive officers and key employees with
extensive experience and expertise in the insurance specialty industry and the waste and environmental services industry.
In addition, with respect to its provision ofoutsourced business services the Company is
dependent on the services of Messrs. Gregory J. Skoda, Michael L. Minotti,
Keith W. Reeves, Patrick T. Carney, Terry L. Silver and certain of its other
key personnel with extensive experience and expertise in such industry.
The ability of the Company to retain its officers and key employees is important
to the success of the Company. The loss of key personnel, whether by resignation
or otherwise, could have a material adverse effect on the Company. The Company
does not maintain key personnel insurance on any of its officers or employees.
Possible Depressing EffectRELIANCE ON INFORMATION PROCESSING SYSTEMS
The Company's business depends, in part, upon its ability to store,
retrieve, process and manage significant databases and periodically to expand
and upgrade its information processing capabilities. Interruption or loss of Future Salesthe
Company's information processing capabilities through loss of Common Stock
No predictions can be made asstored data,
security breach, breakdown or malfunction of computer equipment or software
systems, telecommunications failure, conversion difficulties or damage to the
effect, if any, that future sales
of the Shares, the availability of Common Stock for saleCompany's computer equipment or the perception that
such salessoftware systems could occur will have on the prevailing market price of the Common
Stock.
The Company has registered for sale, from time to time on a continuous
basis under this registration statement and the registration statement dated
January 17, 1997, by certain Selling Stockholders an aggregate of approximately
37,492,215 million shares of Common Stock (including the shares registered
hereunder). Future sales of such shares, or the perception that such sales
could occur, could adversely affect the market price of the Common Stock.
There can be no assurance as to when, and how many of, such shares will be sold
and the effect such sales may have on the market price of the Common Stock. In
addition, the Company intends to issue Common Stock and options and warrants to
purchase shares of Common Stock in connection with future acquisitions.
Although such securities are or will be, as the case may be, subject to
restrictions on resale in accordance with the Securities Act and the
regulations promulgated thereunder, as such restrictions lapse or if such
shares are registered for sale to the public, such securities may be sold into
the public market. In the event of the issuance and subsequent resale of a
substantial number of shares of Common Stock, or a perception that such sales
could occur, there could be a material adverse
effect on the prevailing market
priceCompany. There can be no assurance that the precautions the
Company has taken to protect itself from or minimize the impact of such events
will be adequate. Any damage to the Company's data information processing
system, failure of telecommunications links or breach of the Common Stock.
Dilution
The issuancesecurity of additional shares of Common Stock upon exercise of
outstanding warrants or options, or upon the
Company's completioncomputer systems could result in an interruption of any
acquisitions and business combinations,the Company's
operations or other losses which may not be covered by the Company's insurance.
Any such event could have a dilutive effect on earnings
per share and will have a dilutivematerial adverse effect on the voting rightsCompany's business,
financial condition and results of operations. The Company has reviewed and
continues to review its computer equipment and software systems with regard to
"Year 2000" problems. The Company has formulated a plan and methodology for
addressing "Year 2000" problems and is currently implementing such plan. "Year
2000" problems, if they were to occur, could have a material adverse effect on
the Company's business, financial condition and results of operations.
INADEQUATE PRICING RISK OF INSURANCE
During 1997, approximately 35% of the holders
of Common Stock.
No Cash Dividends
The payment and level of dividends on Common Stock are subject to the
discretion of the Board of Directors of the Company. The payment of dividends
will depend upon business decisions that will be made by
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the Board of Directors of the CompanyCompany's revenues were from time to time based upon the results
of operations and financial conditions of the Company and its
subsidiaries and
such other considerations as the Board of Directors considers relevant. In
addition, the Company's credit facility currently prohibits payment of
dividends and other distributions to the stockholders of the Company. Since
becoming a public company in April 1995, the Company has not paid cash
dividends on its Common Stock and the Company's Board of Directors does not
anticipate paying cash dividends in the foreseeable future. The Company
currently intends to retain future earnings to finance the ongoing operations
and growth of the business.
RISKS RELATED TO THE PROVISION OF INSURANCE AND BONDING SERVICES
Inadequate Pricing Riskspecialty insurance services. The primary risk of any insurance enterprisecarrier is the
risk of inadequate pricing, which is a problem that manifests itself in the form
of an unexpectedly high level of claims after policy issuance. The Company
utilizes a variety of actuarial and qualitative methods to set price levels.
Ultimately, however, pricing depends upon an evaluation of prior experience as a
predictor of future experience. Events or trends that have not occurred in the
past may not be anticipated for the future and, therefore, could result in
inadequate pricing leading to elevated levels of losses. Such losses, if they
were to occur, could have a material adverse effect on the Company's business,
financial condition and results of the
Company.
Unanticipated Losses Due to Inadequate Reserve Estimatesoperations.
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UNANTICIPATED LOSSES DUE TO INADEQUATE RESERVE ESTIMATES
When claims are made under insurance policies written by the Company,
the ultimate amount of liability cannot be determined until claims are paid to
the satisfaction of the insured or until litigation finally determines liability
in disputed cases. Since the process of litigation and settlement can continue
for years, the Company can only assess its ultimate liability (and the ultimate
expense of litigating disputed issues) by estimation. These estimates, or
reserves for losses and loss adjustment expense (which, as of MarchDecember 31, 1997,
were $42.3approximately $50.7 million), are, like prices, determined by a variety of
actuarial and qualitative methods based on prior experience. There can be no
assurance that such reserves will be sufficient to cover the ultimate
liabilities of the Company for insurance policy and surety bond exposures.
The Company uses a reserving system which it believes will enable it to
meet its claims obligations. Due to the nature of some of the coverages written,
claims may be presented which may not be settled for many years after they are
incurred; thus, subjective judgments as to the ultimate exposure to losses are
an integral and necessary component of the loss reserving process. The Company
regularly reviews reserves, using a variety of statistical and actuarial
techniques to analyze current claim costs, frequency and severity data, and
prevailing economic, social and legal factors. Reserves established in prior
years are adjusted as dictated by changes in loss experience and as new
information becomes available. An integral part of the reservingreserve policy of the
Company includes a reserve for incurred but not reported ("IBNR") claims.losses. There
can be no assurance that the assumptions upon which reserves are based are valid
or will be valid in the future. To help assure the adequacy of its IBNR reserves
and individual case reserves, the Company submits to an annual review by
professional actuaries who test reserve adequacy with a variety of sophisticated
mathematical models. In recent years, such actuaries have certified that reserve
levels of the Company are adequate. There can be no assurance, however, that the
modeling techniques of these actuaries will correctly forecast the adequacy of
the Company's reserves. The inadequacy of the Company's insurance reserves may
result in unanticipated losses which could have a material adverse effect on theits
business, financial condition and results of the Company.
Competition
Both the property and casualty and the surety industries have been
highly competitive in recent years resulting in the consolidation of some of
the industries' largest companies. Competition is particularly acute for
smaller, specialty carriers like the Company because the market niches
exploited by the Company are small and can be penetrated by a larger carrier
that elects to cut prices or expand coverage. The Company's insurance
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subsidiaries have endured this risk historically by maintaining a high level of
development of new products, such as its environmental coverage and landfill
bonds eschewed by most major carriers. Nevertheless, there can be no assurance
that future development efforts will succeed or that product erosion from
intensifying competition will not outpace development efforts.
Expansion of Insurance Liability Due to Law Changes; Governmental Regulation
The Company is vulnerable to both judicial and legislative law changes
with respect to its insurance and bonding business. Judicial expansion of terms
of coverage can increase risk coverage beyond levels contemplated in the
underwriting and pricing process. Judicial imposition of pollution liability on
insurers before the era of specific pollution exclusions in insurance policies
created an estimated $25 billion liability, according to industry estimates
reported by A.M. Best, a leading rating agency of insurance companies and
reinsurers, for U.S. insurers and reinsurers that such companies did not know
they were underwriting and for which they received no premium.
At the same time, coverages that are established by statute may be
adversely affected by legislative or administrative changes of law. Most
surety bonds exist because they are required by government agencies. When
governments change the threshold for requiring surety, the market for surety
bonds is directly affected. The repeated postponement by the U.S.
Environmental Protection Agency ("EPA") of deadlines for compliance with the
financial assurance portions of the Resource Conservation and Recovery Act of
1976, as amended ("RCRA"), Subtitle D has significantly slowed growth of the
Company's landfill closure bond program, which was begun in March 1994 because
of the anticipated deadline of April 1994 for universal compliance. Such
compliance currently is not anticipated to be universally enforced until later
in 1997.
