<PAGE>
As filed with the Securities and Exchange Commission on March 9, 1998
Registration No. 333-47089
================================================================================
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
_______________
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_______________
EASTERN ENVIRONMENTAL SERVICES, INC.
(Exact Name of Registrant as Specified in Its Charter)
_______________
DELAWARE 59-2840783
(State of Incorporation) (I.R.S. Employer Identification Number)
1000 CRAWFORD PLACE, SUITE 400 LOUIS D. PAOLINO, JR.
MT. LAUREL, NEW JERSEY 08054 CHAIRMAN AND CHIEF EXECUTIVE OFFICER
(609) 235-6009 1000 CRAWFORD PLACE, SUITE 400
MT. LAUREL, NEW JERSEY 08054
(609) 235-6009
(Address, Including Zip Code, (Name, Address, Including Zip Code
and Telephone Number, Including Area and Telephone Number, Including Code
of Registrant's Principal Executive Area Code, of Agent for Service)
Offices)
_______________________
COPY TO:
H. JOHN MICHEL, JR., ESQUIRE
DRINKER BIDDLE & REATH LLP
1345 CHESTNUT STREET
PHILADELPHIA, PENNSYLVANIA 19107-3496
(215) 988-2700
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement as determined by
market conditions and other factors.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES+
+EFFECTIVE. THIS PROSPECTUS SUPPLEMENT SHALL NOT CONSTITUTE AN OFFER TO SELL OR+
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED MARCH 9, 1998
PROSPECTUS
383,998 SHARES
EASTERN ENVIRONMENTAL SERVICES, INC.
COMMON STOCK
This Prospectus relates to 381,998 shares of Common Stock, par value
$.01 per share (the "Common Stock"), of Eastern Environmental Services, Inc.
(the "Company") currently outstanding (the "Outstanding Shares") and 2,000
shares of Common Stock (the "Warrant Shares") issuable upon exercise of a common
stock purchase warrant of the Company (the "Warrant") (the Outstanding Shares
and the Warrant Shares are collectively referred to herein as the "Shares"). The
Shares are being offered for sale pursuant to this Prospectus (the "Offering"),
from time to time, by or for the account of the stockholders named herein (the
"Registered Stockholders"). See "Registered Stockholders." The Company will not
receive any of the proceeds of the Offering.
The Warrant and all of the 381,998 Outstanding Shares were issued by
the Company in connection with acquisitions of solid waste and other businesses
since September 1997, and all of the 383,998 Shares are included in this
Prospectus pursuant to the exercise of registration rights granted the holders
thereof in connection with such acquisitions.
The Registered Stockholders, either directly, through agents
designated or to be designated from time to time by them, or through
underwriters or dealers, may sell the Shares from time to time on terms to be
determined by the Registered Stockholders at the time of sale. The Registered
Stockholders may also seek, to the extent permitted by applicable laws, to sell
the Shares in transactions under Rule 144 of the Securities Act of 1933, as
amended (the "Securities Act").
All expenses of the Offering, other than commissions or discounts of
broker-dealers, will be borne by the Company. It is estimated that such
expenses to be borne by the Company will approximate $46,240.
The Registered Stockholders and any broker-dealers, agents,
underwriters or dealers that participate with the Registered Stockholders in the
distribution of the Shares may be deemed to be "underwriters" within the meaning
of the Securities Act, and any commissions received by them and any profit on
the resale of the Shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.
The Common Stock is currently traded on the Nasdaq National Market
under the symbol "EESI." The closing sale price of the Common Stock on the
Nasdaq National Market on March 6, 1998 was $25 1/8 per share.
-------------------------
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON
PAGE 4 OF THIS PROSPECTUS FOR INFORMATION THAT SHOULD BE CONSIDERED BY
PROSPECTIVE PURCHASERS.
-------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
-------------------------
The date of this Prospectus is March ___, 1998
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information may be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Commission's Regional Offices at Seven World
Trade Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material
also can be obtained from the Public Reference Section of the Commission, at 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission
maintains a web site at http://www.sec.gov that contains reports, proxy and
information statements and other information regarding registrants, like the
Company, that file electronically with the Commission. The Company's Common
Stock is quoted on the Nasdaq National Market, and reports, proxy statements and
other information concerning the Company may be inspected at the National
Association of Securities Dealers, Inc. at 1735 K Street, N.W., Washington, D.C.
20006-1500.
The Company has filed with the Commission a Registration Statement on Form
S-3 (together with any amendments thereto, the "Registration Statement") under
the Securities Act with respect to the securities offered hereby. As permitted
by the rules and regulations of the Commission, this Prospectus does not contain
all of the information set forth in the Registration Statement and exhibits
thereto. Statements contained in this Prospectus or in any document
incorporated by reference in this Prospectus as to the contents of any contract
or other document referred to herein or therein are not necessarily complete,
and in each instance where such contract or document has been filed as an
exhibit to the Registration Statement, or other document incorporated by
reference, reference is made to the copy of such contract or other document,
each such statement being qualified in all respects by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been previously filed by the Company with the
Commission and are hereby incorporated by reference in this Prospectus as of
their respective dates:
(i) The Company's Annual Report on Form 10-K for the fiscal
year ended June 30, 1997 (as amended on Form 10-K/A filed
October 28, 1997), excluding the financial statements and
notes thereto, selected consolidated financial data, and
the information contained under Management's Discussion and
Analysis of Financial Condition and Results of Operations
which have been superseded by the financial statements and
notes thereto and the information contained under
Management's Discussion and Analysis of Financial Condition
and Results of Operations included in the Company's Form 8-
K dated February 27, 1998.
(ii) The Company's quarterly Report on Form 10-Q for the
quarters ended September 30, 1997 (filed November 13, 1997)
and December 31, 1997 (filed February 17, 1998); (the
financial statements and notes thereto contained in the
Reports on Form 10-Q for the quarter ended September 30,
1997 are deemed to be outdated as they are not on a basis
consistent with the consolidated financial statements and
notes thereto included in the Company's Form 8-K filed
February 27, 1998 as they do not reflect:
(a) pooling of interests accounting for an acquisition
that occurred subsequent to September 30, 1997;
and
(b) earnings per share information calculated in
accordance with the recently issued pronouncement
FASB 128, Earnings Per Share
------------------
(iii) the following current reports of the Company:
(1) five separate reports on Form 8-K/A filed on July 10,
1997, for the purpose of: (i) amending the Company's Form
8-K/A dated July 2, 1996, (ii) amending the Company's Form
8-K dated September 27, 1996, (iii) amending the Company's
Form 8-K dated December 10, 1996, (iv) amending the
Company's Form 8-K dated January 31, 1997, and (v) amending
the Company's Form 8-K dated March 31, 1997; (2) Form 8-K
dated May 12, 1997 (as amended on Forms 8-K/A filed on July
11, 1997 and as amended on Form 8-K/A filed on July 25,
1997); (3) Form 8-K dated August 15, 1997 (as amended on
Form 8-K/A filed on October 10, 1997); (4) Form 8-K dated
August 20, 1997 (as amended on Form 8-K/A filed on November
3, 1997); (5) Form 8-K dated October 17, 1997; (6) Form 8-K
dated October 27, 1997; (7) Form 8-K dated December 1, 1997
(as amended on Form 8-K/A dated February 17, 1998) (8) Form
8-K dated December 1, 1997 (as amended on Form 8-K/A dated
February 13, 1998); (9) Form 8-K dated February 12, 1998;
and (10) Form 8-K dated February 27, 1998; and
<PAGE>
(iv) the description of the Common Stock contained in the
Registration Statement on Form 8-A (File No. 0-16102), including all
amendments and reports filed for the purpose of updating such description
prior to the termination of the Offering.
Additionally, all documents and reports filed by the Company with the
Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of this Prospectus and prior to termination of the
Offering shall be deemed to be incorporated by reference in this Prospectus and
to be a part hereof from the date of filing of such documents or reports. Any
statement or information contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement or information so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon written or oral request, a copy of any or all
of the documents that have been incorporated by reference in this Prospectus,
other than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into the documents that this Prospectus incorporates.
Requests for such copies should be directed to: Investor Relations, Eastern
Environmental Services, Inc., 1000 Crawford Place, Suite 400, Mt. Laurel, New
Jersey 08054, (609) 235-6009.
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<PAGE>
RISK FACTORS
An investment in the shares of Common Stock being offered by this
Prospectus involves a high degree of risk. In addition, this Prospectus and the
Company's reports under the Exchange Act incorporated herein by reference (the
"Incorporated Documents") contain forward-looking statements that involve risks
and uncertainties. Discussions containing such forward-looking statements may
be found under "Risk Factors," as well as in this Prospectus and the
Incorporated Documents generally. The Company's actual results could differ
materially from those anticipated in these forward-looking statements as a
result of certain factors, including those set forth in the following Risk
Factors and elsewhere in this Prospectus and the Incorporated Documents.
