SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Fiscal Year Ended June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission File No. 000-8027
EASTCO INDUSTRIAL SAFETY CORP.
(Name of small business issuer in its charter)
NEW YORK 3842 11-1874010
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Classification Identification
incorporation or Code Number) Number)
organization)
130 West 10th Street, Huntington Station, New York 11746
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (516) 427-1802
Securities registered pursuant to Section 12 (b) of the Act:
Name of Each Exchange
Title of Class on Which Registered
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a) $.12 par value common stock ("Common Stock") Boston Stock Exchange
b) Class B Redeemable common stock purchase Boston Stock Exchange
warrant ("Class B Warrant")
Securities registered pursuant to Section 12 (g) of the Act:
a) $.12 par value common stock ("Common Stock")
b) Class A Redeemable Common Stock Purchase Warrant ("Class A Warrant")
c) Class B Redeemable Common Stock Purchase Warrant ("Class B Warrant")
Check whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act of 1934 during the preceding twelve
(12) months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to the filing requirements for the past
ninety (90) days.
YES X NO
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Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K: [X}
State registrant's revenues for its most recent fiscal year. $34,339,038.
The aggregate market value of the common stock held by non-affiliates of the
registrant as of September 17, 1998 was approximately $1,930,000. Non-affiliates
include all shareholders other than officers, directors and 5% shareholders
known to registrant. Market value is based upon the price of the common stock of
the registrant as of the close of business on September 17, 1998 which was $1.44
per share as reported by NASDAQ.
As of September 17, 1998, the number of shares outstanding of the common stock
of the registrant was 1,683,079 shares. The number of shares has been adjusted
for prior stock splits and estimated rounding for fractional shares.
DOCUMENTS INCORPORATED BY REFERENCE
Part III which includes Item 10 (Directors and Executive Officers of the
Registrant), Item 11 (Executive Compensation), Item 12 (Security Ownership of
Certain Beneficial Owners and Management) and Item 13 (Certain Relationships and
Related Transactions) will be incorporated in the registrant's proxy statement
to be filed within 120 days of June 30, 1998 and are incorporated herein by
reference thereto.
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PART I
Item 1. DESCRIPTION OF BUSINESS
(a) General Development of Business.
Eastco Industrial Safety Corp. (referred to herein as the "Company", the
"Registrant" or "Eastco"), is a corporation organized and existing under the
laws of the State of New York, having been incorporated on May 15, 1958.
The Company, through its wholly-owned subsidiaries, Disposable Safety Wear,
Inc. ("Disposable"), Safety Wear Corp. ("Safety Wear"), Eastco Glove
Technologies, Inc. ("Glove Technologies"),Puerto Rico Safety Equipment
Corporation ("Puerto Rico Safety Equipment"), and Puerto Rico Safety Corp.
("Puerto Rico Safety"), manufactures industrial protective clothing products and
distributes a wide range of industrial safety products. The Company's
Manufacturing Operations sells its products to distributors. The Company's
Distribution Operations sells products to "end users," including manufacturing
companies and service businesses, public utilities, fisheries, pharmaceutical
plants, the transportation industry and companies engaged in hazardous materials
abatement. Use of products sold by the Company has in a large part resulted from
the adoption of OSHA standards and the awareness of industry and the general
public for the need to remove hazardous materials contained in industrial
facilities, schools and buildings.
During fiscal 1997, the Company began to focus more on the sale of products
manufactured by it in its manufacturing segment.
In April, 1997, the Company acquired a business (Glove Technologies) based
in Minnesota which manufactures protective knit gloves which are being sold
nationally through the Company's distributors.
During fiscal year 1997, the Company commenced the use of separate
contracted production facilities in Mexico to sew materials already cut by the
Company. The use of these subcontractors results in reduced production costs.
In March 1997, Lawrence Densen became President and Chief Executive Officer
of the Company. Arthur Wasserspring became Chief Financial Officer and
Vice-President of Finance, and Richard Boyen became Vice-President of
Manufacturing on February 1, 1997.
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(b) Financial Information About Industry Segments.
The financial information about the Company's business segments for each of
its last three fiscal years ended June 30, 1998 is included in Note 10 of the
Notes to the Consolidated Financial Statements and is incorporated by reference
thereto.
(c) Description of Business.
Manufacturing Operations
(i) Manufactured products are sold under the "Charkate/Worksafe", "Charkate",
"Worksafe" and "COVER-UP" trade names. The Company, through Disposable, Safety
Wear and Puerto Rico Safety Equipment, manufactures limited use (in prior years
referred to as disposable) and reusable industrial protective apparel. Limited
use protective products include coveralls, shirts, pants, headwear, hoods,
aprons, smocks, lab coats, hazardous material handler suits, examination gowns,
sleeves, shoe covers and related items. Limited use clothing is designed to
protect the user from, among other things, splash, dirt contamination and
against a wide range of substances. Limited use clothing is made primarily of a
spun bonded polyolefin produced solely by DuPont under the trade name Tyvek(R).
Reusable industrial protective clothing consists of items for the protection of
various parts of the body which are designed to shield the user from, among
other things, splash, dirt, contamination, heat, fire, cold and the outside
environment. Specific products manufactured include coveralls, gloves, mitts,
shirts, thermal underwear, sleeves, coats, pants, leggings, spats, bibs, safety
vests and a variety of other kinds of protective clothing and uniforms.
Pursuant to the acquisition during April, 1997, the Company now
manufactures protective knit gloves and sleeves which are sold by the Company's
Charkate Worksafe/Knit Glove Division. These products are generally made of
cotton and cotton polyester, composite high tensile cut resistant yarns, Kevlar
(R) Brand aramid fibers, as well as steel, stainless steel and other high cut
resistant composite fibers. The products may have special coating and in general
are used to protect the user from cuts and abrasions, and can be used in
industries involving such items as meat packing, glass handling, sheet metal,
and automotive protection.
Sales of manufactured limited use clothing and related limited use products
accounted for approximately 54%, 45% and 43% of the Company's consolidated
revenues for the three fiscal years ended June 30, 1998, respectively.
The Company's Manufacturing Operations and warehousing facilities are
located in Puerto Rico, Minnesota and Alabama. The Company also has contracted
production facilities in Mexico to sew materials already cut by the Company. The
Company's Manufacturing Operations are directed primarily from Alabama and its
sales are directed from New York. The Company's products are sold primarily in
the United States and Puerto Rico. The Company sells its manufactured products
through independent distributors. In addition, manufactured products are sold
through the Company's Distribution Operations in the northeastern region of the
United States and Puerto Rico.
The Company utilizes catalogs, telemarketing and its website
(www.eastco.com) to aid in its sales efforts, although the Company does not
engage in any mail order business. Sales are primarily to distributors who sell
to "end users" comprised of industrial, commercial and governmental accounts.
The Company considers industrial accounts to be those businesses which are
primarily based upon manufacturing and production, while commercial accounts are
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considered by the Company to be service businesses. The Company also believes
that standards established by OSHA have resulted in a need by others to purchase
the Company's products. Sales are also promoted through trade shows, mailings
and advertising in trade magazines and directories.
(ii) The Company has made no public announcement of, or made public information
about, any new product in this segment which would require the investment of a
material amount of the Company's assets or which otherwise is material, other
than with respect to its aforementioned acquisition described above in Item 1(a)
and in the Company's 10QSB for the period ended March 31, 1997, Part II, Item
V(d) which is incorporated by reference herein.
(iii) The Company is not dependent upon any one company for a source of supply
of raw materials for its manufacturing operations other than DuPont which
supplies the Company with Tyvek(R), which is used in various lines of its
limited use products. Products utilizing Tyvek(R) accounted for approximately
52%, 44% and 41% of consolidated sales for the three fiscal years ended June 30,
1998, respectively. Management believes that its current relationship with
DuPont is satisfactory. Loss of DuPont as a supplier of Tyvek (R) would have a
material adverse effect on the Company's Operations.
(iv) Puerto Rico Safety Equipment is engaged in manufacturing in Puerto Rico and
was granted an exemption for seventeen (17) years under the Puerto Rico
Industrial Tax Exemption Act of 1963 (the "Industrial Tax Act") with respect to
Puerto Rico income taxes on the production of such items as safety clothing,
protective sleeves, coats, pants, hoods and jackets for the period commencing
January 1, 1970. On July 1, 1989 Puerto Rico Safety Equipment was granted an
extension of its exemption and has a 90% exemption from Puerto Rico income taxes
for the ten-year period ending on June 30, 1999. During this period, Puerto Rico
Safety Equipment has a 75% exemption from Puerto Rico municipal taxes on its
real and personal property utilized in its operations.
Disposable has been granted a fifteen-year exemption under the Industrial
Tax Act with respect to Puerto Rico income taxes on its operations covering the
production of limited use clothing and with respect to the property used in its
operations for the period commencing June 4, 1977, subject to the terms of the
grant. This exemption has been extended until June 30, 2006 on the basis of a
90% exemption on Puerto Rico income taxes and a 60% exemption on municipal taxes
on its real and personal property.
As Puerto Rico tax exemptions are reduced or expire, the Company may be
required to pay taxes on income earned in Puerto Rico. The Company is unable to
predict the amount of such impact after such exemptions are reduced or expire.
Puerto Rico Safety Equipment and Disposable have elected to apply Section
936 of the Internal Revenue Code, effective July 1, 1979. The provisions of
Section 936 are effective until revoked by the Company. If the
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conditions of Section 936(a)(2) are satisfied, the Section 936 credit equals the
portion of the United States income tax that is attributable to taxable income
from sources outside the United States derived from the active conduct of a
trade or business within a United States possession, or the sale or exchange of
substantially all of the qualified possession source investment income.
Dividends payable by each subsidiary to the Company from operations are entitled
to a 100% dividends received deduction but are subject to a 10% withholding tax
in Puerto Rico. The Omnibus Budget Reconciliation Act of 1993 (the "Omnibus
Act") imposed new limitations on computing the Possession Tax Credit under
Section 936 for tax years beginning after 1993. The Company made an election in
1995 which reduced the credit to 60% of the 1994 level and which further phases
out the credit by 5% in each subsequent year to a maximum credit of 40% in 1998.
Since the credit is a function of future earnings, if any, the effect of such
limitations cannot be determined at the present time. In addition, the Omnibus
Act makes the 100% dividends received deduction subject to the Alternative
Minimum Tax Calculation. The Small Business Job Protection Act of 1996 further
limits the Possession tax credit for years beginning after 2001 with the credit
being eliminated for tax years beginning after 2005. No dividends have been
declared on the aggregate undistributed earnings of Puerto Rico Safety Equipment
and Disposable (which through June 30, 1998, aggregates approximately
$1,187,000) and none are intended to be declared because it is management's
intention to reinvest the earnings, if any, from such subsidiaries indefinitely.
The Company believes that based upon current operations, the Omnibus Act will
not have a material effect on the Company for the foreseeable future.
The Company is a party to a Garment Manufacturer & Seller License Agreement
with DuPont, pursuant to which DuPont provides the Company with nonwoven fabric
under its trademark. This Agreement may be terminated by either party for any
reason with 120 days notice.
(v) The Company does not consider this segment of its business to be seasonal.
(vi) The Company is required to maintain substantial inventories (see
Consolidated Financial Statements) for this segment in order to meet the
immediate shipping requirements of its customers who require products on short
notice and who do not maintain an inventory of same. The Company believes that
other companies in this industry also maintain substantial inventories.
(vii) This segment of the Company is not dependent upon any single customer or
any few customers, the loss of any one or more of whom would have an adverse
effect on the business of the Company. No one company or customer accounts for
more than 10% of the Company's consolidated revenues.
(viii) The dollar amount of backlog of orders estimated and believed to be firm
for this segment as of June 30, 1998 was approximately $972,000 compared to
approximately $1,828,000 as of June 30, 1997. All of the backlog as of June 30,
1998 is expected to be filled during the current fiscal year. The Company's
backlog has been reduced because of its ability to increase production capacity
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thereby allowing it to be more current on its shipments.
(ix) No material portion of the business of the Company for this segment is
subject to renegotiation of profits or termination of contracts or subcontracts
at the election of the government.
(x) The Company faces competition in all of its product markets from larger,
established companies that have greater financial, managerial, sales and
technical resources than the Company, and certain markets for the Company's
products are dominated by such larger companies. While larger competitors may be
able to benefit from economies of scale and to introduce new products that
compete with the Company's products, management of the Company is accustomed to
such competition, and believes the Company will remain competitive in this group
of companies. The Company's major competitors in price and in service in its
Manufacturing Operations are Kappler Inc. and Lakeland Industries, Inc., in
limited use clothing sales, and Red Kap, a subsidiary of VF Industries Inc.,
Topps Mfg. Co. and Workrite Uniform Co. in the sale of reusable clothing.
Primary competitors in the manufacture of gloves are Chicago Protective Apparel,
Inc., Steel Grip, Inc., and Golden Needles Ansell, Inc.
(xi) The Company, during the last three fiscal years, has not spent any material
amount on research and development relating to the development or research
activities of new products, services or techniques or the improvement of
existing products, services or techniques.
(xii) Compliance with Federal, State and local environmental laws is expected to
have no material effect upon capital expenditures, earnings and the competitive
position of the Company. The Company's manufacturing facilities are subject to
regulation and inspection standards established by OSHA. Such facilities have
not yet been inspected for compliance with OSHA. Although the Company believes
it is in material compliance with required standards, there can be no assurance
that any inspection will not reveal that the Company has failed to comply with
OSHA and that, as a result, the Company may be required to expend sums, which
can be costly, to assure compliance with OSHA regulations.
(xiii) The total number of employees employed by the Registrant as of June 30,
1998 was approximately 261 for both segments.
Distribution Operations
(i) The Company, primarily through Eastco, distributes industrial safety
products manufactured by third parties. Products distributed include hard hats,
protective clothing, gloves, glasses, ear muffs, ear plugs, respirators,
goggles, face shields, rainwear, protective footwear, first-aid kits, monitoring
devices, signs and related products. These products are sold to industry and
service businesses, including utilities, hospitals, pharmaceutical plants, and
companies engaged in hazardous materials abatement.
The Company supplies a variety of items which may be used during the
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removal and/or encapsulation of hazardous materials in office buildings,
chemical plants, refineries, power-generating plants, schools and hospitals.
Abatement products sold by the Company largely include items made by other
companies, such as negative air machines, respirators, air filtration equipment,
vacuums, polybags and sheetings, decontamination showers, signs, tools, pumps,
sprayers and related equipment. The Company does not engage in the removal or
encapsulation of hazardous materials. Sales of these products accounted for
approximately 12%, 13% and 20% of the Company's consolidated revenues for the
three fiscal years ended June 30, 1998, respectively. The foregoing percentages
do not include products used in the abatement field which are manufactured by
the Company.
The Company's Distribution Operations are primarily directed from the
Company's offices in New York. The Company also has facilities for warehousing
and distribution of its non-manufactured products in Puerto Rico, Connecticut
and Florida. The Company sells a variety of safety products including those
manufactured by 3M/Racal Health, Ansel/Edmont and Dalloz. Items distributed are
sold primarily in the northeastern region of the United States.
The Company employs full-time salespersons in its Distribution Operations
who sell products distributed by the Company, and on a more limited basis,
products manufactured by the Company. The Company uses catalogs and
telemarketing, and its website (www.eastco.com) in its sales efforts. The
Company does not engage in any mail order business, nor sell on a retail basis.
Sales are primarily to industrial, commercial and governmental accounts.
(ii) The Company has made no public announcement of, or made public information
about, any new product in this segment which would require the investment of a
material amount of the Company's assets or which otherwise is material.
(iii) The Company serves as a distributor for various firms but is not dependent
upon any one company for which it acts as a distributor.
(iv) Patents, trademarks, licenses, franchises and concessions are not material
to this segment.
(v) The Company does not consider this segment of its business to be seasonal.
(vi) The Company is required to maintain substantial inventories (see
Consolidated Financial Statements) for this segment in order to meet the
immediate shipping requirements of its customers who require products on short
notice and who do not maintain an inventory of same. The Company believes that
other companies in this industry also maintain substantial inventories.
(vii) This segment of the Company is not dependent upon any single customer or
any few customers, the loss of any one or more of whom would have an adverse
effect on the business of the Company. No one company or customer
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accounts for more than 10% of the Company's consolidated revenues.
(viii) The dollar amount of backlog of orders estimated and believed to be firm
for the segment as of June 30, 1998 was approximately $276,000 compared to
approximately $319,000 as of June 30, 1997. All of the backlog as of June 30,
1998 is expected to be filled during the current fiscal year.
(ix) No material portion of the business of the Company for this segment is
subject to renegotiation of profits or termination of contracts or subcontracts
at the election of the government.
(x) The Company faces competition in all of its product markets from larger,
established companies that have greater financial, managerial, sales and
technical resources than the Company, and certain markets for the Company's
products are dominated by such larger companies. While larger competitors may be
able to benefit from economies of scale and to introduce new products that
compete with the Company's products, management of the Company is accustomed to
such competition, and believes the Company will remain competitive in this group
of companies. The Company's major competitors in price and in service in its
Distribution Operations are Balco Industries, Inc. and Freemont Safety Corp. in
industrial sales, and Insulation Distributions Company, Industrial Productions
Company and Aramsco Company in abatement sales.
(xi) The Company, during the last three fiscal years, has not spent any material
amount on research and development relating to the development or research
activities of new products, services or techniques or the improvement of
existing products, services or techniques.
(xii) Compliance with Federal, State and local environmental laws in this
segment is expected to have no material effect upon capital expenditures, and
the competitive position of the Company.
(xiii) The total number of employees employed by the Registrant as of June 30,
1998 was approximately 261 for both segments.
(d) Financial Information About Foreign and Domestic Operations and Export
Sales.
All sales of the Company's products are primarily to the United States,
inclusive of Puerto Rico.
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Item 2. DESCRIPTION OF PROPERTY
The following properties are material to the business of the Company:
The executive offices of the Company are located at 130 West 10th Street,
Huntington Station, New York and are owned by the Company (the "Huntington
Property"). The Huntington Property is also used for warehousing and
distributing and contains approximately 25,000 square feet of warehouse space
and 5,000 square feet of office space. At June 30, 1998, the premises were
subject to a first real estate mortgage made in 1992, payable to 130 West 10th
Street Associates, LLC ("Associates") in the amount of $404,985. The wives of
Messrs. Alan Densen and Anthony Towell, executive officers and directors of the
Company and Charles Holzberg, a director, are members of Associates.
The Company's wholly-owned subsidiary, Disposable, leases a building, which
is used for manufacturing and warehousing, consisting of approximately 45,000
square feet in Aguadilla, Puerto Rico from the Puerto Rico Industrial
Development Company. A lease was entered into for these premises on February 21,
1995, effective for the ten year period commencing September 1, 1993. Rent for
the twelve month period ending August 31, 1998 was at the monthly rate of
$8,570, which escalates to $13,041 in the final year of the lease.
The Company's wholly-owned subsidiary, Safety Wear, occupies approximately
40,000 square feet in Decatur, Alabama. The premises are utilized for the
cutting and warehousing of coveralls and other limited use products. The Company
pays $8,450 rent per month on a month-to-month basis. Should these facilities
not be available to the Company, the Company believes that alternative sites are
readily available at a comparative cost.
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Item 3. LEGAL PROCEEDINGS
The Company, in the past, used asbestos in the manufacture of its products.
Such use was terminated by the Company in the mid-1980's. It has been alleged
that asbestos is a cause of cancer, asbestosis, mesothelioma, and other related
diseases, the symptoms of which may not appear for twenty or more years. Since
the early 1980's, numerous lawsuits have been instituted against the Company by
persons who have been exposed to asbestos and asbestos products. Such legal
proceedings, for the most part, are covered by the Company's insurance policies.
As of June 30, 1998, the Company estimates that it is a party to
approximately 1,100 cases with respect to exposure to asbestos involving
approximately 3,000 plaintiffs, of which 800 cases pertain to Puerto Rico Safety
Equipment, involving approximately 2,000 plaintiffs. Reference is made to
Exhibit 99.05 for a schedule of the known pending actions against the Company,
as of June 30, 1998, that have not been settled or dismissed.
All of the actions against the Company to date have been brought by
non-employees of the Company and are based upon personal injury claims. The
pending actions are in the Supreme Court of the State of New York, County of New
York; Superior Court of New Jersey, Middlesex County, Law Division; and the
Court of Common Pleas of Luzerne County, Trial Division of Pennsylvania. The
number of first-party plaintiffs include, in various instances, spouses of said
plaintiffs. The actions, with the exception of one pending action, involve a
multitude of defendants. The complaints allege exposure to asbestos and asbestos
products over various periods of time. Each seeks varying amounts of damages,
usually unlimited, or for each plaintiff as high as $10,000,000 for compensatory
damages and $20,000,000 for punitive damages. The Company may become a party to
additional asbestos actions in the future.
From 1981 through June 30, 1998, the Company estimates that approximately
1,700 actions on behalf of approximately 10,000 first-party plaintiffs have been
instituted against it concerning asbestos-related claims and that approximately
650 actions and the claims of approximately 7,000 plaintiffs have been
terminated against the Company. During fiscal 1998, the Company estimates
approximately 800 actions on behalf of approximately 2,000 first party
plaintiffs were instituted against it and approximately 33 cases involving 700
plaintiffs were settled or discontinued against the Company. The Company
estimates that as of June 30, 1998, with the exception of defense costs, a total
of approximately $1,800,000 has been paid, or agreed to be paid, in settlements
to date with regard to the terminated actions (inclusive of actions against
Puerto Rico Safety Equipment) of which all but approximately $35,000 has been
paid by the Company's insurance carriers. In addition, a number of cases have
been submitted directly to the Company's insurance carriers and settled directly
by them. The foregoing is based upon information available to the Company to
date. Through June 30, 1998, the Company has paid less than $37,000 for legal
and defense costs to counsel appointed by the insurance carriers to defend it.
Past results of settlements and defense costs are not necessarily indicative of
future settlements and defense costs, which the Company is unable to predict.
The Company believes that it maintained various policies of primary
insurance in different amounts which will protect it against liability for
asbestos-made, product-related personal injuries for the periods April 1, 1968
to April 1, 1969 and March 11, 1971 to November 27, 1985. The policies range in
amounts from $50,000 to $1,000,000. The Company also believes that since August
10, 1972 to on or about August 11, 1986, it has had various policies for excess
coverage applicable to asbestos claims. These policies range in amounts from
$500,000 to $10,000,000 for excess coverage. There are gaps of approximately six
weeks in the primary coverage between March 11, 1971 to November 27, 1985 and
approximately thirty-six months in the excess coverage between August 10, 1972
and August 11, 1986, and an additional period of approximately thirteen months
for excess coverage insurance companies in liquidation where there is likely to
be no coverage. Reference is made to Exhibits 99.06 and 99.07 for a schedule of
the foregoing insurance policies. The policies of insurance set forth on
Exhibits 99.06 and 99.07 are not applicable to all of the subsidiaries of the
Company, which have varying
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coverage, and such subsidiaries may also be without coverage for various times
of their doing business. Not all of these policies are in the possession of the
Company.
During fiscal 1994, the Company reached a settlement pertaining to all
pending and future cases against Eastco in the State of New York brought by one
firm of plaintiffs' attorneys. The settlement does not apply to Puerto Rico
Safety Equipment and is only applicable to cases brought by the same law firm
against the Company in the State of New York. The Company is to be dismissed
without any payment in cases not involving any exposure to a power generating
station in the State of New York ("Powerhouse"). Where there is Powerhouse
exposure, a payment of $100 is to be made for each alleged nonmalignant case and
$300 for each malignant case. Where plaintiffs consist of two spouses, such is
deemed one case. Payment is to await appropriate documentation of exposure,
releases from the plaintiffs and the agreement of each plaintiff whose case is
settled. A copy of the letters between counsel for the Company and counsel for
plaintiffs' attorneys setting forth this settlement is designated as Exhibit
99.11.