Inadequate Reinsurance Protection of Insurance Liabilitiesoperations.
INADEQUATE REINSURANCE PROTECTION OF INSURANCE LIABILITIES
The Company depends heavily on reinsurers to assume a substantial
portion of the insurance liability exposures underwritten by it. Failure by one
or more reinsurers (which(who are assuming risks from many sources over which the
Company has no control) could have a material adverse effect on the Company's
performance, since the Company would then be obligated to pay all or a portion
of the failed reinsurer's portion of losses. Moreover, the adequacy of
reinsurance even(even assuming the solvency of all reinsurers,reinsurers) is a matter of
estimation. As with pricing and reserving, procurement of reinsurance is
premised upon assumptions about the future based upon past experience.
Unanticipated events or trends could produce losses inadequately covered by
reinsurance.
Market Reversesreinsurance which could have a material adverse effect on the Company's
business, financial condition and results of operations.
CHANGE IN GOVERNMENTAL REGULATION
The Company is affected by legislative law changes with respect to its
provision of payroll, employee benefits and pension plan administration, tax,
accounting and workers' compensation design and administration services.
Legislative changes may expand or contract the types and amounts of business
services that are required by individuals and businesses. There can be no
assurance that future laws will provide the same or similar opportunities to
provide business consulting and management services to individuals and
businesses that are provided today by existing laws. The Company is also
affected by both judicial and legislative law changes with respect to its
specialty insurance business. Judicial expansion of terms of coverage can
increase risk coverage beyond levels contemplated in Invested Asset Portfoliothe underwriting and
pricing process. In addition, surety bond coverages that are established by
statute may be adversely affected by legislative or administrative changes of
law. When government agencies change the threshold for requiring
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surety, the demand for surety bonds is directly affected. An increase in the
threshold for requiring surety could have a material adverse effect on the
Company's business, financial condition and results of operations.
MARKET REVERSES IN INVESTED ASSET PORTFOLIO
Investment of the Company's assets to balance its reserves and surplus is critical to the maintenance of
the Company's solvency and profitability. The Company believes that many insurance companies earn far more in investment
returns on their portfolio assets than they do from underwriting; and many
companies actually underwrite atmaintains a loss to develop premium balances, hence
portfolio assets, for investment as evidenced by the number of insurers
operating at combined ratios in excess of 100%. The Company maintains an
investment policy of
investing primarily in debt instruments of government agencies and corporate
entities with quality ratings of AAA- or better, and of diversifying investments
sufficiently to minimize the risk of a substantial reverse or default in any one
investment. These policies are articulated by a written policy statement and
overseen by a formal investment committee of senior companyCompany officials. The
Company also employs professional investment advisers to counsel it with respect to its insurance and bonding operations on matters
of policy as well as individual investment transactions, although these advisers
have no discretionary authority to deploy the Company's assets. Notwithstanding
these measures, an aggregation of serious reverses or defaults in the investment
portfolio could have a material adverse effect on the earnings andCompany's business,
financial condition and results of operations.
CONTROL BY EXISTING STOCKHOLDERS
As of February 13, 1998, the Company's executive officers, directors
and principal stockholders beneficially owned an aggregate of 35,882,759 shares
of Common Stock of the Company.
Federal Income Taxes
The Company accounts for federal income taxes in accordance with
Statement(including shares that may be acquired upon
exercise of Financial Accounting Standards No. 109. The Company has reducedoptions or warrants within 60 days after the deferred tax asset by a valuation allowancedate of CSC Group becausethis
Prospectus), constituting approximately 56.0% of the outstanding shares of
Common Stock. In addition, as of said date, Messrs. DeGroote and Huizenga
beneficially owned an aggregate of 22,691,556 shares of Common Stock of the
Company believes it is more likely than not(including shares that some portionmay be acquired upon exercise of options or
warrants within 60 days after the date of this Prospectus, but excluding 500,000
shares for which Mr. DeGroote has subscribed subject to stockholder approval),
constituting approximately 37.9% of the deferred
asset would not be
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realized. In reachingoutstanding shares of the Common Stock.
Accordingly, such persons are in a position to have significant influence with
regard to or control actions that require the consent of the holders of a
majority of the Company's determinationoutstanding voting stock, including the election of
directors.
ANTI-TAKEOVER EFFECT OF DELAWARE GENERAL CORPORATION LAW
Certain provisions of the needDelaware General Corporation Law may
discourage takeover attempts that have not been approved by the Board of
Directors.
VOLATILITY OF TRADING PRICE
The quoted price of the Common Stock could fluctuate widely in response
to provide a
deferred tax valuation allowance, management considered all available evidence,
both positive and negative, as well as the weight and importance given to such
evidence. The factors the Company relied upon in determining the need for the
valuation allowance are that the CSC Group has a history of significant
portions of their taxable income coming from non-recurring transactions, as
well as the risks that CSC Group hasvariations in the areas of product pricing, reserves,
nicheCompany's quarterly operating results, changes in earnings
estimates by securities analysts, changes in the Company's business and changes
in general market competition and adequacy of reinsurance.
RISKS RELATED TO THE PROVISION OF BUSINESS OUTSOURCING SERVICES
Competition
The business outsourcing services industry has been highly competitiveor economic conditions. In addition, in recent years, resulting in the
consolidationstock market has experienced extreme price and volume fluctuations which have
significantly affected the quoted prices of the securities of many growth
companies and strategic
alliances across industry lines. The principal competitive factors in this
industry are service and price. Competition is particularly acute for smallwithout regard to medium sized providers because larger providers or strategic alliances with
larger providers can create service and price distortions in thetheir specific operating performance. Such market
place.
The Company's business outsourcing services subsidiaries have historically
endured these risks by maintaining a high level of development of new services.
There can be no assurance that future development efforts will succeed or that
intensifying competition will not outpace development efforts.
Regulations
The Company is vulnerable to legislative law changes with respect to
its provision of tax advisory, compliance and preparation services. Legislative
changes may expand or contract the types and amounts of business services that
individuals and businesses require. There can be no assurance that future laws
will provide the same or similar opportunities to provide business consulting
and management services to individuals and businesses that the current laws
provide.
RISKS RELATED TO THE PROVISION OF ENVIRONMENTAL SERVICES
Consents of Regulatory Authorities
In October 1996, the Ohio attorney general's office determined that
the Merger Transactions constituted a change of ownership of Ohio Environmental
Protection Agency ("Ohio EPA") permitted facilities owned by Republic
Environmental Systems (Cleveland) Inc. ("RES (Cleveland)") and Republic
Environmental Systems (Ohio), Inc. ("RES (Ohio)"). In addition, the Ohio EPA
may determine that the Merger Transactions constitute a modification of such
permits. As a result, Ohio law requires that the change of ownership of the
permitted facilities, as well as the permit modifications, if any, be approved
by the director of the Ohio EPA, based upon the disclosure statements and an
investigative report prepared by the Ohio attorney general's office. The
Company consummated the Merger Transactions prior to receipt of the requisite
approval of the director of the Ohio EPA as permitted by applicable law. During
the approval process, the Company does not anticipate that the operations at
such facilities will be affected. In the event that the director of the Ohio
EPA ultimately disapproves such change of ownership or, if required, such
permit modifications, the Company would be required to effect the negation of
the change of ownership of such facilities. The negation could be accomplished
through the restoration of the original ownership structure of such facilities,
the disposition of the facilities or another means that complies with the
requirements of applicable law. The failure to obtain approval of such change
of ownership or permit modifications, if any,fluctuations could have a material adverse effect on the financial condition and operationsquoted price of the
Company.
Regulation
The transportation and disposalCommon Stock.
POSSIBLE DEPRESSING EFFECT OF FUTURE SALES OF THE COMPANY'S COMMON STOCK
Future sales of solid and chemical wastes and
rendering of related environmental services are subject to federal, state,
provincial and local requirements which regulate health, safety,Common Stock, or the environment, zoning and land-use. Operating permits are generally required for
treatment, storage and disposal facilities ("TSD Facilities") and certain
transportation vehicles, and these permits are subject to revocation,
modification and renewal. Federal, state, provincial and local regulations
vary, but generally govern waste
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management activities (including final disposal), the location and use of
facilities and also impose restrictions to prohibit or minimize air and water
pollution. In addition, governmental authorities have the power to enforce
compliance with these regulations and to obtain injunctions or impose fines in
the case of violations, including criminal penalties. These regulations are
administered by the EPA and various other federal, state, provincial and local
environmental and health and safety agencies and authorities, including the
Occupational Safety and Health Administration of the U.S. Department of Labor.
