<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 17, 1999
REGISTRATION NO. 333-
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
WASTE MANAGEMENT, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 4953 73-1309529
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
1001 FANNIN STREET
SUITE 4000
HOUSTON, TEXAS 77002
(713) 512-6200
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
---------------------
BRYAN J. BLANKFIELD
ASSISTANT GENERAL COUNSEL
1001 FANNIN STREET, SUITE 4000
HOUSTON, TEXAS 77002
(713) 512-6200
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box: [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) 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 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: [ ]
---------------------
CALCULATION OF REGISTRATION FEE
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<CAPTION>
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PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT BEING OFFERING PRICE AGGREGATE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER NOTE(1) PRICE(1) FEE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
6.000% Senior Notes Due
2001......................... $ 200,000,000 100% $200,000,000 $ 55,600
6.500% Senior Notes Due
2004......................... 200,000,000 100% 200,000,000 55,600
6.875% Senior Notes Due
2009......................... 500,000,000 100% 500,000,000 139,000
7.375% Senior Notes Due
2029......................... 250,000,000 100% 250,000,000 69,500
Guarantee of Senior
Notes(2)..................... $1,150,000,000 100% (3)
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
(2) See inside facing page for additional registrant guarantors.
(3) Pursuant to Rule 457(n), no separate fee for the Guarantee is payable.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS 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 THIS REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(a), MAY DETERMINE.
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<PAGE> 2
TABLE OF ADDITIONAL REGISTRANT GUARANTORS
<TABLE>
<CAPTION>
ADDRESS INCLUDING
STATE OR OTHER IRS ZIP CODE AND
EXACT NAME JURISDICTION OF EMPLOYER TELEPHONE NUMBER
AS SPECIFIED INCORPORATION OF IDENTIFICATION OF PRINCIPAL
IN ITS CHARTER ORGANIZATION NUMBER EXECUTIVE OFFICE
- -------------- ---------------- -------------- -----------------
<S> <C> <C> <C>
Waste Management Holdings, Inc. ............ Delaware 36-2660763 1001 Fannin Street
Suite 4000
Houston, Texas 77002
(713) 512-6200
</TABLE>
<PAGE> 3
SUBJECT TO COMPLETION, DATED SEPTEMBER 17, 1999
WASTE MANAGEMENT, INC.
OFFERS TO EXCHANGE
$200,000,000 6.000% SENIOR NOTES DUE 2001
$200,000,000 6.500% SENIOR NOTES DUE 2004
$500,000,000 6.875% SENIOR NOTES DUE 2009
$250,000,000 7.375% SENIOR NOTES DUE 2029
FOR
$200,000,000 6.000% SENIOR NOTES DUE 2001
$200,000,000 6.500% SENIOR NOTES DUE 2004
$500,000,000 6.875% SENIOR NOTES DUE 2009
$250,000,000 7.375% SENIOR NOTES DUE 2029
---------------------
THE EXCHANGE OFFER:
- We will exchange all outstanding notes that are validly tendered and not
validly withdrawn for an equal principal amount of exchange notes that
are freely tradeable.
- You may withdraw tenders of outstanding notes at any time prior to the
expiration of the exchange offer.
- The exchange offer expires at 5:00 p.m., New York City time, on
, 1999, unless extended. We do not currently intend to extend
the expiration date.
THE EXCHANGE NOTES:
- Terms: Will be substantially identical to the outstanding notes except
that the exchange notes will be freely tradeable.
RESALES OF EXCHANGE NOTES:
- The exchange notes may be sold in the over-the-counter market, in
negotiated transactions or through a combination of such methods.
---------------------
YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 9
OF THIS PROSPECTUS BEFORE PARTICIPATING IN THE EXCHANGE OFFER
---------------------
Neither the Securities and Exchange Commission, nor any state securities
commission, has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this Prospectus. Any representation to the contrary is a
criminal offense.
The date of this Prospectus is , 1999
<PAGE> 4
TABLE OF CONTENTS
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PAGE
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<S> <C>
Where to Find More Information.............................. i
Prospectus Summary.......................................... 1
Risk Factors................................................ 9
Special Note Regarding Forward-Looking Statements........... 16
Use of Proceeds............................................. 16
Ratio of Earnings to Fixed Charges.......................... 17
Description of the Exchange Notes........................... 18
The Exchange Offer.......................................... 37
Certain United States Federal Income Tax Consequences....... 44
Plan of Distribution........................................ 48
Legal Matters............................................... 48
Experts..................................................... 48
</TABLE>
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YOU SHOULD RELY ONLY ON THE INFORMATION INCORPORATED BY REFERENCE OR
CONTAINED IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
DIFFERENT INFORMATION. WE ARE NOT MAKING AN OFFER OF THESE SECURITIES IN ANY
STATE WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD NOT ASSUME THAT THE
INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN
THE DATE ON THE FRONT OF THIS PROSPECTUS.
<PAGE> 5
WHERE TO FIND MORE INFORMATION
We are subject to the information requirements of the Securities Exchange
Act of 1934, and in accordance therewith we file reports, proxy and information
statements and other information with the Securities and Exchange Commission.
You can inspect and copy these reports, proxy and information statements and
other information at:
- the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Washington DC 20549, and
- the regional offices of the Commission located at:
- 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and
- 7 World Trade Center, Suite 1300, New York, New York 10048.
You also can obtain copies of these materials from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, DC 20549 at
prescribed rates. You may obtain information regarding the operation of the
public reference facilities by calling the Commission at 1-800-SEC-0330. You can
obtain electronic filings made through the Electronic Data Gathering, Analysis
and Retrieval System at the Commission's web site, http://www.sec.gov.
In addition, you can inspect material filed by us at the offices of the New
York Stock Exchange, 20 Broad Street, New York, New York 10005, on which shares
of our common stock are listed.
We are incorporating by reference in this Prospectus some information we
file with the Commission, which means that we are disclosing important
information to you by referring you to those documents. Specifically, we
incorporate by reference the documents set forth below that we have previously
filed with the Commission:
<TABLE>
<CAPTION>
COMMISSION FILINGS (FILE NO. 1-12154) -- PERIOD/DATE ----------------------------
<S> <C>
- - Annual Report on Form 10-K Year ended December 31, 1998
- - Quarterly Report on Form 10-Q Quarter ended March 31, 1999 (certain
items in financial statements were
revised in June 30, 1999 Form 10-Q)
- - Quarterly Report on Form 10-Q Quarter ended June 30, 1999
- - Current Report on Form 8-K September 16, 1999
- - Proxy Statement for the 1999 Annual April 5, 1999
Meeting of Stockholders
</TABLE>
The documents we have filed with the Commission pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and
before the termination of the offering made by this Prospectus are also
incorporated by reference into this Prospectus.
This Prospectus, which is a part of the exchange offer registration
statement, does not contain all of the information found in the exchange offer
registration statement. You should refer to the registration statement,
including its exhibits and schedules, for further information.
YOU MAY REQUEST A COPY OF THIS INFORMATION, THE EXCHANGE OFFER REGISTRATION
STATEMENT, AND THE COMMISSION FILINGS AT NO COST, BY WRITING OR TELEPHONING US
AT THE FOLLOWING ADDRESS:
WASTE MANAGEMENT, INC.
1001 FANNIN STREET, SUITE 4000
HOUSTON, TEXAS 77002
(713) 512-6200
ATTN: SECRETARY
TO ENSURE TIMELY DELIVERY, YOU SHOULD REQUEST THESE FILINGS NO LATER THAN
________________.
i
<PAGE> 6
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this prospectus.
You should read the entire prospectus, including the financial data and related
notes and the information incorporated by reference into this prospectus, before
making an investment decision. In this prospectus, the terms "our," "we," "us,"
"Waste Management," and similar terms refer to Waste Management, Inc. and
include all of our consolidated subsidiaries. In this prospectus, the term "you"
refers to a holder of the outstanding notes or the exchange notes.
THE COMPANY
OVERVIEW
We are a global leader in providing integrated waste management services.
In North America, we provide solid waste management services throughout the
United States, as well as in Canada, Mexico and Puerto Rico, including
collection, transfer, recycling and resource recovery services, and disposal
services, including the landfill disposal of hazardous wastes. In addition, we
are a leading developer, operator and owner of waste-to-energy facilities in the
United States. We also engage in other hazardous waste management services
throughout North America, as well as low-level and other radioactive waste
services. Internationally, we operate throughout Europe, the Pacific Rim, South
America and other select international markets. Our diversified customer base
includes commercial, industrial, municipal and residential customers, other
waste management companies, governmental entities and independent power markets.
RECENT DEVELOPMENTS
On September 14, 1999, we announced the declaration of an annual cash
dividend of $0.01 per share payable October 19, 1999 to stockholders of record
on September 30, 1999.
On July 6, 1999, we announced that we had lowered our expected earnings per
share for the three-month period ended June 30, 1999. On July 29, 1999, we
announced a further reduction in our expected earnings for that period. On
August 3, 1999, we announced that our reported operating income for the
three-month period ended March 31, 1999 may have included certain non-recurring
pretax income items. Between July 8, 1999 and August 4, 1999, several lawsuits
that purport to be based on one or more of these announcements have been filed
against us and certain of our officers and directors in the United States
District Court for the Southern District of Texas. Taken together, the
plaintiffs of these lawsuits purport to assert claims on behalf of a class of
purchasers of our common stock between June 10, 1998 and August 2, 1999. Among
other things, the plaintiffs allege that Waste Management and certain of its
officers and directors (i) made knowingly false earnings projections for the
three months ended June 30, 1999 and (ii) failed to adequately disclose facts
relating to its earnings projections that the plaintiffs allege would have been
material to purchasers of Waste Management's common stock. The plaintiffs also
claim that certain of Waste Management's officers and directors sold common
stock at prices known to be inflated by the alleged material misstatements and
omissions. The plaintiffs in these actions seek damages with interest, costs and
such other relief as the respective courts deem proper.
In addition, two of Waste Management's shareholders have filed lawsuits
against certain of our officers and directors in connection with the events
surrounding our second quarter 1999 earnings projections and July 6, 1999
earnings announcement. These lawsuits were filed in the Court of Chancery of the
State of Delaware on July 16, 1999 and in the United States District Court for
the Southern District of Texas on July 27, 1999. The plaintiffs in these actions
purport to allege derivative claims on behalf of Waste Management against these
officers and directors for alleged breaches of fiduciary duty resulting from
their alleged stock sales during the three-month period ended June 30, 1999
and/or their oversight of Waste Management's affairs. The lawsuits name Waste
Management, Inc. as a nominal defendant and seek compensatory and punitive
damages with interest, equitable and/or injunctive relief, costs and such other
relief as the respective courts deem proper.
1
<PAGE> 7
We have also received a letter from participants in our Employee Stock
Purchase Plan who allegedly purchased our common stock on June 30, 1999. The
letter demands that the Administrative Committee of the Plan bring an action
against Waste Management and certain selling officers and directors for losses
allegedly sustained by the participants in connection with their stock
purchases. These Plan participants have indicated in the letter that, absent
action by the Plan, they intend to sue Waste Management and the directors and
officers on behalf of the Plan and its participants.
In addition, the Commission has notified us of an informal inquiry into the
period ended June 30, 1999, as well as certain sales of our common stock that
preceded our July 6, 1999 earnings announcement.
The New York Stock Exchange has notified us that its market Trading
Analysis Department is reviewing transactions in our common stock prior to the
July 6, 1999 earnings forecast announcement.
We are conducting a thorough investigation of each of the allegations that
have been made in connection with our second quarter 1999 earnings
communications. As part of this investigation, our Board of Directors has
authorized a review of the allegations that have been made against certain of
our officers and directors. Roderick M. Hills, a former chairman of the
Commission and chairman of our audit committee, is directing the review.
We have received a Civil Investigative Demand, or CID, from the Antitrust
Division of the United States Department of Justice inquiring into our
non-hazardous solid waste operations in the State of Massachusetts. The CID
purports to have been issued for the purpose of determining whether we have
engaged in monopolization, illegal contracts in restraint of trade, or
anticompetitive acquisitions of disposal and/or hauling assets. The CID requires
us to provide the Department of Justice with certain documents to assist it in
its inquiry.
On July 16, 1999, a lawsuit was filed against Waste Management in the
Circuit Court of Sumter County in the State of Alabama. The plaintiff in the
lawsuit purports to allege on behalf of a class of similarly situated persons
that Waste Management has deprived the class of lump sum payments of pension
plan benefits allegedly promised to be paid in connection with termination of
the Waste Management Holdings defined benefit pension plan. On behalf of the
purported class, the plaintiff seeks compensatory and punitive damages, costs,
restitution with interest, and such other relief as the Court deems proper.
It is not possible at this time to predict the impact that the above
lawsuits may have on Waste Management Holdings or Waste Management, nor is it
possible to predict whether any other suits or claims may arise out of these
matters in the future. However, it is reasonably possible that the outcome of
any present or future litigation may have a material adverse impact on our
financial condition or results of operations in one or more future periods.
Waste Management and Waste Management Holdings intend to defend themselves
vigorously in all the above matters.
An Executive Committee of our Board of Directors has been formed,
consisting of Ralph V. Whitworth, Roderick M. Hills and Jerome P. York. The
Board of Directors has appointed Mr. Whitworth, a managing member of Relational
Investors LLC, as Chairman of the Executive Committee.
Rodney R. Proto has relinquished his position as our President and Chief
Operating Officer and as a member of the Board of Directors. John E. Drury has
stepped aside as Chairman and Chief Executive Officer, but remains a member of
the Board of Directors. Earl E. DeFrates has resigned as Chief Financial Officer
and Gregory T. Sangalis has resigned as our General Counsel.
Our Board of Directors has appointed Ralph V. Whitworth its Chairman.
Additionally, we have named Donald Chappel as our Chief Financial Officer and
Executive Vice President. Mr. Chappel was previously the Vice President and
acting Chief Financial Officer of Waste Management Holdings from October 1997
until its merger with USA Waste Services, Inc. in July 1998 and also served as
our Senior Vice President-Operations and Administration from July 1998 through
April 1999.
We have initiated a search for a new Chief Executive Officer and General
Counsel. Pending the conclusion of this search, the Board of Directors has
appointed Robert S. Miller as the Chief Executive
2
<PAGE> 8
Officer and President. Mr. Miller served as Chairman of the Board of Waste
Management from July 1998 until May 1999 and was a director of Waste Management
Holdings from October 1997 to July 1998. Mr. Miller serves as Vice-Chairman of
Morrison Knudsen Corporation, an engineering and construction firm. He also
served as Chief Executive Officer of Federal-Mogul Corporation from September
until November 1996 and as Chairman of Morrison Knudsen Corporation from April
1995 until September 1996. In addition, since 1993 he has served as Vice
President and Treasurer of Moore Mill and Lumber, a privately held forest
product firm, and from 1992 to 1993, he served as Senior Partner of James E.
Wolfensohn, Inc., an investment banking firm. From 1979 to 1992, Mr. Miller was
with Chrysler Corporation, an automobile and truck manufacturing firm, rising to
become Vice-Chairman of the Board after serving as Chrysler's Chief Financial
Officer. Mr. Miller is a director of Federal-Mogul Corporation, Morrison Knudsen
Corporation, Pope & Talbot, Inc., and Symantec Corporation.
The Board of Directors has initiated a strategic initiative aimed at
increasing shareholder value. We have engaged Chase Securities Inc. and
Donaldson, Lufkin and Jenrette Securities Corporation as financial advisors to
assist us in this matter. The plan calls for disposition of some or all of our
international assets, a substantial majority of our non-core assets, and certain
non-strategic North American solid waste assets that account for 10% of our
operating revenues in that sector. We intend immediately to initiate the
disposition of these assets, and plan to substantially complete these asset
sales in the next 12 months, although there can be no assurance that these
dispositions will be completed in the contemplated time frame. We expect to use
the proceeds of these asset dispositions as they are realized to repay debt,
repurchase shares and pursue tuck-in acquisitions.
SUMMARY OF TERMS OF THE EXCHANGE OFFER
On May 21, 1999, we completed the private offering of the outstanding
notes, consisting of:
- $200 million principal amount of 6.000% Senior Notes due 2001;
- $200 million principal amount of 6.500% Senior Notes due 2004;
- $500 million principal amount of 6.875% Senior Notes due 2009; and
- $250 million principal amount of 7.375% Senior Notes due 2029.
We and the guarantor executed a registration rights agreement with the
initial purchasers in the private offering of the outstanding notes in which we
and the guarantor agreed to deliver to you this prospectus and agreed to:
- file an exchange offer registration statement with the Commission within
120 days after May 21, 1999;
- have the exchange offer registration statement declared effective by the
Commission within 210 days after May 21, 1999; and
- consummate the exchange offer within 30 business days after the date on
which the exchange offer registration statement is declared effective by
the Commission.
You are entitled to exchange in the exchange offer your outstanding notes
for exchange notes which are identical in all material respects to the
outstanding notes except that:
- the exchange notes have been registered under the Securities Act; and
- certain contingent interest rate provisions are no longer applicable.
The Exchange Offer......... We are offering to exchange the aggregate principal
amount of exchange notes for the aggregate
principal amount of outstanding notes. The
outstanding notes may be exchanged only in amounts
which are equal to whole multiples of $1,000.
3
<PAGE> 9
Resales of Exchange
Notes.................... Based on Commission no action letters, we believe
that after the exchange offer you may offer and
sell the exchange notes without registration under
the Securities Act so long as:
- You acquire the exchange notes in the ordinary
course of business.
- When the exchange offer begins you do not have an
arrangement with another person to participate in
a distribution of the exchange notes.
- You are not engaged in a distribution of, nor do
you intend to distribute, the exchange notes.
When you tender the outstanding notes, we will ask
you to represent to us that:
- You are not an affiliate of Waste Management.
- You will acquire the exchange notes in the
ordinary course of business.
- When the exchange offer begins you are not
engaged in, nor do you have plans with another
person to be engaged in, a distribution of the
exchange notes.
If you are unable to make these representations,
you will be required to comply with the
registration and prospectus delivery requirements
under the Securities Act in connection with any
resale transaction.
If you are a broker-dealer and receive exchange
notes for your own account, you must acknowledge
that you will deliver a prospectus if you resell
the exchange notes. By acknowledging your intent
and delivering a prospectus you will not be deemed
to admit that you are an "underwriter" under the
Securities Act. You may use this prospectus as it
is amended from time to time when you resell
exchange notes which were acquired from
market-making or trading activities. For a year
after the expiration date we will make this
prospectus available to any broker-dealer in
connection with such a resale. See "Plan of
Distribution."
Consequences of Failure to
Exchange Notes........... If you do not exchange your outstanding notes
during the exchange offer you will no longer be
entitled to registration rights. You will not be
able to offer or sell the outstanding notes unless
they are later registered, sold pursuant to an
exemption from registration or sold in a
transaction not subject to the Securities Act or
state securities laws. Other than in connection
with the exchange offer, we do not currently
anticipate that we will register the outstanding
notes under the Securities Act. See "The Exchange
Offer -- Consequences of Failure to Exchange."
Expiration Date............ The exchange offer will expire at 5:00 p.m., New
York City time, on , 1999 or such later
date and time to which we extend it, referred to as
the "expiration date."
Conditions to the Exchange
Offer.................... No minimum principal amount of outstanding notes
must be tendered to complete the exchange offer.
However, the exchange offer is subject
4
<PAGE> 10
to certain customary conditions which we may waive.
See "The Exchange Offer -- Conditions."
Procedures for Tendering
Outstanding Notes........ If you wish to participate in the exchange offer,
you must complete, sign and date the accompanying
letter of transmittal or a facsimile copy and mail
it or deliver it to the exchange agent along with
any necessary documentation. Instructions and the
address of the exchange agent are on the letter of
transmittal and in this prospectus. See "The
Exchange Offer -- Procedures for Tendering" and
"-- Exchange Agent." You may also effect a tender
of outstanding notes pursuant to the procedures for
book-entry transfer as described in this
prospectus. See "The Exchange Offer -- Procedures
for Tendering."
Guaranteed Delivery
Procedures............... If you cannot tender the outstanding notes,
complete the letter of transmittal or provide the
necessary documentation prior to the termination of
the exchange offer, you may tender your outstanding
notes according to the guaranteed delivery
procedures set forth in "The Exchange
Offer -- Guaranteed Delivery Procedures."
Special Procedures for
Beneficial Owners........ If you are a beneficial owner of outstanding notes
which are registered in the name of a broker,
dealer, commercial bank, trust company or other
nominee, and you wish to tender outstanding notes
in the exchange offer, you should contact the
registered holder promptly and instruct the
registered holder to tender on your behalf. If you
wish to tender on your own behalf, you must, prior
to completing and executing the letter of
transmittal and delivering your outstanding notes,
either make appropriate arrangements to register
ownership of the outstanding notes in your name or
obtain a properly completed bond power from the
registered holder. The transfer of registered
ownership may take considerable time and may not be
able to be completed prior to the expiration date.
Withdrawal Rights.......... You may withdraw outstanding notes that have been
tendered at any time prior to the expiration date
by sending a written or facsimile withdrawal notice
to the Exchange Agent.
Acceptance of Outstanding
Notes and Delivery of
Exchange Notes........... All outstanding notes properly tendered to the
Exchange Agent by the expiration date will be
accepted for exchange. The exchange notes will be
delivered promptly after the expiration date. See
"The Exchange Offer -- Acceptance of Notes for
Exchange; Delivery of Exchange Notes."
Certain U.S. Federal Income
Tax Consequences......... The exchange of outstanding notes for exchange
notes will not be a taxable event for U.S. federal
income tax purposes. See "Certain United States
Federal Income Tax Consequences."
Exchange Agent............. Chase Bank of Texas, National Association is the
exchange agent for the exchange offer. The address
and telephone number of the exchange agent are set
forth in the section captioned "The Exchange
Offer -- Exchange Agent" of this prospectus.
5
<PAGE> 11
SUMMARY OF TERMS OF THE EXCHANGE NOTES
Issuer..................... Waste Management, Inc.
Notes Offered.............. $200 million principal amount of 6.000% Senior
Notes due 2001;
$200 million principal amount of 6.500% Senior
Notes due 2004;
$500 million principal amount of 6.875% Senior
Notes due 2009; and
$250 million principal amount of 7.375% Senior
Notes due 2029.
Maturities................. For the 2001 exchange notes, May 15, 2001;
for the 2004 exchange notes, May 15, 2004;
for the 2009 exchange notes, May 15, 2009; and
for the 2029 exchange notes, May 15, 2029.
Interest Payment Dates..... Interest on all exchange notes will be paid
semi-annually in cash in arrears on May 15 and
November 15 of each year, commencing November 15,
1999.
Optional Redemption........ Except for the exchange notes due in 2001, the
exchange notes will be redeemable at our option.
The exchange notes may be redeemed in whole or in
part, at any time or from time to time, on not less
than 30 days' notice, at the make-whole price as
defined under "Description of the Exchange
Notes -- Optional Redemption."
Ranking.................... The outstanding notes are, and the exchange notes
will be, our general unsecured senior obligations
and will rank equal in right of payment to all of
our other existing and future senior and unsecured
indebtedness, including debt under our credit
facilities. See "Description of Exchange
Notes -- Ranking."
Subsidiary Guarantee....... The outstanding notes are, and the exchange notes
will be, guaranteed by our subsidiary Waste
Management Holdings, Inc. on a full and
unconditional basis. The subsidiary guarantee will
be equal in right of payment to all senior and
unsecured indebtedness of Waste Management
Holdings, Inc.
Covenants.................. We issued the outstanding notes, and will issue the
exchange notes, under an indenture with Chase Bank
of Texas, National Association, the trustee. The
indenture, among other things, restricts our
ability and the ability of our subsidiaries to:
- create liens securing indebtedness; and
- engage in sale and leaseback transactions.
For more details, see "Description of Exchange
Notes -- Certain Covenants."
The exchange notes will be freely transferable but will also be new
securities for which there will not initially be a market. Accordingly, we
cannot assure you whether a market for the exchange notes will develop or as to
the liquidity of any such market. We do not intend to apply for a listing of the
exchange notes on any securities exchange or automated dealer quotation system.
The initial purchasers in the private offering of the outstanding notes have
advised us that they intend to make a market in the exchange notes. However,
they are not required to do so, and any market-making activities with respect to
the exchange notes may be discontinued without notice.
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<PAGE> 12
HISTORICAL AND SELECTED FINANCIAL INFORMATION
The following selected consolidated financial information as of December
31, 1997 and 1998, and for each of the years in the three year period ended
December 31, 1998, has been derived from Waste Management's audited consolidated
financial statements incorporated by reference herein. This information should
be read in conjunction with such consolidated financial statements and related
notes thereto. The selected consolidated financial information as of December
31, 1994, 1995 and 1996, and for each of the years in the two year period ended
December 31, 1995, has been derived from audited consolidated financial
statements, that have been previously included in Waste Management's reports
under the Exchange Act, restated for certain pooling of interests transactions.
The following selected historical financial information as of and for the six
months ended June 30, 1998 and 1999 has been derived from Waste Management's
unaudited historical financial statements and reflects all adjustments
management considers necessary for a fair presentation of the financial position
and results of operations for these periods. The results of operations for the
six months ended June 30, 1999 are not necessarily indicative of the results
that may be expected for the full year.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
------------------------------------------------------------------- -------------------------
1994 1995 1996 1997 1998 1998 1999
----------- ----------- ----------- ----------- ----------- ----------- -----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Operating revenues............ $ 9,677,048 $10,432,775 $10,998,602 $11,972,498 $12,703,469 $ 6,220,164 $ 6,405,210
----------- ----------- ----------- ----------- ----------- ----------- -----------
Costs and expenses:
Operating (exclusive of
depreciation and
amortization shown
below).................... 5,705,355 6,261,745 6,564,234 7,482,273 7,383,751 3,713,344 3,544,876
General and
administrative............ 1,236,765 1,279,719 1,316,480 1,438,501 1,309,936 729,267 544,642
Depreciation and
amortization.............. 1,129,890 1,186,492 1,264,196 1,391,810 1,498,712 743,665 740,665
Merger costs................ 3,782 26,539 126,626 112,748 1,807,245 14,963 79,695
Asset impairments and
unusual items............. 122,233 394,092 529,768 1,771,145 864,063 -- 19,750
(Income) loss from
continuing operations held
for sale, net of minority
interest.................. (24,143) (25,110) (315) 9,930 151 (2,570) --
----------- ----------- ----------- ----------- ----------- ----------- -----------
8,173,882 9,123,477 9,800,989 12,206,407 12,863,858 5,198,669 4,929,628
----------- ----------- ----------- ----------- ----------- ----------- -----------
Income (loss) from
operations.................. 1,503,166 1,309,298 1,197,613 (233,909) (160,389) 1,021,495 1,475,582
----------- ----------- ----------- ----------- ----------- ----------- -----------
Other income (expense):
Interest expense............ (437,946) (534,964) (525,340) (555,576) (681,457) (329,085) (361,068)
Interest income............. 47,878 41,565 34,603 45,214 26,829 14,504 8,481
Minority interest........... (126,042) (81,367) (41,289) (45,442) (24,254) (38,166) (13,009)
Other income, net........... 113,526 257,773 108,645 127,216 139,392 110,432 30,578
----------- ----------- ----------- ----------- ----------- ----------- -----------
(402,584) (316,993) (423,381) (428,588) (539,490) (242,315) (335,018)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Income (loss) from continuing
operations before income
taxes....................... 1,100,582 992,305 774,232 (662,497) (699,879) 779,180 1,140,564
Provision for income taxes.... 498,233 493,375 486,700 363,341 66,923 350,994 475,614
----------- ----------- ----------- ----------- ----------- ----------- -----------
Income (loss) from continuing
operations.................. 602,349 498,930 287,532 (1,025,838) (766,802) 428,186 664,950
Income (loss) from
discontinued operations..... 27,324 4,863 (263,301) 95,688 -- -- --
Extraordinary item............ -- -- -- (6,809) (3,900) (3,900) --
Accounting change............. (1,281) -- -- (1,936) -- -- --
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net income (loss)............. $ 628,392 $ 503,793 $ 24,231 $ (938,895) $ (770,702) $ 424,286 $ 664,950
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
7
<PAGE> 13
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
------------------------------------------------------------------- -------------------------
1994 1995 1996 1997 1998 1998 1999
----------- ----------- ----------- ----------- ----------- ----------- -----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
Basic earnings (loss) per
common share:
Continuing operations....... $ 1.24 $ 0.99 $ 0.54 $ (1.84) $ (1.31) $ 0.75 $ 1.10
Discontinued operations..... 0.06 0.01 (0.49) 0.17 -- -- --
Extraordinary item.......... -- -- -- (0.01) (0.01) (0.01) --
Accounting change........... -- -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net income (loss)........... $ 1.30 $ 1.00 $ 0.05 $ (1.68) $ (1.32) $ 0.74 $ 1.10
=========== =========== =========== =========== =========== =========== ===========
Diluted earnings (loss) per
common share:
Continuing operations....... $ 1.23 $ 0.97 $ 0.53 $ (1.84) $ (1.31) $ 0.73 $ 1.05
Discontinued operations..... 0.05 0.01 (0.49) 0.17 -- -- --
Extraordinary item.......... -- -- -- (0.01) (0.01) (0.01) --
Accounting change........... -- -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net income (loss)........... $ 1.28 $ 0.98 $ 0.04 $ (1.68) $ (1.32) $ 0.72 $ 1.05
=========== =========== =========== =========== =========== =========== ===========
Cash dividends per common
share....................... $ 0.60 $ 0.58 $ 0.57 $ 0.56 $ 0.16 $ 0.15 $ --
=========== =========== =========== =========== =========== =========== ===========
BALANCE SHEET DATA (AT END OF
PERIOD):
Working capital............... $ (681,813) $(1,027,093) $ (258,210) $(1,967,278) $ (412,269) $(1,247,551) $ (321,801)
Intangible assets, net........ 3,661,594 4,329,909 4,681,381 4,848,176 6,250,324 5,864,321 6,751,228
Total assets.................. 18,124,674 19,950,426 20,727,524 20,156,424 22,715,198 22,525,101 22,991,673
Long-term debt, including
current maturities.......... 7,677,360 8,404,034 9,064,566 9,479,961 11,697,943 10,703,435 11,301,976
Stockholders' equity.......... 4,506,454 5,184,104 5,201,610 3,854,929 4,372,496 5,349,893 5,475,932
</TABLE>
8
<PAGE> 14
RISK FACTORS
In addition to the information set forth in this Prospectus, you should
carefully consider the risks described below before deciding whether to
participate in the exchange offer. The following risks include all of the risks
which we believe to be material at the current time. Additional risks not
presently known to us or that we currently deem immaterial may also impair our
business operations.
THE NOTES ARE SUBORDINATED TO THE DEBT OF OUR SUBSIDIARIES
As a holding company, we conduct our operations through our subsidiaries.
Our only significant assets are the capital stock of our subsidiaries.
Accordingly, our ability to meet our cash obligations depends in part upon the
ability of our subsidiaries to make cash distributions to us. The ability of our
subsidiaries to make distributions to us is, and will continue to be, restricted
by, among other limitations, applicable provisions of the laws of national or
state governments and contractual provisions. Our right to participate in the
assets of any subsidiary (and thus the ability of holders of the exchange notes
to benefit indirectly from such assets) is generally subject to the prior claims
of creditors, including trade creditors, of that subsidiary, except to the
extent that we are recognized as a creditor of such subsidiary, in which case
our claims would still be subject to any security interest of other creditors of
such subsidiary. Therefore, except as described below, the exchange notes will
be subordinated by operation of law to creditors, including trade creditors, of
our subsidiaries with respect to the assets of the subsidiaries, against which
these creditors have a claim.
The exchange notes will be guaranteed by our subsidiary Waste Management
Holdings. Our obligations under our credit facilities and our other senior
indebtedness are also currently guaranteed by Waste Management Holdings.
Similarly, we have guaranteed the outstanding senior indebtedness of Waste
Management Holdings. Thus, the exchange notes will rank equally in right of
payment with the senior indebtedness of Waste Management Holdings, the debt
under our credit facilities and our other senior indebtedness. Because of our
holding company structure and the impact of the Waste Management Holdings'
guarantee, the exchange notes will be structurally subordinated to the claims of
creditors of our subsidiaries, other than Waste Management Holdings. As of June
30, 1999, the amount of this subsidiary indebtedness was approximately $1.9
billion out of our total consolidated long-term debt of approximately $11.3
billion.
Upon any release by the lenders under our credit facilities (or any
replacement or new principal credit facility) of the Waste Management Holdings'
guarantee, we and Waste Management Holdings will each be deemed automatically
and unconditionally released and discharged from our respective obligations
under the guarantees of the senior indebtedness of the other so guaranteed. In
such event, the claims of creditors of Waste Management Holdings will
effectively have priority with respect to the assets and earnings of Waste
Management Holdings over the claims of our creditors, including the holders of
the exchange notes.
U.S. BANKRUPTCY OR FRAUDULENT CONVEYANCE LAW MAY INTERFERE WITH THE PAYMENT OF
THE NOTES
Various applicable fraudulent transfer laws allow courts, under specific
circumstances, to avoid guarantees by a subsidiary and require holders of the
guaranteed obligations to return any payments received from the subsidiary
guarantors. A court may use these laws to avoid the Waste Management Holdings
guarantee of the exchange notes in the event of bankruptcy or insolvency of
Waste Management Holdings.
A court could set aside Waste Management Holdings' guarantee of the
exchange notes to the extent that either of the following were true at the time
it issued the guarantee:
- Waste Management Holdings incurred the guarantee with the intent to
hinder, delay or defraud any of its present or future creditors or
contemplated insolvency with a design to favor one or more creditors to
the total or partial exclusion of others; or
9
<PAGE> 15
- Waste Management Holdings did not receive fair consideration or
reasonably equivalent value for issuing the guarantee and, at the time it
issued the guarantee, it:
- was insolvent or was rendered insolvent by reason of the issuance of the
guarantee;
- engaged or was about to engage in a business or transaction for which
Waste Management Holdings' remaining assets constituted unreasonably
small capital; or
- intended to incur, or believed that it would incur, debts beyond its
ability to pay such debts as they mature.
Among other things, a legal challenge to Waste Management Holdings'
guarantee of the exchange notes on fraudulent transfer grounds may focus on the
benefits, if any, realized by it as a result of our issuance of the exchange
notes. To the extent Waste Management Holdings' guarantee of the exchange notes
were to be avoided on fraudulent conveyance grounds or held unenforceable for
any other reason, you would cease to have any claim in respect of Waste
Management Holdings' guarantee and would be solely our creditors. In such event,
your claim against Waste Management Holdings would be subject to the prior
payments of all Waste Management Holdings' obligations. Waste Management
Holdings may not have sufficient assets, after providing for all prior claims,
to satisfy the claims of all holders of the exchange notes relating to any
voided guarantee.
