<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 1, 1996.
REGISTRATION NO. 333-[ ]
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
INTERNATIONAL ALLIANCE SERVICES, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 22-2769024
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
</TABLE>
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10055 SWEET VALLEY DRIVE
VALLEY VIEW, OHIO 44125
(216) 447-9000
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
---------------------
EDWARD F. FEIGHAN
INTERNATIONAL ALLIANCE SERVICES, INC.
10055 SWEET VALLEY DRIVE
VALLEY VIEW, OHIO 44125
(216) 447-9000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------------
With Copies to:
RICK L. BURDICK, P.C.
AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.
1900 PENNZOIL PLACE-SOUTH TOWER
711 LOUISIANA STREET
HOUSTON, TEXAS 77002
(713) 220-5800
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
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(d)
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: [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
================================================================================================================
PROPOSED MAXIMUM
TITLE OF EACH CLASS AMOUNT TO BE PROPOSED MAXIMUM AGGREGATE OFFERING AMOUNT OF
OF SECURITIES TO BE REGISTERED REGISTERED OFFERING PRICE(1) PRICE(1) REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.01.... 24,852,300 shares $10.375 $257,842,610 $51,569
================================================================================================================
</TABLE>
(1) Estimated pursuant to Rule 457(d) solely for the purpose of calculating the
registration fee.
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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, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.
================================================================================
<PAGE> 2
***************************************************************************
* *
* 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 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 NOVEMBER 1, 1996
PROSPECTUS
24,852,300 SHARES
INTERNATIONAL ALLIANCE SERVICES, INC.
COMMON STOCK
---------------------
This Prospectus relates to 24,852,300 shares (the "Shares") of common
stock, par value $.01 per share ("Common Stock"), of International Alliance
Services, Inc., a Delaware corporation (formerly known as Republic Environmental
Systems, Inc., the "Company"), 11,692,300 of which are currently outstanding and
13,160,000 of which are issuable upon exercise of outstanding warrants. Shares
may be offered from time to time (the "Offering") by persons (the "Selling
Stockholders") who have acquired such Shares in certain private placements and
other transactions not involving a public offering. The Shares are being
registered under the Securities Act of 1933, as amended (the "Securities Act"),
on behalf of the Selling Stockholders in order to permit the public or private
sale or other public or private distribution of the Shares.
The Shares may be sold or distributed from time to time by or for the
account of the Selling Stockholders, or by their pledgees on behalf of the
Selling Stockholders, in transactions (which may involve crosses and block
transactions) on the Nasdaq National Market ("Nasdaq") or any national
securities exchange or U.S. inter-dealer quotation system of a registered
national securities association on which the Shares are then listed, in the
over-the-counter market, in one or more privately negotiated transactions
(including pledges and gifts), through the writing of option on the Shares, in a
combination of such methods of distribution or by any other legally available
means; including the distribution by Alliance Holding Corporation, an Ohio
corporation and Selling Stockholder ("Alliance"), to its stockholders and debt
holders of the Shares which are not sold or otherwise transferred by Alliance.
Such methods of sale may be conducted by the Selling Stockholders at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at prices otherwise negotiated. The Selling Stockholders may
effect such transactions directly, or indirectly through broker-dealers or
agents acting on their behalf and, in connection with such sales, such
broker-dealers or agents may receive compensation in the form of commissions or
discounts from the Selling Stockholders and/or the purchasers of the Shares for
whom they may act as agent or to whom they sell Shares as principal or both
(which commissions or discounts might be in excess of customary commissions). To
the extent required, the names of the agents or broker-dealers, and applicable
commissions or discounts and any other required information with respect to any
particular offer of Shares by the Selling Stockholders, will be set forth in a
Prospectus Supplement. See "Plan of Distribution."
The Company will not receive any of the proceeds from the sale of the
Shares offered hereby, but will bear all expenses incident to the registration
of the Shares under federal and state securities laws and the sale of the Shares
hereunder other than expenses incident to the delivery of the Shares to be sold
by the Selling Stockholders, including any transfer taxes payable on any Shares,
and any commissions and discounts payable to underwriters, agents or dealers.
The Common Stock is quoted on Nasdaq under the symbol "IASI." On October
22, 1996, the last reported sale price for the Common Stock as reported by
Nasdaq was $11.75 per share. The Company had 29,618,158 shares of Common Stock
issued and outstanding as of October 22, 1996.
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE MATTERS SET FORTH UNDER
THE CAPTION "RISK FACTORS" LOCATED ON PAGE 5 OF THIS PROSPECTUS.
---------------------
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 , 1996.
<PAGE> 3
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder (the "Exchange Act"), and, in accordance therewith, files reports,
proxy and information statements and other information with the Securities and
Exchange Commission (the "SEC"). The reports, proxy and information statements
and other information concerning the Company can be inspected and copied at the
public reference facilities maintained by the SEC at Judiciary Plaza, Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the SEC's regional
offices located at Suite 1400, 500 West Madison Street, Chicago, Illinois 60661
and at Seven World Trade Center, 13th Floor, New York, New York 10048. Copies of
such material can also be obtained from the SEC at prescribed rates through the
Public Reference Section of the SEC at 450 Fifth Street, N.W., Washington, D.C.
20549. Such documents also may be obtained through the website maintained by the
SEC at http://www.sec.gov. Such reports, proxy statements and other information
may also be inspected at the offices of Nasdaq at 1735 K Street, N.W.,
Washington, D.C. 20006.
The Company has filed with the SEC a Registration Statement on Form S-3
under the Securities Act with respect to the Shares (such registration
statement, including all amendments and supplements thereto, is hereinafter
referred to as the "Registration Statement"). This Prospectus, which forms a
part of the Registration Statement, does not contain all of the information set
forth in the Registration Statement, certain parts of which have been omitted in
accordance with the rules and regulations of the SEC. Statements contained in
this Prospectus as to the contents of any contract, agreement or other document
are not necessarily complete and in each instance reference is made to the copy
of such contract, agreement or other document filed as an exhibit to the
Registration Statement or incorporated herein by reference, and each such
statement is deemed qualified in its entirety by such reference. The
Registration Statement and exhibits thereto may be inspected without charge at
the public reference facilities maintained by the SEC, regional offices of the
SEC and offices of the SEC and Nasdaq referred to above, and copies thereof may
be obtained from the SEC at prescribed rates.