In addition, certain of the Company's operations are regulated under applicable
laws and regulations in Canada.
The Company believesperception that in the existing climate of heightened legal,
political and citizen awareness and concerns, companies in the hazardous waste
and environmental services industry, including the Company, may be faced with
material fines and penalties and the need to expend funds for remedial work and
related activities at TSD Facilities. The Company has established a reserve
(which, as of March 31, 1997 was approximately $2.3 million) to cover such fines, penalties and costs which the Company's management believes will be
adequate. Further, in connection with the acquisition of certain TSD
Facilities, the Company has been indemnified against certain environmental
liabilities. While such amounts expended in the past or anticipated to be
expended in the future have not had and are not expected to have a materially
adverse effect on the Company's financial condition or operation, the
possibility remains that technological, regulatory or enforcement developments,
the results of environmental studies or other factorssales could
materially alter
this expectation and despite such reserves and indemnification obligations,occur, could adversely affect the market price of the Company's operating results.
The Company's operationCommon Stock.
There can be no assurance as to when, and how many of, TSD Facilities subjects it to certain
operating, monitoring, site maintenance and closure obligations. In order to
construct, expand and operate a TSD Facility, one or more construction or
operating permits, as well as zoning approvals, mustthe Shares will be obtained. These
construction and operating permits and zoning approvals are difficult and
time-consuming to obtain,sold
and the issuanceeffect such sales may have on the market price of such permits and approvals often
is opposed by neighboring landowners and local and national citizens' groups.
Once obtained, the operating permits may be subject to periodic renewal and are
subject to modification and revocation by the issuing agency. In connection
with the Company's acquisition of TSD Facilities, it often may be necessary to
expend considerable time, effort and money to bring the acquired facilities
into compliance with applicable requirements and to obtain the permits and
approvals necessary to increase their capacity. The failureCommon
Stock. As of the date of this Prospectus, the Company to
renew existing permits or obtain newly required permits could adversely affecthas registered under the
Securities Act an aggregate of 43,222,803 shares of the Company's operating results. In addition, the Company's waste
transportation obligations are subject to evolving and expanding laws and
regulations that may impose additional monitoring, training and safety
requirements.
Governmental authorities have the power to enforce compliance with
regulations and permit conditions and to obtain injunctions or impose fines in
case of violations. Citizens' groups may also bring suitCommon Stock
for alleged
violations. During the ordinary course of its operations, the Company hasresale by certain selling stockholders from time to time received citationsunder this and
certain other shelf registration statements. In addition, the Company has
registered under the Securities Act pursuant to a universal
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shelf registration statement an aggregate of $125 million of the Company's
Common Stock, debt securities and warrants to purchase Common Stock or noticesdebt
securities to be offered from such authorities that its
operations are nottime to time to the public and has registered
pursuant to an acquisition shelf registration statement an aggregate of
7,729,468 shares of the Company's Common Stock to be issued from time to time in
complianceconnection with applicable environmental or health or
safety regulations. Upon receiptacquisitions. In addition, 23,444,558 shares of the Company's
Common Stock, which include shares issuable upon the exercise of warrants,
remain subject to various lock-up agreements. The terms of such citations or notices,lock-up
agreements will expire with respect to 15,193,232 of such shares prior to
December 31, 1998, and the Company worksis obligated to register such shares under
the Securities Act for resale from time to time. Such securities may or may not
be subject to resale restrictions in accordance with the authorities to attempt to resolveSecurities Act and the
issues raised. Failure to
correct the problemsregulations promulgated thereunder. As such restrictions lapse or if such shares
are registered for sale to the satisfactionpublic, such securities may be sold to the
public. In the event of the authoritiesissuance and subsequent resale of a substantial
number of shares of the Company's Common Stock, or a perception that such sales
could lead to
monetary or criminal penalties, curtailed operations or facility closure any of
whichoccur, there could havebe a material adverse effect on the prevailing market
price of the Company's Common Stock.
NO DIVIDENDS
Since April 27, 1995, the Company has not paid cash dividends on its
Common Stock, and the Company's Board of Directors does not anticipate paying
cash dividends in the foreseeable future. The Company currently intends to
retain future earnings to finance the ongoing operations and growth of the
business. The payment of dividends in the future will depend upon business
decisions that will be made by the Board of Directors of the Company from time
to time based upon the results of operations and financial condition.
Subtitle Dcondition of RCRA establishes a framework for regulating the disposal
of non-hazardous solid wastes. In the past, the Subtitle D framework has left
the regulation of non-hazardous waste disposal largely to the states. On
October 9, 1991, however, the EPA promulgated a final rule which imposes
minimum federal comprehensive solid waste management criteria and guidelines
including location restrictions, facility design and operating criteria,
closure and post- closure requirements, financial assurance standards,
groundwater monitoring requirements and corrective action standards. Because
some parts of the new regulations will be phased in over time, the full effect
of these regulations may not be felt for several years. However, other than for
groundwater monitoring and financial assurance requirements, all provisions of
the final rule became effective October 9, 1993. Operating and design criteria
for existing operations may have to be modified to comply with these new
regulations. In addition, new requirements applicable to the disposal of
non-hazardous solid waste may be adopted
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when reauthorization of RCRA is taken up by Congress and the Company cannot
predict the effect of such new requirements.
Possibility of Liability for Hazardous Substance Remediation and Damages
With very limited exceptions, federal law imposes joint and several
liability upon present and former owners and operators of facilities that
release "hazardous substances" into the environment and the generators and
transporters of those substances, regardless of the care exercised by such
persons and regardless of when the hazardous substance is first detected in the
environment. All such persons may be liable for the costs of waste site
investigation, waste site cleanup and damages to natural resources. There is an
inherent industry risk of liability arising from the release of "hazardous
substances" into the environment, notwithstanding safety and other measures
taken by the
Company and its subsidiaries and such other owners or operatorsconsiderations as the Board of
facilities. In addition,
because the term "hazardous substance" is very broadly defined under applicable
federal law, "hazardous substances" or "hazardous wastes" may have been
deposited in properties with which the Company has been, or will become,
associated as an owner or operator. Moreover, waste collection companies
acquired by the Company have transported hazardous waste in the past and will
do so in the future, and some of the Company's operations may generate small
amounts of hazardous waste. As a result of the foregoing, the Company may face
claims for remediation of environmental contamination, personal injury or
damage to natural resources at sites with which it is, or has been, associated
as owner, operator, transporter or waste generator and from which there is a
release or threatened release of hazardous substances which causes the
incurrence of response costs and damages. Costs for remediation of, and damages
for, environmental contamination can be very substantial. Given the limitations
in insurance coverage for these risks, such liability could have a material
adverse effect on the Company's business and consolidated financial condition.
Legal Proceedings
The Company is a party to various legal and environmental proceedings
which have arisen in the ordinary course of its business. No assurance can be
given with respect to the outcome of these legal proceedings and the effect
such outcomes may have on the Company.
Lack of Environmental Liability Insurance
The majority of the Company's domestic locations currently carry
site-specific pollution legal liability insurance, which may provide coverage
under certain circumstances for pollution damage to third parties.Directors considers relevant. In addition, the Company's domestic contracting operations carry contractors' pollution
liability insurance, which may provide coverage under certain circumstances for
damage to third parties. However, both of these coverages are restrictive in
nature, as they are subject to certain exclusions and effective dates,
consistent with insurance industry requirements. In addition, such coverage is
subject to specific and aggregate limits which may not be sufficient to cover
claims, if they should arise.
In prior years, consistent with industry trends, the Company was not
able to obtain pollution insurance at reasonable costs and, therefore, carried
only such coverage as was required by regulatory permits. In addition, the
extent of insurance coverage under certain forms of policies has been the
subject in recent years of litigation in which insurance companies have, in
some cases, successfully taken the position that certain risks are not covered
by such policies. If, in the absence of such insurance, the Company were to
incur liability for environmental damages of sufficient magnitude, it could
have a material adverse effectcredit facility
contains restrictions on the Company's business and consolidated
financial condition.
Competition
The hazardous waste industry is highly competitive. Entry and ongoing
operations require substantial technical, managerial and financial resources.
The Company competes with large national companies and with regional and local
companies, some of which have significantly greater financial resources and
more established market positions than the Company.
