Registration No. 333-
As filed with the Securities and Exchange Commission on March 20, 1998.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ALLIED WASTE INDUSTRIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 88-0228636
(State or Other Jurisdiction (I.R.S. Employer Identification Number)
of Incorporation or Organization)
15880 North Greenway/Hayden Loop, Suite 100
Scottsdale, Arizona 85260
(602) 423-2946
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
ALLIED WASTE INDUSTRIES, INC. 1994 AMENDED AND RESTATED INCENTIVE STOCK PLAN
(Full Title of Plan)
Henry L. Hirvela
Allied Waste Industries, Inc.
15880 North Greenway/Hayden Loop, Suite 100
Scottsdale, Arizona 85260
(602) 423-2946
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
With copies to:
David C. Golay
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
(212) 859-8000
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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Proposed Maximum Proposed
Title of Amount to Offering Maximum Aggregate Amount of
Securities to be Registered be registered (1) Price Per Share Offering Price (2) Registration Fee
(2) (2)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Common Stock, par value $.01 per share 1,000,000 $24.625 $24,625,000 $7,264
======================================================================================================================
<FN>
(1) Pursuant to Rule 416(a), also registered hereunder is an indeterminate
number of shares of Common Stock issuable as a result of the anti-dilution
provisions of the Plan.
(2) Pursuant to Rule 457(c), the registration fee is calculated on the basis of
the high and low prices per share of Common Stock, as reported by the
Nasdaq Stock Market, Inc. on March 17, 1998. Pursuant to General
Instruction E. to Form S-8, the registration fee is calculated only with
respect to the additional securities registered under the Plan.
This registration statement registers additional securities related to the
Allied Waste Industries, Inc. 1994 Amended and Restated Incentive Stock
Plan of the same class as other securities for which a registration
statement on Form S-8, no. 33-79654 (the Previous Registration Statement",
has been previously filed. Pursuant to General Instruction E. of Form S-8,
the contents of the Previous Registration Statement are hereby incorporated
by reference.
</FN>
</TABLE>
<PAGE>
PROSPECTUS
1,000,000 Shares
ALLIED WASTE INDUSTRIES, INC.
Common Stock
The 1,000,000 shares of common stock, par value $.01 per share (the "Common
Stock"), of Allied Waste Industries, Inc. (the "Company" or "Allied") offered
hereby are issuable upon the exercise of certain options granted to the Selling
Security Holders under the Company's 1994 Amended and Restated Incentive Stock
Plan and are being offered (the "Offering") by the Selling Security Holders. The
Company will not receive any of the proceeds from the sale of the shares of
Common Stock offered hereby. See "Selling Security Holders."
The Company's Common Stock is traded on the National Market Tier of The
Nasdaq Stock Market ("Nasdaq") under the symbol "AWIN." On March 17, 1998, the
last reported closing sale price of the Common Stock on Nasdaq was $24.6875 per
share.
The Common Stock may be offered and sold from time to time by Selling
Security Holders named herein under the caption "Selling Security Holders"
through dealers or agents or directly to one or more purchasers in fixed price
offerings, in negotiated transactions, at market prices prevailing at the time
of sale or at prices related to such market prices. The terms of the Offering of
Common Stock in respect of which this Prospectus is being delivered, including
any public offering price, any commissions paid to dealers or agents and the
proceeds to the Selling Security Holders, and any other material terms shall be
as set forth in a Prospectus Supplement. See "Plan of Distribution."
See "Risk Factors" beginning on page 5 for a discussion of certain factors
that should be considered in connection with an investment in the Common Stock.
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 20, 1998.
<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. 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 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 contained 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
Page
Incorporation of Certain Documents by Reference..................... 3
The Company......................................................... 4
Risk Factors........................................................ 5
Disclosure Regarding Forward Looking Statements..................... 11
Selling Security Holders............................................ 11
Plan of Distribution................................................ 12
Legal Matters....................................................... 14
Experts............................................................. 14
Available Information............................................... 14
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission
pursuant to the Exchange Act are incorporated herein by reference (i) the
Company's Annual Report on form 10-K for the year ended December 31, 1996, as
amended; (ii) the Company's Quarterly Reports on Form 10-Q, as amended, for the
quarters ended March 31, 1997, June 30, 1997 and September 30, 1997; (iii) the
Company's Definitive Proxy Materials in accordance with Schedule 14A dated June
10, 1997; (iv) the Company's Current Reports on Form 8-K, as amended, dated
January 9, 1997, January 30, 1997, February 14, 1997, February 19, 1997, May 2,
1997, August 27, 1997 and November 4, 1997; (v) the description of the Common
Stock set in the Company's Form 10 dated May 14, 1991; and (vi) and all other
reports filed by the Company pursuant to Section 13(a), 14 or 15(d) of the
Exchange Act since December 31, 1996.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act after the date of this Prospectus and before
the termination of the Offering will be deemed to be incorporated by reference
in this Prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference in this Prospectus shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained in this Prospectus or in any other subsequently filed document which
also is or is deemed to be incorporated by reference modifies or replaces such
statement.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon the written or oral request of such person, a copy
of any or all of the documents incorporated by reference in this Prospectus,
other than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into the information that this Prospectus
incorporates. In addition, a copy of the Company's most recent annual report to
stockholders will be promptly furnished, without charge, upon written or oral
request. All such requests should be directed to Allied Waste Industries, Inc.,
15880 North Greenway-Hayden Loop, Suite 100, Scottsdale, Arizona 85260, Attn:
Investor Relations, telephone (602) 423-2946.