Accordingly, prospective investors should consider carefully the following Risk
Factors, in addition to the other information concerning the Company and its
business contained in this Prospectus and in the Incorporated Documents, before
purchasing the shares of Common Stock offered hereby.
HISTORY OF LOSSES; WORKING CAPITAL DEFICITS; CONTINUING CHARGES
For the years ended June 30, 1997 and 1995, the Company reported net income
of $2.5 million (including $4.2 million of merger costs and related tax
provisions incurred as a result of acquisitions) and $1.3 million, respectively.
Although the Company reported net income during such fiscal years, the Company
has reported net losses in prior years, including a net loss to common
stockholders of approximately $3.5 million (including $2.8 million in unusual
items principally related to the Company's June 1996 change of control) during
the fiscal year ended June 30, 1996. Additionally, the Company had working
capital deficits of $2.0 million and $1.8 million at June 30, 1997 and 1996,
respectively. In connection with the financing of its acquisitions and business
growth, the Company has incurred, and anticipates that it will continue to
incur, significant debt and interest charges under its revolving credit
facility. In addition, the Company will continue to recognize a significant
amount of goodwill amortization charges in connection with its acquisitions of
collection and transportation businesses and transfer stations that are
accounted for under the "purchase" method of accounting. Such goodwill is
amortized over a period of 40 years depending on the business acquired,
resulting in an annual non-cash charge to earnings during that period. As the
Company continues to pursue its acquisition program, its financial position and
results of operations may fluctuate significantly from period to period.
LIMITED OPERATING HISTORY IN REGARD TO SIGNIFICANT ASSETS
The Company's acquisition of solid waste collection, transportation and
disposal businesses during fiscal 1997 contributed approximately $73 million or
76% of the Company's revenues for the fiscal year ended June 30, 1997 and
approximately $136 million or 82% of the Company's assets at June 30, 1997.
Because of the Company's relatively limited operating history with respect to
these recently acquired businesses, no assurances can be given that the Company
will be able to replicate or improve upon their historical financial
performance.
ABILITY TO MANAGE GROWTH
The Company's strategy of growing primarily through acquisitions has
placed, and is expected to continue to place, significant burdens on the
Company's management and on its operational and other resources. The Company
will need to attract, train, motivate, retain and supervise its senior managers,
technical professionals and other employees. Any failure to expand its
management information system capabilities, to implement and improve its
operational and financial systems and controls or, to recruit appropriate
additional personnel in an efficient manner and at a pace consistent with the
Company's business growth, could have a material adverse effect on the Company's
business and results of operations.
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<PAGE>
DEPENDENCE ON ACQUISITIONS FOR GROWTH
The rate of future growth and profitability of the Company is largely
dependent on its ability to identify and acquire additional solid waste
collection, transportation, and disposal businesses. This strategy involves
risks inherent in assessing the values, strengths, weaknesses, risks and
profitability of acquisition candidates, including adverse short-term effects on
the Company's reported operating results, diversion of management's attention,
dependence on retaining, hiring and training key personnel, and risks associated
with unanticipated problems or latent liabilities. There can be no assurance
that acquisition opportunities will be available, that the Company will have
access to the capital required to finance potential acquisitions, that the
Company will continue to acquire businesses, or that any business acquired by
the Company will be integrated successfully into the Company's operations or
prove profitable.
AVAILABILITY OF ACQUISITION TARGETS
Increased competition for acquisition candidates may result in fewer
acquisition opportunities being made available to the Company as well as less
advantageous acquisition terms which may increase acquisition costs to levels
that are beyond the Company's financial capability or that may have an adverse
effect on the Company's business and results of operations. Accordingly, no
assurance can be given as to the number or timing of the Company's acquisitions
or as to the availability of financing necessary to complete an acquisition.
The Company also believes that a significant factor in its ability to consummate
acquisitions following the Offering will be the attractiveness of the Common
Stock as an investment to potential acquisition candidates. Such attractiveness
may, in large part, be dependent upon the market price and capital appreciation
prospects of the Common Stock compared to the equity securities of the Company's
competitors. Many of the Company's competitors for acquisitions are larger,
more established companies with significantly greater capital resources than the
Company and whose equity securities may be more attractive than the Common
Stock. To the extent the Common Stock is less attractive to acquisition
candidates, the Company's acquisition program may be adversely affected.
ABILITY TO INTEGRATE ACQUIRED BUSINESSES AND ACHIEVE OPERATING EFFICIENCIES
The Company is in the process of combining the businesses and assets that
it has recently acquired into an integrated operating structure. This process
may require, among other things, changes in the operating methods and strategies
of these separate businesses. The future growth and profitability of the Company
will be substantially dependent upon its ability to operate recently acquired
companies as well as additional businesses that may be acquired in the future,
and integrate them in the Company's operations. The Company's strategy is to
achieve economies of scale and operating efficiencies through increases in its
size resulting from acquisitions. There can be no assurance that the Company's
efforts to integrate acquired operations will be effective or that expected
efficiencies and economies of scale will be realized. The failure to achieve any
of these results could have a material adverse effect on the Company's business
and results of operations.
POTENTIAL LIABILITIES ASSOCIATED WITH ACQUISITIONS
The businesses acquired by the Company may have liabilities that the
Company does not discover or may be unable to discover during its pre-
acquisition investigations, including liabilities arising from environmental
contamination or non-compliance by prior owners with environmental laws or
regulatory requirements, and for which the Company, as a successor owner or
operator, may be responsible. Certain environmental liabilities, even if not
expressly assumed by the Company, may nonetheless be imposed on the Company
under certain legal theories of successor liability, including the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended. The
businesses acquired by the Company handled and stored petroleum, motor oil, and
other hazardous substances at their facilities. In the past, there may have
been releases of these hazardous substances into the soil or groundwater. The
Company may be required under federal, state, or local law to investigate and
remediate this contamination, if any. Any indemnities or warranties, due to
their limited scope, amount, duration, the financial limitations of the
indemnitor or warrantor, or other reasons, may not fully cover such liabilities.
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<PAGE>
NEED FOR ADDITIONAL CAPITAL; POTENTIAL DILUTION
The Company's acquisition program required a steady increase in capital,
which is expected to continue in the future as the Company pursues its strategy.
The Company has used with respect to completed acquisitions and intends to use
with respect to future acquisitions a combination of Common Stock, cash and the
assumption of debt as consideration. In the event the Company issues Common
Stock to make future acquisitions, the Company's stockholders may experience
dilution in the net tangible book value per share of Common Stock and a regular
infusion of additional Common stock into the capital markets. To the extent the
Company is unable to use Common Stock to make future acquisitions, its ability
to grow may be adversely affected. The Company's capital requirements also
include working capital needs to maintain daily operations and significant
capital expenditures for cell construction and expansion of its landfills,
closure and post-closure care costs associated with its landfills, equipment
purchases, and debt repayment obligations and/or financial assurance
obligations. To the extent that generated cash is not sufficient to meet the
Company's capital needs, the Company will be required to raise additional funds
through bank borrowings (such as its existing credit facility) and significant
additional equity and/or debt financings. No assurance can be given that
additional funding will be available on terms favorable to the Company.
DEPENDENCE ON KEY PERSONNEL
In June 1996, the Company appointed a new Board of Directors and hired a
new management team. The Company's operations are substantially dependent upon
the services of its executive officers, particularly Louis D. Paolino, Jr., the
Chairman of the Board, Chief Executive Officer and President of the Company. The
loss of the services of Mr. Paolino or one or more of the other executive
officers of the Company could have a material adverse effect on the Company's
business and results of operations. The Company does not maintain key-man life
insurance policies on its executive officers.
DEPENDENCE ON THIRD PARTY LANDFILLS
A substantial portion of the solid waste collected by the Company is
delivered to third party landfills under informal arrangements or without long-
term contracts. If these third parties increase their disposal fees and the
Company is unable to pass along the increase to its customers, or if these third
parties discontinue their arrangements with the Company and the Company is
unable to locate alternative disposal sites, the Company's business and results
of operations would be materially adversely affected.