The obligations of Waste Management Holdings under its guarantee of the
exchange notes are limited to an amount which would not cause such guarantee to
be a fraudulent transfer or conveyance. Waste Management Holdings has issued
similar guarantees of certain of our other indebtedness. The determination of
the amount that would be due under its guarantee of the exchange notes or any of
such other guarantees is uncertain.
YOU MAY NOT BE ABLE TO SELL YOUR EXCHANGE NOTES
There is no active trading market for the exchange notes and this market
may never develop. If any of the exchange notes are traded after their initial
issuance, they may trade at a discount from their initial offering price.
Factors that could cause the exchange notes to trade at a discount are:
- an increase in prevailing interest rates;
- a decline in our credit worthiness;
- a weakness in the market for similar securities; and
- declining general economic conditions.
Future trading prices of the exchange notes will depend on many factors,
including, among other things, prevailing interest rates, our operating results
and the market for similar securities. We do not intend to apply for a listing
of the exchange notes on any securities exchange or automated dealer quotation
system. The initial purchasers of the outstanding exchange notes have advised us
that they currently intend to make a market in the exchange notes. However, they
are not obligated to do so and any market making may be discontinued at any time
without notice.
Historically, the market for non-investment grade debt has been subject to
disruptions that have caused volatility in prices. It is possible that the
market for the exchange notes will be subject to disruptions. Any disruptions
may have a negative effect on you, as a holder of the exchange notes, regardless
of our prospects and financial performance.
WE MAY ENCOUNTER DIFFICULTIES IN IMPLEMENTING OUR PROPOSED STRATEGIC INITIATIVE
Our ability to successfully implement our proposed strategic initiative may
be affected by the willingness of prospective purchasers to purchase the assets
we identify as divestiture candidates on terms we find acceptable, the timing
and terms on which such assets may be sold, uncertainties relating to
10
<PAGE> 16
regulatory approvals and other factors affecting the ability of prospective
purchasers to consummate such transactions. The success of our strategic
initiative could also be affected by the availability of financing, and
uncertainties relating to the impact of the proposed strategic initiative on our
credit ratings and, consequently, the availability and cost of debt and equity
financing to us.
WE ARE UNDERGOING CHANGES IN MANAGEMENT
We have initiated a search for a new Chief Executive Officer, Chief
Operating Officer and General Counsel. Our business may be affected by our
ability to retain qualified individuals to serve in those capacities.
WE FACE UNCERTAINTIES RELATING TO PENDING LITIGATION AND INVESTIGATIONS
We face uncertainties relating to pending litigation and investigations as
described in "The Company -- Recent Developments" above. We are unable to
predict the outcome or impact of these matters and there can be no assurance
that they will not have a material adverse effect on us and our business.
WE FACE POTENTIAL DIFFICULTIES IN CONTINUING TO EXPAND AND MANAGE OUR GROWTH
We have grown rapidly, primarily through acquisitions. We cannot guarantee
that we will be able to continue to expand and successfully manage our growth.
We also cannot guarantee that our existing or acquired operations will not be
adversely affected by the pace of our growth. Improving the productivity of our
acquired operations and using our asset base and strategic position to operate
more efficiently is very important to our financial results and prospects. In
particular, whether we will ultimately achieve the anticipated benefits of
acquired operations will depend on a number of factors, including our ability to
effect:
- administrative cost savings;
- rationalization of collection routes;
- insurance and bonding cost reductions; and
- general economies of scale.
Moreover, our ability to continue to grow will depend on a number of
factors, including:
- competition from other waste management companies;
- the availability of attractive acquisition opportunities;
- our ability to mitigate antitrust concerns related to acquisitions in
several markets;
- the availability of working capital;
- our ability to maintain margins on existing or acquired operations; and
- our ability to manage costs in a changing regulatory environment.
OUR ACQUISITION STRATEGY INVOLVES POTENTIAL RISKS
We regularly pursue opportunities to expand by acquiring additional waste
management businesses and operations that can be effectively integrated with our
existing operations. In addition, we regularly pursue mergers and acquisition
transactions, some of which are significant, in new markets where we believe
that we can successfully become a provider of integrated waste management
services. As one of the leading industry consolidators, we could announce
transactions with either publicly or privately owned businesses at any time.
11
<PAGE> 17
Our acquisition strategy involves potential risks. These risks include:
- our failure to accurately assess all of the pre-existing liabilities of
acquired companies;
- unexpected difficulties in successfully integrating the operations of
acquired companies with our existing operations;
- a lack of attractive acquisition opportunities;
- our inability to obtain the capital required to finance potential
acquisitions on satisfactory terms;
- the businesses we acquire not proving profitable; and
- our incurring additional indebtedness or issuing additional equity
securities as a result of future acquisitions.
WE MAY NEED ADDITIONAL CAPITAL IF OUR CASH FLOW IS LESS THAN EXPECTED
We expect to generate sufficient cash flow from our operations in 1999 to
cover our anticipated cash needs for capital expenditures and acquisitions. If
our cash flow from operations during 1999 is less than currently expected, or
our capital requirements increase, either due to strategic decisions or
otherwise, we may elect to incur indebtedness or issue equity securities to
cover any additional capital needs. However, we cannot guarantee that we will be
successful in obtaining additional capital in this manner on acceptable terms.
We also cannot guarantee that we will be successful in renewing our
existing credit facilities, or that we will be able to renew the credit
facilities on terms acceptable to us. If we are unable to renew our existing
credit facilities, or to obtain other financing sources, our business and
operating results could be affected adversely to a material extent.
FLUCTUATING VARIABLE INTEREST RATES COULD AFFECT US
In the past, we have used variable rate debt under revolving bank credit
arrangements as one method of financing our rapid growth. Although our recent
financings have reduced the amount of variable rate debt as a percentage of
total indebtedness outstanding, issuing variable rate debt will continue to be
an alternative for us. Fluctuations in variable interest rates, which may occur
as general interest rates change, could have a material adverse effect on us.
INTENSE COMPETITION COULD REDUCE OUR PROFITABILITY
We encounter intense competition from governmental, quasi-governmental and
private sources in all aspects of our operations.
In North America, the waste management services industry consists of large
national companies and local and regional companies of varying sizes and
financial resources. We compete with numerous waste management companies as well
as with counties and municipalities that maintain their own waste collection and
disposal operations. These counties and municipalities may have financial
competitive advantages because tax revenues and tax-exempt financing are
available to them. In addition, competitors may reduce their prices to expand
sales volume or to win competitively bid municipal contracts. Profitability may
decline because of the national emphasis on recycling, composting, and other
waste reduction programs that could reduce the volume of solid waste collected
or deposited in disposal facilities.
Outside of North America, the waste management services industry is very
decentralized and highly fragmented. In some markets, however, we compete with
substantial companies that hold significant market shares, particularly in
Finland, Germany, the Netherlands, Sweden and the United Kingdom. Some of our
international competitors may have greater financial resources and greater
technical resources than we do with respect to specific matters. Especially in
the case of larger contracts, we may be required to commit substantial resources
over a long period of time during the proposal phase without any assurance that
the contract will be awarded to us. Examples include contracts for city-cleaning
services, contracts or
12
<PAGE> 18
bids with respect to the construction or development of water and wastewater
facilities, or permitting and development of a new treatment facility,
waste-to-energy facility, incinerator or landfill.
OUR ACCOUNTING POLICIES CONCERNING UNAMORTIZED CAPITALIZED EXPENDITURES COULD
RESULT IN A MATERIAL CHARGE AGAINST OUR EARNINGS
In accordance with generally accepted accounting principles, we capitalize
certain expenditures and advances relating to acquisitions, pending
acquisitions, and disposal site development and expansion projects. We expense
indirect acquisition costs, such as executive salaries, general corporate
overhead, public affairs and other corporate services, as incurred. Our policy
is to charge against earnings any unamortized capitalized expenditures and
advances relating to any facility or operation that is permanently shut down,
any pending acquisition that is not consummated, and any disposal site
development or expansion project that is not completed or is no longer deemed to
be profitable within certain time frames. The charge against earnings is reduced
by any portion of the capitalized expenditure and advances that we estimate will
be recoverable, through sale or otherwise. In future periods, we may be required
to incur a charge against earnings in accordance with our policy. Depending on
its magnitude, any such charge could have a material adverse effect on our
consolidated financial statements.
GOVERNMENTAL REGULATIONS MAY RESTRICT OUR OPERATIONS OR INCREASE THE LEVEL OF
COSTS OF OUR OPERATIONS
Stringent government regulations at the federal, state and local level in
the United States and in other countries have a substantial impact on our
operations. A large number of complex laws, rules, orders and interpretations
govern environmental protection, health and safety, land use, zoning and related
matters. Among other things, they may restrict our operations and adversely
affect our operating results and financial condition by imposing conditions such
as:
- limitations on the siting and construction of new waste disposal,
transfer or processing facilities or the expansion of existing
facilities;
- limitations or bans on disposal of out-of-state waste or certain
categories of waste; or
- mandates regarding the disposal of solid waste.
Regulations also affect the siting, design and closure of landfills and
could require us to undertake investigatory or remedial activities, curtail
operations or close a landfill temporarily or permanently. Future changes in
these regulations may require us to modify, supplement or replace equipment or
facilities. The costs of complying with these regulations could be substantial.
In order to develop, expand or operate a landfill or other waste management
facility, we must have various facility permits and other governmental
approvals, including those relating to zoning, environmental protection and land
use. These permits and approvals are difficult, time consuming and costly to
obtain, in part because of possible opposition by governmental officials or
citizens. In addition, these permits and approvals may contain conditions that
limit operations and our ability to change the facility or are otherwise
difficult to comply with. We cannot guarantee that we will be successful in
obtaining and maintaining in effect permits and approvals required for the
successful operation and growth of our business, including permits and approvals
for the development of additional disposal capacity needed to replace existing
capacity that is exhausted.
Courts in the United States, basing their decisions on constitutional law,
have ruled that state and local governments may not use regulatory flow control
laws to restrict the free movement of waste in interstate commerce. We cannot
predict what impact, if any, these decisions will have on our disposal
facilities.
13
<PAGE> 19
WE COULD BE LIABLE FOR ENVIRONMENTAL DAMAGES RESULTING FROM OUR DISPOSAL
FACILITIES AND COLLECTION OPERATIONS
We could be liable if our disposal facilities or collection operations
cause environmental damage to our properties or to nearby landowners,
particularly as a result of the contamination of drinking water sources or soil.
Under current law, we could even be held liable for damage caused by conditions
that existed before we acquired the assets or operations involved. Also, we
could be liable if we arrange for the transportation, disposal or treatment of
hazardous substances that cause environmental contamination, or if a predecessor
owner made such arrangements and under applicable law we are treated as a
successor to the prior owner. Any substantial liability for environmental damage
could have a material adverse effect on our operating results and financial
condition.
In the ordinary course of our business, we may become involved in a variety
of legal and administrative proceedings relating to land use and environmental
laws and regulations. These may include proceedings in which:
- agencies of federal, state, local or foreign governments seek to impose
liability on us under applicable statutes, sometimes involving civil or
criminal penalties for violations, or to revoke or deny renewal of a
permit we need; and
- citizen groups, adjacent landowners or governmental agencies oppose the
issuance of a permit or approval we need, allege violations of the
permits under which we operate or laws or regulations to which we are
subject, or seek to impose liability on us for environmental damage for
which we may be responsible.
The adverse outcome of one or more of these proceedings could have a
material adverse effect on our financial position, results of operations or cash
flows.
From time to time we have received citations or notices from governmental
authorities that our operations are not in compliance with our permits or
certain applicable environmental or land use laws and regulations. In the future
we may receive additional citations or notices. We generally seek to work with
the authorities to resolve the issues raised by such citations or notices.
However, we cannot guarantee that we will always be successful in this regard.
Where we are not, we may incur fines, penalties or other sanctions that could
have a material adverse effect on our financial position, results of operations
or cash flows.
Our insurance for environmental liability meets or exceeds statutory
requirements. However, because we believe that the cost for such insurance is
high relative to the coverage it would provide, our coverages are generally
maintained at statutorily required levels. Due to the limited nature of such
insurance coverage for environmental liability, if we were to incur liability
for environmental damage, such liability could have a material adverse effect on
our financial position, results of operations or cash flows.
THE DEVELOPMENT AND ACCEPTANCE OF ALTERNATIVES TO LANDFILL DISPOSAL AND
WASTE-TO-ENERGY FACILITIES COULD REDUCE OUR ABILITY TO OPERATE AT FULL CAPACITY
Our customers are increasingly using alternatives to landfill disposal,
such as recycling and composting. In addition, state and local governments are
increasingly mandating recycling and waste reduction at the source and
prohibiting the disposal of certain types of wastes, such as yard wastes, at
landfills or waste-to-energy facilities. These developments could reduce the
volume of waste going to landfills and waste-to-energy facilities in certain
areas, which may affect our ability to operate our landfills and waste-to-energy
facilities at full capacity as well as the prices that we can charge for
landfill disposal and waste-to-energy services.
FLUCTUATIONS IN THE PRICE OF RECYCLABLE MATERIALS AFFECT OUR OPERATING REVENUES
Recyclable materials that we process for sale, including paper, plastics,
aluminum and other commodities, are subject to significant price fluctuations.
These fluctuations will affect our future operating revenues and income.
14
<PAGE> 20
THE COMMISSION IS INVESTIGATING THE ACCOUNTING PRACTICES OF WASTE MANAGEMENT
HOLDINGS
The Commission has commenced a formal investigation with respect to the
previously filed financial statements (which were subsequently restated) and the
related accounting policies, procedures and system of internal controls of Waste
Management Holdings, Inc., or "WM Holdings," which we acquired through a merger
in July 1998. Several lawsuits and claims have been filed against WM Holdings
and some of its former officers and directors in connection with the restatement
of WM Holdings' financial statements. We are unable to predict the outcome or
impact of the investigation or any previously filed or future lawsuits or claims
arising out of the restatement. However, it is reasonably possible that they
could have a material adverse impact on our financial condition or results of
operations in one or more future periods.
OUR INTERNATIONAL OPERATIONS ENCOUNTER SOCIAL, POLITICAL AND ECONOMIC RISKS
Our operations in foreign countries generally are subject to a number of
risks inherent in any business operating in foreign countries, all of which are
beyond our control. These risks include:
- political, social and economic instability;
- inflation;
- general strikes;
- nationalization of assets;
- currency restrictions and exchange rate fluctuations;
- nullification, modification or renegotiation of contracts; and
- governmental regulation.
We can make no prediction as to how existing or future foreign governmental
regulations in any jurisdiction may affect us in particular or the waste
management industry in general.
OUR BUSINESS IS SEASONAL IN NATURE AND OUR REVENUES AND RESULTS VARY FROM
QUARTER TO QUARTER
Our operating revenues are usually lower in the winter months, primarily
because the volume of waste relating to construction and demolition activities
usually increases in the spring and summer months and the volume of industrial
and residential waste in certain regions where we operate usually decreases
during the winter months. Our first and fourth quarter results of operations
typically reflect lower operating revenues as a result of this seasonality.
15
<PAGE> 21
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
In the normal course of our business, we, in an effort to help keep our
stockholders and the public informed about our operations, may from time to time
issue or make certain statements, either in writing or orally, that are or
contain forward-looking statements, as that term is defined in the U.S. federal
securities laws. Generally, these statements relate to business plans or
strategies, projected or anticipated benefits or other consequences of such
plans or strategies, projected or anticipated benefits from acquisitions made by
or to be made by us, or projections involving anticipated revenues, earnings, or
other aspects of operating results. Certain statements contained in this
prospectus under "Prospectus Summary -- The Company -- Recent Developments" and
in the reports and filings with the Commission that we incorporated by reference
may be forward-looking statements. The words "may," "expect," "believe,"
"anticipate," "project," "estimate," their opposites and similar expressions are
intended to identify forward-looking statements. We caution readers that such
statements are not guarantees of future performance or events and are subject to
a number of factors that may tend to influence the accuracy of the statements
and the projections upon which the statements are based, including but not
limited to those discussed above under "Risk Factors." All phases of our
operations are subject to a number of uncertainties, risks, and other
influences, many of which are outside our control, and any one of which, or a
combination of which, could materially affect our consolidated financial
statements and operations and whether forward-looking statements made by us
ultimately prove to be accurate.
These factors are discussed more completely in our filings with the
Commission, including our annual report on Form 10-K for the year ended December
31, 1998, and our quarterly reports on Form 10-Q for the quarters ended March
31, 1999 and June 30, 1999, which are incorporated by reference into this
prospectus.
USE OF PROCEEDS
There will be no net proceeds payable to us from the issuance of the
exchange notes. The net proceeds of approximately $1.1 billion from the sale of
the outstanding notes were used to repay all outstanding indebtedness under our
syndicated credit facility and to reduce outstanding commercial paper.
16
<PAGE> 22
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our consolidated ratios of earnings to fixed
charges for the periods shown:
<TABLE>
<CAPTION>
SIX MONTHS
YEARS ENDED DECEMBER 31, ENDED
---------------------------------- JUNE 30,
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- -----------
<S> <C> <C> <C> <C> <C> <C>
Actual............................. 2.7x 2.6x 2.1x N/A(1) N/A(2) 3.5x
</TABLE>
- ---------------
(1) Earnings were insufficient to fund fixed charges in 1997. Additional
earnings of $660.4 million were necessary to cover fixed charges for this
period. The earnings available for fixed charges were negatively impacted by
merger costs of $112.7 million (primarily related to the United Waste
Systems, Inc. merger in August 1997), and asset impairments and unusual
items of $1.8 billion. The asset impairment and unusual items of $1.8
billion primarily related to a comprehensive review performed by Waste
Management Holdings of its operating assets and investments.
(2) Earnings were insufficient to fund fixed charges in 1998. Additional
earnings of $720.4 million were necessary to cover fixed charges for this
period. The earnings available for fixed charges were negatively impacted by
merger costs of $1.8 billion and asset impairments and unusual items of
$864.1 million related primarily to the mergers between Waste Management,
Inc. and Waste Management Holdings in July 1998, and Waste Management, Inc.
and Eastern Environmental Services, Inc. in December 1998.
The following table sets forth our consolidated ratios of earnings to fixed
charges for the periods shown on an as adjusted basis excluding merger costs,
asset impairments and unusual items. The consolidated ratios of earnings to
fixed charges on an as adjusted basis are not a measure of financial performance
required by Commission regulations. This as adjusted presentation has been
provided because we understand that it may be used by certain investors when
analyzing our financial position and performance:
<TABLE>
<CAPTION>
SIX MONTHS
YEARS ENDED DECEMBER 31, ENDED
-------------------------------- JUNE 30,
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----------
<S> <C> <C> <C> <C> <C> <C>
As adjusted.............................. 2.9x 3.2x 3.2x 2.8x 3.4x 3.7x
</TABLE>
We computed our consolidated ratios of earnings to fixed charges by
dividing earnings available for fixed charges by fixed charges. For this
purpose, earnings available for fixed charges are the sum of income available
for fixed charges before income taxes, undistributed earnings from affiliated
companies' minority interests, cumulative effect of accounting changes, and
fixed charges, excluding capitalized interest. Fixed charges are interest,
whether expensed or capitalized, amortization of debt expense and discount on
premium relating to indebtedness, and such portion of rental expense that can be
demonstrated to be representative of the interest factor in the particular case.
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<PAGE> 23
DESCRIPTION OF THE EXCHANGE NOTES
The following description is a summary of the material provisions of the
Senior Indenture and the Registration Rights Agreement. It does not restate
those agreements in their entirety. We urge you to read the Senior Indenture and
the Registration Rights Agreement because they, and not this description, define
your rights as holders of the Exchange Notes.
Capitalized terms used in this description, but not otherwise defined in
this description or other sections of this Prospectus, have the meanings
ascribed to them in the Senior Indenture and the Registration Rights Agreement,
as applicable, unless the context otherwise requires. For purposes of this
"Description of the Exchange Notes," the term "Senior Securities" means
collectively the outstanding notes (the "Notes"), the exchange notes (the
"Exchange Notes"), and all other senior debt securities of the Company issued
under the Senior Indenture. In this description, the words "we," "our," and the
"Company" refer only to Waste Management, Inc., but not to any of our
subsidiaries, unless the context otherwise requires.
We will issue the Exchange Notes as four series of Senior Securities under
an Indenture (the "Senior Indenture") dated as of September 10, 1997 between the
Company and Chase Bank of Texas, National Association, as trustee (the
"Trustee"). The terms of the Notes and the Exchange Notes include those stated
in the Senior Indenture and those made part of the Senior Indenture by reference
to the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
Anyone who receives this Prospectus may obtain a copy of the Senior
Indenture and Registration Rights Agreement without charge by writing to Waste
Management, Inc., 1001 Fannin Street, Suite 4000, Houston, Texas 77002,
Attention: Secretary.
GENERAL
The Exchange Notes:
- will be our general unsecured senior obligations;
- will rank equally with all of our other senior and unsecured obligations,
including debt under our credit facilities; and
- will be unconditionally guaranteed by our subsidiary Waste Management
Holdings (the "Subsidiary Guarantor").
We will issue the Exchange Notes under the Senior Indenture; the Exchange
Notes will rank pari passu as to the right of payment of principal and any
premium and interest with each other series issued thereunder and will rank
senior to all series of subordinated securities issued and outstanding and that
may be issued from time to time. The Exchange Notes will be our unsecured senior
obligations. The Senior Indenture does not limit the amount of Senior
Securities, debentures, notes or other types of indebtedness that may be issued
by us or any of our subsidiaries nor does it restrict transactions between us
and our affiliates or the payment of dividends or other distributions by us to
our stockholders. The rights of our creditors, including holders of the Exchange
Notes, will be limited to our assets and the Exchange Notes will not be an
obligation of any of our subsidiaries (other than pursuant to the Subsidiary
Guarantee). In addition, the Senior Indenture does not and the Exchange Notes
will not contain any covenants or other provisions that are intended to afford
holders of the Exchange Notes special protection in the event of either a change
of control of the Company or a highly leveraged transaction by us.
The Subsidiary Guarantee of the Exchange Notes:
- will be a general, unsecured obligation of the Subsidiary Guarantor; and
- will rank equally in right of payment with all existing and future senior
and unsecured indebtedness of the Subsidiary Guarantor.
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<PAGE> 24
We conduct our operations through our subsidiaries. Our operating
subsidiaries will not guarantee the Exchange Notes. (The Subsidiary Guarantor is
not an operating subsidiary.) Thus, in the event of a bankruptcy, liquidation or
reorganization of any of these non-guarantor subsidiaries, it will pay the
holders of its debts and its trade creditors before it will be able to
distribute any of its assets to us.
We will issue the Exchange Notes in the form of one or more Global Exchange
Notes, in registered form, without coupons, in denominations of $1,000 or an
integral multiple thereof as described under "-- Book-Entry; Delivery; Form and
Transfer." The Global Exchange Notes will be registered in the name of a nominee
of DTC. Each Global Exchange Note (and any Exchange Note issued in exchange
therefor) will be subject to certain restrictions on transfer set forth therein
as described under "-- Book-Entry; Delivery; Form and Transfer -- Transfers of
Interests in Global Exchange Notes for Certificated Exchange Notes." Except as
set forth herein under "-- Book-Entry; Delivery; Form and Transfer -- Transfers
of Interests in Global Exchange Notes for Certificated Exchange Notes," owners
of beneficial interests in a Global Exchange Note will not be entitled to have
Exchange Notes registered in their names, will not receive or be entitled to
receive physical delivery of any such Exchange Note and will not be considered
the registered holder thereof under the Senior Indenture.
PRINCIPAL, MATURITY AND INTEREST
We will issue the Exchange Notes as four series with an aggregate principal
amount of $1,150,000,000. The 2001 Exchange Notes will have an aggregate
principal amount of $200,000,000, the 2004 Exchange Notes will have an aggregate
principal amount of $200,000,000, the 2009 Exchange Notes will have an aggregate
principal amount of $500,000,000 and the 2029 Exchange Notes will have an
aggregate principal amount of $250,000,000. We will issue the Exchange Notes
only in fully registered form, without coupons, in denominations of $1,000 and
integral multiples of $1,000 in excess thereof. There is no sinking fund
applicable to the Exchange Notes.
The 2001 Exchange Notes will mature on May 15, 2001, the 2004 Exchange
Notes will mature on May 15, 2004, the 2009 Exchange Notes will mature on May
15, 2009, and the 2029 Exchange Notes will mature on May 15, 2029.
The Exchange Notes will bear interest at the respective rates per year set
forth on the front cover of this Prospectus. Interest on all Exchange Notes will
be payable semi-annually in arrears on May 15 and November 15 of each year until
maturity, commencing on November 15, 1999. The Company will make each interest
payment to the persons in whose name the Exchange Notes are registered at the
close of business on the April 30 and October 31 immediately preceding the
relevant interest payment date. Interest on the Exchange Notes will accrue from
and including the date of original issuance, or if interest has already been
paid, from and including the date it was most recently paid to (but not
including) each interest payment date. Interest will be computed on the basis of
a 360-day year comprised of twelve 30-day months.
EXCHANGE OFFER
We, the Subsidiary Guarantor and the Initial Purchasers entered into a
Registration Rights Agreement dated as of May 21, 1999 pursuant to which we and
the Subsidiary Guarantor agreed to use our best efforts to conduct an exchange
offer to exchange the Notes for Exchange Notes registered under the Securities
Act or have a shelf registration statement (the "Shelf Registration Statement")
declared effective with respect to the Notes. See "-- Registration Rights;
Liquidated Damages." Upon the issuance of the Exchange Notes, if any, or the
effectiveness of a Shelf Registration Statement, the Senior Indenture with
respect to the Notes and the Subsidiary Guarantee will be subject to and
governed by the Trust Indenture Act.
METHODS OF RECEIVING PAYMENTS ON THE EXCHANGE NOTES
If a holder has given wire transfer instructions to us, we will pay all
principal, interest, and premium, if any, on those Exchange Notes in accordance
with those instructions. All other payments on Exchange
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<PAGE> 25
Notes will be made at the office or agency of the Paying Agent and Registrar
within the City and State of New York unless we elect to make interest payments
by check mailed to the holders at their addresses set forth in the register of
holders.
REPLACEMENT OF SECURITIES
We will replace any mutilated Exchange Note at the expense of the holder
upon surrender of such Exchange Note to the Trustee. We will replace Exchange
Notes that become destroyed, stolen or lost at the expense of the holder upon
delivery to the Trustee of evidence of destruction, loss or theft thereof
satisfactory to us and the Trustee. In the case of a destroyed, lost or stolen
Exchange Note, an indemnity satisfactory to the Trustee and to us may be
required at the expense of the holder of such Exchange Note before a replacement
Exchange Note will be issued. (Section 306 of the Senior Indenture)
PAYING AGENT FOR THE NOTES
Payment of principal of and any premium and interest on the Exchange Notes
will be made at the office of the Paying Agent or Paying Agents, as we may
designate from time to time, except that at our option, payment of any interest
may be made by check mailed on or before the due date to the address of the
Person entitled thereto as such address shall appear in the Security Register.
(Sections 307, 1002 of the Senior Indenture) We may at any time rescind the
designation of any Paying Agent or approve a change in the office through which
any Paying Agent acts, except that we will be required to maintain a Paying
Agent in each Place of Payment for the Exchange Notes. Payment of any
installment of interest on an Exchange Note will be made to the Person in whose
name such Exchange Note is registered at the close of business on the Regular
Record Date for such interest. (Section 307 of the Senior Indenture)
All monies paid by us to a Paying Agent for the payment of principal of and
any premium or interest on any Exchange Note which remain unclaimed at the end
of two years after such principal, premium or interest shall have become due and
payable will (subject to applicable escheat laws) be repaid to us and the holder
of such Exchange Note will thereafter look only to us for payment thereof.
(Section 1003 of the Senior Indenture)
TRANSFER AND EXCHANGE
A holder may transfer or exchange the Exchange Notes in accordance with the
Senior Indenture. The Registrar and the Trustee may require a holder, among
other things, to furnish appropriate endorsements and transfer documents and we
may require a holder to pay any taxes and fees required by law or permitted by
the Senior Indenture. We are not required to transfer or exchange any Exchange
Note for a period of 15 days before a selection of Exchange Notes to be
redeemed. See -- "Optional Redemption."
The registered holder of an Exchange Note will be treated as the owner of
it for all purposes.
SUBSIDIARY GUARANTEE
The Subsidiary Guarantor will guarantee our obligations under the Exchange
Notes. However, the obligations of the Subsidiary Guarantor under its guarantee
of the Exchange Notes are limited to an amount which would not cause the
Subsidiary Guarantor's guarantee of the Exchange Notes to be a fraudulent
transfer or conveyance. The Subsidiary Guarantee will constitute a general,
unsecured obligation of the Subsidiary Guarantor and will rank equally in right
of payment with all existing and future senior and unsecured indebtedness of the
Subsidiary Guarantor. See "Risk Factors -- U.S. bankruptcy or fraudulent
conveyance law may interfere with the payment of the notes."
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<PAGE> 26
The Subsidiary Guarantee will be released:
(1) upon our consolidation or merger with or into the Subsidiary Guarantor;
(2) upon payment in full of all principal, premium, if any, and interest on
the Exchange Notes; or
(3) upon the release of the Subsidiary Guarantor's guarantees under our
credit facilities (or any replacement or new principal credit
facility).
RANKING
As a holding company, we conduct our operations through our subsidiaries.
Our only significant assets are the capital stock of our subsidiaries.
Accordingly, our ability to meet our cash obligations depends in part upon the
ability of our subsidiaries to make cash distributions to us. The ability of our
subsidiaries to make distributions to us is, and will continue to be, restricted
by, among other limitations, applicable provisions of the laws of national or
state governments and contractual provisions. Our right to participate in the
assets of any subsidiary (and thus the ability of holders of the Exchange Notes
to benefit indirectly from such assets) is generally subject to the prior claims
of creditors, including trade creditors, of that subsidiary, except to the
extent that we are recognized as a creditor of such subsidiary, in which case
our claims would still be subject to any security interest of other creditors of
such subsidiary. Therefore, except as described below, the Exchange Notes will
be subordinated by operation of law to creditors, including trade creditors, of
our subsidiaries with respect to the assets of the subsidiaries, against which
these creditors have a claim.
The Exchange Notes will be guaranteed by our subsidiary Waste Management
Holdings. Our obligations under our credit facilities and our other senior
indebtedness are currently guaranteed by Waste Management Holdings. Similarly,
we have guaranteed the outstanding senior indebtedness of Waste Management
Holdings. Thus, the Exchange Notes will rank equally in right of payment with
the senior indebtedness of Waste Management Holdings, the debt under our credit
facilities and our other senior indebtedness. Because of our holding company
structure and the impact of the Waste Management Holdings' guarantee, the
Exchange Notes will be structurally subordinated to the claims of creditors of
our subsidiaries, other than Waste Management Holdings. As of June 30, 1999, the
amount of this subsidiary indebtedness was approximately $1.9 billion out of our
total consolidated long-term debt of approximately $11.3 billion.
Upon any release by the lenders under our credit facilities (or any
replacement or new principal credit facility) of the Waste Management Holdings'
guarantee, we and Waste Management Holdings will each be deemed automatically
and unconditionally released and discharged from our respective obligations
under the guarantees of the senior indebtedness of the other so guaranteed. In
such event, the claims of creditors of Waste Management Holdings will
effectively have priority with respect to the assets and earnings of Waste
Management Holdings over the claims of our creditors, including the holders of
the Exchange Notes.
OPTIONAL REDEMPTION
The 2001 Exchange Notes will not be redeemable. The 2004, 2009 and 2029
Exchange Notes will be redeemable at our option at any time and from time to
time, in whole or in part, upon not less than 30 nor more than 60 days notice to
each holder of Exchange Notes, at a redemption price equal to the Make-Whole
Price. "Make-Whole Price" means an amount equal to the greater of (1) 100% of
the principal amount of the Exchange Notes to be redeemed and (2) as determined
by an Independent Investment Banker, the sum of the present values of the
remaining scheduled payments of principal and interest thereon (not including
any portion of such payments of interest accrued as of the date of redemption)
discounted to the date of redemption on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Adjusted Treasury Rate, plus, in
each case, accrued and unpaid interest thereon to the date of redemption. Unless
we default in payment of the redemption price, on and after the date of
redemption, interest will cease to accrue on the Exchange Notes or portions
thereof called for redemption.
"Adjusted Treasury Rate" means, with respect to any date of redemption, the
rate per annum equal to the semi-annual yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable
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<PAGE> 27
Treasury Price for such date of redemption, plus 0.125% for the 2004 Exchange
Notes, 0.25% for the 2009 Exchange Notes and 0.30% for the 2029 Exchange Notes.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Independent Investment Banker as having a maturity comparable to
the remaining term of the Exchange Notes to be redeemed that would be utilized,
at the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the Exchange Notes.
"Comparable Treasury Price" means, with respect to any date of redemption,
(1) the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such date of redemption, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities," or (2) if such release (or any successor release) is not
published or does not contain such prices on such Business Day, (A) the average
of the Reference Treasury Dealer Quotations for such date of redemption, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if the Trustee obtains fewer than three such Reference Treasury Dealer
Quotations, the average of all such Reference Treasury Dealer Quotations.
"Independent Investment Banker" means one of the Reference Treasury Dealers
appointed by the Trustee after consultation with us.
"Reference Treasury Dealer" means each of Donaldson, Lufkin & Jenrette
Securities Corporation; Banc of America Securities LLC, Chase Securities, Inc.,
J.P. Morgan & Co., Credit Suisse First Boston, Deutsche Bank Securities, Inc.
and Salomon Smith Barney Inc., and their respective successors; but if any of
the foregoing shall not be a primary U.S. Government securities dealer in New
York City (a "Primary Treasury Dealer"), we shall substitute therefor another
Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any date of redemption, the average, as determined
by the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third Business Day preceding such date of redemption.
We may purchase the Exchange Notes in the open market, by tender or
otherwise. The Exchange Notes so purchased may be held, resold or surrendered to
the Trustee for cancellation. If applicable, we will comply with the
requirements of Rule 14e-1 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and other securities laws and regulations in connection
with any such purchase. The Exchange Notes may be defeased in the manner
provided in the Senior Indenture.
CERTAIN COVENANTS
Certain Definitions. For purposes of the following discussion, the
following definitions are applicable. (Sections 1008, 1009 of the Senior
Indenture)
"Attributable Debt" shall mean, as of any particular time, the present
value, discounted at a rate per annum equal to (i) the implied lease rate of or
(ii) if the implied lease rate is not known to us, then the weighted average
interest rate of all Senior Securities outstanding at the time under the Senior
Indenture compounded semi-annually, in either case, of the obligation of a
lessee for rental payments during the remaining term of any lease (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended); the net amount of rent required to be paid for any such
period shall be the total amount of the rent payable by the lessee with respect
to such period, but may exclude amounts required to be paid on account of
maintenance and repairs, insurance, taxes, assessments, water rates and similar
charges; and, in the case of any lease which is terminable by the lessee upon
the payment of a penalty, such net amount shall also include the amount of such
penalty, but no rent shall be considered as required to be paid under such lease
subsequent to the first date upon which it may be so terminated.