<PAGE>
THE COMPANY
The Company is a major solid waste management company in the United
States, as measured by revenues. The Company is a vertically-integrated,
non-hazardous solid waste management company providing collection, transfer,
processing and disposal services. As of January 31, 1998, the Company serves
approximately 1.4 million customers in 18 states. The Company currently conducts
its operations through a network of 79 collection companies, 43 transfer
stations, 57 landfills and 21 recycling facilities. The Company has revenues of
$246.7 million for the year ended December 31, 1996 and $205.1 million and
$633.3 million for the nine months ended September 30, 1996 and 1997,
respectively. The substantial increase in revenues in the first nine months of
1997 compared to the same period in 1996 is primarily attributable to the
acquisition by Allied of the solid waste business of Laidlaw Inc.
("Laidlaw") on December 30, 1996 (the "Laidlaw Acquisition").
Allied was incorporated under the laws of the State of Delaware in July
1989. The principal executive offices of Allied are located at 15880 North
Greenway-Hayden Loop, Suite 100, Scottsdale, Arizona, 85260 and its telephone
number is (602) 423-2946.
<PAGE>
RISK FACTORS
In evaluating the Company and its business, prospective investors should
carefully consider all of the information set forth in this Prospectus and
should give particular attention to the following risk factors.
Risks Associated with Allied's Strategy; Potential Difficulty in
Obtaining Suitable Landfills, Collection Operations, Transfer Stations
and Permits
Allied's strategy depends on its ability to identify and acquire
appropriate landfills, collection operations and transfer stations. There can be
no assurance that Allied will be able to locate appropriate acquisition
candidates, that any identified candidates will be acquired or that acquired
operations will be integrated effectively or prove profitable. Completion of an
acquisition requires the expenditure of sizable amounts of capital and the
competition among companies pursuing an acquisition strategy may increase
capital requirements. Allied could be forced to alter its strategy in the future
if such candidates become unavailable or too costly. In addition, obtaining
permits to operate non-hazardous solid waste landfills has become increasingly
difficult and expensive, often taking a number of years to obtain, requiring
numerous hearings and compliance with zoning, environmental and other regulatory
measures, and often being subject to resistance from citizen or other groups.
There can be no assurance that Allied will be successful in obtaining the
permits it requires, and an inability to receive such permits could have an
adverse effect on Allied's future results of operations. In some areas, suitable
land may be unavailable for new landfill sites. There can be no assurance that
Allied will be successful in obtaining new landfill sites or expanding the
permitted capacity of its current landfills once its landfill capacity has been
consumed. In such event, Allied could be forced to dispose of collected waste at
landfills operated by its competitors, which could have an adverse effect on
Allied's landfill revenues and collection expenses.
Limited Operating History in Regard to Acquired Businesses
Allied has a limited operating history with regard to a significant
portion of its operations. During 1996, Allied acquired 21 companies, excluding
the Laidlaw Acquired Businesses (as defined below), which collectively comprised
approximately $78.8 million or 31.9% of Allied's revenue in 1996. In December
1996, Allied acquired (the "Laidlaw Acquisition") substantially all of the non-
hazardous solid waste management businesses conducted by Laidlaw Inc.
("Laidlaw") in the United States and Canada. The businesses acquired from
Laidlaw (on a pro forma basis after giving effect to the sale by Allied of all
of the Canadian solid waste business acquired in the Laidlaw Acquisition, the
"Laidlaw Acquired Businesses") generated revenues for the twelve months ended
November 30, 1996 of approximately $494.5 million. The revenues for the year
ended December 31, 1996 generated by the operations of Allied excluding such
Laidlaw Acquired Businesses were approximately $246.7 million.
Allied expects to continue to acquire appropriate landfills, collection
operations and transfer stations in the future. The financial position and
results of operations of Allied will depend to a large extent on Allied's
ability to integrate acquired operations effectively and to realize expected
financial benefits and operational efficiencies. There can be no assurance that
Allied's efforts to integrate acquired operations will be effective, or that
expected financial benefits and operational efficiencies will be realized.
Failure to effectively integrate acquired operations could have an adverse
effect on Allied's future results of operations. As Allied continues to pursue
its acquisitions strategy in the future, its financial position and results of
operations may fluctuate significantly from period to period.
<PAGE>
Capital Requirements and Limited Working Capital
Allied intends to fund its cash needs through cash flow from operations
and borrowings under an Amended and Restated Bank Agreement (the "Senior Credit
Facility") dated October 1, 1997 with Goldman Sachs Credit Partners, L.P., as
syndication agent, Credit Suisse First Boston, as administrative agent, and
Citibank, N.A., as documentation agent, and the other bank lenders named therein
and its equipment lease facilities. Because of the capital intensive nature of
the solid waste industry, Allied may use amounts in excess of the cash generated
from operations to retire and service debt and fund acquisitions, landfill
development and capital expenditures. A substantial portion of Allied's
available cash will be required to be applied to service indebtedness, which is
expected to include approximately $156.1 million in annual principal and
interest payments. During 1998, Allied also expects to spend approximately
$209.3 million for capital, closure and post-closure, and remediation
expenditures and has provided approximately $311 million in financial assurance
obligations related to its landfill operations. Amounts expended on capital
expenditures and financial assurance obligations will increase as a result of
any acquisitions or expansions of Allied's operations. As a result of these
capital requirements, Allied may periodically have low levels of working capital
or be required to finance working capital deficits.