EXTENSIVE PERMITTING AND LICENSING REQUIREMENTS
The Company is required to obtain and maintain in effect various federal,
state and local permits and licenses in connection with its solid waste
collection and transportation operations. The Company is also required to
obtain and maintain in effect various facility permits and other governmental
approvals, including those related to zoning, environmental and land use, in
order to develop and operate a landfill, a transfer station or a waste hauling
operation, and is required to obtain additional permits and approvals to expand
its existing landfill operations. These permits and approvals are difficult,
time consuming, and costly to obtain, may be subject to community opposition,
opposition by various local elected officials or citizens, regulatory delays and
other uncertainties, and may be dependent upon the Company's facilities being
included in state or local solid waste management plans and the Company's
entering into satisfactory host agreements with local communities. In addition,
operating permits may be subject to modification, renewal or revocation by the
issuing agencies after issuance, which may increase the Company's obligations
and reopen opportunities for opposition relating to the permits. Moreover, from
time to time, regulatory agencies may impose moratoria on, or otherwise delay,
the review or granting of these permits or approvals or such agencies may modify
the procedures or increase the stringency of the standards applicable to the
review or granting of such permits or approvals.
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<PAGE>
There can be no assurance that the Company will be successful in obtaining
and maintaining in effect the permits and approvals required for the successful
operation and growth of its business, including permits and approvals required
for the development of additional disposal capacity needed to replace existing
capacity that becomes exhausted. The failure of the Company to obtain or
maintain in effect a permit or approval significant to its business would have a
material adverse effect on the Company's business and results of operations.
POTENTIAL PENNSYLVANIA LANDFILL RESTRICTIONS
One of the Company's Pennsylvania landfill operations, acquired by the
Company in December 1996, has been in existence since 1972. From 1972 to 1988,
the 110 acre area of the landfill which received waste or was authorized by
state permits to receive waste had either received all necessary local zoning
approvals or was not required by local ordinance to receive a zoning permit or
other approval to operate. In 1988, the Company received a state expansion
permit for a 32 acre lined expansion area increasing the size of the permitted
disposal area to 142 acres as well as a conditional use zoning approval from the
local township. However, in 1990, the township adopted a new zoning ordinance
which limited the height of municipal waste landfills to 35 feet above the
original land contour. The landfill, as permitted in 1988 and as currently
designed and permitted, exceeds the height limit in certain areas. The Company
has maintained that the current permitted area is an existing nonconforming use
and is not subject to the 35 foot height limitation imposed by the 1990
ordinance. If the township seeks to impose this limitation, and is successful,
the existing permitted capacity of the landfill would be materially reduced.
KENTUCKY LANDFILL OBLIGATIONS
The Company ceased operations at its Kentucky landfill on June 30, 1995
because the existing permitted disposal area did not meet current state law
design requirements. From June 30, 1995 to June 30, 1996, the Company operated
a transfer station at the landfill site and disposed of waste at an alternate
location. The Company simultaneously pursued a final state permit for an
expansion area designed to meet the new state standards. The suspension of
landfill operations and the diversion of waste to an alternate location had an
adverse effect on the Company's operating results and the Company discontinued
its transfer station operation on July 1, 1996. On July 1, 1997, the Company
recommenced operation of its transfer station to fulfill the obligations of the
disposal franchise until the Company's expansion area is completed. The Company
received a final permit to construct its expansion area on October 14, 1996
(reissued February 26, 1997). The final permit issued for the Kentucky landfill
expansion area incorporated the requirements contained in an October 8, 1996
Agreed Order which settled an administrative appeal filed by the Somerset
Pulaski County Concerned Citizens Group. Prior to actual construction of the
expansion area, the Company is required to complete an additional hydrogeologic
investigation to confirm the adequacy of the groundwater monitoring program
approved in the final permit. Any negative results of this investigation could
have a material adverse effect on the permitted disposal capacity at the
Kentucky landfill expansion area and cause a delay in reopening the landfill.
The final permit issued for the Kentucky landfill expansion area also
requires closure of the original disposal area, which ceased operations on June
30, 1995, by August 15, 1997. The Company has commenced closure of the area.
The Company has received a notice of violation and an $80,000 fine for not
completing closure by the required date. The violation could result in the
assessment of penalties and/or a forfeiture of the existing $1.3 million payment
bond posted by the Company to assure a proper closure of this area.
-7-
<PAGE>
GOVERNMENT REGULATION
The Company is subject to extensive and evolving federal, state and local
environmental laws and regulations that have become increasingly stringent in
recent years as a result of greater public interest in protecting the
environment. These laws and regulations affect the Company's business in many
ways and will continue to impose substantial costs on the Company.
The design, operation and closure of landfills is extensively regulated.
These regulations include, among others, the regulations establishing minimum
federal requirements adopted by the United States Environmental Protection
Agency (the "EPA") in October 1991 under Subtitle D (the "Subtitle D
Regulations") of the Resource Conservation and Recovery Act of 1976 ("RCRA").
The Subtitle D Regulations, which generally became effective in October 1993,
include location restrictions, facility design standards, operating criteria,
closure and post-closure requirements, financial assurance requirements,
groundwater monitoring requirements, groundwater remediation standards, and
corrective action requirements. In addition, the Subtitle D Regulations require
that new landfill units meet more stringent liner design criteria (typically,
composite soil and synthetic liners or two or more synthetic liners) designed to
keep leachate out of groundwater and have extensive collection systems to
collect leachate for treatment prior to disposal. Groundwater monitoring wells
must also be installed at virtually all landfills to monitor groundwater quality
and, indirectly, the effectiveness of the leachate collection system operation.
The Subtitle D Regulations also require, where threshold test levels are
present, that methane gas generated at landfills be controlled in a manner that
protects human health and the environment. Each state is required to revise its
landfill regulations to meet these requirements or such requirements will be
automatically imposed upon it by the EPA. Each state is also required to adopt
and implement a permit program or other appropriate system to ensure that
landfills within the state comply with Subtitle D Regulation criteria. Most
states have adopted extensive landfill regulations that have been updated or
replaced with new regulations consistent with, or more stringent than, the
Subtitle D Regulations. Failure to comply with these regulations could require
the Company to undertake investigatory or remedial activities, to curtail or
modify operations, or to close a landfill temporarily or permanently. Future
changes in federal or state regulations may require the Company to modify,
supplement or replace equipment or facilities at costs that may be substantial.
The failure of regulatory agencies to enforce these regulations vigorously or
consistently may give an advantage to competitors of the Company whose
facilities do not comply with the Subtitle D Regulations or its state
counterparts. The Company's ultimate financial obligations related to any
failure to comply with these regulations could have a material adverse effect on
the Company's business and results of operations.
The Company is also regulated under the Federal Water Pollution Control Act
of 1972 (the "Clean Water Act") and the Clean Air Act, as amended in 1990 (the
"Clean Air Act"). The Clean Water Act regulates the discharge of pollutants
from a variety of sources, including landfills, into streams or other surface
waters. If runoff or collected leachate from the Company's landfills or
transfer stations is discharged into surface waters, the Clean Water Act would
require the Company to apply for and obtain a discharge permit, conduct sampling
and monitoring and, under certain circumstances, reduce the quantity of
pollutants in such discharge. Also, virtually all landfills are required to
comply with federal storm water regulations issued in November 1990, which are
designed to prevent contaminated landfill storm water runoff from flowing into
surface waters. The Clean Air Act, including the 1990 amendments, provides for
federal, state and local regulation of emissions of air pollutants into the
atmosphere, including emissions resulting from landfill operations. The EPA
recently promulgated new standards regulating air emissions of certain regulated
pollutants from municipal solid waste landfills. These standards, combined with
the new permitting programs established under the 1990 Clean Air Act amendments,
will probably subject many of the Company's landfills to new permitting
requirements and may require the installation of gas recovery systems. The EPA
has recently promulgated new standards regulating air emissions of certain
regulated pollutants (methane and non-methane organic compounds) from municipal
solid waste landfills. Landfills located in areas with air pollution problems
may be subject to even more extensive air pollution controls and emissions
limitations. The EPA and the states in which the Company has operated also have
adopted regulations under Title V of the Clean Air Act requiring permits for
certain disposal facilities. The Company's continued compliance with
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<PAGE>
these existing and future regulations may impose a significant expense upon the
Company which could have a material adverse effect on the Company's business and
results of operations.
The Occupational Safety and Health Act of 1970, as amended ("OSHA"),
authorizes the Occupational Safety and Health Administration to promulgate
occupational safety and health standards. Various of those promulgated
standards, including standards for notices of hazards, safety in excavation and
the handling of asbestos, may apply to certain of the Company's operations.
OSHA regulations set forth requirements for the training of employees handling,
or who may be exposed in the work place to, concentrations of asbestos-
containing materials that exceed specified action levels. The OSHA regulations
also set standards for employee protection, including medical surveillance, the
use of respirators, protective clothing and decontamination units, during
asbestos demolition, removal, or encapsulation as well as its storage,
transportation, and disposal. In addition, OSHA specifies a maximum permissible
exposure level for airborne asbestos in the workplace. The Company has no
direct involvement in asbestos removal or abatement projects. However,
asbestos-containing waste materials are accepted at certain of the Company's
landfills that are authorized to accept such materials, and some of the
Company's collection businesses receive asbestos-containing waste materials
which have already been packaged and labeled. These packages are loaded onto
the Company's vehicles by employees of the asbestos abatement contractors for
transportation to and disposal at the Company's authorized landfills.