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<PAGE> 28
"Consolidated Net Tangible Assets" shall mean, at any date of
determination, the total amount of our assets after deducting: (i) all the
current liabilities (excluding (a) any current liabilities that by their terms
are extendible or renewable at the option of the obligor thereon to a time more
than 12 months after the time as of which the amount thereof is being computed,
and (b) current maturities of long term debt) and (ii) the value (net of any
applicable reserves) of all intangible assets such as excess of cost over net
assets of acquired businesses, customer lists, covenants not to compete,
licenses, and permits, all as set forth on our consolidated balance sheet and
our consolidated subsidiaries for our most recently completed fiscal quarter,
prepared in accordance with United States generally accepted accounting
principles.
"Guaranty" shall mean any agreement, undertaking or arrangement by which
any Person guarantees, endorses or otherwise becomes or is contingently liable
upon (by direct or indirect agreement, contingent or otherwise, to provide funds
for payment, to supply funds to, or otherwise to invest in, a debtor, or
otherwise to assure a creditor against loss) the debt, obligation or other
liability of any other Person (other than by endorsements of instruments in the
course of collection), or guarantees the payment of dividends or other
distributions upon the shares of any other Person. The amount of the obligor's
obligation under any Guaranty shall (subject to any limitation set forth
therein) be deemed to be the amount of such other Person's debt, obligation or
other liability or the amount of such dividends or other distributions
guaranteed.
"Indebtedness" of any Person shall mean
(a) all obligations of such Person for borrowed money (including,
without limitation, all notes payable and drafts accepted representing
extension of credit and all obligations evidenced by bonds, debentures,
notes or other similar instruments) or on which interest charges are
customarily paid, all as shown on a balance sheet of such Person as of the
date at which Indebtedness is to be determined;
(b) all other items which, in accordance with generally accepted
accounting principles, would be included as liabilities on the liability
side of a balance sheet of such Person as of the date at which Indebtedness
is to be determined; and
(c) whether or not so included as liabilities in accordance with
generally accepted accounting principles,
(i) all indebtedness (excluding, however, prepaid interest thereon)
secured by a Security Interest in property owned or being purchased by
such Person (including, without limitation, indebtedness arising under
conditional sales or other title retention agreements) whether or not
such indebtedness shall have been assumed by such Person, and
(ii) all Guaranties of such Person.
"Principal Property" shall mean any waste processing, waste disposal or
resource recovery plant or similar facility located within the United States
(other than its territories and possessions and Puerto Rico) or Canada and owned
by, or leased to, us or any of our Restricted Subsidiaries, except (a) any such
plant or facility (i) owned or leased jointly or in common with one or more
Persons other than us and our Restricted Subsidiaries in which our interest and
the interest of our Restricted Subsidiaries does not exceed 50%, or (ii) which
the Board of Directors determines in good faith is not of material importance to
the total business conducted, or assets owned, by us and our Subsidiaries as an
entirety, or (b) any portion of such plant or facility which the Board of
Directors determines in good faith not to be of material importance to the use
or operation thereof.
"Restricted Subsidiary" shall mean any Subsidiary (other than any
Subsidiary of which we own directly or indirectly less than all of the
outstanding Voting Stock), (a) principally engaged in, or whose principal assets
consist of property used by us or any of our Restricted Subsidiaries in, the
storage, collection, transfer, interim processing or disposal of waste within
the United States of America or Canada, or (b) which we shall designate as a
Restricted Subsidiary in an Officers' Certificate delivered to the Trustee.
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<PAGE> 29
"Security Instrument" shall mean any security agreement, chattel mortgage,
assignment, financing or similar statement or notice, continuation statement,
other agreement or instrument, or amendment or supplement to any thereof,
providing for, evidencing or perfecting any Security Interest or lien.
"Security Interest" shall mean any interest in any real or personal
property or fixture which secures payment or performance of an obligation and
shall include any mortgage, lien, encumbrance, charge or other security interest
of any kind, whether arising under a Security Instrument or as a matter of law,
judicial process or otherwise.
Consolidation, Merger, Sale. The Senior Indenture provides that we may not
consolidate with or merge into any other Person or convey, transfer or lease its
properties and assets substantially as an entirety to any Person, unless
(a) the Person formed by such consolidation or into which we are
merged or the Person which acquires by conveyance or transfer, or which
leases, our properties and assets substantially as an entirety shall be a
corporation, partnership or trust which shall expressly assume, by a
supplemental indenture, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the principal
of and any premium and interest (including all additional amounts, if any,
payable pursuant to the Senior Indenture) on all the Senior Securities and
the performance or observance of every other covenant of the Senior
Indenture on our part to be performed or observed; and
(b) immediately after giving effect to such transaction and treating
any indebtedness which becomes our obligation or the obligation of a
Subsidiary as a result of such transaction as having been incurred by us or
such Subsidiary at the time of such transaction, no Event of Default, and
no event which, after notice or lapse of time or both, would become an
Event of Default, shall have happened and be continuing.
Upon our consolidation with, or merger into, any other Person or any
conveyance, transfer or lease of our properties and assets substantially as an
entirety, the successor Person formed by such consolidation or into which we are
merged or to which such conveyance, transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and power of ours, under
the Senior Indenture with the same effect as if such successor Person had been
named as herein, and thereafter, except in the case of a lease, the predecessor
Person shall be relieved of all obligations and covenants under the Senior
Indenture and the Senior Securities, and may liquidate and dissolve. (Sections
801, 802 of the Senior Indenture)
Limitation on Liens. The Senior Indenture provides that:
(a) We will not, and will not permit any of our Restricted
Subsidiaries to, create, incur, assume or suffer to exist, directly or
indirectly, any Indebtedness secured by a Security Interest upon any of our
Principal Property or of any of our Restricted Subsidiaries, whether owned
as of the date of the Senior Indenture or thereafter acquired subsequent to
the date of the Senior Indenture, without making effective provision (and
we hereby covenant that in any such case we shall make or cause to be made
effective provision) whereby the Senior Securities of that series then
outstanding and any of our other Indebtedness or the other Indebtedness of
any of our Restricted Subsidiaries then entitled thereto shall be secured
by such Security Interest equally and ratably with any and all of our other
Indebtedness or other Indebtedness of any of our Restricted Subsidiaries
thereby secured for so long as any of our such other Indebtedness or such
other Indebtedness of any of our Restricted Subsidiaries shall be so
secured; but nothing in the Senior Indenture shall prevent, restrict or
apply to Indebtedness secured by:
(1) (a) any Security Interest upon property or assets which is
created prior to or contemporaneously with, or within 360 days after,
(i) in the case of the acquisition of such property or assets, the
completion of such acquisition and (ii) in the case of the construction,
development or improvement of such property or assets, the later to
occur of the completion of such construction, development or improvement
or the commencement of operation or use of the
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<PAGE> 30
property or assets, which Security Interest secures or provides for the
payment, financing or refinancing, directly or indirectly, of all or any
part of the acquisition cost of such property or assets or the cost of
construction, development or improvement thereof; or
(b) any Security Interest upon property or assets existing at
the time of its acquisition, which Security Interest secures obligations
assumed by the us or any of our Restricted Subsidiaries; or
(c) any conditional sales agreement or other title retention
agreement with respect to any property or assets acquired by us or any
of our Restricted Subsidiaries, or
(d) any Security Interest existing on the property or assets or
shares of stock of a corporation or firm at the time such corporation or
firm is merged into or consolidated with us or any of our Restricted
Subsidiaries or at the time of a sale, lease or other disposition of the
property or assets of such corporation or firm as an entirety or
substantially as an entirety to us or any of our Restricted Subsidiaries
or at the time such corporation becomes a Restricted Subsidiary; or
(e) any Security Interest existing on the property, assets or
shares of stock of any successor to us in accordance with the provisions
of the covenant described in "-- Consolidation, Merger, Sale";
if, in each case, any such Security Interest described in the foregoing
clauses (b), (c), (d) or (e) does not attach to or affect property or
assets owned by us or any of our Restricted Subsidiaries before the
event referred to in such clauses; or
(2) Mechanics', materialmen's, carriers' or other like liens
arising in the ordinary course of business (including construction of
facilities) in respect of obligations which are not due or which are
being contested in good faith; or
(3) Any Security Interest arising by reason of deposits with, or
the giving of any form of security to, any governmental agency or any
body created or approved by law or governmental regulation, which is
required by law or governmental regulation as a condition to the
transaction of any business or the exercise of any privilege, franchise
or license (including, without limitation, any Security Interest arising
by reason of one or more letters of credit in connection with any
international waste management contract to be performed by us or by any
of our Subsidiaries or their respective affiliates); or
(4) Security Interests for taxes, assessments or governmental
charges or levies not yet delinquent or Security Interests for taxes,
assessments or governmental charges or levies already delinquent but the
validity of which is being contested in good faith; or
(5) Security Interests (including judgment liens) arising in
connection with legal proceedings so long as such proceedings are being
contested in good faith and, in the case of judgment liens, execution
thereon is stayed; or
(6) Landlords' liens on fixtures located on premises leased by us
or by any of our Restricted Subsidiaries in the ordinary course of
business; or
(7) Any Security Interest in favor of any governmental authority in
connection with the financing of the cost of construction or acquisition
of property; or
(8) Any Security Interest arising by reason of deposits to qualify
us or any of our Restricted Subsidiaries to conduct business, to
maintain self-insurance, or to obtain the benefit of, or comply with,
laws; or
(9) Any Security Interest that secures any Indebtedness of a
Restricted Subsidiary owing to us or another of our Restricted
Subsidiaries or by us to a Restricted Subsidiary; or
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<PAGE> 31
(10) Any Security Interest incurred in connection with pollution
control, sewage or solid waste disposal, industrial revenue or similar
financing; or
(11) Any Security Interest created by any program providing for the
financing, sale or other disposition of trade or other receivables
qualified as current assets in accordance with United States generally
accepted accounting principles entered into by us or by any of our
Restricted Subsidiaries, if such program is on terms comparable for
similar transactions, or any document executed by us or by any of our
Restricted Subsidiaries in connection therewith, and if such Security
Interest is limited to the trade or other receivables in respect of
which such program is created or exists and the proceeds thereof; or
(12) Any extension, renewal or refunding (or successive extensions,
renewals or refundings) in whole or in part of any Indebtedness secured
by any Security Interest referred to in the foregoing clauses (1)
through (11), inclusive, but the Security Interest securing such
Indebtedness shall be limited to the property or assets which,
immediately before such extension, renewal or refunding, secured such
Indebtedness and additions to such property or assets.
Notwithstanding the foregoing provisions, we and any of our
Restricted Subsidiaries may create, incur, assume or suffer to exist any
Indebtedness secured by a Security Interest without so securing the
Notes if, at the time such Security Interest becomes a Security Interest
upon any of our Principal Property or the Principal Property of any such
Restricted Subsidiary and after giving effect thereto, the aggregate
outstanding principal amount of all our Indebtedness and the
Indebtedness of our Restricted Subsidiaries secured by Security
Interests permitted by this sentence (excluding Indebtedness secured by
a Security Interest existing as of the date of the Senior Indenture, but
including the Attributable Debt in respect of Sale and Leaseback
Transactions, other than Sale and Leaseback Transactions which, if the
Attributable Debt in respect thereof had been Indebtedness secured by a
Security Interest, would have been permitted by clause (1)(a) above,
other Sale and Leaseback Transactions the proceeds of which have been
applied or committed to be applied in accordance with the covenant
described in "-- Limitations on Sale and Leaseback Transactions" and
other than Sale and Leaseback Transactions between us and any of our
Restricted Subsidiaries) does not exceed 15% of Consolidated Net
Tangible Assets. (Section 1008 of the Senior Indenture)
(b) If, upon any consolidation or merger of any Restricted Subsidiary
with or into any other corporation, or upon any consolidation or merger of
any other corporation with or into us or any of our Restricted Subsidiaries
or upon any sale or conveyance of the Principal Property of any Restricted
Subsidiary as an entirety or substantially as an entirety to any other
Person, or upon any acquisition by us or by any of our Restricted
Subsidiaries by purchase or otherwise of all or any part of the Principal
Property of any other Person, any Principal Property theretofore owned by
us or such Restricted Subsidiary would thereupon become subject to any
Security Interest not permitted by the terms of the foregoing covenant, we,
before such consolidation, merger, sale or conveyance, or acquisition,
will, or will cause such Restricted Subsidiary to, secure payment of the
principal of and interest, if any, on the Exchange Notes (equally and
ratably with or prior to any of our other Indebtedness or the other
Indebtedness of such Restricted Subsidiary then entitled thereto) by a
direct lien on all such Principal Property prior to all liens other than
any liens theretofore existing thereon by a supplemental indenture or
otherwise. (Section 1008 of the Senior Indenture)
Limitations on Sale and Leaseback Transactions. The Senior Indenture
provides that:
We will not, and will not permit a Restricted Subsidiary to, enter into any
arrangement with any Person (other than with any Restricted Subsidiary)
providing for the leasing to us or any Restricted Subsidiary of any Principal
Property owned or hereafter acquired by us or such Restricted Subsidiary (except
for temporary leases for a term, including any renewal thereof, of not more than
three years and except for leases between us and a Restricted Subsidiary or
between Restricted Subsidiaries), which
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Principal Property has been or is to be sold or transferred by us or such
Restricted Subsidiary to such person (a "Sale and Leaseback Transaction") unless
(a) we or such Restricted Subsidiary would be entitled, pursuant to
the covenant described in "-- Limitation on Liens," to incur Indebtedness
secured by a Security Interest on the property to be leased without equally
and ratably securing the Exchange Notes, or
(b) we shall, and in any such case we covenant that we will, within
180 days after the effective date of any such arrangement, apply an amount
equal to the fair value (as determined by our Board of Directors) of such
property to the redemption of Senior Securities that, by their terms, are
subject to redemption, or to the purchase and retirement of Senior
Securities, or to the payment or other retirement of funded debt for money
borrowed, incurred or assumed by us which ranks senior to or equally and
ratably with the Exchange Notes or of funded debt for money borrowed,
incurred or assumed by any Restricted Subsidiary (other than, in either
case, funded debt owed by us or any Restricted Subsidiary), or
(c) we shall within 180 days after entering into the Sale and
Leaseback Transaction, enter into a bona fide commitment or commitments to
expend for the acquisition or capital improvement of a Principal Property
an amount at least equal to the fair value (as determined by our Board of
Directors) of such property. (Section 1009 of the Senior Indenture)
Notwithstanding the foregoing, we may, and may permit any Restricted
Subsidiary to, effect any Sale and Leaseback Transaction that is not acceptable
pursuant to clauses (a)through (c), inclusive, of the foregoing covenant, if the
Attributable Debt associated with such Sale and Leaseback Transaction, together
with the aggregate principal amount of outstanding debt secured by Security
Interests upon Principal Property not acceptable pursuant to clauses (1) through
(12) of the covenant described in "-- Limitation on Liens," inclusive, do not
exceed 15% of Consolidated Net Tangible Assets. (Section 1009 of the Senior
Indenture)
Compliance Certificates. We are required to furnish to the Trustee annually
a statement as to our compliance with all conditions and covenants under the
Senior Indenture. (Section 1006 of the Senior Indenture)
EVENTS OF DEFAULT; REMEDIES
Events of Default. An Event of Default with respect to any given series of
the Exchange Notes is defined under the Senior Indenture as being one or more of
the following events (hereinafter in this "Description of the Exchange Notes,"
the term "Notes" or "Note" shall mean the "Exchange Note(s)" unless the context
otherwise requires):
(1) default in the payment of any interest upon any Note of that
series when it becomes due and payable, and continuance of such default for
a period of 30 days; or
(2) default in the payment of the principal of (or premium, if any,
on) any Note of that series as and when the same becomes due and payable
whether at maturity, by declaration of acceleration, call for redemption or
otherwise; or
(3) default in the performance, or breach, of any of our other
covenants or warranties in the Senior Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere in
Section 501 of the Senior Indenture specifically dealt with or which has
expressly been included in the Senior Indenture solely for the benefit of a
series of Senior Securities other than the Notes), and continuance of such
default or breach for a period of 60 days after there has been given, by
registered or certified mail, to us by the Trustee or to us and the Trustee
by the holders of at least 25% in principal amount of the Notes of that
series a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default" under
the Senior Indenture; or
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(4) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in our respect in an involuntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging us a
bankrupt or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in our respect
under any applicable Federal or State law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of ours or of any substantial part of our property, or ordering
the winding up or liquidation of our affairs, and the continuance of any
such decree or order for relief or any such other decree or order unstayed
and in effect for a period of 90 consecutive days; or
(5) our commencement of a voluntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or other
similar law or of any other case or proceeding to be adjudicated a bankrupt
or insolvent, or our consent to the entry of a decree or order for relief
in our respect in an involuntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other similar
law or the commencement of any bankruptcy or insolvency case or proceeding
against us, or our filing of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or State law, or our
consent to the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of ours or of any substantial part of our
property, or our making of an assignment for the benefit of creditors, or
our admission in writing of our inability to pay our debts generally as
they become due, or our taking of corporate action in furtherance of any
such action. (Section 501 of the Senior Indenture)
Remedies. If an Event of Default with respect to any given series of Notes
at the time outstanding occurs and is continuing, then in every such case,
either the Trustee or the holders of not less than 25% in principal amount of
the outstanding Notes of that series may declare the principal amount to be due
and payable immediately, by a notice in writing to us (and to the Trustee if
given by holders), and upon any such declaration such principal amount shall
become immediately due and payable. At any time after such a declaration of
acceleration with respect to the Notes of any given series has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee, the holders of a majority in principal amount of the outstanding
Notes of that series, by written notice to us and the Trustee, may rescind and
annul such declaration and its consequences if:
(1) we have paid or deposited with the Trustee a sum sufficient to
pay:
(A) all overdue interest on all Notes of that series,
(B) the principal of (and premium, if any, on) any Note of that
series which has become due otherwise than by such declaration of
acceleration and any interest thereon at the rate prescribed therefor,
(C) to the extent that payment of such interest is lawful, interest
upon overdue interest at the rate prescribed therefor, and
(D) all sums paid or advanced by the Trustee and the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, and
(2) all Events of Default with respect to Notes of that series, other
than the non-payment of the principal of Notes of that series which have
become due solely by such declaration of acceleration, have been cured or
waived as provided in the Senior Indenture.
No such rescission shall affect any subsequent default or impair any right
consequent thereon. (Section 502 of the Senior Indenture) If the Trustee or any
holder of a Note of a given series has instituted any proceeding to enforce any
right or remedy under the Senior Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such holder, then and in every such case, subject to any
determination in such proceeding, we, the Trustee
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and the holders of Notes of that series shall be restored severally and
respectively to their former positions under the Senior Indenture and the Notes
of that series, and thereafter all rights and remedies of the Trustee and the
holders shall continue as though no such proceeding had been instituted.
(Section 509 of the Senior Indenture)
The Senior Indenture provides that, subject to the duty of the Trustee
during default to act with the required standard of care, the Trustee is under
no obligation to exercise any of its rights or powers under the Senior Indenture
at the request or direction of any of the holders, unless such holders shall
have offered to the Trustee reasonable indemnity. (Sections 601, 603 of the
Senior Indenture) No holder of any Note of a given series shall have any right
to institute any proceeding, judicial or otherwise, with respect to the Senior
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy thereunder, unless:
(1) such holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Notes of that series;
(2) the holders of not less than 25% in principal amount of the
outstanding Notes of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its
own name as Trustee under the Senior Indenture;
(3) such holder or holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the holders of a majority in
principal amount of the outstanding Notes of that series. (Section 507 of
the Senior Indenture)
Notwithstanding any other provision in the Senior Indenture, the right of
any holder of any Note to receive payment of the principal of and any premium
and any interest on such Note on the Stated Maturity or Maturities (each as
defined in the Senior Indenture) expressed in such Note, or to institute suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such holder. (Sections 508,
902 of the Senior Indenture)
The holders of a majority in principal amount of the outstanding Notes of
any given series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, with respect to the Notes of that
series, provided that (1) such direction shall not be in conflict with any rule
of law or with the Senior Indenture; (2) the Trustee may take any other action
deemed proper by the Trustee which is not inconsistent with such direction; and
(3) the Trustee shall not be obligated to take any action unduly prejudicial to
holders not joining in such direction or involving the Trustee in personal
liability. (Section 512 of the Senior Indenture) The holders of a majority in
principal amount of the outstanding Notes of any given series may on behalf of
the holders of all the Notes of that series waive any past default under the
Senior Indenture with respect to the Notes of that series and its consequences,
except a default in the payment of the principal of or any premium or interest
on any Note of that series or in respect of a covenant or provision of the
Senior Indenture which, pursuant to the Senior Indenture, cannot be modified or
amended without the consent of the holder of each outstanding Note of that
series. Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of the Senior Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon. (Sections
513, 902 of the Senior Indenture)
If a default occurs under the Senior Indenture with respect to the Notes of
any given series, the Trustee shall give the holders of Notes of that series
notice of such default as and to the extent provided by the Trust Indenture Act;
but in the case of any default or breach of certain covenants or warranties
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with respect to the Notes of any given series, no such notice to holders shall
be given until at least 30 days after the occurrence thereof (the term "default"
for purposes of these provisions being defined as any event which is, or after
notice or lapse of time or both would become, an Event of Default with respect
to the Notes of that series). (Section 602 of the Senior Indenture)
To the fullest extent allowed under applicable law, if for the purpose of
obtaining judgment against us in any court it is necessary to convert the sum
due in respect of the principal of, or premium, if any, or interest on, any
Notes (the "Required Currency") into a currency in which a judgment will be
rendered (the "Judgment Currency"), the rate of exchange used shall be the rate
at which in accordance with normal banking procedures the Trustee could purchase
in the City of New York the Required Currency with the Judgment Currency on the
business day in the City of New York next preceding that on which final judgment
is given. Neither we nor the Trustee shall be liable for any shortfall nor shall
either of them benefit from any windfall in payments to holders of Notes under
this provision of the Senior Indenture caused by a change in exchange rates
between the time the amount of a judgment against us is calculated as above and
the time the Trustee converts the Judgment Currency into the Required Currency
to make payments under the foregoing provisions of the Senior Indenture to
holders of Notes, but payment of such judgment shall discharge all amounts owed
by us on the claim or claims underlying such judgment. (Section 506 of the
Senior Indenture)
DISCHARGE OF INDENTURE
Satisfaction and Discharge of Indenture. The Senior Indenture provides that
we may at our option at any time, satisfy and discharge the Senior Indenture
(except as to any surviving rights of registration of transfer or exchange of
Senior Securities and any right to receive additional amounts pursuant to the
Senior Indenture) with respect to all Senior Securities issued under the Senior
Indenture, which Senior Securities have not already been delivered to the
Trustee for cancellation and which either have become due and payable or are by
their terms due and payable within one year (or are to be called for redemption
within one year) by depositing with the Trustee as trust funds an amount
sufficient to pay when due the principal (and premium, if any) and any interest
on all outstanding Senior Securities when due. (Section 401 of the Senior
Indenture)
Defeasance and Discharge. The Senior Indenture provides that, if we so
elect by Board Resolution with respect to the Notes of any given series, we will
be discharged from any and all obligations in respect of the Notes of that
series (except for certain obligations relating to temporary Notes and exchange
of Notes, registration of transfer or exchange of Notes, replacement of stolen,
lost or mutilated Notes, maintenance of paying agencies to hold moneys for
payment in trust and payment of additional amounts, if any, required in
consequence of United States withholding taxes imposed on payments to non-United
States persons or otherwise required by Section 1004 of the Senior Indenture)
upon the deposit with the Trustee, in trust, of money and/or U.S. Government
Obligations which through the payment of interest and principal in respect
thereof in accordance with their terms will provide money in an amount
sufficient to pay the principal of (and premium, if any), and each installment
of interest on, the Notes of that series on the stated maturity of such payments
in accordance with the terms of the Senior Indenture and the Notes of that
series. (Sections 1302, 1304 of the Senior Indenture) Such a trust may only be
established if, among other things, we have delivered to the Trustee an opinion
of counsel to the effect that (i) we have received from, or there has been
published by, the Internal Revenue Service a ruling, or (ii) since the date of
the Senior Indenture there has been a change in applicable federal income tax
law, in either case to the effect that, and based thereon such opinion of
counsel shall confirm that, the holders of such series will not recognize
income, gain or loss for federal income tax purposes as a result of such
deposit, defeasance and discharge, and will be subject to federal income tax on
the same amounts and in the same manner and at the same times as would have been
the case if such deposit, defeasance and discharge had not occurred. (Section
1304 of the Senior Indenture)
Covenant Defeasance. The Senior Indenture also provides that, if we so
elect by Board Resolution with respect to the Notes of any given series, we may
omit to comply with certain restrictive covenants, including the covenants
described under "-- Limitation on Liens" and "-- Limitations on Sale and
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Leaseback Transactions," and any such omission shall not be an Event of Default
with respect to the Notes of that series, upon the deposit with the Trustee, in
trust, of money and/or U.S. Government Obligations which through the payment of
interest and principal in respect thereof in accordance with their terms will
provide money in an amount sufficient to pay the principal of (and premium, if
any), and each installment of interest on, the Notes of that series on the
stated maturity of such payments in accordance with the terms of the Senior
Indenture and the Notes of that series. Our obligations under the Senior
Indenture and the Notes of that series other than with respect to such covenants
shall remain in full force and effect. (Section 1303 of the Senior Indenture)
Such a trust may be established only if, among other things, we have delivered
to the Trustee an opinion of counsel to the effect that the holders of such
series will not recognize income, gain or loss for federal income tax purposes
as a result of such deposit and defeasance of certain obligations and will be
subject to federal income tax on the same amounts and in the same manner and at
the same time as would have been the case if such deposit and defeasance had not
occurred. (Section 1304 of the Senior Indenture)
Although the amount of money and U.S. Government Obligations on deposit
with the Trustee would be intended to be sufficient to pay amounts due on the
Notes of such series at the time of their stated maturity, in the event we
exercise our option to omit compliance with the covenants defeased with respect
to the Notes as described above, and the Notes are declared due and payable
because of the occurrence of any Event of Default, such amount may not be
sufficient to pay amounts due on the Notes at the time of the acceleration
resulting from such Event of Default. We shall in any event remain liable for
such payments as provided in the Senior Indenture.
Federal Income Tax Consequences. Under current United States federal income
tax law, defeasance and discharge would likely be treated as a taxable exchange
of the Notes to be defeased for an interest in the defeasance trust. As a
consequence, a holder would recognize gain or loss equal to the difference
between the holder's cost or other tax basis for the Notes and the value of the
holder's interest in the defeasance trust, and thereafter would be required to
include in income the holder's share of the income, gain or loss of the
defeasance trust. Under current United States federal income tax law, covenant
defeasance would ordinarily not be treated as a taxable exchange of the Notes.
MEETINGS, MODIFICATION AND WAIVER
We and the Trustee may make modifications and amendments of the Senior
Indenture with the consent of the holders of a majority in aggregate principal
amount of the Outstanding Senior Securities of each series affected by such
modification or amendment; but no such modification or amendment may, without
the consent of the holder of each Outstanding Senior Security affected thereby,
(a) change the Stated Maturity of the principal of, or any installment
of principal of or interest on any Senior Security,
(b) change the Redemption Date with respect to any Senior Security,
(c) reduce the principal amount of, or premium or interest on, any
Senior Security,
(d) change any of our obligations to pay additional amounts,
(e) change the coin or currency in which any Senior Security or any
premium or interest thereon is payable,
(f) change the redemption right of any holder,
(g) impair the right to institute suit for the enforcement of any
payment on or with respect to any Senior Security,
(h) reduce the percentage in principal amount of outstanding Senior
Securities of any series, the consent of whose holders is required for
modification or amendment of the Senior Indenture or for waiver of
compliance with certain provisions of the Senior Indenture or for waiver of
certain defaults,
(i) reduce the requirements contained in the Senior Indenture for
quorum or voting,
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(j) change any of our obligations to maintain an office or agency in
the places and for the purposes required by the Senior Indenture, or
(k) modify any of the above provisions. (Section 902 of the Senior
Indenture)
We may make modifications and amendments of the Senior Indenture without
the consent of any holders of Senior Securities, when authorized by a Board
Resolution, and the Trustee, to:
(a) evidence the succession of another Person and the assumption by
any such successor of our covenants therein and in the Senior Securities
pursuant to Article Eight of the Senior Indenture; or
(b) add to our covenants for the benefit of the holders of all or any
series of Senior Securities (and if such covenants are to be for the
benefit of less than all series of Senior Securities, stating that such
covenants are expressly being included solely for the benefit of such
series) or to surrender any right or power therein conferred upon us; or
(c) add any additional Events of Default; or
(d) permit or facilitate the issuance of Senior Securities in
uncertificated form, provided that any such action shall not adversely
affect the interests of the holders of Senior Securities of any series in
any material respect; or
(e) add to, change or eliminate any of the provisions of the Senior
Indenture in respect of one or more series of Senior Securities, but any
such addition, change or elimination (A) shall neither (i) apply to any
Senior Security of any series created before the execution of such
supplemental indenture and entitled to the benefit of such provision nor
(ii) modify the rights of the holder of any such Senior Security with
respect to such provision or (B) shall become effective only when there is
no such Senior Security Outstanding; or
(f) secure the Senior Securities pursuant to the requirements of
Section 1006 of the Senior Indenture or otherwise; or
(g) establish the form or terms of Senior Securities of any series as
permitted by Sections 201 and 301 of the Senior Indenture; or
(h) evidence and provide for the acceptance of appointment under the
Senior Indenture by a successor Trustee with respect to the Senior
Securities of one or more series and to add to or change any of the
provisions of the Senior Indenture as shall be necessary to provide for or
facilitate the administration of the trusts thereunder by more than one
Trustee, pursuant to the requirements of Section 611(b) of the Senior
Indenture; or
(i) cure any ambiguity, to correct or supplement any provision therein
or in any supplemental indenture which may be defective or inconsistent
with any other provision therein or in any supplemental indenture, or to
make any other provisions with respect to matters or questions arising
under the Senior Indenture; but such action shall not adversely affect the
interests of the holders of Senior Securities of any series in any material
respect. (Section 901 of the Senior Indenture)
The holders of a majority in aggregate principal amount of outstanding
Notes of any given series may, on behalf of all holders of Notes of that series
outstanding, waive, insofar as the Notes of that series are concerned,
compliance by us with certain restrictive provisions of the Senior Indenture.
(Section 1007 of the Senior Indenture) The holders of a majority in aggregate
principal amount of the Notes of a series may, on behalf of all holders of Notes
of that series, waive any past default under the Senior Indenture with respect
to the Notes of that series, except a default (a) in the payment of the
principal of or any premium or interest on the Notes of that series or (b) in
respect of a covenant or provision of the Senior Indenture which cannot be
modified or amended without the consent of the holder of each outstanding Note
of that series. (Section 513 of the Senior Indenture)
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The Senior Indenture contains provisions for convening meetings of the
holders of Notes of any given series. (Section 1402) A meeting may be called at
any time by the Trustee, and also, upon our request, or the holders of at least
10% in aggregate principal amount of the outstanding Notes of any given series,
in any such case upon notice given in accordance with "Notices" below. (Section
1402 of the Senior Indenture) Except for any consent which must be given by the
holder of each outstanding Note of any given series, as described above, any
resolution presented at a meeting (or adjourned meeting at which a quorum is
present) may be adopted by the affirmative vote of the holders of a majority in
aggregate principal amount of the Notes of that series; but any resolution with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other action which may be made, given or taken by the holders of a
specified percentage, which is less than a majority, in aggregate principal
amount of the Notes of any given series may be adopted at a meeting (or
adjourned meeting duly reconvened at which a quorum is present) by the
affirmative vote of the holders of such specified percentage in aggregate
principal amount of the Notes of that series. Any resolution passed or decision
taken at any meeting of holders of Notes of any given series duly held in
accordance with the Senior Indenture will be binding on all the holders of the
Notes of that series. The quorum at any meeting of the holders of Notes of any
given series, and at any reconvened meeting, will be Persons holding or
representing a majority in aggregate principal amount of the Notes of that
series. (Section 1404 of the Senior Indenture)
Governing Law. The Senior Indenture, the Notes and the Exchange Notes will
be governed by, and construed in accordance with, the laws of the State of New
York. (Section 113 of the Senior Indenture)
NOTICES
We will give notices to holders of the Notes by first-class mail to the
addresses of such holders as they appear in the Security Register. (Section 106
of the Senior Indenture)
REGARDING THE TRUSTEE
The Trustee appointed and serving as trustee pursuant to the Senior
Indenture is Chase Bank of Texas, National Association ("Chase Bank").
The Senior Indenture contains certain limitations on the right of the
Trustee, should it become our creditor, to obtain payment of claims in certain
cases, or to realize for its own account on certain property received in respect
of any such claim as security or otherwise. (Section 613 of the Senior
Indenture) The Trustee is permitted to engage in certain other transactions.
Chase Bank, as the trustee under the Senior Indenture, may be a depository for
funds of, may make loans to and may perform other routine banking services for
us and certain of our affiliates in the normal course of business. Chase Bank
also serves as trustee for our subordinated debentures. If the Trustee acquires
any conflicting interest (as described in the Senior Indenture), it must
eliminate such conflict or resign within 90 days of the occurrence and the
continuance of a default under the Senior Indenture. (Section 608 of the Senior
Indenture)
The holders of a majority in principal amount of all outstanding Notes of
any given series (or if more than one series of Senior Securities is affected
thereby, all series of Senior Securities so affected, voting as a single class)
will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy or power available to the Trustee for the
Notes of that series or all such series of Senior Securities so affected.
(Section 512 of the Senior Indenture)
In case an Event of Default with respect to the Notes of any given series
shall occur (and shall not be cured) under the Senior Indenture and is known to
the Trustee, the Trustee shall exercise such of the rights and powers vested in
it by the Senior Indenture and use the same degree of care and skill in its
exercise as a prudent person would exercise or use under the circumstances in
the conduct of his own affairs. Subject to such provisions, no Trustee will be
under any obligation to exercise any of its rights or powers under the Senior
Indenture at the request of any of the holders of the Notes of any given series
unless they shall have offered to the Trustee security and indemnity
satisfactory to it.
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BOOK-ENTRY, DELIVERY; FORM AND TRANSFER
We will initially issue the Exchange Notes in the form of one or more
registered global Exchange Notes without interest coupons (collectively the
"Global Exchange Notes"). Upon issuance, the Global Exchange Notes will be
deposited with the Trustee, as custodian for DTC, and registered in the name of
DTC or its nominee, in each case for credit to the accounts of DTC's Direct and
Indirect Participants (as defined below).
The Global Exchange Notes may be transferred, in whole and not in part,
only to another nominee of DTC or to a successor of DTC or its nominee in
certain limited circumstances. Beneficial interests in the Global Exchange Notes
may be exchanged for Exchange Notes in certificated form in certain limited
circumstances. See "-- Transfer of Interests in Global Exchange Notes for
Certificated Exchange Notes."