Further regulatory action by federal, state and local governments could
accelerate expenditures for closure and post-closure monitoring and obligate
Allied to spend sums in addition to those presently reserved for such purposes.
These factors, together with the other factors discussed above, could
substantially increase Allied's operating costs and impair Allied's ability to
invest in its facilities.
Allied's ability to make scheduled payments of principal of, or to pay
interest on, or to refinance its indebtedness depends on its future performance,
which, to a certain extent, is subject to general economic, financial,
competitive, legislative, regulatory and other factors beyond its control. Based
upon the current level of operations and anticipated growth, management of
Allied believes that available cash flow, together with available borrowing
under the Senior Credit Facility, and other sources of liquidity, will be
adequate to meet Allied's anticipated future requirements for working capital,
letters-of-credit, capital expenditures and scheduled payments of principal of,
and interest on debt incurred under the Senior Credit Facility, and interest on
the Allied Waste North America ("AWNA") 10.25% Senior Subordinated Notes due
2006 (the "AWNA Notes") and, commencing December 1, 2002, on Allied's 11.30%
Senior Discount Notes due 2007 (the "Allied Notes"). However, the principal
payments at maturity on the AWNA Notes and the Allied Notes may require
refinancing. There can be no assurance that Allied's business will generate
sufficient cash flow from operations or that future financings will be available
in an amount sufficient to enable Allied or AWNA to service its indebtedness or
to make necessary capital expenditures, or that any refinancing would be
available on commercially reasonable terms, or at all. Additionally, depending
on the timing, amount and structure of any future acquisitions and the
availability of funds under the Senior Credit Facility, Allied may need to raise
additional capital to fund the acquisition and integration of additional solid
waste businesses. There can be no assurance that Allied will be able to secure
such additional funding on favorable terms, if at all.
Competition from Other Companies and Municipalities; Landfill Alternatives
The non-hazardous solid waste industry is led by five large national
waste management companies, one of which is Allied, and includes numerous
regional and local companies, all of which contribute to the high level of
competition that characterizes the industry. Some of these companies have
considerably greater financial and operational resources than Allied. In
addition, cities and counties 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.
<PAGE>
Alternatives to landfill disposal, such as recycling and composting,
are increasingly being used, and incineration continues to be utilized in some
markets in which Allied operates. There has also been an increasing trend at the
state and local levels to mandate waste reduction at the source and to prohibit
the disposal of certain types of wastes, such as yard wastes, at landfills. This
trend may result in a reduction in the volume of waste going to landfills in
certain areas, which may affect Allied's ability to operate its landfills at
their full capacity and/or affect the prices that can be charged for landfill
disposal services. In addition, most of the states in which Allied operates
landfills have adopted plans or requirements that set goals for specified
percentages of certain solid waste items to be recycled. These recycling goals
will be phased in over the next few years.
Substantial Leverage; Ability to Service Debt; Dependence on Distributions from
Subsidiaries
Allied has substantial indebtedness with significant debt service
requirements and is highly leveraged. At September 30, 1997, Allied's
consolidated debt was approximately $1,168.3 million. The degree to which Allied
is leveraged has important consequences, including the following: (i) the
ability of Allied to obtain additional financing in the future, whether for
working capital, capital expenditures, acquisitions or other purposes, may be
impaired, (ii) a substantial portion of Allied's cash flow from operations is
required to be dedicated to the payment of principal and interest on its debt,
thereby reducing funds available to Allied for other purposes, (iii) Allied's
flexibility in planning for or reacting to changes in market conditions may be
limited, (iv) Allied may be more vulnerable in the event of a downturn in its
business and (v) to the extent of Allied's outstanding debt under the Senior
Credit Facility at variable rates that have not been hedged, Allied will be
vulnerable to increases in interest rates. At September 30, 1997, approximately
$297 million in aggregate borrowings were outstanding under the Senior Credit
Facility. All borrowings under the Senior Credit Facility will mature in 2003.
The ability of Allied to meet its debt service obligations will depend
on the future operating performance and financial results of Allied, which will
be subject in part to factors beyond the control of Allied. Although Allied
believes that its cash flow will be adequate to meet its interest payments,
there can be no assurance that Allied will continue to generate earnings in the
future sufficient to cover its fixed charges. If Allied is unable to generate
earnings in the future sufficient to cover its fixed charges and is unable to
borrow sufficient funds under either the Senior Credit Facility or from other
sources, it may be required to refinance all or a portion of its existing debt
or to sell all or a portion of its assets. There can be no assurance that a
refinancing would be possible, nor can there be any assurance as to the timing
of any asset sales or the proceeds which Allied could realize therefrom. In
addition, the terms of certain of its debt restrict Allied's ability to sell
assets and Allied's use of the proceeds therefrom.
Allied holds all of its assets and conducts all of its operations
through its subsidiary AWNA and AWNA's subsidiaries. Allied thus derives all of
its operating income and cash flow from AWNA and must rely upon distributions
from AWNA to generate the funds necessary to meet its obligations. If for any
reason, including a shortfall in anticipated operating results or proceeds from
asset sales, AWNA were unable to meet its debt service obligations, it would be
in default under the terms of certain of its debt. In the event of such a
default, the holders of such debt could elect to declare all of such debt
immediately due and payable, including accrued and unpaid interest, and to
terminate their commitments with respect to funding obligations under such debt.
In addition, such holders could proceed against any collateral which, in the
case of certain debt, consists of the capital stock of AWNA and its subsidiaries
and substantially all of the assets of AWNA and its subsidiaries. Any default
with respect to any of AWNA's debt could result in a default under other debt or
result in the bankruptcy of AWNA.
