------------------------------ OMB APPROVAL ------------------------------ OMB Number Expires: Estimated average burden hours per response ....... 0.5 ------------------------------ U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 4 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(f) of the Investment Company Act of 1940 [_] Check box if no longer subject of Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b). ________________________________________________________________________________ 1. Name and Address of Reporting Person* Schneider Henry -------------------------------------------------------------------------------- (Last) (First) (Middle) c/o U.S. Energy Systems, Inc. 515 N. Flagler Drive, Suite 702 -------------------------------------------------------------------------------- (Street) West Palm Beach Florida 33401 -------------------------------------------------------------------------------- (City) (State) (Zip) ________________________________________________________________________________ 2. Issuer Name and Ticker or Trading Symbol U.S. Energy Systems, Inc. (USEY) ________________________________________________________________________________ 3. IRS Identification Number of Reporting Person, if an Entity (Voluntary) ________________________________________________________________________________ 4. Statement for Month/Year July 2000 ________________________________________________________________________________ 5. If Amendment, Date of Original (Month/Year) ================================================================================ 6. Relationship of Reporting Person to Issuer (Check all applicable) [X] Director [X] 10% Owner [X] Officer (give title below) [_] Other (specify below) Vice President ________________________________________________________________________________ 7. Individual or Joint/Group Filing (Check applicable line) [X] Form filed by one Reporting Person [_] Form filed by more than one Reporting Person ________________________________________________________________________________ ================================================================================ Table I -- Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned ================================================================================

6. 4. 5. Owner- Securities Acquired (A) or Amount of ship 3. Disposed of (D) Securities Form: 7. Transaction (Instr. 3, 4 and 5) Beneficially Direct Nature of 2. Code ------------------------------- Owned at End (D) or Indirect 1. Transaction (Instr. 8) (A) of Month Indirect Beneficial Title of Security Date ------------ Amount or Price (Instr. 3 (I) Ownership (Instr. 3) (mm/dd/yy) Code V (D) and 4) (Instr.4) (Instr. 4) ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ Series A Convertible 7/31/00 M 861,110 A $9.00 (1) (1) (1) Preferred Stock ------------------------------------------------------------------------------------------------------------------------------------ ----------------------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ====================================================================================================================================

* If the Form is filed by more than one Reporting Person, see Instruction 4(b)(v). Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly. (Print or Type Responses) FORM 4 (continued) Table II -- Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities) ================================================================================

10. 9. Owner- Number ship of Form 2. Deriv- of Conver- 5. 7. ative Deriv- 11. sion Number of Title and Amount Secur- ative Nature or Derivative 6. of Underlying 8. ities Secur- of Exer- 4. Securities Date Securities Price Bene- ity: In- cise 3. Trans- Acquired (A) Exercisable and (Instr. 3 and 4) of ficially Direct direct Price Trans- action or Disposed Expiration Date ---------------- Deriv- Owned (D) or Bene- 1. of action Code of(D) (Month/Day/Year) Amount ative at End In- ficial Title of Deriv- Date (Instr. (Instr. 3, ---------------- or Secur- of direct Owner- Derivative ative (Month/ 8) 4 and 5) Date Expira- Number ity Month (I) ship Security Secur- Day/ ------ ------------ Exer- tion of (Instr. (Instr. (Instr. (Instr. (Instr. 3) ity Year) Code V (A) (D) cisable Date Title Shares 5) 4) 4) 4) ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ Option to Buy $49.00 7/2831/00 AM ~~V 50~~861,~~000~~110 (1) (1) ~~Common~~Series ~~Stock~~A 50861,~~000~~110 ~~50,000~~0 DConvertible Preferred Stock ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ====================================================================================================================================

Explanation of Responses: (1) The option was granted on August 26, 1998 and was to expire on or about August 26, 2000. The option was exercised by the payment of $8,611.10 in cash and the $7,741,378.90 balance of the purchase price was paid in the form of a one year limited recourse promissory note (the "Note") made by Energy Systems Investors LLC ("ESI"), of which the Reporting Person is a manager, in favor of the Issuer. The obligations evidenced by the Note are secured by a pledge of the 861,110 shares of Series A Convertible Preferred Stock (the "Series A Stock"). At the end of July 2000, the Reporting Person owned an aggregate of 916,666 shares of Series A Stock of which 55,556 shares were owned by Henry Schneider directly and 861,110 shares were owned by ESI. The 55,556 shares of Series A Stock had previously been transferred by ESI to Henry Schneider (individually) in accordance with Rule 16a-13. Each share of Series A Stock is currently convertible into four shares of the Issuer's Common Stock. /s/ Henry Schneider August 9, 2000 --------------------------------------------- ----------------------- Henry Schneider Date ** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a). Note: File three copies of this Form, one of which must be manually signed. If space provided is insufficient, see Instruction 6 for procedure.

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