Accordingly, OSHA regulations designed to minimize employees' exposure to
airborne asbestos fibers and provide employees with proper training and
protection generally apply to the Company's operations in the transportation,
handling and disposal of asbestos waste.
In addition, most states and municipalities in which the Company operates
or may operate have adopted laws or requirements which limit or ban certain
categories of waste or mandate the disposal or recycling of local refuse. These
recycling laws and requirements have the effect of reducing landfill disposal
tonnage. Additionally, certain permits and approvals, as well as state and
local regulations, may seek to limit a landfill to accepting waste that
originates from specified geographic areas or seek to restrict the importation
of out-of-state waste. Generally, such legislative or regulatory restrictions
have not withstood judicial challenges. However, from time to time, federal
legislation is proposed which would allow individual states to prohibit the
disposal of out-of-state waste or to limit the amount that could be imported for
disposal. This legislation would also authorize in certain instances local
governmental units to mandate the flow of waste to certain designated facilities
or impose other flow control restrictions. Although no such federal legislation
has been enacted to date, if such federal legislation should be enacted in the
future, states in which the Company operates landfills could act to limit or
prohibit the importation of out-of-state waste or require the Company's
collection operations to utilize certain designated sites. Such federal or
state actions could have an adverse effect on the Company's landfills that
receive a significant portion of waste originating from other states and on the
Company's collection operations. Further, restrictions on out-of-state waste
could result in higher disposal costs for the Company's collection operations.
If the Company were unable to pass such higher costs through to its customers,
the Company's business and results of operations could be adversely affected.
Each state in which the Company currently operates, or may operate in the
future, also has laws and regulations governing the generation, storage,
treatment, handling, transportation and disposal of solid waste, water and air
pollution and, in most cases, the siting, design, operation, maintenance,
closure and post-closure maintenance of landfills and other solid waste
management facilities. Many states also have programs that require
investigation and clean-up of sites containing hazardous materials in a manner
comparable to or more stringent than CERCLA. These statutes impose requirements
for investigation and clean-up of contaminated sites and liability for costs and
damages associated with such sites. Some of the state laws provide for the
imposition of liens on property owned by responsible parties. Many
municipalities also have ordinances, local laws and regulations affecting the
Company's operations. These include zoning and health measures that limit solid
waste management activities to specified sites or activities.
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REGULATION BY NEW YORK CITY TRADE WASTE COMMISSION
In 1996, the New York City Council enacted Local Law 42 ("Local Law 42") in
order to control the corrupting influence of organized crime on the waste
hauling industry. Local Law 42 created the Trade Waste Commission (the "TWC")
and established rules for licensing and regulating the operations of the
commercial and industrial waste industry in New York City. The law prohibits the
collection, disposal or transfer of commercial and industrial waste without a
license issued by the TWC and requires TWC approval of all acquisitions or other
business combinations proposed by all licensees. Each acquisition, sale or
merger transaction generally must be submitted for review by the TWC 30 days
before the transaction takes effect, although the amount of time required for
review depends on the complexity of the transaction and the need to investigate
the background of the principals involved. In September 1997, one of the
Company's subsidiaries received a license from the TWC which enables it to
conduct New York City collections operations. The license, like all TWC
licenses, has a term of two years. The TWC also sets maximum rates for the
industry and establishes operational requirements. The Company's New York City
collection operations are subject to Local Law 42, which could preclude or
materially impact the Company's operations in this region, the time and cost of
completing future acquisitions in this region, and the rates which may be
charged for collection services.
PUBLIC UTILITY REGULATION
The rates that the Company may charge at its West Virginia landfill for the
disposal of municipal solid waste are regulated by the West Virginia Public
Service Commission. Rate regulation in West Virginia and the adoption of rate
regulation in other states in which the Company owns landfills could have an
adverse effect on the Company's business and results of operations.
POSSIBLE LEGAL ACTION
Companies in the solid waste management business, including the Company,
are frequently subject in the normal course of business to judicial and
administrative proceedings involving federal, state or local agencies or citizen
groups. These governmental agencies may seek to impose fines or penalties on
the Company, to revoke or deny renewal of the Company's operating permits or
licenses for violations or alleged violations of environmental
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laws or regulations, or require that the Company make expenditures to remediate
potential environmental problems relating to waste disposed of or stored by the
Company or its predecessors, or resulting from its or its predecessors'
transportation and collection operations. Any adverse outcome in these
proceedings could have an adverse effect on the Company's business and results
of operations and may subject the Company to adverse publicity. The Company may
also be subject to actions brought by local governments, individuals or
community groups in connection with the permitting or licensing of its
operations, any alleged violation of such permits or licenses, or other matters.
POTENTIAL ENVIRONMENTAL LIABILITY
GENERAL. The Company is subject to liability for any environmental damage
that its solid waste facilities may cause to neighboring landowners,
particularly as a result of the contamination of drinking water sources or soil,
including damage resulting from the conditions existing prior to the acquisition
of such facilities by the Company. The Company also may be subject to liability
from any off-site environmental contamination caused by pollutants or hazardous
substances whose transportation, treatment or disposal was arranged by the
Company or its predecessors. Any substantial liability for environmental damage
incurred by the Company could have a material adverse effect on the Company's
business and results of operations.
CERCLA imposes strict, joint, and several liability on the present owners
and operators of facilities from which a release of hazardous substances into
the environment has occurred, as well as any party that owned or operated the
facility at the time of disposal of the hazardous substances regardless of when
the hazardous substance was first detected. Similar liability is imposed upon
the generators of waste that contains hazardous substances and hazardous
substance transporters that select the treatment, storage, or disposal site.
All such persons, who are referred to as potentially responsible parties
("PRPs"), generally are jointly and severally liable for the expense of
investigation, clean-up and natural resource damages relating to environmental
contamination, regardless of whether they exercised due care or complied with
all relevant laws and regulations. These costs can be substantial. Liability
can be based upon the existence of even very small amounts of the more than 700
"hazardous substances" listed by the EPA and is not limited to the disposal of
"hazardous wastes," as statutorily defined. It is likely that hazardous
substances have in the past come to be located in landfills which the Company
has been associated as an owner or operator or as a result of its solid waste
collection operations. Moreover, the Company's solid waste collection
operations may have transported hazardous substances in the past and may do so
on occasion in the future.
The National Emission Standards for Hazardous Air Pollutants ("NESHAPs")
regulate the collection, packaging, transportation and disposal of asbestos-
containing material. NESHAPs regulate visible emissions of asbestos fibers to
outside air and require emissions controls and appropriate work practices.
Asbestos is listed as a hazardous substance under CERCLA. A few states have
classified asbestos as hazardous waste and require appropriate handling and
disposal practices. The Company transports and disposes of asbestos-containing
materials. There can be no assurance that the Company will not face claims
resulting from environmental liabilities relating to these and other materials
in its solid waste management operations.
PENNSYLVANIA LANDFILL. Prior to 1990, one of the Company's Pennsylvania
landfills disposed of municipal solid waste in an unlined disposal area. This
unlined area was operated by the former owner and has caused localized
groundwater contamination. As a condition to a recent permit modification, the
Company has agreed to remove all waste from unlined areas to remove the source
of contamination and relocate the waste to a Subtitle D approved disposal area
at the landfill. For the period of trash relocation, the Company will operate a
groundwater removal and treatment system which has received a permit for the
associated surface water discharge. Relocation of trash began in April 1997, is
coordinated with new pad construction, and is scheduled to be completed in
fiscal year 2008. At June 30, 1997, the Company had accrued approximately $4.0
million for such relocation and removal costs. An additional condition of the
permit modification requires groundwater monitoring of five private water supply
wells off-site. Low levels of volatile organic compounds have been detected in
two of these private water supply wells. The Company has not established a
specific financial reserve for potential costs relating to this remediation
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or any additional potential liabilities associated with this contamination. The
Company currently believes that ultimate resolution of these matters should not
have a material adverse effect on the Company's business or results of
operations. However, there can be no assurance that the Company's ultimate
financial obligations related to these matters will not have a material adverse
effect on the Company's business and results of operations.