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<PAGE> 4
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, filed by the Company (File No. 0-25890) with the
SEC pursuant to the Exchange Act, are incorporated herein by reference and made
a part of this Prospectus:
(i) the Company's Registration Statement on Form 10, file No. 0-25890,
dated April 26, 1995;
(ii) the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995;
(iii) the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996;
(iv) the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1996;
(v) the Company's Current Report on Form 8-K of June 10, 1996; and
(vi) the Company's definitive Schedule 14C Information Statement dated
September 23, 1996.
All reports and other documents filed by the Company with the SEC pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the Offering shall be deemed
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in this Prospectus or
in a document incorporated or deemed to be incorporated by reference in this
Prospectus shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained in this Prospectus or in any
other subsequently filed document that also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company undertakes to provide without charge to each person to whom a
copy of this Prospectus has been delivered, upon the written or oral request of
such person, a copy of any or all of the documents incorporated by reference
herein, other than the exhibits to such documents, unless such exhibits are
specifically incorporated by reference into the information that this Prospectus
incorporates. Written or oral requests for such copies should be directed to
International Alliance Services, Inc., 10055 Sweet Valley Drive, Valley View,
Ohio, 44125, Attention: Corporate Secretary, telephone number (216) 447-9000.
4
<PAGE> 5
RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION SET FORTH IN THIS PROSPECTUS,
PROSPECTIVE PURCHASERS OF THE SHARES SHOULD CONSIDER CAREFULLY THE FOLLOWING
RISK FACTORS IN EVALUATING AN INVESTMENT IN THE COMPANY.
RISKS RELATED TO THE COMPANY
Control by Alliance
As a result of the Combination (defined herein), Alliance owns 26,076,000
shares, or 78.6% of the outstanding shares of Common Stock. Such shares include
7,116,000 shares owned of record by MGD Holdings Ltd. ("MGD Holdings"), a
Bermuda corporation controlled by Michael G. DeGroote, the Chairman of the
Company and the beneficial owner of 36.9% of the outstanding Shares of Common
Stock, for which Alliance shares voting power under a voting agreement, dated
October 18, 1996 (the "Voting Agreement"), between Alliance and MGD Holdings.
Pursuant to the Voting Agreement, MGD Holdings, for a period of two years from
the date thereof, has agreed to vote all shares of Common Stock held by MGD
Holdings from time to time in accordance with the recommendations of the
management of Alliance. Accordingly, Alliance has the capability to determine
the outcome of any vote of the Company's stockholders during this period.
Further, four of the seven members of the Board of Directors were nominated by
Alliance. Accordingly, Alliance has effective control of the Company's Board of
Directors.
Dependence on Key Personnel
The Company depends and will continue to depend in the foreseeable future
on the services of Messrs. Michael G. DeGroote, Edward F. Feighan, Craig L.
Stout, Joseph E. LoConti, Douglas R. Gowland and certain of its other officers
and key employees with extensive experience and expertise. The ability of the
Company to retain its officers and key employees is important to the success of
the Company. The loss of key personnel, whether by resignation or otherwise,
including the election of directors, could have a material adverse effect on the
Company. The Company does not maintain key personnel insurance on any of its
officers or employees.
Possible Depressing Effect of Future Sales of Common Stock
No predictions can be made as to the effect, if any, that future sales of
the Shares, the availability of Common Stock for sale, or the perception that
such sales could occur, will have on the prevailing market price of the Common
Stock. In addition, the Company has issued and intends to issue in the future
Common Stock and/or options or warrants to purchase Common Stock pursuant to
exemptions from registration available under the Securities Act in connection
with certain of its acquisitions. Such securities are subject to restrictions on
resale in accordance with the Securities Act and the regulations promulgated
thereunder. As such restrictions lapse or if such shares are registered for sale
to the public, such securities may be sold into the public market. In the event
of the issuance and subsequent resale of a substantial number of shares of
Common Stock, or a perception that such sales could occur, there could be a
material adverse effect on the prevailing market price of the Common Stock.
Dilution
The issuance of additional shares of Common Stock upon exercise of the
Combination Warrants (defined herein), or upon the Company's completion of any
acquisitions and business combinations, may have a dilutive effect on the voting
rights of the holders of Common Stock. While the management of the Company
intends to use the infusions of capital from the Combination to finance growth
and acquisitions, there can be no assurance that such cash infusions will result
in an enhancement of the Company's financial condition.
5
<PAGE> 6
RISKS RELATED TO THE PROVISION OF WASTE SERVICES
Consents of Regulatory Authorities
On October 18, 1996, the Company consummated the merger of Century Surety
Company, an Ohio corporation ("CSC" and, together with its subsidiaries, the
"CSC Group"), and Commercial Surety Agency, Inc., d/b/a Century Surety
Underwriters, an Ohio corporation ("CSU" and, together with CSC and its
subsidiaries, the "Insurance Subsidiaries"), into two wholly-owned subsidiaries
of the Company (the "Mergers"). The Company and the Insurance Subsidiaries were
required to seek consents from certain regulatory authorities as a result of the
Mergers. The Ohio attorney general's office has determined that the Mergers will
constitute a change of ownership of Ohio Environmental Protection Agency ("Ohio
EPA") permitted facilities owned by Republic Environmental Systems (Cleveland)
Inc. ("RES (Cleveland)") and Republic Environmental Systems (Ohio), Inc. ("RES
(Ohio)"). In addition, the Ohio EPA may determine that the Mergers constitute a
modification of such permits. As a result, Ohio law requires that the change of
ownership of the permitted facilities, as well as the permit modifications, if
any, be approved by the director of the Ohio EPA, based upon the disclosure
statements and an investigative report prepared by the Ohio attorney general's
office. The Company consummated the Mergers prior to receipt of the requisite
approval of the director of the Ohio EPA as permitted by applicable law. During
the approval process, the Company does not anticipate that the operations at
such facilities will be effected. In the event that the director of the Ohio EPA
ultimately disapproves such change of ownership or, if required, such permit
modifications, the Company would be required to effect the negation of the
change of ownership of such facilities. The negation could be accomplished
through the restoration of the original ownership structure of such facilities,
the disposition of the facilities or another means that complies with the
requirements of applicable law. The failure to obtain approval of such change of
ownership or permit modifications, if any, could have a material adverse effect
on the financial condition and operations of the Company.