An agreement between the Company and its primary insurance carriers dated
March 26, 1990 became effective June 26, 1990 (the "Indemnity Agreement"). The
Company entered into the Indemnity Agreement in an effort to resolve
uncertainties as to its insurance coverage which will cover asbestos claims
against the parent company where any exposure to asbestos is alleged during the
period 1971 to 1985, inclusive. Pursuant to the Indemnity Agreement, the Company
is obligated to share in the payment of asbestos-related claims against Eastco.
Pursuant to the Indemnity Agreement, the Company is obligated to pay 12% of all
attorneys' fees incurred on its behalf and 17% of indemnity costs (which include
judgment and settlement amounts). The balance of these costs are to be paid by
the insurance carriers which are party to the Indemnity Agreement. The Indemnity
Agreement is subject to the policy limitations of each insurance policy, and may
be terminated at any time upon ninety (90) days notice by any of the parties,
provided that termination may not be effective as to any asbestos action that
has already been placed on the trial calendar, unless it has a scheduled trial
date more than twelve (12) months from the date the notice of termination is
given. The Company is presently aware of approximately fifteen (15) cases on the
trial calendar. A copy of the Indemnity Agreement dated March 26, 1990 is
designated as Exhibit 99.09.
Effective during May, 1991, the Company entered into a Settlement Agreement
and Release with Mount Vernon Fire Insurance Company. Pursuant to this
Settlement Agreement, which is designated Exhibit 99.10, the Company
discontinued its action against Mount Vernon, which provided that, subject to
the terms of the Settlement Agreement, Mount Vernon would reimburse the Company
(where applicable) for 6.25% of attorneys' fees (52.08% of the Company's 12%
share referred to in the Indemnity Agreement in the previous paragraph) and
6.25% of indemnification costs (36.76% of the Company's 17% share referred to in
the Indemnity Agreement in the previous paragraph). The Settlement Agreement is
not applicable to any asbestos actions against the Company where no exposure
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is alleged to products manufactured or distributed by Eastco between April 1,
1968 and April 1, 1969. The Settlement Agreement may be terminated at any time
upon 90 days notice, but such notice is not applicable to asbestos actions
placed on a trial calendar, unless such has a trial date more than twelve (12)
months from the date the notice of termination is given. The Settlement
Agreement provides that the limit available under the policy is $100,000 plus
attorneys' fees while the Settlement Agreement is in effect and is applicable
only to the parent company. Approximately $28,000 has been reimbursed by Mount
Vernon Fire Insurance Company as of June 30, 1998 for indemnification.
The Company is unable to ascertain the total extent of insurance applicable
to asbestos claims against it or the extent to which its insurance carriers will
provide coverage. The two agreements referred to above between the Company and
the insurance carriers may not be applicable to Puerto Rico Safety Equipment,
which is covered by other insurance. To date, the claims settled by Puerto Rico
Safety Equipment have been paid in full by insurance. A schedule of insurance
believed to be applicable to Puerto Rico Safety Equipment is designated Exhibit
99.08. No agreement has been reached with the insurance companies confirming all
of these policies, which range from $100,000 to $500,000 for primary coverage
and $1,000,000 to $5,000,000 for excess coverage. The policies for Puerto Rico
Safety Equipment cover the period March 11, 1971 to July 23, 1986 with various
gaps as described on the exhibit.
The Company's insurance may not provide coverage for punitive damages where
such damages are sought against it in pending litigation. Punitive damages are
allowable in addition to compensatory damages and are awarded as a punishment to
the defendant for the wrong in the particular case as well as for the protection
of the public against similar acts, to deter the defendant from a repetition of
the wrongful act and to serve as a warning to others. Usually a wrong,
aggravated by an evil or wrongful motive or a willful and intentional misdoing
or a reckless indifference equivalent thereto, is required for a court to award
punitive damages. The Company is unable to specify whether its actions would
give rise to punitive damages. It believes that its actions should not give rise
to punitive damages. There, however, can be no assurance that this will be the
case. The Company is a party to miscellaneous other litigation which the Company
believes will have no material affect against it.
13
<PAGE>
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
EXECUTIVE OFFICERS OF THE REGISTRANT
First Elected
Offices and Officer of
Name Position Held the Company
- ---- ------------- --------------
Lawrence Densen President and Chief 1986
Executive Officer
Alan E. Densen Senior Vice President 1958
Anthony P. Towell Senior Vice President 1989
and Secretary
Arthur Wasserspring Vice President of 1997
Finance and Chief
Financial Officer
Richard Boyen Vice President of 1997
Manufacturing
- ----------------
All of the above executive officers have been elected to serve until the next
annual meeting of the board of directors presently anticipated to be held
December, 1998, or until their respective successors are elected and qualified.
Alan E. Densen is the father of Lawrence Densen.
14
<PAGE>
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
(a) The principal market on which the Common Stock of the Company is traded
is the NASDAQ Small-Cap Market and its symbol is ESTO. The following chart sets
forth the high and low sales prices as determined from NASDAQ for the Common
Stock for the last two fiscal years and is adjusted for the Company's 1-for-10
reverse stock split effective August 12,1996 (the "Reverse Split").
The following chart sets forth the high and low bid prices for the periods
indicated as determined from NASDAQ quotations reflecting interdealer prices
without retail mark-up, mark-down or commission and may not necessarily
represent actual transactions:
High Low
------------ ------------
Fiscal Year Ended June 30
1997
----
First Quarter $ 10.00 $ 5.63
Second Quarter 6.25 4.25
Third Quarter 4.75 3.75
Fourth Quarter 5.31 2.13
1998
----
First Quarter $ 3.00 $ 2.25
Second Quarter 3.25 1.63
Third Quarter 3.44 1.81
Fourth Quarter 3.56 2.38
(b) The approximate number of holders of record of the Common Stock as of
September 17, 1998 was 214. The Company believes there are in excess of 1,200
beneficial holders of the Common Stock.
(c) (1) No dividends have been paid during the past two years.
(2) The Company has no present intention of paying any cash dividends in
its foreseeable future and intends to use its net income, if any, in its
operations.
(3) The Company is prohibited from paying dividends under its loan
agreement with Congress Financial Corporation.
(d) During fiscal 1998 no equity securities that were not registered under
the Securities Act of 1933, as amended were sold by the Registrant.
15
<PAGE>
ITEM 6.SELECTED FINANCIAL DATA
EASTCO INDUSTRIAL SAFETY CORP.AND SUBSIDIARIES
<TABLE>
<CAPTION>
Years Ended June 30,
------------------------------------------------------
1998 1997 1996 1995 1994
-------- -------- -------- -------- --------
(in thousands, except for per share data)
<S> <C> <C> <C> <C> <C>
Operations
- ----------
Net Sales $ 34,339 $ 27,988 $ 26,983 $ 24,025 $ 20,746
Net Income/(Loss) (488) (1,392) 10 78 (2,711)
Earnings (Loss) per Share (.29) (.98) .03 .22 (20.76)
Cash Dividends per Share(1) 0 0 0 0 0
<CAPTION>
As of June 30,
------------------------------------------------------
1998 1997 1996 1995 1994
-------- -------- -------- -------- --------
(in thousands, except for per share data)
<S> <C> <C> <C> <C> <C>
Financial Condition
- -------------------
Total Assets $ 17,685 $ 14,041 $ 12,472 $ 10,716 $ 9,002
Long-term Debt 538 811 434 490 539
Shareholders' Equity 3,899 4,387 2,604 2,026 1,948
Shareholders' Equity per
Outstanding Share (2) 2.32 2.61 3.40 5.83 5.60
</TABLE>
(1) The Company has never declared or paid a cash dividend on its common stock.
It is the policy of the Board of Directors to retain earnings for use in
the Company's operations. In addition, the Company is prohibited from
paying such dividends based on its loan agreement with Congress Financial
Corporation.
(2) Adjusted to reflect a 1-for-10 reverse stock split effective August 12,
1996.
16
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
The Company operates in the manufacturing and distribution industry
segments. For an understanding of the significant factors that influenced the
Company's performance during the past three fiscal years, the following
discussion should be read in conjunction with the consolidated financial
statements, including the related notes, and other information appearing
elsewhere in this report.
Results of Operations.
Fiscal 1998 Compared to Fiscal 1997
Consolidated net sales during fiscal 1998 increased 22.7% to approximately
$34,339,000 from $27,988,000 during fiscal 1997. In fiscal 1998, Manufacturing
Operations revenues, including $1,123,000 of incremental sales attributable to
the glove division operation (acquired in April 1997), increased 24.4% to
$24,767,000 from $19,907,000 in fiscal 1997, while Distribution Operations
revenues increased 18.5% to $9,572,000 in fiscal 1998 from $8,081,000 in fiscal
1997. The Company believes that the overall increase in sales was due to
increased demand for the Company's products in both the manufacturing and
distribution segments, the improvement in the Company's inventory position and
the continued overall improvement in industry conditions.
The Company's overall gross profit percentage increased in fiscal 1998 to
16.6% as compared to 14.8% in fiscal 1997. The gross profit percentage for the
Distribution Operations decreased from 16.8% in fiscal 1997 to 16.1% in fiscal
1998. The decrease was primarily attributable to a continued change in the
customer base to industrial customers from environmental customers where the
gross profit is lower but where the customers are more stable and credit-worthy.
Additionally, the competitive environment in the marketplace continues to reduce
gross profits. The gross profit percentage for the Manufacturing Operations
increased to 16.9% in fiscal 1998 from 14.0% for fiscal 1997. This increase in
gross profit was caused in part by (i) continued increases in production levels
by the Company's contractor in Mexico at lower costs for products previously
produced in Puerto Rico and Alabama and (ii) continued production efficiencies
in Puerto Rico and Alabama to meet increased sales.
Selling, general and administrative expenses for fiscal 1998 were
$5,369,000 or 15.6% of sales compared to $4,870,000 or 17.4% of sales for fiscal
1997. The increase was primarily due to (i) $225,000 in incremental expenses
attributable to the glove division (acquired April 1997) and (ii) and an
increase in total non-glove operations commissions of $113,000 attributable to
increased sales.
Interest expense was $879,000 for fiscal 1998 as compared to $681,000 in
the prior year. This increase was principally due to an increase in average
borrowings in fiscal 1998 on the Company's asset-based facility with Congress
Financial Corporation ("Congress"), as well as a full year's interest on
additional borrowings from Congress used to purchase the Minnesota glove
business in April 1997.
The Company's net loss for fiscal 1998 was $488,000 as compared to a net
loss of $1,392,000 in fiscal 1997. Included in fiscal 1998 is a loss of
approximately $266,000 (including $108,000 in non-cash goodwill and
depreciation) related to the glove division acquired in April 1997. During the
fourth quarter of fiscal 1998, the Company incurred a net loss of $656,000,
which was primarily the result of selling price reductions on certain of the
Company's products during the fourth quarter due to competition and market
conditions. Another factor contributing to this loss was a higher mix of sales
of manufactured products with lower margins. Additionally, due to cash flow
requirements, the Company offered certain products at higher selling price
discounts in order to increase the borrowing base of accounts receivable under
its line of credit agreement with Congress.
17
<PAGE>
Fiscal 1997 Compared to Fiscal 1996
The Company's net loss for fiscal 1997 was $1,392,000, as compared to net
income of $10,000 in fiscal 1996.
Consolidated net sales during fiscal 1997 increased by 3.7% to approximately
$27,988,000 from $26,983,000 during fiscal 1996. In fiscal 1997, Manufacturing
Operations revenues increased 11.3% to $19,907,000 from $17,889,000 in fiscal
1996 while Distribution Operations revenues decreased 11.1% to $8,081,000 in
fiscal 1997 from $9,094,000 in fiscal 1996. The Company believes that the
overall increase in sales was due to continued increased demand for the
Company's products in the manufacturing segment. The decrease in distribution
sales was due to a change in focus in the Company's customers from end users
engaged in hazardous material abatement ("environmental customers") to other
industrial end users ("industrial customers"). This caused a $1,631,000 decrease
in sales to environmental customers, only partially offset by a $618,000
increase in sales to industrial customers.
The Company's overall gross profit percentage decreased in fiscal 1996 to
14.8% as compared to 20.3% in fiscal 1996. The gross profit percentage for the
Distribution Operations decreased from 18.5% in fiscal 1996 to 16.8% in fiscal
1997 due to a change in the customer base from environmental customers to
industrial customers where the customer base is more stable and credit-worthy.
The gross profit percentage for the Manufacturing Operations was 14.0% for
fiscal 1997 as compared to 21.2% for fiscal 1996. This reduction was caused in
part by (1) the Company's contractor in Mexico not meeting expected production
levels, which forced higher production domestically at higher costs, (2) higher
manufacturing costs due to payroll and other overhead increases, (3) increased
sales in lower gross profit products, and (4) continued intense competition in
the marketplace.
During the first three months ended September 30, 1996 the Company
sustained a decrease in sales due to hurricanes in Puerto Rico that affected
both production and shipments and therefore sales for that quarter. This loss in
production for the quarter caused lower production efficiencies in Puerto Rico
because of the weather related down-time.
Selling, general and administrative expenses for fiscal 1997 were
$4,870,000 or 17.4% of sales compared to $4,546,000 or 16.8% for the prior
fiscal year. This increase was principally due to increased marketing expenses,
including a new telemarketing program and catalogs, an increase in bad debt
expense and operating expenses of the new glove manufacturing subsidiary in
Minnesota acquired during April 1997.
Interest expense was $681,000 for fiscal 1997 as compared to $836,000 in
the prior year. This decrease was due principally to a reduction in interest
rates from the Company's major lender from 2 1/2% to 1% over the prime rate and
average lower borrowings during fiscal 1997.
Net cash used for operating activities was principally a result of the
Company's net loss, an increase in inventories and a reduction in accounts
18
<PAGE>
payable. Cash flows used in investing activities was for the purchase of
property, plant, and equipment, and the acquisition of the glove manufacturing
business in Minnesota completed in April 1997. Cash flows provided by financing
activities was principally from the proceeds of the rights and public offering
completed during November 1996.
The Company, in connection with the purchase of the glove manufacturing
business in Minnesota during the fourth quarter of fiscal 1997, borrowed
$440,000 from Congress, issued 100,000 shares of its Common Stock valued at
approximately $412,000, has agreed to make additional payments over the next
three to five years aggregating at least $240,000 and paid cash of approximately
$295,000 (see Note 12 of the Notes to the Consolidated Financial Statements).
The material loss of $1.3 million recorded by the Company in the fourth
quarter fiscal 1997 was incurred due to:
a) Serious production disruption in Mexico began in April 1997 as a result of
the withdrawal of the Company's manufacturing contractor and consequently the
need to manufacture these products at its plants in Alabama and Puerto Rico at a
net loss to meet short-term sales commitments and retain market share. The total
cost of this disruption was approximately $1,025,000.
b) The purchase of the new glove division in April 1997 which resulted in lower
than expected sales with negligible gross profit and higher selling, general and
administrative expenses. The foregoing resulted in a loss of approximately
$56,000.
c) Increases in certain reserves and expense accruals as a result of fourth
quarter events. This included auditing fees of approximately $50,000, bad debt
and inventory reserve expenses aggregating $95,000, and advertising and
catalogs, which are consistently expensed as the catalogs are mailed, of
approximately $80,000.
The items discussed above were related wholly to fourth quarter 1997
events, having no impact on previously filed interim financial statements.
Liquidity and Capital Resources
Net cash used for operating activities was principally a result of the
Company's net loss, an increase in inventories and receivables offset by an
increase in accounts payable. Cash flows used in investing activities was for
the purchase of property, plant, and equipment. Cash flows provided by financing
activities was principally from borrowings under the Company's loan agreement
with Congress.
The Company has working capital as of June 30, 1998 of $1,709,000 as
compared to working capital of $2,474,000 as of June 30, 1997. The decrease
19
<PAGE>
resulted primarily from the effect of the loss as well as the reduction in
long-term debt. A substantial portion of the Company's working capital consists
of inventory which was $7,850,000 and $5,973,000 as of June 30 1998 and 1997,
respectively. The Company is required to maintain substantial inventories of its
numerous products to meet the immediate requirements of its customers who need
products on short notice and who do not maintain an inventory of such products.
The Company has a line of credit agreement with Congress, which expires
October of 1999. The line provides for borrowings up to $9,000,000, with
interest payable monthly at 1% above the prime rate, and an unused line fee of
1/4% a year. In August 1998, Congress amended its agreement to increase the line
of credit to increase the maximum the Company can borrow on the inventory
portion to $4,500,000 from $3,850,000. The limits on borrowings remain at 85% of
eligible accounts receivable and 55% of eligible inventory. The amounts
outstanding at June 30, 1998 and June 30, 1997 were $8,189,000 and $5,418,000,
respectively. The Company had $62,000 available for borrowing at June 30, 1998
based on its formula with Congress. The loan is subject to certain working
capital and net worth requirements and is collateralized by all of the assets of
the Company not previously pledged under other loan agreements. Although the
Company, at June 30, 1998, was not in compliance with the tangible net worth
requirement of the loan agreement, Congress waived this default for this fiscal
year and reduced the requirement for future periods (see Note 5 of the Notes to
the Consolidated Financial Statements). The loan agreement prohibits the payment
of cash dividends by the Company.
The Company believes that its current working capital position, line of
credit and operations will be sufficient to satisfy its cash needs through June
30, 1999.
The Company has no material commitments for capital expenditures.
At the present time, the Company, together with a variety of defendants, is
a party to various asbestos-related lawsuits involving a number of plaintiffs
alleging damages from exposure to asbestos products sold by the Company. The
Company may become a party to additional asbestos-related actions in the future.
The Company is also party to a non-asbestos product liability action. While as
indicated in Item 3. Legal Proceedings, legal and settlement costs to the
Company have not been material to date, the Company cannot, at this time,
determine the outcome of these uncertainties which may have an adverse effect
upon the liquidity of the Company in the future.
Year 2000
The Company does not believe, based upon its internal reviews and other
factors, that future external and internal costs to be incurred relating to the
20
<PAGE>
modification of internal-use software for the Year 2000 will have a material
effect on the Company's results of operations or financial position. Although
the Company cannot control the efforts of the third parties with which it
interfaces, it does not currently anticipate that there will be any significant
disruption of the Company's ability to transact business.
Recent Events
Late in the first quarter of fiscal 1999, Hurricane Georges struck the
Island of Puerto Rico, causing serious damage to the Island's infrastructure.
The Company's manufacturing facility in Aguadilla was closed for approximately
three weeks due to disruption of utility services; however, only minimal
physical damage was sustained by the facility. The Company anticipates that the
facility will be at full production by mid-October. Management believes that the
effect of Hurricane Georges will not have a significant impact on the results of
operations for the quarter ended September 30, 1998.
Additionally, the Company anticipates lower gross margins in the first
quarter due to intense competition in the marketplace resulting from weaker
demand emanating from the overall effect of the General Motors strike and
unseasonably hot weather.
Risks and Other Considerations
From time to time, information provided by the Company or statements made
by its employees, or information provided in its filings with the Securities and
Exchange Commission may contain forward looking information. Any statements
contained herein or otherwise made that are not statements of historical fact
may be deemed to be forward looking statements. Without limiting the foregoing,
the words "believes", "expects", "anticipates", "plans" and similar expressions
are intended to identify forward looking statements. The Company's actual future
results may differ materially from those projections or statements made in such
forward looking information as a result of various risks and uncertainties,
including, but not limited, to the following:
The Company, since its fiscal year ended June 30, 1991 with the exception
of fiscal years 1996 and 1995, has had a history of significant losses. There
can be no assurances that the Company will be profitable or will not incur
losses in the future.
The Company is dependent upon its revolving line of credit with Congress
Financial Corp. In the event that the Company is unable to comply with its
obligations to Congress, the Company's indebtedness could be declared
immediately due and payable and in certain cases the Company's assets could be
foreclosed upon. There can be no assurances that there will be other sources of
financing for the Company if required.
The Company is a party to asbestos litigation and additional asbestos
actions continue to be brought against it. To date, the Company believes that
its insurance coverage has been adequate, but there can be no assurances that
such coverage will continue to be adequate in the future. There can be no
assurances that asbestos litigation will not have an adverse affect upon the
Company. For a more complete discussion on asbestos litigation and the Company's
insurance coverage, reference is made to Item 3 of the Company's Form 10-K for
June 30, 1998 and future filings under form 10-Q.
The Company has competitors that have greater financial, management, sales
and technical resources than the Company. The Company's success also depends to
a significant degree on the contributions of its key management. The loss of
services of one or more key members of management could have an adverse affect
upon the Company. The Company is also dependent upon DuPont which supplies the
Company with Tyvek(R) which is used for various lines of the Company's limited
use products. Management believes that its current relationship with DuPont is
satisfactory. The Company is a party
21
<PAGE>
to a Garment Manufacturer & Seller License Agreement with DuPont, pursuant to
which DuPont provides the Company with nonwoven fabric under its trademark. This
Agreement may be terminated by either party for any reason with 120 days notice.
Loss of DuPont as a supplier of Tyvek(R) would have material adverse effects on
the Company's operations. The Company is also required to maintain substantial
inventory for its operations in order to meet the immediate requirements of its
customers who require products on short notice. There can be no assurances that
the Company will be able to maintain sufficient inventory or that the Company
will not return to periods where there is sufficient working capital to maintain
its inventory to meet the needs of its customers.
The Company also enjoys the benefits of various tax incentives with respect
to its operations in Puerto Rico which are described in Item 1 of its Form 10-K
for June 30, 1998. If Puerto Rico's tax exemptions are reduced or expire, the
Company may be required to pay taxes on income earned in Puerto Rico. The
Company is unable to predict the amount of such impact after such exemptions are
reduced or expire.
Due to the foregoing, the market price of the Company's Common Stock may be
volatile at times in response to fluctuations of the Company's operating
results, changes in analyst earnings estimates, market conditions as well as
general conditions and other factors general to the Company.
22
<PAGE>
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See the Consolidated Financial Statements annexed hereto.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Eastco Industrial Safety Corp. and Subsidiaries:
We have audited the accompanying consolidated balance sheet of Eastco Industrial
Safety Corp. (a New York corporation) and Subsidiaries as of June 30, 1998, and
the related consolidated statements of income, changes in shareholders' equity
and cash flows for the year then ended. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Eastco Industrial Safety Corp.
and Subsidiaries as of June 30, 1998, and the results of their operations and
their cash flows for the year then ended in conformity with generally accepted
accounting principles.
Our audit was made for the purpose of forming an opinion on the basic
consolidated financial statements taken as a whole. The schedule listed in the
index of financial statements is presented for purposes of complying with the
Securities and Exchange Commission's rules and is not part of the basic
consolidated financial statements. This schedule has been subjected to the
auditing procedures applied in the audit of the basic consolidated financial
statements and, in our opinion, fairly states in all material respects the
financial data required to be set forth therein in relation to the basic
consolidated financial statements taken as a whole.
/s/ARTHUR ANDERSEN LLP
Melville, New York
September 17, 1998
<PAGE>
CORNICK, GARBER & SANDLER, LLP
Certified Public Accountants
Independent Auditors' Report on Supplemental Schedule
Board of Directors
Eastco Industrial Safety Corp.
In connection with our audits of the consolidated financial statements of
Eastco Industrial Safety Corp. and Subsidiaries at June 30, 1997 and 1996 and
for each of the two years in the period ended June 30, 1997, we have also
audited Schedule II for each of the two years ended June 30, 1997, included in
this annual report on Form 10-K. In our opinion, such schedule presents fairly
the information required to be set forth therein.
/s/ Cornick, Garber & Sandler, LLP
CORNICK, GARBER & SANDLER, LLP
-----------------------------------
CERTIFIED PUBLIC ACCOUNTANTS
Uniondale, New York
October 27, 1997
<PAGE>
CORNICK, GARBER & SANDLER, LLP
Certified Public Accountants
Independent Auditors' Report
Board of Directors and Shareholders
Eastco Industrial Safety Corp.
