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PROSPECTUS
Filed pursuant to rule 424b2
{LOGO} File no. 33-51879
BROWNING-FERRIS INDUSTRIES,INC.
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
WARRANTS
Browning-Ferris Industries, Inc. (the "Company") may offer from time to
time, either jointly or separately, at prices and on terms to be determined at
or prior to the time of sale, up to an aggregate initial offering price of not
more than $700 million (or, if applicable, the equivalent thereof in other
currencies) of its (i) unsecured debt securities ("Debt Securities") consisting
of debentures, notes and/or other unsecured evidences of indebtedness in one or
more series, (ii) shares of preferred stock, without par value ("Preferred
Stock"), in one or more series, (iii) shares of common stock, par value $.16 2/3
per share ("Common Stock") or (iv) Warrants ("Warrants") to purchase Debt
Securities, Preferred Stock or Common Stock (the Debt Securities, Preferred
Stock, Common Stock and Warrants are collectively referred to as "Securities").
Specific terms of the Securities ("Offered Securities") in respect of which
this Prospectus is being delivered will be set forth in an accompanying
Prospectus Supplement ("Prospectus Supplement"), together with the terms of the
offering of the Offered Securities and the initial price and the net proceeds to
BFI from the sale thereof. The Prospectus Supplement will set forth with regard
to the particular Offered Securities, without limitation, the following: (i) in
the case of Debt Securities, the specific designation, aggregate principal
amount, ranking as senior debt or subordinated debt, authorized denomination,
maturity, rate or rates or method of calculation of interest and dates for
payment thereof, any exchangeability, conversion, redemption, prepayment or
sinking fund provisions, the currency or currencies or currency unit or currency
units in which principal, premium, if any, or interest, if any, is payable, (ii)
in the case of Preferred Stock, the designation, number of shares, liquidation
preference per share, initial public offering price, dividend rate (or method of
calculation thereof), dates on which dividends shall be payable and dates from
which dividends shall accrue, any redemption or sinking fund provisions, any
voting rights, and any conversion or exchange rights, (iii) in the case of
Common Stock, the number of shares of Common Stock and the terms of the offering
and sale thereof, and (iv) in the case of Warrants, the number and terms
thereof, the designation and number of Securities issuable upon their exercise,
the exercise price, the terms of the offering and sale thereof and, where
applicable, the duration and detachability thereof.
The Company may sell the Securities directly, through agents designated
from time to time or through underwriters or dealers. If any agents of the
Company or any underwriters or dealers are involved in the sale of the
Securities, the names of such agents, underwriters or dealers and any applicable
commissions and discounts will be set forth in the Prospectus Supplement.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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This Prospectus may not be used to consummate sales of the Securities
unless accompanied by a Prospectus Supplement.
January 19, 1994
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS AND THE PROSPECTUS SUPPLEMENT IN CONNECTION WITH THE OFFERING MADE
HEREBY AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANY OTHER PERSON.
THIS PROSPECTUS AND THE PROSPECTUS SUPPLEMENT SHALL NOT CONSTITUTE AN OFFER TO
SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD
BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF OR THAT THE INFORMATION
CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THEIR
RESPECTIVE DATES.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
filed by the Company with the Commission may be inspected at 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the following Regional Offices of the
Commission: New York Regional Office, Seven World Trade Center, New York, New
York 10048; and Chicago Regional Office, Northwestern Atrium Center, 500 West
Madison Street, Chicago, Illinois 60661, and copies of such material can be
obtained from the Public Reference Section of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549 at prescribed rates. Such reports, proxy statements
and other information can also be inspected at the offices of the New York Stock
Exchange, Inc., 20 Broad Street, New York, New York 10005, at the offices of the
Chicago Stock Exchange, Incorporated, 120 S. LaSalle Street, Chicago, Illinois
60603, and at the offices of the Pacific Stock Exchange Incorporated, 301 Pine
Street, San Francisco, California 94104.
This Prospectus constitutes a part of a Registration Statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") filed by the Company with the Commission under the Securities Act of
1933, as amended (the "Securities Act"). This Prospectus omits certain of the
information contained in the Registration Statement, and reference is hereby
made to the Registration Statement for further information with respect to the
Company and the Securities offered hereby. Any statements contained herein
concerning the provisions of any document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission are not
necessarily complete, and in each instance reference is made to the copy of such
document so filed. Each such statement is qualified in its entirety by such
reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1993 (the "Annual Report"), including the financial statements and
schedules of the Company for the fiscal years covered by the Annual Report and
the report thereon by Arthur Andersen & Co. contained in the Annual Report,
filed with the Commission pursuant to the Exchange Act, is incorporated herein
by reference.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus, and prior to the termination of the offering of the Securities,
shall be deemed to be incorporated by reference in the Prospectus and to be a
part hereof from the date of filing of such documents. Any statement contained
herein or in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any
subsequently filed document which also is or is deemed to be incorporated by
reference herein or in the accompanying Prospectus Supplement modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
Copies of all documents incorporated by reference (other than exhibits to
such documents, unless such exhibits are specifically incorporated by reference
in such documents) will be provided without charge to each person, including any
beneficial owner, who receives a copy of this Prospectus on the written request
of such person addressed to the Corporate Secretary's Department,
Browning-Ferris Industries, Inc., P.O. Box 3151, Houston, Texas 77253, or upon
the oral request of such person directed to the Corporate Secretary's Department
at (713) 870-7893.
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THE COMPANY
The Company is one of the largest publicly-held companies engaged in
providing waste services. Subsidiaries and affiliates collect, transport, treat
and/or process, recycle and dispose of commercial, residential and municipal
solid waste and industrial wastes. The Company's subsidiaries are also involved
in resource recovery facilities, medical waste services, portable restroom
services and municipal and commercial sweeping operations. The Company's
subsidiaries or affiliates operate in approximately 430 operating locations in
North America and 115 operating locations outside of North America (including
approximately 17 operating locations of unconsolidated affiliates), and employ
approximately 31,600 persons (including approximately 3,200 employees of
unconsolidated affiliates). In addition to operations in the United States,
Canada and Puerto Rico, subsidiaries of the Company own interests in
subsidiaries or affiliates with operations in Australia, Finland, Hong Kong,
Italy, Kuwait, the Netherlands, New Zealand, Spain, the United Kingdom and
Venezuela.