Regulation
The collection and disposal of solid and chemical wastes, operation of
landfills and rendering of related environmental services are subject to
federal, state, provincial and local requirements which regulate health, safety,
the environment, zoning and land-use. Operating permits are generally required
for landfills, TSD Facilities and certain collection vehicles, and these permits
are subject to revocation, modification and renewal. Federal, state, provincial
and local regulations vary, but generally govern disposal activities and the
location and use of facilities and also impose restrictions to prohibit or
minimize air and water pollution. In addition, governmental authorities have the
power to enforce compliance with these regulations and to obtain injunctions or
impose fines in the case of violations, including criminal penalties. These
regulations are administered by the U.S. Environmental Protection Agency (the
"EPA") and various other federal, state, provincial and local environmental and
health and safety agencies and authorities, including the Occupational Safety
and Health Administration of the U.S. Department of Labor. In addition, certain
of the Company's operations are regulated under applicable laws and regulations
in Canada.
The Company believes that in the existing climate of heightened legal,
political and citizen awareness and concerns, companies in the waste management
and environmental services industry, including the Company, may be faced with
material fines and penalties and the need to expend funds for remedial work and
related activities at TSD Facilities and landfills. The Company has established
a reserve (which as of June 30, 1996 was approximately $3.6 million) to cover
such fines, penalties and costs which the Company's management believes will be
adequate. Further, in connection with Republic Industries, Inc.'s ("RII")
acquisition of the Company, certain former stockholders of the Company agreed to
indemnify the Company against certain environmental liabilities. There can be no
assurance that such reserve or indemnities will be adequate or that
technological, regulatory or enforcement developments, the results of
environmental studies or other factors will not have a material adverse effect
on the Company's business and consolidated financial condition.
The Company's operation of TSD Facilities subjects it to certain operating,
monitoring, site maintenance, closure and post-closure obligations, including
posting significant financial assurance requirements for such obligations. In
order to construct, expand and operate a TSD Facility, one or more construction
or operating
6
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permits, as well as zoning approvals, must be obtained. These construction and
operating permits and zoning approvals are difficult and time-consuming to
obtain, and the issuance of such permits and approvals often is opposed by
neighboring landowners and local and national citizens' groups. Once obtained,
the operating permits may be subject to periodic renewal and are subject to
modification and revocation by the issuing agencies. In connection with the
Company's acquisition of TSD Facilities, it often may be necessary to expend
considerable time, effort and money to bring the acquired facilities into
compliance with applicable requirements and to obtain the permits and approvals
necessary to increase their capacity.
Governmental authorities have the power to enforce compliance with
regulations and permit conditions and to obtain injunctions or impose fines in
case of violations. Citizens' groups may also bring suit for alleged violations.
During the ordinary course of its operations, the Company has from time to time
received citations or notices from such authorities that its operations are not
in compliance with applicable environmental or health or safety regulations.
Upon receipt of such citations or notices, the Company works with the
authorities to attempt to resolve the issues raised. Failure to correct the
problems to the satisfaction of the authorities could lead to monetary or
criminal penalties, curtailed operations or facility closures which could have a
material adverse effect on the Company's business and consolidated financial
condition.
Subtitle D of the Resource Conservation and Recovery Act of 1976, as
amended ("RCRA"), establishes a framework for regulating the disposal of
non-hazardous solid wastes. In the past, the Subtitle D framework has left the
regulation of non-hazardous waste disposal largely to the states. On October 9,
1991, however, the EPA promulgated a final rule which imposes minimum federal
comprehensive solid waste management criteria and guidelines including location
restrictions, facility design and operating criteria, closure and post-closure
requirements, financial assurance standards, groundwater monitoring requirements
and corrective action standards, many of which have not commonly been in effect
or enforced in connection with solid waste landfills. States will be required to
revise their landfill regulations to meet these requirements. Because some parts
of the new regulations will be phased in over time, the full effect of these
regulations may not be felt for several years. However, other than for
groundwater monitoring and financial assurance requirements, all provisions of
the final rule became effective October 9, 1993. Operating and design criteria
for existing operations may have to be modified to comply with these new
regulations. In addition, new requirements applicable to the disposal of
non-hazardous solid waste may be adopted when reauthorization of RCRA is taken
up by Congress and the Company cannot predict the effect of such new
requirements.
Possibility of Liability for Hazardous Substance Remediation and Damages
With very limited exceptions, federal law imposes joint and several
liability upon present and former owners and operators of facilities that
release "hazardous substances" into the environment and the generators and
transporters of those substances, regardless of the care exercised by such
persons and regardless of when the hazardous substance is first detected in the
environment. All such persons may be liable for the costs of waste site
investigation, waste site cleanup and damages to natural resources. There is an
inherent industry risk of liability arising from the release of "hazardous
substances" into the environment, notwithstanding safety and other measures
taken by the Company and other owners or operators of facilities. In addition,
because the term "hazardous substance" is very broadly defined under applicable
federal law, "hazardous substances" or "hazardous wastes" may have been
deposited in properties with which the Company has been, or will become,
associated as an owner or operator. Moreover, waste collection companies
acquired by the Company have transported hazardous waste in the past and will do
so in the future, and some of the Company's operations may generate small
amounts of hazardous waste. As a result of the foregoing, the Company may face
claims for remediation of environmental contamination, personal injury or damage
to natural resources at sites with which it is, or has been, associated as
owner, operator, transporter or waste generator and from which there is a
release or threatened release of hazardous substances which causes the
incurrence of response costs and damages. Costs for remediation of, and damages
for, environmental contamination can be very substantial. Given the limitations
in insurance coverage for these risks, such liability could have a material
adverse impact on the Company's business and consolidated financial condition.
7
<PAGE> 8
Legal Proceedings
The Company is a party to various legal and environmental proceedings which
have arisen in the ordinary course of its business. No assurance can be given
with respect to the outcome of these legal proceedings and the effect such
outcomes may have on the Company.