KENTUCKY LANDFILL. On December 30, 1994, the Company received a notice of
intent to sue from a neighbor of the Kentucky landfill for an alleged
unauthorized discharge of hazardous substances resulting in damage to the
neighboring property. No lawsuit has been initiated. The Company believes any
lawsuit by this neighboring landowner would lack merit and it would vigorously
defend such a lawsuit. The Company currently believes that ultimate resolution
of these matters should not have a material adverse effect on the Company's
business or results of operations. However, there can be no assurance that the
Company's ultimate financial obligations related to these matters will not have
a material adverse effect on the Company's business and results of operations.
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SUPERFUND LIABILITY. One of the Company's solid waste collection
subsidiaries is a party to a Superfund litigation, which has been settled by
substantially all of the defendants. The Company is being defended in this
action by one of its insurance carriers, which did not accept a $13,000
settlement offer. Because the settlement offer was not accepted, the Company
could be subject to claims for any deficiency between the amount contributed by
all settling parties and the actual costs of remediating the site. While the
Company has no reason to believe that any such claims will be asserted and has
no meaningful basis to estimate the amount of such claims, no assurances can be
given that they would not be brought or that the amount claimed would not be
substantial. Were any such claim to be asserted, the Company would expect to
vigorously assert all available defenses and believes that its liability, if
any, would be either covered by insurance or, under applicable law, the
responsibility of the carrier because of its failure to accept settlement.
However, no assurances can be given that insurance proceeds would cover the
entire amount of the claim or that the Company would prevail in any action
against the carrier. Accordingly, there can be no assurance that the Company's
ultimate financial obligations related to this matter will not have a material
adverse effect on the Company's business and results of operations.
POTENTIAL INADEQUACY OF ACCRUALS FOR CLOSURE AND POST-CLOSURE COSTS
The Company has material financial obligations relating to closure and
post-closure costs of the landfills it operates. While the precise amounts of
these future obligations cannot be determined, at December 31, 1997, the Company
estimated the total costs to be approximately $19.3 million for final closure of
its landfills, of which $4.1 million had been accrued as of December 31, 1997.
The Company makes an accrual for these costs based on consumed airspace in
relation to the management's estimate of total available airspace of the
landfills. Post-closure monitoring costs pursuant to applicable regulations
(generally for a term of 30 to 40 years after final closure) are estimated at
$11.1 million. At December 31, 1997, the Company had accrued $3.5 million for
such projected post-closure costs. The Company will provide additional accruals
based on engineering estimates of consumption of permitted landfill airspace
over the useful lives of its landfills. There can be no assurance that the
Company's ultimate financial obligations for actual closing or post-closing
costs will not exceed the amount then accrued and reserved or amounts otherwise
receivable pursuant to insurance policies or trust funds. Such a circumstance
could have a material adverse effect on the Company's business and results of
operations.
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ABILITY TO MEET BONDING REQUIREMENTS
The Company is required to post a form of financial assurance at its
landfills to ensure proper closure and post-closure monitoring and maintenance.
Additionally, some of the Company's collection and transportation contracts
require performance and payment bonds to guarantee project completion and
certain states may require collateral bonds to secure compliance with hazardous
waste transportation requirements. The Company's ability to meet these bonding
requirements is contingent upon the Company's performance record and
creditworthiness. Any inability by the Company to maintain bonding capacity or
a sizable increase in payment could have a material adverse impact on the
Company's business and results of operations.
LIMITS ON INSURANCE COVERAGE
The Company carries insurance covering its assets and operations, including
pollution liability coverage. Specifically, each of the Company's landfills has
pollution liability coverage of $5.0 million per occurrence or $5.0 million in
the aggregate subject to a $500,000 deductible per occurrence. Nevertheless,
there can be no assurance that the Company's insurance will provide sufficient
coverage in the event an environmental claim is made against the Company or that
the Company will be able to maintain in place such insurance at reasonable
costs. An uninsured or underinsured claim against the Company of sufficient
magnitude could have a material adverse effect on the Company's business and
results of operations. The Company also is subject to the risk of claims by
employees and others made after the expiration of the policy coverage period,
including asbestos-related illnesses (such as asbestosis, lung cancer,
mesothelioma and other cancers), which may not become apparent until many years
after exposure. From May 15, 1985 through April 28, 1988, the Company carried
claims-made general liability coverage. Any claims presented on the basis of
exposure during that period may not be covered by insurance and any liability
resulting therefrom could, consequently, have an adverse effect on the Company's
business and results of operations.
WASTE REDUCTION PROGRAMS
Alternatives to landfill disposal, such as recycling, incineration and
composting, are increasingly being used. There also has been an increasing trend
at the state and local levels to mandate recycling and waste reduction at the
source and to prohibit the disposal of certain types of wastes at landfills.
Many states (including states in which the Company operates) have enacted laws
that require counties to adopt comprehensive plans to reduce the volume of solid
waste deposited in landfills through waste planning, composting, recycling or
other programs. Some states (including most states in which the Company
operates) have adopted legislation that prohibits the disposal of yard waste,
tires, and other items in landfills. These developments could result in a
reduction in the volume of waste destined for landfills in certain areas, which
may affect the Company's ability to operate its landfills at their full capacity
and/or affect the prices that can be charged for landfill disposal services.
Such effects could have a material adverse effect on the Company's business and
results of operations.
COMPETITION
The solid waste management industry is highly competitive and the Company
believes that industry consolidation will increase competitive pressures. The
Company competes with several large national waste management companies,
including Waste Management, Inc. (formerly WMX Technologies, Inc.), Browning
Ferris Industries, Inc., U.S.A. Waste Services, Inc. and Allied Waste
Industries, Inc. A number of these competitors have significantly greater
financial, technical, marketing and other resources than the Company. The
Company also competes with numerous well-established smaller, local or regional
firms, some of which have accumulated substantial goodwill. In addition,
municipalities that operate their own waste collection and disposal facilities
often enjoy the benefits of tax-exempt financing and may control the disposal of
waste collected within their jurisdictions. Increased competition from these
companies or municipalities could have a material adverse effect on the
Company's business and results of operations.
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The Company provides residential collection services under municipal
contracts with terms ranging from one to five years. As is customary in the
waste management industry, such contracts come up for competitive bidding
periodically and there is no assurance that the Company will be the successful
bidder or will be able to retain such contracts. If the Company is unable to
replace any contract lost through the competitive bidding process with a
comparable contract within a reasonable time period or to use any surplus
equipment in other service areas, the Company's business and results of
operations could be adversely affected.
SEASONALITY; ECONOMIC CONDITIONS
The Company's revenues tend to be somewhat lower in the winter months.
This is primarily attributable to the fact that (i) the volume of waste relating
to construction and demolition activities tends to increase in the spring and
summer months and (ii) the volume of industrial and residential waste in the
regions in which the Company operates tends to decrease during the winter
months. In addition, particularly harsh weather conditions may affect the
Company's operations by interfering with collection, transportation and disposal
operations, delaying the development of landfill capacity, and/or reducing the
volume of waste generated by the Company's customers, which could have a
material adverse effect on the Company's business and results of operations.
The Company's business is affected by general economic conditions, both
nationally and in the geographic regions in which the Company's operations are
currently located. There can be no assurance that a national or local economic
downturn will not result in a reduction in the volume of waste being collected,
transported and disposed of by the Company and/or the prices that the Company
can charge for its services.
ANTI-TAKEOVER PROVISIONS; CHANGE IN CONTROL PROVISIONS
The Board of Directors and the stockholders of the Company have approved a
charter amendment to provide for an undesignated class of preferred stock. No
shares of preferred stock are outstanding as of the date of this Prospectus. It
is not possible to state the precise effect of preferred stock upon the rights
of the holders of the Company's Common Stock until the Board of Directors
determines the respective preferences, limitations and relative rights of the
holders of one or more series or classes of the preferred stock. However, such
effect might include: (i) reduction of the amount otherwise available for
payment of dividends on Common Stock, to the extent dividends are payable on any
issued shares of preferred stock, and restrictions on dividends on Common Stock
if dividends on the preferred stock are in arrears; (ii) dilution of the voting
power of the Common Stock to the extent that the preferred stock has voting
rights; and (iii) the holders of Common Stock not being entitled to share in the
Company's assets upon liquidation until satisfaction of any liquidation
preference granted to the preferred stock.
The preferred stock may be viewed as having the effect of discouraging an
unsolicited attempt by another person or entity to acquire control of the
Company and may therefore have an anti-takeover effect. Issuances of authorized
preferred shares can be implemented and have been implemented by some companies
in recent years with voting or conversion privileges intended to make
acquisition of the Company more difficult or costly. Such an issuance could
discourage or limit the stockholders' participation in certain types of
transactions that might be proposed (such as a tender offer), whether or not
such transactions were favored by the majority of the stockholders, and could
enhance the ability of officers and directors to retain their positions.