The term "Company" refers to Browning-Ferris Industries, Inc., a Delaware
corporation, and its subsidiaries, affiliates and predecessors unless the
context requires otherwise. The Company's executive offices are located at 757
N. Eldridge, Houston, Texas 77079. The Company's mailing address is P.O. Box
3151, Houston, Texas 77253, and its telephone number is (713) 870-8100.
APPLICATION OF PROCEEDS
Unless otherwise indicated in a Prospectus Supplement with respect to the
proceeds from the sale of the particular Securities to which such Prospectus
Supplement relates, the net proceeds to be received by the Company from the sale
of the Securities will be added to the Company's general funds and are expected
to be applied to reduce certain outstanding debt and for general corporate
purposes, including capital expenditures and acquisitions.
DESCRIPTION OF DEBT SECURITIES
The following description of the Debt Securities sets forth certain general
terms and provisions of the Debt Securities to which any Prospectus Supplement
may relate ("Offered Debt Securities"). The particular terms of the Offered Debt
Securities and the extent to which such general provisions may apply will be
described in a Prospectus Supplement relating to such Offered Debt Securities.
The Debt Securities will be general unsecured obligations of the Company
and will constitute either senior debt securities or subordinated debt
securities. In the case of Debt Securities that will be senior debt securities
("Senior Debt Securities" and "Offered Senior Debt Securities"), the Debt
Securities will be issued under a Restated Indenture dated as of September 1,
1991, between the Company and Texas Commerce Bank, National Association, as
Trustee (successor trustee to First City, Texas - Houston, National Association,
which was formerly First City National Bank of Houston) (the "Senior Trustee"),
(the "Senior Indenture"). In the case of Debt Securities that will be
subordinated debt securities ("Subordinated Debt Securities" and "Offered
Subordinated Debt Securities"), the Debt Securities will be issued under an
Indenture dated as of August 1, 1987, as amended (the "Subordinated Indenture"),
between the Company and NationsBank of Texas, National Association, as Trustee
(successor trustee to First RepublicBank Houston, National Association, as
Trustee) (the "Subordinated Trustee"). The Senior Indenture and the Subordinated
Indenture are sometimes referred to herein individually as an "Indenture" and
collectively as the "Indentures". The Senior Trustee and the Subordinated
Trustee are sometimes referred to herein individually as a "Trustee" and
collectively as the "Trustees". The statements under this caption relating to
the Debt Securities and the Indentures are summaries only and do not purport to
be complete. Such summaries make use of terms defined in the Indentures.
Wherever such terms are used herein or particular provisions of the Indentures
are referred to, such terms or provisions, as the case may be, are incorporated
by reference as part of the statements made herein, and such statements are
qualified in their entirety by such reference. Certain defined terms in the
Indentures are capitalized herein. The references below apply to the section
numbers in each of the Indentures,
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unless otherwise indicated. Both the Senior Indenture and the Subordinated
Indenture, and the Securities issued thereunder, are governed by Texas law.
PROVISIONS APPLICABLE TO BOTH SENIOR AND SUBORDINATED DEBT SECURITIES
General. The Indentures do not limit the aggregate principal amount of the
Debt Securities issuable thereunder or of any particular series of the Debt
Securities and provide that Debt Securities may be issued thereunder from time
to time in one or more series with the same or various maturities at par, at a
premium or at a discount. Offered Debt Securities bearing no interest or
interest at a rate which at the time of issuance is below market rate ("Original
Issue Discount Securities") will be sold at a discount (which may be
substantial) from their stated principal amount. Federal income tax consequences
and other special considerations applicable to any such Original Issue Discount
Securities will be described in the Prospectus Supplement relating thereto.
Reference is made to the Prospectus Supplement for the following terms of
the Offered Debt Securities: (i) the title and the limit on the aggregate
principal amount of Offered Debt Securities; (ii) the percentage of their
principal amount at which the Offered Debt Securities will be sold; (iii) the
date or dates on which the principal of (and premium, if any, on) the Offered
Debt Securities will be payable; (iv) the rate or rates (which may be fixed or
variable) per annum, if any, at which the Offered Debt Securities will bear
interest or the method of determining such rate or rates; (v) the date or dates
from which such interest, if any, shall accrue the date or dates on which such
interest, if any, will be payable and the regular record date for interest
payable on any payment date; (vi) the place or places where the principal of
(and premium, if any) and interest, if any, on the Offered Debt Securities will
be payable; (vii) the terms for redemption or early payment, if any, including
any mandatory or optional sinking fund or analogous provision; (viii) the
principal amount of any Offered Debt Securities that are Original Issue Discount
Securities, which would be payable upon declaration of acceleration of the
maturity of the Offered Debt Securities; (ix) any modifications of the Events of
Default or covenants of the Company contained in the Indenture pertaining to the
Offered Debt Securities; (x) information with respect to book-entry procedures,
if any; (xi) as to Subordinated Debt Securities only, whether the offered
Subordinated Debt Securities are convertible into Common Stock of the Company
and, if so, the initial conversion price; and (xii) any other terms of the
Offered Debt Securities not inconsistent with the Indenture under which they are
issued. (Section 301)
Unless otherwise indicated in the Prospectus Supplement relating thereto,
principal of and any premium and interest on the Offered Debt Securities will be
payable, and the Offered Debt Securities will be exchangeable and transfer
thereof will be registrable, at the corporate trust office of the Trustee or at
the office of each paying agent, if any, identified in the Prospectus Supplement
with respect to the Offered Debt Securities; provided that, at the option of the
Company, payment of any interest may be made by check mailed to the address of
the Person entitled thereto as it appears in the Security Register. The
Corporate Trust Office of the Senior Trustee is located at 712 Main Street,
Houston, Texas 77002, and the Corporate Trust Office of the Subordinated Trustee
is located at 700 Louisiana Street, Houston, Texas 77002. (Sections 301, 305 and
1002)
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the Offered Debt Securities will be issued in only fully registered form without
coupons in denominations of $1,000 or any integral multiple thereof, and no
service charge will be made for any transfer or exchange of such Offered Debt
Securities, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith. (Sections 302
and 305)
Global Securities. The Offered Debt Securities of a series may be issued in
whole or in part in the form of one or more global securities ("Global
Securities") that will be issued to and registered in the name of the depositary
(the "Depositary") identified in the Prospectus Supplement, or its nominee,
relating to such series. Global Securities may be issued only in
fully-registered form and in either temporary or permanent form. Unless and
until a Global Security is exchanged in whole or in part for the individual Debt
Securities represented thereby, such Global Security may not be transferred
except as a
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whole by the Depositary to its nominee or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by such Depositary or
any such nominee to a successor Depositary or nominee of such successor
Depositary. (Section 305)
The specific terms of the depositary arrangement with respect to a series
of Offered Debt Securities will be described in the Prospectus Supplement
relating to such series. The Company anticipates that the following provisions
will generally apply to depositary arrangements.
