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Filed pursuant to 424(B)(2)
to registration # 333-31815
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED DECEMBER 17, 1997)
$25,000,000
[AMERICAN RESIDENTIAL SERVICES, INC. LOGO]
AMERICAN RESIDENTIAL SERVICES, INC.
CONVERTIBLE SENIOR SUBORDINATED NOTES, SERIES A
INTEREST PAYABLE APRIL 15 AND OCTOBER 15
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American Residential Services, Inc. ("ARS") may offer and issue its
Convertible Senior Subordinated Notes, Series A (the "Notes"), in business
combination transactions (each, an "Acquisition") involving its acquisition,
directly or indirectly, of businesses or other operating assets. It expects the
Acquisitions will consist principally of businesses that provide (i) residential
and commercial maintenance, repair and replacement services for heating,
ventilating and air conditioning, plumbing, electrical, indoor air quality and
other systems and (ii) new installation services of those systems in homes and
small commercial facilities under construction. ARS will determine the terms of
the Acquisitions through direct negotiations with the owners or controlling
persons of the businesses or assets to be acquired and expects the Notes issued
will be valued at prices reasonably related to their principal amount. It does
not expect to pay any underwriting discounts or commissions, but may pay
finder's fees from time to time with respect to specific Acquisitions. Any
person receiving any such fees may be deemed to be an underwriter within the
meaning of the Securities Act of 1933, as amended (the "Securities Act"). ARS
will pay all expenses of this offering.
The Notes will be convertible at the option of their holders in whole or in
part into shares of common stock, par value $.001 per share ("Common Stock"), of
ARS at any time on or after their respective Convertibility Commencement Dates
and at or before maturity, unless previously redeemed, at their respective
Initial Conversion Prices per share that the applicable pricing supplement
hereto (each, a "Pricing Supplement") will specify, subject to adjustment in
certain events. The Common Stock trades on the New York Stock Exchange ("NYSE")
under the symbol "ARS." On April 21, 1997, the closing sale price of the Common
Stock as reported on the NYSE was $10.69 per share.
The Notes will mature on April 15, 2004 and bear interest from the date on
which the Notes are issued (the "Original Issue Date") at the fixed rates that
the applicable Pricing Supplement will specify. Interest on the Notes will be
payable semi-annually on April 15 and October 15 of each year. The Notes do not
provide for a sinking fund. ARS, at its option, may redeem the Notes on and
after April 20, 2000, in whole or in part, at the redemption prices that the
applicable Pricing Supplement will specify.
The Notes are unsecured obligations of ARS, are subordinate to all present
and future Senior Indebtedness (as defined in the Indenture described in the
accompanying Prospectus) of ARS and will be effectively subordinated to all
indebtedness and other liabilities of subsidiaries of ARS.
Persons receiving the Notes offered hereby may be contractually required to
hold some portions of those Notes for periods of up to two years. In addition,
pursuant to the provisions of Rule 145 under the Securities Act, the volume
limitations and certain other requirements of Rule 144 under the Securities Act
will apply to resales of those Notes by affiliates of the businesses the Company
acquires for a period of one year (or such shorter period as the Securities and
Exchange Commission may prescribe).
SEE "RISK FACTORS" ON PAGE 4 OF THE ACCOMPANYING PROSPECTUS FOR A
DISCUSSION OF CERTAIN RISK FACTORS THAT SHOULD BE CONSIDERED BEFORE ACQUIRING
THE NOTES OFFERED HEREBY.
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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.
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The date of this Prospectus Supplement is April 22, 1998.
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DESCRIPTION OF THE NOTES
The following description of the principal terms of the Notes offered
hereby (referred to in the accompanying Prospectus as the "Convertible Debt
Securities") supplements, and to the extent inconsistent therewith replaces, the
description set forth in the Prospectus under "Description of the Convertible
Debt Securities" (the "Prospectus Description"), to which reference is hereby
made, of the general terms and provisions of the Convertible Debt Securities.
Unless the applicable Pricing Supplement specifies otherwise, the Notes will
have the terms described in the Prospectus Description and below in this
Prospectus Supplement. Certain terms defined in the Indenture are capitalized
herein. The Initial Conversion Price of each Note will be subject to adjustment
as provided in the Indenture. See "-- Conversion Rights" in the Prospectus
Description.
GENERAL
The Notes will be issued as part of the purchase price the Company will pay
for businesses or other assets it acquires in separate Acquisitions. The Pricing
Supplement relating to the Notes issued in connection with each Acquisition will
describe the following terms: (i) the aggregate principal amount of those Notes;
(ii) the Original Issue Date; (iii) the rate per annum at which those Notes will
bear interest; (iv) the Redemption Prices at which ARS, at its option, may
redeem those Notes; and (v) the Initial Conversion Price and Convertibility
Commencement Date of those Notes.