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THE COMPANY
The Company is a diversified services company which, acting through
its subsidiaries, provides business outsourcing services, specialty insurance
services and waste and environmental services. In October 1996, the Company
completed the Merger Transactions. Through the Company's insurance
subsidiaries, the Company provides specialty insurance and bondingability to small and
medium sized commercial enterprises in over forty states throughout the United
States.
In December 1996, the Company completed the acquisition of SMR.
Through SMR, the Company provides business consulting and management services
in the areas of tax planning, tax return preparation and compliance, computer
consulting, outsourcing, employee benefit program design and administration,
and human resource management to individuals and small and medium sized
commercial enterprises primarily in Ohio.
In February 1997, the Company signed a non-binding letter of
intent and confidentiality agreement (collectively, the "Letter of Intent") to
sell the Company's environmental services operations. The Letter of Intent
also contemplates the formation of a strategic alliance between the Company and
the purchaser whereby the Company will continue to have access to the Company's
environmental resources for the benefit of its insurance customers after the
sale. The Company anticipates that the sale will be completed by mid-1997.
Consummation of the transaction remains subject to the purchaser's due
diligence, the negotiation and execution of definitive documentation and the
receipt of necessary governmental and third party approvals and consents.
Accordingly, there can be no assurance that the transaction will be
consummated.
The Company's strategy is to aggressively grow as a diversified
services company by expanding its recently acquired business outsourcing
services and specialty insurance operations through internal growth and
additional acquisitions in such industries.
The Company was formed as a Delaware corporation in 1987 under the
name Stout Environmental, Inc. In 1992, the Company was acquired by Republic
Industries, Inc. ("RII"). In April 1995, RII effected a spin-off of its
hazardous waste operations through a distribution of the Common Stock of the
Company to the stockholders of record of RII (the "Spin-off"). In connection
with the Merger Transactions, in October 1996, the Company changed its name to
International Alliance Services, Inc. from Republic Environmental Systems, Inc.
The Company's Common Stock trades on Nasdaq under the trading symbol "IASI."
The principal executive office of the Company is located at 10055
Sweet Valley Drive, Valley View, Ohio, 44125 and its telephone number is (216)
447-9000.pay dividends..
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares offered hereby. The Company will bear all expenses incident to the
registration of the Shares under federal and state securities laws and the sale
of the Shares hereunder other than expenses incident to the delivery of the
Shares to be sold by Selling Stockholders, including anyStockholders. Any transfer taxes payable on any
Shares and any commissions and discounts payable to underwriters, agents or
dealers. See "Plan of Distribution."dealers shall be paid by the Selling Stockholders.
11
13
SELLING STOCKHOLDERS
The following table sets forth the name of each Selling Stockholder,
the number of shares of Common Stock beneficially owned by each Selling
Stockholder as of May 15, 1997,February 19, 1998, and the number of Shares registered hereby
that each Selling Stockholder may offer and sell pursuant to this Prospectus.
However, because the Selling Stockholders may offer all or a portion of the
Shares at any time and from time to time after the date hereof, the exact number
of Shares that each Selling Stockholder may retain upon completion of the
Offering cannot be determined at this time. To the knowledge of the Company,
none of the Selling Stockholders has had any 12
13
material relationship with the
Company except as set forth in the footnotes to the following table and as more
fully described elsewhere in this Prospectus (including the information
incorporated by reference in this Prospectus).
BENEFICIAL OWNERSHIP
AFTER OFFERING
BENEFICIAL OWNERSHIP (ASSUMING ALL SHARES
PRIOR TO OFFERING (1) REGISTERED ARE SOLD)(1)
--------------------- -----------------------
NUMBER OF SHARES
TO AFTERPERCENT BEING REGISTERED IN PERCENT
NAME SHARES OF TOTAL THE OFFERING (1)
OWNERSHIP BE OFFERED FOR THE ----------------------
PRIOR TO THE SELLING STOCKHOLDER'S NUMBER PERCENT
SELLING STOCKHOLDER OFFERING ACCOUNT OF SHARES OF CLASS
------------------- -------- ------- --------- --------TOTAL
American National Bank &
Massachusetts Mutual Life Insurance Company(2) 231,000(3) * 231,000 -- --
Massachusetts Mutual Corporate Value Partners
Limited (2) 69,000(3) * 69,000 -- --
Victory Ventures LLC 115,000(3) * 115,000 -- --
Putnam Variable Trust - Putnam VT Voyager
Fund(4) 176,100(3) * 176,100 -- --
Putnam Diversified Equity Fund (4) 26,500(3) * 26,500 -- --
Putnam Voyager Fund II (4) 50,600(3) * 50,600 -- --
Putnam Voyager Fund (4) 746,800(3) 1.6 746,800 -- --
Gabelli International Limited 50,000(3) * 50,000 -- --
Whitier Trust Co. Of Chicago . . . . . . . . . . . . . 20,008 20,008 0100,000(3) * Marjorie Boyas . . . . . . . . . . .100,000 -- --
Network Fund III, Ltd. (5) 70,000(3) * 70,000 -- --
Network Fund IV, LLC (5) 30,000(3) * 30,000 -- --
Chilton QP Investment Partners, L.P. (6) 11,630(3) * 11,630 -- --
Chilton Opportunity Trust, L.P. (6) 8,665(3) * 8,665 -- --
Chilton Opportunity International (BVI) Ltd. (6) 10,310(3) * 10,310 -- --
Chilton International (BVI) Ltd. (6) 89,980(3) * 89,980 -- --
Chilton Investment Partners, L.P. (6) 79,415(3) * 79,415 -- --
Clarke H. Bailey 10,000(3) * 10,000 1,500 8,500-- --
Robert L. Egan 10,000(3) * 10,000 -- --
Straus-Spelman L.P. (7) 17,000(3) * 17,000 -- --
Straus Partners L.P. (7) 83,000(3) * 83,000 -- --
Willametta K. Day Foundation 40,000(3) * 40,000 -- --
Oscar Investment Fund, L.P. 20,000(3) * 20,000 -- --
Kobrick Offshore Fund, Ltd. (8) 1,700(3) * 1,700 -- --
Kobrick Fund, L.P. (8) 43,800(3) * 43,800 -- --
Kobrick-Cendant Capital Fund (8) 27,600(3) * 27,600 -- --
Kobrick-Cendant Emerging Growth Fund (8) 26,900(3) * 26,900 -- --
Cascade Investment LLC 500,000(3) 1.1 500,000 -- --
Drake & Company 100,000(3) * 100,000 -- --
Hathaway Partners Investment L.P. 30,000(3) * 30,000 -- --
Warburg Pincus Emerging Growth Fund 400,000(3) * 400,000 -- --
IDS Life Managed Fund, Inc. 750,000(3) 1.6 750,000 -- --
Zeke L.P. 100,000(3) * 100,000 -- --
Berrard Holdings Limited Partnership 100,000(3) * 100,000 -- --
12
14
BENEFICIAL OWNERSHIP
AFTER OFFERING
BENEFICIAL OWNERSHIP (ASSUMING ALL SHARES
PRIOR TO OFFERING (1) REGISTERED ARE SOLD)(1)
--------------------- -----------------------
NUMBER OF SHARES
PERCENT BEING REGISTERED IN PERCENT
NAME SHARES OF TOTAL THE OFFERING SHARES OF TOTAL
Porter Partners, L.P. 75,000(3) * 75,000 -- --
Aaron Fleck 100,000(3) * 100,000 -- --
Lancaster Investment Partners, L.P. 150,000(3) * 150,000 -- --
South Ferry Building Company 46,000(3) * 46,000 -- --
Aaron Wolfson 4,000(3) * 4,000 -- --
Millisor & Nobil Co., L.P.A 384,615 * 96,154 288,461 *
Marvin B. Basil (9) 64,513 * 9,676 54,837 *
Eleanor A. Basil (9) 64,513 * 9,676 54,837 *
Connie B. Freeman (10) 29,204 * 4,381 24,823 *
Paul K. Freeman (10) 179,204 * 154,381 24,823 *
Scott D. Chapman 49,255 * 12,314 36,941 *
Roy Simmons 49,255 * 12,314 36,941 *
Ralph M. Daniel, Jr 274,423 * 274,423 -- --
J. Michael Boyas . . . . . . . . . . . . 101,277 15,191 86,086Meador 274,423 * Nicholas Boyas . . . . . . . . . . . 10,772 1,615 9,157274,423 -- --
Frederick Bass 401,258 * Pete Boyas . . . . . . . . . . . . . 1,250,565 187,585 1,062,980 3.0%