Upon the issuance of a Global Security, the Depositary or its nominee will
credit, on its book-entry registration and transfer system, the respective
principal amounts of the individual Debt Securities represented by such Global
Security to the accounts of persons that have accounts with the Depositary. Such
accounts shall be designated by the dealers, underwriters or agents with respect
to such Debt Securities or by the Company if such Debt Securities are offered
and sold directly by the Company. Ownership of beneficial interests in a Global
Security will be limited to persons that have accounts with the Depositary
("Participants") or persons that may hold interests through Participants.
Ownership of beneficial interests in such Global Security will be shown on, and
the transfer of that ownership will be effected only through, records maintained
by the Depositary or its nominee (with respect to interests of Participants) and
the records of Participants (with respect to interests of persons other than
Participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a Global Security.
So long as the Depositary or its nominee is the registered owner of a
Global Security, such registered owner will be considered the sole owner or
holder of the Debt Securities represented by such Global Security for all
purposes under the Indenture. Except as provided below, owners of beneficial
interests in a Global Security will not be entitled to have any of the
individual Debt Securities represented by such Global Security registered in
their names, will not receive or be entitled to receive physical delivery of any
such Debt Securities in definitive form and will not be considered the owners or
holders thereof under the Indenture.
Payments of principal of and premium, if any, and interest, if any, on Debt
Securities represented by a Global Security registered in the name of the
Depositary or its nominee will be made to the Depositary or its nominee, as the
case may be, as the registered owner of the Global Security representing such
Debt Securities. None of the Company, the Trustee, any Paying Agent or the
Security Registrar for such Debt Securities will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests of the Global Security for such Debt
Securities or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
The Company expects the Depositary or its nominee, immediately upon receipt
of any payment of principal, premium or interest in respect of a Global
Security, will credit Participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of such Global Security as shown on the records of the Depositary or its
nominee. The Company also expects that payments by Participants to owners of
beneficial interests in such Global Security held through such Participants will
be governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or registered
in "street name". Such payments will be the sole responsibility of such
Participants. The Company has no control over the practices of the Depositary or
the Participants and there can be no assurance that these practices will not be
changed. If the Depositary for a series of Debt Securities is at any time
unwilling, unable or ineligible to continue as depositary and a successor
depositary is not appointed by the Company within 90 days, the Company will
issue individual Debt Securities of such series in exchange for the Global
Security representing such series of Debt Securities. In addition, the Company
may at any time and in its sole discretion, subject to any limitations described
in the Prospectus Supplement relating to such Debt Securities, determine not to
have any Debt Securities of a series represented by one or more Global
Securities and, in such event, will issue individual Debt Securities of such
series in exchange for the Global Security representing such series of Debt
Securities. Further, if there shall have occurred and be
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continuing an Event of Default, or an event which, with the giving of notice or
lapse of time, or both, would constitute an Event of Default with respect to any
series of Debt Securities represented by a Global Security, such Global Security
shall be exchangeable for individual Debt Securities of such series. In any such
instance, an owner of a beneficial interest in a Global Security will be
entitled to a physical delivery of individual Debt Securities of the series
represented by such Global Security equal in principal amount to such beneficial
interest and to have such Debt Securities registered in its name. Individual
Debt Securities of such series so issued will be issued in denominations, unless
otherwise specified by the Company, of $1,000 and integral multiples thereof.
Consolidation, Merger and Sale of Assets. Each Indenture provides that the
Company, without the consent of the holders of any of the outstanding Debt
Securities, may consolidate with or merge into any other corporation or transfer
or lease its assets substantially as an entirety to any Person or may acquire or
lease the assets of any Person substantially as an entirety or may permit any
corporation to merge into the Company provided that (i) the successor is a
corporation organized under the laws of any domestic jurisdiction; (ii) the
successor corporation, if other than the Company, assumes the Company's
obligations under the Indenture and the Debt Securities issued thereunder; (iii)
after giving effect to the 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 occurred and be continuing; and (iv) certain other conditions are met.
(Section 801)
Modification of the Indentures. Each Indenture provides that the Company
and the Trustee may, without the consent of any holders of Debt Securities,
enter into supplemental indentures for the purposes, among other things, of
adding to the Company's covenants, adding additional Events of Default,
establishing the form or terms of Debt Securities, curing ambiguities or
inconsistencies in the Indenture or making any other provisions with respect to
matters arising under the Indenture if such action shall not adversely affect
the interests of the holders of any series of Debt Securities in any material
respect or to change or eliminate any of the provisions of the Indenture with
respect to a series of Debt Securities if such series is not then outstanding.