Lack of Environmental Liability Insurance
The majority of the Company's domestic locations currently carry
site-specific pollution legal liability insurance, which may provide coverage
under certain circumstances for pollution damage to third parties. In addition,
the Company's domestic contracting operations carry contractors' pollution
liability insurance, which may provide coverage under certain circumstances for
damage to third parties. However, both of these coverages are restrictive in
nature, as they are subject to certain exclusions and effective dates,
consistent with insurance industry requirements. In addition, such coverage is
subject to specific and aggregate limits which may not be sufficient to cover
claims, if they should arise.
In prior years, consistent with industry trends, the Company was not able
to obtain pollution insurance at reasonable costs and, therefore, carried only
such coverage as was required by regulatory permits. In addition, the extent of
insurance coverage under certain forms of policies has been the subject in
recent years of litigation in which insurance companies have, in some cases,
successfully taken the position that certain risks are not covered by such
policies. If, in the absence of such insurance, the Company were to incur
liability for environmental damages of sufficient magnitude, it could have a
material adverse effect on the Company's business and consolidated financial
condition.
Competition
The hazardous waste industry is highly competitive. Entry and ongoing
operations require substantial technical, managerial and financial resources.
The Company competes with large national companies and with regional and local
companies, some of which have significantly greater financial resources and more
established market positions than the Company.
RISKS RELATED TO THE PROVISION OF INSURANCE AND BONDING SERVICES
Inadequate Pricing Risk
The primary risk of any insurance enterprise is the risk of inadequate
pricing, which is a problem that manifests itself in the form of an unexpectedly
high level of claims after policy issuance. The Company utilizes a variety of
actuarial and qualitative methods to set price levels, ultimately, however,
pricing depends upon an evaluation of prior experience as a predictor of future
experience. Events or trends that have not occurred in the past may not be
anticipated for the future and, therefore, could result in inadequate pricing
leading to elevated levels of losses. Such losses could have a material adverse
effect on the financial condition of the Company.
Unanticipated Losses Due to Inadequate Reserve Estimates
When claims are made, the ultimate amount of liability cannot be determined
until claims are paid to the satisfaction of the insured or until litigation
finally determines liability in disputed cases. Since the process of litigation
and settlement can continue for years, the Company can only assess its ultimate
liability (and the ultimate expense of litigating disputed issues) by
estimation. These estimates, or reserves for losses and loss adjustment expense
(which, as of June 30, 1996, were $39.3 million) are, like prices, determined by
a variety of actuarial and qualitative methods based on prior experience. There
can be no assurance that such reserves will be sufficient to cover the ultimate
liabilities of the Company for policy and bond exposures.
The Company uses a reserving system which it believes will enable it to
meet claims obligations. Due to the nature of some of the coverages written,
claims may be presented which may not be settled for many years after they are
incurred; thus, subjective judgments as to the ultimate exposure to losses are
an integral and necessary component of the loss reserving process. The Company
continually reviews reserves, using a variety
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<PAGE> 9
of statistical and actuarial techniques to analyze current claim costs,
frequency and severity data, and prevailing economic, social and legal factors.
Reserves established in prior years are adjusted as dictated by changes in loss
experience and as new information becomes available. An integral part of the
reserving policy of the Company includes a reserve for incurred but not reported
("IBNR") claims. There can be no assurance that the assumptions upon which
reserves are based will continue to be valid in the future.
To help assure the adequacy of its IBNR reserves and individual case
reserves, the Company submits to an annual review by professional actuaries who
test reserve adequacy with a variety of sophisticated mathematical models. In
recent years, such actuaries have certified that reserve levels of the Company
are adequate. There can be no assurance, however, that the modeling techniques
of these actuaries will correctly forecast the adequacy of the Company's
reserves.
The inadequacy of reserves may result in unanticipated losses which could
have a material adverse effect on the financial condition of the Company.
Competition
Both the property and casualty and the surety industries have been highly
competitive in recent years resulting in the consolidation of some of the
industries' largest companies. Competition is particularly acute for smaller,
specialty carriers like the Company because the market niches exploited by the
Company are small and can be penetrated by a larger carrier that elects to cut
prices or expand coverage. The Company's insurance subsidiaries have endured
this risk historically by maintaining a high level of development of new
products, such as its environmental coverage and landfill bonds eschewed by most
major carriers. Nevertheless, there can be no assurance that future development
efforts will succeed or that product erosion from intensifying competition will
not outpace development efforts.
Expansion of Insurance Liability Due to Law Changes
The Company is vulnerable to both judicial and legislative law changes with
respect to its insurance and bonding business. Judicial expansion of terms of
coverage can increase risk coverage beyond levels contemplated in the
underwriting and pricing process. Judicial imposition of pollution liability on
insurers before the era of specific pollution exclusions in insurance policies
created an estimated $25 billion liability, according to industry estimates
reported by A.M. Best, a leading rating agency of insurance companies and
reinsurers, for U.S. insurers and reinsurers that such companies did not know
they were underwriting and for which they received no premium.
At the same time, coverages that are established by statute may be
adversely affected by legislative or administrative changes of law. Most surety
bonds exist because they are required by government agencies. When governments
change the threshold for requiring surety, the market for surety bonds is
directly affected. Indeed, the repeated postponement by the EPA of deadlines for
compliance with the financial assurance portions of RCRA Subtitle D has
significantly slowed growth of the Company's landfill closure bond program,
which was begun in March 1994 because of the anticipated deadline of April 1994
for universal compliance. Such compliance currently is not anticipated to be
universally mandated until after April 1997.
Inadequate Reinsurance Protection of Insurance Liabilities
The Company depends heavily on reinsurers to assume a substantial portion
of the exposures underwritten by it. Failure by one or more reinsurers (which
are assuming risks from many sources over which the Company has no control)
could have a material adverse impact on performance, since the Company would
then be obligated to pay the failed reinsurer's portion of losses. Moreover, the
adequacy of reinsurance, even assuming the solvency of all reinsurers, is a
matter of estimation. As with pricing and reserving, procurement of reinsurance
is premised upon assumptions about the future based upon past experience.
Unanticipated events or trends could produce losses inadequately covered by
reinsurance.