Huntington Station, New York
We have audited the accompanying consolidated balance sheet of Eastco
Industrial Safety Corp. and Subsidiaries as at June 30, 1997 and the related
consolidated statements of operations, changes in shareholders' equity and cash
flows for each of the two years in the period ended June 30, 1997. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the aforementioned consolidated financial statements
present fairly, in all material respects, the consolidated financial position of
Eastco Industrial Safety Corp. and Subsidiaries as at June 30, 1997 and the
results of their operations and their cash flows for each of the two years in
the period ended June 30, 1997, in conformity with generally accepted accounting
principles.
/s/ Cornick, Garber & Sandler, LLP
CORNICK, GARBER & SANDLER, LLP
-----------------------------------
Certified Public Accountants
Uniondale, New York
October 27, 1997
<PAGE>
<TABLE>
<CAPTION>
EASTCO INDUSTRIAL SAFETY CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30,
--------
ASSETS 1998 1997
------ ---- ----
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 223,125 $ 112,258
Accounts receivable, net of allowance for doubtful accounts of
$185,000 and $219,000, respectively (Note 5) 6,191,916 4,561,053
Inventories (Notes 1, 2 and 5) 7,849,665 5,972,904
Other current assets 692,595 670,155
------------ ------------
Total current assets 14,957,301 11,316,370
Property, plant and equipment, net (Notes 1, 3, 5 and 6) 2,276,677 2,213,971
Excess of cost over net assets acquired (Note 1) 426,229 448,910
Other assets 24,794 61,338
------------ ------------
Total assets $ 17,685,001 $ 14,040,589
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Loans payable (Note 5) $ 8,189,842 $ 5,417,675
Current maturities of long-term debt (Note 6) 277,628 278,821
Accounts payable 4,384,580 2,770,626
Accrued expenses 395,860 374,764
------------ ------------
Total current liabilities 13,247,910 8,841,886
LONG-TERM DEBT, less current maturities (Note 6) 538,283 811,410
------------ ------------
Total liabilities 13,786,193 9,653,296
------------ ------------
COMMITMENT AND CONTINGENCIES (Notes 6, 8 and 11)
SHAREHOLDERS' EQUITY (Notes 1, 6 and 7):
Preferred stock, $.01 par value; authorized 1,000,000 shares; no
shares issued and outstanding -- --
Common stock, $.12 par value; authorized 20,000,000 shares;
1,683,079 issued and outstanding 201,970 201,970
Additional paid-in capital 9,807,708 9,807,708
Accumulated deficit (6,110,870) (5,622,385)
------------ ------------
Total shareholders' equity 3,898,808 4,387,293
------------ ------------
Total liabilities and shareholders' equity $ 17,685,001 $ 14,040,589
============ ============
</TABLE>
The accompanying notes are an integral part of these
consolidated balance sheets.
-2-
<PAGE>
<TABLE>
<CAPTION>
EASTCO INDUSTRIAL SAFETY CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Years Ended June 30,
--------------------------------------------------------
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
NET SALES $ 34,339,038 $ 27,987,969 $ 26,982,699
COST OF GOODS SOLD (Note 1) 28,622,886 23,838,094 21,495,693
------------ ------------ ------------
Gross profit 5,716,152 4,149,875 5,487,006
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (Note 1) 5,369,397 4,870,030 4,546,222
------------ ------------ ------------
INCOME (LOSS) FROM OPERATIONS 346,755 (720,155) 940,784
OTHER (INCOME) EXPENSE (44,166) (9,074) 16,388
INTEREST EXPENSE 879,406 680,749 836,359
SETTLEMENT WITH FORMER UNDERWRITER (Note 7) -- -- 78,000
------------ ------------ ------------
Net (loss) income $ (488,485) $ (1,391,830) $ 10,037
============ ============ ============
(LOSS) INCOME PER SHARE (Note 1)
Basic $ (.29) $ (.98) $ .03
============ ============ ============
Diluted $ (.29) $ (.98) $ .02
============ ============ ============
AVERAGE NUMBER OF SHARES USED IN COMPUTING PER SHARE AMOUNTS
Basic 1,683,079 1,413,775 362,391
============ ============ ============
Diluted 1,683,079 1,413,775 595,758
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
-3-
<PAGE>
<TABLE>
<CAPTION>
EASTCO INDUSTRIAL SAFETY CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Common Stock * Additional
------------------------ Paid-In Accumulated
Shares Amount Capital (Deficit) Total
----------- --------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
BALANCE, July 1, 1995 347,738 $ 41,729 $6,224,509 $(4,240,592) $2,025,646
Shares issued on settlement with former underwriter 10,000 1,200 70,825 -- 72,025
Exercise of Class A warrants 3,750 450 48,300 -- 48,750
Shares issued on conversion of subordinated debenture 26,374 3,165 121,963 -- 125,128
Purchase and retirement of common stock (21,374) (2,565) (177,435) -- (180,000)
Shares issued in private placement 399,000 47,880 454,314 -- 502,194
Net income for the year ended June 30, 1996 -- -- -- 10,037 10,037
----------- --------- ---------- ----------- ----------
BALANCE, June 30, 1996 765,488 91,859 6,742,476 (4,230,555) 2,603,780
Shares issued in private placement 114,000 13,680 140,320 -- 154,000
Shares issued in shareholder rights and public offering 703,591 84,431 2,524,405 -- 2,608,836
Sale of warrants to underwriter -- -- 7 -- 7
Shares issued for acquisition of glove manufacturing business 100,000 12,000 400,500 -- 412,500
Net loss for the year ended June 30, 1997 -- -- -- (1,391,830) (1,391,830)
----------- --------- ---------- ----------- ----------
BALANCE, June 30, 1997 1,683,079 201,970 9,807,708 (5,622,385) 4,387,293
Net loss for the year ended June 30, 1998 -- -- -- (488,485) (488,485)
----------- --------- ---------- ----------- ----------
BALANCE, June 30, 1998 1,683,079 $ 201,970 $9,807,708 $(6,110,870) $3,898,808
=========== ========= ========== =========== ==========
</TABLE>
* Gives effect to a 1-for-10 reverse stock split in August 1996.
The accompanying notes are an integral part of these consolidated statements.
-4-
<PAGE>
<TABLE>
<CAPTION>
EASTCO INDUSTRIAL SAFETY CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended June 30,
------------------------------------------
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $ (488,485) $ (1,391,830) $ 10,037
Adjustments to reconcile net (loss) income to net cash used
in operating activities:
Depreciation and amortization 244,530 144,606 134,290
Provision for losses on accounts receivable 52,000 104,736 105,732
Shares issued for services and settlement with former underwriter -- -- 72,025
Net changes in assets and liabilities:
Accounts receivable (1,682,863) 3,281 (876,629)
Inventories (1,876,761) (603,667) (866,339)
Other current assets (22,440) (228,392) 40,105
Other assets 36,544 145,572 (75,122)
Accounts payable 1,613,954 (463,505) 343,084
Accrued expenses 21,096 83,423 (40,566)
------------ ------------ ------------
Total adjustments (1,613,940) (813,946) (1,163,420)
------------ ------------ ------------
Net cash used in operating activities (2,102,425) (2,205,776) (1,153,383)
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment (284,555) (281,362) (93,274)
Acquisition of glove manufacturing business -- (734,526) --
------------ ------------ ------------
Net cash used in investing activities (284,555) (1,015,888) (93,274)
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt (274,320) (79,551) (48,762)
Borrowings under line of credit agreement 35,919,028 32,054,480 28,621,372
Repayments under line of credit agreement (33,146,861) (32,489,880) (27,697,205)
Borrowings under Bridge loan -- -- 500,000
Repayment of Bridge loan -- -- (500,000)
Net proceeds from private placement of common stock -- 154,000 502,194
Net proceeds from convertible subordinated debenture -- -- 225,128
Net proceeds from shareholder rights and public offering -- 2,608,843 --
Borrowings to finance acquisition of glove manufacturing business -- 440,000 --
Repayment of convertible subordinated debenture -- -- (100,000)
Proceeds from exercise of Class A warrants -- -- 48,750
Purchase of treasury stock -- -- (180,000)
------------ ------------ ------------
Net cash provided by financing activities 2,497,847 2,687,892 1,371,477
------------ ------------ ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 110,867 (533,772) 124,820
CASH AND CASH EQUIVALENTS, beginning of year 112,258 646,030 521,210
------------ ------------ ------------
CASH AND CASH EQUIVALENTS, end of year $ 223,125 $ 112,258 $ 646,030
============ ============ ============
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the year for interest $ 879,406 $ 680,749 $ 836,359
============ ============ ============
Cash paid during the year for income taxes $ 8,454 $ 12,758 $ 5,440
============ ============ ============
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING ACTIVITIES:
Noncash consideration for acquisition of glove manufacturing business:
Common stock issued $ -- $ 412,500 $ --
============ ============ ============
Minimum guaranteed payments $ -- $ 240,000 $ --
============ ============ ============
Conversion of convertible subordinated debenture into common stock $ -- $ -- $ 150,000
============ ============ ============
Retirement of treasury stock $ -- $ -- $ 128,000
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
<PAGE>
EASTCO INDUSTRIAL SAFETY CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1998
1. BUSINESS AND ORGANIZATION:
--------------------------
Operations
Eastco Industrial Safety Corp. and Subsidiaries (the "Company") operates in two
industry segments. The first is the manufacture and sale of industrial
protective clothing products to distributors throughout the United States and in
Puerto Rico. The second is the distribution and sale of industrial protective
clothing and other protective products directly to "end users" located primarily
in the Northeastern United States and Puerto Rico.
The Company's manufacturing division uses Tyvek(R) to produce limited use
clothing. Tyvek(R) is sold solely by E.I. Dupont Industries, Inc. Products made
of Tyvek(R) accounted for approximately 52%, 44% and 41% of consolidated sales
for the years ended June 30, 1998, 1997 and 1996, respectively.
Principles of Consolidation
The consolidated financial statements include the accounts of Eastco Industrial
Safety Corp. and its subsidiaries, all of which are wholly-owned. All
significant intercompany balances and transactions have been eliminated in
consolidation.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents.
Inventories
Inventories are stated at the lower of cost (determined on a first-in, first-out
basis) or market, which represents estimated net realizable value.
Depreciation and Amortization
Property, plant and equipment are depreciated on a straight-line basis over the
estimated useful lives of the related assets. Leasehold improvements are
amortized on a straight-line basis over the shorter of their estimated useful
lives or the remaining term of the lease.
-6-
<PAGE>
Excess of Cost over Net Assets Acquired
The excess of cost over the net assets of a business acquired in April 1997 is
being amortized on a straight-line basis over its estimated useful life of 20
years (Note 12). Management periodically evaluates this asset for impairment
using estimated future cash flows from the acquired business and other estimates
of cost recoverability.
Fair Value of Financial Instruments
Cash and cash equivalents, receivables, loans payable and long-term debt are
reflected in the consolidated balance sheets at amounts considered by management
to reasonably approximate their fair value because of their relative short-term
maturities, recent incurrence or because they bear variable interest rates.
Stock Options and Warrants
In 1997, the Company adopted the disclosure only provisions of Statement of
Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock Based
Compensation" for stock options and warrants granted to its employees, officers
and directors and, therefore, continues to apply the provisions of Accounting
Principles Board Opinion No. 25 and related interpretations in its accounting
for such grants. Accordingly, no compensation cost is recognized for these
grants unless they are for less than fair value at issuance or are considered a
variable award.
Per Share Amounts
The Company adopted Statement of Financial Accounting Standards No. 128 ("SFAS
128"), "Earnings Per Share" during 1998. Under the new standard, basic earnings
per share is computed based on the weighted average number of common shares
outstanding and excludes any potential dilution; diluted earnings per share
reflects potential dilution from the exercise or conversion of securities into
common stock. Earnings per share data for all prior periods presented have been
restated to conform with the provisions of SFAS 128. Common stock equivalents
are excluded from the computation for the years ended June 30, 1998 and 1997 as
they would have an anti-dilutive effect. The number of shares of common stock
subject to stock options included in diluted earnings per share was 232,827 for
the year ended June 30, 1996.
Recently Issued Accounting Standards
In June 1997, the FASB issued SFAS No. 130 "Reporting Comprehensive Income."
SFAS No. 130 establishes standards for the reporting and display of
comprehensive income and its components in a full set of financial statements.
The Company's consolidated financial statements will be required to include
comprehensive income disclosures beginning with the first quarter of fiscal
1999. Restatement of prior period information will be made for comparative
purposes, if applicable.
In June 1997, the FASB issued SFAS No. 131 "Disclosures about Segments of an
Enterprise and Related Information." SFAS No. 131 establishes standards for the
reporting of operating segments in interim and annual financial statements, as
well as requiring related disclosures about products and services, geographic
areas and major customers. This standard is effective for the Company's fiscal
1999 financial statements. Initial adoption of this standard may take place on
an interim or year end basis.
SFAS Nos. 130 and 131 expand and modify financial statements disclosures and ,
accordingly, will have no impact on the Company's results of operations or
financial position.
-7-
<PAGE>
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting of Derivative Instruments
and Hedging Activities" ("SFAS 133"). The Statement establishes accounting and
reporting standards requiring that every derivative instrument, including
certain derivative instruments embedded in other contracts, be recorded in the
balance sheet as either an asset or liability measured at its fair value. The
Statement requires that changes in the derivative's fair value be recognized
currently in earnings unless specific hedge accounting criteria are met. Special
accounting for qualifying hedges allows a derivative's gains and losses to
offset related results on the hedged item in the income statement, and requires
that a company must formally document, designate, and assess the effectiveness
of transactions that receive hedge accounting. SFAS 133 is effective for fiscal
years beginning after June 15, 1999 and will not require retroactive restatement
of prior period financial statements. The Company currently does not use
derivatives nor does it engage in hedging transactions or anticipate a material
impact in future years.
2. INVENTORIES:
------------
Inventories consist of the following at June 30:
1998 1997
---------- ----------
Raw materials $1,579,096 $2,049,328
Work-in-process 802,011 1,145,395
Finished goods 5,468,558 2,778,181
---------- ----------
Total $7,849,665 $5,972,904
========== ==========
3. PROPERTY, PLANT AND EQUIPMENT, NET:
-----------------------------------
Property, plant and equipment is comprised of the following at June 30:
<TABLE>
<CAPTION>
Estimated
Useful
1998 1997 Life (Years)
---- ---- ------------
<S> <C> <C> <C>
Cost:
Land $ 382,000 $ 382,000 N/A
Building and leasehold improvements 842,967 833,741 5 - 40
Machinery and equipment 2,377,079 2,106,191 3 - 10
Furniture and fixtures 250,604 246,163 7 - 10
----------- -----------
Total 3,852,650 3,568,095
Less: accumulated depreciation and amortization (1,575,973) (1,354,124)
----------- -----------
Balance $ 2,276,677 $ 2,213,971
=========== ===========
</TABLE>
Depreciation and amortization expense for property, plant and equipment for the
years ended June 30, 1998, 1997 and 1996 amounted to $221,849, $139,881 and
$134,290, respectively.
4. INCOME TAXES:
-------------
The Company accounts for income taxes under the provisions of Statement of
Financial Accounting Standards No. 109 ("SFAS 109"). While SFAS 109 requires the
recognition of a deferred tax asset for the benefit of net operating loss
carryforwards, it also requires the recognition of a valuation allowance when it
is more likely than not that such benefit will not be realized. As a result of
the Company's history of losses, it has recorded a valuation allowance equal to
the net deferred tax asset accounts as of June 30, 1998 and 1997.
-8-
<PAGE>
Deferred income taxes relate to the following temporary differences and
carryforwards as of June 30:
<TABLE>
<CAPTION>
1998 1997
---- ----
Deferred tax assets:
<S> <C> <C>
Net operating loss carryforwards $ 2,356,000 $ 2,121,000
Allowance for doubtful accounts and credits 79,000 88,000
Tax basis adjustments to inventory 139,000 51,000
Accelerated depreciation of property and equipment 5,000 --
----------- -----------
Total 2,579,000 2,260,000
----------- -----------
Less deferred tax liability:
Accelerated depreciation of property and equipment -- 37,000
Other 18,000 --
----------- -----------
Total 18,000 37,000
----------- -----------
Balance 2,561,000 2,223,000
Less: valuation allowance (2,561,000) (2,223,000)
----------- -----------
Net deferred income taxes after valuation allowance $ -- $ --
=========== ===========
</TABLE>
Two wholly-owned Puerto Rico based subsidiaries have been granted exemptions
from paying Puerto Rico income taxes under provisions of the Puerto Rico
Industrial Tax Exemption Act of 1963, provided such subsidiaries continue to
meet the terms and conditions of their grants. One subsidiary's exemption
expires June 30, 1999. This subsidiary has received a 90% exemption from Puerto
Rico income taxes and a 75% exemption from Puerto Rico municipal and property
taxes. The second subsidiary has received a 90% exemption from Puerto Rico
income and property taxes and a 60% exemption from Puerto Rico municipal income
taxes to June 2006. These subsidiaries have elected, pursuant to Section 936 of
the Internal Revenue Code, to receive credits equivalent to the amount of
Federal income taxes which would otherwise be due on their income. The Omnibus
Budget Reconciliation Act of 1993 (the "Act") imposes limitations on computing
the Possession Tax Credit under Section 936 for tax years beginning after 1993.
In addition, the Act makes the 100% dividends received deduction subject to the
Alternative Minimum Tax calculation. The Small Business Job Protection Act of
1996 further limits the Possession Tax Credit for years beginning after 2001
with the credit being eliminated after the years beginning after 2005.
Dividends, if paid by the Puerto Rico based subsidiaries, are subject to a
withholding tax of 10%; however, no taxes have been provided on their aggregate
undistributed earnings (of approximately $1,187,000 at June 30, 1998) because it
is management's intention to reinvest such earnings indefinitely.
A reconciliation between the federal statutory tax rate and the effective tax
rate is as follows:
<TABLE>
<CAPTION>
Years ended June 30,
----------------------------------------
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Income tax (benefit) expense at the statutory rate $(166,085) $(529,000) $ 3,000
Effect of net operating loss of Puerto Rican
subsidiaries for which there is no current tax benefit 256,085 172,000 --
Effect of domestic net operating loss for which there is
no current tax benefit -- 357,000 --
Benefit of utilization of net operating loss
carryforwards (90,000) -- (3,000)
--------- --------- ---------
Actual income tax expense $ -- $ -- $ --
========= ========= =========
</TABLE>
-9-
<PAGE>
At June 30, 1998, the Company has net operating loss carryforwards of
approximately $6,200,000 for federal income tax purposes. The Company's domestic
operations generated taxable income in fiscal 1998 for which it utilized
approximately $265,000 of net operating loss carryforwards. Such carryforwards
expire from 2005 through 2013. As a result of the private placement offering in
June 1996, the amount of the loss carryforwards which can be utilized to offset
future taxable income will be limited to approximately $345,000 per year, plus
any loss carryforwards incurred after June 30, 1996. However, to the extent such
annual limitation is not utilized in any year, it may be further carried forward
until the carryforward would have otherwise expired.
5. LOANS PAYABLE:
--------------
Loans payable at June 30, 1998 and 1997 are comprised of borrowings under the
Company's line of credit agreement with Congress Financial Corporation
("Congress").
The Company amended and extended its line of credit agreement with Congress
during 1997. The line, which expires in October 1999, provides for borrowings up
to $9,000,000 with interest payable monthly at 1% above the prime rate (8.5% at
June 30, 1998), plus an unused line fee of 1/4% a year. Borrowings are limited
to 85% of eligible accounts receivable and 55% of eligible inventory up to
maximum inventory borrowings of $3,850,000. In August 1998, the line of credit
agreement was amended to increase maximum inventory borrowings to $4,500,000.
The loans are subject to certain working capital and net worth requirements and
are collateralized by all assets of the Company not previously pledged under
other loan agreements. The loan agreement prohibits the payment of dividends by
the Company. The Company had an informal agreement with Congress whereby
Congress agreed to provide the Company an additional $500,000 in borrowing
availability of which $250,000 was repaid at $11,250 a week beginning November
1, 1993. In September 1993, Congress sold to three individuals, who are officers
and directors of the Company, $250,000 in junior participations in the loans
made to the Company. Congress repurchased $35,000 of the junior participations
in May 1996 and the remaining balance during November 1996.
The Company was not in compliance with the tangible net worth requirement at
June 30, 1998; however, Congress has waived such covenant and amended it
downward to $3,100,000 for the year ending June 30, 1999, and not less than
$3,500,000 at all times thereafter.
6. LONG TERM DEBT:
---------------
Long term debt is comprised of the following at June 30:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Mortgage payable - interest at 12% per annum, collateralized by land,
building and personal property (a) $ 404,985 $ 433,736
Mortgage payable - interest at 1 1/4% above the prime rate,
collateralized by all assets of the Puerto Rico subsidiaries (b) 119,725 215,311
Term loan - interest at 1 1/4% above the prime rate, collateralized by all
assets of the Company not previously pledged(c) 123,034 209,517
Guaranteed payments for purchase of glove manufacturing business
(see Note 12) (d) 168,167 231,667
---------- ----------
Total 815,911 1,090,231
Less: current maturities 277,628 278,821
---------- ----------
Noncurrent portion $ 538,283 $ 811,410
========== ==========
</TABLE>
-10-
<PAGE>
Maturities of the long-term debt are as follows:
Year ending June 30:
1999 $277,628
2000 151,411
2001 52,993
2002 53,962
2003 279,917
--------
Total $815,911
========
(a) The mortgage with an original interest rate of 14.0% per annum, and which
was due in July 1997, was amended and extended on September 26, 1996. The
amendment reduced the annual interest rate to 12.0% commencing July 1,
1997, with monthly payments of $6,223 until July 1, 2002, when the
remaining balance of approximately $275,000 is payable. In connection with
the original mortgage in 1992, the Company issued five year warrants to
acquire 10,833 shares at $30.00 a share. In January 1995, the Company
reduced the exercise price to $13.00 and extended the expiration date until
April 1999. Approximately 38% of this mortgage is held by a group of
investors which includes the spouses of certain officers and directors and
a past director of the Company. Interest on the mortgage aggregated
approximately $46,000, $65,000 and $72,000 for the years ended June 30,
1998, 1997 and 1996, respectively.
(b) The mortgage is repayable in 29 monthly principal installments of $7,690
plus interest to October 1, 1999. The funds received were used for the
acquisition of the glove manufacturing business (see Note 12).
(c) The term loan is repayable in 29 monthly principal installments of $7,483,
plus interest to October 1, 1999. The funds received were also used for the
acquisition of the glove manufacturing business (see Note 12).
(d) This amount is comprised of guaranteed payments to two individuals in
connection with the acquisition of the glove manufacturing business. One
individual is entitled to 10% of income before taxes (as defined) of the
glove manufacturing business for the five year period commencing July 1,
1997, up to a maximum of $180,000, but in no event less than $18,000 per
year, for which the Company has accrued the $90,000 minimum payment. The
second individual entered into a consulting agreement with the Company for
a three year period commencing April 17, 1997, which calls for a fee of
$50,000 per year, payable in monthly installments. The Company has accrued
the $150,000 required payment. The $240,000 accrued aggregate minimum
payments, which are due regardless of continued employment, have been
recorded as additional purchase price. No imputed interest has been
recorded on these payments as the effect would not be material.
7. SHAREHOLDERS' EQUITY:
---------------------
Preferred Stock
On August 12, 1996, the shareholders of the Company approved an amendment to the
Company's certificate of incorporation to authorize 1,000,000 shares of
preferred stock. No preferred shares have been issued.
-11-
<PAGE>
Common Stock
On August 12, 1996, the shareholders of the Company approved a 1-for-10 reverse
stock split of all outstanding shares of the Company's common stock. The
consolidated financial statements and notes thereto give effect to this split
for all periods presented.