(Section 901) Each Indenture also contains provisions permitting the Company,
with the consent of the holders of not less than a majority in principal amount
of the outstanding Debt Securities of the affected series, to execute
supplemental indentures adding any provisions to or changing or eliminating any
of the provisions of the Indenture or modifying the rights of the holders of the
Debt Securities of such series, except that no such supplemental indenture may,
without the consent of the holders of all of the outstanding Debt Securities
affected thereby, among other things: (i) change the maturity of the principal
of or any installment of principal or interest on any of the Debt Securities;
(ii) reduce the principal amount thereof or the rate of interest, if any,
thereon or any premium payable on the redemption thereof; (iii) reduce the
amount of the principal of Original Issue Discount Securities payable on any
date; (iv) change the place of payment where, or the coin or currency in which,
any of the Debt Securities or any premium or interest thereon is payable; (v)
impair the right to institute suit for the enforcement of any such payment on or
after the applicable maturity date; (vi) reduce the percentage in principal
amount of the Debt Securities of any outstanding series the consent of the
holders of which is required for any such supplemental indenture or for any
waiver of compliance with certain provisions of, or of certain defaults under,
the Indenture; (vii) as to the Subordinated Indenture only, adversely affect the
right to convert the Subordinated Debt Securities (if convertible) or modify the
subordination provisions of the Subordinated Indenture in a manner adverse to
the holders of Subordinated Debt Securities; or (viii) with certain exceptions,
modify the foregoing requirements. (Section 902)
Events of Default, Notice and Waiver. Unless otherwise indicated in the
Prospectus Supplement relating to a particular series of Debt Securities, an
Event of Default in respect to any series of Debt Securities is defined in each
Indenture to be a (i) default for 30 days in the payment of any installment of
interest upon any of the Debt Securities of such series when due; (ii) default
in the payment of principal of (or premium, if any, on) any of the Debt
Securities of such series when due; (iii) default in the making or satisfaction
of any sinking fund payment when the same becomes due by the terms of the Debt
Securities of such series; (iv) default by the Company in the performance, or
breach, of any of its other
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covenants in the Indenture which shall not have been remedied for a period of 60
days after notice by the Trustee or the holders of at least 25% in principal
amount of the Debt Securities of such series; (v) certain events of bankruptcy,
insolvency or reorganization of the Company; and (vi) such other events as may
be specified for each series. (Section 501)
A default under other indebtedness of the Company or any of its
subsidiaries will not be a default under either Indenture, and an Event of
Default under one series of Debt Securities will not necessarily be an Event of
Default under another series of Debt Securities issued under the same Indenture.
Each Indenture provides that if an Event of Default specified therein with
respect to any outstanding series of Debt Securities issued thereunder shall
have occurred and be continuing, either the Trustee or the holders of not less
than 25% in principal amount of the Debt Securities of such series may declare
the principal (or, if the Debt Securities of such series are Original Issue
Discount Securities, such portion of the principal amount as may be specified by
the terms of such series) of all of the Debt Securities of such series to be
immediately due and payable. Such declaration may be rescinded if certain
conditions are satisfied. (Section 502)
Each Indenture also provides that the holders of not less than a majority
in principal amount of the Debt Securities of any outstanding series may 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 Debt Securities of such series, provided that the Trustee may
take any other proper action not inconsistent with such direction and may
decline to act if such direction is contrary to law or to the Indenture or would
involve the Trustee in personal liability. (Section 512)
In addition, each Indenture also provides that the holders of not less than
a majority in principal amount of the Debt Securities of any outstanding series
thereunder may on behalf of the holders of all of the Debt Securities of such
series waive any past default with respect to such series and its consequences,
except a default (i) in the payment of the principal of (or premium, if any) or
interest on any of the Debt Securities of such series or (ii) in respect of a
covenant or provision of the Indenture which, under the terms thereof, cannot be
modified or amended without the consent of the holders of all of the Debt
Securities of such series. (Section 513)
Each Indenture contains provisions entitling the Trustee, subject to the
duty of the Trustee during an Event of Default in respect of any series of Debt
Securities issued thereunder to act with the required standard of care, to be
indemnified by the holders of the Debt Securities of such series before
proceeding to exercise any right or power under the Indenture at the request of
the holders of the Debt Securities of such series. (Sections 601 and 603)
Each Indenture also provides that the Trustee will, within 90 days after
the occurrence of a default in respect of any series of Debt Securities issued
thereunder give to the holders of the Debt Securities of such series notice of
all uncured and unwaived defaults known to it; provided, however, that, except
in the case of a default in the payment of the principal of (or premium, if
any), or interest on, or any sinking fund installment with respect to, any Debt
Securities of such series, the Trustee will be protected in withholding such
notice if it in good faith determines that the withholding of such notice is in
the interest of the holders of the Debt Securities of such series; and provided
further, that such notice shall not be given until at least 30 days after the
occurrence of an Event of Default regarding the performance or breach of any
covenant or warranty of the Company under the Indenture other than for the
payment of the principal of (or premium, if any) or interest on, or any sinking
fund installment with respect to, any of the Debt Securities of such series. The
term default for the foregoing purpose only means any event which is, or after
notice or lapse of time, or both, would become, an Event of Default with respect
to the Debt Securities of such series. (Section 602)
Each Indenture requires the Company to file annually with the Trustee a
certificate, executed by an officer of the Company, indicating whether the
Company has fulfilled all of its obligations or is in default under certain
covenants under the Indenture. (Section 1004)
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PROVISIONS APPLICABLE TO SENIOR DEBT SECURITIES
General. The Senior Debt Securities will be unsecured obligations of the
Company issued under the Senior Indenture and will rank on a parity with all
other unsecured and unsubordinated indebtedness of the Company.