9
<PAGE> 10
Market Reverses in Invested Asset Portfolio
Investment of the Company's assets to balance its reserves and surplus is
critical to the maintenance of the Company's solvency and profitability. The
Company believes that many insurance companies earn far more in investment
returns on their portfolio assets than they do from underwriting; and many
companies actually underwrite at a loss to develop premium balances, hence
portfolio assets, for investment as evidenced by the number of insurers
operating at combined ratios in excess of 100%. The Company maintains an
investment policy of investing primarily in debt instruments of government
agencies and corporate entities with quality ratings of AA or better, and of
diversifying investments sufficiently to minimize the risk of a substantial
reverse or default in any one investment. These policies are articulated by a
written policy statement and overseen by a formal investment committee of senior
company officials. The Company also employs professional investment advisers to
counsel it with respect to its insurance and bonding operations on matters of
policy as well as individual investment transactions, although these advisers
have no discretionary authority to deploy the Company's assets. Notwithstanding
these measures, an aggregation of serious reverses or defaults in the investment
portfolio could produce a materially adverse impact on the earnings and
financial condition of the Company.
Federal Income Taxes
The Company accounts for federal income taxes in accordance with Statement
of Financial Accounting Standards No. 109. The Company has reduced the deferred
tax asset by a valuation allowance of CSC because the Company believes "it is
more likely than not" that the deferred asset would not be realized through
future taxable income. In reaching the Company's determination of the need to
provide a deferred tax valuation allowance, management considered all available
evidence, both positive and negative, as well as the weight and importance given
to such evidence. The negative factors the Company relied upon in determining
the need for the valuation allowance are that the CSC Group has a history of
significant portions of their taxable income coming from non-recurring
transactions, as well as the risks that CSC has in the areas of product pricing,
reserves, niche market competition and adequacy of reinsurance.
10
<PAGE> 11
THE COMPANY
The Company is a diversified services company which, acting through its
subsidiaries, provides waste and environmental services and specialty insurance
services. The waste services the Company provides include hazardous and
non-hazardous waste treatment, storage and transportation services, disposal
services and a broad range of related environmental services including
engineering, consulting and analysis, remediation, groundwater/wastewater and
other technical services. The Company currently operates seven hazardous and
non-hazardous waste treatment, storage and disposal facilities ("TSD
Facilities") located in the United States and Canada. These TSD Facilities are
serviced by the Company's integrated trucking operations. The Company does not
own any hazardous waste disposal sites.
In October 1996, the Company acquired CSC and CSU. See "Recent
Developments." Through the Company's insurance subsidiaries, the Company
provides specialty insurance and bonding to small- and medium-sized commercial
enterprises in over forty states throughout the United States.
The Company was formed as a Delaware corporation in 1987 under the name
Stout Environmental, Inc. In 1992, the Company was acquired by RII. In April
1995, RII effected a spin-off of its hazardous waste operations through a
distribution of the Common Stock of the Company to the stockholders of record of
RII (the "Spin-off"). Pursuant to the Spin-off, the RII stockholders received
one share of the Company's Common Stock for every five shares of RII common
stock. Approximately 10,800,000 shares of Common Stock of the Company were
distributed to RII stockholders. In October 1996, the Company changed its name
to International Alliance Services, Inc. from Republic Environmental Systems,
Inc. The Company's Common Stock trades on Nasdaq under the trading symbol
"IASI."
The principal executive office of the Company is located at 10055 Sweet
Valley Drive, Valley View, Ohio, 44125 and its telephone number is (216)
447-9000.
RECENT DEVELOPMENTS
THE COMBINATION
On October 18, 1996, by written consent of the holders of a majority of the
outstanding shares of Common Stock, the Company consummated the following
transactions (collectively referred to herein as the "Combination") resulting in
the issuance of 18,760,000 shares of Common Stock and warrants to purchase an
additional 16,200,000 shares of Common Stock.
The Mergers
The Company issued 14,760,000 shares of Common Stock, warrants to purchase
an additional 4,200,000 shares of Common Stock at exercise prices ranging from
$2.625 to $3.875 per share (the "Merger Warrants") and a promissory note in the
aggregate principal amount of $4,000,000 in exchange for all of the outstanding
common stock of CSC and CSU, pursuant to an Agreement and Plan of Merger dated
May 19, 1996 among the Company, two wholly-owned, newly-created subsidiaries of
the Company, CSC, CSU and Alliance.
The Stock Issuances
The Company issued and sold to (i) Mr. H. Wayne Huizenga, 2,000,000 shares
of Common Stock and warrants to purchase an additional 6,000,000 shares of
Common Stock at exercise prices ranging from $2.625 to $3.875 per share (the
"Huizenga Warrants") for an aggregate purchase price of $5,250,000 and (ii) MGD
Holdings and its assigns, 2,000,000 shares of Common Stock and warrants to
purchase an additional 6,000,000 shares of Common Stock at exercise prices
ranging from $2.625 to $3.875 per share (the "MGD Warrants" and together with
the Merger Warrants and the Huizenga Warrants, the "Combination Warrants") for
an aggregate purchase price of $5,250,000, pursuant to certain stock purchase
agreements (collectively, the "Stock Issuances").
11
<PAGE> 12
Amendments to the Certification of Incorporation
In connection with the Combination, the Company's stockholders adopted
amendments to the Company's Certificate of Incorporation changing the name of
the Company from Republic Environmental Systems, Inc. to International Alliance
Services, Inc. and increasing the number of authorized shares of Common Stock
from 20,000,000 to 100,000,000.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares offered hereby, but will bear all expenses incident to the registration
of the Shares under federal and state securities laws and the sale of the Shares
hereunder other than expenses incident to the delivery of the Shares to be sold
by Selling Stockholders, including any transfer taxes payable on any Shares, and
any commissions and discounts payable to underwriters, agents or dealers. See
"Plan of Distribution."