DEPOSITARY PROCEDURES
DTC has advised us that DTC is a limited-purpose trust company created to
hold securities for its participating organizations (collectively, the "Direct
Participants") and to facilitate the clearance and settlement of transactions in
those securities between Direct Participants through electronic book-entry
changes in accounts of Participants. The Direct Participants include securities
brokers and dealers (including the Initial Purchasers), banks, trust companies,
clearing corporations and certain other organizations. Access to DTC's system is
also available to other entities that clear through or maintain a direct or
indirect, custodial relationship with a Direct Participant (collectively, the
"Indirect Participants"). DTC may hold securities beneficially owned by other
persons only through the Direct Participants or Indirect Participants, and such
other persons' ownership interest and transfer of ownership interest will be
recorded only on the records of the appropriate Direct Participant and/or
Indirect Participant, and not on the records maintained by DTC.
DTC has also advised us that, pursuant to DTC's procedures, (1) upon
deposit of the Global Exchange Notes, DTC will credit the accounts of the Direct
Participants designated by the Initial Purchasers with portions of the principal
amount of the Global Exchange Notes allocated by the Initial Purchasers to such
Direct Participants, and (2) DTC will maintain records of the ownership
interests of such Direct Participants in the Global Exchange Notes and the
transfer of ownership interests by and between Direct Participants. DTC will not
maintain records of the ownership interests of, or the transfer of ownership
interests by and between, Indirect Participants or other owners of beneficial
interests in the Global Exchange Notes. Direct Participants and Indirect
Participants must maintain their own records of the ownership interests of, and
the transfer of ownership interests by and between, Indirect Participants and
other owners of beneficial interests in the Global Exchange Notes.
The laws of some states require that certain persons take physical delivery
in definitive, certificated form, of securities that they own. This may limit or
curtail the ability to transfer beneficial interests in a Global Exchange Note
to such persons. Because DTC can act only on behalf of Direct Participants,
which in turn act on behalf of Indirect Participants and others, the ability of
a person having a beneficial interest in a Global Exchange Note to pledge such
interest to persons or entities that are not Direct Participants in DTC, or to
otherwise take actions in respect of such interests, may be affected by the lack
of physical certificates evidencing such interests. For certain other
restrictions on the transferability of the Exchange Notes see "-- Transfers of
Interests in Global Exchange Notes for Certificated Exchange Notes."
EXCEPT AS DESCRIBED IN "-- TRANSFERS OF INTERESTS IN GLOBAL EXCHANGE NOTES
FOR CERTIFICATED EXCHANGE NOTES," OWNERS OF BENEFICIAL INTERESTS IN THE GLOBAL
EXCHANGE NOTES WILL NOT HAVE EXCHANGE NOTES REGISTERED IN THEIR NAMES, WILL NOT
RECEIVE PHYSICAL DELIVERY OF EXCHANGE NOTES IN CERTIFICATED FORM AND WILL NOT BE
CONSIDERED THE REGISTERED OWNERS OR HOLDERS THEREOF UNDER THE SENIOR INDENTURE
FOR ANY PURPOSE.
Under the terms of the Senior Indenture, we and the Trustee will treat the
persons in whose names the Exchange Notes are registered (including Exchange
Notes represented by Global Exchange Notes) as
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the owners thereof for the purpose of receiving payments and for any and all
other purposes whatsoever. Payments in respect of the principal, premium,
Liquidated Damages, if any, and interest on Global Exchange Notes registered in
the name of DTC or its nominee will be payable by the Trustee to DTC or its
nominee as the registered holder under the Senior Indenture. Consequently,
neither we, the Trustee nor any of our agents or the Trustee has or will have
any responsibility or liability for (1) any aspect of DTC's records or any
Direct Participant's or Indirect Participant's records relating to or payments
made on account of beneficial ownership interests in the Global Exchange Notes
or for maintaining, supervising or reviewing any of DTC's records or any Direct
Participant's or Indirect Participant's records relating to the beneficial
ownership interests in any Global Exchange Note or (2) any other matter relating
to the actions and practices of DTC or any of its Direct Participants or
Indirect Participants.
DTC has advised us that its current payment practice (for payments of
principal, interest and the like) with respect to securities such as the
Exchange Notes is to credit the accounts of the relevant Direct Participants
with such payment on the payment date in amounts proportionate to such Direct
Participant's respective ownership interests in the Global Exchange Notes as
shown on DTC's records. Payments by Direct Participants and Indirect
Participants to the beneficial owners of the Exchange Notes will be governed by
standing instructions and customary practices between them and will not be the
responsibility of DTC, the Trustee or us. Neither we nor the Trustee will be
liable for any delay by DTC or its Direct Participants or Indirect Participants
in identifying the beneficial owners of the Exchange Notes, and we and the
Trustee may conclusively rely on and will be protected in relying on
instructions from DTC or its nominee as the registered owner of the Exchange
Notes for all purposes.
The Global Exchange Notes will trade in DTC's Same-day Funds Settlement
System and, therefore, transfers between Direct Participants in DTC will be
effected in accordance with DTC's procedures, and will be settled in immediately
available funds. Transfers between Indirect Participants who hold an interest
through a Direct Participant will be effected in accordance with the procedures
of such Direct Participant but generally will settle in immediately available
funds.
DTC has advised us that it will take any action permitted to be taken by a
holder of Exchange Notes only at the direction of one or more Direct
Participants to whose account interests in the Global Exchange Notes are
credited and only in respect of such portion of the aggregate principal amount
of the Exchange Notes as to which such Direct Participant or Direct Participants
has or have given direction. However, if there is an Event of Default with
respect to the Exchange Notes, DTC reserves the right to exchange Global
Exchange Notes (without the direction of one or more of its Direct Participants)
for legended Exchange Notes in certificated form, and to distribute such
certificated forms of Exchange Notes to its Direct Participants. See
"-- Transfers of Interests in Global Exchange Notes for Certificated Exchange
Notes."
Although DTC has agreed to the foregoing procedures to facilitate transfers
of interests in Global Exchange Notes among Direct Participants, it is under no
obligation to perform or to continue to perform such procedures, and such
procedures may be discontinued at any time. None of the Initial Purchasers or
the Trustee will have any responsibility for the performance by DTC or its
respective Direct and Indirect Participants of their respective obligations
under the rules and procedures governing any of their operations.
The information in this section concerning DTC and its book-entry system
has been obtained from sources that we believe to be reliable, but we do not
take any responsibility for the accuracy thereof.
TRANSFERS OF INTERESTS IN GLOBAL EXCHANGE NOTES FOR CERTIFICATED EXCHANGE NOTES
We may exchange an entire Global Exchange Note for Certificated Exchange
Notes if (1) (a) DTC notifies us that it is unwilling or unable to continue as
Depositary for the Global Exchange Notes or we determine that DTC is unable to
act as such Depositary and we thereupon fail to appoint a successor depositary
within 90 days or (b) DTC has ceased to be a clearing agency registered under
the Exchange Act, (2) we at our option, notify the Trustee in writing that we
elect to cause the issuance of Certificated Exchange Notes or (3) there shall
have occurred and be continuing a Default or an Event of Default with
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respect to the Exchange Notes. In any such case, we will notify the Trustee in
writing that, upon surrender by the Direct and Indirect Participants of their
interest in such Global Exchange Note, Certificated Exchange Notes will be
issued to each person that such Direct and Indirect Participants and the DTC
identify as being the beneficial owner of the related Exchange Notes.
Beneficial interests in Global Exchange Notes held by any Direct or
Indirect Participant may be exchanged for Certificated Exchange Notes upon
request to DTC, by such Direct Participant (for itself or on behalf of an
Indirect Participant), to the Trustee in accordance with customary DTC
procedures. Certificated Exchange Notes delivered in exchange for any beneficial
interest in any Global Exchange Note will be registered in the names, and issued
in any approved denominations, requested by DTC on behalf of such Direct or
Indirect Participants (in accordance with DTC's customary procedures).
Neither we nor the Trustee will be liable for any delay by the holder of
the Global Exchange Notes or DTC in identifying the beneficial owners of
Exchange Notes, and we and the Trustee may conclusively rely on, and will be
protected in relying on, instructions from the holder of the Global Exchange
Note or DTC for all purposes.
CERTIFICATED EXCHANGE NOTES
Certificated Exchange Notes may be exchangeable for other Certificated
Exchange Notes of any authorized denominations and of a like aggregate principal
amount and tenor in accordance with the Senior Indenture. Certificated Exchange
Notes may be presented for exchange, and may be presented for registration of
transfer (duly endorsed, or accompanied by a duly executed written instrument of
transfer), at the designated office of the Trustee (the "Security Registrar").
Such transfer or exchange will be effected upon the Security Registrar or such
other transfer agent, as the case may be, being satisfied with the documents of
title and identity of the person making the request. We may at any time
designate additional transfer agents with respect to the Exchange Notes.
We shall not be required to (a) issue, exchange or register the transfer of
any Certificated Exchange Note for a period of 15 days next preceding the
mailing of notice of redemption of such Exchange Note or (b) exchange or
register the transfer of any Certificated Exchange Note or portion thereof
selected, called or being called for redemption, except in the case of any
Certificated Exchange Note to be redeemed in part, the portion thereof not so to
be redeemed.
If a Certificated Exchange Note is mutilated, destroyed, lost or stolen, it
may be replaced at the office of the Security Registrar upon payment by the
holder of such expenses as may be incurred by us and the Security Registrar in
connection therewith and the furnishing of such evidence and indemnity as we and
the Security Registrar may require. Mutilated Exchange Notes must be surrendered
before new Exchange Notes will be issued.
SAME DAY SETTLEMENT
Payments in respect of the Exchange Notes represented by the Global
Exchange Notes (including principal, premium, if any, and interest and
Liquidated Damages, if any) will be made by wire transfer of immediately
available same day funds to the accounts specified by the holder of interests in
such Global Exchange Note. Principal, premium, if any, and interest and
Liquidated Damages, if any, on all Certificated Exchange Notes in registered
form will be payable at the office or agency of the Trustee, except that, at our
option, payment of any interest and Liquidated Damages, if any, may be made (1)
by check mailed to the address of the Person entitled thereto as such address
shall appear in the security register or (2) by wire transfer to an account
maintained by the Person entitled thereto as specified in the security register.
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THE EXCHANGE OFFER
We sold the Notes on May 21, 1999, pursuant to the Purchase Agreement dated
as of March 18, 1999 (the "Purchase Agreement") by and among Waste Management
Holdings, the Initial Purchasers and us. The Notes were subsequently offered by
the Initial Purchasers to qualified institutional buyers pursuant to Rule 144A
and to purchasers pursuant to Regulation S under the Securities Act.
REGISTRATION RIGHTS; LIQUIDATED DAMAGES
The following description is a summary of the material provisions of the
Registration Rights Agreement. It does not restate that agreement in its
entirety. We urge you to read the proposed form of Registration Rights Agreement
in its entirety because it, and not this description, defines your registration
rights as holder of these Notes.
We, the Subsidiary Guarantor and the Initial Purchasers entered into the
Registration Rights Agreement as of May 21, 1999. Pursuant to the Registration
Rights Agreement, we and the Subsidiary Guarantor agreed to file with the
Commission the Exchange Offer Registration Statement on the appropriate form
under the Securities Act with respect to the exchange of Exchange Notes for
Notes (the "Exchange Offer"). Upon the effectiveness of the Exchange Offer
Registration Statement, we agreed to offer to the holders of Transfer Restricted
Securities (as defined below) pursuant to the Exchange Offer who are able to
make certain representations the opportunity to exchange their Transfer
Restricted Securities for Exchange Notes.
The Registration Rights Agreement provides that if:
(1) the Exchange Offer is not permitted by applicable law or
Commission policy; or
(2) any holder of Transfer Restricted Securities notifies us prior to
the 20th business day following the date by which the Exchange Offer is
required to be consummated that:
(a) it is prohibited by law or Commission policy from participating
in the Exchange Offer; or
(b) that it may not resell the Exchange Notes acquired by it in the
Exchange Offer to the public without delivering a prospectus and the
prospectus contained in the Exchange Offer Registration Statement is not
appropriate or available for such resales; or
(c) that it is a broker-dealer and owns Notes acquired directly
from us or one of our affiliates,
then we will file with the Commission a Shelf Registration Statement to cover
resales of the Notes by the holders thereof who satisfy certain conditions
relating to the provision of information in connection with the Shelf
Registration Statement.
"Transfer Restricted Securities" means:
(1) Each Note, until the earliest to occur of:
(a) the date on which such Note is exchanged in the Exchange Offer
for an Exchange Note;
(b) the date on which such Note has been disposed of in accordance
with a Shelf Registration Statement (and the purchasers thereof have
been issued Exchange Notes); and
(c) the date on which such Note is distributed to the public
pursuant to Rule 144 (and purchasers thereof have been issued Exchange
Notes).
(2) Each Exchange Note until the date on which such Exchange Note is
disposed of by a broker-dealer pursuant to the Plan of Distribution
contemplated by the Exchange Offer Registration Statement (including the
delivery of the Prospectus contained therein).
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The Registration Rights Agreement provides that, unless the Exchange Offer
is not permitted by applicable law or Commission policy:
(1) we will file an Exchange Offer Registration Statement with the
Commission on or prior to 120 days after May 21, 1999;
(2) we will use our best efforts to have the Exchange Offer
Registration Statement declared effective by the Commission on or prior to
210 days after May 21, 1999;
(3) we will:
(a) use our best efforts to cause the Exchange Offer Registration
Statement to be continuously effective and keep the Exchange Offer open
for not less than 20 business days or the minimum period required by
law, if such period is no longer than 20 business days; and
(b) use our best efforts to consummate the Exchange Offer on or
prior to 30 business days after the date on which the Exchange Offer
Registration Statement was declared effective by the Commission (the
"Consummation Deadline"); and
(4) if obligated to file the Shelf Registration Statement, we will
file the Shelf Registration Statement with the Commission on or prior to 90
days after such filing obligation arises and use its best efforts to cause
the Shelf Registration to be declared effective by the Commission on or
prior to 60 days after such Shelf Registration Statement is required to be
filed.
The Registration Rights Agreement provides that if:
(1) we fail to file any of the registration statements required to be
filed by the Registration Rights Agreement on or before the date specified
for such filing;
(2) any of such registration statements is not declared effective by
the Commission on or prior to the date specified for such effectiveness;
(3) we fail to consummate the Exchange Offer on or prior to the
Consummation Deadline; or
(4) the Shelf Registration Statement or the Exchange Offer
Registration Statement is declared effective but thereafter ceases to be
effective or usable in connection with resales of Transfer Restricted
Securities during the periods specified in the Registration Rights
Agreement (each such event referred to in clauses (1) through (4) above, a
"Registration Default"),
then we will pay liquidated damages to each holder of Notes subject to such
Registration Default in an amount equal to $.05 per week per $1,000 in principal
amount of Notes held by such holder for each week or portion thereof that the
Registration Default continues for the first 90-day period immediately following
the occurrence of the first Registration Default.
The amount of liquidated damages will increase by an additional $.05 per
week per $1,000 in principal amount of Notes with respect to each subsequent
90-day period until all Registration Defaults have been cured, up to a maximum
amount of liquidated damages of $.25 per week per $1,000 in principal amount of
Notes, provided that we will not be required to pay liquidated damages for more
than one Registration Default at any given time.
All accrued liquidated damages will be paid directly by us on each relevant
Interest Payment Date for the Notes to the persons whose names are registered at
the close of business on the relevant Regular Record Date.
Following the cure of all Registration Defaults, the accrual of Liquidated
Damages will cease.
Each holder of Notes will be required to make certain representations to us
(as described in the Registration Rights Agreement) in order to participate in
the Exchange Offer and will be required to deliver certain information to be
used in connection with the Shelf Registration Statement and to provide comments
on the Shelf Registration Statement within the time periods set forth in the
Registration Rights
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Agreement in order to have such holder's Notes included in the Shelf
Registration Statement and benefit from the provisions regarding liquidated
damages set forth above. By acquiring Notes, a holder will be deemed to have
agreed by virtue of the Registration Rights Agreement to indemnify us, against
certain losses arising out of information furnished by such holder in writing
for inclusion in any Shelf Registration Statement. Holders of Notes will also be
required to suspend their use of the prospectus included in the Shelf
Registration Statement under certain circumstances upon receipt of written
notice to that effect from us.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS; TERMINATION
The term "Expiration Date" shall mean , 1999, unless we, in
our sole discretion, extend the Exchange Offer, in which case the term
"Expiration Date" shall mean the latest date to which the Exchange Offer is
extended.
To extend the Expiration Date, we will notify the Exchange Agent of any
extension by oral or written notice and will notify the holders of the Exchange
Notes by means of a press release or other public announcement prior to 9:00
a.m., New York City time, on the next business day after the previously
scheduled Expiration Date. Such announcement may state that we are extending the
Exchange Offer for a specified period of time.
We reserve the right (i) to delay acceptance of any Notes, to extend the
Exchange Offer or to terminate the Exchange Offer and not permit acceptance of
Notes not previously accepted if any of the conditions set forth herein under
"-- Conditions" shall have occurred and shall not have been waived by us, by
giving oral or written notice of such delay, extension or termination to the
Exchange Agent, or (ii) to amend the terms of the Exchange Offer in any manner
deemed by it to be advantageous to the holders of the Notes. Any such delay in
acceptance, extension, termination or amendment will be followed as promptly as
practicable by oral or written notice thereof to the Exchange Agent. If the
Exchange Offer is amended in a manner determined by us to constitute a material
change, we will promptly disclose such amendment in a manner reasonably
calculated to inform the holders of the Notes of such amendment.
Without limiting the manner in which we may choose to make public
announcement of any delay, extension, amendment or termination of the Exchange
Offer, we shall have no obligations to publish, advertise, or otherwise
communicate any such public announcement, other than by making a timely release
to an appropriate news agency.
INTEREST ON THE EXCHANGE NOTES
The Exchange Notes will accrue interest for the 2001 Exchange Notes at a
rate of 6.000% per annum, for the 2004 Exchange Notes at a rate of 6.500% per
annum, for the 2009 Exchange Notes at a rate of 6.875% per annum and for the
2029 Exchange Notes at a rate of 7.375% per annum. Interest on the Exchange
Notes will accrue from the last date on which interest was paid on the Notes,
or, if we have paid no interest on such Notes, from May 21, 1999, the date of
issuance of the Notes for which the Exchange Offer is being made. Interest on
the Exchange Notes are payable semi-annually on May 15 and November 15,
commencing on November 15, 1999.
PROCEDURES FOR TENDERING
To tender in the Exchange Offer, you must complete, sign and date the
Letter of Transmittal, or a facsimile thereof, have the signatures thereon
medallion guaranteed if required by the Letter of Transmittal, and mail or
otherwise deliver such Letter of Transmittal or such facsimile, together with
any other required documents, to the Exchange Agent prior to 5:00 p.m., New York
City time, on the Expiration Date. In addition, either (i) a timely confirmation
of a book-entry transfer (a "Book-Entry Confirmation") of such Notes into the
Exchange Agent's account at The Depositary (the "Book-Entry Transfer Facility")
pursuant to the procedure for book-entry transfer described below, must be
received by the Exchange Agent prior to the Expiration Date or (ii) you must
comply with the guaranteed delivery procedures described below. THE METHOD OF
DELIVERY OF LETTERS OF TRANSMITTAL
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AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND
RISK OF THE HOLDERS. IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT
REGISTERED MAIL, PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED, BE USED. IN
ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY TO THE
EXCHANGE AGENT BEFORE THE EXPIRATION DATE. NO LETTERS OF TRANSMITTAL OR OTHER
REQUIRED DOCUMENTS SHOULD BE SENT TO THE COMPANY. Delivery of all documents must
be made to the Exchange Agent at its address set forth below. You may also
request your respective brokers, dealers, commercial banks, trust companies or
nominees to effect such tender.
Your tender of Notes will constitute an agreement between you and the
Company in accordance with the terms and subject to the conditions set forth
herein and in the Letter of Transmittal. Any beneficial owner whose Notes are
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee and who wishes to tender should contact such registered holder
promptly and instruct such registered holder to tender on his behalf.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be medallion guaranteed by any member firm of a registered
national securities exchange or of the National Association of Securities
Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or an "eligible guarantor" institution within
the meaning of Rule 17Ad-15 under the Exchange Act (each an "Eligible
Institution") unless the Notes tendered pursuant thereto are tendered for the
account of an Eligible Institution.
If the Letter of Transmittal is signed by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations, or
others acting in a fiduciary or representative capacity, such person should so
indicate when signing, and unless waived by us, evidence satisfactory to us of
their authority to so act must be submitted with the Letter of Transmittal.
We will determine questions as to the validity, form, eligibility
(including time of receipt) and withdrawal of the tendered Notes, in our sole
discretion, which determination will be final and binding. We reserve the
absolute right to reject any and all Notes not properly tendered or any Notes
which, if accepted, would, in the opinion of our counsel, be unlawful. We also
reserve the absolute right to waive any irregularities or conditions of tender
as to particular Notes. Our interpretation of the terms and conditions of the
Exchange Offer (including the instructions in the Letter of Transmittal) will be
final and binding on all parties. Unless waived, any defects or irregularities
in connection with tenders of Notes must be cured within such time as we shall
determine. Neither we, the Exchange Agent nor any other person shall be under
any duty to give notification of defects or irregularities with respect to
tenders of Notes, nor shall any of them incur any liability for failure to give
such notification. Tenders of Notes will not be deemed to have been made until
such irregularities have been cured or waived. The Exchange Agent will return
any Notes it receives that are not properly tendered and as to which the defects
or irregularities have not been cured or waived without cost to such holder by
the Exchange Agent, unless otherwise provided in the Letter of Transmittal, as
soon as practicable following the Expiration Date.
In addition, we reserve the right, in our sole discretion, subject to the
provisions of the Senior Indenture, to purchase or make offers for any Notes
that remain outstanding subsequent to the Expiration Date or, as set forth under
"-- Conditions," to terminate the Exchange Offer in accordance with the terms of
the Registration Rights Agreement, and to the extent permitted by applicable
law, purchase Notes in the open market, in privately negotiated transactions or
otherwise. The terms of any such purchases or offers could differ from the terms
of the Exchange Offer.
ACCEPTANCE OF NOTES FOR EXCHANGE; DELIVERY OF EXCHANGE NOTES
Upon satisfaction or waiver of all of the conditions to the Exchange Offer,
we will accept all Notes properly tendered promptly after the Expiration Date,
and we will issue the Exchange Notes promptly after acceptance of the Notes. See
"-- Conditions." For purposes of the Exchange Offer, Notes shall be
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<PAGE> 46
deemed to have been accepted as validly tendered for exchange when, as and if we
have given oral or written notice thereof to the Exchange Agent.
In all cases, we will issue the Exchange Notes for Notes that are accepted
for exchange pursuant to the Exchange Offer only after timely receipt by the
Exchange Agent of a Book-Entry Confirmation of such Notes into the Exchange
Agent's account at the Book-Entry Transfer Facility, a properly completed and
duly executed Letter of Transmittal and all other required documents. If we do
not accept any tendered Notes for any reason set forth in the terms and
conditions of the Exchange Offer, we will credit such unaccepted or such
nonexchanged Notes to an account maintained with such Book-Entry Transfer
Facility as promptly as practicable after the expiration or termination of the
Exchange Offer.
BOOK-ENTRY TRANSFER
The Exchange Agent will make a request to establish an account with respect
to the Notes at the Book-Entry Transfer Facility for purposes of the Exchange
Offer within two business days after the date of this Prospectus. Any financial
institution that is a participant in the Book-Entry Transfer Facility's systems
may make book-entry delivery of Notes by causing the Book-Entry Transfer
Facility to transfer such Notes into the Exchange Agent's account at the
Book-Entry Transfer Facility in accordance with such Book-Entry Transfer
Facility's procedures for transfer. However, the Letter of Transmittal (or
facsimile) thereof with any required signature guarantees and any other required
documents must, in any case, be transmitted to and received by the Exchange
Agent at one of the addresses set forth under "-- Exchange Agent" no later than
the Expiration Date or the guaranteed delivery procedures described below must
be complied with.
GUARANTEED DELIVERY PROCEDURES
If the procedures for book-entry transfer cannot be completed on a timely
basis, a tender may be effected if (i) the tender is made through an Eligible
Institution, (ii) before the Expiration Date, the Exchange Agent receives from
such Eligible Institution a properly completed and duly executed Letter of
Transmittal (or a facsimile thereof) and Notice of Guaranteed Delivery,
substantially in the form we provided (by facsimile transmission, mail or hand
delivery), setting forth the name and address of the holder of Notes and the
amount of Notes tendered, stating that the tender is being made thereby and
guaranteeing that within three New York Stock Exchange, Inc. ("NYSE") trading
days after the date of execution of the Notice of Guaranteed Delivery, a
Book-Entry Confirmation and any other documents required by the Letter of
Transmittal will be deposited by the Eligible Institution with the Exchange
Agent, and (iii) a Book-Entry Confirmation and all other documents required by
the Letter of Transmittal are received by the Exchange Agent within three NYSE
trading days after the date of execution of the Notice of Guaranteed Delivery.
WITHDRAWAL OF TENDERS
Tenders of Notes may be withdrawn at any time prior to 5:00 p.m., New York
City time, on the Expiration Date.
For a withdrawal to be effective, a written notice of withdrawal must be
received by the Exchange Agent before 5:00 p.m., New York City time, on the
Expiration Date at one of the addresses set forth under "-- Exchange Agent." Any
such notice of withdrawal must specify the name and number of the account at the
Book-Entry Transfer Facility from which the Notes were tendered, identify the
principal amount of the Notes to be withdrawn, and specify the name and number
of the account at the Book-Entry Transfer Facility to be credited with the
withdrawn Notes and otherwise comply with the procedures of such Book-Entry
Transfer Facility. We will determine all questions as to the validity, form and
eligibility (including time of receipt) of such notice, and our determination
shall be final and binding on all parties. Any Notes so withdrawn will be deemed
not to have been validly tendered for exchange for purposes of the Exchange
Offer. Any Notes which have been tendered for exchange but which are not
exchanged for any reason will be credited to an account maintained with such
Book-Entry Transfer Facility for the Notes
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as soon as practicable after withdrawal, rejection of tender or termination of
the Exchange Offer. Properly withdrawn Notes may be retendered by following one
of the procedures described under "-- Procedures for Tendering" and
"-- Book-Entry Transfer" at any time on or prior to the Expiration Date.
CONDITIONS
Notwithstanding any other term of the Exchange Offer, Notes will not be
required to be accepted for exchange, nor will Exchange Notes be issued in
exchange for any Notes, and we may terminate or amend the Exchange Offer as
provided herein before the acceptance of such Notes, if, because of any change
in law, or applicable interpretations thereof by the Commission, we determine
that we are not permitted to effect the Exchange Offer. We have no obligation
to, and will not knowingly, permit acceptance of tenders of Notes from our
affiliates or from any other holder or holders who are not eligible to
participate in the Exchange Offer under applicable law or interpretations
thereof by the Staff of the Commission, or if the Exchange Notes to be received
by such holder or holders of Notes in the Exchange Offer, upon receipt, will not
be tradable by such holder without restriction under the Securities Act and the
Exchange Act and without material restrictions under the "blue sky" or
securities laws of substantially all of the states of the United States.
EXCHANGE AGENT
Chase Bank of Texas, National Association has been appointed as Exchange
Agent for the Exchange Offer. You should direct your questions and requests for
assistance and requests for additional copies of this Prospectus or of the
Letter of Transmittal to the Exchange Agent addressed as follows:
By Mail (Certified, Registered, Overnight or First Class) or Hand Delivery:
Chase Bank of Texas, National Association
600 Travis Street
Houston, Texas 77002
Telephone Number (713) 216-7000
FEES AND EXPENSES
We will bear the expenses of soliciting tenders pursuant to the Exchange
Offer. We are making the principal solicitation for tenders pursuant to the
Exchange Offer by mail; however we may make additional solicitations by
telegraph, telephone, telecopy or in person by our officers and regular
employees.
We will not make any payments to brokers, dealers or other persons
soliciting acceptances of the Exchange Offer. We, however, will pay the Exchange
Agent reasonable and customary fees for its services and will reimburse the
Exchange Agent for its reasonable out-of-pocket expenses in connection
therewith.
We will bear the expenses to be incurred in connection with the Exchange
Offer, including fees and expenses of the Exchange Agent and the Trustee, and
accounting, legal, printing and related fees and expenses.
We will pay all transfer taxes, if any, applicable to the exchange of Notes
pursuant to the Exchange Offer. If, however, Exchange Notes or Notes for
principal amounts not tendered or accepted for exchange are to be registered or
issued in the name of any person other than the registered holder of the Notes
tendered, or if tendered Notes are registered in the name of any person other
than the person signing the Letter of Transmittal, or if a transfer tax is
imposed for any reason other than the exchange of Notes pursuant to the Exchange
Offer, then the amount of any such transfer taxes (whether imposed on the
registered holder or any other persons) will be payable by the tendering holder.
If satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the Letter of Transmittal, the amount of such transfer taxes will
be billed directly to such tendering holder.
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<PAGE> 48
RESALE OF EXCHANGE NOTES
Based on an interpretation by the staff of the Commission set forth in
no-action letters issued to third parties, we believe that Exchange Notes issued
pursuant to the Exchange Offer in exchange for Notes may be offered for resale,
resold and otherwise transferred by any owner of such Exchange Notes (other than
any such owner which is our "affiliate" within the meaning of Rule 405 under the
Securities Act) without compliance with the registration and prospectus delivery
provisions of the Securities Act, if such Exchange Notes are acquired in the
ordinary course of such owner's business and such owner does not intend to
participate, and has no arrangement or understanding with any person to
participate, in the distribution of such Exchange Notes. Any owner of Notes who
tenders in the Exchange Offer with the intention to participate, or for the
purpose of participating, in a distribution of the Exchange Notes may not rely
on the position of the staff of the Commission enunciated in the "Exxon Capital
Holdings Corporation" or similar no-action letters but rather must comply with
the registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction. In addition, any such resale transaction
should be covered by an effective registration statement containing the selling
security holders information required by Item 507 of Regulation S-K of the
Securities Act. Each broker-dealer that receives Exchange Notes for its own
account in exchange for Notes, where such Notes were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, may be a statutory underwriter and must acknowledge that it will
deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such Exchange Notes.
By tendering in the Exchange Offer, each Holder (or DTC participant, in the
case of tenders of interests in the Global Notes held by DTC) will represent to
us (which representation may be contained the Letter of Transmittal) to the
effect that (A) it is not our affiliate, (B) it is not engaged in, and does not
intend to engage in, and has no arrangement or understanding with any person to
participate in, a distribution of the Exchange Notes to be issued in the
Exchange Offer and (C) it is acquiring the Exchange Notes in its ordinary course
of business. Each Holder will acknowledge and agree that any broker-dealer and
any such Holder using the Exchange Offer to participate in a distribution of the
Exchange Notes acquired in the Exchange Offer (1) could not under Commission
policy as in effect on the date of the Registration Rights Agreement rely on the
position of the Commission enunciated in the No-Action Letters, and (2) must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with a secondary resale transaction and that such a
secondary resale transaction must be covered by an effective registration
statement containing the selling security holder information required by Item
507 or 508, as applicable, of Regulation S-K if the resales are of Exchange
Notes obtained by such Holder in exchange for Notes acquired by such Holder
directly from us or our affiliate.
To comply with the securities laws of certain jurisdictions, it may be
necessary to qualify for sale or to register the Exchange Notes before offering
or selling such Exchange Notes. We have agreed, pursuant to the Registration
Rights Agreement and subject to certain specified limitations therein, to
cooperate with selling Holders or underwriters in connection with the
registration and qualification of the Exchange Notes for offer or sale under the
securities or "blue sky" laws of such jurisdictions as may be necessary to
permit the holders of Exchange Notes to trade the Exchange Notes without any
restrictions or limitations under the securities laws of the several states of
the United States.
CONSEQUENCES OF FAILURE TO EXCHANGE
Holders of Notes who do not exchange their Notes for Exchange Notes
pursuant to the Exchange Offer will continue to be subject to the restrictions
on transfer of such Notes as set forth in the legend thereon as a consequence of
the issuance of the Notes pursuant to exemptions from, or in transactions not
subject to, the registration requirements of the Securities Act and applicable
state securities laws. We do not currently anticipate that we will register the
Notes under the Securities Act. To the extent that Notes are tendered and
accepted in the Exchange Offer, the trading market for untendered and tendered
but unaccepted Notes could be adversely affected.
43
<PAGE> 49
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the principal United States federal income
tax consequences from the Exchange Offer and from the ownership of the Notes or
Exchange Notes. It deals only with Notes or Exchange Notes held as capital
assets and not with special classes of Holders, such as dealers in securities or
currencies, life insurance companies, tax exempt entities, and persons that hold
a Note or an Exchange Note in connection with an arrangement that completely or
partially hedges the Note or Exchange Note. Further, the discussion does not
address all aspects of taxation that might be relevant to particular Holders in
light of their individual circumstances. The discussion is based upon the
Internal Revenue Code of 1986, as amended (the "Code"), and regulations, rulings
and judicial decisions thereunder as of the date hereof. Such authorities may be
repealed, revoked or modified so as to result in federal income tax consequences
different from those discussed below.
For purposes of the following discussion, a "U.S. Holder" means a
beneficial owner of a Note or an Exchange Note that is, for United States
federal income tax purposes: (1) a citizen or resident of the United States; (2)
a partnership, corporation or other entity created or organized in or under the
law of the United States or of any State of the United States; (3) an estate,
the income of which is subject to United States federal income tax regardless of
its source; (4) a trust classified as a United States person for United States
federal income tax purposes. A "Non-U.S. Holder" is a beneficial owner of a Note
or an Exchange Note that, for United States federal income tax purposes, is not
a U.S. Holder.
HOLDERS TENDERING THEIR NOTES OR PROSPECTIVE PURCHASERS OF EXCHANGE NOTES
SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING THE UNITED STATES FEDERAL
INCOME TAX AND ANY STATE OR LOCAL TAX CONSEQUENCES OF THE EXCHANGE OF THE NOTES
FOR EXCHANGE NOTES, AND OF THE OWNERSHIP AND DISPOSITION OF THE NOTES OR
EXCHANGE NOTES IN LIGHT OF THEIR PARTICULAR SITUATIONS, AND ANY CONSEQUENCES
UNDER THE LAWS OF ANY OTHER TAXING JURISDICTION.
EXCHANGE OF NOTES FOR EXCHANGE NOTES
The exchange of Notes for Exchange Notes pursuant to the Exchange Offer
will not be treated as an "exchange" for United States federal income tax
purposes because the Notes will not be considered to differ materially in kind
or extent from the Exchange Notes. Rather, the Exchange Notes received by a
Holder will be treated as a continuation of the Notes in the hands of such
Holder. The adjusted basis and holding period of the Exchange Notes for any
Holder will be the same as the adjusted basis and holding period of the Notes.