Limitations on Liens. The Senior Indenture does not contain any covenant
restricting the amount of indebtedness which may be incurred by the Company or
any of its Subsidiaries. The Senior Indenture, however, provides, in general,
that except as provided in this and in the following paragraph, the Company will
not, and will not permit any Restricted Subsidiary to, issue, assume or
guarantee any Debt secured by a Lien upon any Principal Property of the Company
or any Restricted Subsidiary or upon any shares of stock or Debt of any
Restricted Subsidiary (whether such Principal Property, shares of stock or Debt
are now owned or hereafter acquired) without in any such case effectively
providing concurrently with the issuance, assumption or guaranty of any such
Debt that the Senior Debt Securities (together with, if the Company shall so
determine, any other indebtedness of or guaranty by the Company or such
Restricted Subsidiary then existing or thereafter created which is not
subordinate to the Senior Debt Securities) shall be secured equally and ratably
with (or, at the option of the Company, prior to) such Debt, so long as such
Debt shall be so secured; provided, however, that the foregoing restrictions
shall not apply to Debt secured by: (1) Liens on property, shares of stock or
indebtedness of any corporation existing at the time such corporation becomes a
Restricted Subsidiary; (2) Liens on any property (including shares of stock or
Debt) existing at the time of acquisition thereof or securing the payment of all
or any part of the purchase price or construction cost thereof or securing any
Debt incurred prior to, at the time of or within 180 days after, the acquisition
of such property or the completion of any such construction for the purpose of
financing all or any part of the purchase price or construction cost thereof;
(3) Liens on any property to secure all or any part of the cost of development,
operation, construction, alteration, repair or improvement of all or any part of
such property, or to secure Debt incurred prior to, at the time of or within 180
days after, the completion of such development, operation, construction,
alteration, repair or improvement for the purpose of financing all or any part
of such cost; (4) Liens which secure Debt owing by a Restricted Subsidiary to
the Company or to another Restricted Subsidiary or by the Company to a
Restricted Subsidiary; (5) Liens securing indebtedness of a corporation which
becomes a successor of the Company by reason of a consolidation, merger or any
conveyance, transfer or lease of the properties and assets of the Company
substantially as an entirety; (6) Liens on property of the Company or a
Restricted Subsidiary in favor of governmental authorities to secure partial,
progress, advance or other payments or to secure any indebtedness incurred for
the purpose of financing all or any part of the purchase price or the cost of
construction of the property subject to such Liens, or in favor of any trustee
or mortgagee for the benefit of holders of indebtedness of any such entity
incurred for any such purpose; (7) Liens incurred in connection with pollution
control, sewage or solid waste disposal, industrial revenue or similar
financing; (8) Liens existing at January 15, 1985; and (9) any extension,
renewal or replacement (or successive extensions, renewals or replacements), in
whole or in part, of any Lien referred to in the foregoing clauses (1) to (8),
inclusive, or of any Debt secured thereby; provided that such extension, renewal
or replacement Lien shall be limited to all or any part of the same property
that secured the Lien extended, renewed or replaced (plus any improvements on
such property) and shall secure no larger amount of Debt than that existing at
the time of such extension, renewal or replacement. (Section 1005)
The Company and any one or more Restricted Subsidiaries may issue, assume
or guarantee Debt secured by a Lien which would otherwise be subject to the
foregoing restrictions if at the time it does so (the "Incurrence Time") such
Debt plus all other Debt of the Company and its Restricted Subsidiaries secured
by a Lien which would otherwise be subject to the foregoing restrictions (not
including Debt permitted to be secured as described in clauses (1) through (9)
in the preceding paragraph), plus the aggregate Attributable Debt (determined as
of the Incurrence Time) of Sale and Leaseback Transactions (other than Sale and
Leaseback Transactions described in clauses (a) and (b) of the first paragraph
under the caption "Limitation on Sale and Leaseback Transactions" herein)
entered into after January 15, 1985 and in existence at the Incurrence Time
(less the aggregate amount of proceeds of such
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Sale and Leaseback Transactions which shall have been applied as described in
clause (d) of the first paragraph under the caption "Limitation on Sale and
Leaseback Transactions" herein), does not exceed 10% of the Consolidated Net
Tangible Assets. (Section 1005)
Limitation on Sale and Leaseback Transactions. The Senior Indenture
provides, in general, that the Company will not itself, and will not permit any
Restricted Subsidiary to, enter into any arrangements with any bank, insurance
company or other lender or investor (other than the Company or another
Restricted Subsidiary) providing for the leasing as lessee by the Company or any
such Restricted Subsidiary of any Principal Property (except a lease for a
temporary period not to exceed three years by the end of which it is intended
the use of such Principal Property by the lessee will be discontinued), which
was or is owned by the Company or a Restricted Subsidiary and which has been or
is to be sold or transferred by the Company or a Restricted Subsidiary, more
than 180 days after the completion of construction and commencement of full
operation thereof by the Company or such Restricted Subsidiary, to such lender
or investor or to any person to whom funds have been or are to be advanced by
such lender or investor on the security of such Principal Property (herein
called a "Sale and Leaseback Transaction") unless: (a) the Company or such
Restricted Subsidiary would (at the time of entering into such arrangement) be
entitled, as described in clauses (1) through (9) of the first paragraph under
the caption "Limitations on Liens" herein, without equally and ratably securing
the Senior Debt Securities, to issue, assume or guarantee indebtedness secured
by a Lien on such Principal Property, or (b) such Sale and Leaseback Transaction
relates to a landfill or other waste disposal site (excluding any plant or
similar facility located thereon) owned by the Company or such Restricted
Subsidiary or which the Company or such Restricted Subsidiary has the right to
use, or (c) the Attributable Debt of the Company and its Restricted Subsidiaries
in respect of such Sale and Leaseback Transaction and all other Sale and
Leaseback Transactions entered into after January 15, 1985 (other than such Sale
and Leaseback Transactions as are referred to in clauses (a), (b) or (d) of this
paragraph), plus the aggregate principal amount of Debt secured by Liens on
Principal Properties then outstanding (excluding any such Debt secured by Liens
described in clauses (1) through (9) of the first paragraph under the caption
"Limitations on Liens" herein) which do not equally and ratably secure the
Senior Debt Securities, would not exceed 10% of Consolidated Net Tangible Assets
or (d) the Company, within 180 days after the sale or transfer, applies or
causes a Restricted Subsidiary to apply (subject to certain reductions described
in the Senior Indenture) an amount equal to the greater of the net proceeds of
such sale or transfer or fair market value of the Principal Property so sold and
leased back at the time of entering into such Sale and Leaseback Transaction to
the retirement of Senior Debt Securities or other indebtedness of the Company
(other than indebtedness subordinated to the Senior Debt Securities) or
indebtedness of a Restricted Subsidiary, for money borrowed, having a stated
maturity more than 12 months from the date of such application or which is
extendible at the option of the obligor thereon to a date more than 12 months
from the date of such application. (Section 1006)
Definitions. Certain terms used in the above described restrictions are
given the following definitions in Section 101 of the Senior Indenture:
"Attributable Debt" in respect of a Sale and Leaseback Transaction means,
as of any particular time, the present value (discounted at the rate of interest
implicit in the terms of the lease involved in such Sale and Leaseback
Transaction, as determined in good faith by the Company) of the obligation of
the lessee thereunder for net rental payments (excluding, however, any amounts
required to be paid by such lessee, whether or not designated as rent or
additional rent, on account of maintenance and repairs, services, insurance,
taxes, assessments, water rates and similar charges or any amounts required to
be paid by such lessee thereunder contingent upon monetary inflation or the
amount of sales, maintenance and repairs, insurance, taxes, assessments, water
rates or similar charges) during the remaining term of such lease (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended).