In April 1991, the Company sold, pursuant to a rights offering, 48,007 shares of
common stock. In this connection, the underwriter was sold a warrant to purchase
4,078 shares of common stock at $53.30 per share, which was exercisable until
February 28, 1996. The Company also had borrowed $200,000 with interest at 17%
per annum during February 1991 from five unrelated parties. These loans were
repaid out of the proceeds of the rights offering, including interest. In
connection with these loans, the Company issued warrants to purchase 833 shares
of common stock, exercisable at $30.00 per share until May 13, 1996. In January
1995, the Company reduced the exercise price of the above warrants to $13.00 and
extended their expiration dates until April 1999.
In April 1996, the holder of a $250,000 convertible subordinated debenture,
issued in February 1996, converted $150,000 of the debenture into 26,374 shares
of the Company's common stock. The Company repurchased 21,374 of these shares
for $180,000 and retired the stock. The remaining $100,000 balance of the
debenture was repurchased for $120,000. The $20,000 excess has been included
with interest expense for the year ended June 30, 1996.
On April 19, 1994, the Company sold in a public offering 200,000 units at $20.00
per unit, each consisting of one share of the Company's common stock and one
Class A warrant. Each warrant entitled the holder to purchase one share of
common stock at an exercise price of $24.00 a share from April 12, 1995 through
April 12, 1999. In January 1995, the Company reduced the exercise price to
$13.00 a share. These warrants are redeemable by the Company commencing April
12, 1995 at $1.00 per warrant, provided that the high bid price of its stock is
at least $19.50 for the required number of days prior to the Notice of
Redemption. The Company also granted to the underwriter an option to purchase,
at the same price, 30,000 units to cover over-allotments. This option was
exercised in May 1994. In addition, the Company sold to the underwriter for $10
an option, exercisable from April 12, 1995 to April 12, 1999, to purchase 23,000
additional units at $29.00 per unit and entered into a two year consulting
agreement with the underwriter at a total cost of $72,000. Subsequent to the
public offering, two officers of the underwriter became directors of the Company
until their resignations on July 10, 1995.
On July 10, 1995, the Company issued 10,000 shares of common stock to the
underwriter of its 1994 public stock offering in exchange for the cancellation
of all of its rights under the Underwriting Agreement. The $78,000 cost thereof,
equal to the market value of the shares issued and legal expenses incurred, is
separately reflected in the consolidated statement of income for the year ended
June 30, 1996.
In October 1996, the Company sold, pursuant to a combination shareholder rights
and public offering, 703,591 units at $5.00 per unit, with each unit consisting
of one share of common stock and one Class B warrant. Each warrant entitles the
holder to purchase one share of common stock at an exercise price of $6.25 per
share during the period from twelve months to three years after the closing date
of the offering. The warrants may be repurchased by the Company, upon 30 days
prior written notice, eighteen months after the offering at $.01 per warrant if
the high bid price of the common stock for the 15 consecutive trading days
ending on the third day prior to the date of notice is in excess of 150% of the
exercise price of the warrant. The Company also sold to the offering
agent/underwriter, for a total value of $7, warrants to purchase 70,359 units.
The warrants are exercisable at $6.00 per unit for four years commencing in
November 1997. In addition, the Company entered into a one year consulting
agreement with the offering agent/underwriter for approximately $70,000.
-12-
<PAGE>
Private Placements
On June 28, 1996, the Company issued, in a private placement, 10 1/2 units at
$57,000 a unit, with each unit consisting of 38,000 shares of the Company's
common stock. The net proceeds to the Company were approximately $501,000 after
fees to the placement agent and other expenses. The proceeds were used to repay
a $500,000 bridge loan obtained in May 1996. On July 9, 1996, an additional 3
units were sold for net proceeds of approximately $165,000. The Company issued
three year warrants to purchase 2,500 shares of common stock at $10.00 per share
in connection with the foregoing transactions.
Other Warrants
On May 13, 1996, warrants to purchase 9,003 shares each were granted to the
Company's then president and two of the vice-presidents for their guarantees of
overadvances by Congress (see Note 5). The warrants are exercisable until
February 23, 2001 at $5.35 per share. The fair value of these warrants using the
Black Scholes option pricing model is $4.12.
On July 26, 1995, the Company issued to a consulting firm, which is the employer
of a then-new director of the Company, a five year warrant to purchase 12,500
shares of the Company for $12.50 a share. The fair value of the warrants using
the Black Scholes option pricing model is $9.78.
In January 1994, a corporate officer/director of the Company purchased a warrant
from a prior lender. The warrant is for the purchase of 92,477 shares at $5.62
per share. The expiration date of this warrant was extended from March 31, 1997
until April 11, 1999.
Incentive Stock Option Plans
The Company's 1992 Incentive Stock Option Plan provides for the granting of
options for up to 20,000 shares of the Company's common stock to December 20,
2002. At June 30, 1998, options to purchase 300 shares at $27.50 per share are
outstanding and exercisable. The Company has agreed not to issue any additional
options under this plan.
The Company's 1994 Incentive Stock Option Plan provides for the granting of
options for up to 10,000 shares of the Company's common stock to January 2004.
At June 30, 1998, options to purchase 8,500 shares at $10.63 per share are
outstanding and exercisable.
On August 12, 1996, the shareholders approved the adoption of the 1996 Incentive
Stock Option Plan, which provides for the granting of options for up to 300,000
shares of the Company's common stock to key employees until May 2006. As of June
30, 1998, 231,100 stock options were granted to employees at exercise prices
ranging from $2.25 - $3.44, of which 59,500 are exercisable. Of these options,
140,000 will vest over the next three years; the remaining options will vest
based upon the Company achieving certain sales and income requirements.
Options granted under the incentive stock option plans must be exercised within
such period as stated in the plans and, in any event, must be exercised no later
than ten years after the date they are granted. The plans provide that the
exercise price of the options may not be less than 100% of the fair market value
of common stock at the date of grant or 110% in the case of an incentive stock
option granted to any employee owning more than 10% of the voting power of all
classes of stock of the Company.
-13-
<PAGE>
Transactions under the above Incentive Stock Option plans are summarized as
follows:
<TABLE>
<CAPTION>
June 30, 1998 June 30, 1997 June 30, 1996
----------------------- -------------------- ------------------
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
-------- ------ -------- ------ -------- ------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning of year 241,065 $ 2.66 9,665 $12.60 9,665 $12.60
Granted 1,400 $ 2.58 231,400 $ 2.25 -- --
Forfeited (400) $ 2.25 -- -- -- --
Expired/Canceled (2,165) $12.08 -- -- -- --
-------- ------ -------- ------ -------- ------
Outstanding at end of year 239,900 2.58 241,065 2.66 9,665 12.60
======== ======== ====== ======== ======
Exercisable at end of year 68,300 3.41 69,065 4.30 9,665 12.60
======== ======== ====== ======== ======
Weighted average fair value of
options granted $ 2.34 $ 2.06 --
</TABLE>
Other Stock Options
1996 Stock Options
On August 12, 1996, the shareholders approved the adoption of the 1996
Nonqualified Stock Option Plan, which provides for the granting of options for
up to 300,000 shares of the Company's stock until August 2006. As of June 30,
1998, 124,000 nonqualified stock options were granted to employees under the
1996 Nonqualified Stock Option Plan at exercise prices ranging from $2.25 -
$3.44 per share, of which 31,100 are exercisable.
1995 Stock Options
On January 20, 1995, the Board of Directors granted to the Company's then
president and two vice-presidents ten-year nonqualified options to purchase
249,708 shares at $5.17 per share. The options are exercisable after five years
but may become exercisable sooner upon the Company achieving pretax earnings
targets. As of June 30, 1998, options for 124,854 shares are exercisable.
Other nonqualified options outstanding and exercisable at June 30, 1998, under
prior years' grants, aggregate 3,108 shares at exercise prices of $16.88 to
$30.00 a share.
Non-qualified stock option activity is summarized as follows:
<TABLE>
<CAPTION>
June 30, 1998 June 30, 1997 June 30, 1996
------------- ------------- -------------
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning of year 395,816 $ 4.17 252,816 $ 5.26 249,816 $ 5.12
Granted 21,000 $ 3.44 143,000 $ 2.25 3,000 16.88
Forfeited (32,000) $ 2.25 -- -- -- --
Expired/Canceled (8,000) $ 2.25 -- -- -- --
-------- -------- -------- ------ -------- ------
Outstanding at end of year 376,816 3.84 395,816 $ 4.17 252,816 5.26
======== ======== ========
Exercisable at end of year 159,062 4.86 156,562 $ 4.83 127,962 5.40
======== ======== ========
Weighted average fair value of options granted
$ 3.13 $ 2.06 $15.49
</TABLE>
-14-
<PAGE>
The following table summarizes information about stock options outstanding at
June 30, 1998:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
------------------------------------------------------ --------------------------------
Number Weighted Weighted Number Weighted
Outstanding Average Average Exercisable Average
at Remaining Exercise at Exercise
Range of Exercise Prices 6/30/98 Contractual Life Price 6/30/98 Price
------------------------ ------- ---------------- ----- ------- -----
<S> <C> <C> <C> <C> <C> <C>
$ 2.25 - $ 3.38 334,100 8.99 $ 2.25 80,100 $ 2.26
3.39 - 5.08 21,000 9.78 $ 3.44 10,500 $ 3.44
5.09 - 7.63 249,708 6.56 $ 5.11 124,854 $ 5.11
7.64 - 11.46 8,500 6.56 $ 10.63 8,500 $ 10.63
11.47 - 17.21 3,000 7.07 $ 16.88 2,000 $ 16.88
25.84 - 38.76 408 5.04 $ 28.16 408 $ 28.16
------- -------
616,716 227,362
======= =======
</TABLE>
If the Company had elected to recognize compensation cost for option grants to
its employees, officers and directors under the fair value method of SFAS No.
123, rather than continue to apply the provisions of Accounting Principles Board
Opinion No. 25, net income (loss) and the related per share amounts would have
been reported as indicated by the following pro forma amounts:
<TABLE>
<CAPTION>
Year Ended June 30: 1998 1997 1996
------------------- ---- ---- ----
<S> <C> <C> <C>
Net (loss) income:
As reported $ (488,485) $ (1,391,830) $10,037
Pro forma 649,562 (1,452,962) 10,037
(Loss) income per share:
Basic $ (.29) $ (.98) $ .03
Pro forma $ (.39) $ (1.03) $ .03
Diluted $ (.29) $ (.98) $ .02
Pro forma $ (.39) $ (1.03) $ .02
</TABLE>
The fair value of each stock option grant is estimated as of the date of grant
using the Black-Scholes option pricing model with the following weighted average
assumptions:
June 30,
----------------------------------
1998 1997 1996
---- ---- ----
Risk-free interest rate 6.56% 6.70% 6.61%
Expected lives 10 10 10
Expected volatility 96.2% 80.4% 99.4%
Expected dividend yields 0% 0% 0%
-15-
<PAGE>
8. COMMITMENTS AND CONTINGENCIES :
Rent
The Company is obligated through August 2003 under several noncancelable
long-term operating leases covering office, factory and warehouse facilities.
Minimum annual rentals under leases are:
Year Ending June 30:
1999 $137,000
2000 157,000
2001 142,000
2002 151,000
2003 and thereafter 182,000
--------
Total $769,000
========
Rent expense, including month-to-month rentals, was $412,000, $289,000 and
$226,000 in the fiscal years ended June 30, 1998, 1997 and 1996, respectively.
Employment Agreements
The Company has employment agreements with three of its officers which commenced
on July 1, 1995. On March 1, 1997, these officers were appointed to new
positions with certain changes to their agreements and two new officers were
elected. The following is a summary of these employment agreements as of June
30, 1998:
Officer Expiration Date Annual Salary
------- --------------- -------------
President (a) July 1, 2001 $125,000
Senior Vice-President (b) July 1, 2001 $113,000
Senior Vice-President and Secretary (c) July 1, 2001 $ 62,500
Vice-President of Finance January 31, 2001 $ 92,500
Vice-President of Manufacturing January 31, 2001 $ 98,800
(a) This officer is entitled to a bonus of 3 1/3% of the Company's income
before taxes and interest and a bonus of 3/4% of net sales in excess of
$20,500,000.
(b) This officer is entitled to a bonus of 3 1/3% of the Company's income
before taxes and interest.
(c) This officer is entitled to a bonus of 3 1/3% of the Company's income
before taxes and interest.
Each of the agreements provides for minimum annual increases of 10%, commencing
at various dates, and has automatic renewal provisions.
In addition, should an unrelated party obtain more than 20% of the Company's
then outstanding stock, other than by transactions initiated by the Company, the
following will occur for three of the officers:
(a) Each will be paid a bonus equal to their minimum base salary for the next
three years
(b) All rights (options, warrants, etc.) will become immediately vested and
exercisable
For the remaining two officers, should a majority of the Board of Directors be
replaced, other than by voluntary resignation or their demise, the employees can
terminate their agreement within six months of such occurrence and receive a
one-time bonus of three times their current salary.
-16-
<PAGE>
All bonuses for the years ended June 30, 1998, 1997 and 1996 have been waived
and the bonuses based on income before taxes and interest have been waived
through June 30, 2000.
9. PROFIT SHARING PLAN:
The Company's qualified profit sharing plan for eligible full-time employees
includes a 401(k) salary deferral feature that requires a matching contribution
from the Company of up to $500 per employee for the 401(k) feature and provides
for discretionary profit sharing contributions by the Company, as approved by
its Board of Directors. Contribution expense was approximately $15,700 and
$6,900 for the fiscal years ended June 30, 1998 and 1997, respectively. There
were no required matching contributions or authorized contributions for the year
ended June 30, 1996.
10. INDUSTRY SEGMENTS:
Information for the Company's distribution and manufacturing segments for the
years ended June 30, 1998, 1997 and 1996 is summarized as follows:
<TABLE>
<CAPTION>
1998 Distribution Manufacturing Total
---- ------------ ------------- -----
<S> <C> <C> <C>
Net sales $ 9,571,559 $ 24,767,479 $ 34,339,038
Operating profit 63,300 1,619,176 1,682,476
General corporate expenses -- -- (1,335,721)
Interest expense -- -- (879,406)
Net loss -- -- (488,485)
Identifiable assets 5,148,664 12,536,337 17,685,001
Capital expenditures 12,243 269,593 281,836
Depreciation and amortization expense 61,574 182,956 244,530
1997
----
Net sales $ 8,081,082 $ 19,906,887 $ 27,987,969
Operating (loss) profit (155,685) 874,739 719,054
General corporate expenses -- -- (1,430,135)
Interest expense -- -- (680,749)
Net loss -- -- (1,391,830)
Identifiable assets 4,408,928 9,631,661 14,040,589
Capital expenditures 81,570 993,792 1,075,362
Depreciation and amortization expense 62,893 81,713 144,606
1996
----
Net sales $ 9,094,046 $ 17,888,653 $ 26,982,699
Operating profit 133,760 2,124,131 2,257,891
General corporate expenses -- -- (1,411,495)
Interest expense -- -- (836,359)
Net income -- -- 10,037
Identifiable assets 5,182,514 7,289,591 12,472,105
Capital expenditures 43,704 49,570 93,274
Depreciation and amortization expense 58,941 75,349 134,290
</TABLE>
11. LITIGATION:
At June 30, 1998, the Company is a defendant in approximately 1,100 lawsuits,
together with a multitude of other defendants, in actions alleging exposure by
approximately 3,000 first party plaintiffs to asbestos and products containing
asbestos sold by the Company over unspecified periods of time.
-17-
<PAGE>
To June 30, 1998 and since 1981, the Company estimates approximately 1,700
actions on behalf of approximately 10,000 first party plaintiffs have been
instituted against it concerning asbestos-related claims and that approximately
650 actions and the claims of approximately 7,000 plaintiffs have been
terminated (the foregoing numbers assume the consummation of pending
settlements). The Company estimates that, with the exception of defense costs, a
total of approximately $1,800,000 has been agreed to in settlements to date with
regard to the terminated actions of which all but $35,000 has been paid by the
Company's insurance carriers. To June 30, 1998, the Company has paid less than
$37,000 for legal and defense costs to counsel appointed by the insurance
companies to defend it. The Company entered into an agreement with its primary
insurance companies, wherefore its liability is limited to 12% of the cost of
the defense liability and 17% of the settlement claim of certain litigation. The
agreement, which is subject to policy limitations on each insurance policy, may
be terminated at any time upon 90 days notice by any of the parties provided
that termination may not be effective as to any asbestos action that has already
been placed on the trial calendar, unless it has a scheduled trial date more
than 12 months from the date the notice is given. In May 1991, the Company
reached an agreement with Mount Vernon Fire Insurance Company, one of its
primary insurance carriers, with respect to its pending and future asbestos
litigation. Mount Vernon agreed to contribute 6.25% to the Company's defense
costs and 6.25% to its indemnity costs for so long a period of time as $100,000
in aggregate has not been paid for indemnity costs. This agreement applied only
during the period Mount Vernon provided insurance coverage, which was between
April 1, 1968 and April 1, 1969. However, because past results of settlements
and defense costs are not necessarily indicative of future settlements and
defense costs and because, as of this date, management is still unable to fully
ascertain the extent of insurance coverage, neither management nor counsel is
able to predict the outcome of these matters or the range of any potential
liability that might result. In addition, based on past history, management
believes it is likely that there will be additional asbestos action against the
Company.
The Company is party to other product liability litigation arising in the
ordinary course of business.
After consultation with counsel, the Company considers that its ultimate
liability, if any, after available insurance coverage, in the majority of these
matters, would not have a material adverse effect upon the Company's financial
position. However, there can be no assurances that the Company's insurance
coverage will adequately cover these cases or whether the Company's insurance
will provide coverage for punitive damages should they be awarded.
12. ACQUISITION OF GLOVE MANUFACTURING:
In April 1997, the Company, through Eastco Glove Technologies, Inc. (a
newly-formed, wholly-owned subsidiary) acquired all the common stock of
Protective Knitting, Inc. ("PKI") and certain machinery, equipment and inventory
from a company related to PKI. The purchase price was approximately $1,387,000,
which has been recorded as follows:
Inventory $ 139,000
Machinery and equipment 794,000
Excess of cost over net assets acquired 454,000
------------
$ 1,387,000
============
In connection with this purchase, the Company borrowed $440,000 from Congress,
(see Notes 6b, 6c and 6d), issued 100,000 shares of its common stock valued at
approximately $412,000 and has agreed to make additional payments to PKI's
former owners over the next three to five years which aggregate at least
$240,000 (see Note 6d). The remaining purchase price, including closing costs
was paid in cash. The acquisition has been accounted for as a purchase
transaction. The operations of PKI prior to its acquisition were not material in
relation to those of the Company.
<PAGE>
SCHEDULE II
EASTCO INDUSTRIAL SAFETY CORP. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
(rounded to the nearest thousand)
YEARS ENDED JUNE 30, 1998, 1997 AND 1996
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
- ------------------------------------------------------------------------------------------------------------------
Additions
Balance at Charged to costs Deductions - Balance at
Description beginning of period and expenses describe (1) end of period
- ------------------------------------------------------------------------------------------------------------------
1998
----
<S> <C> <C> <C> <C>
Allowance for doubtful accounts $219,000 $ 52,000 $ 86,000 $185,000
- ------------------------------------------------------------------------------------------------------------------
1997
----
Allowance for doubtful accounts $155,000 $105,000 $ 41,000 $219,000
- ------------------------------------------------------------------------------------------------------------------
1996
----
Allowance for doubtful accounts $304,000 $106,000 $255,000 $155,000
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Deductions relate to uncollectible accounts charged off to valuation
accounts, net of recoveries.
This schedule should be read in conjunction with the accompanying consolidated
financial statements and notes thereto.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
Reference is made to Item 4 of the Form 8-K dated June 4, 1998 and filed by
EDGAR on June 4, 1998 which is incorporated by reference herein.
PART III
Item 10, Item 11, Item 12 and Item 13 (DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT,EXECUTIVE COMPENSATION, SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT, and CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
respectively), will be incorporated in the Company's Proxy Statement to be filed
within 120 days of June 30, 1998 and will be incorporated herein by reference.
23
<PAGE>
Item 14. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are incorporated by reference to the Company's
Registration Statement on Form SB-2 (No. 333-09517), as filed on August 2, 1996
and as amended:
Exhibit Description of Exhibit
- ------- ----------------------
1.01 Form of Standby Agreement (with Royce Investment Group Inc.)
3.01 Certificate of Incorporation, as amended
3.01.1 Certificate of Amendment to Certificate of Incorporation filed
August 12, 1996
3.01.2 Certificate of Amendment to Certificate of Incorporation dated
February 15, 1989
3.02 By-Laws
3.02.1 Amendments to By-Laws adopted September, 1996
4.01 Form of Common Stock Certificate
4.05 Form of Class B Warrant Certificate (filed as Exhibit 4.04)
4.06 Form of Warrant Agency Agreement for Class B Warrants between the
Registrant and American Stock Transfer and Trust Co. (filed as
Exhibit 4.05)
4.07 Form of Underwriters (Royce Investment Group Inc.) Warrant filed
as Exhibit 4.06)
10.01 Employment Agreement with Alan Densen, dated as of July 1, 1995
10.02 Employment Agreement with Lawrence Densen, dated as of July 1,
1995
10.03 Employment Agreement with Anthony Towell, dated as of July 1, 1995
10.05 Amendment to Financing Agreements with Congress dated July, 1996
10.07 Form of Modification Agreement to Employment Agreements with Alan
Densen, Lawrence Densen and Anthony Towell and Waiver
99.01 1996 Incentive Stock Option Plan as amended to date
99.02 1996 Non-Qualified Stock Option Plan as amended to date
99.03 Form of Warrants held by Anthony Towell dated January 31, 1994
(and whose exercise date has been extended to April 30, 1999)
24
<PAGE>
99.04 Form of Option Agreements Granted as of January 20, 1995 with Alan
Densen, Anthony Towell and Lawrence Densen
99.06 Product liability primary insurance coverage for asbestos
99.07 Product liability excess insurance coverage for asbestos
99.08 Insurance coverage for Puerto Rico Safety Equipment Corporation
for asbestos
99.09 Defense and indemnity agreement dated March 26, 1990
99.10 Defense and indemnity agreement dated May, 1991
99.11 Letters between L'Abbate & Balkan, counsel for Eastco and Wilentz,
Goldman & Spitzer, counsel for plaintiffs' attorneys, dated
February 3, 1994 and March 14, 1994, respectively, with respect to
settlement of New York cases
25
<PAGE>
The following exhibits are incorporated by reference to the Company's
annual reports on Form 10K for the periods indicated:
For the year ended June 30, 1991:
- ---------------------------------
10.04 Accounts Financing Agreement (Security Agreement), Covenants
Supplement to Accounts Financing Agreement (Security Agreement),
Inventory Loan Agreement and Inventory and Equipment Security
Agreement Supplement to Accounts Financing Agreement (Security
Agreement) executed as of October 1, 1991 with Congress (filed as
Exhibit 10.1)
For the year ended June 30, 1993:
- ---------------------------------
10.06 Exemption of Puerto Rico Safety Corporation with respect to Puerto
Rico taxes as amended to date
The following exhibits are incorporated by reference to the Registration
Statement on Form S-1 (No. 33-74988) as amended, effective April 12, 1994. The
number in parentheses refers to the exhibit number in the Form S-1:
4.03 Form of Class A Warrant Certificate (4b)
4.04 Form of Warrant Agency Agreement between the Company and American
Stock Transfer and Trust Co. (4c)
The following exhibits are incorporated by reference to the Company's form
10-QSB for the quarterly period ended March 31, 1997:
10.01.1 Modification to employment agreement with Alan E. Densen dated
March 1, 1997.
10.02.1 Modification to employment agreement with Lawrence Densen dated
March 1, 1997.
10.03.1 Modification to employment agreement with Anthony P. Towell dated
March 1, 1997.