In addition, certain of the Company's executive officers that have entered
into employment agreements with the Company will be entitled to receive certain
bonuses in cash or Common Stock upon a change in control of the Company in such
amounts that, in the aggregate, could have an adverse effect on the Company's
liquidity and capital resources. Accordingly, such provisions could discourage
or prevent bids to takeover the Company and decrease values that would otherwise
be obtained by stockholders for their Common Stock.
The Company is subject to the anti-takeover provisions of Section 203 of
the Delaware General Corporation Law, which prohibits the Company from engaging
in a "business combination" with an "interested stockholder" for a period of
three years after the date of the transaction in which the person became an
interested stockholder, unless
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the business combination is approved in a prescribed manner. The application of
Section 203 also could have the effect of delaying or preventing a change in
control of the Company without further action by the stockholders.
CONTROL BY MANAGEMENT
Executive officers and directors of the Company as a group beneficially own
a significant amount of the outstanding Common Stock. As a result, these
existing stockholders, if acting together, will be able to influence
significantly the election of individuals to the Board of Directors and the
outcome of other matters submitted for stockholder consideration.
VOLATILITY OF STOCK PRICE
The market price of the Common Stock has been and is likely to continue to
be highly volatile. Factors such as fluctuations in the Company's quarterly
revenues and operating results, the Company's ongoing acquisition program,
governmental regulations, market conditions for waste management stocks in
general, and economic conditions generally may have a significant impact on the
market price of the Common Stock. In addition, as the Company pursues its
acquisition program, it may agree to issue shares of Common Stock that will
generally become available for resale which may have an impact on the market
price of the Common Stock.
ADDITIONAL RISKS
In addition to the Risk Factors set forth above, prospective investors in
the Common Stock should review the Company's Incorporated Documents, which may
contain, in certain instances and from time to time, additional and supplemental
information relating to the risks set forth above and/or additional risks to be
considered by investors in the Common Stock, including, without limitation,
information relating to losses experienced by the Company in particular
historical periods, working capital deficits of the Company at particular dates,
information relating to pending and recently completed acquisitions,
descriptions of new or changed federal or state regulations applicable to the
Company, data relating to remediation and other actions taken by the Company,
and estimates at various times of the Company's potential liabilities for
compliance with environmental laws or in connection with pending litigation,
including estimates of closure and post-closure costs.
LACK OF CASH DIVIDENDS ON COMMON STOCK
The Company does not expect to pay any cash dividends on the Common Stock
in the foreseeable future. Any cash otherwise available for such dividends will
be reinvested in the Company's business. In addition, the Company's current
credit facility agreement prohibits the payment of cash dividends without prior
bank approval.
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USE OF PROCEEDS
All of the Shares offered hereby are being offered for the account of the
Registered Stockholders. The Company will not receive any of the proceeds of
the Offering.
THE COMPANY
Eastern Environmental Services, Inc. is a non-hazardous solid waste
management company specializing in the collection, transportation and disposal
of residential, industrial, commercial and special waste, principally in the
eastern United States. In June 1996, control of the Company was acquired by a
group of investors who repositioned the Company for the purpose of implementing
an aggressive acquisition program in the solid waste industry.
The Company believes that significant opportunities exist to acquire solid
waste collection, transportation and disposal businesses in the eastern United
States and to develop within its existing markets. As part of its acquisition
program, the Company reviews acquisition opportunities on an ongoing basis and
is currently in various stages of negotiating the acquisition of additional
solid waste management businesses. There can be no assurance that any of such
acquisition negotiations will result in the actual acquisition of additional
solid waste management businesses.
The Company's principal executive offices are located at 1000 Crawford
Place, Suite 400, Mt. Laurel, New Jersey 08054, and its telephone number is
(609) 235-6009.
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REGISTERED STOCKHOLDERS
The Warrant and all of the 381,998 Outstanding Shares included in this
Prospectus were issued by the Company in connection with acquisitions of solid
waste and other businesses since September 1997, and all of the 383,998 Shares
are included in this Prospectus pursuant to the exercise of registration rights
granted the holders thereof in connection with such acquisitions.
The following table lists the names of the persons whose Shares are covered
by this Prospectus (the "Registered Stockholders"), and for each, the number of
Shares beneficially owned at the commencement of the Offering, the number of
shares being offered for sale and the number of Shares and percentage interest
of the Company to be beneficially owned after the Offering.
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF NUMBER OF SHARES OWNED
BENEFICIALLY OWNED OUTSTANDING WARRANT SHARES AFTER OFFERING
AT COMMENCEMENT SHARES BEING BEING --------------
REGISTERED STOCKHOLDERS OF OFFERING OFFERED OFFERED NUMBER PERCENT
- ------------------------- ----------- ------- --------- -------------------
<S> <C> <C> <C> <C> <C>
Ambrose Hamm 530,413 (1) 134,263 -- 353,608 (7) 1.5
Lillian Hamm 112,427 37,476 -- 74,951 *
Daniel Laratro 108,334 36,111 -- 72,223 *
Deidre Laratro 108,333 36,111 -- 72,222 *
Katherine Caristia 64,578 (2) 20,820 -- 43,052 (8) *
Keilley Hamm Trust 61,694 20,565 -- 41,129 *
Keith Hamm Trust 61,694 20,565 -- 41,129 *
Jeanette Cascione 149,747 (3) 9,541 -- 138,522 (9) *
Nicholas Cascione, Jr. 149,668 (4) 11,225 -- 138,443 (4) *
The Nicholas J. Cascione
Revocable Trust 25,068 (5) 1,684 -- 23,384 (5) *
Dominick Marzano 54,422 16,327 -- 38,095 *
Carl M. Casagrande, Jr. 28,327 16,327 -- 12,000 *
Albert Casagrande 16,327 16,327 -- -- *
Keilley Strobeck 2,394 798 -- 1,596 *
Keith Hamm 2,394 798 -- 1,596 *
James Caristia, Jr. 1,413 471 -- 942 *
Leah Caristia 1,413 471 -- 942 *
James Caristia Jr. Trust 1,059 353 -- 706 *
Leah H. Caristia Trust 1,059 353 -- 706 *
Keith Hamm Jr. Trust 1,059 353 -- 706 *
Charles Henry Strobeck Jr. Trust 1,059 353 -- 706 *
Krystal Leah Strobeck Trust 1,059 353 -- 706 *
Travis John Strobeck Trust 1,059 353 -- 706 *
Stephen J. Duskin -- -- 2,000 (6) -- *
- -------------------
</TABLE>
* Less than 1%
(1) Includes a total of 127,624 shares held in the Keilley Hamm Trust, the
Keith Hamm Trust, the Keith Hamm, Jr. Trust, the Charles Henry Strobeck,
Jr. Trust, the Travis John Strobeck Trust and the Krystal Leah Strobeck
Trust, of which Ambrose Hamm is the sole trustee.
(2) Includes a total of 2,118 shares held in the James Caristia, Jr. Trust and
the Leah H. Caristia Trust, of which Katherine Caristia is a trustee.
(3) Includes 25,068 shares beneficially held by the Nicholas J. Cascione
Revocable Trust, of which Jeanette Cascione is the sole trustee. Also
includes 8,500 shares issuable upon exercise of warrants, all of which have
vested.
(4) Includes 10,000 shares issuable upon exercise of warrants, all of which
have vested.
(5) Includes 1,500 shares issuable upon exercise of warrants, all of which have
vested.
(6) Represents 2,000 shares of Common Stock issuable upon exercise of a
warrant. Fifty percent of the shares underlying the warrant vest on August
21, 1998. The remaining 1,000 shares will vest on August 21, 1999.
(7) Includes a total of 85,082 shares that will be held in the Keilley Hamm
Trust, the Keith Hamm Trust, the Keith Hamm, Jr. Trust, the Charles Henry
Strobeck, Jr. Trust, the Travis John Strobeck Trust and the Krystal Leah
Strobeck Trust, of which Ambrose Hamm is the sole trustee, after the
Offering.
(8) Includes a total of 1,412 shares that will be held in the James Caristia,
Jr. Trust and the Leah H. Caristia Trust, of which Katherine Caristia is a
trustee, after the Offering.
(9) Includes 23,384 shares that will be beneficially held by the Nicholas J.
Cascione Revocable Trust, of which Jeanette Cascione is the sole trustee,
after the Offering. Also includes 8,500 shares issuable upon exercise of
warrants, all of which have vested.
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PLAN OF DISTRIBUTION
The Shares may be sold from time to time to purchasers directly by any of
the Registered Stockholders, or, alternatively, any of the Registered
Stockholders may from time to time offer the Shares through dealers or agents,
who may receive compensation in the form of underwriting discounts, concessions
or commissions from a Registered Stockholder and/or the purchasers of the Shares
for whom they may act as agent. Any discounts, commissions or concessions
received by any such dealers or agents and any profits on the sale of Shares by
them may be deemed to be underwriting discounts and commissions under the
Securities Act.