12
<PAGE> 13
SELLING STOCKHOLDERS
The following table sets forth the name of each Selling Stockholder, the
number of shares of Common Stock owned by each Selling Stockholder immediately
prior to the Offering, the number of Shares registered hereby that each Selling
Stockholder may offer in the Offering, the number of shares of Common Stock to
be owned by each Selling Stockholder upon completion of the Offering as
contemplated hereby and the percentage of total shares of Common Stock to be
owned by each Selling Stockholder upon completion of the Offering as
contemplated hereby. However, because the Selling Stockholders may offer all or
a portion of the Shares at any time and from time to time after the date hereof,
the exact number of Shares that each Selling Stockholder may retain upon
completion of the Offering cannot be determined at this time. At the present
time, neither MGD Holdings nor Mr. Huizenga has any intention of selling any
portion of their respective Shares. To the knowledge of the Company, none of the
Selling Stockholders has had any material relationship with the Company except
as set forth in the footnotes to the following table and as more fully described
elsewhere in this Prospectus (including the information incorporated by
reference in this Prospectus).
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
BENEFICIAL NUMBER OF SHARES TO AFTER THE OFFERING(1)
OWNERSHIP BE OFFERED FOR THE ------------------------
PRIOR TO THE SELLING STOCKHOLDER'S NUMBER PERCENT
SELLING STOCKHOLDER OFFERING(1) ACCOUNT OF SHARES OF CLASS
- ------------------------------------- ------------ --------------------- ---------- --------
<S> <C> <C> <C> <C>
Alliance Holding Corporation......... 26,076,000(2) 2,844,000 16,116,000(3) 48.6%
J. P. Bryan.......................... 23,000(4) 20,000(4) 3,000 *
Rick L. Burdick(5)................... 20,000(6) 20,000(6) -0- *
Comeau Trust......................... 60,000(7) 60,000(7) -0- *
Douglas R. Gowland(8)................ 206,800(9) 120,000(9) 86,800 *
H. Wayne Huizenga.................... 8,000,000(10) 8,000,000(10) -0- *
Donald E. Koogler(11)................ 120,000(12) 120,000(12) -0- *
Fred Luchak.......................... 236,000(13) 200,000(13) 36,000 *
MGD Holdings Ltd.(14)................ 13,136,000(15) 13,136,000(15) -0- *
Tom Walker........................... 2,300 2,300 -0- *
James Watt........................... 200,000(16) 200,000(16) -0- *
Alan E. Wolfe........................ 65,000(17) 65,000(17) -0- *
R.E. Wolfe........................... 65,000(17) 65,000(17) -0- *
---------- ---------- ---------- ----
Total...................... 41,094,100 24,852,300 16,241,800 49.0%
========== ========== ========== ====
</TABLE>
- ---------------
* less than one percent
(1) The information contained in the table above reflects "beneficial"
ownership of the Common Stock within the meaning of Rule 13d-3 under the
Exchange Act.
(2) Includes 4,200,000 shares of Common Stock issuable upon exercise of
outstanding warrants and 7,116,000 shares of Common Stock owned of record
by MGD Holdings for which Alliance shares voting power with MGD Holdings
pursuant to the Voting Agreement. See "Risk Factors -- Risk Related to the
Company -- Control by Alliance."
(3) May include up to 4,200,000 shares of Common Stock issuable upon exercise
of outstanding warrants.
(4) Includes 16,000 shares of Common Stock issuable upon exercise of
outstanding warrants.
(5) Mr. Burdick is a partner with the law firm of Akin, Gump, Strauss, Hauer &
Feld, L.L.P. ("Akin Gump"). Akin Gump has provided legal services to the
Company and certain of its affiliates from time to time for which it
received customary compensation in each of 1993, 1994 and 1995.
(6) Includes 20,000 shares of Common Stock issuable upon exercise of
outstanding warrants.
(7) Includes 12,000 shares of Common Stock issuable upon exercise of
outstanding warrants.
(8) Mr. Gowland has served as a director of the Company since March 1992 and as
the president of the Company's hazardous waste subsidiaries since March
1992. Mr. Gowland served as Executive Vice President and Chief Operating
Officer of the Company from April 1995 until October 1996. From 1992 until
the Spin-off was effected (April 1995), Mr. Gowland served as President of
the Company and Vice President -- Hazardous Waste Operations of RII.
(9) Includes 70,000 shares of Common Stock issuable upon exercise of
outstanding warrants.
(10) Includes 6,000,000 shares of Common Stock issuable upon exercise of
outstanding warrants.
(11) Mr. Koogler served as the Executive Vice President and Chief Operating
Officer of RII, the sole stockholder of the Company from May 1991 until the
Spin-off was effected (April 1995).
(12) Includes 72,000 shares of Common Stock issuable upon exercise of
outstanding warrants.
(13) Includes 150,000 shares of Common Stock issuable upon exercise of
outstanding warrants.
(14) MGD Holdings is a company controlled by Mr. DeGroote who serves as its
President and Chief Executive Officer and a Director. Mr. DeGroote has
served as the Chairman of the Board and a Director of the Company since
April 1995. From April 1995 until October 1996, Mr. DeGroote served as
Chief Executive Officer of the Company. Mr. DeGroote also served as
Chairman of the Board, President and Chief Executive Officer of RII from
May 1991 until August 1995.
(15) Includes 6,020,000 shares of Common Stock issuable upon exercise of
outstanding warrants.
(16) Includes 150,000 shares of Common Stock issuable upon exercise of
outstanding warrants.
(17) Includes 10,000 shares of Common Stock issuable upon exercise of
outstanding warrants.
13
<PAGE> 14
PLAN OF DISTRIBUTION
The Shares may be sold or distributed from time to time by or for the
account of the Selling Stockholders, or their pledgees on behalf of the Selling
Stockholder, in transactions (which may involve crosses and block transactions)
on Nasdaq or any national securities exchange or U.S. inter-dealer quotation
system of a registered national securities association on which the Shares are
then listed, in the over-the-counter market, in one or more privately negotiated
transactions (including pledges and gifts), through the writing of options on
the Shares, in a combination of such methods of distribution or by any other
legally available means; including the distribution by Alliance to its
stockholders and debt holders of the Shares which are not sold or otherwise
transferred by Alliance. Such methods of sale may be conducted by the Selling
Stockholders at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at prices otherwise negotiated. The Selling
Stockholders may effect such transactions directly, or indirectly through
broker-dealers or agents acting on their behalf and, in connection with such
sales, such broker-dealers or agents may receive compensation in the form of
commissions or discounts from the Selling Stockholders and/or the purchasers of
the Shares for whom they may act as agent or to whom they sell Shares as
principal or both (which commissions or discounts might be in excess of
customary commissions). To the extent required, the names of the agents or
broker-dealers, and applicable commissions or discounts and any other required
information with respect to any particular offer of Shares by the Selling
Stockholders, will be set forth in a Prospectus Supplement.