10.08 Stock Exchange Agreement among Eastco Glove Technologies Inc.,
Eastco Industrial Safety Corp., Steven Robins and Phillip Robins
dated April 17, 1997.
10.09 Asset Purchase Agreement among PR Industries Inc., Steven Robins,
Phillip Robins, Eastco Glove technologies Inc. and Eastco
Industrial Safety Corp., dated April 17, 1997.
10.10 Voting Trust agreement among Eastco Industrial Safety Corp., Alan
E. Densen, Anthony P. Towell, Lawrence Densen, Steven Robins and
Phillip Robins dated April 17, 1997.
10.11 Employment agreement with Arthur Wasserspring dated February 1,
1997.
10.12 Employment agreement with Richard Boyen dated February 1, 1997.
10.13 Amendment #8 to Financing Agreements with Congress Financial Corp.
dated April 17, 1997.
The following exhibits are annexed hereto:
21.01 Subsidiaries of the Registrant
27.01 Financial Data Schedule
99.05 Asbestos Litigation as of June 30, 1998
(b) A report on Form 8-K, Item 4 Changes in Registrant's Certifying Accountant
dated June 4, 1998 was filed during the last quarter of the fiscal year ended
June 30, 1998.
26
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
EASTCO INDUSTRIAL SAFETY CORP.
By: /S/ LAWRENCE DENSEN Date: 10/2/98
---------------------------
LAWRENCE DENSEN
President and Chief Executive Officer
By: /S/ ARTHUR J. WASSERSPRING Date: 10/2/98
---------------------------
ARTHUR J. WASSERSPRING
Vice President of Finance, and
Chief Financial Officer
In accordance with the Exchange Act, this report has been signed by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /S/ LAWRENCE DENSEN Date: 10/2/98
---------------------------
LAWRENCE DENSEN
Director
By: /S/ ALAN DENSEN Date: 10/2/98
---------------------------
ALAN DENSEN
Director
By: /S/ CHARLES HOLZBERG Date: 10/2/98
---------------------------
CHARLES HOLZBERG
Director
By: /S/ MARTIN FLEISHER Date:10/2/98
---------------------------
MARTIN FLEISHER
Director
By: /S/ ANTHONY P.TOWELL Date: 10/2/98
---------------------------
ANTHONY P. TOWELL
Director
By: /S/ JAMES A. FAVIA Date: 10/2/98
---------------------------
JAMES A. FAVIA
Director
By: /S/ BRUCE FRIEDMAN Date: 10/2/98
---------------------------
BRUCE FRIEDMAN
Director
27
EXHIBIT 21.01
EASTCO INDUSTRIAL SAFETY CORP.
SUBSIDIARIES
FOR THE YEAR ENDED JUNE 30, 1998
Name of Subsidiary State of Incorporation
- ------------------ -----------------------
Disposable Safety Wear, Inc. Delaware
Puerto Rico Safety Corporation New York
Puerto Rico Safety Equipment Corporation Delaware
Safety Wear Corp. Delaware
Eastco Glove Technologies, Inc. Minnesota
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Jun-30-1998
<PERIOD-END> Jun-30-1998
<CASH> 223,125
<SECURITIES> 0
<RECEIVABLES> 6,376,916
<ALLOWANCES> (185,000)
<INVENTORY> 7,849,665
<CURRENT-ASSETS> 14,957,301
<PP&E> 3,852,650
<DEPRECIATION> (1,575,973)
<TOTAL-ASSETS> 17,685,001
<CURRENT-LIABILITIES> 13,247,910
<BONDS> 0
0
0
<COMMON> 201,970
<OTHER-SE> 3,696,838
<TOTAL-LIABILITY-AND-EQUITY> 17,685,001
<SALES> 34,339,038
<TOTAL-REVENUES> 34,339,038
<CGS> 28,622,886
<TOTAL-COSTS> 28,622,886
<OTHER-EXPENSES> 5,325,231
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 879,406
<INCOME-PRETAX> (488,485)
<INCOME-TAX> 0
<INCOME-CONTINUING> (488,485)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (488,485)
<EPS-PRIMARY> (.29)
<EPS-DILUTED> (.29)
</TABLE>
EXHIBIT 99.05
<PAGE>
SCHEDULE OF PENDING ASBESTOS LITIGATION June 30, 1998
o The actions set forth below in New Jersey are in the Superior Court, Law
Division, Middlesex County.
o The actions set forth below in New York are in the Supreme Court, New
York County (unless otherwise indicated).
o The actions set forth below in Pennsylvania are in Luzerne County, Court
of Common Pleas.
A 6 counts each for damages in excess of $20,000 for compensatory and
damages in excess of $20,000 for punitive damages.
B 9 counts each for damages in excess of $475,000 for compensatory and
damages in excess of $75,000 for punitive damages.
C 1 cause of action for $10 million in punitive damages, 1 cause of action
for $10 million compensatory damages and 1 cause of action for $5 million
compensatory damages.
* During fiscal 1994, the Company reached a settlement pertaining to all
pending and future cases against Eastco in the State of New York brought
by one firm of plaintiffs' attorneys. The settlement does not apply to
Puerto Rico Safety Equipment and is only applicable to cases brought by
the same law firm against the Company in the State of New York. The
Company is to be dismissed without any payment in cases not involving any
exposure to a power generating station in the State of New York
("Powerhouse"). Where there is Powerhouse exposure, a payment of $100 is
to be made for each alleged nonmalignant case and $300 for each malignant
case. Where plaintiffs consist of two spouses, such is deemed one case.
Payment is to await appropriate documentation of exposure, releases from
the plaintiffs and the agreement of each plaintiff whose case is settled.
A copy of the letters between counsel for the Company and counsel for
plaintiffs' attorneys setting forth this settlement is designated as
Exhibit 99.11.
** Various counts for unspecified damages including compensation and
punitive.
*** Standard complaint as made available to the Company during October, 1989
pursuant to which 10 causes of action are alleged seeking $10,000,000 in
compensatory damages and $20,000,000 in punitive damages on behalf of
each plaintiff.
**** Incorporates standard complaint filed with Middlesex County Clerk in the
State of New Jersey pursuant to which various counts are alleged seeking
unspecified amounts of compensatory and punitive damages on behalf of
each plaintiff.
***** Sets forth a standard complaint filed with the Supreme Court in all
Counties within the City of New York for personal injury or wrongful
death containing various causes of action including causes of action
seeking $10,000,000 in compensatory damages and $10,000,000 in
<PAGE>
punitive damages on behalf of each plaintiff.
PLAINTIFFS
Number of plaintiffs is as per inception of case or as otherwise indicated.
DEFENDANTS
Number of defendants excludes John Does and unnamed parties. Certain named
defendants are successors to other entities not included in the count. No
representation is made as to whether the named defendants were all served or are
still party to the actions as to whether additional defendants have been brought
into the actions. No representation is given as to whether or not all or any of
the defendants are still engaged in business, have insurance, or their ability
to pay any claim judgment against them.
DAMAGES
No representation is given as to whether or not complaints have been amended to
reflect different claims or includes additional plaintiffs. Each action also
seeks costs.
<PAGE>
<TABLE>
<CAPTION>
CASE_ID DATE STATE COMPANY NO_PLNTF NO_DEFEND DAMAGES
<S> <C> <C> <C> <C> <C> <C>
PENTONY 6/1/87 NY EASTCO 2 1 C
HORNACK 9/1/88 PA CHARKATE 2 17 A
JAMES 9/1/88 PA CHARKATE 1 19 A
GANDZYK 1/1/89 PA CHARKATE 1 14 A
ARGENZIANO 2/1/89 NJ EASTCO 1 57 **
DANOWSKI 4/1/89 PA EASTCO 2 13 A
BEZKOROWAYN 6/1/89 NJ CHARKATE 3 57 **
NOVAK 6/1/89 NJ CHARKATE 2 16 **
REALIN 6/1/89 NJ CHARKATE 2 16 **
PACELLI 9/1/89 PA EASTCO 2 16 A
PAWLASKI 9/1/89 PA EASTCO 1 18 A
TOMAINE 9/1/89 PA EASTCO 2 14 A
LEARY 5/1/90 PA EASTCO 2 14 A
PETROSKY 6/1/90 PA CHARKATE 2 13 A
ZYMESKY 7/1/90 PA EASTCO 2 17
LEFKOWITZ 8/1/90 NJ EASTCO 1 58 **
BECKETT 9/1/90 NJ EASTCO 9 64 **
JANUARY 9/1/90 NJ EASTCO 2 55 **
MANNING 10/1/90 NJ EASTCO 2 55 **
RAHL 11/1/90 NJ EASTCO 2 56 **
ALESSI 12/1/90 NJ EASTCO 2 55 **
CYR 12/1/90 NJ EASTCO 2 53 **
LINDLAR 12/1/90 NJ EASTCO 6 57 **
SHJARBACK 1/1/91 NJ EASTCO 3 61 **
TOMNEY 1/1/91 NJ EASTCO 1 51 **
CARLUCCIO 4/1/91 NJ EASTCO 5 58 **
ENGLAND 4/1/91 NJ EASTCO 2 55 **
MOLNAR 4/1/91 NJ EASTCO 2 22 **
SABO 4/1/91 NJ EASTCO 2 55 **
SPELLMAN 4/1/91 NJ EASTCO 1 57 **
NUNN 5/1/91 NJ EASTCO 2 58 **
McGUINNESS 8/1/91 NJ EASTCO 1 59 **
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASE_ID DATE STATE COMPANY NO_PLNTF NO_DEFEND DAMAGES
<S> <C> <C> <C> <C> <C> <C>
SWEENEY 8/1/91 NJ EASTCO 10 61 **
BUNDA 9/1/91 NJ EASTCO 1 60 **
BROWN 2/1/92 NJ EASTCO 2 32 **
PETERSON 9/1/92 NJ EASTCO 2 59 **
MARCOGLIESE 10/1/92 NJ EASTCO 2 57 **
BEVILACQUA 11/1/92 NJ EASTCO 2 59 **
BRANSON 11/1/92 NJ EASTCO 2 49 **
INGRAM 1/1/93 NJ EASTCO 1 60 **
McGRATH 1/1/93 NJ EASTCO 2 61 **
PRATHER 1/1/93 NJ EASTCO 1 23 **
SZABO 1/1/93 NJ EASTCO 2 28 **
TEDESCO 1/1/93 NJ EASTCO 2 58 **
TIER 1/1/93 NJ EASTCO 2 58 **
IANDOLI 2/1/93 NJ EASTCO 2 58 **
FLANAGAN 3/1/93 NJ EASTCO 1 57 ****
BUTLER 4/1/93 NJ EASTCO 1 62 **
CASTAGNA 4/1/93 NJ EASTCO 1 58 **
MARGL 4/1/93 NJ EASTCO 2 49 ****
PENDLETON 4/1/93 NJ EASTCO 1 29 **
BAILEY 6/1/93 NJ EASTCO 2 21 **
MARTINEZ 6/1/93 NJ EASTCO 1 24 **
SLECKMAN 6/1/93 NJ EASTCO 1 62 **
TELFOR 6/1/93 NJ EASTCO 2 28 **
AGLIATA 7/1/93 NJ EASTCO 2 77 **
RACZYNSKY 7/1/93 NJ EASTCO 1 28 **
GONZALEZ 8/1/93 NJ EASTCO 2 28 **
JANCSEK 8/1/93 NJ EASTCO 2 26 **
VAUGHN 8/1/93 NJ EASTCO 2 44 ****
PODUBYNSKY 9/1/93 NJ EASTCO 2 29 **
SCHWARZ 9/1/93 NJ EASTCO 1 58 **
CHAPMAN 10/1/93 NJ EASTCO 2 26 **
HARRINGTON 10/1/93 NJ EASTCO 1 58 **
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASE_ID DATE STATE COMPANY NO_PLNTF NO_DEFEND DAMAGES
<S> <C> <C> <C> <C> <C> <C>
MUTH 10/1/93 NJ EASTCO 1 23 **
ORAS 10/1/93 NJ EASTCO 2 52 ****
CORNWELL 12/1/93 NJ EASTCO 1 46 ****
D'APOLITO 12/1/93 NJ EASTCO 1 46 ****
JAGLOWSKI 12/1/93 NJ EASTCO 2 51 ****
JOHNSON 12/1/93 NJ EASTCO 2 40 ****
PAONE 12/1/93 NJ EASTCO 2 46 ****
ROMERO 12/1/93 NJ EASTCO 1 51 ****
BABISH, P. 1/1/94 NJ EASTCO 1 59 **
BEITZ 1/1/94 NJ EASTCO 1 46 ****
EGAN 1/1/94 NJ EASTCO 1 46 ****
GRANT, S. 1/1/94 NJ EASTCO 2 24 **
JACKSON, 1/1/94 NJ EASTCO 2 26 **
KOVACK 1/1/94 NJ EASTCO 1 46 ****
MITCHELL, A. 1/1/94 NJ EASTCO 1 46 ****
MURPHY 1/1/94 NJ EASTCO 1 46 ****
PEREZ, A. 1/1/94 NJ EASTCO 1 46 ****
RING, JOSEPH 1/1/94 NJ EASTCO 1 26 **
SHINE, WILLIAM 1/1/94 NJ EASTCO 1 58 **
SPIEWAK 1/1/94 NJ EASTCO 1 46 ****
SUTAK 1/1/94 NJ EASTCO 1 22 **
THOMSON 1/1/94 NJ EASTCO 2 25 **
BROWN, O. 3/1/94 NJ EASTCO 2 40 **
CSAKI 3/1/94 NJ EASTCO ' 1 26 **
FARKAS 3/1/94 NJ EASTCO 2 27 **
GELATO 3/1/94 NJ EASTCO 1 41 **
HELFRICH 3/1/94 NJ EASTCO 2 61 ****
REZES 3/1/94 NJ EASTCO 2 40 **
SMITH 3/1/94 NJ EASTCO 2 20 **
WILSON 3/1/94 NJ EASTCO 2 24 **
ARLEQUIN, I. 4/1/94 NJ EASTCO 2 40 **
BARAT 4/1/94 NJ EASTCO 1 41 **
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASE_ID DATE STATE COMPANY NO_PLNTF NO_DEFEND DAMAGES
<S> <C> <C> <C> <C> <C> <C>
CERKA 4/1/94 NJ EASTCO 2 86 ****
DANBREVILLE 4/1/94 NJ EASTCO 2 56 ****
DANEKE 4/1/94 NJ EASTCO 2 55 ****
DeSIMMONEM 4/1/94 NJ EASTCO 2 55 ****
FERNANDEZ, E. 4/1/94 NJ EASTCO 1 55 ****'
GNAPP 4/1/94 NJ EASTCO 2 56 ****
HARVEY, P. 4/1/94 NJ EASTCO 1 56 ****
HOGATE 4/1/94 NJ EASTCO 2 9 ****
MAHALCHICK 4/1/94 NJ EASTCO 2 53 ****
MAROSI 4/1/94 NJ EASTCO 2 56 ****
MITE 4/1/94 NJ EASTCO 2 56 ****
MOSS 4/1/94 NJ EASTCO 2 56 ****
OLDFIELD 4/1/94 NJ EASTCO 1 56 ****
PAPA 4/1/94 NJ EASTCO 1 56 ****
RICCI 4/1/94 NJ EASTCO 2 56 ****
WAGNER 4/1/94 NJ EASTCO 2 39 **
YOUNG 4/1/94 NJ EASTCO 2 56 ****
BIONDO 5/1/94 NJ EASTCO 1 55 ****
BUTCHKO 5/1/94 NJ EASTCO 2 60 ****
GAYDOS 5/1/94 NJ EASTCO 1 36 **
ZUBER 5/1/94 NJ EASTCO 2 24 **
DAVIS, THOMAS 5/4/94 NJ EASTCO 2 41 ****
BRITTON 5/24/94 NJ EASTCO 2 24 **
DEMSKI 5/24/94 NJ EASTCO 2 30 ****
FULTZ 5/24/94 NJ EASTCO 2 33 **
CRAVEN 5/31/94 NJ EASTCO 2 24 **
GRIFFIS 5/31/94 NJ EASTCO 2 23 **
LODATO 5/31/94 NJ EASTCO 2 40 **
MENDES 5/31/94 NJ EASTCO 2 40 **
MILLIAN 5/31/94 NJ EASTCO 2 40 **
POLITES 5/31/94 NJ EASTCO 2 25 **
SALVAGGIO 5/31/94 NJ EASTCO 1 29 **
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASE_ID DATE STATE COMPANY NO_PLNTF NO_DEFEND DAMAGES
<S> <C> <C> <C> <C> <C> <C>
WELCH 5/31/94 NJ EASTCO 1 25 **
WOOD 5/31/94 NJ EASTCO 2 22 **
LAMONT 6/2/94 NJ EASTCO 2 23 ****
MATUSEWSKI 6/2/94 NJ EASTCO 2 19 ****
PERRINE 6/2/94 NJ EASTCO 2 41 ****
DONOGHUE 6/24/94 NJ EASTCO 2 59 ****
ESPOSITO 6/24/94 NJ EASTCO 2 41 ****
PARISI 6/24/94 NJ EASTCO 2 50 ****
SATTERTHWAIT 6/24/94 NJ EASTCO 2 24 ****
SHANAHAN 6/24/94 NJ EASTCO 2 41 ****
STILES 6/24/94 NJ EASTCO 2 67 ****
WHITEHURST 6/24/94 NJ EASTCO 1 36 ****
BENJAMIN, 7/20/94 NJ EASTCO 2 22 ****
MASON, 7/20/94 NJ EASTCO 2 25 ****
SMITH, 7/20/94 NJ EASTCO 1 22 ****
CORDWELL, 7/22/94 NJ EASTCO 2 23 ****
KERNER, CHARL 7/22/94 NJ EASTCO 2 40 ****
MIRABELLI, 7/22/94 NJ EASTCO 2 21 ****
SCHMIDLAPP, 7/22/94 NJ EASTCO 2 40 ****
CSONTOS, 7/27/94 NJ EASTCO 2 25 ****
DIPIERRO, 7/27/94 NJ EASTCO 1 23 ****
HARTLAUB, JAY 7/27/94 NJ EASTCO 2 54 ****
RASIMOWICZ, 7/27/94 NJ EASTCO 2 41 ****
SCARPONE, 7/27/94 NJ EASTCO 1 40 ****
SIBONA, RALPH 7/27/94 NJ EASTCO 2 55 ****
SYPKO, ROBERT 7/27/94 NJ EASTCO 2 54 ****
BREURE, LEONA 7/29/94 NJ EASTCO 2 41 ****
CZWALGA, 7/29/94 NJ EASTCO 2 26 ****
DONCSEC, 7/29/94 NJ EASTCO 2 40 ****
GUAY, RICHARD 7/29/94 NJ EASTCO 2 41 ****
HAMILTON, 7/29/94 NJ EASTCO 2 29 ****
MCKERNAN, 7/29/94 NJ EASTCO 1 41 ****
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASE_ID DATE STATE COMPANY NO_PLNTF NO_DEFEND DAMAGES
<S> <C> <C> <C> <C> <C> <C>
NATALE, JOSEP 7/29/94 NJ EASTCO 2 40 ****
PALLADINO, 7/29/94 NJ EASTCO 1 41 ****
SONNTAG, 7/29/94 NJ EASTCO 2 41 ****
STAUDT, LOUIS 7/29/94 NJ EASTCO 2 41 ****
BLONIARZ, 8/18/94 NJ EASTCO 2 23 ****
BODNER, PAUL 8/18/94 NJ EASTCO 2 30 ****
DREXLER, 8/18/94 NJ EASTCO 2 54 ****
NUCASO, ALFRE 8/18/94 NJ EASTCO 1 22 ****
BARA, STELLA 8/29/94 NJ EASTCO 2 64 ****
CATANESE, 8/29/94 NJ EASTCO 2 47 ****
DANIELS, JESSE 8/29/94 NJ EASTCO 1 53 ****
FOLK, CHARLES 8/29/94 NJ EASTCO 1 41 ****
FREDERICKS, 8/29/94 NJ EASTCO 2 40 ****
HELLER, JOHN 8/29/94 NJ EASTCO 2 41 ****
LISTO, LOUIS 8/29/94 NJ EASTCO 2 47 ****
POECZE, KALMA 8/29/94 NJ EASTCO 2 19 ****
VENEZIA, 8/29/94 NJ EASTCO 2 41 ****
JONES, ALFRED 8/30/94 NJ EASTCO 1 23 ****
KEARNEY, 8/30/94 NJ EASTCO 1 49 ****