<PAGE>
Restrictions Imposed by the Senior Credit Facility, the Allied Notes and the
AWNA Notes
The Senior Credit Facility and the indentures relating to the Allied
Notes and the AWNA Notes contain a number of significant covenants that, among
other things, will restrict the ability of Allied and its subsidiaries to
dispose of assets, incur additional indebtedness, incur liens on property or
assets, repay other indebtedness, pay dividends, enter into certain investments
or transactions, repurchase or redeem capital stock, engage in mergers or
consolidations, or engage in certain transactions with subsidiaries and
affiliates and otherwise restrict corporate activities. There can be no
assurance that such restrictions will not adversely affect Allied's ability to
finance its future operations or capital needs or engage in other business
activities that may be in the interest of Allied. In addition, the Senior Credit
Facility also requires Allied to maintain compliance with certain financial
ratios. The ability of Allied to comply with such ratios may be affected by
events beyond Allied's control. A breach of any of these covenants or the
inability of Allied to comply with the required financial ratios could result in
a default under the Senior Credit Facility or either or both of the indentures
relating to the Allied Notes and the AWNA Notes. In the event of any such
default under the Senior Credit Facility, the lenders under the Senior Credit
Facility could elect to declare all borrowings outstanding under the Senior
Credit Facility, together with accrued interest and other fees, to be due and
payable, to require Allied to apply all of its available cash to repay such
borrowings or to prevent Allied from making debt service payments on any
indebtedness of Allied. If Allied were unable to repay any such borrowings when
due, the lenders could proceed against their collateral. In the event of a
default under the indenture relating to the Allied Notes or the AWNA Notes, the
holders of such notes could elect to declare such notes to be due and payable.
If the indebtedness under the Senior Credit Facility, the Allied Notes or the
AWNA Notes were to be accelerated, it is unlikely that the assets of Allied
and/or AWNA would be sufficient to repay amounts due on other debt securities
then outstanding.
Reliance on Management
Allied will rely significantly on the services of its senior management
team. Allied could be adversely affected if any member of the senior management
team were unwilling or unable to continue in Allied's employ. There can be no
assurance that Allied will be successful in locating, hiring or retaining
qualified personnel.
Cost of Compliance with Environmental Regulations; Risk of Future Litigation
The scope and stringency of laws and regulations designed to protect
the environment have increased dramatically. Compliance with the evolving and
expanding regulatory requirements, including the adoption in October 1991 of
Subtitle D regulations ("Subtitle D") pursuant to the Resource Conservation and
Recovery Act of 1976, as amended ("RCRA"), has been and will continue to be
costly. Rigorous regulatory standards require waste management companies to
enhance or replace equipment and to modify landfill operations or, in some
cases, to close landfills. There can be no assurance that Allied will be able to
implement price increases sufficient to offset the cost of complying with these
standards. In addition, environmental regulatory changes could accelerate
expenditures for closure and post-closure monitoring at solid waste facilities
and obligate Allied to spend sums in addition to those presently reserved for
such purposes. These factors could increase substantially Allied's operating
costs as well as the possibility of the impairment of Allied's investment in its
facilities.
In addition to the costs of complying with environmental regulations,
Allied will continue to be involved in legal proceedings in the ordinary course
of business. Government agencies may seek to impose fines on Allied for alleged
failure to comply with laws and regulations or to revoke or to deny the renewal
of, Allied's permits and licenses. In addition, governmental agencies, as well
as surrounding landowners, may assert claims against Allied alleging
environmental damage or violations of permits and licenses pursuant to which
Allied operates. Citizens' groups have become increasingly active in challenging
the grant or renewal of permits and licenses, and responding to such challenges
has further increased the costs associated with permitting new facilities or
expanding current facilities. A significant judgment against Allied, the loss of
a significant permit or license or the imposition of a significant fine could
have a material adverse affect on Allied's financial condition.
Certain of Allied's waste disposal operations traverse state
boundaries. Such operations could be adversely affected if the federal
government or a state in which a landfill is located limits or prohibits,
imposes discriminatory fees on, or otherwise seeks to discourage disposal,
within state boundaries, of waste collected outside of the state.
As a condition to the Laidlaw Acquisition, Allied engaged Emcon
Environmental Services, Inc. ("Emcon"), an independent environmental consultant,
to conduct environmental assessments of the subsidiaries acquired in the Laidlaw
Acquisition (the "LSW Subsidiaries"). In its reports (the "Emcon Report"), Emcon
identified several contaminated landfills and other locations, including
landfills and other locations owned by the LSW Subsidiaries, that could pose
significant sources of liability to the LSW Subsidiaries. The costs of
performing the investigation, design, remediation and allocation of
responsibility to the subsidiaries of Allied vary significantly between sites.
Based on the information available, Allied recorded a provision of $51.5 million
for environmental matters, including closure and post-closure costs, in the 1996
consolidated statement of operations and expects these amounts to be disbursed
over the next 30 years. The actual liability at these sites cannot currently be
determined due to a number of uncertainties including the extent of the
contamination, the appropriate remedy, the financial viability of other
potentially responsible parties and the ultimate apportionment of responsibility
among such potentially responsible parties.