"Consolidated Net Tangible Assets" means the aggregate amount of assets
(less applicable reserves and other properly deductible items) after deducting
therefrom (a) all goodwill, trade names, trademarks, patents, unamortized debt
discount and expense and other like intangibles and (b) all
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current liabilities, all as reflected in the Company's latest audited
consolidated balance sheet contained in the Company's most recent annual report
to its stockholders prior to the time as of which "Consolidated Net Tangible
Assets" shall be determined.
"Debt" means indebtedness for borrowed money.
"Lien" means any mortgage, pledge, security interest, lien or other
encumbrance.
"Principal Property" means any waste processing, waste disposal or resource
recovery plant or similar facility located within the United States of America
(other than its territories and possessions and Puerto Rico) and owned by, or
leased to, the Company or any Restricted Subsidiary, except (a) any such plant
or facility (i) owned or leased jointly or in common with one or more persons
other than the Company and its Subsidiaries, in which the interest of the
Company and its 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 the Company and its Subsidiaries
as an entirety, or (b) any portion of any 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" means any Subsidiary substantially all the property
of which is located, or substantially all the business of which is carried on,
within the United States of America (excluding its territories and possessions
and Puerto Rico).
"Subsidiary" means any corporation of which the Company directly or
indirectly owns or controls stock which under ordinary circumstances (not
dependent upon the happening of a contingency) has voting power to elect a
majority of the board of directors of such corporation.
Defeasance. If so provided in the Prospectus Supplement accompanying the
Offered Senior Debt Securities, the Company may discharge its indebtedness and
its obligations under the Senior Indenture with respect to such series by
depositing funds or obligations issued or guaranteed by the United States of
America with the Senior Trustee. The Prospectus Supplement will more fully
describe the provisions, if any, relating to such discharge. (Section 403)
Regarding the Senior Trustee. The Senior Trustee is a lending bank under an
unsecured variable interest rate bank credit agreement with the Company. The
Company has and may from time to time in the future have other banking
relationships with the Senior Trustee in the ordinary course of business.
PROVISIONS APPLICABLE TO SUBORDINATED DEBT SECURITIES
General. The Subordinated Debt Securities will be unsecured obligations of
the Company to be issued under the Subordinated Indenture, and will be
subordinate in right of payment to certain other indebtedness of the Company as
described under "Subordination".
Subordination. The Subordinated Debt Securities will be subordinate and
junior in right of payment, as set forth in the Subordinated Indenture, to the
prior payment in full of all Senior Debt of the Company. "Senior Debt" is
defined in the Subordinated Indenture as the principal of (and premium, if any)
and interest on any indebtedness, whether outstanding at the date of the
Subordinated Indenture or thereafter created or incurred, which is for (a) money
borrowed by the Company, (b) obligations of the Company evidencing the purchase
price for acquisitions by the Company or a subsidiary other than in the ordinary
course of business, (c) money borrowed by others and assumed or guaranteed by
the Company, (d) capitalized lease obligations of the Company, (e) obligations
under performance guarantees, support agreements and other agreements in the
nature thereof relating to the obligations of any subsidiary of the Company with
respect to waste-to-energy facilities and (f) renewals, extensions, refundings,
amendments and modifications of any indebtedness, of the kind described in the
foregoing clauses (a), (b), (c), (d) and (e) or of the instruments creating or
evidencing such indebtedness, unless, in each case, by the terms of the
instrument creating or evidencing such indebtedness or such renewal, extension,
refunding, amendment and modification, it is provided that such indebtedness is
not senior in right of payment to the Subordinated Debt Securities. (Section
1311)
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In the event of any distribution of assets of the Company upon its
dissolution, winding up, liquidation or reorganization, the holders of Senior
Debt shall first be paid in full in respect of principal, premium (if any) and
interest before any such payments are made on account of the Subordinated Debt
Securities. In addition, in the event that (a) the Subordinated Debt Securities
or any other debt securities issued under the Subordinated Indenture are
declared due and payable because of an Event of Default (other than under the
circumstances described in the preceding sentence) or (b) any default by the
Company has occurred and is continuing in the payment of principal, premium (if
any), sinking funds or interest on any Senior Debt, then no payment shall be
made on account of principal, premium (if any), sinking funds or interest on the
Subordinated Debt Securities until all such payments due in respect of such
Senior Debt have been paid full. (Sections 1301 and 1304)
By reason of such subordination, creditors of the Company who are not
holders of Senior Debt may, subject to any subordination provisions that may be
applicable to such creditors, recover more ratably than holders of the
Subordinated Debt Securities.
As of September 30, 1993, the Company had outstanding approximately $430
million principal amount of indebtedness which would constitute "Senior Debt".
The Company also has unused lines of credit for up to a maximum of $1 billion at
January 11, 1994. The amount of Senior Debt may change in the future, and the
Subordinated Indenture contains no limitations on the incurrence of Senior Debt.
Conversion. The Subordinated Indenture provides that a series of
Subordinated Debt Securities may be convertible into Common Stock. The following
provisions will apply to convertible Subordinated Debt Securities unless
otherwise provided in the Prospectus Supplement for such series of Subordinated
Debt Securities.
The holder of any convertible Subordinated Debt Securities will have the
right, exercisable at any time prior to maturity, subject to prior redemption by
the Company, to convert any portion of such Subordinated Debt Securities that is
$1,000 in principal amount or any integral multiple thereof, into shares of
Common Stock at the conversion price or conversion rate set forth in the
Prospectus Supplement, subject to adjustment.