The Selling Stockholders and any such underwriters, brokers, dealers or
agents that participate in such distribution may be deemed to be "underwriters"
within the meaning of the Securities Act, and any discounts, commissions or
concessions received by any such underwriters, brokers, dealers or agents might
be deemed to be underwriting discounts and commissions under the Securities Act.
Neither the Company nor the Selling Stockholders can presently estimate the
amount of such compensation. The Company knows of no existing arrangements
between any Selling Stockholder and any other Selling Stockholder, underwriter,
broker, dealer or other agent relating to the sale or distribution of the
Shares.
Under applicable rules and regulations under the Exchange Act, any person
engaged in a distribution of any of the Shares may not simultaneously engage in
market activities with respect to the Common Stock for a period of nine business
days prior to the commencement of such distribution. In addition and without
limiting the foregoing, the Selling Stockholders will be subject to applicable
provisions of the Exchange Act; including without limitation Rules 10b-5, 10b-6
and 10b-7, which provisions may limit the timing of purchases and sales of any
of the Shares by the Selling Stockholders. All of the foregoing may affect the
marketability of the Common Stock.
The Company will not receive any of the proceeds from the sale of the
Shares offered hereby, but will bear all expenses incident to the registration
of the Shares under federal and state securities laws and the sale of the Shares
hereunder other than expenses incident to the delivery of the Shares to be sold
by the Selling Stockholders, including any transfer taxes payable on any Shares,
and any commissions and discounts payable to underwriters, agents or dealers.
In order to comply with certain states' securities laws, if applicable, the
Shares will be sold in such jurisdictions only through registered or licensed
brokers or dealers. In addition, in certain states the Common Stock may not be
sold unless the Common Stock has been registered or qualified for sale in such
state or an exemption from registration or qualification is available and is
complied with.
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon for the
Company by Akin Gump. Mr. Burdick, a partner with Akin Gump, owns warrants to
purchase 20,000 shares of Common Stock. All of the Shares of Common Stock
issuable upon exercise of such warrants are being registered hereunder.
14
<PAGE> 15
EXPERTS
The audited consolidated and combined financial statements of the Company
(formerly known as Republic Environmental Systems, Inc.) and its subsidiaries
incorporated by reference in this Prospectus and elsewhere in this Registration
Statement have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report with respect thereto and are included
in reliance upon the authority of said firm as experts in giving said reports.
The audited consolidated financial statements and schedules of CSC as of
December 31, 1995 and 1994 and each of the years in the three-year period ended
December 31, 1995, and the audited financial statements of CSU as of December
31, 1995 and 1994 and each of the years in the three-year period ended December
31, 1995 incorporated herein by reference have been audited and reported upon by
KPMG Peat Marwick LLP, independent certified public accountants. The report of
KPMG Peat Marwick LLP covering the CSC December 31, 1994 consolidated financial
statements refers to a change in accounting for investments in certain debt and
equity securities. Such financial statements and schedules have been
incorporated by reference herein in reliance upon the report of KPMG Peat
Marwick LLP with respect thereto and upon the authority of said firm as experts
in accounting and auditing.
UNCERTAINTY OF FORWARD LOOKING STATEMENTS
Certain statements and information in this Prospectus (including documents
incorporated herein by reference, see "Incorporation of Certain Documents by
Reference") constitute forward-looking statements within the meaning of the
Federal Private Securities Litigation Reform Act of 1995. Such forward-looking
statements are typically punctuated by words or phrases such as "anticipate,"
"estimate," "projects," "management believes," "the Company believes" and words
or phrases of similar import. Such statements are subject to certain risks,
uncertainties or assumptions. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual results
may vary materially from those anticipated, estimated or projected. Among the
key factors that may have a direct bearing on the Company's results and
financial condition are: (i) competitive practices in the hazardous waste
industry in which the Company will compete, (ii) fluctuations in waste
transportation prices, (iii) environmental liabilities to which the Company may
become subject in the future which are not covered by an indemnity or insurance,
(iv) the impact of current and future laws and governmental regulations
(particularly environmental regulations) affecting the hazardous waste industry
in general and the Company's operations in particular, (v) competitive practices
in the specialty insurance and bonding industries, (vi) competitive practices in
the reinsurance markets utilized by the Company's insurance operations, (vii)
judicial, legislative, and regulatory changes of law relating to risks covered
by the Company's insurance operations or to the operations of insurance
companies in general, (viii) market fluctuations in the values or returns on
assets in the investment portfolios held by the Company's insurance and bonding
subsidiaries, (ix) pricing of the insurance products of the Company's insurance
subsidiaries and (x) adverse loss development.
15
<PAGE> 16
- ------------------------------------------------------
- ------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE
BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE SELLING
STOCKHOLDERS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER
TO BUY ANY SECURITY OTHER THAN THE SHARES OF COMMON STOCK OFFERED HEREBY, NOR
DOES IT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SHARES OF COMMON STOCK BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. 3
Incorporation of Certain Documents by
Reference........................... 4
Risk Factors.......................... 5
The Company........................... 11
Recent Developments................... 11
Use of Proceeds....................... 12
Selling Stockholders.................. 13
Plan of Distribution.................. 14
Legal Matters......................... 14
Experts............................... 15
Uncertainty of Forward Looking
Statements.......................... 15
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
24,852,300 SHARES
INTERNATIONAL
ALLIANCE
SERVICES, INC.
COMMON STOCK
PROSPECTUS
, 1996
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 17
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses, other than
underwriting discounts and commissions, payable by the Registrant in connection
with the issuance and distribution of the securities being registered hereby.
<TABLE>
<S> <C>
Securities and Exchange Commission Filing Fees............................. $51,569
Printing and Engraving Costs............................................... $
Legal Fees and Expenses.................................................... $
Accounting Fees and Expenses............................................... $
Miscellaneous.............................................................. $
-------
Total............................................................ $
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Certificate of Incorporation of the Company entitles the Board of
Directors to provide for indemnification of directors and officers to the
fullest extent provided by law, except for liability (i) for any breach of the
directors' duty of loyalty to the Company or its stockholders, (ii) for acts of
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) for unlawful payments of dividends, or for unlawful
stock purchases or redemptions or (iv) for any transaction from which the
director derived an improper personal benefit.