The representations made by the Laidlaw sellers in the Stock Purchase
Agreement, dated September 17, 1996, among Allied, AWNA and Laidlaw, among
others, relating to the Laidlaw Acquisition (the "Laidlaw Acquisition
Agreement") with respect to environmental matters (i) terminated on the closing
of the Laidlaw Acquisition as to all matters disclosed in writing to Allied at
least five business days prior to the closing or disclosed with specificity in
the Emcon Report and (ii) terminate on the third anniversary of the closing of
the Laidlaw Acquisition as to all matters other than those described in clause
(i) and which are known to Laidlaw on the closing date. The Laidlaw Acquisition
Agreement further provided that Laidlaw's indemnification obligations with
respect to environmental matters would be limited to the amount by which the
aggregate of all such damages exceed a $1.0 million basket, without giving
effect to any materiality qualifications. At the closing of the Laidlaw
Acquisition, Allied and Laidlaw entered into a Special Environmental Indemnity,
which provided that the indemnity in respect of properties located at Etobicoke,
Ontario, Delafield, Wisconsin and Gary Lagoons, Indiana would not be subject to
the three-year limitation or any basket. In connection with Allied's repurchase
of two junior subordinated debentures with an aggregate face amount of $318.3
million and a warrant to acquire 20.4 million shares of Allied common stock, all
of which were issued as consideration in the Laidlaw Acquisition, for cash
consideration of $230 million, Allied has agreed that the indemnity for damages
arising out of the Etobicoke, Ontario and Delafield, Wisconsin sites will be
limited to a three-year period from the closing of the Laidlaw Acquisition and
to an amount in excess of a $25 million basket with such $25 million basket to
be reduced by any damages to which the $1 million basket in the Laidlaw
Acquisition Agreement applies.
Hazardous Substances Liability
The Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended ("CERCLA"), has been interpreted to impose joint and
several liability on current and former owners or operators of facilities at
which there has been a release or a threatened release of a "hazardous
substance" and on persons who generate, transport or arrange for the disposal of
such substances at the facility. Hundreds of substances are defined as
"hazardous" under CERCLA and their presence, even in minute amounts, can result
in substantial liability. The statute provides for the remediation of
contaminated facilities and imposes costs on the responsible parties. The
expense of conducting such a cleanup can be significant. Notwithstanding its
efforts to comply with applicable regulations and to avoid transporting and
receiving hazardous substances, such substances may be present in waste
collected by Allied or disposed of in its landfills, or in waste collected,
transported or disposed of in the past by acquired companies. Cleanup liability
may arise under various state laws similar to CERCLA. As used in this
Prospectus, "non-hazardous waste" means substances, including asbestos, that are
not defined as hazardous wastes under federal regulations.
<PAGE>
Potential Undisclosed Liabilities Associated with Acquisitions
In connection with any acquisition of business or assets by Allied,
there may be liabilities that Allied fails or is unable to discover, including
liabilities arising from non-compliance with environmental laws by prior owners,
and for which Allied, as a successor owner, may be responsible.
Potential Uninsured or Underinsured Environmental Liabilities
As is typically the case in the solid waste industry, Allied is able to
obtain only very limited environmental impairment insurance regarding its
landfills. An uninsured or underinsured claim of sufficient magnitude would
require Allied to fund such claim from cash flow generated by operations or
borrowings under the Senior Credit Facility or other sources of liquidity. There
can be no assurance that Allied would be able to fund any such claim from
operations, the Senior Credit Facility or elsewhere.
Laidlaw Tax Indemnification
Laidlaw has disclosed to Allied the existence of a tax controversy (the
"Tax Controversy") in the amount of more than $385 million with the United
States Internal Revenue Service (the "IRS") involving the consolidated U.S.
federal income tax liability for the fiscal years 1986 through 1991 of the
members of an affiliated group of corporations (the "LTI U.S. Consolidated Tax
Group") within the meaning of Section 1504(c) of the Internal Revenue Code
("IRC"), of which Laidlaw Transportation, Inc. ("LTI") is the common parent
corporation (which includes LTI, those Laidlaw Acquired Businesses which are
incorporated in the U.S. (the "LSW U.S. Subsidiaries"), and other U.S.
subsidiaries of LTI which were not acquired in the Laidlaw Acquisition). The LTI
U.S. Consolidated Tax Group has also received notice that fiscal years 1992,
1993 and 1994 will be examined regarding this issue. Under Treasury Regulations
promulgated under Section 1502 of the IRC, each member of the LTI U.S.
Consolidated Tax Group including each LSW U.S. Subsidiary, is or could be
severally liable for United States federal income tax liabilities of the entire
LTI U.S. Consolidated Tax Group, including all amounts at issue in the Tax
Controversy which are ultimately determined to be owed.
Allied has obtained an indemnity from Laidlaw certain of its
subsidiaries (the "Laidlaw Group") which covers the amounts at issue in the Tax
Controversy for which any LSW U.S. Subsidiary may ultimately be found liable.
The obligation of the Laidlaw Group is to indemnify Allied in respect of amounts
at issue in the Tax Controversy is a general, unsecured obligation of the
Laidlaw Group. The ability of the Laidlaw Group to pay and fulfill such
indemnification obligation will depend on the financial condition of the Laidlaw
Group at the time of any required performance of such obligation, as to which
Allied has no assurance.