In certain events, the conversion price or conversion rate will be subject
to adjustment as set forth in the Subordinated Indenture. Such events include
the issuance of shares of Common Stock as a dividend or distribution on the
Common Stock; subdivisions, combinations and reclassifications of the Common
Stock; the fixing of a record date for the issuance to all holders of Common
Stock of rights or warrants entitling the holders thereof (for a period expiring
within 45 days of the record date) to subscribe for or purchase shares of Common
Stock at a price per share less than the then current market price per share of
Common Stock (as determined pursuant to the Subordinated Indenture); and the
fixing of a record date for the distribution to all holders of Common Stock of
evidences of indebtedness or assets (excluding cash dividends paid from surplus)
of the Company or subscription rights or warrants (other than those referred to
above). No adjustment of the conversion price or conversion rate will be
required unless an adjustment would require a cumulative increase or decrease of
at least 1% in such price or rate. (Section 1404)
Fractional shares of Common Stock will not be issued upon conversion, but,
in lieu thereof, the Company will pay a cash adjustment based on the then
current market price for the Common Stock. Upon conversion, no adjustments will
be made for accrued interest or dividends, and, accordingly, convertible
Subordinated Debt Securities surrendered for conversion between the record date
for an interest payment and the interest payment date (except convertible
Subordinated Debt Securities called for redemption on a redemption date during
such period) must be accompanied by payment of an amount equal to the interest
thereon which the registered holder is to receive. (Sections 1403 and 1405)
In the case of any reclassification or change in the outstanding shares of
Common Stock, any consolidation or merger of the Company (with certain
exceptions) or any conveyance, transfer or lease of the property and assets of
the Company substantially as an entirety, the holder of convertible Subordinated
Debt Securities, after the consolidation, merger, conveyance, transfer or lease,
will have the
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right to convert such convertible Subordinated Debt Securities into the kind and
amount of securities, cash and other property which the holder would have been
entitled to receive upon or in connection with such consolidation, merger,
conveyance, transfer or lease, if the holder had held the Common Stock issuable
upon conversion of such convertible Subordinated Debt Securities immediately
prior to such consolidation, merger, conveyance, transfer or lease. (Section
1406)
Regarding the Subordinated Trustee. The Subordinated Trustee is a lending
bank under an unsecured variable interest rate bank credit agreement with the
Company. The Company has and may from time to time in the future have other
banking relationships with the Subordinated Trustee in the ordinary course of
business.
CAPITAL STOCK
Pursuant to its Restated Certificate of Incorporation, the Company is
authorized to issue (i) 400,000,000 shares of Common Stock, $.16 2/3 par value
and (ii) 25,000,000 shares of Preferred Stock, without par value, of which
4,000,000 shares have been designated by the Board of Directors as Series A
Participating Preferred Stock which may be issued upon the exercise of Rights
(hereinafter defined) associated with the Common Stock as discussed below.
On June 1, 1988, the Board of Directors of the Company declared a dividend
distribution of one right (a "Right") on each share of Common Stock outstanding
at the close of business on June 13, 1988, and in connection therewith entered
into a Rights Agreement, dated as of June 1, 1988 (as amended, the "Rights
Agreement") with Texas Commerce Bank National Association (subsequently
succeeded by First Chicago Trust Company of New York) as Rights Agent. In
addition, the Board authorized the issuance of one Right with respect to each
share of Common Stock that becomes outstanding between June 13, 1988 and the
earliest of the dates on which separate Right certificates are distributed or
the Rights expire or are redeemed. The Rights distribution was not taxable to
stockholders.
When exercisable, each Right will entitle the registered holder to purchase
one one-hundredth of a share of Series A Participating Preferred Stock at an
exercise price of $110.00, subject to adjustment. The Rights will not be
exercisable prior to the expiration of the Company's right to redeem the Rights.
The Company is entitled to redeem the Rights at $.05 per Right (subject to
adjustment) up to and including the tenth business day (twentieth business day
if the Board of Directors so determines) after the acquisition by a person of
beneficial ownership of shares of the Company's stock having 10% or more of the
general voting power of the Company. The Rights will expire on June 13, 1998,
unless earlier redeemed.
In general, the Rights Agreement provides that if the Company is acquired
in a merger or other business combination transaction on or at any time after
the date on which a person obtains ownership of stock having 10% more of the
Company's general voting power ("Stock Acquisition Date"), provision must be
made prior to the consummation of such transaction to entitle each holder of a
Right (except as provided in the Plan) to purchase at the exercise price a
number of the acquiring company's common shares having a market value
(determined as provided in the Rights Agreement) at the time of such transaction
of two times the exercise price of the Right. The Rights Agreement also provides
that in the event of (i) the acquisition of the Company on or at any time after
the Stock Acquisition Date in a merger or other business combination transaction
in which the Company's Common Stock remains outstanding and unchanged, (ii)
certain self-dealing transactions by a 10% or greater stockholder, (iii) the
acquisition by a person of at least 15% of the general voting power of the
Company or (iv) an increase in the ownership interest of a 10% or greater
stockholder by more than 1% as a result of the occurrence of any of certain
events specified in the Rights Agreement, then, in each such case, each holder
of a Right (except as provided in the Rights Agreement) will have the right to
receive, upon payment of the exercise price, a number of shares of Series A
Participating Preferred Stock having a market value (determined as provided in
the Rights Agreement) at the time of such transaction of two times the exercise
price of a Right.
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Certain provisions in the Company's Restated Certificate of Incorporation
and By-laws may have the effect of delaying, deferring or preventing a change in
control of the Company. These provisions require that the Company's Board of
Directors be divided into three classes that are elected for staggered three-
year terms; provide that stockholders may act only at annual or special meetings
and may not act by written consent; provide that special meetings of
stockholders may be called only by the Board of Directors; authorize the
directors of the Company to determine the size of the Board of Directors;
require that stockholder nominations for directors be made to the Nominating
Committee of the Company prior to a meeting of stockholders; provide that
directors may be removed only for cause and only by a supermajority vote (80% of
shares outstanding) of the stockholders (a "Supermajority Vote"), including a
majority in interest of the holders ("Minority Holders") of voting stock held by
persons other than any person who, together with its affiliates and associates,
owns more than 10% of the voting stock; provide for certain minimum price and
procedural requirements in connection with certain business combinations, in the
absence of which the business combination would require approval by a
Supermajority Vote, including a majority in interest of the Minority Holders;
require a Supermajority Vote, including a majority in interest of the Minority
Holders, for the amendment of any of the foregoing provisions unless approved by
a majority of the Board of Directors in certain events; and authorize the Board
of Directors to establish one or more series of Preferred Stock, without any
further stockholder approval, having rights, preferences, privileges and
limitations that could impede or discourage the acquisition of control of the
Company.