Ronnie Boyas . . . . . . . . . . . . 4,311 646 3,665240,755 160,503 *
Stacey Boyas . . . . . . . . . . . . 101,277 15,191 86,086Gary A. Nagler 225,708 * Tony Boyas . . . . . . . . . . . . . 101,277 15,191 86,086135,425 90,283 *
Joan Carney . . . . . . . . . . . . . 75,000 (2) 19,350 (2) 55,650 *
William F. Comiskey, Jr. . . . . . . 117,174 37,017 80,157 *
Michael G. DeGroote(3) . . . . . . . 14,247,112 (4) 1,111,112 (5) 13,136,000 (6) 31.3%
Roswell P. And Shirley Sue Ellis(7) . 82,500 82,500 0 *
Edward F. Feighan(8) . . . . . . . . 584,000 87,600 496,400 1.4%
Harve A. Ferrill(9) . . . . . . . . 13,000 (10) 11,000 (11) 2,000 (12) *
First Premium Services, Inc. . . . . 26,210 26,210 0 *
Whitney L. Hubbs . . . . . . . . . . 1,159 385 774 *
Indiana Lumbermens Mutual Ins. Co. . 45,903 45,903 0 *
Charles King . . . . . . . . . . . . 362,780 54,416 308,364 *
Kenneth A. Lanci . . . . . . . . . . 102,216 15,333 86,883 *
Kenneth & Davie LaVan . . . . . . . . 1,119,177 167,877 951,300 2.6%
Arlene M. LoConti(13) . . . . . . . . 707,987 106,198 601,789 1.8%
Joseph A. LoConti . . . . . . . . . . 618,403 92,760 525,643 1.5%
Joseph E. LoConti((14) . . . . . . . 1,752,000 262,800 1,489,200 4.1%
LoConti Family Trust(15) . . . . . . 1,536,800 230,520 1,306,280 3.6%
Geraldine L. Longo . . . . . . . . . 53,986 9,652 44,334 *
Saverio J. Longo . . . . . . . . . . 22,029 7,335 14,694 *
Midwest Indemnity Corp. . . . . . . . 138,655 138,655 0 *
Kenneth R. Millisor . . . . . . . . . 585,000 (16) 193,050 (16) 391,950 1.1%
Anna Marie Minotti . . . . . . . . . 472,500 (17) 121,905 (17) 350,595 1.0%
Lea Boyas Morabito . . . . . . . . . 101,277 15,191 86,086 *
National American Insurance Co. . . . 176,470 176,470 0 *
Steven M. Nobil . . . . . . . . . . . 315,000 (18) 103,950 (18) 211,050 *
Patan Rock, Inc. . . . . . . . . . . 408,800 61,320 347,480 *
Mark Perkins . . . . . . . . . . . . 27,500 27,500 0 *
Rochelle Reeves . . . . . . . . . . . 463,500 (19) 119,583 (19) 343,917 *
Richard C. Rochon(20) . . . . . . . 111,110 (21) 111,110 (22) 0 *
Joseph R. Rutigliano . . . . . . . . 102,216 15,333 86,883 *
David J. Sgro . . . . . . . . . . . . 98,900 12,075 86,825 *
David M. Sgro . . . . . . . . . . . . 8,600 1,050 7,550 *
Patricia Skoda(23) . . . . . . . . . 781,000 (24) 169,872 (24) 611,128 1.7%
Sophia Management Ltd(25). . . . . . 5,825,000 1,029,750 4,795,250 13.3%
Craig L. Stout(26) . . . . . . . . . 817,600 122,640 694,960 1.9%
Joseph and Juanita Tartabini
Charitable Trust . . . . . . . . . . 1,361,665 204,250 1,157,415 3.2%
Christopher Timm . . . . . . . . . . 82,500 82,500 0 *
Felicia P. Young . . . . . . . . . . 233,600 35,040 198,560 *
------- ------ -------
Total . . . . . . . . . . . . . 35,177,816 5,366,139 29,811,677 71.5%
========== ========= ========== ======
- -------------------------
*less-----------------
* Less than one percent
13
141%.
(1) The information contained in the table above includes sharesShares of Common Stock that the Selling Stockholder has the right to acquireare not outstanding but that may be
acquired by a person upon exercise of options or warrants within 60
days after the date of this Prospectus are deemed outstanding for the
purpose of computing the number of shares and the percentage of
outstanding shares beneficially owned by such person; however, such
shares are not deemed outstanding for the purpose of computing the
percentage of outstanding shares beneficially owned by any other
person.
(2) Each of these entities has a common investment advisor, which may be
deemed to be the beneficial owner of all of the shares held by such
entities.
(3) Acquired from CBIZ and certain selling stockholders through a private
placement on February 6, 1998.
(4) Each of these entities has a common investment advisor, which may be
deemed to be the exercisebeneficial owner of any option or warrantall of the shares held by such
entities.
(5) Each of these entities has a common investment advisor, which may be
deemed to be the beneficial owner of all of the shares held by such
entities.
(6) Each of these entities has a common investment advisor, which may be
deemed to be the beneficial owner of all of the shares held by such
entities.
(7) Each of these entities has a common investment advisor, which may be
deemed to be the beneficial owner of all of the shares held by such
entities.
(8) Each of these entities has a common investment advisor, which may be
deemed to be the beneficial owner of all of the shares held by such
entities.
(9) Marvin and excludesEleanor Basil are married and each of them may be deemed to
beneficially own the shares of Common Stockthe other.
(10) Connie and options or warrantsPaul Freeman are married and each of them may be deemed to
purchasebeneficially own the shares of Common
Stock held of record by other parties.
(2) Includes 14,850 shares of Common Stock issuable upon exercise of
outstanding warrants.
(3) Mr. DeGroote has served as Chairman of the Board and a Director of the
Company since April 1995. Mr. DeGroote served as President and Chief
Executive Officer of the Company from April 1995 until October 1996.
Mr. DeGroote also served as Chairman of the Board, President and
Chief Executive Officer of Republic Industries, Inc. from May 1991
until August 1995.
(4) Consists of 7,751,556 shares of Common Stock owned of record by
Westbury (Bermuda) Ltd., successor-in-interest to MGD Holdings
("Westbury"), and 6,495,556 shares of Common Stock that Westbury has
the right to acquire upon exercise of outstanding warrants.
(5) Includes 555,556 shares of Common Stock issuable upon exercise of
outstanding warrants.
(6) Consists of 7,196,000 shares of Common Stock owned of record by
Westbury and 5,940,000 shares of Common Stock that Westbury has the
right to acquire upon exercise of outstanding warrants.
(7) Ms. Ellis is the wife of Roswell P. Ellis, the Senior Vice President -
Insurance Group of the Company since March 1997.
(8) Mr. Feighan has served as Chief Executive Officer, President and a
Director of the Company since October 1996.
(9) Mr. Ferrill has served as a Director of the Company since October
1996.
(10) Consists of 7,500 shares of Common Stock owned of record by The Harve
A. Ferrill Trust U/A 12/31/69 and 5,500 shares of Common Stock
issuable upon exercise of outstanding warrants.
(11) Includes 5,500 shares of Common Stock issuable upon exercise of
outstanding warrants.
(12) Owned of record by The Harve A. Ferrill Trust U/A 12/31/69.
(13) Ms. LoConti is the mother of Joseph E. LoConti. See Footnote 14.
(14) Mr. LoConti served as Vice Chairman and a Director of the Company from
April 1995 until March 1997. Mr. LoConti has entered into a
Representation Agreement with the Company under which Mr. LoConti will
continue to provide his exclusive services to the Company.
(15) Joseph E. LoConti serves as trustee. See Footnote 14.
(16) Includes 193,050 shares of Common Stock issuable upon exercise of
outstanding warrants.
(17) Includes 93,555 shares of Common Stock issuable upon exercise of
outstanding warrants.
(18) Includes 103,950 shares of Common Stock issuable upon exercise of
outstanding warrants.
(19) Includes 91,773 shares of Common Stock issuable upon exercise of
outstanding warrants.
(20) Mr. Rochon has served as a Director of the Company since October 1996.
(21) Consists of 111,110 shares of Common Stock owned of record by WeeZor I
Limited Partnership, a limited partnership controlled by Mr. Rochon,
and includes 55,555 shares of Common Stock issuable upon exercise of
outstanding warrants.
(22) Includes 55,555 shares of Common Stock issuable upon exercise of
outstanding warrants.
(23) Ms. Skoda is the wife of Gregory J. Skoda, the Executive Vice
President and Chief Financial Officer of the Company since December
1996.