Shares Eligible for Future Sale; Potential Adverse Effect on Stock Price;
Registration Rights
Based on the number of outstanding shares of Common Stock as of February
28, 1998, Allied has outstanding a total of 112,670,209 shares of Common Stock,
including 804,942 shares of Common Stock subject to outstanding warrants and
7,189,986 shares of Common Stock subject to stock options granted under Allied's
stock options plans. See Note 8 of Notes to Allied's Consolidated Financial
Statements, included in Allied's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996, as amended, filed under the Exchange Act and
incorporated by reference herein. Of such shares, approximately 86,205,062
shares of Common Stock, and approximately, 572,827 shares issuable upon exercise
of warrants held by non-affiliates of Allied and 1,296,872 shares issuable upon
exercise of vested stock options held by non-affiliates of Allied will be
immediately eligible for sale in the public market without restriction, except
for shares purchased by or issued to an affiliate of Allied (within the meaning
of the Securities Act), which will be subject to the resale limitations of Rule
144 promulgated under the Securities Act. 26,376,765 shares of Common Stock are
owned by certain private securities investment funds affiliated with either
Apollo Advisors II, L.P. or the Blackstone Group (collectively, the "Apollo
Blackstone Investors"). For so long as the Apollo/Blackstone Investors remain an
affiliate of Allied, any shares of Common Stock held by the Apollo/Blackstone
Investors will only be available for public sale if such shares are registered
under the Securities Act of wold in accordance with an applicable exemption from
registration, such as Rule 144, pursuant to which the Apollo/Blackstone
Investors would be subject to the volume and other limitations under such rule.
Three months after the Apollo/Blackstone Investors were to cease to be an
affiliate of Allied, all of such shares held for more than two years would then
immediately become eligible for public sale without being subject to the
limitations of Rule 144. In addition, the Apollo/Blackstone Investors are
entitled to require Allied to register their shares of Common Stock at any time
after May 15, 1999 and holders of 129,250 shares of Common Stock and holders of
warrants to purchase 647,827 shares of Common Stock currently may require Allied
to register their shares of Common Stock. Allied and its directors, executive
officers and regional vice presidents have agreed not to sell, contract to sell
or otherwise dispose of any shares of Common Stock or any securities of Allied
that are substantially similar to the shares of Common Stock, or any other
security convertible into or exchangeable for, or that represent the right to
receive shares of Common Stock or any such similar securities, except for shares
of Common Stock issuable pursuant to convertible debt securities, warrants and
stock options outstanding on the date of this Prospectus Supplement and shares
of Common Stock (or securities convertible or exchangeable into shares of Common
Stock) to be issued solely in connection with acquisitions, for a period of 90
days after the date of this Prospectus Supplement without the prior written
consent of the Underwriter, except for the shares of Common Stock offered in the
Offerings.
No prediction can be made as to the effect, if any, that future sales
of shares, or the availability of shares for future sale, will have on the
market price of the Common stock prevailing from time to time. Sales of
substantial amounts of Common Stock (including shares issuable upon the exercise
of stock options), or the perception that such sales could occur, could
adversely affect prevailing market prices for the Common Stock.
Impact of Adverse Weather Conditions
The collection and landfill operations of Allied could be adversely
affected by protracted periods of inclement weather which delay the development
of landfill capacity, the transfer of waste or reduce the volume of waste
generated. There can be no assurance that protracted periods of inclement
weather will not have a material adverse effect on Allied's future results of
operations.
DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS
This Prospectus contains certain statements that are "Forward Looking
Statements" within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act. Those statements include, among other things, the
discussions of the Company's business strategy and expectations concerning
market position, future operations, margins, profitability, liquidity and
capital resources, as well as statements concerning the integration of the
operations of businesses and assets that have been acquired by the Company and
the achievement of financial benefits and operational efficiencies in connection
therewith. Although the Company believes that the expectations reflected in such
Forward Looking Statements are reasonable, they can give no assurance that such
expectations will prove to be correct. Generally, these statements relate to
business plans or strategies, projected or anticipated benefits or other
consequences of such plans or strategies, number of acquisitions and projected
or anticipated benefits from acquisitions made by or to be made by the Company,
or projections involving anticipated revenues, expenses, earnings, levels of
capital expenditures or other aspects of operating results and financial
conditions. All phases of the operations of the Company are subject to a number
of uncertainties, risks and other influences, many of which are outside the
control of the Company and any one of which, or a combination of which, could
materially affect the results of the Company's operations and whether the
Forward Looking Statements made by the Company ultimately prove to be accurate.
Important factors that could cause actual results to differ materially from the
Company's expectations are disclosed in this section and in "Risk Factors."
<TABLE>
SELLING SECURITY HOLDERS
The following table sets forth certain information regarding each
Selling Security Holder at December 31, 1997.
<CAPTION>
Percentage
Name Owned After
Number of Shares Owned Shares Owned Offering
Shares Offered Before Offering After Offering
<S> <C> <C> <C> <C>
Roger A. Ramsey................................. 500,000 (1) 1,141,848 (2) 908,848 0.9
Thomas H. Van Weelden........................... 500,000 (1) 1,529,194 (3) 1,295,860 1.2
<FN>
(1) Includes 300,000 shares of Common Stock that may be acquired on the exercise of options after the underlying
options vest.
(2) Includes (i) 694 shares of Common Stock that are beneficially owned by an
affiliate of Mr. Ramsey and (ii) 809,675 shares of Common Stock that may be
acquired on the exercise of options.
(3) Includes 632,175 shares of Common Stock that may be acquired on the exercise of options and warrants.