Article VII of the Bylaws of the Company provide that to the fullest extent
and in the manner provided by the laws of the State of Delaware and specifically
as is permitted under Section 145 of the General Corporation Law of the State of
Delaware, the Company shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
other than an action by or in the right of the Company, by reason of the fact
that such person is or was a director, officer, employee or agent of the
Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against expenses, including attorneys' fees,
judgments, fines and amounts paid in settlement actually and reasonably incurred
in connection with such action, suit, or proceeding if he acted in good faith
and in a manner he reasonably believed to be in and not opposed to the best
interests of the Company, and with respect to any criminal action or proceeding,
he had no reasonable cause to believe his conduct was unlawful. Determination of
any action, suit, or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in a good faith and in a manner which he
reasonably believed to be in and not opposed to the best interests of the
Company, and with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was lawful.
The Bylaws provide that the Company shall indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Company to procure a judgment
in its favor by reason of the fact that he is or was a director, officer,
employee or agent of another corporation, partnership, joint venture,trust or
other enterprise against expenses, including attorneys' fees, actually and
reasonably incurred by him in connection with the defense or settlement of such
action or suit if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Company, 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 for negligence or
misconduct in the performance of his duty to the Company unless the court orders
otherwise.
II-1
<PAGE> 18
ITEM 16. EXHIBITS
The following exhibits are filed as part of this Registration Statement:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
- -------------------- ------------------------------------------------------------------------
<C> <S>
4.1 -- Form of Stock Certificate of Common Stock of the Company (filed as
Exhibit 4.1 to the Company's Registration Statement on Form 10, file
no. 0-25890, and incorporated herein by reference).
5.1* -- Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
24.1 -- Consent of Arthur Andersen LLP.
24.2 -- Consent of KPMG Peat Marwick LLP.
24.3* -- Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P. (included in its
opinion filed as Exhibit 5.1).
25.1 -- Powers of Attorney (included on the signature pages attached hereto).
</TABLE>
- ---------------
* To be filed by amendment.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes as follows:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement 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.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered herein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(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.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to section 13(a) or 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.
(c) 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-2
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 the Cleveland, Ohio on October 31, 1996.
INTERNATIONAL ALLIANCE
SERVICES, INC.
(Registrant)
By: /s/ EDWARD F. FEIGHAN
------------------------------------
Edward F. Feighan
Chief Executive Officer and
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears
below on this Registration Statement hereby constitutes and appoints Craig L.
Stout, Michael D. Schmidt and Douglas R. Gowland and each of them, with full
power to act without the other, his true and lawful attorney-in-fact and agent,
with full power of substitution for him and his name, place and stead, in any
and all capacities (until revoked in writing), to sign any and all amendments or
supplements (including post-effective amendments thereto) to this Form S-3
Registration Statement of International Alliance Services, Inc. and any
registration statement filed pursuant to Rule 462 and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto each said attorneys-in-fact
and agents, full power and authority to do and perform each and every act and
thing requisite and necessary fully to all intents and purposes as he might or
could do in person, thereby ratifying and confirming all that each of said
attorneys-in-fact and agents, or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ MICHAEL G. DEGROOTE Chairman of the Board and October 22, 1996
- --------------------------------------------- Director
Michael G. DeGroote
/s/ EDWARD F. FEIGHAN Chief Executive Officer, October 31, 1996
- --------------------------------------------- President and Director
Edward F. Feighan (Principal Executive
Officer)
/s/ DOUGLAS R. GOWLAND Vice President of October 31, 1996
- --------------------------------------------- Environmental Operations
Douglas R. Gowland and Director
/s/ RICHARD C. ROCHON Director October 22, 1996
- ---------------------------------------------
Richard C. Rochon
/s/ JOSEPH E. LOCONTI Vice Chairman and Director October 22, 1996
- ---------------------------------------------
Joseph E. LoConti
/s/ CRAIG L. STOUT Executive Vice President, October 31, 1996
- --------------------------------------------- Chief Operating Officer and
Craig L. Stout Director (Principal
Financial and Accounting
Officer)
/s/ HARVE A. FERRILL Director October 22, 1996
- ---------------------------------------------
Harve A. Ferrill
</TABLE>
II-3
<PAGE> 20
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
- -------------------- ------------------------------------------------------------------------
<C> <S>
4.1 -- Form of Stock Certificate of Common Stock of the Company (filed as
Exhibit 4.1 to the Company's Registration Statement on Form 10, file
no. 0-25890, and incorporated herein by reference).
5.1* -- Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
24.1 -- Consent of Arthur Andersen LLP.
24.2 -- Consent of KPMG Peat Marwick LLP.
24.3* -- Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P. (included in its
opinion filed as Exhibit 5.1).
25.1 -- Powers of Attorney (included on the signature pages attached hereto).
</TABLE>
- ---------------
* To be filed by amendment.
<PAGE> 1
EXHIBIT 24.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement on Form S-3 of our report dated
February 13, 1996 (except with respect to the matters discussed in Note 12, as
to which the date is June 14, 1996) included in Republic Environmental Systems,
Inc.'s Form 10-K for the year ended December 31, 1995, and to all references to
our Firm included in this Registration Statement.
/s/ Arthur Andersen LLP
Philadelphia, PA
October 25, 1996
<PAGE> 1
EXHIBIT 24.2
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Century Surety Company
The Board of Directors and Shareholder
Commercial Surety Agency, Inc.:
We consent to the incorporation by reference in this Registration Statement
on Form S-3 of our report for Century Surety Company dated April 9, 1996, except
as to note 12, which is as of June 14, 1996, and our report for Commercial
Surety Agency, Inc. dated June 7, 1996, included in the Republic Environmental
Systems, Inc. definitive information statement dated September 23, 1996 and to
the reference to our firm under the heading "experts" in the prospectus. Our
report for Century Surety Company refers to a change in 1994 in accounting for
certain investments in debt and equity securities.
/s/ KPMG Peat Marwick LLP
Cleveland, Ohio
November 1, 1996