(24) Includes 96,822 shares of Common Stock issuable upon exercise of
outstanding warrants.
(25) Mssrs. Joseph E. LoConti, Craig L. Stout, Edward F. Feighan and
Gregory J. Skoda are managers of Sophia Management Ltd. See
Footnotes 8, 14, 23 and 26.
(26) Mr. Stout has served as Chief Operating Officer and a Director of the
Company since October 1996.other.
13
15
PLAN OF DISTRIBUTION
The Shares may be sold or distributed from time to time by or for the
account of the Selling Stockholders, or their pledgees on behalf of the Selling
Stockholder, in transactions (which may involve crosses and block transactions)
on Nasdaq or any national securities exchange or U.S. inter-dealer quotation
system of a registered national securities association on which the Shares are
then listed, in the over-the-counter market, in one or more privately negotiated
transactions (including sales pursuant to pledges), through the writing of
options on the Shares, in a combination of such methods of distribution or by
any other legally available means. This Prospectus also may be used, with the
Company's consent, by donees of the Selling Stockholders, or by other persons
acquiring Shares and who wish to offer and sell such Shares under circumstances
requiring or making desirable its use. Such methods of sale may be conducted by
the Selling Stockholders at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at prices otherwise
negotiated. The Selling Stockholders may effect such transactions directly, or
indirectly through broker-dealers or agents acting on their behalf and, in
connection with such sales, such broker-dealers or agents may receive
compensation in the form of commissions or discounts from the Selling
Stockholders and/or the purchasers of the Shares for whom they may act as agent
or to whom they sell Shares as principal or both (which commissions or discounts
might be in excess of customary commissions). To the extent required, the
Company will file, during any period in which 14
15
offers or sales are being made,
one or more supplements to this Prospectus to set forth the names of donees of
Selling Stockholders and any other material information with respect to the plan
of distribution not previously disclosed.
The Shares may be sold from time to time by the Selling Stockholders,
or by pledgees, donees, transferees or other successors in interest. The Selling
Stockholders may also loan or pledge the Shares registered hereunder to a
broker-dealer and the broker-dealer may sell the Shares so loaned or upon a
default the broker-dealer may effect sales of the pledged Shares pursuant to
this Prospectus.
The Selling Stockholders and any such underwriters, brokers, dealers or
agents that participate in such distribution may be deemed to be "underwriters"
within the meaning of the Securities Act, and any discounts, commissions or
concessions received by any such underwriters, brokers, dealers or agents might
be deemed to be underwriting discounts and commissions under the Securities Act.
Neither the Company nor the Selling Stockholders can presently estimate the
amount of such compensation. The Company knows of no existing arrangements
between any Selling Stockholder and any other Selling Stockholder, underwriter,
broker, dealer or other agent relating to the sale or distribution of the
Shares.
Under applicable rules and regulations under the Exchange Act, any
person engaged in a distribution of any of the Shares may not simultaneously
engage in market activities with respect to the Common Stock for a period of
two business days prior to the commencement of such distribution.except in
accordance with applicable law. In addition and without limiting the foregoing,
the Selling Stockholders will be subject to applicable provisions of the
Exchange Act; including without limitation Rule 10b-5 and Regulation M, which
provisions may limit the timing of purchases and sales of any of the Shares by
the Selling Stockholders. All of the foregoing may affect the marketability of
the Common Stock.
The Company will not receive any of the proceeds from the sale of the
Shares offered hereby, buthereby. The Company will bear all expenses incident to the
registration of the Shares under federal and state securities laws and the sale
of the Shares hereunder other than expenses incident to the delivery of the
Shares to be sold by the Selling Stockholders, including anyStockholders. Any transfer taxes payable on any
Shares and any commissions and discounts payable to underwriters, agents or
dealers.dealers shall be paid by the Selling Stockholders.
In order to comply with certain states' securities laws, if applicable,
the Shares will be sold in such jurisdictions only through registered or
licensed brokers or dealers. In addition, in certain states the Common Stock may
not be sold unless the Common Stock has been registered or qualified for sale in
such state or an exemption from registration or qualification is available and
is complied with.
14
16
LEGAL MATTERS
The validity of the Shares offered hereby will behas been passed upon for the
Company by Akin, Gump, Strauss, Hauer & Feld, L.L.P. ("Akin Gump"). Mr. Rick L.
Burdick, a partner with Akin Gump, owns 500is a director of the Company and is the
beneficial owner of 62,500 shares of Common Stock (including options and
warrants to purchase 12,000 shares of Common Stock.Stock).
EXPERTS
The audited consolidated and combined financial statements and schedules of Century Business Services,
Inc. as of December 31, 1997, 1996 and 1995 and for each of the Company (formerly known as Republic Environmental Systems, Inc.) and its
subsidiaries foryears in the
yearsthree-year period ended December 31, 1994, 1995 and 19961997, have been incorporated by reference
herein and in this Prospectus and elsewherethe registration statement in this Registration Statement
have been audited byreliance upon the report of KPMG
Peat Marwick LLP, independent certified public accountants, incorporated by
reference herein, and upon the authority of said firm as experts in accounting
and auditing.
UNCERTAINTY OF FORWARD LOOKING STATEMENTS
Certain statements and information in this Prospectus (including
documents incorporated herein by reference, see "Incorporation of Certain
Documents by Reference") constitute forward-looking statements within the
meaning of the Federal Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are typically punctuated by words or phrases such as
"anticipate," "estimate," "projects," "management believes," "the Company
believes" and words or phrases of similar import. Such statements are subject to
certain risks, uncertainties or assumptions. Should one or more of these risks
or uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those anticipated, estimated or
projected. Among the key factors that may have a direct bearing on the Company's
results of operations and financial condition are: (i) 15
16
demand for the Company's services;Century's ability to grow
through acquisitions of strategic and complementary businesses; (ii) the Company'sCentury's
ability to finance such acquisitions; (iii) Century's ability to manage growth;
(iv) Century's ability to integrate the operations of acquired businesses; (iii) the Company's(v)
Century's ability to expand into
new markets; (iv) the consummation of the Company's dispositionattract and retain experienced personnel; (vi) Century's
ability to store, retrieve, process and manage significant databases; (vii)
Century's ability to manage pricing of its environmental services operations; (v) environmental liabilities to which the
Company may become subject in the future which are not covered by an indemnity
or insurance; (vi)insurance products and adequately
reserve for losses; (viii) the impact of current and future laws and
governmental regulations affecting the Company'sCentury's operations; (vii) competitive practices in
the specialty insurance and bonding industries; (viii) competitive practices in
the reinsurance markets utilized by the Company's insurance operations; (ix)
judicial, legislative, and regulatory changes of law relating to risks covered
by the Company's insurance operations or to the operations of insurance
companies in general; (x) market
fluctuations in the values or returns on assets in the Company'sCentury's investment
portfolios; (xi) pricing of the Company's
insurance products; and (xii) adverse loss development.
No dealer, salesperson or other person has been authorized to give any
information or to make any representations other than those contained in or
incorporated by reference in this Prospectus in connection with the offer made
by this Prospectus and, if given or made, such information or representations
must not be relied upon as having been authorized by the Company or the Selling
Stockholders. Neither the delivery of this Prospectus nor any sale made
hereunder shall under any circumstances create an implication that there has
been no change in the affairs of the Company since the date hereof. This
Prospectus does not constitute an offer to sell or the solicitation of an offer
to buy any security other than the shares of Common Stock offered hereby, nor
does it constitute an offer to sell or a solicitation of an offer to buy any
shares of Common Stock by anyone in any jurisdiction in which such offer or
solicitation is not authorized, or in which the person making such offer or
solicitation is not qualified to do so, or to any person to whom it is unlawful
to make such offer or solicitation.
16portfolios.
15
17
================================================================================
No dealer, salesperson or other person has been authorized to give any
information or to make any representations other than those contained in or
incorporated by reference in this Prospectus in connection with the offer made
by this Prospectus and, if given or made, such information or representations
must not be relied upon as having been authorized by the Company or the Selling
Stockholders. Neither the delivery of this Prospectus nor any sale made
hereunder shall under any circumstances create an implication that there has
been no change in the affairs of the Company since the date hereof. This
Prospectus does not constitute an offer to sell or the solicitation of an offer
to buy any security other than the shares of Common Stock offered hereby, nor
does it constitute an offer to sell or a solicitation of an offer to buy any
shares of Common Stock by anyone in any jurisdiction in which such offer or
solicitation is not authorized, or in which the person making such offer or
solicitation is not qualified to do so, or to any person to whom it is unlawful
to make such offer or solicitation.