LISTO, PATSY 8/30/94 NJ EASTCO 2 47 ****
MEEKS, LESTER 8/30/94 NJ EASTCO 2 23 ****
METALLO, 8/30/94 NJ EASTCO 2 41 ****
MORAN, 8/30/94 NJ EASTCO 2 42 ****
RAPPISI, 8/30/94 NJ EASTCO 2 41 ****
DIVER, 8/31/94 NJ EASTCO 2 54 ****
DUNN, THOMAS 8/31/94 NJ EASTCO 2 54 ****
GRESH, 8/31/94 NJ EASTCO 2 40 ****
HOUCK, 8/31/94 NJ EASTCO 2 49 ****
LaFASO, EDWAR 8/31/94 NJ EASTCO 2 40 ****
LUBAS, 8/31/94 NJ EASTCO 2 40 ****
OSTOFF, JOHN 8/31/94 NJ EASTCO 2 48 ****
SINGLETARY, 8/31/94 NJ EASTCO 2 22 ****
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASE_ID DATE STATE COMPANY NO_PLNTF NO_DEFEND DAMAGES
<S> <C> <C> <C> <C> <C> <C>
SWISSTACK, 8/31/94 NJ EASTCO 2 55 ****
WARHOLICK, 8/31/94 NJ EASTCO 2 41 ****
CHESSERE, 9/12/94 NJ EASTCO 2 65 ****
CRUM, DONALD 9/12/94 NJ EASTCO 1 12 ****
DAVIS, DONALD 9/12/94 NJ EASTCO 2 20 ****
FERRARA, 9/12/94 NJ EASTCO 2 46 ****
FORD, ARTHUR 9/12/94 NJ EASTCO 2 48 ****
GIBNEY, SHEILA 9/12/94 NJ EASTCO 2 63 ****
HAMM, JAMES 9/12/94 NJ EASTCO 2 21 ****
HECKMAN, 9/12/94 NJ EASTCO 2 41 ****
HILAIRE, 9/12/94 NJ EASTCO 2 47 ****
LAUDICINA, 9/12/94 NJ EASTCO 1 46 ****
MADJESKI, 9/12/94 NJ EASTCO 2 47 ****
MARTUCCI, 9/12/94 NJ EASTCO 2 47 ****
MAULBECK, 9/12/94 NJ EASTCO 2 49 ****
SUOSSO, FLORE 9/12/94 NJ EASTCO 2 21 ****
BOCCHINI, 9/22/94 NJ EASTCO 2 30 ****
BOYLE, DAVID 9/22/94 NJ EASTCO 2 47 ****
BUCHTA, WILLIA 9/22/94 NJ EASTCO 1 49 ****
CASTNER, 9/22/94 NJ EASTCO 2 47 ****
CEFALONI, 9/22/94 NJ EASTCO 2 33 ****
CHRISTIANSON, 9/22/94 NJ EASTCO 2 47 ****
FLECK, 9/22/94 NJ EASTCO 2 46 ****
FUSS, CARL 10/3/94 NJ EASTCO 2 30 ****
GERDING, 10/3/94 NJ EASTCO 2 49 ****
IANNACONE, 10/3/94 NJ EASTCO 2 49 ****
LEONARD, 10/3/94 NJ EASTCO 1 30 ****
LIMONE, MARIO 10/3/94 NJ EASTCO 2 21 ****
MARDRUS, 10/3/94 NJ EASTCO 2 47 ****
MARINO, FRANK 10/3/94 NJ EASTCO 2 47 ****
MARRON, DONA 10/6/94 NJ EASTCO 2 49 ****
MATHIASEN, 10/6/94 NJ EASTCO 2 87 ****
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASE_ID DATE STATE COMPANY NO_PLNTF NO_DEFEND DAMAGES
<S> <C> <C> <C> <C> <C> <C>
McARTHUR, 10/6/94 NJ EASTCO 2 52 ****
REITER, PAUL 10/6/94 NJ EASTCO 1 47 ****
SAMEK, ALBINA 10/6/94 NJ EASTCO 2 60 ****
SAXE, GARY 10/6/94 NJ EASTCO 2 48 ****
SONTAG, FRED 10/6/94 NJ EASTCO 1 46 ****
SZABO, LOUIS 10/6/94 NJ EASTCO 2 47 ****
POTTER 5/17/95 NJ EASTCO 1 47 ****
NUNEZ 6/5/95 NJ EASTCO 1 42 ****
CLARK, JOAN 6/19/95 NJ EASTCO_PR 2 91 **
BADER, 9/21/95 NY EASTCO 1 60 ***
BREWER, E. 6/30/96 NY EASTCO 3 *
GUZZETTI, M. 6/30/96 NY EASTCO 1 *
PAJAK, E. 6/30/96 NY EASTCO 1 *
RICE, G. 10/30/96 NY EASTCO 16 *
Brown, Joan J. 11/12/96 PA EASTCO_PR 1 105 B
TERRITO, G. 11/26/96 NY EASTCO 19 *
SEARS, W. 12/9/96 NY EASTCO 26 *
STOCK, J. 12/20/96 NY EASTCO 10 *
PLAGIANNAKOS, 2/3/97 NY EASTCO 27 *
CANCEL, R. 2/10/97 NY EASTCO 35 *
MARTINEZ, R. 2/11/97 NY EASTCO 4 *
ULIANO, A. 2/13/97 NY EASTCO 3 *
DALRYMPLE, W. 3/11/97 NY EASTCO 43 *
TARANTOLA, J. 3/20/97 NY EASTCO 61 *
KJELDSEN, O. 4/9/97 NY EASTCO 10 *
ESCUDERO, J. 4/15/97 NY EASTCO 4 *
SACCONE, A. 4/15/97 NY EASTCO 1 *
KILROY, M. 4/23/97 NY EASTCO 44 *
CHUDKOSKY, C. 4/24/97 NY EASTCO 17 *
REUTLINGER, 5/12/97 NY EASTCO 3 *
BASTA, F. 6/19/97 NY EASTCO 22 *
HALSTEAD, G. 6/19/97 NY EASTCO 10 *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASE_ID DATE STATE COMPANY NO_PLNTF NO_DEFEND DAMAGES
<S> <C> <C> <C> <C> <C> <C>
HANNIGAN, D. 6/26/97 NY EASTCO 3 *
BIGLEY, JOS 7/15/97 NY EASTCO_PR 13 *
VOLPE, JAMES 7/22/97 NY EASTCO_PR 23 *
DEMKO, 8/13/97 NJ EASTCO 4 41
ERSKINE, JOS 9/23/97 NY EASTCO_PR 18 *
RIZZO, JOSEPH 9/26/97 NY EASTCO_PR 63 *
TIEDEMANN, 9/26/97 NY EASTCO_PR 12 *
DOLCE, 10/8/97 NY EASTCO_PR 2 *
WALPOLE, 10/8/97 NY EASTCO_PR 4 *
CROWLEY, 10/10/97 NY EASTCO_PR 2 86 *****
FOLEY, WILLIAM 10/10/97 NY EASTCO_PR 1 86 *****
GAVALES, JOHN 10/10/97 NY EASTCO_PR 2 86 *****
MIDOLO, RALPH 10/10/97 NY EASTCO_PR 2 86 *****
SALTALAMACCH 10/10/97 NY EASTCO_PR 2 86 *****
SIMINONE, 10/10/97 NY EASTCO_PR 1 86 *****
TIVIN, ELLIOT 10/10/97 NY EASTCO_PR 2 86 *****
BOGUS, VIVIAN 11/5/97 NY EASTCO_PR 2 76 *****
BROWN, EMMA 11/5/97 NY EASTCO_PR 2 76 *****
COURTNEY, 11/5/97 NY EASTCO_PR 2 76 *****
MCCARRON, 11/5/97 NY EASTCO PR 9 *
WALSH, 11/5/97 NY EASTCO_PR 2 76 *****
INZONE, MICHA 11/14/97 NY EASTCO PR 5 *
ASTUTO, VINCE 11/24/97 NY EASTCO_PR 2 77 *****
BROOKS, LAYER 11/24/97 NY EASTCO_PR 2 77 *****
BRUCE, 11/24/97 NY EASTCO_PR 2 77 *****
EVANS, 11/24/97 NY EASTCO_PR 2 77 *****
FORSTER, 11/24/97 NY EASTCO_PR 1 77 *****
GARCIA, JOYCE 11/24/97 NY EASTCO_PR 1 77 *****
GRAHAM, D'ANT 11/24/97 NY EASTCO_PR 2 77 *****
WOLFINGER, 11/24/97 NY EASTCO_PR 2 77 *****
ABRAMSON, 12/17/97 NY EASTCO_PR 2 75 *****
AGUGLIARO, 12/17/97 NY EASTCO_PR 2 75 *****
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASE_ID DATE STATE COMPANY NO_PLNTF NO_DEFEND DAMAGES
<S> <C> <C> <C> <C> <C> <C>
ALBARELLO, 12/17/97 NY EASTCO_PR 1 75 *****
ALGARIN, CRUZ 12/17/97 NY EASTCO_PR 2 75 *****
AMBROSE, 12/17/97 NY EASTCO_PR 2 75 *****
AMERI, ROBERT 12/17/97 NY EASTCO_PR 2 75 *****
ANTENUCCI, 12/17/97 NY EASTCO_PR 1 75 *****
ATTEROLE, 12/17/97 NY EASTCO_PR 2 75 *****
BARRETT, JOHN 12/17/97 NY EASTCO_PR 2 75 *****
BARROW, JOSE 12/17/97 NY EASTCO_PR 1 75 *****
BATISTA, EDWIN 12/17/97 NY EASTCO_PR 2 75 *****
BERZAK, LESTE 12/17/97 NY EASTCO_PR 1 75 *****
BIELLI, ARTHUR 12/17/97 NY EASTCO_PR 2 75 *****
BIRCH, WARREN 12/17/97 NY EASTCO_PR 2 75 *****
BRACCHI, 12/17/97 NY EASTCO_PR 2 75 *****
BRANCACCIO, 12/17/97 NY EASTCO_PR 2 75 *****
CAMPISI, LOUIS 12/17/97 NY EASTCO_PR 2 75 *****
CARECCIA, 12/17/97 NY EASTCO_PR 2 75 *****
CARROLL, 12/17/97 NY EASTCO_PR 2 75 *****
CHALMERS, 12/17/97 NY EASTCO_PR 2 75 *****
CHIPMAN, 12/17/97 NY EASTCO_PR 2 75 *****
CIESLAK, 12/17/97 NY EASTCO_PR 1 75 *****
CIPOLLA, JOHN 12/17/97 NY EASTCO_PR 2 75 *****
COLANTONIO, 12/17/97 NY EASTCO_PR 2 75 *****
CONTI, VINCENT 12/17/97 NY EASTCO_PR 2 75 *****
COPLEY, HUBER 12/17/97 NY EASTCO_PR 2 75 *****
COSENZO, 12/17/97 NY EASTCO_PR 2 75 *****
CROMARTIE, 12/17/97 NY EASTCO_PR 1 75 *****
DECONTE, CARL 12/17/97 NY EASTCO_PR 2 75 *****
DENINNO, NICK 12/17/97 NY EASTCO_PR 2 75 *****
DINKIER, 12/17/97 NY EASTCO_PR 2 75 *****
DISTEFANO, 12/17/97 NY EASTCO_PR 2 75 *****
DOWD, WALTER 12/17/97 NY EASTCO_PR 1 75 *****
DURSO, JOHN 12/17/97 NY EASTCO_PR 2 75 *****
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASE_ID DATE STATE COMPANY NO_PLNTF NO_DEFEND DAMAGES
<S> <C> <C> <C> <C> <C> <C>
ELLGEN, GEOR 12/17/97 NY EASTCO_PR 1 75 *****
FARRELL, 12117/97 NY EASTCO_PR 2 75 *****
FARRELL, 12/17/97 NY EASTCO_PR 2 75 *****
FEE, JAMES 12117/97 NY EASTCO_PR 2 75 *****
FEEHAN, JOHN 12117/97 NY EASTCO_PR 2 75 *****
FERRERI, 12117/97 NY EASTCO_PR 2 75 *****
FOX, CHARLES 12/17/97 NY EASTCO_PR 2 75 *****
FRIED, MARTIN 12117/97 NY EASTCO_PR 1 75 *****
FRIEDMAN, 12/17/97 NY EASTCO_PR 2 75 *****
GECZI, JOSZEF 12/17/97 NY EASTCO_PR 1 75 *****
GERSTEL, 12/17/97 NY EASTCO_PR 2 75 *****
GOLDSTEIN, 12/17/97 NY EASTCO_PR 2 75 *****
GONZALEZ, 12/17/97 NY EASTCO_PR 2 75 *****
GRACI, 12/17/97 NY EASTCO_PR 2 75 *****
GRAFENSTEIN, 12/17/97 NY EASTCO_PR 2 75 *****
GUGLIUZZO, 12/17/97 NY EASTCO_PR 2 75 *****
HALVORSEN, 12/17/97 NY EASTCO_PR 2 75 *****
HANDLER, 12/17/97 NY EASTCO_PR 2 75 *****
MANLY, HAROLD 12/17/97 NY EASTCO_PR 2 75 *****
HAUGH, 12/17/97 NY EASTCO_PR 2 75 *****
HEMSLEY, 12/17/97 NY EASTCO_PR 2 75 *****
HENDERSON, 12/17/97 NY EASTCO_PR 2 75 *****
HERSEY, KENNE 12/17/97 NY EASTCO_PR 2 75 *****
HEWSKI, HARRY 12/17/97 NY EASTCO_PR 2 75 *****
HILTON, ROMAN 12/17/97 NY EASTCO_PR 1 75 *****
HILTY, THOMAS 12/17/97 NY EASTCO_PR 2 75 *****
INGENITO, NEIL 12/17/97 NY EASTCO_PR 2 75 *****
IOIMO, FRANK 12/17/97 NY EASTCO_PR 2 75 *****
JENKINS, JAMES 12/17/97 NY EASTCO_PR 2 75 *****
JOSEPH, PETER 12/17/97 NY EASTCO_PR 2 75 *****
KEENAN, MICHA 12/17/97 NY EASTCO_PR 2 75 *****
KELLEHER, 12/17/97 NY EASTCO_PR 2 75 *****
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASE_ID DATE STATE COMPANY NO_PLNTF NO_DEFEND DAMAGES
<S> <C> <C> <C> <C> <C> <C>
KERN, THOMAS 12/17/97 NY EASTCO_PR 2 75 *****
KHEDERIAN, 12/17/97 NY EASTCO PR 1 75 *****
KIRKPATRICK, 12/17/97 NY EASTCO_PR 2 75 *****
KIRSCHENBAUM 12/17/97 NY EASTCO_PR 1 75 *****
KLEIN, ISIDORE 12/17/97 NY EASTCO_PR 2 75 *****
KNAPP, JOSEPH 12/17/97 NY EASTCO_PR 2 75 *****
KOGEN, JACK 12/17/97 NY EASTCO_PR 2 75 *****
KOPPELMAN, 12/17/97 NY EASTCO_PR 2 75 *****
KRUNSIECK, 12/17/97 NY EASTCO_PR 2 75 *****
LAMADIEU, 12/17/97 NY EASTCO_PR 2 75 *****
LAMPONE, 12/17/97 NY EASTCO_PR 2 75 *****
LANDESMAN, 12/17/97 NY EASTCO_PR 2 75 *****
LARSEN, JOHN 12/17/97 NY EASTCO_PR 2 75 *****
LEWANDOWSKI, 12/17/97 NY EASTCO_PR 2 75 *****
LINDAUER, 12/17/97 NY EASTCO_PR 2 75 *****
LINDSTROM, 12/17/97 NY EASTCO PR 1 75 *****
LONGOBARDI, 12/17/97 NY EASTCO_PR 1 75 *****
MAHONEY, 12/17/97 NY EASTCO_PR 2 75 *****
MAIO, ROCCO 12/17/97 NY EASTCO_PR 2 75 *****
MARSCHAUSER, 12/17/97 NY EASTCO_PR 2 75 *****
MARTINEZ, 12/17/97 NY EASTCO_PR 2 75 *****
MAYMI, ANGEL 12/17/97 NY EASTCO_PR 2 75 *****
MCDERMOTT, 12/17/97 NY EASTCO_PR 1 75 *****
MCGRATH, 12/17/97 NY EASTCO_PR 1 75 *****
MCLESTER, 12/17/97 NY EASTCO_PR 2 75 *****
MEHLROSE, 12/17/97 NY EASTCO PR 1 75 *****
MONTGOMERY, 12/17/97 NY EASTCO PR 2 75 *****
MORACE, RAYM 12/17/97 NY EASTCO PR 2 75 *****
MULLIGAN, 12/17/97 NY EASTCO_PR 2 75 *****
MURPHY, BERN 12/17/97 NY EASTCO_PR 2 75 *****
MURPHY, JOHN 12/17/97 NY EASTCO_PR 2 75 *****
NOTTAGE, 12/17/97 NY EASTCO_PR 2 75 *****
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASE_ID DATE STATE COMPANY NO_PLNTF NO_DEFEND DAMAGES
<S> <C> <C> <C> <C> <C> <C>
O'CONNOR, 12/17/97 NY EASTCO_PR 2 75 *****
O'LEARY, JOHN 12/17/97 NY EASTCO_PR 2 75 *****
OLIVIERO, 12/17/97 NY EASTCO_PR 1 75 *****
OLSEN, JAMES 12/17/97 NY EASTCO_PR 1 75 *****
ORTEGA RAUL 12/17/97 NY EASTCO_PR 2 75 *****
PENNA, 12/17/97 NY EASTCO_PR 2 75 *****
PFAFF, AUGUST 12/17/97 NY EASTCO_PR 1 75 *****
PHIPPARD, 12/17/97 NY EASTCO_PR 2 75 *****
PIAZZA, FRANK 12/17/97 NY EASTCO_PR 1 75 *****
POLIKOFF, 12/17/97 NY EASTCO_PR 2 75 *****
ROCHE, DANIEL 12/17/97 NY EASTCO_PR 2 75 *****
RODRIGUEZ, 12/17/97 NY EASTCO_PR 2 75 *****
ROGERS, OWEN 12/17/97 NY EASTCO_PR 2 75 *****
ROKSVOLD, 12/17/97 NY EASTCO_PR 2 75 *****
SALVADOR, 12/17/97 NY EASTCO_PR 2 75 *****
SCHULHOFF, 12/17/97 NY EASTCO_PR 2 75 *****
SHANNON, 12/17/97 NY EASTCO_PR 2 75 *****
SHAPIRO, 12/17/97 NY EASTCO_PR 2 75 *****
SHILD, RUBIN 12/17/97 NY EASTCO_PR 2 75 *****
SIDORENKO, 12/17/97 NY EASTCO_PR 2 75 *****
SMAGALA, 12/17/97 NY EASTCO_PR 2 75 *****
SOLOMON, 12/17/97 NY EASTCO_PR 2 75 *****
SOTO, EFRAIN 12/17/97 NY EASTCO_PR 2 75 *****
STARK, PHILIP 12/17/97 NY EASTCO_PR 2 75 *****
SULLIVAN, 12/17/97 NY EASTCO_PR 2 75 *****
SWINSON, 12/17/97 NY EASTCO_PR 2 75 *****
TARDINO, 12/17/97 NY EASTCO_PR 2 75 *****
TARDINO, 12/17/97 NY EASTCO_PR 2 75 *****
THOMPSON, 12/17/97 NY EASTCO_PR 2 75 *****
TOICH, BLAZ 12/17/97 NY EASTCO_PR 2 75 *****
TOUHY, 12/17/97 NY EASTCO_PR 2 75 *****
TREANGEN, 12/17/97 NY EASTCO_PR 2 75 *****
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASE_ID DATE STATE COMPANY NO_PLNTF NO_DEFEND DAMAGES
<S> <C> <C> <C> <C> <C> <C>
VSKOCIL, 12/17/97 NY EASTCO_PR 2 75 *****
WALKO, 12/17/97 NY EASTCO_PR 2 75 *****
WASSERMAN, 12/17/97 NY EASTCO_PR 2 75 *****
WEBB, 12/17/97 NY EASTCO_PR 2 75 *****
WEBSTER, 12/17/97 NY EASTCO PR 2 75 *****
WEINGARTEN, 12/17/97 NY EASTCO_PR 1 75 *****
WIDMAN, WILTO 12/17/97 NY EASTCO_PR 2 75 *****
WRIGHT, IAN 12/17/97 NY EASTCO_PR 1 75 *****
ZALESNY, 12/17/97 NY EASTCO_PR 1 75 *****
ADSLUF, GORD 12/30/97 NY EASTCO_PR 2 75 *****
AGRUSO, VINCE 12/30/97 NY EASTCO_PR 2 75 *****
AIREY, EDWIN 12/30/97 NY EASTCO_PR 2 75 *****
ANDREWS, 12/30/97 NY EASTCO_PR 2 75 *****
ATSCH, ROBERT 12/30/97 NY EASTCO PR 1 75 *****
BARBACCIA, 12/30/97 NY EASTCO_PR 1 75 *****
BASILE, ANTHO 12/30/97 NY EASTCO_PR 2 75 *****
BELLEW, TEREN 12/30/97 NY EASTCO_PR 2 75 *****
BERGMAN, 12/30/97 NY EASTCO_PR 2 75 *****
BRIDWELL, 12/30/97 NY EASTCO PR 1 75 *****
BUONAGURA, 12/30/97 NY EASTCO_PR 2 75 *****
CAPORASO, 12/30/97 NY EASTCO_PR 1 75 *****
CARR, VIOLA 12/30/97 NY EASTCO_PR 1 75 *****
CIMINE, JOSEPH 12/30/97 NY EASTCO_PR 2 75 *****
CLARK, 12/30/97 NY EASTCO_PR 2 75 *****
COLUMBIA, 12/30/97 NY EASTCO_PR 2 75 *****
CONTARDO, 12/30/97 NY EASTCO_PR 2 75 *****
DEVINNY, 12/30/97 NY EASTCO_PR 2 75 *****
DICKS, CARL 12/30/97 NY EASTCO_PR 2 75 *****
DIPLACIDO, 12/30/97 NY EASTCO_PR 2 75 *****
DIXON, 12/30/97 NY EASTCO_PR 2 75 *****
DOWNES, MICH 12/30/97 NY EASTCO_PR 2 75 *****
EGAN, PATRICK 12/30/97 NY EASTCO_PR 2 75 *****
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASE_ID DATE STATE COMPANY NO_PLNTF NO_DEFEND DAMAGES
<S> <C> <C> <C> <C> <C> <C>
GREEN, JOHN 12/30/97 NY EASTCO_PR 2 75 *****
HAMBLIN, 12/30/97 NY EASTCO_PR 2 75 *****
HARDMAN, 12/30/97 NY EASTCO_PR 2 75 *****
HARTER, JACK 12/30/97 NY EASTCO_PR 2 75 *****
HECKENBACH, 12/30/97 NY EASTCO_PR 2 75 *****
HELLER, RICHA 12/30/97 NY EASTCO_PR 2 75 *****
HIBBERT, 12/30/97 NY EASTCO_PR 2 75 *****
JULIO, MICHAEL 12/30/97 NY EASTCO_PR 2 75 *****
KEE, ROBERT 12/30/97 NY EASTCO_PR 2 75 *****
KENYON, WARR 12/30/97 NY EASTCO_PR 2 75 *****
KING, LORENZO 12/30/97 NY EASTCO_PR 2 75 *****
KOHLER, BERT 12/30/97 NY EASTCO_PR 2 75 *****
LALKA, JOSEPH 12/30/97 NY EASTCO_PR 1 75 *****
LEACH, 12/30/97 NY EASTCO_PR 1 75 *****
LEHMAN, WAYN 12/30/97 NY EASTCO_PR 2 75 *****
LEONARD, 12/30/97 NY EASTCO_PR 1 75 *****
LICATA, ANTHO 12/30/97 NY EASTCO_PR 2 75 *****
LIZAITIS, 12/30/97 NY EASTCO_PR 2 75 *****
LONZI, ALBERT 12/30/97 NY EASTCO_PR 2 75 *****
LOWMACK, 12/30/97 NY EASTCO_PR 1 75 *****
MCGROGAN, 12/30/97 NY EASTCO_PR 2 75 *****
MEARA, 12/30/97 NY EASTCO PR 2 75 *****
MEYERS, HENR 12/30/97 NY EASTCO_PR 2 75 *****
MILLER, DONAL 12/30/97 NY EASTCO_PR 2 75 *****
MORF, ROBERT 12/30/97 NY EASTCO_PR 1 75 *****
MONDAY, PARK 12/30/97 NY EASTCO_PR 2 75 *****
NERI, THOMAS 12/30/97 NY EASTCO_PR 2 75 *****
NORIS, 12/30/97 NY EASTCO_PR 2 75 *****
NORMAN, LAVE 12/30/97 NY EASTCO_PR 2 75 *****
PECUCH, DEMIA 12/30/97 NY EASTCO_PR 2 75 *****