Similarly, there will be no United States federal income tax consequences to a
Holder of Notes that does not participate in the exchange offer.
TAX CONSEQUENCES TO U.S. HOLDERS
Payments of Interest. Payments of stated interest on a Note or an Exchange
Note generally will be taxable to a U.S. Holder as ordinary interest income at
the time it is received or accrued, depending on the U.S. Holder's method of
accounting for tax purposes.
Sale, Exchange, Redemption or Retirement. Upon the sale, exchange,
redemption or retirement of a Note or an Exchange Note, a U.S. Holder will
recognize taxable gain or loss equal to the difference between the amount
realized on such sale, exchange, redemption or retirement (not including any
amount attributable to accrued but unpaid interest not previously included in
gross income) and such Holder's adjusted tax basis in the Note or Exchange Note.
To the extent attributable to accrued but unpaid interest not previously
included in gross income, the amount recognized by the U.S. Holder will be
treated as a payment of interest. See "-- Payments of Interest." Gain or loss
recognized on the sale, exchange, redemption or retirement generally will be
capital gain or loss. The deductibility of capital losses is subject to
limitations.
44
<PAGE> 50
Market Discount and Premium. U.S. Holders that did not acquire their
interest in the Exchange Notes pursuant to an acquisition of Notes on their
original issue at their original offering price or pursuant to an exchange of
such Notes for Exchange Notes pursuant to the exchange offer may be considered
to have acquired their Exchange Notes with market discount or amortizable bond
premium as such terms are defined for United States federal income tax purposes.
Such Holders should consult their tax advisors as to the federal income tax
consequences of the market discount and premium rules of the Code.
Backup Withholding. Payments made on, and proceeds from the sale of, Notes
or Exchange Notes may be subject to a "backup" withholding tax of 31% unless the
Holder complies with certain identification requirements. Any withheld amounts
will generally be allowed as a credit against the Holder's federal income tax
provided the required information is timely filed with the IRS.
TAX CONSEQUENCES TO NON-U.S. HOLDERS
Interest. The so-called "portfolio interest" exception provides that
interest on the Notes or Exchange Notes will not be subject to U.S. federal
income tax and withholding of U.S. federal income tax will not be required with
respect to the payment by us or our paying agent of principal or interest on the
Notes or Exchange Notes owned by a Non-U.S. Holder, provided that (1) the
beneficial owner of the Notes or Exchange Notes does not actually or
constructively own 10% or more of the total combined voting power of all classes
of stock of the Company entitled to vote within the meaning of Section 871(h)(3)
of the Tax Code and the Treasury Regulations issued thereunder, (2) the
beneficial owner is not (i) a foreign tax exempt organization or a foreign
private foundation for U.S. federal income tax purposes, (ii) a bank whose
receipt of interest on the Notes or Exchange Notes is described in Section
881(c)(3)(A) of the Tax Code or (iii) a "controlled foreign corporation" (as
defined Section 957 of the Tax Code) that is related directly, indirectly or
constructively to us through stock ownership, (3) such interest is not
considered contingent interest under Section 871(h)(4) of the Tax Code and the
Treasury Regulations thereunder, and (4) the beneficial owner satisfies the
requirements (described generally below) set forth in Section 871(h) and Section
881(c) of the Tax Code and the Treasury Regulations thereunder relating to
registered securities.
To satisfy the requirements referred to in (4) above, the beneficial owner
of such Notes or Exchange Notes, or a financial institution holding the Notes or
Exchange Notes on behalf of such owner, must provide, in accordance with
specified procedures, our paying agent with a statement to the effect that the
beneficial owner is not a U.S. person. Currently, these requirements will be met
if either (i) the beneficial owner of the Notes or Exchange Notes certifies to
us or our paying agent, under penalties of perjury, that it is not a U.S. person
(which certification may be made on an IRS Form W-8 or successor form) and
provides its name and address or (ii) a securities clearing organization, bank
or other financial institution that holds customers' securities in the ordinary
course of its trade or business (a "financial institution") and that holds the
Notes or Exchange Notes on behalf of a beneficial owner, certifies to us or our
paying agent, under penalties of perjury, that such statement has been received
by it from the beneficial owner (directly or through another intermediary
financial institution), and furnishes us or our paying agent with a copy
thereof. A certificate described in this paragraph is effective only with
respect to payments of interest made to the certifying Non-U.S. Holder after the
issuance of the certificate, in the calendar year of its issuance and two
immediately succeeding calendar years.
Treasury Regulations (the "Final Regulations") finalized in 1997,
applicable to interest paid after December 31, 1999, provide alternative
documentation procedures for satisfying the certification requirement described
above. However, the Department of the Treasury and the IRS have announced their
intention to extend the dates of applicability of the Final Regulations to
payments made after December 31, 2000. Such regulations add intermediary
certification options for certain qualifying agents. Under one such option, a
withholding agent would be allowed to rely on IRS Form W-8 furnished by a
financial institution or other intermediary on behalf of one or more beneficial
owners (or other intermediaries) without having to obtain the beneficial owner
certificate described in the preceding paragraph, provided that the financial
institution or intermediary has entered into a withholding agreement with the
IRS and thus is a "qualified intermediary." Under another option, an authorized
foreign agent of
45
<PAGE> 51
a U.S. withholding agent would be permitted to act on behalf of the U.S.
withholding agent, provided certain conditions are met. With respect to the
certification requirement for Notes or Exchange Notes that are held by a foreign
partnership, the Final Regulations provide that unless the foreign partnership
has entered into a withholding agreement with the IRS, the foreign partnership
will be required, in addition to providing an intermediary Form W-8, to attach
an appropriate certification by each partner. Prospective investors, including
foreign partnerships and their partners, should consult their tax advisors
regarding possible additional reporting requirements.
If a Non-U.S. Holder cannot satisfy the requirements of the "portfolio
interest" exception described above, payments of interest made to such Non-U.S.
Holder will generally be subject to withholding tax of 30% unless the beneficial
owner of the Notes or Exchange Notes provides us or our paying agent, as the
case may be, with a properly executed (i) IRS Form 1001 (or successor form)
claiming an exemption from or reduced rate of withholding under the benefit of a
tax treaty or (ii) IRS Form 4224 (or successor form) stating that interest paid
on the Notes or Exchange Notes is not subject to withholding tax because it is
effectively connected with the beneficial owner's conduct of a trade or business
in the United States. Under the Final Regulations, Non-U.S. Holders will
generally be required to provide IRS Form W-8BEN, W-8IMY, W-8EXP, or W-8ECI in
lieu of Form 1001 and Form 4224, although alternative documentation may be
applicable in certain situations. Additionally, the Non-U.S. Holders will be
required to obtain U.S. taxpayer identification numbers. In each such case, the
relevant IRS form must be delivered pursuant to applicable procedures and must
be properly transmitted to the person otherwise required to withhold U.S.
federal income tax, and none of the persons receiving the relevant form may have
actual knowledge that any statement on the form is false.
Gain on Disposition of Notes or Exchange Notes. A Non-U.S. Holder will not
be subject to withholding of U.S. federal income tax on any gain realized on the
sale, exchange, retirement, or other disposition of the Notes or Exchange Notes,
unless (i) such Holder is an individual who is present in the United States for
183 days or more during the taxable year and certain other requirements are met,
or (ii) the gain is effectively connected with the conduct of a United States
trade or business of the Holder.
Federal Estate Taxes. Under Section 2105(b) of the Tax Code, if interest on
the Notes or Exchange Notes would be exempt from withholding of U.S. federal
income tax under the rules described under "-- Interest" (without regard to the
statement requirement), the Notes or Exchange Notes will not be included in the
estate of a Non-U.S. Holder for U.S. federal estate tax purposes.
Effectively Connected Income. If a Non-U.S. Holder is engaged in a trade or
business in the United States and interest on the Notes or Exchange Notes (or
gain realized on the sale, exchange or other disposition of the Notes or
Exchange Notes) is effectively connected with the conduct of such trade or
business, the Non-U.S. Holder, although exempt from the withholding tax
discussed above, will generally be subject to U.S. federal income tax on such
effectively connected income in the same manner as if it were a U.S. person.
Under the Final Regulations, such Non-U.S. Holder may also need to provide a
United States taxpayer identification number (social security number or employer
identification number) on forms referred to under "-- Interest" in order to meet
the requirements set forth above. In addition, if such Non-U.S. Holder is a
foreign corporation, it may be subject to a branch profits tax equal to 30% of
its effectively connected earnings and profits for the taxable year, subject to
adjustments. For this purpose, interest on, and any gain recognized on the sale,
exchange or other disposition of, the Notes or Exchange Notes will be included
in such foreign corporation's effectively connected earnings and profits if such
interest or gain, as the case may be, is effectively connected with the conduct
by such foreign corporation of a trade or business in the United States.
Backup Withholding and Information Reporting. Certain "backup" withholding
and information reporting requirements may apply to payments on, and to proceeds
of sale before maturity of, the Notes or Exchange Notes. Interest paid to a
Non-U.S. Holder on a registered security will be required to be reported
annually on IRS Form 1042-S. We are not obligated to reimburse or indemnify
Holders of the Notes or Exchange Notes, including Non-U.S. Holders, for any tax
imposed on, or withheld from payments with respect to the Notes or Exchange
Notes.
46
<PAGE> 52
No information reporting on IRS Form 1099 or backup withholding will be
required with respect to payments made by us or any paying agent to Non-U.S.
Holders on registered securities with respect to which a statement described
under "-- Interest" has been received; provided that we or our paying agent, as
the case may be, does not have actual knowledge that the beneficial owner is a
U.S. person.
In addition, backup withholding and information reporting will not apply if
payments of principal or interest on the Notes or Exchange Notes are paid to or
collected by a foreign office of a custodian, nominee or other foreign agent on
behalf of the beneficial owner of such Notes or Exchange Notes, or if the
foreign office of a broker (as defined in applicable Treasury Regulations) pays
the proceeds of the sale of the Notes or Exchange Notes to the owner thereof.
If, however, such nominee, custodian, agent or broker is, for U.S. federal
income tax purposes, a U.S. person, a controlled foreign corporation or a
foreign person 50% or more of whose gross income is effectively connected with
the conduct of a United States trade or business for a specified three-year
period, or another United States related person described in Section
1.6049-5(c)(5) of the Treasury Regulations, then information reporting will be
required unless (i) such custodian, nominee, agent or broker has in its records
documentary evidence that the beneficial owner is not a U.S. person and certain
other conditions are met or (ii) the beneficial owner otherwise establishes an
exemption.
Payments of principal and interest on the Notes or Exchange Notes to the
beneficial owner of such Notes or Exchange Notes by a United States office of a
custodian, nominee or agent, or payment by the United States office of a broker
of the proceeds of the sale of the Notes or Exchange Notes, will be subject to
information reporting and backup withholding unless the Holder or beneficial
owner provides the statement described under "-- Interest" or otherwise
establishes an exemption from information reporting and backup withholding, and
the payor does not have actual knowledge that the beneficial owner is a U.S.
person.
Applicable Tax Treaties. Non-U.S. Holders should also consult any
applicable income tax treaties, which may provide for a lower rate of
withholding tax, exemption from or reduction of branch profits tax, or other
rules different from those under United States federal tax laws.
47
<PAGE> 53
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of the Exchange Notes received in
exchange for the Notes where such Notes were acquired as a result of
market-making activities or other trading activities. The Company has agreed
that, starting on the Expiration Date and ending on the close of business on the
first anniversary of the Expiration Date, it will make this Prospectus, as
amended or supplemented, available to any broker-dealer for use in connection
with any such resale.
The Company will not receive any proceeds from any sale of the Exchange
Notes by broker-dealers. The Exchange Notes received by broker-dealers for their
own account pursuant to the Exchange Offer may be sold from time to time in one
or more transactions in the over-the counter market, in negotiated transactions,
through the writing of options on the Exchange Notes or a combination of such
methods of resale, at market prices or negotiated prices. Any such resale may be
made directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such Exchange Notes. Any
broker-dealer that resells Exchange Notes that were received by it for its own
account pursuant to the Exchange Offer and any broker or dealer that
participates in a distribution of such Exchange Notes may be deemed to be an
"Underwriter" within the meaning of the Securities Act and any profit of any
such resale of Exchange Notes and any commissions or concessions received by any
such persons may be deemed to be underwriting compensation under the Securities
Act. The Letter of Transmittal states that by acknowledging that it will deliver
and by delivering a prospectus, a broker-dealer will not be deemed to admit that
it is an "Underwriter" within the meaning of the Securities Act.
For a period of one year after the Expiration Date, the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay all expenses
incident to the Exchange Offer and will indemnify the holders of the Exchange
Notes against certain liabilities, including liabilities under the Securities
Act.
LEGAL MATTERS
Locke Liddell & Sapp LLP will opine on the validity of the Exchange Notes
for us.
EXPERTS
The audited consolidated financial statements for the year ended December
31, 1998 appearing in Waste Management's Current Report on Form 8-K dated
September 16, 1999 incorporated by reference in this prospectus have been
audited by Arthur Andersen LLP, independent public accountants, as set forth in
their report. In their report, that firm states that, with respect to USA Waste
Services, Inc. and its Subsidiaries, its opinion is based on reports of other
auditors, namely PricewaterhouseCoopers LLP. The financial statements of Waste
Management referred to above have been included herein in reliance upon the
authority of those firms as experts in giving said reports.
The audited consolidated financial statements of USA Waste Services, Inc.
as of December 31, 1997 and for the years ended December 31, 1997 and 1996, not
separately incorporated by reference in this prospectus, have been audited by
PricewaterhouseCoopers LLP, independent accountants, whose report thereon is
incorporated by reference herein. Such financial statements, to the extent they
have been included in the financial statements of Waste Management, Inc., have
been so included in reliance on the report of such independent accountants given
on the authority of said firm as experts in auditing and accounting.
48
<PAGE> 54
---------------------
WASTE MANAGEMENT, INC.
OFFERS TO EXCHANGE
$200,000,000 6.000% Senior Notes Due 2001
$200,000,000 6.500% Senior Notes Due 2004
$500,000,000 6.875% Senior Notes Due 2009
$250,000,000 7.375% Senior Notes Due 2029
FOR
$200,000,000 6.000% Senior Notes Due 2001
$200,000,000 6.500% Senior Notes Due 2004
$500,000,000 6.875% Senior Notes Due 2009
$250,000,000 7.375% Senior Notes Due 2029
---------------------
<PAGE> 55
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 102 of the Delaware General Corporation Law ("DGCL") allows a
corporation to eliminate the personal liability of a director to the corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, except in cases where the director breached his or her duty of loyalty
to the corporation or its stockholders, failed to act in good faith, engaged in
intentional misconduct or a knowing violation of the law, willfully or
negligently authorized the unlawful payment of a dividend or approved an
unlawful stock redemption or repurchase or obtained an improper personal
benefit. The Registrant's Restated Certificate of Incorporation (the "Waste
Management Charter") contains a provision which eliminates directors' personal
liability as set forth above.
The Waste Management Charter and the Bylaws of Waste Management provide in
effect that the Registrant shall indemnify its directors and officers, and may
indemnify its employees and agents, to the extent permitted by the DGCL. Section
145 of the DGCL provides that a Delaware corporation has the power to indemnify
its directors, officers, employees and agents in certain circumstances.
Subsection (a) of Section 145 of the DGCL empowers a corporation to
indemnify any director, officer, employee or agent, or former director, officer,
employee or agent 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 corporation), against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
in connection with such action, suit or proceeding provided that such director,
officer, employee or agent acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, provided
that such director, officer, employee or agent had no reasonable cause to
believe that his or her conduct was unlawful.
Subsection (b) of Section 145 of the DGCL empowers a corporation to
indemnify any director, officer, employee or agent, or former director, officer,
employee or agent, 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
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred in connection with
the defense or settlement of such action or suit provided that such person acted
in good faith and in a manner he or she reasonably believed to be in or not
opposed to the best interests of the corporation, except that no indemnification
may be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the corporation unless and only to the
extent that the Court of Chancery shall determine that, despite the adjudication
of liability, such person is fairly and reasonably entitled to indemnity for
such expenses which the court shall deem proper.
Section 145 of the DGCL further provides that, to the extent that a
director or officer of a corporation has been successful in the defense of any
action, suit or proceeding referred to in subsections (a) and (b) of Section 145
of the DGCL or in the defense of any claim, issue or matter therein, he or she
shall be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him or her in connection therewith; that indemnification
provided by Section 145 of the DGCL shall not be deemed exclusive of any other
rights to which the party seeking indemnification may be entitled; and the
corporation is empowered to purchase and maintain insurance on behalf of a
director, officer, employee or agent of the corporation against any liability
asserted against him or her or incurred by him or her in any such capacity or
arising out of his or her status as such whether or not the corporation would
have the power to indemnify him or her against such liabilities under Section
145 of the DGCL; and that, unless indemnification is ordered by a court, the
determination that indemnification under subsections (a) and (b) of Section 145
of the DGCL is proper because the director, officer, employee or
II-1
<PAGE> 56
agent has met the applicable standard of conduct under such subsections shall be
made with respect to a person who is a director or officer at the time of such
determination (1) by a majority vote of the directors who are not parties to
such action, suit or proceeding, even though less than a quorum, or (2) by a
committee of such directors designated by majority vote of such directors, even
though less than a quorum, or (3) if there are no such directors, or if such
directors so direct, by independent legal counsel in a written opinion, or (4)
by the stockholders.
The Registrant has purchased certain liability insurance for its officers
and directors as permitted by Section 145(g) of the DGCL.
The Registrant has entered into Indemnification Agreements with certain of
its directors and executive officers. Such Indemnification Agreements provide
that such persons (the "Indemnitees") will be indemnified and held harmless from
all expenses, including (without limitation) reasonable fees and expenses of
counsel, and all liabilities, including (without limitation) the amount of any
judgments, fines, penalties, excise taxes and amounts paid in settlement,
actually incurred by an Indemnitee with respect to any threatened, pending or
completed claim, action (including any action by or in the right of the
Registrant), suit or proceeding (whether formal or informal, or civil, criminal,
administrative, legislative, arbitrative or investigative) in respect of which
such Indemnitee is, was or at any time becomes, or is threatened to be made, a
party, witness, subject or target, by reason of the fact that such Indemnitee is
or was a director, officer, agent or fiduciary of the Registrant or serving at
the request of the Registrant as a director, officer, employee, fiduciary or
representative of another enterprise. Such Indemnification Agreements also
provide that the Registrant, if requested to do so by an Indemnitee, will
advance to such Indemnitee, prior to final disposition of any proceeding, the
expenses actually incurred by the Indemnitee subject to the obligation of the
Indemnitee to refund if it is ultimately determined that such Indemnitee was not
entitled to Indemnification.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
3.1 -- Restated Certificate of Incorporation, as amended
[Incorporated by reference to Exhibit 3.2 to the
Registrant's Current Report on Form 8-K dated July 16,
1998].
3.2 -- Restated Bylaws, as amended [Incorporated by reference to
Exhibit 3 to the Registrant's Form 10-Q for the quarter
ended June 30, 1999].
4.1 -- Specimen Stock Certificate [Incorporated by reference to
Exhibit 4.1 to Registrant's Annual Report on Form 10-K
for the year ended December 31, 1998].
4.2 -- Indenture for Senior Debt Securities dated September 10,
1997, among the Registrant and Texas Commerce Bank
National Association, as trustee, now known as Chase Bank
of Texas, National Association [Incorporated by reference
to Exhibit 4.1 to the Registrant's Current Report on Form
8-K dated September 10, 1997].
4.3* -- Form of Exchange Note.
4.4* -- Registration Rights Agreement dated as of May 21, 1999 by
and among Waste Management, Inc., Waste Management
Holdings, Inc. and Donaldson, Lufkin & Jenrette
Securities Corporation, Banc of America LLC, Chase
Securities Inc., J.P. Morgan & Co., Credit Suisse First
Boston, Deutsche Bank Securities Inc. and Salomon Smith
Barney.
5.1* -- Opinion of Locke Liddell & Sapp LLP.
10.1 -- 1990 Stock Option Plan [Incorporated by reference to
Exhibit 10.1 to the Registrant's Annual Report on Form
10-K for the year ended December 31, 1990].
</TABLE>
II-2
<PAGE> 57
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
10.2 -- Conformed copy of 1993 Stock Incentive Plan, as amended
and restated [Incorporated by reference to Exhibit 10.2
to the Registrant's Annual Report on Form 10-K for year
ended December 31, 1998].
10.3 -- Conformed copy of 1996 Stock Option Plan for Non-Employee
Directors, as amended [Incorporated by reference to
Exhibit 10.3 to the Registrant's Annual Report on Form
10-K for year ended December 31, 1998].
10.4 -- Envirofil, Inc. 1993 Stock Incentive Plan [Incorporated
by reference to Exhibit 4.1 to the Registrant's
Registration Statement on Form S-8, File No. 33-84990].
10.5 -- Western Waste Industries Amended and Restated 1983
Incentive Stock Option Plan [Incorporated by reference to
Exhibit 99.1 to the Registrant's Registration Statement
on Form S-8, File No. 333-02181].
10.6 -- Western Waste Industries 1983 Non-Qualified Stock Option
Plan [Incorporated by reference to Exhibit 99.2 to the
Registrant's Registration Statement on Form S-8, File No.
333-02181].
10.7 -- Western Waste Industries 1992 Option Plan [Incorporated
by reference to Exhibit 99.3 to the Registrant's
Registration Statement on Form S-8, File No. 333-02181].
10.8 -- Sanifill, Inc. 1994 Long-Term Incentive Plan
[Incorporated by reference to Exhibit 99.1 to the
Registrant's Registration Statement on Form S-8, File No.
333-08161].
10.9 -- Sanifill, Inc. 1989 Stock Option Plan [Incorporated by
reference to Exhibit 99.2 to the Registrant's
Registration Statement on Form S-8, File No. 333-08161].
10.10 -- Waste Management, Inc. 1997 Equity Incentive Plan
[Incorporated by reference to Exhibit A to Waste
Management Holdings' Proxy Statement for its 1997 Annual
Meeting of Shareholders].
10.11 -- WMX Technologies, Inc. 1996 Replacement Stock Option Plan
[Incorporated by reference to Exhibit 4.13 to Waste
Management Holdings' Registration Statement on Form S-8,
File No. 333-01325].
10.12 -- WMX Technologies, Inc. 1992 Stock Option Plan
[Incorporated by reference to Exhibit 10.31 to Waste
Management Holdings' Registration Statement on Form S-1,
File No. 33-44849].
10.13 -- WMX Technologies, Inc. 1992 Stock Option Plan for
Non-Employee Directors [Incorporated by reference to
Exhibit 10.23 to Waste Management Holdings' 1996 Annual
Report on Form 10-K].
10.14 -- Waste Management, Inc. 1982 Stock Option Plan, as amended
to March 11, 1988 [Incorporated by reference to Exhibit
10.3 to Waste Management Holdings' 1988 Annual Report on
Form 10-K].
10.15 -- Wheelabrator Technologies Inc. 1992 Stock Option Plan
[Incorporated by reference to Exhibit 10.45 to the 1991
Annual Report on Form 10-K of Wheelabrator Technologies
Inc.].
10.16 -- Wheelabrator Technologies Inc. 1988 Stock Plan for
Executive Employees of WTI and its Subsidiaries
[Incorporated by reference to Exhibit 28.1 to Amendment
No. 1 to the Registration Statement of Wheelabrator
Technologies Inc. on Form S-8, File No. 33-31523].
10.17 -- Chemical Waste Management, Inc. 1992 Stock Option Plan
[Incorporated by reference to Exhibit 10.19 to the 1991
Annual Report on Form 10-K of Chemical Waste Management,
Inc.].
10.18 -- 1991 Stock Option Plan for Non-Employee Directors of
Wheelabrator Technologies, Inc. [Incorporated by
reference to Exhibit 19.04 WTI's Quarterly Report for the
quarterly period ended June 30, 1991].
</TABLE>
II-3
<PAGE> 58
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
10.19 -- Amendments dated as of September 7, 1990 to the WTI 1988
Stock Plan [Incorporated by reference to Exhibit 19.02 to
the 1990 Annual Report on Form 10-K of Wheelabrator
Technologies Inc.].
10.20 -- Amendment dated as of November 1, 1990 to the WTI 1988
Stock Plan [Incorporated by reference to Exhibit 19.04 to
the 1990 Annual Report on Form 10-K of Wheelabrator
Technologies Inc.].
10.21 -- Amendment dated as of November 1, 1990 to the WTI 1986
Stock Plan [Incorporated by reference to Exhibit 19.03 to
the 1990 Annual Report on Form 10-K of Wheelabrator
Technologies Inc.].
10.22 -- Amendment dated as of December 6, 1991 to the WTI 1986
Stock Plan [Incorporated by reference to Exhibit 19.01 to
the 1991 Annual Report on Form 10-K of Wheelabrator
Technologies Inc.].
10.23 -- Amendment dated as of December 6, 1991 to the WTI 1988
Stock Plan [Incorporated by reference to Exhibit 19.02 to
the 1991 Annual Report on Form 10-K of Wheelabrator
Technologies Inc.].
10.24 -- 1997 Employee Stock Purchase Plan [Incorporated by
reference to Exhibit 10.10 to the Registrant's Annual
Report on Form 10-K for the year ended December 31,
1997].
10.25 -- 401(k) Restoration Plan [Incorporated by reference to
Exhibit 10.11 to the Registrant's Annual Report on Form
10-K for the year ended December 31, 1997].
10.26 -- TransAmerican Waste Industries, Inc. Amended and Restated
1990 Stock Incentive Plan [Incorporated by reference to
Exhibit 99.1 to the Registrant's Registration Statement
on Form S-8, File No. 333-51975].
10.27 -- TransAmerican Waste Industries, Inc. 1997 Non-Employee
Director Stock Option Plan [Incorporated by reference to
Exhibit 99.2 to the Registrant's Registration Statement
on Form S-8, File No. 333-51975].
10.28 -- Eastern Environmental Services, Inc. 1997 Stock Option
Plan [Incorporated by reference to Exhibit 4.1 to the
Registrant's Registration Statement on Form S-8, File No.
333-70055].
10.29 -- Eastern Environmental Services, Inc. Amended and Restated
1996 Stock Option Plan [Incorporated by reference to
Exhibit 4.2 to the Registrant's Registration Statement on
Form S-8, File No. 333-70055].
10.30 -- Eastern Environmental Services, Inc. 1991 Stock Option
Plan [Incorporated by reference to Exhibit 4.3 to the
Registrant's Registration Statement on Form S-8, File No.
333-70055].
10.31 -- Form of Employment Agreement by and between the
Registrant and its Executive Officers [Incorporated by
reference to Exhibit 10.31 to the Registrant's Annual
Report on Form 10-K for the year ended December 31,
1998].
10.32 -- Second Amended and Restated Revolving Credit Agreement,
dated as of July 16, 1998 among the Registrant, Bank of
America National Trust and Savings Association, Morgan
Guaranty Trust Company of New York and other financial
institutions [Incorporated by reference to Exhibit 10.3
to the Registrant's Quarterly Report on Form 10-Q/A for
the quarter ended June 30, 1998].
10.33 -- Loan Agreement dated as of July 16, 1998, among the
Registrant, Bank of America National Trust and Savings
Association, Chase Bank of Texas, N.A., Deutsche Bank AG,
New York Branch, Morgan Guaranty Trust Company of New
York and other financial institutions [Incorporated by
reference to Exhibit 10.4 to the Registrant's Quarterly
Report on Form 10-Q/A for the quarter ended June 30,
1998].
</TABLE>
II-4
<PAGE> 59
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
10.34 -- 1998 Waste Management, Inc. Directors' Deferred
Compensation Plan [Incorporated by reference to Exhibit
10.1 to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1999].
10.35 -- 1999 Waste Management, Inc. Directors' Deferred
Compensation Plan [Incorporated by reference to Exhibit
10.2 to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1999].
21.1 -- Subsidiaries of the Registrant [Incorporated by reference
to Exhibit 21.1 to the Registrant's Annual Report on Form
10-K for year ended December 31, 1998].
23.1* -- Consent of Arthur Andersen LLP.
23.2* -- Consent of PricewaterhouseCoopers LLP.
23.3* -- Consent of Locke Liddell & Sapp LLP (included in Exhibit
5.1).
24.1* -- Power of Attorney (set forth on signature page).
99.1* -- Form of Letter of Transmittal.
99.2* -- Form of Notice of Guaranteed Delivery.
</TABLE>
- ---------------
* Filed herewith
Exhibits listed above which have been filed with the Commission are
incorporated herein by reference with the same effect as if filed with this
Registration Statement.
ITEM 22. UNDERTAKINGS
The undersigned registrants hereby undertake:
(1) 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 Securities Exchange Act of 1934 that
is incorporated by reference in this registration statement 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.
(2) Insofar as indemnification for liabilities arising under the
Securities Act, may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described under Item
20 above, or otherwise, the registrant has been advised that in the opinion
of the Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that as
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 be governed by the final
adjudication of such issue.
(3) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this
Form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
effective date of the registration statement through the date of responding
to the request.
(4) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in the registration statement when
it became effective.
II-5
<PAGE> 60
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
WASTE MANAGEMENT, INC.
By: /s/ ROBERT S. MILLER
----------------------------------
Robert S. Miller
Chief Executive Officer
Date: September 17, 1999
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Robert S. Miller, Ralph V. Whitworth and Bryan J.
Blankfield and each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution for him and in his name,
place and stead, in any and all capacities, to sign, execute and file this
registration statement under the Securities Act and any and all amendments
(including, without limitation, post-effective amendments and any amendment or
amendments or additional registration statements filed pursuant to Rule 462
under the Securities Act increasing the amount of securities for which
registration is being sought) to this registration statement, and to file the
same, with all exhibits thereto, and all other documents necessary or advisable
to comply with the applicable state securities laws, and to file the same,
together with other documents in connection therewith, with the appropriate
state securities authorities, granting unto said attorneys-in-fact and agents
full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, 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 below by the following persons on behalf of the
Registrant and in the capacities and on September 17, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ ROBERT S. MILLER President and Chief Executive
- ----------------------------------------------------- Officer and Director
Robert S. Miller (Principal Executive Officer)
/s/ RALPH V. WHITWORTH Chairman of the Board
- -----------------------------------------------------
Ralph V. Whitworth
/s/ DONALD R. CHAPPEL Executive Vice President and
- ----------------------------------------------------- Chief Financial Officer
Donald R. Chappel (Principal Financial Officer)
/s/ BRUCE E. SNYDER Vice President and Chief
- ----------------------------------------------------- Accounting Officer
Bruce E. Snyder (Principal Accounting Officer)
/s/ H. JESSE ARNELLE Director
- -----------------------------------------------------
H. Jesse Arnelle
</TABLE>
II-6
<PAGE> 61
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ PASTORA SAN JUAN CAFFERTY Director
- -----------------------------------------------------
Pastora San Juan Cafferty
/s/ RALPH F. COX Director
- -----------------------------------------------------
Ralph F. Cox
/s/ JOHN E. DRURY Director
- -----------------------------------------------------
John E. Drury
/s/ RODERICK M. HILLS Director
- -----------------------------------------------------
Roderick M. Hills
/s/ RICHARD D. KINDER Director
- -----------------------------------------------------
Richard D. Kinder
/s/ PAUL M. MONTRONE Director
- -----------------------------------------------------
Paul M. Montrone
/s/ JOHN C. POPE Director
- -----------------------------------------------------
John C. Pope
/s/ STEVEN G. ROTHMEIER Director
- -----------------------------------------------------
Steven G. Rothmeier
/s/ JEROME B. YORK Director
- -----------------------------------------------------
Jerome B. York
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
WASTE MANAGEMENT HOLDINGS, INC.
By: /s/ BRYAN J. BLANKFIELD
----------------------------------
Bryan J. Blankfield
Vice President and Secretary
Date: September 17, 1999
II-7
<PAGE> 62
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
3.1 -- Restated Certificate of Incorporation, as amended
[Incorporated by reference to Exhibit 3.2 to the
Registrant's Current Report on Form 8-K dated July 16,
1998].
3.2 -- Restated Bylaws, as amended [Incorporated by reference to
Exhibit 3 to the Registrant's Form 10-Q for the quarter
ended June 30, 1999].
4.1 -- Specimen Stock Certificate [Incorporated by reference to
Exhibit 4.1 to Registrant's Annual Report on Form 10-K
for the year ended December 31, 1998].
4.2 -- Indenture for Senior Debt Securities dated September 10,
1997, among the Registrant and Texas Commerce Bank
National Association, as trustee, now known as Chase Bank
of Texas, National Association [Incorporated by reference
to Exhibit 4.1 to the Registrant's Current Report on Form
8-K dated September 10, 1997].
4.3* -- Form of Exchange Note.
4.4* -- Registration Rights Agreement dated as of May 21, 1999 by
and among Waste Management, Inc., Waste Management
Holdings, Inc. and Donaldson, Lufkin & Jenrette
Securities Corporation, Banc of America LLC, Chase
Securities Inc., J.P. Morgan & Co., Credit Suisse First
Boston, Deutsche Bank Securities Inc. and Salomon Smith
Barney.
5.1* -- Opinion of Locke Liddell & Sapp LLP.
10.1 -- 1990 Stock Option Plan [Incorporated by reference to
Exhibit 10.1 to the Registrant's Annual Report on Form
10-K for the year ended December 31, 1990].
10.2 -- Conformed copy of 1993 Stock Incentive Plan, as amended
and restated [Incorporated by reference to Exhibit 10.2
to the Registrant's Annual Report on Form 10-K for year
ended December 31, 1998].
10.3 -- Conformed copy of 1996 Stock Option Plan for Non-Employee
Directors, as amended [Incorporated by reference to
Exhibit 10.3 to the Registrant's Annual Report on Form
10-K for year ended December 31, 1998].
10.4 -- Envirofil, Inc. 1993 Stock Incentive Plan [Incorporated
by reference to Exhibit 4.1 to the Registrant's
Registration Statement on Form S-8, File No. 33-84990].
10.5 -- Western Waste Industries Amended and Restated 1983
Incentive Stock Option Plan [Incorporated by reference to
Exhibit 99.1 to the Registrant's Registration Statement
on Form S-8, File No. 333-02181].
10.6 -- Western Waste Industries 1983 Non-Qualified Stock Option
Plan [Incorporated by reference to Exhibit 99.2 to the
Registrant's Registration Statement on Form S-8, File No.
333-02181].
10.7 -- Western Waste Industries 1992 Option Plan [Incorporated
by reference to Exhibit 99.3 to the Registrant's
Registration Statement on Form S-8, File No. 333-02181].
10.8 -- Sanifill, Inc. 1994 Long-Term Incentive Plan
[Incorporated by reference to Exhibit 99.1 to the
Registrant's Registration Statement on Form S-8, File No.
333-08161].