------------------
TABLE OF CONTENTS
PAGE
----
Available Information . . . . . . . . . . 3
Incorporation of Certain Documents
by Reference . . . . . . . . . . . . . . 4
Risk Factors . . . . . . . . . . . . . . . 5
The Company . . . . . . . . . . . . . . . 12
Use of Proceeds . . . . . . . . . . . . . 12
Selling Stockholders . . . . . . . . . . . 13
Plan of Distribution . . . . . . . . . . . 15
Legal Matters . . . . . . . . . . . . . . 16
Experts . . . . . . . . . . . . . . . . . 16
Uncertainty of Forward
Looking Statements . . . . . . . . . . . . 16
5,366,139 SHARES
INTERNATIONAL
ALLIANCE
SERVICES, INC.
COMMON STOCK
PROSPECTUS
_____________, 1997
================================================================================
18
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14.14 -- OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.DISTRIBUTION
The following table sets forth the estimated expenses, other than
underwriting discounts and commissions, payable by the Registrant in connection
with the issuance and distribution of the securities being registered hereby.
Securities and Exchange Commission Filing Fee . . . . . . . . . . . . . . . . . . . . . . . . . .Fee....................... $ ----------28,284
Printing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
----------..................................................... 10,000
Legal Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
----------............................................ 100,000
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
----------...................................................... 1,716
--------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
----------......................................................... $140,000
ITEM 15.15 -- INDEMNIFICATION OF DIRECTORS AND OFFICERS.OFFICERS
Section 145 of the General Corporation Law of the State of Delaware
(the "DGCL") empowers a Delaware corporation to indemnify any person who was or
is a party, or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of such corporation) by
reason of the fact that such person is or was an officer or director of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise. The indemnity may include expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding, provided that such person acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the corporation or of another corporation or other enterprise at the former
corporation's request, in an action by or in the right of the corporation to
procure an enterprise at the former corporation's request, in an action by or in
the right of the corporation to procure a judgment in its favor under the same
conditions, except that no indemnification is permitted without judicial
approval if the officer or director is adjudged to be liable to the corporation.
Where an officer or director is successful on the merits or otherwise in defense
of any action referred to above, or in defense of any claim, issue or matter
therein, the corporation must indemnify such person against the expenses
(including attorneys' fees) which such person actually and reasonably incurred
in connection therewith. Section 145 further provides that any indemnification
shall be made by the corporation only as authorized in each specific case upon a
determination that indemnification of such person is proper because he has met
the applicable standard of conduct by the (i) stockholders, (ii) board of
directors by a majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding, (iii) committee of directors who are
not parties to such action, suit or proceeding designated by majority vote by
such disinterested directors even if less than a quorum, or (iv) independent
legal counsel, if there are no such disinterested directors, or if such
disinterested directors so direct. Section 145 further provides that
indemnification pursuant to its provisions is not exclusive of other rights of
indemnification to which a person may be entitled under any bylaw, agreement,
vote of stockholders or disinterested directors or otherwise.
The Amended and Restated Certificate of Incorporation, as amended, of
the Company entitles the Board of Directors to provide for indemnification of
directors and officers to the fullest extent provided by law, except for
liability (i) for any breach of the
directors'director's duty of loyalty to the Company or its
stockholders, (ii) for acts ofor omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) for unlawful
payments of dividends, or for unlawful stock purchases or redemptions, or (iv)
for any transaction from which the director derived an improper personal
benefit.
Article VII of the Amended and Restated Bylaws of the Company provideprovides
that to the fullest extent and in the manner providedpermitted by the laws of the State
of Delaware and specifically as is permitted under Section 145 of the General Corporation Law
of the State of Delaware,DGCL, the
Company shall indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, other than an
II-1
18
action by or in the right of the Company, by reason of the fact that such person
is or was a director, officer, employee or agent of the Company, or is or was
serving at the request of the Company as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise
against expenses, including attorneys' fees, judgments, fines and amounts paid
in settlement actually and reasonably incurred in connection with such action,
suit, or proceeding if hesuch person acted in good faith and in a manner he
reasonably believed to be in and not opposed to the best interests of the
Company and with respect to any criminal action or proceeding, hesuch person had
no reasonable cause to believe his conduct was unlawful. Determination of anyan
action, suit, or proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo contendere or its equivalent shall not, of itself, create a
presumption that thea person did not act in a good faith and in a manner which hesuch person
reasonably believed to be in and not opposed to the best interests of the
Company, and with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was lawful.
The Amended and Restated Bylaws provide that any decision as to
indemnification shall be made: (a) by the Board of Directors of the Company by a
majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding; or (b) if such a quorum is not obtainable, or even
if obtainable, if a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion; or (c) by the stockholders. The Board of
Directors of the Company may authorize indemnification of expenses incurred by
an officer or director in defending a civil or criminal action, suit or
proceeding in advance of the final disposition of such action, suit or
proceeding. Indemnification pursuant to these provisions is not exclusive of any
other rights to which those seeking indemnification may be entitled under any
bylaw, agreement, vote of stockholders or disinterested directors or otherwise
and shall indemnifycontinue as to a person who has ceased to be a director or officer.
The Company may purchase and maintain insurance on behalf of any person who is
or was a director, officer, employee or is a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or inagent of the rightCompany.
Further, the Amended and restated Bylaws of the Company provide that
the indemnity provided will be extended to procurethe directors, officers, employees
and agents of any constituent corporation (including any constituent of a
judgmentconstituent) absorbed in a consolidation or merger which, if its favor by reason of the factseparate
existence has continued, would have had power and authority to indemnify its
directors, officers, and employees or agents so that heany person who is or was a
director, officer, employee or agent of such constituent corporation, or is or
was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under the provisions
of the Amended and Restated Bylaws with respect to the resulting or surviving
corporation as such person would have with respect to such constituent
corporation if its separate existence had continued.
The Company does not currently maintain a separate insurance policy
relating to its directors and officers; however, the Company is currently
considering purchasing and maintaining an insurance policy under which the
directors and officers of the Company would be insured, within the limits and
subject to the limitations of the policy, against certain expenses including attorneys' fees, actually
and reasonably incurred by him in connection
with the defense of certain claims, actions, suits or settlementproceedings, and certain
liabilities which might be imposed as a result of such actionclaims, actions, suits or
suit if he acted in good faith and in a manner he reasonably
believed toproceedings, which may be inbrought against them by reason of being or not opposed to the best interests of the Company, except
that no indemnification shall be made in respect of any claim, issuehaving been
such directors or matter
as to which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the Company unless the court
orders otherwise.
II-1officers.
II-2
19
ITEM 16.16 -- EXHIBITS
The following exhibitsExhibits are filed as part of this Registration
Statement:
EXHIBIT NUMBER EXHIBIT DESCRIPTION
4.1* -- Form of Stock Certificate of Common Stock of the Company
(filed as Exhibit 4.1 to the Company's Registration
Statement on Form 10, file no. 0-25890, and incorporated
herein by reference).
5.1** -- Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
23.1 -- Consent of KPMG Peat Marwick LLP.
23.2** -- Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
(included in its opinion filed as Exhibit 5.1).
24.1 -- Powers of Attorney (included on the signature pages
attached hereto).
EXHIBIT DESCRIPTION
NUMBER -----------
------
*3.1 --Amended and Restated Certificate of Incorporation of the
Company (filed as Exhibit 3.1 to Registration Statement on
Form 10, Commission File No. 0-25890 and incorporated herein
by reference)
*3.2 --Certificate of Amendment to the Amended and Restated
Certificate of Incorporation of the Company dated October
18, 1996 (filed as Exhibit 3.2 to Annual Report on Form 10-K
for the fiscal year ended December 31, 1996 and incorporated
herein by reference)
*3.3 --Certificate of Amendment to the Amended and Restated
Certificate of Incorporation of the Company effective
October 23, 1997 (filed as Exhibit 3.3 to Annual Report on
Form 10-K for the fiscal year ended December 31, 1997 and
incorporated herein by reference)
*3.4 --Amended and Restated Bylaws of the Company (filed as
Exhibit 3.2 to Registration Statement on Form 10, Commission
File No. 0-25890 and incorporated herein by reference)
*4.1 --Form of Stock Certificate of Common Stock of the Company
(filed as Exhibit 4.1 to the Company's Registration
Statement on Form 10, Commission File No. 0-25890 and
incorporated herein by reference)
*4.2 --Promissory Note, dated October 18, 1996, in the original
aggregate principal amount of $4.0 million issued by the
Company payable to Alliance Holding (filed as Exhibit 99.7
to the Company's Current Report on Form 8-K dated October
18, 1996 and incorporated herein by reference)
*4.3 --Form of Warrant for the purchase of the Company's Common
Stock (filed as Exhibit 4.3 to Annual Report on Form 10-K
for the fiscal year ended December 31, 1997 and incorporated
herein by reference)
5.1 --Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
23.1 --Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
(included in Exhibit 5.1)
23.2 --Consent of KPMG Peat Marwick LLP
23.3 --Consent of KPMG Peat Marwick LLP
23.4 --Consent of KPMG Peat Marwick LLP
23.5 --Consent of KPMG Peat Marwick LLP
23.6 --Consent of KPMG Peat Marwick LLP
23.7 --Consent of KPMG Peat Marwick LLP
23.8 --Consent of KPMG Peat Marwick LLP
23.9 --Consent of Altschuler, Melvoin and Glasser LLP
23.10 --Consent of Gelfond Hochstadt Pangburn & Co.