POTTER, FRANK 12/30/97 NY EASTCO_PR 2 75 *****
RAST, ROBERT 12/30/97 NY EASTCO_PR 2 75 *****
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASE_ID DATE STATE COMPANY NO_PLNTF NO_DEFEND DAMAGES
<S> <C> <C> <C> <C> <C> <C>
RUNSTROM, 12/30/97 NY EASTCO_PR 2 75 *****
SAVITTERI, SAM 12/30/97 NY EASTCO_PR 1 75 *****
SCHWARTZ, 12/30/97 NY EASTCO_PR 2 75 *****
SELLERS, 12/30/97 NY EASTCO_PR 2 75 *****
SICOLI, ALFRED 12/30/97 NY EASTCO_PR 2 75 *****
SMALES, FRED 12/30/97 NY EASTCO_PR 1 75 *****
SMITH, DOYLE 12/30/97 NY EASTCO_PR 2 75 *****
SMITH, 12/30/97 NY EASTCO_PR 2 75 *****
SMITH, JOHN T. 12/30/97 NY EASTCO_PR 2 75 *****
SOTTILARE, 12/30/97 NY EASTCO_PR 2 75 *****
STABILITO, 12/30/97 NY EASTCO_PR 1 75 *****
STONE, MARY 12/30/97 NY EASTCO_PR 1 75 *****
SUNDMAN, 12/30/97 NY EASTCO_PR 2 75 *****
TRANTHAM, 12/30/97 NY EASTCO_PR 1 75 *****
TRAVIS, CLINTO 12/30/97 NY EASTCO PR 1 75 *****
VAN MOOSE, 12/30/97 NY EASTCO_PR 1 75 *****
VANZILE, 12/30/97 NY EASTCO_PR 2 75 *****
WATSON, OKIE 12/30/97 NY EASTCO_PR 2 75 *****
WILLIAMS, 12/30/97 NY EASTCO PR 1 75 *****
WISSELL, JOHN 12/30/97 NY EASTCO_PR 2 75 *****
ZAPATA, OCTAVI 12/30/97 NY EASTCO_PR 2 75 *****
INGOGLIA, 1/16/98 NY EASTCO_PR 25 *
HASSEL, ERROL 1/30/98 NY EASTCO PR 71 *
ROMANO, PETE 2/3/98 NY EASTCO_PR 37 *
HESS, WILLIAM 2/4/98 NY EASTCO_PR 2 *
ALLEN, R. 2/9/98 NY EASTCO_PR 1 77 *****
ANDERSON, J. 2/9/98 NY EASTCO PR 1 77 *****
ANISKY, R. 2/9/98 NY EASTCO_PR 2 77 *****
AUGER, B. 2/9/98 NY EASTCO PR 2 77 *****
BABLO, E. 2/9/98 NY EASTCO_PR 1 77 *****
BAGGER, J. 2/9/98 NY EASTCO_PR 2 77 *****
BALINT, J. 2/9/98 NY EASTCO_PR 2 77 *****
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASE_ID DATE STATE COMPANY NO_PLNTF NO_DEFEND DAMAGES
<S> <C> <C> <C> <C> <C> <C>
BALLARD, C. 2/9/98 NY EASTCO_PR 1 77 *****
BALLARD, W. 2/9/98 NY EASTCO_PR 2 77 *****
BESS, C. 2/9/98 NY EASTCO_PR 2 77 *****
BILLLINGS, R. 2/9/98 NY EASTCO_PR 2 77 *****
BLAMPIED, W. 2/9/98 NY EASTCO PR 2 77 *****
BLODGETT, H. 2/9/98 NY EASTCO_PR 2 77 *****
BORST, G. 2/9/98 NY EASTCO_PR 2 77 *****
BREWER, J. 2/9/98 NY EASTCO_PR 1 77 *****
BREWER, T. 2/9/98 NY EASTCO_PR 2 77 *****
BRIMMER, B. 2/9/98 NY EASTCO_PR 2 77 *****
BRISCHLER, G. 2/9/98 NY EASTCO_PR 2 77 *****
BROOKS, J. 2/9/98 NY EASTCO_PR 1 77 *****
BROSTKO, E. 2/9/98 NY EASTCO_PR 2 77 *****
BROWN, VAL. 2/9/98 NY EASTCO_PR 2 77 *****
BRUNDAGE, R. 2/9/98 NY EASTCO_PR 2 77 *****
BUCKLEN, C. 2/9/98 NY EASTCO_PR 2 77 *****
BUCKLEY, H. 2/9/98 NY EASTCO_PR 2 77 *****
BUSHELON, M. 2/9/98 NY EASTCO_PR 2 77 *****
BUTTERWORTH, 2/9/98 NY EASTCO_PR 2 77 *****
CANINO, R. 2/9/98 NY EASTCO_PR 2 77 *****
CANTER, K. 2/9/98 NY EASTCO_PR 2 77 *****
CARAPELLA, G. 2/9/98 NY EASTCO_PR 2 77 *****
CASSILLO, J 2/9/98 NY EASTCO_PR 2 77 *****
CERASARO, O 2/9/98 NY EASTCO_PR 2 77 *****
CHALLENGER, C 2/9/98 NY EASTCO PR 1 77 *****
CLEVELAND, E 2/9/98 NY EASTCO_PR 2 77 *****
CLINK, V 2/9/98 NY EASTCO_PR 2 77 *****
COLEGROVE, L 2/9/98 NY EASTCO_PR 2 77 *****
CONLIN, J 2/9/98 NY EASTCO PR 2 77 *****
CONMY, J 2/9/98 NY EASTCO_PR 2 77 *****
COOK, R 2/9/98 NY EASTCO_PR 2 77 *****
CRABTREE, F 2/9/98 NY EASTCO_PR 2 77 *****
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASE_ID DATE STATE COMPANY NO_PLNTF NO_DEFEND DAMAGES
<S> <C> <C> <C> <C> <C> <C>
CRAIG, J 2/9/98 NY EASTCO_PR 2 77 *****
CRANE, K 2/9/98 NY EASTCO_PR 2 77 *****
CRUGER, T 2/9/98 NY EASTCO_PR 2 77 *****
CUSACK, J 2/9/98 NY EASTCO_PR 2 77 *****
CUSICK, R 2/9/98 NY EASTCO_PR 2 77 *****
DABREAU, R. 2/9/98 NY EASTCO_PR 1 77 *****
DAVIDSON, J 2/9/98 NY EASTCO PR 2 77 *****
DAYTON, D 2/9/98 NY EASTCO_PR 2 77 *****
DeLAPI, N 2/9/98 NY EASTCO PR 2 77 *****
DEMINO, P 2/9/98 NY EASTCO_PR 2 77 *****
DESASSURE, I 2/9/98 NY EASTCO_PR 2 77 *****
DIBBLE, J 2/9/98 NY EASTCO_PR 2 77 *****
DiFRANCESCO, 2/9/98 NY EASTCO_PR 2 77 *****
DONLEY, K 2/9/98 NY EASTCO_PR 2 77 *****
DOUGHERTY, R 2/9/98 NY EASTCO_PR 1 77 *****
EAST, W 2/9/98 NY EASTCO_PR 2 77 *****
FICHERA, S 2/9/98 NY EASTCO PR 2 77 *****
FINNERTY, F 2/9/98 NY EASTCO_PR 2 77 *****
FLAMIO, M 2/9/98 NY EASTCO_PR 2 77 *****
FLOWERS, D 2/9/98 NY EASTCO_PR 2 77 *****
FRALEIGH, G 2/9/98 NY EASTCO_PR 2 77 *****
FREEMAN, R. 2/9/98 NY EASTCO PR 1 77 *****
FUNKHOUSER, 2/9/98 NY EASTCO PR 2 77 *****
GARVIN, J 2/9/98 NY EASTCO_PR 2 77 *****
GERMILLER, J 2/9/98 NY EASTCO_PR 2 77 *****
GORDON, J 2/9/98 NY EASTCO_PR 2 77 *****
GREGORY, E. 2/9/98 NY EASTCO_PR 1 77 *****
HAHN, G 2/9/98 NY EASTCO_PR 2 77 *****
HANNIGAN, R 2/9/98 NY EASTCO_PR 2 77 *****
HANSON, K 2/9/98 NY EASTCO_PR 2 77 *****
HARDEN, L 2/9/98 NY EASTCO_PR 2 77 *****
HARLEY, T 2/9/98 NY EASTCO_PR 2 77 *****
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASE_ID DATE STATE COMPANY NO_PLNTF NO_DEFEND DAMAGES
<S> <C> <C> <C> <C> <C> <C>
HAYHURST, R. 2/9/98 NY EASTCO_PR 1 77 *****
HILL, R 2/9/98 NY EASTCO_PR 2 77 *****
HORNBECK A 2/9/98 NY EASTCO_PR 2 77 *****
HUSTED, R 2/9/98 NY EASTCO_PR 2 77 *****
JOHNSON, A 2/9/98 NY EASTCO_PR 2 77 *****
JOHNSTON, G 2/9/98 NY EASTCO PR 2 77 *****
KANEY, D 2/9/98 NY EASTCO_PR 2 77 *****
KEELEY, R 2/9/98 NY EASTCO_PR 2 77 *****
KELLY, F. 2/9/98 NY EASTCO_PR 1 77 *****
KLIMEK, M 2/9/98 NY EASTCO_PR 2 77 *****
KOEPPEL, R 2/9/98 NY EASTCO_PR 2 77 *****
KUBIT, D 2/9/98 NY EASTCO_PR 2 77 *****
KUHN, K 2/9/98 NY EASTCO PR 2 77 *****
LAPLANTE, J. 2/9/98 NY EASTCO PR 1 77 *****
LEE, MICHAEL 2/9/98 NY EASTCO_PR 1 77 *****
LEONARD, R 2/9/98 NY EASTCO_PR 2 77 *****
LEX, H 2/9/98 NY EASTCO_PR 2 77 *****
LUCE, W 2/9/98 NY EASTCO_PR 2 77 *****
LUNDERMAN, C 2/9/98 NY EASTCO_PR 2 77 *****
MALENICH, J 2/9/98 NY EASTCO_PR 2 77 *****
MARCHASIN, G 2/9/98 NY EASTCO_PR 2 77 *****
MARSHAK, S 2/9/98 NY EASTCO_PR 2 77 *****
MARSHALL, W 2/9/98 NY EASTCO PR 2 77 *****
MASTERSON, F 2/9/98 NY EASTCO_PR 2 77 *****
MASTERSON, R. 2/9/98 NY EASTCO_PR 1 77 *****
MASTRELLA, R 2/9/98 NY EASTCO PR 2 77 *****
MATERESE, J 2/9/98 NY EASTCO_PR 2 77 *****
McANDREW, C 2/9/98 NY EASTCO_PR 2 77 *****
McGLONE, R 2/9/98 NY EASTCO_PR 2 77 *****
MENDRYSA, B 2/9/98 NY EASTCO PR 2 77 *****
MENDRYSA, G. 2/9/98 NY EASTCO_PR 1 77 *****
MILANO, C 2/9/98 NY EASTCO_PR 2 77 *****
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASE_ID DATE STATE COMPANY NO_PLNTF NO_DEFEND DAMAGES
<S> <C> <C> <C> <C> <C> <C>
MILEVOJ, S 2/9/98 NY EASTCO_PR 2 77 *****
MIRRO, D 2/9/98 NY EASTCO_PR 2 77 *****
MOSS, J. 2/9/98 NY EASTCO_PR 2 77 *****
MYERS, J 2/9/98 NY EASTCO_PR 2 77 *****
NATOLI, J 2/9/98 NY EASTCO_PR 2 77 *****
NILSEN, J. 2/9/98 NY EASTCO_PR 2 77 *****
NOLAN, B 2/9/98 NY EASTCO_PR 2 77 *****
NOVAK, C. 2/9/98 NY EASTCO_PR 1 77 *****
NUCHERENO, F 2/9/98 NY EASTCO_PR 2 77 *****
O'REILLEY, T 2/9/98 NY EASTCO_PR 2 77 *****
OSMAN, J 2/9/98 NY EASTCO_PR 2 77 *****
OSTERHOUT, R 2/9/98 NY EASTCO_PR 2 77 *****
OWENS, J 2/9/98 NY EASTCO_PR 2 77 *****
PALMESE, J 2/9/98 NY EASTCO_PR 2 77 *****
PALOMBI, J 2/9/98 NY EASTCO_PR 2 77 *****
PAVLIK, R 2/9/98 NY EASTCO_PR 2 77 *****
PENNA, C 2/9/98 NY EASTCO_PR 2 77 *****
PETKASH, G 2/9/98 NY EASTCO_PR 2 77 *****
POWERS, R 2/9/98 NY EASTCO_PR 2 77 *****
QUINN, J 2/9/98 NY EASTCO_PR 2 77 *****
REED, L. 2/9/98 NY EASTCO_PR 2 77 *****
REILLY, J. 2/9/98 NY EASTCO_PR 1 77 *****
REYNOLDS, J. 2/9/98 NY EASTCO_PR 1 77 *****
SALISBURY, J. 2/9/98 NY EASTCO_PR 2 77 *****
SANTORA, N. 2/9/98 NY EASTCO_PR 2 77 *****
SCHMITT, W. 2/9/98 NY EASTCO_PR 1 77 *****
SEJERSEN, C 2/9/98 NY EASTCO_PR 2 77 *****
SHANNON, R. 2/9/98 NY EASTCO_PR 2 77 *****
SMITH, LESLIE 2/9/98 NY EASTCO_PR 2 77 *****
STAFFORD, M 2/9/98 NY EASTCO_PR 2 77 *****
SWEELY, L. 2/9/98 NY EASTCO_PR 2 77 *****
SZCZITKA, R 2/9/98 NY EASTCO_PR 2 77 *****
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASE_ID DATE STATE COMPANY NO_PLNTF NO_DEFEND DAMAGES
<S> <C> <C> <C> <C> <C> <C>
VALENTE, D. 2/9/98 NY EASTCO_PR 1 77 *****
ZUCKERMAN, E 2/9/98 NY EASTCO_PR 2 77 *****
TAMBURI, 2/12/98 NY EASTCO_PR 34 *****
ABRAM, JOSEPH 2/17/98 NY EASTCO_PR 1 75 *****
ALLEN, 2/17/98 NY EASTCO_PR 2 75 *****
AMATO, PAUL 2/17/98 NY EASTCO_PR 1 75 *****
ASHFORD, 2/17/98 NY EASTCO_PR 1 75 *****
ASTALFA, 2/17/98 NY EASTCO_PR 2 75 *****
BALDWIN, 2/17/98 NY EASTCO_PR 2 75 *****
BAME, DAVID 2/17/98 NY EASTCO_PR 2 75 *****
BARSI, DANTE 2/17/98 NY EASTCO_PR 2 75 *****
BEAMER, CHEST 2/17/98 NY EASTCO_PR 2 75 *****
BENNETT, 2/17/98 NY EASTCO_PR 1 75 *****
BERRY, 2/17/98 NY EASTCO_PR 2 75 *****
BILELLO, 2/17/98 NY EASTCO_PR 2 75 *****
BLAKE, 2/17/98 NY EASTCO_PR 2 75 *****
BLATTENDERGE 2/17/98 NY EASTCO_PR 2 75 *****
BONGIORNI, 2/17/98 NY EASTCO_PR 1 75 *****
BRADY, JOHN 2/17/98 NY EASTCO_PR 2 75 *****
BRANNIGAN, 2/17/98 NY EASTCO_PR 2 75 *****
BREHENY, 2/17/98 NY EASTCO_PR 2 75 *****
BROSKI, HENRY 2/17/98 NY EASTCO_PR 2 75 *****
BUCK, EDWARD 2/17/98 NY EASTCO_PR 2 75 *****
BUDZYN, LOUIS 2/17/98 NY EASTCO_PR 1 75 *****
BUGNO, 2/17/98 NY EASTCO_PR 2 75 *****
CAMUS, DAVID 2/17/98 NY EASTCO_PR 1 75 *****
CANINI, FRANK 2/17/98 NY EASTCO_PR 2 75 *****
CARFORA, 2/17/98 NY EASTCO_PR 2 75 *****
CARINCI, 2/17/98 NY EASTCO_PR 2 75 *****
CARPENTER, 2/17/98 NY EASTCO_PR 2 75 *****
CEHOK, MELVIN 2/17/98 NY EASTCO_PR 2 75 *****
CHERNIKOWSKI, 2/17/98 NY EASTCO_PR 1 75 *****
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASE_ID DATE STATE COMPANY NO_PLNTF NO_DEFEND DAMAGES
<S> <C> <C> <C> <C> <C> <C>
CHINI, MARINO 2/17/98 NY EASTCO_PR 2 75 *****
CHUDY, 2/17/98 NY EASTCO_PR 1 75 *****
CIMINELLO, 2/17/98 NY EASTCO_PR 2 75 *****
CISCO, THOMAS 2/17198 NY EASTCO_PR 2 75 *****
CLARK, JAMES 2/17/98 NY EASTCO_PR 2 75 *****
CLARKE, GARY 2/17/98 NY EASTCO_PR 2 75 *****
CLARONE, 2/17/98 NY EASTCO_PR 2 75 *****
CLIFFORD, 2/17/98 NY EASTCO_PR 2 75 *****
CONNOLLY, 2/17/98 NY EASTCO_PR 1 75 *****
COSTA, JOSEPH 2/17/98 NY EASTCO_PR 2 75 *****
COUGHLIN, 2/17/98 NY EASTCO_PR 2 75 *****
CRAGNOLIN, 2/17/98 NY EASTCO_PR 2 75 *****
CRESPO, LUIS 2/17/98 NY EASTCO_PR 1 75 *****
CURTIS, RONAL 2/17/98 NY EASTCO_PR 2 75 *****
D'AGOSTINO, 2/17/98 NY EASTCO_PR 1 75 *****
DAMIANO, 2/17/98 NY EASTCO PR 2 75 *****
DAMSTETTER, 2/17/98 NY EASTCO_PR 2 75 *****
DAVIS, WILLIAM 2/17/98 NY EASTCO_PR 2 75 *****
DAWSON, EDDIE 2/17/98 NY EASTCO_PR 1 75 *****
DAY, WILLIAM L. 2/17/98 NY EASTCO_PR 2 75 *****
DEVINE, EDWAR 2/17/98 NY EASTCO PR 2 75 *****
DEWEY, 2/17/98 NY EASTCO_PR 2 75 *****
DIANA, 2/17/98 NY EASTCO_PR 1 75 *****
DiCESARE, 2/17/98 NY EASTCO_PR 2 75 *****
DiCESARE, 2/17/98 NY EASTCO PR 2 75 *****
DiGIACOMO, 2/17/98 NY EASTCO_PR 2 75 *****
DINIGRO, 2/17/98 NY EASTCO_PR 1 75 *****
DOMBROWSKI, 2/17/98 NY EASTCO_PR 1 75 *****
DONAHUE, 2/17/98 NY EASTCO_PR 1 75 *****
DONSON, HARO 2/17/98 NY EASTCO_PR 2 75 *****
DREW, 2/17/98 NY EASTCO_PR 2 75 *****
DRISCOLL, 2/17/98 NY EASTCO_PR 2 75 *****
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASE_ID DATE STATE COMPANY NO_PLNTF NO_DEFEND DAMAGES
<S> <C> <C> <C> <C> <C> <C>
DULSKI, STANLE 2/17/98 NY EASTCO_PR 2 75 *****
DURR, PHILIP 2/17/98 NY EASTCO_PR 2 75 *****
DZIECHCIARZ, 2/17/98 NY EASTCO_PR 2 75 *****
ENDERS, CHARL 2/17/98 NY EASTCO_PR 2 75 *****
ERVOLINO, 2/17/98 NY EASTCO_PR 2 75 *****
ESPOSITO, 2/17/98 NY EASTCO_PR 1 75 *****
FALZON, ANTHO 2/17/98 NY EASTCO_PR 2 75 *****
FARRAND, 2/17/98 NY EASTCO_PR 2 75 *****
FERRIS, WENZE 2/17/98 NY EASTCO PR 2 75 *****
FILBERT, 2/17/98 NY EASTCO_PR 1 75 *****
FIVES,NORMAN 2/17/98 NY EASTCO_PR 2 75 *****
FORD, 2/17/98 NY EASTCO_PR 2 75 *****
FORMISANO, 2/17/98 NY EASTCO_PR 1 75 *****
FORREST, 2/17/98 NY EASTCO_PR 2 75 *****
FORTIN, EDWAR 2/17/98 NY EASTCO_PR 2 75 *****
FRAVEL, DALE 2/17/98 NY EASTCO_PR 2 75 *****
FRAZIER, 2/17/98 NY EASTCO_PR 2 75 *****
FREIJE, NICK 2/17/98 NY EASTCO PR 2 75 *****
FREY, WILLIAM 2/17/98 NY EASTCO_PR 2 75 *****
GALARDO, 2/17/98 NY EASTCO_PR 2 75 *****
GARVEY, GEOR 2/17/98 NY EASTCO_PR 2 75 *****
GASIEWICZ, 2/17/98 NY EASTCO_PR 1 75 *****
GAULRAPP, 2/17/98 NY EASTCO_PR 1 75 *****
GEORGE, WILBE 2/17/98 NY EASTCO_PR 2 75 *****
GILES, ROBERT 2/17/98 NY EASTCO_PR 2 75 *****
GILLEN, RICHAR 2/17/98 NY EASTCO_PR 2 75 *****
GIOLA, DONALD 2/17/98 NY EASTCO_PR 2 75 *****
GIRUZI, 2/17/98 NY EASTCO_PR 2 75 *****
GODFREY, 2/17/98 NY EASTCO_PR 1 75 *****
GORDON, EDWA 2/17/98 NY EASTCO_PR 2 75 *****
GRANT, 2/17/98 NY EASTCO_PR 1 75 *****
GRANT, 2/17/98 NY EASTCO_PR 1 75 *****
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASE_ID DATE STATE COMPANY NO_PLNTF NO_DEFEND DAMAGES
<S> <C> <C> <C> <C> <C> <C>
GRECO, FRED 2/17/98 NY EASTCO_PR 2 75 *****
GRIECO, FRANK 2/17/98 NY EASTCO_PR 2 75 *****
GRIST, RONALD 2/17/98 NY EASTCO_PR 2 75 *****
GROVES, DONA 2/17/98 NY EASTCO PR 2 75 *****
GUMB, WILLIAM 2/17/98 NY EASTCO_PR 1 75 *****
HALSTEAD, 2/17/98 NY EASTCO_PR 2 75 *****
HAMMER, RICHA 2/17/98 NY EASTCO_PR 2 75 *****
HANKS, RONALD 2/17/98 NY EASTCO_PR 2 75 *****
HANNOT, FRAN 2/17/98 NY EASTCO_PR 2 75 *****
HERTZLER, 2/17/98 NY EASTCO_PR 1 75 *****
HOLSTEIN, 2/17/98 NY EASTCO_PR 2 75 *****
HORAN, 2/17/98 NY EASTCO_PR 2 75 *****
HORNER, HOWA 2/17/98 NY EASTCO PR 1 75 *****
HUBER, 2/17/98 NY EASTCO PR 2 75 *****
HUSON, JACOB 2/17/98 NY EASTCO_PR 2 75 *****
JAGIELLO, PAUL 2/17/98 NY EASTCO PR 2 75 *****
JEMIOLO, 2/17/98 NY EASTCO_PR 2 75 *****
JENNISON, 2/17/98 NY EASTCO_PR 2 75 *****
JOHNSON, 2/17/98 NY EASTCO PR 2 75 *****
JONES, ELMER 2/17/98 NY EASTCO_PR 2 75 *****
KALINKA, 2/17/98 NY EASTCO PR 2 75 *****
KARAS, JAMES 2/17/98 NY EASTCO_PR 2 75 *****
KARPIK, NORBE 2/17/98 NY EASTCO_PR 2 75 *****
KASMARCIK, 2/17/98 NY EASTCO_PR 2 75 *****
KEARNS, ROBE 2/17/98 NY EASTCO_PR 2 75 *****
KEEVE, LEROY 2/17/98 NY EASTCO_PR 2 75 *****
KELLEY, PETE 2/17/98 NY EASTCO_PR 2 75 *****
KELLY, THOMAS 2/17/98 NY EASTCO_PR 2 75 *****
KEMITCH, JOHN 2/17/98 NY EASTCO_PR 2 75 *****
KENNEDY, 2/17/98 NY EASTCO_PR 2 75 *****
KIRCHER, 2/17/98 NY EASTCO_PR 2 75 *****
KIRWAN, PATRI 2117/98 NY EASTCO_PR 2 75 *****
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASE_ID DATE STATE COMPANY NO_PLNTF NO_DEFEND DAMAGES
<S> <C> <C> <C> <C> <C> <C>
KLISZCZ, 2/17/98 NY EASTCO_PR 2 75 *****
KNOWLES, 2/17/98 NY EASTCO_PR 2 75 *****
KORBEL, FLORI 2/17/98 NY EASTCO_PR 2 75 *****