10.9 -- Sanifill, Inc. 1989 Stock Option Plan [Incorporated by
reference to Exhibit 99.2 to the Registrant's
Registration Statement on Form S-8, File No. 333-08161].
10.10 -- Waste Management, Inc. 1997 Equity Incentive Plan
[Incorporated by reference to Exhibit A to Waste
Management Holdings' Proxy Statement for its 1997 Annual
Meeting of Shareholders].
</TABLE>
<PAGE> 63
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
10.11 -- WMX Technologies, Inc. 1996 Replacement Stock Option Plan
[Incorporated by reference to Exhibit 4.13 to Waste
Management Holdings' Registration Statement on Form S-8,
File No. 333-01325].
10.12 -- WMX Technologies, Inc. 1992 Stock Option Plan
[Incorporated by reference to Exhibit 10.31 to Waste
Management Holdings' Registration Statement on Form S-1,
File No. 33-44849].
10.13 -- WMX Technologies, Inc. 1992 Stock Option Plan for
Non-Employee Directors [Incorporated by reference to
Exhibit 10.23 to Waste Management Holdings' 1996 Annual
Report on Form 10-K].
10.14 -- Waste Management, Inc. 1982 Stock Option Plan, as amended
to March 11, 1988 [Incorporated by reference to Exhibit
10.3 to Waste Management Holdings' 1988 Annual Report on
Form 10-K].
10.15 -- Wheelabrator Technologies Inc. 1992 Stock Option Plan
[Incorporated by reference to Exhibit 10.45 to the 1991
Annual Report on Form 10-K of Wheelabrator Technologies
Inc.].
10.16 -- Wheelabrator Technologies Inc. 1988 Stock Plan for
Executive Employees of WTI and its Subsidiaries
[Incorporated by reference to Exhibit 28.1 to Amendment
No. 1 to the Registration Statement of Wheelabrator
Technologies Inc. on Form S-8, File No. 33-31523].
10.17 -- Chemical Waste Management, Inc. 1992 Stock Option Plan
[Incorporated by reference to Exhibit 10.19 to the 1991
Annual Report on Form 10-K of Chemical Waste Management,
Inc.].
10.18 -- 1991 Stock Option Plan for Non-Employee Directors of
Wheelabrator Technologies, Inc. [Incorporated by
reference to Exhibit 19.04 WTI's Quarterly Report for the
quarterly period ended June 30, 1991].
10.19 -- Amendments dated as of September 7, 1990 to the WTI 1988
Stock Plan [Incorporated by reference to Exhibit 19.02 to
the 1990 Annual Report on Form 10-K of Wheelabrator
Technologies Inc.].
10.20 -- Amendment dated as of November 1, 1990 to the WTI 1988
Stock Plan [Incorporated by reference to Exhibit 19.04 to
the 1990 Annual Report on Form 10-K of Wheelabrator
Technologies Inc.].
10.21 -- Amendment dated as of November 1, 1990 to the WTI 1986
Stock Plan [Incorporated by reference to Exhibit 19.03 to
the 1990 Annual Report on Form 10-K of Wheelabrator
Technologies Inc.].
10.22 -- Amendment dated as of December 6, 1991 to the WTI 1986
Stock Plan [Incorporated by reference to Exhibit 19.01 to
the 1991 Annual Report on Form 10-K of Wheelabrator
Technologies Inc.].
10.23 -- Amendment dated as of December 6, 1991 to the WTI 1988
Stock Plan [Incorporated by reference to Exhibit 19.02 to
the 1991 Annual Report on Form 10-K of Wheelabrator
Technologies Inc.].
10.24 -- 1997 Employee Stock Purchase Plan [Incorporated by
reference to Exhibit 10.10 to the Registrant's Annual
Report on Form 10-K for the year ended December 31,
1997].
10.25 -- 401(k) Restoration Plan [Incorporated by reference to
Exhibit 10.11 to the Registrant's Annual Report on Form
10-K for the year ended December 31, 1997].
10.26 -- TransAmerican Waste Industries, Inc. Amended and Restated
1990 Stock Incentive Plan [Incorporated by reference to
Exhibit 99.1 to the Registrant's Registration Statement
on Form S-8, File No. 333-51975].
</TABLE>
<PAGE> 64
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
10.27 -- TransAmerican Waste Industries, Inc. 1997 Non-Employee
Director Stock Option Plan [Incorporated by reference to
Exhibit 99.2 to the Registrant's Registration Statement
on Form S-8, File No. 333-51975].
10.28 -- Eastern Environmental Services, Inc. 1997 Stock Option
Plan [Incorporated by reference to Exhibit 4.1 to the
Registrant's Registration Statement on Form S-8, File No.
333-70055].
10.29 -- Eastern Environmental Services, Inc. Amended and Restated
1996 Stock Option Plan [Incorporated by reference to
Exhibit 4.2 to the Registrant's Registration Statement on
Form S-8, File No. 333-70055].
10.30 -- Eastern Environmental Services, Inc. 1991 Stock Option
Plan [Incorporated by reference to Exhibit 4.3 to the
Registrant's Registration Statement on Form S-8, File No.
333-70055].
10.31 -- Form of Employment Agreement by and between the
Registrant and its Executive Officers [Incorporated by
reference to Exhibit 10.31 to the Registrant's Annual
Report on Form 10-K for the year ended December 31,
1998].
10.32 -- Second Amended and Restated Revolving Credit Agreement,
dated as of July 16, 1998 among the Registrant, Bank of
America National Trust and Savings Association, Morgan
Guaranty Trust Company of New York and other financial
institutions [Incorporated by reference to Exhibit 10.3
to the Registrant's Quarterly Report on Form 10-Q/A for
the quarter ended June 30, 1998].
10.33 -- Loan Agreement dated as of July 16, 1998, among the
Registrant, Bank of America National Trust and Savings
Association, Chase Bank of Texas, N.A., Deutsche Bank AG,
New York Branch, Morgan Guaranty Trust Company of New
York and other financial institutions [Incorporated by
reference to Exhibit 10.4 to the Registrant's Quarterly
Report on Form 10-Q/A for the quarter ended June 30,
1998].
10.34 -- 1998 Waste Management, Inc. Directors' Deferred
Compensation Plan [Incorporated by reference to Exhibit
10.1 to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1999].
10.35 -- 1999 Waste Management, Inc. Directors' Deferred
Compensation Plan [Incorporated by reference to Exhibit
10.2 to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1999].
21.1 -- Subsidiaries of the Registrant [Incorporated by reference
to Exhibit 21.1 to the Registrant's Annual Report on Form
10-K for year ended December 31, 1998].
23.1* -- Consent of Arthur Andersen LLP.
23.2* -- Consent of PricewaterhouseCoopers LLP.
23.3* -- Consent of Locke Liddell & Sapp LLP (included in Exhibit
5.1).
24.1* -- Power of Attorney (set forth on signature page).
99.1* -- Form of Letter of Transmittal.
99.2* -- Form of Notice of Guaranteed Delivery.
</TABLE>
- ---------------
* Filed herewith
Exhibits listed above which have been filed with the Commission are
incorporated herein by reference with the same effect as if filed with this
Registration Statement.
<PAGE> 1
EXHIBIT 4.3
GLOBAL SECURITY
THIS SECURITY IS A BOOK-ENTRY SECURITY WITHIN THE MEANING OF THE
INDENTURE AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A
DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME
OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY
(OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN SUCH LIMITED
CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK LIMITED-PURPOSE TRUST COMPANY ("DTC"),
TO THE COMPANY OR ITS AGENT FOR REGISTRATION FOR TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
BOOK-ENTRY SECURITY
No. _____ Principal Amount: U.S. $_______
CUSIP ________
WASTE MANAGEMENT, INC.
___% SENIOR NOTE DUE 20__
WASTE MANAGEMENT, INC., a Delaware corporation (the "Company"), for
value received, hereby promises to pay to CEDE & CO. or registered assigns, at
the office or agency of the Company, the principal sum of $______________ U.S.
dollars on May 15, 20___ in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts, and to pay interest at an annual rate of ___% payable
on May 15 and November 15 in each year, to the person in whose name the Security
is registered at the close of business on the record date for such interest
which shall be the preceding April 30 or October 31, respectively, payable
commencing November 15, 1999, with interest on November 15, 1999 consisting of
interest accrued from May 21, 1999 to and including November 14, 1999.
Reference is made to the further provisions of this Security set forth
on the reverse hereof. Such further provisions shall for all purposes have the
same effect as though fully set forth at this place.
The statements in the legend set forth above are an integral part of
the terms of this Security and by acceptance hereof the Holder of this Security
agrees to be subject to, and bound by, the terms and provisions set forth in
such legend.
This Security is issued in respect of a series of Securities of an
aggregate of U.S. $______________ in original principal amount designated as the
___% Senior Notes due 20__ of the Company and is governed by the Indenture dated
as of September 10, 1997, duly executed and delivered by the Company to Chase
Bank of Texas, National Association, as trustee (the "Trustee"), as supplemented
by Board Resolutions (as defined in the Indenture) (such Indenture and Board
Resolutions, collectively, the "Indenture"). The terms of the Indenture are
incorporated herein by reference. This Security shall in all respects be
entitled to the same benefits as definitive Securities under the Indenture.
If and to the extent that any provision of the Indenture limits,
qualifies, or conflicts with any other provision of the Indenture which is
required to be included in the Indenture or is deemed applicable to the
Indenture by virtue of the provisions of the Trust Indenture Act of 1939, as
amended, such required provision shall control.
The Company hereby irrevocably undertakes to the Holder hereof to
exchange this Book-Entry Security in accordance with the terms of the Indenture
without charge.
This Security shall not be valid or become obligatory for any purpose
until the Certificate of Authentication hereon shall have been manually signed
by the Trustee under the Indenture.
<PAGE> 2
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
WASTE MANAGEMENT, INC.,
a Delaware corporation
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
[Corporate Seal]
Attest:
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
Dated: , 1999
--------
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, as Trustee
By:
---------------------------------------------------
Authorized Signatory
2
<PAGE> 3
REVERSE OF BOOK-ENTRY SECURITY
WASTE MANAGEMENT, INC.
___% SENIOR NOTE DUE 20__
This Book-Entry Security is one of a duly authorized issue of
Securities or other evidences of indebtedness of the Company (the "Securities")
of the series hereinafter specified, all issued or to be issued under and
pursuant to the Indenture, to which Indenture reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the Holders of the
Securities. The Securities may be issued in one or more series, which different
series may be issued in various aggregate principal amounts, may mature at
different times, may bear interest (if any) at different rates, may be subject
to different sinking, purchase or analogous funds (if any) and may otherwise
vary as provided in the Indenture. This Security is one of a series designated
as the ___% Senior Notes due 20__ of the Company, limited in aggregate principal
amount to $________________.
This is a Global Security issued pursuant to Section 203 of the
Indenture. This is an Exchange Note and a Global Note for this series within the
meaning of the Board Resolution.
1. Interest.
Waste Management, Inc., a Delaware corporation (hereinafter called the
"Company," which term includes any successors under the Indenture hereinafter
referred to), promises to pay interest on the principal amount of this Security
at the rate of ___% per annum. To the extent it is lawful, the Company promises
to pay interest on any interest payment due but unpaid on such principal amount
at a rate of ___% per annum.
The Company will pay interest semi-annually on May 15 and November 15
of each year (each an "Interest Payment Date"), commencing November 15, 1999.
Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid on the Securities, from
May 21, 1999. Interest will be computed on the basis of a 360-day year
consisting of twelve 30-day months.
2. Method of Payment.
The Company shall pay interest on the Securities (except Defaulted
Interest) to the persons who are the registered Holders at the close of business
on April 30 and October 31 (the "Regular Record Date"), respectively,
immediately preceding the Interest Payment Date. Any such interest not so
punctually paid ("Defaulted Interest"), may be paid to the persons who are
registered Holders at the close of business on a Special Record Date for the
payment of such Defaulted Interest, or in any other lawful manner not
inconsistent with the requirements of any securities exchange on which such
Securities may then be listed if such manner of payment shall be deemed
practicable by the Trustee, as more fully provided in the Indenture referred to
below. Except as provided below, the Company shall pay principal and interest in
such coin or currency of the United States of America as at the time of payment
shall be legal tender for payment of public and private debts ("U.S. Legal
Tender"). Payments in respect of the Book-Entry Securities (including principal,
premium, if any, and interest) will be made by wire transfer of immediately
available funds to the accounts specified by the Depositary. Payments in respect
of Securities in definitive form (including principal, premium, if any, and
interest) will be made at the office or agency of the Company maintained for
such purpose within the Borough of Manhattan, The City of New York, or at the
option of the Company, payment of interest may be made by check mailed to the
Holders on the Regular Record Date or on the Special Record Date at their
addresses set forth in the Security Register of Holders.
3. Paying Agent and Registrar.
Initially, Chase Bank of Texas, National Association (the "Trustee")
will act as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-Registrar at any time upon notice to the Trustee and the
Holders. The Company or any of its Subsidiaries may, subject to certain
exceptions, act as Paying Agent, Registrar or co-Registrar.
4. Indenture.
This Security is one of a duly authorized issue of Securities of the
Company issued and to be issued in one or more series under the Indenture
between the Company and the Trustee. Capitalized terms herein are used as
defined in the Indenture unless otherwise defined herein. The terms of the
Securities include those stated in the Indenture, all indentures supplemental
thereto, those made part of the Indenture
3
<PAGE> 4
by reference to the Trust Indenture Act of 1939, as amended, as in effect on the
date of the Indenture, and those terms stated in the Resolutions of the Board of
Directors of the Company dated [April 30, 1999] (the "Resolutions"). The
Securities are subject to all such terms, and Holders of Securities are referred
to the Indenture, all indentures supplemental thereto, said Act and said
Resolutions for a statement of them. The Securities of this series are general
unsecured obligations of the Company limited in aggregate principal amount to
$250,000,000.
5. Redemption.
This Security will be redeemable by the Company at any time and from
time to time, in whole or in part, upon not less than 30 nor more than 60 days
notice to each holder of this Security, at a redemption price equal to the
Make-Whole Price. "Make-Whole Price" means an amount equal to the greater of (1)
100% of the principal amount of the Securities to be redeemed and (2) as
determined by an Independent Investment Banker, the sum of the present values of
the remaining scheduled payments of principal and interest thereon (not
including any portion of such payments of interest accrued as of the date of
redemption) discounted to the date of redemption on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Adjusted
Treasury Rate, plus, in each case, accrued and unpaid interest thereon to (but
not including) the date of redemption. Unless the Company defaults in payment of
the redemption price, on and after the date of redemption, interest will cease
to accrue on the Securities or portions thereof called for redemption.
"Adjusted Treasury Rate" means, with respect to any date of
redemption, the rate per annum equal to the semi-annual yield to
maturity of the Comparable Treasury Issue, assuming a price for the
Comparable Treasury Issue (expressed as a percentage of its principal
amount) equal to the Comparable Treasury Price for such date of
redemption, plus 0.30%.
"Comparable Treasury Issue" means the United States Treasury
security selected by the Independent Investment Banker as having a
maturity comparable to the remaining term of the Securities to be
redeemed that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term
of the Securities.
"Comparable Treasury Price" means, with respect to any date of
redemption, (1) the average of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of
its principal amount) on the third Business Day preceding such date of
redemption, as set forth in the daily statistical release (or any
successor release) published by the Federal Reserve Bank of New York
and designated "Composite 3:30 p.m. Quotations for U.S. Government
Securities," or (2) if such release (or any successor release) is not
published or does not contain such prices on such Business Day, (A) the
average of the Reference Treasury Dealer Quotations for such date of
redemption, after excluding the highest and lowest such Reference
Treasury Dealer Quotations, or (B) if the Trustee obtains fewer than
three such Reference Treasury Dealer Quotations, the average of all
such Reference Treasury Dealer Quotations.
"Independent Investment Banker" means one of the Reference
Treasury Dealers appointed by the Trustee after consultation with the
Company.
"Reference Treasury Dealer" means each of Donaldson, Lufkin &
Jenrette Securities Corporation; Banc of America Securities LLC; Chase
Securities Inc.; J. P. Morgan Securities Inc.; Credit Suisse First
Boston Corporation; Deutsche Bank Securities Inc.; and Salomon Smith
Barney Inc., and their respective successors; provided, however, that
if any of the foregoing shall not be a primary U.S. Government
securities dealer in New York City (a "Primary Treasury Dealer"), the
Company shall substitute therefor another Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer and any date of redemption, the average,
as determined by the Trustee, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of
its principal amount) quoted in writing to the Trustee by such
Reference Treasury Dealer at 5:00 p.m. on the third Business Day
preceding such date of redemption.
In the case of a partial redemption, the Company or the Trustee shall
select the Securities or portions thereof for redemption by such method as the
Company or the Trustee shall deem fair and appropriate. The Securities may be
redeemed in part in multiples of $1,000 only.
Any such redemption will also comply with Article Eleven of the
Indenture.
Notice of redemption will be given in the manner provided in the
Indenture to the Holders of Securities to be redeemed not less than 30 days and
not more than 60 days prior to the Redemption Date.
4
<PAGE> 5
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Make-Whole Price and, except as set forth in the Indenture, from and after such
Redemption Date (unless the Company shall default in the payment of the
Make-Whole Price), the Securities called for redemption will cease to bear
interest and the only right of the Holders of such Securities will be to receive
payment of the Make-Whole Price.
6. Denominations; Transfer; Exchange.
The Securities are issued in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000 in excess thereof. A
Holder may register the transfer or exchange of Securities in accordance with
the Indenture. The Securities Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay
any taxes and fees required by law or permitted by the Indenture.
7. Person Deemed Owners.
The registered Holder of a Security may be treated as the owner of it
for all purposes.
8. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented, and any existing Event of Default or compliance with
any provision may be waived, with the written consent of the Holders of a
majority in aggregate principal amount of the Securities then outstanding.
Without notice to or consent of any Holder, the parties thereto may amend or
supplement the Indenture or the Securities to, among other things, cure any
ambiguity, defect or inconsistency, or make any other change that does not
adversely affect the rights of any Holder of a Security. Any such consent or
waiver by the Holder of this Security (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such Holder and upon all future
Holders and owners of this Security and any Securities which may be issued in
exchange or substitution herefor, irrespective of whether or not any notation
thereof is made upon this Security or such other Securities.
9. Defaults and Remedies.
If an Event of Default occurs and is continuing, then in every such
case, the Trustee or the Holders of 25% in aggregate principal amount of the
Securities then outstanding may declare the principal amount of all the
Securities to be due and payable immediately in the manner and with the effect
provided in the Indenture. Notwithstanding the preceding sentence, however, if
at any time after the unpaid principal amount of the Securities shall have been
so declared due and payable and before any judgment or decree for the payment of
the moneys due shall have been obtained or entered as hereinafter provided, the
Company shall pay or shall deposit with the Trustee a sum sufficient to pay all
overdue installments of interest, if any, upon all of the Securities and the
principal of any and all Securities which shall have become due otherwise than
by acceleration and any interest thereon at the rate prescribed therefor herein
and, to the extent that payment of such interest is lawful, interest upon
overdue interest at the rate prescribed therefor herein, as well as the
reasonable compensation, disbursements, expenses and advances of the Trustee,
and any and all defaults under the Indenture, other than the nonpayment of such
portion of the principal amount of and accrued interest, if any, on such
Securities which shall become due by acceleration, shall have been cured or
shall have been waived or provision deemed by the Trustee to be adequate shall
have been made therefor -- then in every such case the Holders of a majority in
aggregate principal amount of the Securities then Outstanding, by written notice
to the Company and to the Trustee, may rescind and annul such declaration and
its consequences; but no such rescission and annulment shall extend to or shall
affect any subsequent default, or shall impair any right consequent thereon.
Holders of Securities may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may require indemnity satisfactory to it
before it enforces the Indenture or the Securities. Subject to certain
limitations, Holders of a majority in aggregate principal amount of the
Securities then outstanding may direct the Trustee in its exercise of any trust
or power.
10. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Company or its Affiliates or any subsidiary of the Company's Affiliates, and may
otherwise deal with the Company or its Affiliates as if it were not the Trustee.
5
<PAGE> 6
11. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on the other side of this
Security.
12. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (=tenant in common), TEN ENT (=tenants
by the entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common), CUST (=Custodian), and U/G/M/A (=Uniform Gifts to Minors
Act).
13. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Note Identification Procedures, the Company will cause CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such number as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
14. Absolute Obligation.
No reference herein to the Indenture and no provision of this Security
or the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this
Security in the manner, at the respective times, at the rate and in the coin or
currency herein prescribed.
15. No Recourse.
No recourse under or upon any obligation, covenant or agreement
contained in the Indenture or in any Security, or because of any indebtedness
evidenced thereby, shall be had against any incorporator, past, present or
future stockholder, officer or director, as such of the Company or of any
successor, either directly or through the Company or of any successor, under any
rule of law, statute or constitutional provision or by the enforcement of any
assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of the Security
by the Holder and as part of the consideration for the issue of the Security.
16. Governing Law.
This Security shall be construed in accordance with and governed by the
laws of the State of New York.
6
<PAGE> 7
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this Security, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C> <C> <C>
TENCOM as tenants in common UNIF Gift Min Act Custodian
----------- --------------
(Cus) (Minor)
TENANT as tenants by the entireties
JT TEN joint tenants with rights Under Uniform Gifts to Minors
of survivorship and not Act
tenants in common --------------------------------------------------------
</TABLE>
ADDITIONAL ABBREVIATIONS MAY ALSO BE USED THOUGH NOT IN THE ABOVE LIST.
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
---------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please print or typewrite name and address of assignee)
the within Security and does hereby irrevocably constitute and appoint
__________________________ Attorney to transfer the said Security in the
Security Register of the within-named Company, with full power of substitution
in the premises.
--------------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of this Security in every
particular without alteration or enlargement
or any change whatever.
- --------------------------------------------
SIGNATURE GUARANTEED: The signature must be
guaranteed by a commercial bank or trust
company or by a member firm of the New York
Stock Exchange or another national
Securities exchange. Notarized or witnessed
signatures are not acceptable.
PAYMENT INSTRUCTIONS
The assignee should include the following for purposes of payment:
Payments shall be made, by wire transfer or otherwise, in immediately available
funds to ______________________________________________________ for the account
of ___________________________________________________________, account number
__________________, or if mailed by check, ____________________________________.
Applicable reports and statements should be mailed to __________________________
_________________________________________. This information is provided
______________________________________________, the assignee named above, or
_____________________________________________________________, its agent.
7
<PAGE> 1
EXHIBIT 4.4
- --------------------------------------------------------------------------------
A/B EXCHANGE
REGISTRATION RIGHTS AGREEMENT
Dated as of May 21, 1999
by and among
WASTE MANAGEMENT, INC.
WASTE MANAGEMENT HOLDINGS, INC.
and
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
BANC OF AMERICA SECURITIES LLC
CHASE SECURITIES INC.
J.P. MORGAN & CO.
CREDIT SUISSE FIRST BOSTON
DEUTSCHE BANK SECURITIES INC.
SALOMON SMITH BARNEY
- --------------------------------------------------------------------------------
<PAGE> 2
This Registration Rights Agreement (the "AGREEMENT") is made and
entered into as of May 21, 1999, by and among Waste Management, Inc., a Delaware
corporation (the "COMPANY"), Waste Management Holdings, Inc. (the "GUARANTOR")
and Donaldson, Lufkin & Jenrette Securities Corporation, Banc of America
Securities LLC, Chase Securities Inc., J.P. Morgan & Co., Credit Suisse First
Boston, Deutsche Bank Securities Inc. and Salomon Smith Barney (each an "INITIAL
PURCHASER" and, collectively, the "INITIAL PURCHASERS"), each of whom has agreed
to purchase the Company's 6% Senior Notes due 2001, 6-1/2% Senior Notes due
2004, 6-7/8% Senior Notes due 2009 and 7-3/8% Senior Notes due 2029
(collectively, the "NOTES") pursuant to the Purchase Agreement (as defined
below).
This Agreement is made pursuant to the Purchase Agreement, dated May
18, 1999, (the "PURCHASE AGREEMENT"), by and among the Company, the Guarantor
and the Initial Purchasers. In order to induce the Initial Purchasers to
purchase the Notes, the Company and the Guarantor have agreed to provide the
registration rights set forth in this Agreement. The execution and delivery of
this Agreement is a condition to the obligations of the Initial Purchasers set
forth in Section 2 of the Purchase Agreement. Capitalized terms used herein and
not otherwise defined shall have the meaning assigned to them in the Indenture,
dated as of September 10, 1997, between the Company and Chase Bank of Texas,
National Association, as Trustee, relating to the Notes and the Exchange Notes
(the "INDENTURE").
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
ACT: The Securities Act of 1933, as amended.
AFFILIATE: As defined in Rule 144 of the Act.
BROKER-DEALER: Any broker or dealer registered under the Exchange
Act.
CERTIFICATED SECURITIES: Definitive Notes, as defined in the
Indenture.
CLOSING DATE: The date hereof.
COMMISSION: The Securities and Exchange Commission.
CONSUMMATE: An Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Exchange Notes to be issued in the Exchange Offer and the
related Guarantees, (b) the maintenance of such Exchange Offer Registration
Statement continuously effective and the keeping of the Exchange Offer open for
a period not less than the period required pursuant to Section 3(b) hereof and
(c) the delivery by the Company to the Registrar under the Indenture of Exchange
Notes in the same aggregate principal amount as the aggregate principal amount
of Notes tendered by Holders thereof pursuant to the Exchange Offer.
CONSUMMATION DEADLINE: As defined in Section 3(b) hereof.
EFFECTIVENESS DEADLINE: As defined in Sections 3(a) and 4(a) hereof.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
<PAGE> 3
EXCHANGE NOTES: The Company's 6% Senior Notes due 2001, the 6-1/2%
Senior Notes due 2004, 6-7/8%Senior Notes due 2009 and 7-3/8% Senior Notes due
2029, to be issued pursuant to the Indenture (i) in the Exchange Offer or (ii)
as contemplated by Section 4 hereof.
EXCHANGE OFFER: The exchange and issuance by the Company of a
principal amount of Exchange Notes with related Guarantees (which shall be
registered pursuant to the Exchange Offer Registration Statement) equal to the
outstanding principal amount of Notes that are tendered by such Holders in
connection with such exchange and issuance.
EXCHANGE OFFER REGISTRATION STATEMENT: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
EXEMPT RESALES: The transactions in which the Initial Purchasers
propose to sell the Notes to certain "qualified institutional buyers," as such
term is defined in Rule 144A under the Act and pursuant to Regulation S under
the Act.
FILING DEADLINE: As defined in Sections 3(a) and 4(a) hereof.
GUARANTEES: The guarantees by Waste Management Holdings, Inc. of the
Company's obligations under the Notes.
HOLDERS: As defined in Section 2 hereof.
PROSPECTUS: The prospectus included in a Registration Statement at
the time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.
RECOMMENCEMENT DATE: As defined in Section 6(d) hereof.
REGISTRATION DEFAULT: As defined in Section 5 hereof.
REGISTRATION STATEMENT: Any registration statement of the Company and
the Guarantor relating to (a) an offering of Exchange Notes pursuant to an
Exchange Offer or (b) the registration for resale of Transfer Restricted
Securities pursuant to the Shelf Registration Statement, in each case, (i) that
is filed pursuant to the provisions of this Agreement and (ii) including the
Prospectus included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.
REGULATION S: Regulation S promulgated under the Act.
RULE 144: Rule 144 promulgated under the Act.
RULE 144A: Rule 144A promulgated under the Act.
SHELF REGISTRATION STATEMENT: As defined in Section 4(a) hereof.
SUSPENSION NOTICE: As defined in Section 6(d) hereof.
-2-
<PAGE> 4
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section
77aaa-77bbbb) as in effect on the date of the Indenture.
TRANSFER RESTRICTED SECURITIES: Each Note and related Guarantee,
until the earliest to occur of (a) the date on which such Note and related
Guarantee is exchanged in the Exchange Offer for an Exchange Note and related
Guarantee which is entitled to be resold to the public by the Holder thereof
without complying with the prospectus delivery requirements of the Act, (b) the
date on which such Note and related Guarantee has been disposed of in accordance
with a Shelf Registration Statement (and the purchasers thereof have been issued
Exchange Notes), and (c) the date on which such Note and related Guarantee is
distributed to the public pursuant to Rule 144 under the Act (and purchasers
thereof have been issued Exchange Notes), and each Exchange Note and related
Guarantee until the date on which such Exchange Note is disposed of by a
Broker-Dealer pursuant to the "Plan of Distribution" contemplated by the
Exchange Offer Registration Statement (including the delivery of the Prospectus
contained therein).
SECTION 2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities
(each, a "HOLDER") whenever such Person owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by applicable
federal law (after the procedures set forth in Section 6(a)(i) below have been
complied with), the Company and the Guarantor shall (i) cause the Exchange Offer
Registration Statement to be filed with the Commission as soon as practicable
after the Closing Date, but in no event later than 120 days after the Closing
Date (such 120th day being the "FILING DEADLINE"), (ii) use its best efforts to
cause such Exchange Offer Registration Statement to become effective at the
earliest possible time, but in no event later than 210 days after the Closing
Date (such 210th day being the "EFFECTIVENESS DEADLINE"), (iii) in connection
with the foregoing, (A) file all pre-effective amendments to such Exchange Offer
Registration Statement as may be necessary in order to cause it to become
effective, (B) file, if applicable, a post-effective amendment to such Exchange
Offer Registration Statement pursuant to Rule 430A under the Act and (C) cause
all necessary filings, if any, in connection with the registration and
qualification of the Exchange Notes to be made under the Blue Sky laws of such
jurisdictions as are necessary to permit Consummation of the Exchange Offer, and
(iv) upon the effectiveness of such Exchange Offer Registration Statement,
commence and Consummate the Exchange Offer. The Exchange Offer shall be on the
appropriate form permitting (i) registration of the Exchange Notes and related
Guarantees to be offered in exchange for the Notes that are Transfer Restricted
Securities and (ii) resales of Exchange Notes and related Guarantees by
Broker-Dealers that tendered into the Exchange Offer Notes that such
Broker-Dealer acquired for its own account as a result of market making
activities or other trading activities (other than Notes acquired directly from
the Company or any of its Affiliates) as contemplated by Section 3(c) below.
(b) The Company and the Guarantor shall use their respective best
efforts to cause the Exchange Offer Registration Statement to be effective
continuously, and shall keep the Exchange Offer open for a period of not less
than the minimum period required under applicable federal and state securities
laws to Consummate the Exchange Offer; provided, however, that in no event shall
such period be less than 20 Business Days. The Company and the Guarantor shall
cause the Exchange Offer to comply with all applicable federal and state
securities laws. No securities other than the Exchange Notes (and the related
Guarantees) shall be included in the Exchange Offer Registration Statement. The
Company and the Guarantor shall use their respective best efforts to cause the
Exchange Offer to be Consummated on the
-3-
<PAGE> 5
earliest practicable date after the Exchange Offer Registration Statement has
become effective, but in no event later than 30 Business Days thereafter (such
30th day being the "CONSUMMATION DEADLINE").
(c) The Company shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any Broker-Dealer who holds Transfer Restricted Securities that
were acquired for the account of such Broker-Dealer as a result of market-making
activities or other trading activities (other than Notes acquired directly from
the Company or any Affiliate of the Company), may exchange such Transfer
Restricted Securities pursuant to the Exchange Offer. Such "Plan of
Distribution" section shall also contain all other information with respect to
such sales by such Broker-Dealers that the Commission may require in order to
permit such sales pursuant thereto, but such "Plan of Distribution" shall not
name any such Broker-Dealer or disclose the amount of Transfer Restricted
Securities held by any such Broker-Dealer, except to the extent required by the
Commission as a result of a change in policy, rules or regulations after the
date of this Agreement.
Because such Broker-Dealer may be deemed to be an "underwriter"
within the meaning of the Act and must, therefore, deliver a prospectus meeting
the requirements of the Act in connection with its initial sale of any Exchange
Notes received by such Broker-Dealer in the Exchange Offer, the Company and the
Guarantor shall permit the use of the Prospectus contained in the Exchange Offer
Registration Statement by such Broker-Dealer to satisfy such prospectus delivery
requirement. To the extent necessary to ensure that the prospectus contained in
the Exchange Offer Registration Statement is available for sales of Exchange
Notes by Broker-Dealers, the Company and the Guarantor agree to use their
respective best efforts to keep the Exchange Offer Registration Statement
continuously effective, supplemented, amended and current as required by and
subject to the provisions of Sections 6(a) and (c) hereof and in conformity with
the requirements of this Agreement, the Act and the policies, rules and
regulations of the Commission as announced from time to time, for a period of
one year from the Consummation Deadline or such shorter period as will terminate
when all Transfer Restricted Securities covered by such Registration Statement
have been sold pursuant thereto. The Company and the Guarantor shall provide
sufficient copies of the latest version of such Prospectus to such
Broker-Dealers, promptly upon request, and in no event later than one day after
such request, at any time during such period.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Exchange Offer is not permitted by
applicable law or Commission policy (after the Company and the Guarantor have
complied with the procedures set forth in Section 6(a)(i) below) or (ii) if any
Holder of Transfer Restricted Securities shall notify the Company within 20
Business Days following the Consummation Deadline that (A) such Holder has been
advised by counsel that it was prohibited by law or Commission policy from
participating in the Exchange Offer or (B) such Holder may not resell the
Exchange Notes acquired by it in the Exchange Offer to the public without
delivering a prospectus and the Prospectus contained in the Exchange Offer
Registration Statement is not appropriate or available for such resales by such
Holder or (C) such Holder is a Broker-Dealer and holds Notes acquired directly
from the Company or any of its Affiliates, then the Company and the Guarantor
shall:
(x) cause to be filed, on or prior to 30 days after the earlier
of (i) the date on which the Company determines that the Exchange
Offer Registration Statement cannot be filed as a result of clause
(a)(i) above and (ii) the date on which the Company receives the
notice specified in clause (a)(ii) above, (such earlier date, the
"FILING DEADLINE"), a shelf registration statement pursuant to Rule
415 under the Act (which may be an amendment to the Exchange Offer
Registration Statement (the "SHELF REGISTRATION STATEMENT")),
relating to all Transfer Restricted Securities, and
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<PAGE> 6
(y) shall use their respective best efforts to cause such Shelf
Registration Statement to become effective on or prior to 60 days
after the Filing Deadline for the Shelf Registration Statement (such
60th day the "EFFECTIVENESS DEADLINE").
If, after the Company and the Guarantor have filed an Exchange Offer
Registration Statement that satisfies the requirements of Section 3(a) above,
the Company and the Guarantor are required to file and make effective a Shelf
Registration Statement solely because the Exchange Offer is not permitted under
applicable federal law or Commission policy (i.e., clause (a)(i) above), then
the filing of the Exchange Offer Registration Statement shall be deemed to
satisfy the requirements of clause (x) above; provided that, in such event, the
Company and the Guarantor shall remain obligated to meet the Effectiveness
Deadline set forth in clause (y).