The Shares may be sold from time to time in one or more transactions at a
fixed offering price, which may be changed, at varying prices determined at the
time of sale, or at negotiated prices. Such prices will be determined by a
Registered Stockholder or by agreement between a Registered Stockholder and/or
dealers. The Shares are listed on the Nasdaq National Market and may be sold in
transactions on the Nasdaq National Market. In addition, the Shares may be sold,
to the extent permitted, from time to time in transactions effected in
accordance with the provisions of Rule 144 under the Securities Act.
In connection with the offer and sale of the Shares, various state
securities laws and regulations require that any such offer and sale should be
made only through the use of a broker-dealer registered as such in any state
where a Registered Stockholder engages such broker-dealer and in any state where
such broker-dealer intends to offer and sell the Shares.
Under applicable rules and regulations under the Exchange Act, any person
engaged in a distribution of the Shares may not bid for or purchase the Shares
until after such person has completed his or her participation in such
distribution, including the period of five business days prior to the
commencement of such distribution. In addition to and without limiting the
foregoing, the Registered Stockholders and any other person participating in
such distribution will be subject to other applicable provisions of the Exchange
Act and the Rules and Regulations thereunder, including without limitation
Regulation M, which provisions may affect the timing of purchases and sales of
any of the Shares by the Registered Stockholders and any such other person. All
of the foregoing may affect the marketability of the Shares and the ability of
any person or entity to engage in market-making activities with respect to the
Shares.
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for the
Company by Drinker Biddle & Reath LLP, Philadelphia, Pennsylvania, counsel for
the Company.
EXPERTS
The consolidated financial statements of the Company as of June 30, 1997
and 1996 and for each of the three years in the period ended June 30, 1997
appearing in the Company's Current Report on Form 8-K (dated February 27, 1998),
which are incorporated by reference herein, have been audited by Ernst & Young
LLP, independent auditors, as set forth in their report thereon included therein
and incorporated by reference herein which, as to each of the two years in the
period ended June 30, 1996, is based in part on the reports of Bardall,
Weintraub P.C. and Paternostro, Callahan & DePreitas, LLP, independent auditors.
Such financial statements are incorporated by reference herein in reliance upon
such reports given upon the authority of such firms as experts in accounting and
auditing.
The combined financial statements of Allied Environmental Services, Inc.
and affiliates as of and for the period ended June 30, 1996 and 1995 and at and
for the years then ended appearing in the Company's Current Report on Form 8-K
dated July 2, 1996, as amended by its Form 8-K/A dated July 10, 1997, which are
incorporated by reference herein, have been audited by BDO Seidman LLP,
independent auditors, as set forth in
-19-
<PAGE>
their report thereon included therein and incorporated by reference herein.
Such financial statements are incorporated by reference herein in reliance upon
such report given upon the authority of such firm as experts in accounting and
auditing.
The combined financial statements of Allied Environmental Services, Inc.,
Allied Environmental Services, West, Inc., Allied Mid-Atlantic, Inc. and Allied
Waste Management, Inc. as of and for the period ended June 30, 1994 and at and
for the year then ended appearing in the Company's Current Report on Form 8-K
dated July 2, 1996, as amended by its Form 8-K/A dated July 10, 1997, which are
incorporated by reference herein, have been audited by B.J. Klinger & Co., P.C.,
independent auditors, as set forth in their report thereon included therein and
incorporated by reference herein. Such financial statements are incorporated by
reference herein in reliance upon such report given upon the authority of such
firm as experts in accounting and auditing.
The combined financial statements of Super Kwik, Inc. and Waste Maintenance
Services, Inc. appearing in the Company's Current Report on Form 8-K dated
September 27, 1996, as amended by its Form 8-K/A dated July 10, 1997, which are
incorporated by reference herein, have been audited by Bardall, Weintraub P.C.,
independent auditors, as set forth in their report thereon included therein and
incorporated by reference herein. Such financial statements are incorporated by
reference herein in reliance upon such report given upon the authority of such
firm as experts in accounting and auditing.
The financial statements of R&A Bender, Inc. and R&A Property, Ltd.
appearing in the Company's Current Report on Form 8-K dated December 10, 1996,
as amended by its Form 8-K/A dated July 10, 1997, which are incorporated by
reference herein, have been audited by Boyer & Ritter, CPAs, independent
auditors, as set forth in their reports thereon included therein and
incorporated by reference herein. Such financial statements are incorporated by
reference herein in reliance upon such reports given upon the authority of such
firm as experts in accounting and auditing.
The combined financial statements of Donno Company, Inc. and affiliates
appearing in the Company's Current Report on Form 8-K dated January 31, 1997, as
amended by its Form 8-K/A dated July 10, 1997, which are incorporated by
reference herein, have been audited by Paternostro, Callahan & DeFreitas, LLP,
independent auditors, as set forth in their report thereon included therein and
incorporated by reference herein. Such financial statements are incorporated by
reference herein in reliance upon such report given upon the authority of such
firm as experts in accounting and auditing.
The financial statements of Apex Waste Services, Inc. appearing in the
Company's Current Report on Form 8-K dated March 31, 1997, as amended by its
Form 8-K/A dated July 10, 1997, which are incorporated by reference herein, have
been audited by Daniel P. Irwin & Associates, P.C., independent auditors, as set
forth in their report thereon included therein and incorporated by reference
herein. Such financial statements are incorporated by reference herein in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
The combined financial statements of Waste Services, Inc. and affiliates at
December 31, 1996 and for the year then ended appearing in the Company's Current
Report on Form 8-K dated May 12, 1997, as amended by its Forms 8-K/A dated July
11, 1997 and July 25, 1997, which are incorporated by reference herein, have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
financial statements are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
The financial statements of Pappy, Inc. as of October 31, 1996 and 1995 and
for the years then ended appearing in the Company's Current Report on Form 8-K
dated August 15, 1997, as amended by its Form 8-K/A filed October 10, 1997,
which are incorporated by reference herein, have been audited by Ernst & Young
LLP, independent auditors, as set forth in their report thereon included therein
and incorporated by reference herein.
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<PAGE>
Such financial statements are incorporated by reference herein in reliance upon
such report given upon the authority of such firm as experts in accounting and
auditing.
The financial statements of Soil Rednediation of Philadelphia, Inc. and USA
Waste of Fairless Hills, Inc. appearing in the Company's Current Report on Form
8-K dated August 20, 1997 as amended by its Form 8-K/A dated November 3, 1997,
which are incorporated by reference herein, have been audited by Daniel P. Irwin
& Associates, P.C., independent auditors, as set forth in their report thereon
included therein and incorporated by reference herein. Such financial Statements
are incorporated by reference herein in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
The consolidated financial statements of Pine Grove, Inc. appearing in the
Company's Current Report on Form 8-K dated December 1, 1997 as amended by its
Form 8-K/A dated February 17, 1998, which are incorporated by reference herein,
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon included therein and incorporated herein by reference.
Such financial statements are incorporated herein by reference in reliance upon
such report given upon the authority of such firm as experts in accounting and
auditing.
-------------------
-21-
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY,
THE SELLING STOCKHOLDERS OR ANY OTHER PERSON. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH AN OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF
THE COMPANY SINCE SUCH DATE.
--------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information...................................... 2
Incorporation of Certain Documents By Reference............ 2
Risk Factors............................................... 4
Use of Proceeds............................................ 17
The Company................................................ 17
Registered Stockholders.................................... 18
Plan of Distribution....................................... 19
Legal Matters.............................................. 19
Experts.................................................... 19
</TABLE>
383,998 SHARES
Common Stock
EASTERN ENVIRONMENTAL SERVICES, INC.
--------------------
PROSPECTUS
MARCH __, 1998
--------------------
-22-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses payable by the
Registrant in connection with this Registration Statement.
Securities and Exchange Commission Registration Fee.. $ 2,740
Legal Fees and Expenses.............................. 25,000
Accounting Fees and Expenses......................... 10,000
Printing Fees and Expenses........................... 6,000
Miscellaneous Expenses............................... 2,500
-------
Total................................................ $46,240
=======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware (the
"DGCL") provides, in general, that a corporation incorporated under the laws of
the State of Delaware, such as the Company, may indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding (other than an action by or in the right
of the corporation) by reason of the fact that such person is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding if such person acted in good
faith and in a manner such person reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe such person's conduct was
unlawful. In the case of an action by or in the right of the corporation, a
Delaware corporation may indemnify any such person against expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
with the defense or settlement of such action or suit if such person acted in
good faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of the corporation, except that no indemnification
shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the corporation unless and only to the
extent that the court determines upon application that, despite the adjudication
of liability but in view of all circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses.