24.1 --Power of Attorney (included in the signature page of this
Registration Statement)
- ---------------------------
* Previously filed.
** To be filed by amendment.
ITEM 17. UNDERTAKINGS.17 -- UNDERTAKINGS
(a) The undersigned RegistrantCompany hereby undertakes as follows:undertakes:
II-3
20
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statementRegistration Statement:
(i) to include any prospectus required by Section 10 (a)
(3) of the Securities Act:
(ii) to reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in this
Registration Statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424 (b) if, in the
aggregate, the changes in volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement;
(iii) to include any material information with respect to
the plan of distribution not previously disclosed in thethis Registration Statement
or any material change to such information in the Registration Statement.Statement;
(2) That,that, for the purpose of determining any liability under
the Securities Act, each such post- effectivepost-effective amendment shall be deemed to be a
new registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.thereof; and
(3) Toto remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.Offering.
(b) The undersigned RegistrantCompany hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the Registrant'sCompany's
annual report pursuant to section 13(a)Section 13 (a) or section 15(d)15 (d) of the Exchange Act
that is incorporated by reference in the registration statementthis Registration Statement shall be deemed
to be a new registration statement relating to the securities offered therein,herein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.thereof;
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933act may be permitted to directors, officers and controlling persons
of the RegistrantCompany pursuant to the foregoing provisions, or otherwise, the RegistrantCompany
has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the RegistrantCompany of expenses incurred or paid
by a director, officer or controlling person of the RegistrantCompany in the successful
defense of any action, suit, or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the RegistrantCompany will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to
II-2
20 a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3II-4
21
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the RegistrantCompany certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the cityCity of Cleveland,Valley View, State of Ohio, on May 15, 1997.
INTERNATIONAL ALLIANCEFebruary 19,
1998.
CENTURY BUSINESS SERVICES, INC.
(Registrant)
By: /s/ EDWARD F. FEIGHAN
-------------------------------------
Edward F. Feighan
ChiefGREGORY J. SKODA
----------------------------------------
Gregory J. Skoda
Executive Officer andVice President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears
below on this Registration Statement hereby constitutes and appoints Edward F. Feighan,Michael G. DeGroote and Gregory J. Skoda, and Craig L. Stout, and
each of them, with fullthe power to act without the other, his true and lawful
attorney-in-factattorneys-in-fact and agent,agents, with full power of substitution and
resubstitution, for him andin his name, place and stead, in any and all capacities,
(until revoked in writing), to sign on his behalf individually and in each capacity stated below any andor all
amendments or post-effective amendments to this Registration Statement, of International Alliance Services,
Inc. and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto each said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, therebyhereby ratifying and confirming all that each of said
attorneys-in-fact and agents, or theireither of them, or histheir substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons on behalf of the
Company in the
capacities andindicated on the dates indicated.February 19, 1998.
SIGNATURE TITLE
DATE- --------- -----
----
/s/ MICHAEL G. DEGROOTE President, Chief Executive Officer, Chairman of the
- ---------------------------------------------- Board and Director May 15, 1997
- ----------------------------------(Principal Executive Officer)
Michael G. DeGroote
/s/ EDWARD F. FEIGHAN Chief Executive Officer, May 15, 1997
- ---------------------------------- President and Director
Edward F. Feighan (Principal Executive Officer)
/s/ HARVE A. FERRILL Director May 15, 1997
- ----------------------------------
Harve A. Ferrill
/s/ DOUGLAS R. GOWLAND Senior Vice President - Environmental May 15, 1997
- ---------------------------------- Operations and Director
Douglas R. Gowland
/s/ RICHARD C. ROCHON Director May 15, 1997
- ----------------------------------
Richard C. Rochon
/s/ GREGORY J. SKODA Executive Vice President and May 15, 1997Director
- --------------------------------------------------------------------------------
Gregory J. Skoda
/s/ CHARLES D. HAMM, JR. Chief Financial Officer and Treasurer (Principal
Gregory J. Skoda- ---------------------------------------------- Accounting and Financial and Accounting Officer)
Charles D. Hamm, Jr.
/s/ CRAIGRICK L. STOUT Chief Operating Officer May 15, 1997BURDICK Director
- ---------------------------------- and----------------------------------------------
Rick L. Burdick
/s/ JOSEPH S. DiMARTINO Director
Craig L. Stout- ----------------------------------------------
Joseph S. DiMartino
/s/ HARVE A. FERRILL Director
May --, 1997
- ----------------------------------
Hugh----------------------------------------------
Harve A. Ferrill
/s/ HUGH P. LOWENSTEIN Director
- ----------------------------------------------
Hugh P. Lowenstein
/s/ RICHARD C. ROCHON Director
- ----------------------------------------------
Richard C. Rochon
II-5
22
INDEX TO EXHIBITS
EXHIBIT DESCRIPTION
NUMBER EXHIBIT DESCRIPTION
------------
------ -------------------
4.1* --*3.1 --Amended and Restated Certificate of Incorporation of the
Company (filed as Exhibit 3.1 to Registration Statement on
Form 10, Commission File No. 0-25890 and incorporated herein
by reference)
*3.2 --Certificate of Amendment to the Amended and Restated
Certificate of Incorporation of the Company dated October
18, 1996 (filed as Exhibit 3.2 to Annual Report on Form 10-K
for the fiscal year ended December 31, 1996 and incorporated
herein by reference)
*3.3 --Certificate of Amendment to the Amended and Restated
Certificate of Incorporation of the Company effective
October 23, 1997 (filed as Exhibit 3.3 to Annual Report on
Form 10-K for the fiscal year ended December 31, 1997 and
incorporated herein by reference)
*3.4 --Amended and Restated Bylaws of the Company (filed as
Exhibit 3.2 to Registration Statement on Form 10, Commission
File No. 0-25890 and incorporated herein by reference)
*4.1 --Form of Stock Certificate of Common Stock of the Company
(filed as Exhibit 4.1 to the Company's Registration
Statement on Form 10, file no.Commission File No. 0-25890 and
incorporated herein by reference).
5.1** -- Opinion
*4.2 --Promissory Note, dated October 18, 1996, in the original
aggregate principal amount of $4.0 million issued by the
Company payable to Alliance Holding (filed as Exhibit 99.7
to the Company's Current Report on Form 8-K dated October
18, 1996 and incorporated herein by reference)
*4.3 --Form of Warrant for the purchase of the Company's Common
Stock (filed as Exhibit 4.3 to Annual Report on Form 10-K
for the fiscal year ended December 31, 1997 and incorporated
herein by reference)
5.1 --Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
23.1 -- Consent of KPMG Peat Marwick LLP.
23.2** -- Consent--Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
(included in its opinion filed as Exhibit 5.1).
23.2 --Consent of KPMG Peat Marwick LLP
23.3 --Consent of KPMG Peat Marwick LLP
23.4 --Consent of KPMG Peat Marwick LLP
23.5 --Consent of KPMG Peat Marwick LLP
23.6 --Consent of KPMG Peat Marwick LLP
23.7 --Consent of KPMG Peat Marwick LLP
23.8 --Consent of KPMG Peat Marwick LLP
23.9 --Consent of Altschuler, Melvoin and Glasser LLP
23.10 --Consent of Gelfond Hochstadt Pangburn & Co.
24.1 -- Powers--Power of Attorney (included onin the signature pages attached hereto).page of this
Registration Statement)
- ------------------------
* Previously filed.
** To be filed by amendment