</FN>
</TABLE>
The number of shares of Common Stock set forth above under the caption
"Number of Shares Offered" represents the aggregate number of shares of Common
Stock offered by each Selling Security Holder. The number of shares of Common
Stock set forth above under the captions "Shares Owned Before Offering" and
`Shares Owned After Offering" represent the aggregate number of shares of Common
Stock beneficially owned by each Selling Security Holder before and after
completion of the Offering, respectively. The number set forth above under the
caption "Percentage Owned After Offering" represents the percentage of the
Common Stock beneficially owned by each Selling Security Holder after completion
of the Offering. Each Selling Security Holder may, but is not required to, sell
all of the shares of Common Stock owned by such Selling Security Holder.
Roger A. Ramsey is the current Chairman of the Board of the Company.
Thomas H. Van Weelden is the current President and Chief Executive Officer of
the Company.
PLAN OF DISTRIBUTION
The Selling Security Holders may offer the shares of Common Stock
subject to this Prospectus from time to time, on Nasdaq or otherwise, in one or
more offerings through underwriters, dealers or agents, or directly to one or
more purchasers in fixed price offerings, in negotiated transactions, at market
prices prevailing at the time of sale or at prices related to such market
prices.
If underwriters are used in any offering of shares of Common Stock, the
underwriter or underwriters with respect to such offering will be named in a
Prospectus Supplement. Only underwriters named in a Prospectus Supplement will
be deemed to be underwriters in connection with the shares of Common Stock
offered thereby. Firms not so named will have no direct or indirect
participation in the underwriting of such Common Stock, although such a firm may
participate in the distribution of such Common Stock under circumstances
entitling it to a dealer's commission. Unless otherwise set forth in the
Prospectus Supplement relating to such offering, any underwriting agreement
pertaining to any offering of shares of Common Stock will (i) entitle the
underwriters to indemnification by the Company and the Selling Security Holders
against certain civil liabilities under the Securities Act; (ii) provide that
the obligations of the underwriters will be subject to certain conditions
precedent; and (iii) provide that the underwriters will be obligated to purchase
all shares of such Common Stock so offered if any shares are purchased. If
underwriters are used in any offering of Common Stock, the names of such
underwriters, the anticipated date of delivery and other material terms of the
transaction will be set forth in the Prospectus Supplement relating to such
offering.
<PAGE>
If a dealer is used in any offering of Common Stock, the Selling
Security Holder will sell such Common Stock to the dealer as principal. The
dealer may then resell such Common Stock to the public at varying prices to be
determined by such dealer at the time of resale. The name of the dealer and the
material terms of the transaction will be set forth in the Prospectus Supplement
relating to such offering.
Common Stock may be offered through agents designated by the Selling
Security Holders from time to time. Any such agent will be named, and the terms
of any such agency will be set forth, in the Prospectus Supplement relating
thereto. Unless otherwise set forth in such Prospectus Supplement, any such
agent will be acting on a best efforts basis for the period of its appointment.
Dealers or agents named in a Prospectus Supplement may be deemed to be
underwriters (within the meaning of the Securities Act) of the Common Stock
offered thereby. Unless otherwise set forth in the applicable Prospectus
Supplement, such dealers or agents may, under agreements with the Selling
Security Holders, be entitled to indemnification by the Company or the Selling
Security Holders against certain civil liabilities under the Securities Act.
Underwriters, dealers and agents may engage in transactions with or
perform services for the Company in the ordinary course of business.
Offers to purchase Common Stock may be solicited, and sales thereof may
be made, by the Selling Security Holders directly to one or more purchasers in
fixed price offerings, in negotiated transactions, at market prices prevailing
at the time of sale or at prices related to such market prices. Certain of such
purchasers may be deemed to be underwriters with respect to any resale by them
of Common Stock so acquired. This Prospectus may be delivered by any such
purchaser in connection with any such resales. Such resales may be through
underwriters, dealers or agents, or directly to one or more purchasers, all in
the manner described above.
<PAGE>
LEGAL MATTERS
Certain legal matters in connection with the shares of Common Stock
offered hereby will be passed on for the Company by Fried, Frank, Harris,
Shriver and Jacobson, New York, New York.
EXPERTS
The audited consolidated financial statements incorporated by reference
in this prospectus and elsewhere in the registration statement have been audited
by Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are incorporated by reference in reliance upon
the authority of said firm as experts in giving said report.
The audited consolidated financial statements of Laidlaw Solid Waste
Management Group incorporated by reference in this Prospectus and elsewhere in
the Registration Statement have been audited by Coopers & Lybrand, independent
public accountants, as indicated in their report with respect thereto, and are
incorporated herein by reference in reliance upon the authority of said firm as
experts in accounting and auditing.
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission)" in Washington, D.C. a Registration Statement on Form S-8 under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
Common Stock offered by this Prospectus. Statements made in this Prospectus
regarding the contents of any contract or document are not necessarily complete
and, in each instance, reference is hereby made to the copy of such contract or
document filed to the Registration Statement. Each such statement is qualified
in its entirety by such reference. Certain portions of the Registration
Statement have not been included in this Prospectus. For further information,
reference is made to the Registration Statement and the exhibits thereto.
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 Commission. The Registration Statement (with exhibits), as well as such
reports, proxy statements and other information, can be inspected and copied at
the public reference facilities maintained by the Commission at its principal
offices at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, its
regional offices at Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60601 and 7 World Trade Center, 13th Floor, New York,
New York 10007, and at its site on the World Wide Web at http://www.sec.gov.
Copies of such material can also be obtained at prescribed rates from the Public
Reference Section of the Commission at its principal office at Judiciary Plaza,
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. The Common Stock is
listed on Nasdaq and material filed by the Company can be inspected at the
offices of Nasdaq at 1735 K Street, N.W., Washington, D.C. 20006.