Article Tenth, Paragraph (a) of the Certificate of Incorporation of the
Company provides that each person who was or is made a party or is threatened to
be made a party to or is involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (hereinafter a "proceeding"),
by reason of the fact that he or she, or a person of whom he or she is the legal
representative, is or was a director or officer of the Company or is or was
serving at the request of the Company as a director, officer, employee or agent
of another company or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether or
not the basis of such proceeding is alleged action in an official capacity as a
director, officer, employee or agent, or in any other capacity while serving as
a director, officer, employee or agent, shall be indemnified and held harmless
by the Company to the fullest extent authorized by the DGCL, as the same exists
or may hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Company to provide broader
II-1
<PAGE>
indemnification rights than the DGCL permitted the Company to provide prior to
such amendment), against all expense, liability and loss (including attorneys'
fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to
be paid in settlement) reasonably incurred or suffered by such person in
connection therewith. Such indemnification continues as to a person who has
ceased to be a director, officer, employee or agent or in any other capacity
while serving as a director, officer, employee or agent and inures to the
benefit of his or her heirs, executors and administrators; provided, however,
that except as provided in Paragraph (b) of the Article Tenth (described below),
the Company shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person only if
such proceeding (or part thereof) was authorized by the board of directors of
the Company. Article Tenth, Paragraph (a) further provides that such right to
indemnification shall be a contract right and shall include the right to be paid
by the Company the expenses incurred in defending any such proceeding in advance
of its final disposition; provided, however, that if the DGCL requires, the
payment of such expenses incurred by a director or officer (in his or her
capacity as a director or officer and not in any other capacity in which service
was or is rendered by such person while a director or officer, including,
without limitation, service to an employee benefit plan) in advance of the final
disposition of a proceeding shall be made only upon delivery to the Company of
an undertaking, by or on behalf of such director or officer, to repay all
amounts so advanced if it shall ultimately be determined that such director or
officer is not entitled to be indemnified under the Certificate of Incorporation
or otherwise. The Company may, by action of its Board of Directors, provide
indemnification to employees and agents of the Company with the same scope and
effect as the foregoing indemnification of directors and officers. The foregoing
right to indemnification and advancement of expenses is not exclusive.
Article Tenth, Paragraph (b) of the Certificate of Incorporation provides
further that if a claim described under Paragraph (a) of Article Tenth is not
paid in full by the Company within thirty (30) days after a written claim has
been received by the Company, the claimant may at any time thereafter bring suit
against the Company to recover the unpaid amount of the claim and, if
successful, in whole or in part, the claimant shall be entitled to be paid also
the expense of prosecuting such claim. It shall be a defense to any such action
(other than an action brought to enforce a claim for expenses incurred in
defending any proceeding in advance of its final disposition where the required
undertaking, if any is required, has been tendered to the Company) that the
claimant has not met the standards of conduct that make it permissible under
the DGCL for the Company to indemnify the claimant for the amount claimed, but
the burden of providing such defense shall be on the Company. Neither the
failure of the Company (including its Board of Directors, independent legal
counsel or its stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because he or she has met the applicable standard of conduct
set forth in the DGCL, nor an actual determination by the Company (including its
Board of Directors, independent legal counsel, or its stockholders) that the
claimant has not met such applicable standard or conduct, shall be a defense to
the action or create a presumption that the claimant has not met the applicable
standard of conduct.
As permitted by Article Tenth of the Certificate of Incorporation and
Section 145(g) of the DGCL, the directors and officers of the Company and its
subsidiaries are covered by policies of insurance under which they are insured,
within limits and subject to certain limitations, against certain expenses in
connection with the defense of actions, suits or proceedings and certain
liabilities that might be imposed as a result of such actions, suits or
proceedings, in which they are parties by reason of being or having been
directors or officers; the Company is similarly insured, with respect to certain
payments it might be required to make to its directors or officers under the
applicable statutes and its charter provisions. The Company has also entered
into indemnification agreements with certain of its directors and officers.
II-2
<PAGE>
The Company is also indemnified against certain liabilities, including
liabilities under the Securities Exchange Act of 1934, or will contribute
payments that the certain underwriters may be required to make in respect
thereof, in an underwriting agreement executed in connection with the public
offering of 5,175,000 shares of Common Stock of the Company under a
Registration Statement on Form S-3 (File No. 333-27245) filed by the Company.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) EXHIBITS:
Exhibit
Number Description
- ------- -----------
5 Opinion of Drinker Biddle & Reath LLP
23.8 Consent of Drinker Biddle & Reath LLP (included in Exhibit 5 Opinion)
_____________
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.
II-3
<PAGE>
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3, and the information required to be
included in a post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Mt. Laurel, New Jersey on March 9, 1998.
EASTERN ENVIRONMENTAL SERVICES,INC.
By: /s/Louis D. Paolino, Jr.
---------------------------------------
Louis D. Paolino, Jr.
Chairman of the Board and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons, in the
capacities indicated, on March 9, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- -------------------------- ----------------------------- ----
<S> <C> <C>
/s/ Louis D. Paolino, Jr. Chairman of the March 9, 1998
- -------------------------- Board and Chief
Louis D. Paolino, Jr. Executive Officer
(Principal Executive Officer)
/s/ Gregory M. Krzemien Chief Financial March 9, 1998
- -------------------------- Officer and
Gregory M. Krzemien Treasurer
(Principal Financial Officer)
/s/ Ronald Pirollo Controller March 9, 1998
- --------------------------
Ronald Pirollo
George O. Moorehead* Director March 9, 1998
- --------------------------
George O. Moorehead
Kenneth C. Leung* Director March 9, 1998
- --------------------------
Kenneth C. Leung
</TABLE>
- --------------------
*Gregory M. Krzemien, pursuant to a Power of Attorney executed by each of the
directors and officers noted above and included in the signature page of the
initial filing of this Registration Statement, by signing his name hereto, does
hereby sign and execute this Amendment No. 1 to Registration Statement on behalf
of the persons noted above, in the capacities indicated, and does hereby sign
and execute this Amendment No. 1 to Registration Statement on his own behalf, in
the capacity indicated.
/s/ Gregory M. Krzemien
-------------------------
Gregory M. Krzemien
II-5
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
5 Opinion of Drinker Biddle & Reath LLP
</TABLE>
II-6
<PAGE>
Exhibit 5
---------
DRINKER BIDDLE & REATH LLP
1345 Chestnut Street
Philadelphia, PA 19107-3496
Phone: (215) 988-2700
March 9, 1998
Eastern Environmental Services, Inc.
1000 Crawford Place, Suite 400
Mt. Laurel, New Jersey 08054
Re: Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
We have acted as counsel to Eastern Environmental Services, Inc., a
Delaware corporation (the "Company"), in connection with the preparation and
filing with the Securities and Exchange Commission of a Registration Statement
on Form S-3 (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), registering an aggregate of 383,998 shares of
the Company's Common Stock, par value $.01 per share (the "Shares"), 381,998 of
which are currently issued and outstanding (the "Outstanding Shares") and 2,000
of which are issuable upon the exercise of a warrant (the "Warrant Shares"), for
resale by the several Registered Stockholders (as defined in the Registration
Statement).
In this connection, we have examined the originals or copies, certified or
otherwise identified to our satisfaction, of the Certificate of Incorporation
and the By-laws of the Company, resolutions of the Company's Board of
Directors, and such other documents and corporate records relating to the
Company and the issuance and sale of the Outstanding Shares and the Warrant
Shares as we have deemed appropriate. This opinion is based exclusively on the
General Corporation Law of the State of Delaware.
In all cases, we have assumed the legal capacity of each natural person
signing any of the documents and corporate records examined by us, the
genuineness of signatures, the authenticity of documents submitted to us as
originals, the conformity to authentic original documents of documents submitted
to us as copies and the accuracy and completeness of all corporate records and
other information made available to us by the Company.
On the basis of the foregoing, we are of the opinion that the Outstanding
Shares have been validly issued and are fully paid and non-assessable by the
Company, and that the Warrant Shares, upon exercise of the warrant and payment
therefor in accordance with the terms thereof, will be validly issued, fully
paid and non-assessable by the Company.
We hereby consent to the reference to our firm under the caption "Legal
Matters" in the prospectus included in the Registration Statement and to the
filing of this opinion as an exhibit to the Registration Statement. In giving
this consent we do not admit that we come within the categories of persons whose
consent is required under Section 7 of the Securities Act.
Very truly yours,
/s/ DRINKER BIDDLE & REATH LLP
DRINKER BIDDLE & REATH LLP