KORUTZ, FRED 2/17/98 NY EASTCO_PR 2 75 *****
KOWALSKI, 2/17/98 NY EASTCO_PR 2 75 *****
KREUTER, 2/17/98 NY EASTCO_PR 2 75 *****
KRITZBERG, 2/17/98 NY EASTCO_PR 2 75 *****
KUSCZAK, 2/17/98 NY EASTCO_PR 2 75 *****
KUZNIAR, 2/17/98 NY EASTCO_PR 2 75 *****
LABBY, JAMES 2/17/98 NY EASTCO_PR 2 75 *****
LACKNER, JOHN 2/17/98 NY EASTCO_PR 2 75 *****
LADELIA, JAMES 2/17/98 NY EASTCO PR 2 75 *****
LANE, EDMUND 2/17/98 NY EASTCO PR 2 75 *****
LANGAN, THOM 2/17/98 NY EASTCO PR 2 75 *****
LAVANDIER, 2/17/98 NY EASTCO PR 2 75 *****
LAVELLE, 2/17/98 NY EASTCO_PR 2 75 *****
LAWSON, JUNIO 2/17/98 NY EASTCO_PR 2 75 *****
LEE, YONG 2/17/98 NY EASTCO_PR 1 75 *****
LISKA, PAUL S. 2/17/98 NY EASTCO_PR 2 75 *****
LOGALBO, 2/17/98 NY EASTCO_PR 2 75 *****
LOUGHNANE, 2/17/98 NY EASTCO PR 2 75 *****
LYNCH, 2/17/98 NY EASTCO_PR 2 75 *****
LYON, 2/17/98 NY EASTCO_PR 2 75 *****
MALAVE, MICHA 2/17/98 NY EASTCO_PR 2 75 *****
MALINE, FRANK 2/17/98 NY EASTCO_PR 2 75 *****
MARCHITELLI, 2/17/98 NY EASTCO_PR 2 75 *****
MAURER, ROBE 2/17/98 NY EASTCO_PR 2 75 *****
McDONALD, 2/17/98 NY EASTCO_PR 2 75 *****
McGOLDRICK, 2/17/98 NY EASTCO_PR 1 75 *****
MILLER, JOSEPH 2/17/98 NY EASTCO PR 2 75 *****
MILLER, PAUL 2/17/98 NY EASTCO PR 2 75 *****
MINCONE, 2/17/98 NY EASTCO_PR 1 75 *****
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASE_ID DATE STATE COMPANY NO_PLNTF NO_DEFEND DAMAGES
<S> <C> <C> <C> <C> <C> <C>
MORABITO, 2/17/98 NY EASTCO PR 2 75 *****
MORGAN, EDWA 2/17/98 NY EASTCO_PR 2 75 *****
MORNELLI, 2/17/98 NY EASTCO_PR 1 75 *****
MUCICA, GEOR 2/17/98 NY EASTCO_PR 2 75 *****
MULE, PHILIP 2/17/98 NY EASTCO_PR 2 75 *****
NAGLER, ROBE 2/17/98 NY EASTCO PR 2 75 *****
NESBITT, 2/17/98 NY EASTCO_PR 1 75 *****
NEWAM, 2/17/98 NY EASTCO_PR 2 75 *****
NICOLOSI, 2/17/98 NY EASTCO_PR 2 75 *****
NOSWORTHY, 2/17/98 NY EASTCO_PR 2 75 *****
NUSS, ROY 2/17/98 NY EASTCO_PR 2 75 *****
O'CONNELL, 2/17/98 NY EASTCO_PR 2 75 *****
O'HARA, GEORG 2/17/98 NY EASTCO_PR 2 75 *****
O'NEILL, DENNIS 2/17/98 NY EASTCO PR 2 75 *****
OBERST, RAYM 2/17/98 NY EASTCO PR 2 75 *****
ORLANDO, 2/17/98 NY EASTCO_PR 2 75 *****
ORSAEO, PETER 2/17/98 NY EASTCO PR 2 75 *****
ORSO, VINCENT 2/17/98 NY EASTCO PR 2 75 *****
OTT, ADAM 2/17/98 NY EASTCO_PR 2 75 *****
PANDOLFO, 2/17/98 NY EASTCO_PR 2 75 *****
PARAGI, JOSEP 2/17/98 NY EASTCO PR 1 75 *****
PATRELO, 2/17/98 NY EASTCO_PR 2 75 *****
PAWENSKI, 2/17/98 NY EASTCO_PR 2 75 *****
PECKA, 2/17/98 NY EASTCO_PR 1 75 *****
PECORA, PHILIP 2/17/98 NY EASTCO_PR 2 75 *****
PELOT, JOSEPH 2/17/98 NY EASTCO PR 1 75 *****
PETERSON, 2/17/98 NY EASTCO PR 2 75 *****
PETROPOL, 2/17/98 NY EASTCO_PR 2 75 *****
PFERSCHING, 2/17/98 NY EASTCO_PR 2 75 *****
PIECHOWICZ, 2/17/98 NY EASTCO_PR 2 75 *****
PISIAK, CATHERI 2/17/98 NY EASTCO_PR 1 75 *****
POISSANT, 2/17/98 NY EASTCO_PR 2 75 *****
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASE_ID DATE STATE COMPANY NO_PLNTF NO_DEFEND DAMAGES
<S> <C> <C> <C> <C> <C> <C>
POLIGNONE, 2/17/98 NY EASTCO_PR 1 75 *****
PRZYBYLSKI, 2/17/98 NY EASTCO_PR 2 75 *****
PULIZI, 2/17/98 NY EASTCO_PR 2 75 *****
PYANOWSKI, 2/17/98 NY EASTCO_PR 2 75 *****
QUINN, 2/17/98 NY EASTCO_PR 2 75 *****
QUITER, LLOYD 2/17/98 NY EASTCO_PR 2 75 *****
RAGANESE, 2/17/98 NY EASTCO_PR 1 77 *****
RANDALL, 2/17/98 NY EASTCO_PR 2 75 *****
REED, 2/17/98 NY EASTCO PR 1 75 *****
REED, MICHAEL 2/17/98 NY EASTCO_PR 1 75 *****
REID, JACK W. 2/17/98 NY EASTCO_PR 2 75 *****
REISS, HARRY 2/17/98 NY EASTCO_PR 2 75 *****
ROBERTSON, 2/17/98 NY EASTCO_PR 1 75 *****
ROBERTSON, 2/17/98 NY EASTCO_PR 2 75 *****
ROLAND, THOM 2/17/98 NY EASTCO_PR 1 75 *****
ROSENBLATT, 2/17/98 NY EASTCO_PR 2 75 *****
ROSS, FRED E. 2/17/98 NY EASTCO_PR 2 75 *****
ROSSI, FRANK 2/17/98 NY EASTCO_PR 2 75 *****
ROWAN, FRED 2/17/98 NY EASTCO_PR 2 75 *****
RUSAY, WILLIAM 2/17/98 NY EASTCO_PR 2 75 *****
RYCHEL, WALTE 2/17/98 NY EASTCO_PR 2 75 *****
RYDER, 2/17/98 NY EASTCO_PR 1 75 *****
SALISBURY, 2/17/98 NY EASTCO_PR 2 75 *****
SCHERA, VINCE 2/17/98 NY EASTCO_PR 2 75 *****
SCHICK, THOMA 2/17/98 NY EASTCO_PR 2 75 *****
SCHWENDENEM 2/17/98 NY EASTCO_PR 2 75 *****
SHEEHAN, 2/17/98 NY EASTCO_PR 2 75 *****
SHERMAN, 2/17/98 NY EASTCO_PR 2 75 *****
SICILIANO, 2/17/98 NY EASTCO_PR 1 75 *****
SIKKAS, BERNA 2/17/98 NY EASTCO_PR 2 75 *****
SIMMS, 2/17/98 NY EASTCO_PR 2 75 *****
SKOCZYLAS, 2/17/98 NY EASTCO_PR 1 75 *****
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASE_ID DATE STATE COMPANY NO_PLNTF NO_DEFEND DAMAGES
<S> <C> <C> <C> <C> <C> <C>
SLAGHT, WILLIA 2/17/98 NY EASTCO_PR 2 75 *****
SMITH, WALTER 2/17/98 NY EASTCO_PR 2 75 *****
SMITHLING, 2/17/98 NY EASTCO_PR 2 75 *****
SPERA, ROBERT 2/17/98 NY EASTCO_PR 2 75 *****
SPINA, ANTONIO 2/17/98 NY EASTCO_PR 2 75 *****
SPONZ, JACK 2117/98 NY EASTCO_PR 2 75 *****
STAFFORD, 2/17/98 NY EASTCO_PR 2 75 *****
STAGLIANO, 2/17/98 NY EASTCO_PR 1 75 *****
STANIEWICZ, 2/17/98 NY EASTCO_PR 2 75 *****
STEPHENS, 2/17/98 NY EASTCO_PR 1 75 *****
SUMMA, 2/17/98 NY EASTCO_PR 2 75 *****
SZALKOWSKI, 2/17/98 NY EASTCO_PR 2 75 *****
TALARICO, 2/17/98 NY EASTCO_PR 2 75 *****
TAYLOR, JAMES 2/17/98 NY EASTCO_PR 2 75 *****
TAYLOR, JAMES 2/17/98 NY EASTCO_PR 2 75 *****
TEETER, ROBER 2/17/98 NY EASTCO_PR 2 75 *****
THOMPSON, 2/17/98 NY EASTCO PR 1 75 *****
TILLEY, PERCY 2/17/98 NY EASTCO_PR 2 75 *****
TOBIN, JAMES 2117/98 NY EASTCO_PR 2 75 *****
TRELLA, ALLEN 2/17/98 NY EASTCO_PR 2 75 *****
TROIANO, 2/17/98 NY EASTCO_PR 2 75 *****
TURNER, LES 2/17/98 NY EASTCO_PR 2 75 *****
TUTTLE, CHEST 2/17/98 NY EASTCO_PR 2 75 *****
UCCI, ANTHONY 2117/98 NY EASTCO_PR 2 75 *****
UTTARO, PETER 2/17/98 NY EASTCO_PR 2 75 *****
VAGIANOS, 2/17/98 NY EASTCO_PR 2 75 *****
VALENTI, 2/17/98 NY EASTCO PR 1 75 *****
VANDEUSEN, 2/17/98 NY EASTCO_PR 2 75 *****
VOELKER, 2/17/98 NY EASTCO_PR 2 75 *****
WALL, JOSEPH 2/17/98 NY EASTCO_PR 2 75 *****
WALPOLE, JOHN 2/17/98 NY EASTCO_PR 2 75 *****
WALSH, 2/17/98 NY EASTCO_PR 2 75 *****
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASE_ID DATE STATE COMPANY NO_PLNTF NO_DEFEND DAMAGES
<S> <C> <C> <C> <C> <C> <C>
WALTER, GERAL 2/17/98 NY EASTCO_PR 2 75 *****
WARFIELD, 2/17/98 NY EASTCO_PR 2 75 *****
WARNER, ADDIS 2/17/98 NY EASTCO_PR 1 75 *****
WEBER, 2/17/98 NY EASTCO_PR 2 75 *****
WEINSTEIN, 2/17/98 NY EASTCO_PR 2 75 *****
WESSLOCK, 2/17/98 NY EASTCO_PR 1 75 *****
WHITE, 2/17/98 NY EASTCO_PR 2 75 *****
WINKOS, JOSEP 2/17/98 NY EASTCO_PR 2 75 *****
WINSTON, 2/17/98 NY EASTCO_PR 1 75 *****
WITTMAN, 2/17/98 NY EASTCO_PR 2 75 *****
WOLOSZYN, 2/17/98 NY EASTCO_PR 2 75 *****
WOOD, 2/17/98 NY EASTCO_PR 2 75 *****
WOOD, 2/17/98 NY EASTCO_PR 1 75 *****
YARBOROUGH, 2/17/98 NY EASTCO_PR 1 75 *****
ZEOLLA, PAT 2/17/98 NY EASTCO_PR 2 75 *****
ZICCARELLI, 2/17/98 NY EASTCO_PR 2 75 *****
ZWANA, JOHN S. 2/17/98 NY EASTCO_PR 2 75 *****
PASCUCCI, 2/26/98 NY EASTCO_PR 2 *
YELVERTON, 3/2/98 NY EASTCO_PR 17 *
KELLY, MARY 3/5/98 NY EASTCO PR 2 74 *****
DARBY, LEWIS 3/17/98 NY EASTCO_PR 30 *
PRIMIANO, BEN 3/17/98 NY EASTCO_PR 1 *
SCHUIT, MICHAE 3/17/98 NY EASTCO PR 14 *
ABLONDI, ITALO 3/25/98 NY EASTCO_PR 1 77 *****
BROWN, 3/25/98 NY EASTCO_PR 2 77 *****
BUDZYN, RICHA 3/25/98 NY EASTCO PR 1 77 *****
BUTRYN, SOPHI 3/25/98 NY EASTCO_PR 2 77 *****
CARTER, JAMES 3/25/98 NY EASTCO_PR 2 77 *****
CARTER, KENNE 3/25/98 NY EASTCO_PR 2 77 *****
CLEGHORN, 3/25/98 NY EASTCO_PR 2 77 *****
CLIMENTI, 3/25/98 NY EASTCO_PR 2 77 *****
CREPS, 3/25/98 NY EASTCO_PR 2 77 *****
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASE_ID DATE STATE COMPANY NO_PLNTF NO_DEFEND DAMAGES
<S> <C> <C> <C> <C> <C> <C>
DARBY, JEROME 3/25/98 NY EASTCO_PR 2 77 *****
DARCHANGELO, 3/25/98 NY EASTCO_PR 1 77 *****
DONZELLA, 3/25/98 NY EASTCO_PR 2 77 *****
EARL, ROBERT 3/25/98 NY EASTCO_PR 2 77 *****
ESPOSITO, 3/25/98 NY EASTCO_PR 2 77 *****
FARLEY, THOMA 3/25/98 NY EASTCO_PR 2 77 *****
FORSYTHE, 3/25/98 NY EASTCO_PR 2 77 *****
GIANNOTTI, 3/25/98 NY EASTCO PR 1 77 *****
GITTENS, 3/25/98 NY EASTCO_PR 2 77 *****
GOLDSTEIN, 3/25/98 NY EASTCO_PR 2 77 *****
HAMMESFAHR, 3/25/98 NY EASTCO PR 2 77 *****
HARRIS, IDA 3/25/98 NY EASTCO_PR 2 77 *****
HIEB, JAMES P. 3/25/98 NY EASTCO_PR 2 77 *****
HOUGH, 3/25/98 NY EASTCO_PR 2 77 *****
KELLER, ROBER 3/25/98 NY EASTCO PR 2 77 *****
KLINE, EUGENE 3/25/98 NY EASTCO_PR 2 77 *****
LOPOPOLO, 3/25/98 NY EASTCO PR 2 77 *****
MARTILLO, 3/25/98 NY EASTCO_PR 2 77 *****
McDONALD, 3/25/98 NY EASTCO PR 2 77 *****
McLEARY, 3/25/98 NY EASTCO_PR 2 77 *****
McNALTY, 3/25/98 NY EASTCO_PR 2 77 *****
MECUM, 3/25/98 NY EASTCO_PR 2 77 *****
MICALE, ANTHO 3/25/98 NY EASTCO_PR 2 77 *****
NAIRY, HAROLD 3/25/98 NY EASTCO_PR 2 77 *****
NOTTIS, DOUGL 3/25/98 NY EASTCO_PR 2 77 *****
PETERSON, 3/25/98 NY EASTCO_PR 2 77 *****
POLLINA, VITO 3/25/98 NY EASTCO_PR 2 77 *****
POWERS, JOHN 3/25/98 NY EASTCO PR 2 77 *****
SABATINO, 3/25/98 NY EASTCO PR 2 77 *****
SEMPIER, GAIL 3/25/98 NY EASTCO_PR 2 77 *****
STEARNS, 3/25/98 NY EASTCO_PR 1 77 *****
STEMMLE, 3/25/98 NY EASTCO_PR 2 77 *****
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASE_ID DATE STATE COMPANY NO_PLNTF NO_DEFEND DAMAGES
<S> <C> <C> <C> <C> <C> <C>
SYLVESTER, 3/25/98 NY EASTCO_PR 2 77 *****
VUKOV, ANTE 3/25/98 NY EASTCO_PR 2 77 *****
WIERSBICKI, 3/25/98 NY EASTCO_PR 2 77 *****
WINNIE, DUANE 3/25/98 NY EASTCO_PR 2 77 *****
WREN, GORDON 3/25/98 NY EASTCO_PR 1 77 *****
YOUNG, MARK 3/25/98 NY EASTCO_PR 2 77 *****
YOUNGMAN, 3/25/98 NY EASTCO_PR 2 77 *****
ZEOLLA, P 4/1/98 NY EASTCO_PR 34 *
FARRINGTON, 4/7/98 NY EASTCO_PR 8 *
SAINT, DEREK 4/8/98 NY EASTCO_PR 43 *
ANDRUCKI, 4/9/98 NY EASTCO_PR 14 *
ROSENFRANTZ, 4/9/98 NY EASTCO_PR 2 *
ALLMAN, BERNA 4/14/98 NY EASTCO_PR 2 72 *****
CARFAGNO, 4/14/98 NY EASTCO_PR 1 72 *****
DEGROAT, 4/14/98 NY EASTCO_PR 1 72 *****
FREDERICK, 4/14/98 NY EASTCO_PR 2 72 *****
GUIMENTO, 4/14/98 NY EASTCO_PR 2 72 *****
JAZOWICK, 4/14/98 NY EASTCO_PR 2 72 *****
LaCORTE, 4/14/98 NY EASTCO_PR 2 72 *****
LAURELLA, 4/14/98 NY EASTCO_PR 2 72 *****
LEONE, JACKJ. 4/14/98 NY EASTCO_PR 2 72 *****
MOLODY, NICHO 4/14/98 NY EASTCO_PR 1 72 *****
MORAN, 4/14/98 NY EASTCO_PR 1 72 *****
NELSON, ARTHU 4/14/98 NY EASTCO_PR 2 72 *****
NIRMAIER, 4/14/98 NY EASTCO_PR 1 72 *****
SMITH, 4/14/98 NY EASTCO_PR 2 72 *****
STRIANO, PHILIP 4/14/98 NY EASTCO_PR 2 72 *****
WAHLERS, 4/14/98 NY EASTCO_PR 2 72 *****
WEBER, PHILIP 4/14/98 NY EASTCO_PR 1 72 *****
BAUGHMAN, 4/29/98 NY EASTCO_PR 2 *
BISHOP, BRIAN 4/29/98 NY EASTCO_PR 26 *
ANDERSON, 5/1/98 NY EASTCO_PR 2 72 *****
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASE_ID DATE STATE COMPANY NO_PLNTF NO_DEFEND DAMAGES
<S> <C> <C> <C> <C> <C> <C>
BARCZAK, 5/1/98 NY EASTCO_PR 1 72 *****
BEAZLEY, 5/1/98 NY EASTCO_PR 2 72 *****
BRADLEY, 5/1/98 NY EASTCO_PR 2 72 *****
CALLAGHAN, 5/1/98 NY EASTCO_PR 2 72 *****
CRALL, CAROLE 5/1/98 NY EASTCO_PR 2 72 *****
CURCIO, FRANK 5/1/98 NY EASTCO_PR 1 72 *****
GENOVA, IGNAZI 5/1/98 NY EASTCO_PR 2 72 *****
GOLDMAN, 5/1/98 NY EASTCO_PR 2 72 *****
GUASTELLA, 5/1/98 NY EASTCO_PR 2 72 *****
HOROS, 5/1/98 NY EASTCO_PR 2 72 *****
HOROS, JAMES 5/1/98 NY EASTCO_PR 2 72 *****
JOHNSON, 5/1/98 NY EASTCO_PR 2 72 *****
KEENAN, JAMES 5/1/98 NY EASTCO_PR 2 72 *****
KROM, HARRY 5/1/98 NY EASTCO_PR 2 72 *****
MASON, 5/1/98 NY EASTCO_PR 2 72 *****
MOTTOLA, 5/1/98 NY EASTCO_PR 2 72 *****
MUDRICK, 5/1/98 NY EASTCO_PR 2 72 *****
NARDINI, 5/1/98 NY EASTCO_PR 2 72 *****
NEIDIG, LAWRE 5/1/98 NY EASTCO_PR 2 72 *****
PASKIEWIEZ, 5/1/98 NY EASTCO_PR 1 72 *****
PERRY, PAUL E. 5/1/98 NY EASTCO_PR 2 72 *****
PHILLIPS, 5/1/98 NY EASTCO_PR 2 72 *****
PISCITELLI, 5/1/98 NY EASTCO_PR 2 72 *****
SENZER, HARRY 5/1/98 NY EASTCO_PR 2 72 *****
SERVEDIO, 5/1/98 NY EASTCO_PR 2 72 *****
SMITH, LEROY 5/1/98 NY EASTCO_PR 2 72 *****
STAPLES, FRED 5/1/98 NY EASTCO_PR 2 72 *****
SUURHANS, 5/1/98 NY EASTCO_PR 1 72 *****
ZULIC, SILVIO 5/1/98 NY EASTCO_PR 2 72 *****
CHANDLER, 5/7/98 NY EASTCO_PR 2 65 *****
JAMES, JOSEPH 5/7/98 NJ EASTCO 2 56 *****
LEGER, LUCY 5/7/98 NY EASTCO_PR 2 65 *****
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASE_ID DATE STATE COMPANY NO_PLNTF NO_DEFEND DAMAGES
<S> <C> <C> <C> <C> <C> <C>
ROBLES, MARG 5/7/98 NY EASTCO_PR 1 65 *****
ZARACHOV, 5/7/98 NY EASTCO_PR 2 65 *****
HARTLEY, 5/14/98 NY EASTCO PR 17 *
TALARICO, 5/14/98 NY EASTCO PR 45 *
BERRY, WIL 5/20/98 NY EASTCO_PR 2 70 *****
BOLAND, THOM 5/20/98 NY EASTCO_PR 1 70 *****
BOSTIC, BARNE 5/20/98 NY EASTCO_PR 2 70 *****
D'AMICO, FRANK 5/20/98 NY EASTCO_PR 2 70 *****
D'ONOFRIO, 5/20198 NY EASTCO_PR 2 70 *****
DeSIO, JOSEPH 5/20/98 NY EASTCO_PR 2 70 *****
DOBLE, BERNT 5/20198 NY EASTCO PR 1 70 *****
FRECHETT, 5120198 NY EASTCO_PR 2 70 *****
HOOD, GEORGE 5120198 NY EASTCO_PR 1 70 *****
JONES, GERALD 5/20/98 NY EASTCO PR 2 70 *****
KAY, STANLEY 5/20/98 NY EASTCO_PR 1 70 *****
KELLY, 5/20/98 NY EASTCO_PR 1 70 *****
KOSHEK, JOHN 5/20/98 NY EASTCO_PR 2 70 *****
KOZAN, ROBERT 5/20/98 NY EASTCO_PR 1 70 *****
KRUSZKA, 5/20/98 NY EASTCO_PR 2 70 *****
LIEBOWITZ, 5/20/98 NY EASTCO PR 1 70 *****
MARCUS, STEVE 5/20/98 NY EASTCO_PR 2 70 *****
NICHOLSON, 5/20/98 NY EASTCO_PR 2 70 *****
NOWLIN, WARR 5/20/98 NY EASTCO_PR 2 70 *****
OCHS, MURRAY 5/20/98 NY EASTCO_PR 2 70 *****
OTTO, WILLIAM 5/20/98 NY EASTCO_PR 2 70 *****
PETRONE, 5/20198 NY EASTCO_PR 2 70 *****
RENDT, DORIS 5/20/98 NY EASTCO_PR 2 70 *****
SANTORELLI, 5/20/98 NY EASTCO_PR 2 70 *****
SAVARESE, 5/20/98 NY EASTCO_PR 2 70 *****
SBARRA, RAYM 5/20/98 NY EASTCO_PR 1 70 *****
SGAMBATI, 5/20/98 NY EASTCO_PR 2 70 *****
SHUBERT, 5/20/98 NY EASTCO_PR 1 70 *****
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASE_ID DATE STATE COMPANY NO_PLNTF NO_DEFEND DAMAGES
<S> <C> <C> <C> <C> <C> <C>
SIANO, VINCENT 5/20/98 NY EASTCO_PR 2 70 *****
SPERLING, 5/20/98 NY EASTCO_PR 1 70 *****
STARK, 5/20/98 NY EASTCO_PR 2 70 *****
WOOD, ROBERT 5/20/98 NY EASTCO_PR 2 70 *****
KILLIAN, DAVID 5/26/98 NY EASTCO_PR 1 84 *****
MEZICH, MIRKO 6/8/98 NY EASTCO_PR 2 51 *****
COOPER, ROBE 6/10/98 NY EASTCO_PR 20 *
VENTURINO, 6/9/98 NY EASTCO_PR 9 *
LOMBARDI, 6/15/98 NY EASTCO_PR 18 *
PERRONE, 6/18/98 NY EASTCO_PR 11 *
</TABLE>