<PAGE>
Item 8. Exhibits.
Exhibit Description
5.1 Opinion of Fried, Frank, Harris, Shriver and Jacobson
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Coopers & Lybrand
23.3 Consent of Fried, Frank, Harris, Shriver and Jacobson
(included in Exhibit 5.1 opinion)
24.1 Power of Attorney (included on signature page)
<PAGE>
POWER OF ATTORNEY
Each of the undersigned hereby appoints Roger A. Ramsey, Henry L.
Hirvela, Peter S. Hathaway, each of them, with full power to act alone, as
attorney and agents for the undersigned, with full power of substitution, for
and in the name, place and stead of the undersigned, to sign and file with the
Securities and Exchange Commission under the Securities Act of 1933 any and all
amendments and exhibits to this Registration Statement and any and all
applications, instruments and other documents to be filed with the Securities
and Exchange Commission pertaining to the registration of the securities covered
hereby, with full power and authority to do and perform any and all acts and
things whatsoever requisite or desirable.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Scottsdale,
State of Arizona, on March 20, 1998.
ALLIED WASTE INDUSTRIES, INC.
By: /s/ Henry L. Hirvela
Henry L. Hirvela
Vice President - Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons and in the
capacities indicated on March 20, 1998.
Signature Title
/s/ ROGER A. RAMSEY Chairman of the Board of Directors
Roger A. Ramsey
/s/ THOMAS H. VAN WEELDEN Director, President and Chief Executive Officer
Thomas H. Van Weelden (Principal Executive Officer)
/s/ HENRY L. HIRVELA Vice President - Chief Financial Officer
Henry L. Hirvela (Principal Financial Officer)
/s/ PETER S. HATHAWAY Vice President - Chief Accounting Officer
Peter S. Hathaway (Principal Accounting Officer)
/s/ NOLAN LEHMANN Director
Nolan Lehmann
/s/ ALAN B. SHEPARD Director
Alan B. Shepard
/s/ BRIAN A. O'LEARY Director
Brian A. O'Leary
/s/ MICHAEL GROSS Director
Michael Gross
/s/ HOWARD A. LIPSON Director
Howard A. Lipson
/s/ DENNIS HENDRIX Director
Dennis Hendrix
/s/ WARREN B. RUDMAN Director
Warren B. Rudman
/s/ VINCENT TESE Director
Vincent Tese
<PAGE>
EXHIBIT INDEX
Sequentially
Numbered
Exhibit Description Page
5.1 Opinion of Fried, Frank, Harris,
Shriver and Jacobson
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Coopers & Lybrand
23.3 Consent of Fried, Frank, Harris,
Shriver and Jacobson
24.1 Power of Attorney
Exhibit 5.1
March 19, 1998
Allied Waste Industries, Inc.
15880 North Greenway/Hayden Loop
Suite 100
Scottsdale, Arizona 85260
Ladies and Gentlemen:
We are acting as special counsel to Allied Waste Industries, Inc., a
Delaware corporation (the "Company"), in connection with the registration,
pursuant to a Registration Statement on Form S-8, of 1,000,000 shares (the
"Shares") of the Company's common stock, par value $.01 per share, which may be
issued upon the exercise of options and/or rights that have been granted to the
employees/officers named as Selling Security Holders in the Registration
Statement on Form S-8 under the Company's 1994 Amended and Restated Incentive
Stock Plan (the "Plan").
In connection with this option, we have examined the originals, or
certified, conformed or reproduction copies, of all records, agreements,
instruments and documents as we have deemed relevant or necessary as the basis
for the opinion hereinafter expressed. In all such examinations, we have assumed
the genuineness of all signatures on original or certified copies and the
conformity to original or certified copies of all copies submitted to us as
conformed or reproduction copies. As to various questions of fact relevant to
such opinion, we have relied upon certificates and statements of public
officials, officers or representatives of the Company and others.
Based upon the foregoing, and subject to the limitations set forth
herein, we are of the opinion that the Shares, when issued and paid for (with
the consideration received by the Company being not less than the par value
thereof) in accordance with the Plan and the applicable stock option agreements,
will be validly issued, fully paid and non-assessable.
The opinion expressed herein is limited to the federal laws of the
United States, and to the extent required by the foregoing opinion, the General
Corporation Law of the State of Delaware.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form S-8 relating to the registration of the Shares.
In giving this consent we do not admit that we are in the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as
amended.
Very truly yours,
FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
By: /s/David Golay____________________________
David Golay
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated March 26, 1997
included in Allied Waste Industries, Inc.'s Form 10-K for the year ended
December 31, 1996 and to all references to our Firm included in this
registration statement.
ARTHUR ANDERSEN LLP
Phoenix, Arizona,
March 18, 1998.
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
Laidlaw Solid Waste Management Group
We consent to the incorporation by reference in the Registration Statement of
Allied Waste Industries, Inc. on Form S-8 dated March 20, 1998, of our report
dated September 30, 1996, to the Directors of Laidlaw Inc. on the balance sheets
of the Laidlaw Solid Waste Management Group as at August 31, 1995 and 1996 and
the statements of operations and cash flows for years ended August 31, 1994,
1995 and 1996, which report is incorporated in the Form 8K/A-4 dated of February
19, 1997.
This letter is provided to securities regulatory authorities pursuant to the
requirements of their securities legislation and is not for any other purpose.
March 20, 1998 /s/Coopers & Lybrand
Hamilton, Canada Chartered Accountants