To the extent necessary to ensure that the Shelf Registration
Statement is available for sales of Transfer Restricted Securities by the
Holders thereof entitled to the benefit of this Section 4(a) and the other
securities required to be registered therein pursuant to Section 6(b)(ii)
hereof, the Company and the Guarantor shall use their respective best efforts to
keep any Shelf Registration Statement required by this Section 4(a) continuously
effective, supplemented, amended and current as required by and subject to the
provisions of Sections 6(b) and (c) hereof and in conformity with the
requirements of this Agreement, the Act and the policies, rules and regulations
of the Commission as announced from time to time, for a period of at least two
years (as extended pursuant to Section 6(d)) following the Closing Date, or such
shorter period as will terminate when all Transfer Restricted Securities covered
by such Shelf Registration Statement have been sold pursuant thereto.
(b) Provision by Holders of Certain Information in Connection with
the Shelf Registration Statement. No Holder of Transfer Restricted Securities
may include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 days after receipt of a request therefor, the
information specified in Item 507 or 508 of Regulation S-K, as applicable, of
the Act for use in connection with any Shelf Registration Statement or
Prospectus or preliminary Prospectus included therein. No Holder of Transfer
Restricted Securities shall be entitled to liquidated damages pursuant to
Section 5 hereof unless and until such Holder shall have provided all such
information. Each selling Holder agrees to promptly furnish additional
information required to be disclosed in order to make the information previously
furnished to the Company by such Holder not materially misleading.
SECTION 5. LIQUIDATED DAMAGES
If (i) any Registration Statement required by this Agreement is not
filed with the Commission on or prior to the applicable Filing Deadline, (ii)
any such Registration Statement has not been declared effective by the
Commission on or prior to the applicable Effectiveness Deadline, (iii) the
Exchange Offer has not been Consummated on or prior to the Consummation Deadline
or (iv) any Registration Statement required by this Agreement is filed and
declared effective but shall thereafter cease to be effective or fail to be
usable for its intended purpose without being succeeded within five Business
Days by a post-effective amendment to such Registration Statement that cures
such failure and that is itself declared effective within five Business Days of
filing of such post-effective amendment to such Registration Statement (each
such event referred to in clauses (i) through (iv), a "REGISTRATION DEFAULT"),
then the Company and the Guarantor hereby jointly and severally agree to pay to
each Holder of Transfer Restricted Securities affected thereby liquidated
damages in an amount equal to $.05 per week per $1,000 in principal amount of
Transfer Restricted Securities held by such Holder for each week or portion
thereof that the Registration Default continues for the first 90-day period
immediately following the occurrence of such Registration Default.
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<PAGE> 7
The amount of the liquidated damages shall increase by an additional $.05 per
week per $1,000 in principal amount of Transfer Restricted Securities with
respect to each subsequent 90-day period until all Registration Defaults have
been cured, up to a maximum amount of liquidated damages of $.25 per week per
$1,000 in principal amount of Transfer Restricted Securities; provided that the
Company and the Guarantor shall in no event be required to pay liquidated
damages for more than one Registration Default at any given time.
Notwithstanding anything to the contrary set forth herein, (1) upon filing of
the Exchange Offer Registration Statement (and/or, if applicable, the Shelf
Registration Statement), in the case of (i) above, (2) upon the effectiveness of
the Exchange Offer Registration Statement (and/or, if applicable, the Shelf
Registration Statement), in the case of (ii) above, (3) upon Consummation of the
Exchange Offer, in the case of (iii) above, or (4) upon the filing of a
post-effective amendment to the Registration Statement or an additional
Registration Statement that causes the Exchange Offer Registration Statement
(and/or, if applicable, the Shelf Registration Statement) to again be declared
effective or made usable in the case of (iv) above, the liquidated damages
payable with respect to the Transfer Restricted Securities as a result of such
clause (i), (ii), (iii) or (iv), as applicable, shall cease.
All accrued liquidated damages shall be paid to the Holders entitled
thereto, in the manner provided for the payment of interest in the Indenture, on
each Interest Payment Date, as more fully set forth in the Indenture and the
Notes. Notwithstanding the fact that any securities for which liquidated damages
are due cease to be Transfer Restricted Securities, all obligations of the
Company and the Guarantor to pay liquidated damages with respect to securities
shall survive until such time as such obligations with respect to such
securities shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company and the Guarantor shall (x) comply with all
applicable provisions of Section 6(c) below, (y) use their respective best
efforts to effect such exchange and to permit the resale of Exchange Notes and
related Guarantees by Broker-Dealers that tendered in the Exchange Offer Notes
that such Broker-Dealer acquired for its own account as a result of its market
making activities or other trading activities (other than Notes acquired
directly from the Company or any of its Affiliates) being sold in accordance
with the intended method or methods of distribution thereof, and (z) comply with
all of the following provisions:
(i) If, following the date hereof there has been announced a
change in Commission policy with respect to exchange offers such as the
Exchange Offer, that in the reasonable opinion of counsel to the Company
raises a substantial question as to whether the Exchange Offer is
permitted by applicable federal law, the Company and the Guarantor hereby
agree to seek a no-action letter or other favorable decision from the
Commission allowing the Company and the Guarantor to Consummate an
Exchange Offer for such Transfer Restricted Securities. The Company and
the Guarantor hereby agree to pursue the issuance of such a decision to
the Commission staff level. In connection with the foregoing, the Company
and the Guarantor hereby agree to take all such other actions as may be
requested by the Commission or otherwise required in connection with the
issuance of such decision, including without limitation (A) participating
in telephonic conferences with the Commission, (B) delivering to the
Commission staff an analysis prepared by counsel to the Company setting
forth the legal bases, if any, upon which such counsel has concluded that
such an Exchange Offer should be permitted and (C) diligently pursuing a
resolution (which need not be favorable) by the Commission staff.
(ii) As a condition to its participation in the Exchange Offer,
each Holder of Transfer Restricted Securities (including, without
limitation, any Holder who is a Broker Dealer) shall furnish, upon the
request of the Company, prior to the Consummation of the Exchange Offer, a
written
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<PAGE> 8
representation to the Company (which may be contained in the letter of
transmittal contemplated by the Exchange Offer Registration Statement) to
the effect that (A) it is not an Affiliate of the Company, (B) it is not
engaged in, and does not intend to engage in, and has no arrangement or
understanding with any person to participate in, a distribution of the
Exchange Notes to be issued in the Exchange Offer and (C) it is acquiring
the Exchange Notes in its ordinary course of business. As a condition to
its participation in the Exchange Offer each Holder using the Exchange
Offer to participate in a distribution of the Exchange Notes shall
acknowledge and agree that, if the resales are of Exchange Notes obtained
by such Holder in exchange for Notes acquired directly from the Company or
an Affiliate thereof, it (1) could not, under Commission policy as in
effect on the date of this Agreement, rely on the position of the
Commission enunciated in Morgan Stanley and Co., Inc. (available June 5,
1991) and Exxon Capital Holdings Corporation (available May 13, 1988), as
interpreted in the Commission's letter to Shearman & Sterling dated July
2, 1993, and similar no-action letters (including, if applicable, any
no-action letter obtained pursuant to clause (i) above), and (2) must
comply with the registration and prospectus delivery requirements of the
Act in connection with a secondary resale transaction and that such a
secondary resale transaction must be covered by an effective registration
statement containing the selling security holder information required by
Item 507 or 508, as applicable, of Regulation S-K.
(iii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Company and the Guarantor shall provide a supplemental
letter to the Commission (A) stating that the Company and the Guarantor
are registering the Exchange Offer in reliance on the position of the
Commission enunciated in Exxon Capital Holdings Corporation (available May
13, 1988), Morgan Stanley and Co., Inc. (available June 5, 1991) as
interpreted in the Commission's letter to Shearman & Sterling dated July
2, 1993, and, if applicable, any no-action letter obtained pursuant to
clause (i) above, (B) including a representation that neither the Company
nor the Guarantor has entered into any arrangement or understanding with
any Person to distribute the Exchange Notes to be received in the Exchange
Offer and that, to the best of the Company's and the Guarantor's
information and belief, each Holder participating in the Exchange Offer is
acquiring the Exchange Notes in its ordinary course of business and has no
arrangement or understanding with any Person to participate in the
distribution of the Exchange Notes received in the Exchange Offer and (C)
any other undertaking or representation required by the Commission as set
forth in any no-action letter obtained pursuant to clause (i) above, if
applicable.
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company and the Guarantor shall:
(i) comply with all the provisions of Section 6(c) below and use
their respective best efforts to effect such registration to permit
the sale of the Transfer Restricted Securities being sold in
accordance with the intended method or methods of distribution
thereof (as indicated in the information furnished to the Company
pursuant to Section 4(b) hereof), and pursuant thereto the Company
and the Guarantor will prepare and file with the Commission a
Registration Statement relating to the registration on any
appropriate form under the Act, which form shall be available for the
sale of the Transfer Restricted Securities in accordance with the
intended method or methods of distribution thereof within the time
periods and otherwise in accordance with the provisions hereof.
(ii) issue, upon the request of any Holder or purchaser of Notes
covered by any Shelf Registration Statement contemplated by this
Agreement, Exchange Notes and related Guarantees having an aggregate
principal amount equal to the aggregate principal amount of Notes and
related Guarantees sold pursuant to the Shelf Registration Statement
and surrendered to the
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<PAGE> 9
Company for cancellation; the Company shall register Exchange Notes
and the related Guarantees on the Shelf Registration Statement for
this purpose and issue the Exchange Notes and the related Guarantees
to the purchaser(s) of securities subject to the Shelf Registration
Statement in the names as such purchaser(s) shall designate.
(c) General Provisions. In connection with any Registration Statement
and any related Prospectus required by this Agreement, the Company and the
Guarantor shall:
(i) use their respective best efforts to keep such Registration
Statement continuously effective and provide all requisite financial
statements for the period specified in Section 3 or 4 of this Agreement,
as applicable. Upon the occurrence of any event that would cause any such
Registration Statement or the Prospectus contained therein (A) to contain
an untrue statement of material fact or omit to state any material fact
necessary to make the statements therein not misleading or (B) not to be
effective and usable for resale of Transfer Restricted Securities during
the period required by this Agreement, the Company and the Guarantor shall
file promptly an appropriate amendment to such Registration Statement
curing such defect, and, if Commission review is required, use their
respective best efforts to cause such amendment to be declared effective
as soon as practicable.
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the applicable Registration Statement as may
be necessary to keep such Registration Statement effective for the
applicable period set forth in Section 3 or 4 hereof, as the case may be;
cause the Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 under
the Act, and to comply fully with Rules 424, 430A and 462, as applicable,
under the Act in a timely manner; and comply with the provisions of the
Act with respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance with the
intended method or methods of distribution by the sellers thereof set
forth in such Registration Statement or supplement to the Prospectus;
(iii) advise each Holder promptly and, if requested by such
Holder, confirm such advice in writing, (A) when the Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and,
with respect to any applicable Registration Statement or any
post-effective amendment thereto, when the same has become effective, (B)
of any request by the Commission for amendments to the Registration
Statement or amendments or supplements to the Prospectus or for additional
information relating thereto, (C) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement
under the Act or of the suspension by any state securities commission of
the qualification of the Transfer Restricted Securities for offering or
sale in any jurisdiction, or the initiation of any proceeding for any of
the preceding purposes, and (D) of the existence of any fact or the
happening of any event that makes any statement of a material fact made in
the Registration Statement, the Prospectus, any amendment or supplement
thereto or any document incorporated by reference therein untrue, or that
requires the making of any additions to or changes in the Registration
Statement in order to make the statements therein not misleading, or that
requires the making of any additions to or changes in the Prospectus in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. If at any time the Commission
shall issue any stop order suspending the effectiveness of the
Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification or
exemption from qualification of the Transfer Restricted Securities under
state securities or Blue Sky laws, the Company and the Guarantor shall use
their respective best efforts to obtain the withdrawal or lifting of such
order at the earliest possible time;
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<PAGE> 10
(iv) subject to Section 6(c)(i), if any fact or event
contemplated by Section 6(c)(iii)(D) above shall exist or have occurred,
prepare a supplement or post-effective amendment to the Registration
Statement or related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities, the
Prospectus will not contain an untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
(v) furnish to each Holder in connection with such exchange or
sale, if any, before filing with the Commission, copies of any
Registration Statement or any Prospectus included therein or any
amendments or supplements to any such Registration Statement or Prospectus
(including all documents incorporated by reference after the initial
filing of such Registration Statement), which documents will be subject to
the review and comment of such Holders in connection with such sale, if
any, for a period of at least two Business Days, and the Company will not
file any such Registration Statement or Prospectus or any amendment or
supplement to any such Registration Statement or Prospectus (including all
such documents incorporated by reference) to which such Holders shall
reasonably object within two Business Days after the receipt thereof. A
Holder shall be deemed to have reasonably objected to such filing if such
Registration Statement, amendment, Prospectus or supplement, as
applicable, as proposed to be filed, contains an untrue statement of a
material fact or omits to state any material fact necessary to make the
statements therein not misleading or fails to comply with the applicable
requirements of the Act;
(vi) promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus,
make available to each Holder copies of such document in connection with
such exchange or sale, if any, make the Company's and the Guarantor's
representatives available for discussion of such document and other
customary due diligence matters, and include such information in such
document prior to the filing thereof as such Holders may reasonably
request;
(vii) make available, at reasonable times, for inspection by
each Holder and any attorney or accountant retained by such Holder, all
financial and other records and pertinent corporate documents of the
Company and the Guarantor and cause the Company's and the Guarantor's
officers, directors and employees to supply all relevant information
reasonably requested by any such Holder, attorney or accountant in
connection with such Registration Statement or any post-effective
amendment thereto subsequent to the filing thereof and prior to its
effectiveness, provided that such Holder, attorney or accountant shall
keep all such information confidential;
(viii) if requested by any Holders in connection with such
exchange or sale, promptly include in any Registration Statement or
Prospectus, pursuant to a supplement or post-effective amendment if
necessary, such information as such Holders may reasonably request to have
included therein, including, without limitation, information relating to
the "Plan of Distribution" of the Transfer Restricted Securities; and make
all required filings of such Prospectus supplement or post-effective
amendment as soon as practicable after the Company is notified of the
matters to be included in such Prospectus supplement or post-effective
amendment;
(ix) furnish to each Holder in connection with such exchange or
sale without charge, at least one copy of the Registration Statement, as
first filed with the Commission, and of each amendment thereto, including
all documents incorporated by reference therein and all exhibits
(including exhibits incorporated therein by reference);
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<PAGE> 11
(x) deliver to each Holder without charge, as many copies of the
Prospectus (including each preliminary prospectus) and any amendment or
supplement thereto as such Persons reasonably may request; the Company and
the Guarantor hereby consent to the use (in accordance with law) of the
Prospectus and any amendment or supplement thereto by each selling Holder
in connection with the offering and the sale of the Transfer Restricted
Securities covered by the Prospectus or any amendment or supplement
thereto;
(xi) upon the request of any Holder, enter into such agreements
(including underwriting agreements) and make such representations and
warranties and take all such other actions in connection therewith in
order to expedite or facilitate the disposition of the Transfer Restricted
Securities pursuant to any applicable Registration Statement contemplated
by this Agreement as may be reasonably requested by any Holder in
connection with any sale or resale pursuant to any applicable Registration
Statement. In such connection the Company and the Guarantor shall:
(A) upon request of any Holder, furnish (or in the case of
paragraphs (2) and (3), use their respective best efforts to cause to
be furnished) to each Holder, upon Consummation of the Exchange Offer
or upon the effectiveness of the Shelf Registration Statement, as the
case may be:
(1) a certificate, dated such date, signed on behalf of
the Company and the Guarantor by (x) the President or any Vice
President and (y) a principal financial or accounting officer of
the Company, confirming, as of the date thereof, the matters set
forth in Sections 9(a), 9(b) and 9(k) of the Purchase Agreement;
(2) opinions, dated the date of Consummation of the
Exchange Offer or the date of effectiveness of the Shelf
Registration Statement, as the case may be, of counsel for the
Company and the Guarantor covering matters similar to those set
forth in paragraphs (d) and (e) of Section 9 of the Purchase
Agreement and such other customary matter as such Holder may
reasonably request, and in any event including a statement to
the effect that such counsel has participated in conferences
with officers and other representatives of the Company and the
Guarantor, representatives of the independent public accountants
for the Company and the Guarantor and have considered the
matters required to be stated therein and the statements
contained therein, although such counsel has not independently
verified the accuracy, completeness or fairness of such
statements; and that such counsel advises that, on the basis of
the foregoing (relying as to materiality upon the statements of
officers and other representatives of the Company and the
Guarantor and without independent check or verification) no
facts came to such counsel's attention that caused such counsel
to believe that the applicable Registration Statement, at the
time such Registration Statement or any post-effective amendment
thereto became effective and, in the case of the Exchange Offer
Registration Statement, as of the date of Consummation of the
Exchange Offer, contained an untrue statement of a material fact
or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, or that the Prospectus contained in such
Registration Statement as of its date and, in the case of the
opinion dated the date of Consummation of the Exchange Offer, as
of the date of Consummation, contained an untrue statement of a
material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
Without limiting the foregoing, such counsel may state further
that such counsel assumes no responsibility for, and has not
independently verified, the accuracy, completeness or fairness
of the financial statements, notes and schedules and other
financial data included in any Registration Statement
contemplated by this Agreement or the related Prospectus; and
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<PAGE> 12
(3) a customary comfort letter, dated the date of
Consummation of the Exchange Offer, or as of the date of
effectiveness of the Shelf Registration Statement, as the case
may be, from the Company's independent accountants, in the
customary form and covering matters of the type customarily
covered in comfort letters to underwriters in connection with
underwritten offerings, and affirming the matters set forth in
the comfort letters delivered pursuant to Section 9(g) of the
Purchase Agreement; and
(B) deliver such other documents and certificates as may be
reasonably requested by the selling Holders to evidence compliance
with the matters covered in clause (A) above and with any customary
conditions contained in any agreement entered into by the Company and
the Guarantor pursuant to this clause (xi);
(xii) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders and their counsel in
connection with the registration and qualification of the Transfer
Restricted Securities under the securities or Blue Sky laws of such
jurisdictions as the selling Holders may request and do any and all other
acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Transfer Restricted Securities covered by the
applicable Registration Statement; provided, however, that neither the
Company nor the Guarantor shall be required to register or qualify as a
foreign corporation where it is not now so qualified or to take any action
that would subject it to the service of process in suits or to taxation,
other than as to matters and transactions relating to the Registration
Statement, in any jurisdiction where it is not now so subject;
(xiii) in connection with any sale of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Securities, cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Transfer Restricted
Securities to be sold and not bearing any restrictive legends; and to
register such Transfer Restricted Securities in such denominations and
such names as the selling Holders may request at least two Business Days
prior to such sale of Transfer Restricted Securities;
(xiv) use their respective best efforts to cause the disposition
of the Transfer Restricted Securities covered by the Registration
Statement to be registered with or approved by such other governmental
agencies or authorities as may be necessary to enable the seller or
sellers thereof to consummate the disposition of such Transfer Restricted
Securities, subject to the proviso contained in clause (xii) above;
(xv) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of a Registration Statement
covering such Transfer Restricted Securities and provide the Trustee under
the Indenture with printed certificates for the Transfer Restricted
Securities which are in a form eligible for deposit with the Depository
Trust Company;
(xvi) otherwise use their respective best efforts to comply with
all applicable rules and regulations of the Commission, and make generally
available to its security holders with regard to any applicable
Registration Statement, as soon as practicable, a consolidated earnings
statement meeting the requirements of Rule 158 (which need not be audited)
covering a twelve-month period beginning after the effective date of the
Registration Statement (as such term is defined in paragraph (c) of Rule
158 under the Act);
(xvii) cause the Indenture to be qualified under the TIA not
later than the effective date of the first Registration Statement required
by this Agreement and, in connection therewith, cooperate
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<PAGE> 13
with the Trustee and the Holders to effect such changes to the Indenture as
may be required for such Indenture to be so qualified in accordance with
the terms of the TIA; and execute, and use their respective best efforts to
cause the Trustee to execute, all documents that may be required to effect
such changes and all other forms and documents required to be filed with
the Commission to enable such Indenture to be so qualified in a timely
manner; and
(xviii) provide promptly to each Holder, upon request, each
document filed with the Commission pursuant to the requirements of Section
13 or Section 15(d) of the Exchange Act.
(d) Restrictions on Holders. Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of the notice referred to in
Section 6(c)(iii)(C) or any notice from the Company of the existence of any fact
of the kind described in Section 6(c)(iii)(D) hereof (in each case, a
"SUSPENSION NOTICE"), such Holder will forthwith discontinue disposition of
Transfer Restricted Securities pursuant to the applicable Registration Statement
until (i) such Holder has received copies of the supplemented or amended
Prospectus contemplated by Section 6(c)(iv) hereof, or (ii) such Holder is
advised in writing by the Company that the use of the Prospectus may be resumed,
and has received copies of any additional or supplemental filings that are
incorporated by reference in the Prospectus (in each case, the "RECOMMENCEMENT
DATE"). Each Holder receiving a Suspension Notice hereby agrees that it will
either (i) destroy any Prospectuses, other than permanent file copies, then in
such Holder's possession which have been replaced by the Company with more
recently dated Prospectuses or (ii) deliver to the Company (at the Company's
expense) all copies, other than permanent file copies, then in such Holder's
possession of the Prospectus covering such Transfer Restricted Securities that
was current at the time of receipt of the Suspension Notice. The time period
regarding the effectiveness of such Registration Statement set forth in Section
3 or 4 hereof, as applicable, shall be extended by a number of days equal to the
number of days in the period from and including the date of delivery of the
Suspension Notice to the date of delivery of the Recommencement Date.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's and the Guarantor's
performance of or compliance with this Agreement will be borne by the Company,
regardless of whether a Registration Statement becomes effective, including
without limitation: (i) all registration and filing fees and expenses; (ii) all
fees and expenses of compliance with federal securities and state Blue Sky or
securities laws; (iii) all expenses of printing (including printing certificates
for the Exchange Notes to be issued in the Exchange Offer and printing of
Prospectuses), messenger and delivery services and telephone; (iv) all fees and
disbursements of counsel for the Company and the Guarantor and the Holders of
Transfer Restricted Securities, as set forth in Section (b) below; (v) all
application and filing fees in connection with listing the Exchange Notes on a
national securities exchange or automated quotation system pursuant to the
requirements hereof; and (vi) all fees and disbursements of independent
certified public accountants of the Company and the Guarantor (including the
expenses of any special audit and comfort letters required by or incident to
such performance).
The Company will, in any event, bear its and the Guarantor's internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expenses of
any annual audit and the fees and expenses of any Person, including special
experts, retained by the Company or the Guarantor.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company and the Guarantor
will reimburse the Initial Purchasers and the Holders of Transfer Restricted
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<PAGE> 14
Securities who are tendering Notes in the Exchange Offer and/or selling or
reselling Notes or Exchange Notes pursuant to the "Plan of Distribution"
contained in the Exchange Offer Registration Statement or the Shelf Registration
Statement, as applicable, for the reasonable fees and disbursements of not more
than one counsel, who shall be McDermott, Will & Emery unless another firm shall
be chosen by the Holders of a majority in principal amount of the Transfer
Restricted Securities for whose benefit such Registration Statement is being
prepared.
SECTION 8. INDEMNIFICATION
(a) The Company and the Guarantor agree, jointly and severally, to
indemnify and hold harmless each Holder and each Person, if any, who controls
such Holder (within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act), from and against any and all losses, claims, damages, liabilities
and judgments, caused by any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement, preliminary prospectus or
Prospectus (or any amendment or supplement thereto) provided by the Company to
any Holder or any prospective purchaser of Exchange Notes or registered Notes,
or caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
judgments are caused by an untrue statement or omission or alleged untrue
statement or omission that is based upon information relating to any of the
Holders furnished in writing to the Company by or on behalf of any of the
Holders.
(b) Each Holder of Transfer Restricted Securities agrees, severally
and not jointly, to indemnify and hold harmless the Company and the Guarantor,
and their respective directors and officers, and each person, if any, who
controls (within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act) the Company or the Guarantor, to the same extent as the foregoing
indemnity from the Company and the Guarantor set forth in Section 8(a) above,
but only with reference to information relating to such Holder furnished in
writing to the Company by or on behalf of such Holder expressly for use in any
Registration Statement. In no event shall any Holder, its directors, officers or
any Person who controls such Holder be liable or responsible for any amount in
excess of the amount by which the total amount received by such Holder with
respect to its sale of Transfer Restricted Securities pursuant to a Registration
Statement exceeds (i) the amount paid by such Holder for such Transfer
Restricted Securities and (ii) the amount of any damages that such Holder, its
directors, officers or any Person who controls such Holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"INDEMNIFIED PARTY"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PERSON") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, (except that in the case
of any action in respect of which indemnity may be sought pursuant to both
Sections 8(a) and 8(b), a Holder shall not be required to assume the defense of
such action pursuant to this Section 8(c), but may employ separate counsel and
participate in the defense thereof, but the fees and expenses of such counsel,
except as provided below, shall be at the expense of the Holder). Any
indemnified party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of the indemnified party unless (i) the
employment of such counsel shall have been specifically authorized in writing by
the indemnifying party, (ii) the indemnifying party shall have failed to assume
the defense of such action or employ counsel reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses
-13-
<PAGE> 15
available to it which are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of the indemnified party).
In any such case, the indemnifying party shall not, in connection with any one
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all indemnified parties and all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be designated
in writing by a majority of the Holders, in the case of the parties indemnified
pursuant to Section 8(a), and by the Company and the Guarantor, in the case of
parties indemnified pursuant to Section 8(b). The indemnifying party shall
indemnify and hold harmless the indemnified party from and against any and all
losses, claims, damages, liabilities and judgments by reason of any settlement
of any action (i) effected with its written consent or (ii) effected without its
written consent if the settlement is entered into more than forty business days
after the indemnifying party shall have received a request from the indemnified
party for reimbursement for the fees and expenses of counsel (in any case where
such fees and expenses are at the expense of the indemnifying party) and, prior
to the date of such settlement, the indemnifying party shall have failed to
comply with such reimbursement request. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement or
compromise of, or consent to the entry of judgment with respect to, any pending
or threatened action in respect of which the indemnified party is or could have
been a party and indemnity or contribution may be or could have been sought
hereunder by the indemnified party, unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability on claims that are or could have been the subject matter of such
action and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of the indemnified party.
(d) To the extent that the indemnification provided for in this
Section 8 is unavailable to an indemnified party in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or judgments (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company and
the Guarantor, on the one hand, and the Holders, on the other hand, from their
sale of Transfer Restricted Securities or (ii) if the allocation provided by
clause 8(d)(i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
8(d)(i) above but also the relative fault of the Company and the Guarantor, on
the one hand, and of the Holders, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative fault of the Company and the Guarantor, on the one
hand, and of the Holders, on the other hand, shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Guarantor, on the one
hand, or by the Holders, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company, the Guarantor and each Holder agree that it would not be
just and equitable if contribution pursuant to this Section 8(d) were determined
by pro rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other reasonable expenses incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8, no Holder, its directors, its
officers or any Person, if any, who controls such Holder shall be required to
-14-
<PAGE> 16
contribute, in the aggregate, any amount in excess of the amount by which the
total received by such Holder with respect to the sale of Transfer Restricted
Securities pursuant to a Registration Statement exceeds (i) the amount paid by
such Holder for such Transfer Restricted Securities and (ii) the amount of any
damages which such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Holders' obligations to contribute
pursuant to this Section 8(d) are several in proportion to the respective
principal amount of Transfer Restricted Securities held by each Holder hereunder
and not joint.
SECTION 9. RULE 144A AND RULE 144
The Company and the Guarantor agree with each Holder, for so long as
any Transfer Restricted Securities remain outstanding and during any period in
which the Company or the Guarantor (i) is not subject to Section 13 or 15(d) of
the Exchange Act, to make available, upon request of any Holder, to such Holder
or beneficial owner of Transfer Restricted Securities in connection with any
sale thereof and any prospective purchaser of such Transfer Restricted
Securities designated by such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Act in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144A, and (ii) is subject to
Section 13 or 15 (d) of the Exchange Act, to make all filings required thereby
in a timely manner in order to permit resales of such Transfer Restricted
Securities pursuant to Rule 144.
SECTION 10. MISCELLANEOUS
(a) Remedies. The Company and the Guarantor acknowledge and agree
that any failure by the Company and/or the Guarantor to comply with their
respective obligations under Sections 3 and 4 hereof may result in material
irreparable injury to the Initial Purchasers or the Holders for which there is
no adequate remedy at law, that it will not be possible to measure damages for
such injuries precisely and that, in the event of any such failure, the Initial
Purchasers or any Holder may obtain such relief as may be required to
specifically enforce the Company's obligations under Sections 3 and 4 hereof.
The Company and the Guarantor further agree to waive the defense in any action
for specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. Neither the Company nor the Guarantor
will, on or after the date of this Agreement, enter into any agreement with
respect to its securities that is inconsistent with the rights granted to the
Holders in this Agreement or otherwise conflicts with the provisions hereof. No
holder of any security of the Company or the Guarantor has any right to require
registration of any securities of the Company or the Guarantor because of the
filing of the Registration Statement that has not been waived. The rights
granted to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's and the
Guarantor's securities under any agreement in effect on the date hereof.
(c) Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to or departures
from the provisions hereof may not be given unless (i) in the case of Section 5
hereof and this Section 10(c)(i), the Company has obtained the written consent
of Holders of all outstanding Transfer Restricted Securities and (ii) in the
case of all other provisions hereof, the Company has obtained the written
consent of Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities (excluding Transfer Restricted Securities held by the
Company or its Affiliates). Notwithstanding the foregoing, a waiver or consent
to departure from the provisions hereof that relates exclusively to the rights
of Holders whose Transfer Restricted Securities are
-15-
<PAGE> 17
being tendered pursuant to the Exchange Offer, and that does not affect directly
or indirectly the rights of other Holders whose Transfer Restricted Securities
are not being tendered pursuant to such Exchange Offer, may be given by the
Holders of a majority of the outstanding principal amount of Transfer Restricted
Securities subject to such Exchange Offer.
(d) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company and the
Guarantor on the one hand, and the Initial Purchasers, on the other hand, and
shall have the right to enforce such agreements directly to the extent they may
deem such enforcement necessary or advisable to protect its rights or the rights
of Holders hereunder.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of
the Registrar under the Indenture, with a copy to the Registrar under the
Indenture; and
(ii) if to the Company or the Guarantor to:
Waste Management, Inc.
1001 Fannin Street, Suite 4000
Houston, Texas 77002
Telecopier No.: (713) 209-9711
Attention: General Counsel
With a copy to:
Locke Liddell & Sapp LLP
600 Travis Street
Houston, Texas 77002-3095
Telecopier No.: (713) 223-3717
Attention: Marcus Watts
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next Business Day, if timely delivered
to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express assignment,
subsequent Holders; provided, that nothing herein shall be deemed to permit any
assignment, transfer or other disposition of Transfer Restricted Securities in
violation of the terms hereof or of the Purchase Agreement or the Indenture. If
any transferee of any Holder shall acquire Transfer Restricted Securities in any
manner, whether by operation of law or otherwise, such Transfer Restricted
Securities shall be held subject to all of the terms of this Agreement, and by
taking and holding such Transfer Restricted Securities such Person shall be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement, including the restrictions on resale set
forth in
-16-
<PAGE> 18
this Agreement and, if applicable, the Purchase Agreement, and such Person shall
be entitled to receive the benefits hereof.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
(j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
-17-
<PAGE> 19
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
WASTE MANAGEMENT, INC.
By:
--------------------------
Name:
Title:
WASTE MANAGEMENT HOLDINGS, INC.
By:
--------------------------
Name:
Title:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By:
--------------------------
Name:
Title:
<PAGE> 1
EXHIBIT 5.1
September 17, 1999
Waste Management, Inc.
1001 Fannin Street, Suite 4000
Houston, Texas 77002
Ladies and Gentlemen:
We have acted as special counsel for Waste Management, Inc. (the
"Company"), a Delaware corporation, and Waste Management Holdings, Inc. (the
"Guarantor"), a Delaware corporation, in connection with the registration under
the Securities Act of 1933, as amended (the "Securities Act"), of the proposed
offering by the Company of $1,150,000,000 aggregate principal amount of 6%
Senior Notes due 2001, 6 1/2% Senior Notes due 2004, 6 7/8% Senior Notes due
2009 and 7 3/8% Senior Notes due 2029 of the Company (collectively, the
"Exchange Notes") in exchange for the same amount of its outstanding 6% Senior
Notes due 2001, 6 1/2% Senior Notes due 2004, 67/8% Senior Notes due 2009 and
7 3/8% Senior Notes due 2029 (collectively, the "Outstanding Notes"), and
guarantees (collectively, the "Subsidiary Guarantees") thereof by the Guarantor.
The Exchange Notes are to be issued under the Indenture (the "Indenture") dated
as of September 10, 1997, between the Company and Chase Bank of Texas, National
Association (formerly known as Texas Commerce Bank National Association), as
trustee.
Before rendering the opinions hereinafter set forth, we have examined
the Registration Statement on Form S-4 (the "Registration Statement") relating
to the Exchange Notes, the Prospectus contained therein, the Indenture,
certified copies of the Restated Certificate of Incorporation and Bylaws of the
Company, the Restated Certificate of Incorporation and Bylaws of the Guarantor,
and minutes of meetings and unanimous consents of the Board of Directors of the
Company and of the Guarantor, certificates of public officials and originals or
copies, certified or otherwise authenticated to our satisfaction, of such other
documents, records and instruments as we deemed necessary or advisable in order
to render the opinions hereinafter set forth. We have relied upon the accuracy
of the facts and information set forth therein. In the course of the foregoing
investigation, we have assumed (a) the genuineness of all signatures on, and the
authenticity of, all documents submitted to us as originals and the conformity
to original documents of all documents submitted to us as copies, as well as the
capacity of natural persons to sign and execute such documents; (b) the due
authorization, execution and delivery by the parties thereto, other than the
<PAGE> 2
September 17, 1999
Page 2
Company and the Guarantor, of all such documents examined by us; (c) that, to
the extent that any such document purports to constitute the agreement of a
party other than the Company or the Guarantor, it constitutes the valid and
binding obligation of such other party; (d) that there has not been any mutual
mistake of fact or misunderstanding, fraud, duress or undue influence; and (e)
that the conduct of the parties has complied with any requirement of good faith,
fair dealing and conscionability.