The Notes (i) will be unsecured obligations of ARS, (ii) are currently
limited to $25,000,000 in aggregate principal amount and (iii) will mature on
April 15, 2004. The Notes will bear interest at a fixed rate per annum from
their Original Issue Date or from the most recent Interest Payment Date to which
interest has been paid or provided for, payable semiannually on April 15 and
October 15 of each year (each an Interest Payment Date), to the Person in whose
name the Note (or any predecessor Note) is registered at the close of business
on the preceding April 1 or October 1 (each a Regular Record Date), as the case
may be (whether or not a business day). Interest on the Notes will be paid on
the basis of a 360-day year of twelve 30-day months.
Principal of, and interest on, the Notes will be payable at the office of
the Trustee in New York, New York, and the Notes may be surrendered for
registration of transfer, exchange or conversion at that office. ARS may, at its
option, pay interest on the Notes by check mailed to the address of the Person
entitled thereto as it appears in the Securities Register for the Notes on the
Regular Record Date for that interest payment.
The Notes will be issued in fully registered form, without coupons, in
denominations of $1,000 and any integral multiples thereof.
CONVERSION RIGHTS
The applicable Pricing Supplement will set forth the Convertibility
Commencement Date of the Notes to be issued in connection with each Acquisition
and, unless that Pricing Supplement provides otherwise, that date will be the
day (whether or not a business day) following the first anniversary of the date
that Acquisition closes.
The Notes will be convertible at the option of their holders in whole or in
part into shares of Common Stock at any time on or after their respective
Convertibility Commencement Dates and at or before maturity, unless previously
redeemed, at their respective Initial Conversion Prices per share, subject to
adjustment in certain events.
The applicable Pricing Supplement will set forth the Initial Conversion
Price for the Notes to be issued in connection with each Acquisition, which will
be determined as follows. The Initial Conversion Price of each Note issued in
any Acquisition will be 100% of the "Calculated Value" for that Acquisition plus
a premium, rounded to the highest whole cent. For any Acquisition, "Calculated
Value" will mean the average of the daily market prices of a share of Common
Stock for the 20 consecutive trading days on the NYSE
S-2
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immediately preceding the date that is the 10th day (whether or not a business
day) prior to the date on which that Acquisition closes. For purposes of
determining any Calculated Value, the market price of a share of Common Stock
for any trading day on the NYSE means, in each case as reported for equity
securities listed on the NYSE, the closing sale price, regular way, on that day
for a share of that stock or, if no sale of that stock takes place on that day,
the average of the closing bid and asked prices on that day for a share of that
stock. The Calculated Value used in connection with any Acquisition may be
higher or lower than the fair market value of a share of Common Stock on the
date on which that Acquisition closes.
OPTIONAL REDEMPTION
ARS may, at its option, redeem the Notes, in whole or from time to time in
part, at any time on or after April 20, 2000, on not less than 15 nor more than
60 days' notice mailed to each Holder of Notes to be redeemed at its address
appearing in the Security Register for the Notes and prior to Maturity of the
Notes at the Redemption Prices that the applicable Pricing Supplement will
specify, plus accrued and unpaid interest to the Redemption Date (subject to the
right of Holders of record of the Notes on the relevant Regular Record Date to
receive interest due on an Interest Payment Date that is on or prior to the
Redemption Date).
The Redemption Price for each Note will be 100% of the principal amount
thereof plus the premium, if any, that the applicable Pricing Supplement may
specify.
No sinking fund is provided for the Notes.
SUBORDINATION
The Notes will be subordinated to all Senior Indebtedness as provided in
the Indenture, and the Indenture's definition of Senior Indebtedness will apply
to the Notes. See "-- Subordination" in the Prospectus Description.
EVENTS OF DEFAULT
The Events of Default with respect to the Notes will be those described in
clauses (i) through (vii) of the first sentence under " -- Events of Default" in
the Prospectus Description.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS SUPPLEMENT,
THE APPLICABLE PRICING SUPPLEMENT AND THE PROSPECTUS, AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS PROSPECTUS SUPPLEMENT, THE APPLICABLE PRICING
SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER
THAN THOSE TO WHICH THEY RELATE OR AN OFFER TO SELL, OR A SOLICITATION OF AN
OFFER TO BUY, IN ANY STATE TO ANY PERSON TO WHOM IT IS NOT LAWFUL TO MAKE SUCH
OFFER IN SUCH STATE. THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT, THE APPLICABLE
PRICING SUPPLEMENT OR THE PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT THE
INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
PROSPECTUS SUPPLEMENT
Description of the Notes............ S-2
PROSPECTUS
Prospectus Summary.................. 3
Risk Factors........................ 4
Price Range of Common Stock......... 7
Dividend Policy..................... 7
Selected Financial Information...... 8
Description of the Convertible Debt
Securities........................ 10
Description of Capital Stock........ 19
Certain United States Federal Income
Tax Consequences.................. 23
Plan of Distribution................ 26
Experts............................. 26
Available Information............... 26
Incorporation of Certain Information
by Reference...................... 27
</TABLE>
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ARS LOGO
AMERICAN RESIDENTIAL
SERVICES INC.
$25,000,000
CONVERTIBLE SENIOR SUBORDINATED
NOTES, SERIES A
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PROSPECTUS SUPPLEMENT
APRIL 22, 1998
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