Based upon the foregoing, we are of the opinion that as of the date
hereof and subject to the qualifications and limitations set forth below:
(1) each of the Company and the Guarantor has been duly incorporated
and is validly existing as a corporation in good standing under the laws of
Delaware;
(2) the execution, delivery and performance of the Exchange Notes is
within the corporate power of the Company;
(3) the execution, delivery and performance of the Subsidiary
Guarantees is within the corporate power of the Guarantor;
(4) the Exchange Notes have been duly authorized and, when the
Registration Statement becomes effective under the Securities Act and the
Exchange Notes have been duly executed and authenticated in accordance with the
provisions of the Indenture and issued and delivered in exchange for the
Outstanding Notes as described in the Registration Statement, the Exchange Notes
will be entitled to the benefits of the Indenture and will be valid and binding
obligations of the Company, enforceable in accordance with their terms except as
(a) the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (b) rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability; and
(5) the Subsidiary Guarantees have been duly authorized and are the
valid and binding obligations of the Guarantor, enforceable in accordance with
their respective terms (with respect to the Exchange Notes when the Registration
Statement becomes effective under the Securities Act and the Exchange Notes are
duly executed and authenticated in accordance with the provisions of the
Indenture and issued and delivered in exchange for the Outstanding Notes as
described in the Registration Statement, and with respect to the Outstanding
Notes before such time) except as (a) the enforceability thereof may be limited
by bankruptcy, insolvency or similar laws affecting creditors' rights generally
and (b) the availability of equitable remedies may be limited by equitable
principles of general applicability.
<PAGE> 3
September 17, 1999
Page 3
The opinions expressed herein are limited to matters arising under the
laws of the States of New York and Texas, the General Corporation Law of the
State of Delaware and the federal laws of the United States of America, in each
case as in effect on the date hereof, which have been published and are
generally available in a format that makes legal research reasonably feasible,
and we disclaim any responsibility to inform you of any change. We have assumed
that the constitutionality or validity of a relevant statute, rule, regulation
or agency action is not in issue.
We consent to the use of this opinion as an exhibit to the Registration
Statement and to the reference to our firm in the Registration Statement and the
Prospectus constituting a part thereof under the caption "Legal Matters." In
giving this consent, we do not thereby admit that we are in the category of
persons whose consent is required under Section 7 of the Securities Act.
Very truly yours,
/s/ Locke Liddell & Sapp LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference of our report on Waste Management, Inc.'s
consolidated financial statements for the year ended December 31, 1998 dated
February 25, 1999 (except with respect to the matters discussed in Notes 20 and
21, as to which the date is September 16, 1999) included in Waste Management,
Inc.'s Current Report on Form 8-K dated September 16, 1999 in this Registration
Statement on Form S-4 and related Prospectus of Waste Management, Inc. and to
all references to our Firm included in or incorporated by reference in this
Registration Statement.
/s/ Arthur Andersen LLP
Houston, Texas
September 16, 1999
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-4 relating to the exchange of $1.15 billion of
Senior Notes of Waste Management, Inc., of our report dated March 16, 1998
relating to the consolidated financial statements of USA Waste Services, Inc.
as of December 31, 1997, and for the years ended December 31, 1997 and 1996,
which appears in the Waste Management, Inc. Annual Report on Form 10-K for the
year ended December 31, 1998 and Current Report on Form 8-K dated September 16,
1999. We also consent to the reference to us under the heading "Experts" in such
Registration Statement.
/s/ PricewaterhouseCoopers LLP
Houston, Texas
September 16, 1999
<PAGE> 1
EXHIBIT 99.1
LETTER OF TRANSMITTAL
WASTE MANAGEMENT, INC.
OFFERS TO EXCHANGE
$200,000,000 6.000% SENIOR NOTES DUE 2001
$300,000,000 6.500% SENIOR NOTES DUE 2004
$500,000,000 6.875% SENIOR NOTES DUE 2009
$250,000,000 7.375% SENIOR NOTES DUE 2029
ISSUED FOR
$200,000,000 6.000% SENIOR NOTES DUE 2001
$300,000,000 6.500% SENIOR NOTES DUE 2004
$500,000,000 6.875% SENIOR NOTES DUE 2009
$250,000,000 7.375% SENIOR NOTES DUE 2029
THIS EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
5:00 P.M., NEW YORK CITY TIME, ON , 1999
UNLESS THE OFFER IS EXTENDED
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
(THE "EXCHANGE AGENT")
By Mail, (Certified, Registered, Overnight or First Class) or Hand Delivery:
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
600 TRAVIS STREET
HOUSTON, TEXAS 77002
TELEPHONE NUMBER
(713) 216-7000
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT
CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF
TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS
COMPLETED.
The undersigned hereby acknowledges receipt of the Prospectus dated
, 1999 (the "Prospectus") of Waste Management, Inc. (the "Company")
and this Letter of Transmittal, which together constitute the Company's offer
(the "Exchange Offer") to exchange $1,000 principal amount of its 6.000% Senior
Notes due 2001; 6.500% Senior Notes due 2004; 6.875% Senior Notes due 2009; and
7.375% Senior Notes due 2029 (the "Exchange Notes"), which have been registered
under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to
a Registration Statement of which the Prospectus is a part, for each $1,000
principal amount 6.000% Senior Notes due 2001; 6.500% Senior Notes due 2004;
6.875% Senior Notes due 2009; and 7.375% Senior Notes due 2029 issued by the
Company (the "Notes"), respectively. The term "Expiration Date" shall mean 5:00
p.m., New York City time, on , 1999 unless the Company, in its
reasonable judgment, extends the Exchange Offer, in which case the term shall
mean the latest date and time to which the Exchange Offer is extended.
Capitalized terms used but not defined herein have the meaning given to them in
the Prospectus.
YOUR BANK OR BROKER CAN ASSIST YOU IN COMPLETING THIS FORM. THE
INSTRUCTIONS INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED.
QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE
<PAGE> 2
PROSPECTUS AND THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE AGENT.
List on the next page the Notes to which this Letter of Transmittal
relates. If the space indicated is inadequate, the Certificate of Registration
Numbers and Principal Amounts should be listed on a separately signed schedule
affixed hereto.
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------
DESCRIPTION OF NOTES TENDERED HEREBY
- ------------------------------------------------------------------------------------------------------------
CERTIFICATE AGGREGATE
NAME(S) AND ADDRESS(ES) OR PRINCIPAL AMOUNT PRINCIPAL
OF REGISTERED OWNER(S) REGISTRATION REPRESENTED AMOUNT
(PLEASE FILL IN) NUMBER(S)* BY NOTES TENDERED**
- ------------------------------------------------------------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
Total
- ------------------------------------------------------------------------------------------------------------
* Need not be completed by Book-Entry Holders.
** Unless otherwise indicated, the Holder will be deemed to have tendered the Full Aggregate Principal
Amount represented by such Notes. All Tenders must be in integral multiples of $1,000.
- ------------------------------------------------------------------------------------------------------------
</TABLE>
This Letter of Transmittal is to be used (i) if certificates of Notes are
to be forwarded herewith, (ii) if delivery of Notes is to be made by book-entry
transfer to an account maintained by the Exchange Agent at The Depository Trust
Company (the "Depository"), pursuant to the procedures set forth in "The
Exchange Offer -- Procedures for Tendering Notes" in the Prospectus or (iii) if
tender of the Notes is to be made according to the guaranteed delivery
procedures described in the Prospectus under the caption "The Exchange
Offer -- Guaranteed Delivery Procedures." See Instruction 2. DELIVERY OF
DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE
EXCHANGE AGENT.
The term "Holder" with respect to the Exchange Offer means any person in
whose name Notes are registered on the books of the Company or any other person
who has obtained a properly completed bond power from the registered holder. The
undersigned has completed, executed and delivered this Letter of Transmittal to
indicate the action the undersigned desires to take with respect to the Exchange
Offer. Holders who wish to tender their Notes must complete this letter in its
entirety.
[ ] CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE
TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE DEPOSITORY AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution -----------------------------------------------
[ ] The Depository Trust Company
Account Number --------------------------------------------------------------
Transaction Code Number -----------------------------------------------------
Holders whose Notes are not immediately available or who cannot deliver
their Notes and all other documents required hereby to the Exchange Agent on or
prior to the Expiration Date must tender their Notes according to the guaranteed
delivery procedure set forth in the Prospectus under the caption "The Exchange
Offer -- Guaranteed Delivery Procedures." See Instruction 2.
<PAGE> 3
[ ]CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY AND COMPLETE THE FOLLOWING:
Name of Registered
Holder(s) --------------------------------------------------------------
Name of Eligible Institution that Guaranteed
Delivery --------------------------------------------------------------
If delivery by book-entry transfer:
Account Number --------------------------------------------------------------
Transaction Code Number -----------------------------------------------------
[ ]CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name --------------------------------------------------------------------------
Address -----------------------------------------------------------------------
<PAGE> 4
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Company the principal amount of the Notes
indicated above. Subject to, and effective upon, the acceptance for exchange of
such Notes tendered hereby, the undersigned hereby exchanges, assigns and
transfers to, or upon the order of, the Company all right, title and interest in
and to such Notes as are being tendered hereby, including all rights to accrued
and unpaid interest thereon as of the Expiration Date. The undersigned hereby
irrevocably constitutes and appoints the Exchange Agent the true and lawful
agent and attorney-in-fact of the undersigned (with full knowledge that said
Exchange Agent acts as the agent of the Company in connection with the Exchange
Offer) to cause the Notes to be assigned, transferred and exchanged. The
undersigned represents and warrants that it has full power and authority to
tender, exchange, assign and transfer the Notes and to acquire Exchange Notes
issuable upon the exchange of such tendered Notes, and that when the same are
accepted for exchange, the Company will acquire good and unencumbered title to
the tendered Notes, free and clear of all liens, restrictions, charges and
encumbrances and not subject to any adverse claim.
The undersigned represents to the Company that (A) it is not an affiliate
of the Company, (B) it is not engaged in, and does not intend to engage in, and
has no arrangement or understanding with any person to participate in, a
distribution of the Exchange Notes to be issued in the Exchange Offer and (C) it
is acquiring the Exchange Notes in its ordinary course of business. If the
undersigned or the person receiving the Exchange Notes covered hereby is a
broker-dealer that is receiving the Exchange Notes for its own account in
exchange for Notes that were acquired as a result of market-making activities or
other trading activities, the undersigned acknowledges that it or such other
person will deliver a prospectus in connection with any resale of such Exchange
Notes; however, by so acknowledging and by delivering a prospectus, the
undersigned will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. The undersigned and any such other person
acknowledges that, if they are participating in the Exchange Offer for the
purpose of distributing the Exchange Notes, (i) they cannot rely on the position
of the staff of the Securities and Exchange Commission enunciated in Exxon
Capital Holdings Corporation (available May 13, 1988) as interpreted in the
Securities and Exchange Commission's letter to Shearman & Sterling dated July 2,
1993, Morgan Stanley & Co., Incorporated (available June 5, 1991), Warnaco, Inc.
(available June 5, 1991), and Epic Properties, Inc. (available October 21, 1991
or similar no-action letters and, in the absence of an exemption therefrom, must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with the resale transaction and (ii) failure to
comply with such requirements in such instance could result in the undersigned
or any such other person incurring liability under the Securities Act for which
such persons are not indemnified by the Company. If the undersigned or the
person receiving the Exchange Notes covered by this letter is an affiliate (as
defined under Rule 405 of the Securities Act) of the Company, the undersigned
represents to the Company that the undesigned understands and acknowledges that
such Exchange Notes may not be offered for resale, resold or otherwise
transferred by the undersigned or such other person without registration under
the Securities Act or an exemption therefrom.
The undersigned also warrants that it will, upon request, execute and
deliver any additional documents deemed by the Exchange Agent or the Company to
be necessary or desirable to complete the exchange, assignment and transfer of
tendered Notes or transfer ownership of such Notes on the account books
maintained by a book-entry facility. The undersigned further agrees that
acceptance of any tendered Notes by the Company and the issuance of Exchange
Notes in exchange therefor shall constitute performance in full by the Company
of its obligations under the Registration Rights Agreement and that the Company
shall have no further obligations or liabilities thereunder for the registration
of the Notes or the Exchange Notes.
The Exchange Offer is subject to certain conditions set forth in the
Prospectus under the caption "The Exchange Offer -- Conditions." The undersigned
recognizes that as a result of these conditions (which may be waived, in whole
or in part, by the Company), as more particularly set forth in the Prospectus,
the Company may not be required to exchange any of the Notes tendered hereby
and, in such event, the Notes not exchanged will be returned to the undersigned
at the address shown below the signature of the undersigned.
<PAGE> 5
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned and every obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned. Tendered Notes may be withdrawn at any time
prior to the Expiration Date.
Unless otherwise indicated in the box entitled "Special Registration
Instructions" or the box entitled "Special Delivery Instructions" in this Letter
of Transmittal, certificates for all Exchange Notes delivered in exchange for
tendered Notes, and any Notes delivered herewith but not exchanged, will be
registered in the name of the undersigned and shall be delivered to the
undersigned at the address shown below the signature of the undersigned. If an
Exchange Note is to be issued to a person other than the person(s) signing this
Letter of Transmittal, or if the Exchange Note is to be mailed to someone other
than the person(s) signing this Letter of Transmittal or to the person(s)
signing this Letter of Transmittal at an address different than the address
shown on this Letter of Transmittal, the appropriate boxes of this Letter of
Transmittal should be completed. If Notes are surrendered by Holder(s) that have
completed either the box entitled "Special Registration Instructions" or the box
entitled "Special Delivery Instructions" in this Letter of Transmittal,
signature(s) on this Letter of Transmittal must be Medallion Guaranteed by an
Eligible Institution (defined in Instruction 2).
SPECIAL REGISTRATION
INSTRUCTIONS
To be completed ONLY if the Exchange Notes are to be issued in the name of
someone other than the undersigned.
Name:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Book-Entry Transfer Facility Account:
- -------------------------------------------------------------------
- --------------------------------------------------------------------------------
Employee Identification or Social Security Number:
- ----------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT OR TYPE)
SPECIAL DELIVERY
INSTRUCTIONS
To be completed ONLY if the Exchange Notes are to be sent to someone other
than the undersigned, or to the undersigned at an address other than that shown
under "Description of Notes Tendered Hereby."
Name:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT OR TYPE)
<PAGE> 6
(REGISTERED HOLDER(S) OF NOTES SIGN HERE)
(IN ADDITION, COMPLETE SUBSTITUTE FORM W-9 BELOW)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Signature(s) of Registered Holder(s))
Must be signed by registered holder(s) exactly as name(s) appear(s) on the
Notes or on a security position listing as the owner of the Notes or by
person(s) authorized to become registered holder(s) by properly completed bond
powers transmitted herewith. If signature is by attorney-in-fact, trustee,
executor, administrator, guardian, officer of a corporation or other person
acting in a fiduciary capacity, please provide the following information.
(Please print or type):
Name and Capacity (full title):
- -------------------------------------------------------------------------
Address (including zip code):
---------------------------------------------------------------------------
Area Code and Telephone Number:
---------------------------------------------------------------------
Taxpayer Identification or Social Security No.:
---------------------------------------------------------
Dated:
---------------------------------------------------------------
MEDALLION GUARANTEE
(IF REQUIRED -- SEE INSTRUCTION 4)
Authorized Signature:
--------------------------------------------------------------
(Signature of Representative of Medallion Guarantor)
Name and Title:
- --------------------------------------------------------------------------------
Name of Plan:
- --------------------------------------------------------------------------------
Area Code and Telephone Number:
-------------------------------------------------
(Please Print or Type)
Dated:
---------------------------------------------------------------
<PAGE> 7
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PAYOR'S NAME: CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
- ----------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART I -- PLEASE PROVIDE YOUR TIN IN THE ----------------------------------
FORM W-9 BOX AT RIGHT AND CERTIFY BY SIGNING AND SOCIAL SECURITY NUMBER
DATING BELOW. OR
----------------------------------
EMPLOYER IDENTIFICATION NUMBER
(IF AWAITING TIN,
WRITE "APPLIED FOR")
-----------------------------------------------------------------------------------
DEPARTMENT OF THE TREASURY PART II -- FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING, SEE THE ENCLOSED GUIDELINES
INTERNAL REVENUE SERVICE FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 AND
COMPLETE AS INSTRUCTED THEREIN.
-----------------------------------------------------------------------------------
PAYER'S REQUEST FOR TAXPAYER CERTIFICATION -- Under penalties of perjury, I certify that:
IDENTIFICATION NUMBER (TIN) (1) The number shown on this form is my correct Taxpayer Identification Number
(or a Taxpayer Identification Number has not been issued to me) and either (a) I
have mailed or delivered an application to receive a Taxpayer Identification
Number to the appropriate Internal Revenue Service ("IRS") or Social Security
Administration office or (b) I intend to mail or deliver an application in
the near future. I understand that if I do not provide a Taxpayer
Identification Number within 60 days, 31% of all reportable payments made to
me thereafter will be withheld until I provide a number, and
(2) I am not subject to backup withholding either because (a) I am exempt from
backup withholding, (b) I have not been notified by the IRS that I am subject to
backup withholding as a result of a failure to report all interest or
dividends, or (c) the IRS has notified me that I am no longer subject to
backup withholding.
CERTIFICATION INSTRUCTIONS -- You must cross out item (2) above if you have been
notified by the IRS that you are subject to backup withholding because of under
reporting interest or dividends on your tax return. However, if after being
notified by the IRS that you were subject to backup withholding you received
another notification from the IRS that you are no longer subject to backup
withholding, do not cross out item (2). (Also see instructions in the enclosed
Guidelines.)
Signature ____________ Date ____________ , 1999
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
<PAGE> 8
INSTRUCTIONS
FORMING PART OF THE TERMS AND
CONDITIONS OF THE EXCHANGE OFFER
1. Delivery of this Letter of Transmittal and Certificates. All physically
delivered Notes or confirmations of any book-entry transfer to the Exchange
Agent's account at a book-entry transfer facility of Notes tendered by
book-entry transfer, as well as a properly completed and duly executed copy of
this Letter of Transmittal or facsimile thereof, and any other documents
required by this Letter of Transmittal, must be received by the Exchange Agent
at the address set forth herein on or prior to the Expiration Date (as defined
in the Prospectus). The method of delivery of this Letter of Transmittal, the
Notes and any other required documents is at the election and risk of the
Holder, and except as otherwise provided below, the delivery will be deemed made
only when actually received by the Exchange Agent. If such delivery is by mail,
it is suggested that registered mail with return receipt requested, properly
insured, be used.
No alternative, conditional, irregular or contingent tenders will be
accepted. All tendering Holders, by execution of this Letter of Transmittal (or
facsimile thereof), shall waive any right to receive notice of the acceptance of
the Notes for exchange.
Delivery to an address other than as set forth herein, or instructions via
a facsimile number other than the ones set forth herein, will not constitute a
valid delivery.
2. Guaranteed Delivery Procedures. Holders who wish to tender their Notes,
but whose Notes are not immediately available and thus cannot deliver their
Notes, the Letter of Transmittal or any other required documents to the Exchange
Agent (or comply with the procedures for book-entry transfer) on or prior to the
Expiration Date, may effect a tender if:
(a) the tender is made through a member firm of a registered national
securities exchange or of the National Association of Securities Dealers,
Inc., a commercial bank or trust company having an office or correspondent
in the United States or an "eligible guarantor institution" within the
meaning of Rule 17Ad-15 under the Exchange Act (an "Eligible Institution");
(b) prior to the Expiration Date, the Exchange Agent receives from
such Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
setting forth the name and address of the Holder, the registration
number(s) of such Notes and the principal amount of Notes tendered, stating
that the tender is being made thereby and guaranteeing that, within three
New York Stock Exchange trading days after the Expiration Date, the Letter
of Transmittal (or facsimile thereof), together with the Notes (or a
confirmation of book-entry transfer of such Notes into the Exchange Agent's
account at the Depository) and any other documents required by the Letter
of Transmittal, will be deposited by the Eligible Institution with the
Exchange Agent; and
(c) such properly completed and executed Letter of Transmittal (or
facsimile thereof), as well as all tendered Notes in proper form for
transfer (or a confirmation of book-entry transfer of such Notes into the
Exchange Agent's account at the Depository) and all other documents
required by the Letter of Transmittal, are received by the Exchange Agent
within three New York Stock Exchange trading days after the Expiration
Date.
Any Holder who wishes to tender Notes pursuant to the guaranteed delivery
procedures described above must ensure that the Exchange Agent receives the
Notice of Guaranteed Delivery relating to such Notes prior to the Expiration
Date. Failure to complete the guaranteed delivery procedures outlined above will
not, of itself, affect the validity or effect a revocation of any Letter of
Transmittal form properly completed and executed by a Holder who attempted to
use the guaranteed delivery procedures.
3. Partial Tenders; Withdrawals. If less than the entire principal amount
of Notes evidenced by a submitted certificate is tendered, the tendering Holder
should fill in the principal amount tendered in the column entitled "Principal
Amount Tendered" of the box entitled "Description of Notes Tendered Hereby."
<PAGE> 9
A newly issued Note for the principal amount of Notes submitted but not tendered
will be sent to such Holder as soon as practicable after the Expiration Date.
All Notes delivered to the Exchange Agent will be deemed to have been tendered
in full unless otherwise indicated.
Notes tendered pursuant to the Exchange Offer may be withdrawn at any time
prior to the Expiration Date, after which tenders of Notes are irrevocable. To
be effective, a written telegraphic or facsimile transmission notice of
withdrawal must be timely received by the Exchange Agent. Any such notice of
withdrawal must (i) specify the name of the person having deposited the Notes to
be withdrawn (the "Depositor"), (ii) identify the Notes to be withdrawn
(including the registration number(s) and principal amount of such Notes or, in
the case of Notes transferred by book-entry transfer, the name and number of the
account at the Depository to be credited), (iii) be signed by the Holder in the
same manner as the original signature on this Letter of Transmittal (including
any required Medallion Guarantees) or be accompanied by documents of transfer
sufficient to have the Trustee with respect to the Notes register the transfer
of such Notes into the name of the person withdrawing the tender and (iv)
specify the name in which any such Notes are to be registered, if different from
that of the Depositor. All questions as to the validity, form and eligibility
(including time of receipt) of such notices will be determined by the Company,
whose determination shall be final and binding on all parties. Any Notes so
withdrawn will be deemed not to have been validly tendered for purposes of the
Exchange Offer and no Exchange Notes will be issued with respect thereto unless
the Notes so withdrawn are validly retendered. Any Notes which have been
tendered but which are not accepted for exchange, will be returned to the Holder
thereof without cost to such Holder, or will be credited to an account
maintained with the Depository, as soon as practicable after withdrawal,
rejection of tender or termination of Exchange Offer.
4. Signature on this Letter of Transmittal; Written Instruments and
Endorsements; Medallion Guarantee. If this Letter of Transmittal is signed by
the registered Holder(s) of the Notes tendered hereby, the signature must
correspond with the name(s) as written on the face of the certificates without
alteration or enlargement or any change whatsoever. If this Letter of
Transmittal is signed by a participant in the Depository, the signature must
correspond with the name as it appears on the security position listing as the
owner of the Notes.
If any of the Notes tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If a number of Notes registered in different names is tendered, it will be
necessary to complete, sign and submit as many separate copies of this Letter of
Transmittal as there are different registrations of Notes.
Signatures on this Letter of Transmittal or on a notice of withdrawal, as
the case may be, must be Medallion Guaranteed by an Eligible Institution unless
the Notes tendered hereby are tendered (i) by a registered Holder who has not
completed the box entitled "Special Registration Instructions" or "Special
Delivery Instructions" on the Letter of Transmittal or (ii) for the account of
an Eligible Institution.
If this Letter of Transmittal is signed by the registered Holder or Holders
of Notes (which term, for the purposes described herein, shall include a
participant in the Depository whose name appears on a security listing as the
owner of the Notes) listed and tendered hereby, no endorsements of the tendered
Notes or separate written instruments of transfer or exchange are required. In
any other case, the registered Holder (or acting Holder) must either properly
endorse the Notes or transmit properly completed bond powers with this Letter of
Transmittal (in either case, executed exactly as the name(s) of the registered
Holder(s) appear(s) on the Notes, and, with respect to a participant in the
Depository whose name appears on a security position listing as the owner of
Notes, exactly as the name of the participant appears on such security position
listing), with the signature on the Notes or bond power guaranteed by an
Eligible Institution (except where the Notes are tendered for the account of an
Eligible Institution).
If this Letter of Transmittal, any certificates or separate written
instruments of transfer or exchange are signed by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or others
acting in a fiduciary or representative capacity, such persons should so
indicate when signing, and, unless
<PAGE> 10
waived by the Company, proper evidence satisfactory to the Company of their
authority to so act must be submitted.
5. Special Registration and Delivery Instructions. Tendering Holders should
indicate, in the applicable box, the name and address (or account at the
Depository) in which the Exchange Notes or substitute Notes for principal
amounts not tendered or not accepted for exchange are to be issued (or
deposited), if different from the names and addresses or accounts of the person
signing this Letter of Transmittal. In the case of issuance in a different name,
the employer identification number or social security number of the person named
must also be indicated and the tendering Holder should complete the applicable
box.
If no instructions are given, the Exchange Notes (and any Notes not
tendered or not accepted) will be issued in the name of and sent to the acting
Holder of the Notes or deposited at such Holder's account at the Depository.
6. Transfer Taxes. The Company shall pay all transfer taxes, if any,
applicable to the transfer and exchange of Notes to it or its order pursuant to
the Exchange Offer. If a transfer tax is imposed for any other reason other than
the transfer and exchange of Notes to the Company or its order pursuant to the
Exchange Offer, the amount of any such transfer taxes (whether imposed on the
registered Holder or any other person) will be payable by the tendering Holder.
If satisfactory evidence of payment of such taxes or exception therefrom is not
submitted herewith, the amount of such transfer taxes will be collected from the
tendering Holder by the Exchange Agent.
Except as provided in this Instruction 6, it will not be necessary for
transfer stamps to be affixed to the Notes listed in this Letter of Transmittal.
7. Waiver of Conditions. The Company reserves the right, in its reasonable
judgment, to waive, in whole or in part, any of the conditions to the Exchange
Offer set forth in the Prospectus.
8. Mutilated, Lost, Stolen or Destroyed Notes. Any Holder whose Notes have
been mutilated, lost, stolen or destroyed should contact the Exchange Agent at
the address indicated above for further instructions.
9. Requests for Assistance or Additional Copies. Questions relating to the
procedure for tendering as well as requests for additional copies of the
Prospectus and this Letter of Transmittal, may be directed to the Exchange Agent
at the address and telephone number set forth above. In addition, all questions
relating to the Exchange Offer, as well as requests for assistance or additional
copies of the Prospectus and this Letter of Transmittal, may be directed to
Waste Management, Inc., 1001 Fannin Street, Suite 4000, Houston, Texas 77002,
Attention: Secretary, telephone (713) 512-6200.
10. Validity and Form. All questions as to the validity, form, eligibility
(including time of receipt), acceptance of tendered Notes and withdrawal of
tendered Notes will be determined by the Company in its sole discretion, which
determination will be final and binding. The Company reserves the absolute right
to reject any and all Notes not properly tendered or any Notes the Company's
acceptance of which would, in the opinion of counsel for the Company, be
unlawful. The Company also reserves the right, in its reasonable judgment, to
waive any defects, irregularities or conditions of tender as to particular
Notes. The Company's interpretation of the terms and conditions of the Exchange
Offer (including the instructions in this Letter of Transmittal) will be final
and binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of Notes must be cured within such time as the Company
shall determine. Although the Company intends to notify Holders of defects or
irregularities with respect to tenders of Notes, neither the Company, the
Exchange Agent nor any other person shall incur any liability for failure to
give such notification. Tenders of Notes will not be deemed to have been made
until such defects or irregularities have been cured or waived. Any Notes
received by the Exchange Agent that are not properly tendered and as to which
the defects or irregularities have not been cured or waived will be returned by
the Exchange Agent to the tendering Holder as soon as practicable following the
Expiration Date.
<PAGE> 11
IMPORTANT TAX INFORMATION
Under federal income tax law, a Holder tendering Notes is required to
provide the Exchange Agent with such Holder's correct TIN on Substitute Form W-9
above. If such Holder is an individual, the TIN is the Holder's social security
number. The Certificate of Awaiting Taxpayer Identification Number should be
completed if the tendering Holder has not been issued a TIN and has applied for
a number or intends to apply for a number in the near future. If the Exchange
Agent is not provided with the correct TIN, the Holder may be subject to a $50
penalty imposed by the Internal Revenue Service. In addition, payments that are
made to such Holder with respect to tendered Notes may be subject to backup
withholding of 31%.
Certain Holders (including, among others, all domestic corporations and
certain foreign individuals and foreign entities) are not subject to these
backup withholding and reporting requirements. In order for a foreign individual
to qualify as an exempt recipient, such individual must submit a statement,
signed under penalties of perjury, attesting to such individual's exempt status.
Forms of such statements can be obtained from the Depositary. See the enclosed
Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9 for additional instructions.
If backup withholding applies, the Exchange Agent is required to withhold
31% of any amounts otherwise payable to the Holder. Backup withholding is not an
additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained from the Internal
Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a Holder with
respect to Notes tendered for exchange, the Holder is required to notify the
Exchange Agent of his or her correct TIN by completing the form herein
certifying that the TIN provided on Substitute Form W-9 is correct (or that such
Holder is awaiting a TIN) and that (i) each Holder is exempt, (ii) such Holder
has not been notified by the Internal Revenue Service that he or she is subject
to backup withholding as a result of failure to report all interest or dividends
or (iii) the Internal Revenue Service has notified such Holder that he or she is
no longer subject to backup withholding.
WHAT NUMBER TO GIVE THE EXCHANGE AGENT
Each Holder is required to give the Exchange Agent the social security
number or employer identification number of the record Holder(s) of the Notes.
If Notes are in more than one name or are not in the name of the actual Holder,
consult the enclosed Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9 for additional guidance on which number to report.
If the tendering Holder has not been issued a TIN and has applied for a number
or intends to apply for a number in the near future, the stockholder should
write "Applied For" in the space provided for in the TIN in Part I, and sign and
date the Substitute Form W-9. If "Applied For" is written in Part I and the
Depositary is not provided with a TIN within 60 days, the Depositary will
withhold 31% of all payments of the purchase price to such stockholder until a
TIN is provided to the Depositary.
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A FACSIMILE THEREOF (TOGETHER WITH
NOTES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS)
OR A NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE EXCHANGE AGENT ON OR
PRIOR TO THE EXPIRATION DATE.
<PAGE> 1
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF
6.000% SENIOR NOTES DUE 2001
6.500% SENIOR NOTES DUE 2004
6.875% SENIOR NOTES DUE 2009
7.375% SENIOR NOTES DUE 2029
(INCLUDING THOSE IN BOOK-ENTRY FORM)
OF
WASTE MANAGEMENT, INC.
This form or one substantially equivalent hereto must be used to accept the
Exchange Offer of Waste Management, Inc. (the "Company") made pursuant to the
Prospectus, dated , 1999 (the "Prospectus"), if certificates
for the outstanding 6.000% Senior Notes due 2001; 6.500% Senior Notes due 2004;
6.875% Senior Notes due 2009; 7.375% Senior Notes due 2029 issued by Waste
Management, Inc. (the "Notes") are not immediately available or if the procedure
for book-entry transfer cannot be completed on a timely basis or time will not
permit all required documents to reach the Exchange Agent prior to 5:00 p.m.,
New York time, on the Expiration Date of the Exchange Offer. Such form may be
delivered or transmitted by telegram, telex, facsimile transmission, mail or
hand delivery to Chase Bank of Texas, National Association (the "Exchange
Agent") as set forth below. In addition, in order to utilize the guaranteed
delivery procedure to tender Notes pursuant to the Exchange Offer, a completed,
signed and dated Letter of Transmittal (or facsimile thereof) as well as all
tendered Notes in proper form for transfer (or a confirmation of book-entry
transfer of such Notes into the Exchange Agent's account at the Depository Trust
Company) and all other documents required by the Letter of Transmittal must also
be received by the Exchange Agent within three New York Stock Exchange trading
days after the Expiration Date. Capitalized terms not defined herein are defined
in the Prospectus.
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, EXCHANGE AGENT
By Mail, (Certified, Registered, Overnight or First Class) or Hand Delivery:
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
600 TRAVIS STREET
HOUSTON, TEXAS 77002
TELEPHONE NUMBER
(713) 216-7000
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
<PAGE> 2
LADIES AND GENTLEMEN:
Upon the terms and conditions set forth in the Prospectus and the
accompanying Letter of Transmittal, the undersigned hereby tenders to the
Company the principal amount of Notes set forth below, pursuant to the
guaranteed delivery procedure described in "The Exchange Offer -- Guaranteed
Delivery Procedures" section of the Prospectus.
Principal Amount of Notes Tendered: (1) $
- -------------------------------------------
(1) Must be in denominations of principal amount of $1,000 and any integral
multiple thereof
Certificate Nos. (if available):
- --------------------------------------------------------------------------
Total Principal Amount Represented by Certificate(s): $
- ----------------------------------------------
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned and every obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned.
PLEASE SIGN HERE
<TABLE>
<S> <C>
x ---------------------------------------------- ------------------------------------------------
- ------------------------------------------------ ------------------------------------------------
Signature(s) of Owner(s) or Authorized Signatory Date
</TABLE>
Area Code and Telephone Number:
- ------------------------------------------
Must be signed by the holder(s) of Notes as their name(s) appear(s) on
certificates for Notes or on a security position listing, or by person(s)
authorized to become registered holder(s) by endorsement and documents
transmitted with this Notice of Guaranteed Delivery. If signature is by a
trustee, executor, administrator, guardian, attorney-in-fact, officer or other
person acting in a fiduciary or representative capacity, such person must set
forth his or her full title below. If Notes will be delivered by book-entry
transfer to The Depository Trust Company, provide account number.
Please print name(s) and address(es)
Name(s): -------------------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
Capacity: -------------------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
Address(es): -------------------------------------------------------------
-------------------------------------------------------------
Account Number: -------------------------------------------------------------
<PAGE> 3
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a financial institution (including most banks, savings and
loan associations and brokerage houses) that is a participant in the Securities
Transfer Agents Medallion Program, the New York Stock Exchange Medallion
Signature Program or the Stock Exchanges Medallion Program, hereby guarantees
that the undersigned will deliver to the Exchange Agent the certificates
representing the Notes being tendered hereby or confirmation of book-entry
transfer of such Notes into the Exchange Agent's account at The Depository Trust
Company, in proper form for transfer, together with any other documents required
by the Letter of Transmittal within three New York Stock Exchange trading days
after the Expiration Date.
<TABLE>
<S> <C>
Name of Firm ------------------------------------- Authorized Signature ------------------------------
Address ------------------------------------------ Name ----------------------------------------------
- -------------------------------------------------- (Please Type or Print)
Area Code and Title ---------------------------------------------
Telephone No. ------------------------------------ Date ----------------------------------------------
</TABLE>
NOTE: DO NOT SEND CERTIFICATES OF NOTES WITH THIS FORM. CERTIFICATES OF NOTES
SHOULD BE SENT ONLY WITH A COPY OF THE PREVIOUSLY EXECUTED LETTER OF
TRANSMITTAL.