Description of Common Stock. At December 31, 1993, 174,402,335 shares of
Common Stock were issued and outstanding and 34,300,722 shares were reserved for
issuance (i) pursuant to the Company's Dividend Reinvestment Plan and employee
benefit plans (including stock option plans), (ii) upon conversion of
debentures, and (iii) in connection with the acquisition of businesses and
properties in the normal course of business. Subject to the dividend preferences
of any outstanding shares of Preferred Stock, all shares of Common Stock are
entitled to participate in such dividends as may be declared by the Board of
Directors out of assets available for such payment. Holders of Common Stock are
entitled to one vote for each share held. All outstanding shares are, and shares
issuable hereunder will be, validly issued, fully paid and nonassessable.
Holders of Common Stock have no cumulative voting rights or preemptive rights.
In the event of a liquidation, dissolution or winding up of the Company, holders
of Common Stock are entitled to share ratably in the distribution of assets
remaining after payment of debts and expenses and of any preference due to
holders of any preferred stock of the Company then outstanding. As described
above, one Right will be issued in respect of each share of Common Stock issued
before the earliest of the dates on which separate Right certificates are
distributed or the Rights expire or are redeemed.
The Common Stock Transfer Agent and Registrar is First Chicago Trust
Company of New York, Stock Transfer Department, Post Office Box 3891, Church
Street Station, New York, New York 10008.
Description of Preferred Stock. Under the Company's Restated Certificate of
Incorporation, the Board of Directors may provide for the issuance of up to
25,000,000 shares of Preferred Stock in one or more series. The rights,
preferences, privileges and restrictions, including liquidation preferences, of
the Preferred Stock of each series will be fixed or designated by the Board of
Directors pursuant to a certificate of designation without any further vote or
action by the Company's stockholders. The issuance of Preferred Stock could have
the effect of delaying, deferring or preventing a change in control of the
Company. Upon issuance against full payment of the purchase price therefor,
shares of Preferred Stock offered hereby will be fully paid and nonassessable.
The specific terms of a particular series of Preferred Stock offered hereby
will be described in a Prospectus Supplement relating to such series and will
include the following:
(i) The maximum number of shares to constitute the series and the
distinctive designation thereof;
(ii) The annual dividend rate, if any, on shares of the series,
whether such rate is fixed or variable or both, the date or dates from
which dividends will begin to accrue or accumulate and whether dividends
will be cumulative;
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(iii) Whether the shares of the series will be redeemable and, if so,
the price at and the terms and conditions on which the shares of the series
may be redeemed, including the time during which shares of the series may
be redeemed and any accumulated dividends thereon that the holders of
shares of the series shall be entitled to receive upon the redemption
thereof;
(iv) The liquidation preference, if any, applicable to shares of the
series;
(v) Whether the shares of the series will be subject to operation of a
retirement or sinking fund and, if so, the extent and manner in which any
such fund shall be applied to the purchase or redemption of the shares of
the series for retirement or for other corporate purposes, and the terms
and provisions relating to the operation of such fund;
(vi) The terms and conditions, if any, on which the shares of the
series shall be convertible into, or exchangeable for, shares of any other
class or classes of capital stock of the Company or another corporation or
any series of any other class or classes, or of any other series of the
same class, including the price or prices or the rate or rates of
conversion or exchange and the method, if any, of adjusting the same;
(vii) The voting rights, if any, on the shares of the series; and
(viii) Any other preferences and relative, participating, optional or
other special rights or qualifications, limitations or restrictions
thereof.
DESCRIPTION OF WARRANTS
The Company may issue Warrants, including Warrants to purchase Debt
Securities ("Debt Warrants") and Warrants to purchase Common Stock or Preferred
Stock ("Stock Warrants"). Warrants may be issued independently of or together
with any other Securities and may be attached to or separate from such
Securities. Each series of Warrants will be issued under a separate Warrant
Agreement (each a "Warrant Agreement") to be entered into between the Company
and a Warrant Agent ("Warrant Agent"). The Warrant Agent will act solely as an
agent of the Company in connection with the Warrant of such series and will not
assume any obligation or relationship of agency for or with holders or
beneficial owners of Warrants. The following sets forth certain general terms
and provisions of the Warrants offered hereby. Further terms of the Warrants and
the applicable Warrant Agreement will be set forth in the applicable Prospectus
Supplement.
DEBT WARRANTS
The applicable Prospectus Supplement will describe the terms of any Debt
Warrants, including the following: (i) the title of such Debt Warrants; (ii) the
offering price for such Debt Warrants, if any; (iii) the aggregate number of
such Debt Warrants; (iv) the designation and terms of the Debt Securities
purchasable upon exercise of such Debt Warrants; (v) if applicable, the
designation and terms of the Securities with which such Debt Warrants are issued
and the number of such Debt Warrants issued with each such Security; (vi) if
applicable, the date from and after which such Debt Warrants and any Securities
issued therewith will be separately transferable; (vii) the principal amount of
Debt Securities purchasable upon exercise of a Debt Warrant and the price at
which such principal amount of Debt Securities may be purchased upon exercise;
(viii) the date on which the right to exercise such Debt Warrants shall commence
and the date on which such right shall expire; (ix) if applicable, the minimum
or maximum amount of such Debt Warrants that may be exercised at any one time;
(x) whether the Debt Warrants represented by the Debt Warrant certificates or
Debt Securities that may be issued upon exercise of the Debt Warrants will be
issued in registered or bearer form; (xi) information with respect to book-entry
procedures, if any; (xii) the currency, currencies or currency units in which
the offering price, if any, and the exercise price are payable; (xiii) if
applicable, a discussion of certain United States federal income tax
considerations; (xiv) the antidilution provisions of such Debt Warrants, if any;
(xv) the redemption or call provisions, if any, applicable to such Debt
Warrants; and (xvi) any additional terms of
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the Debt Warrants, including terms, procedures and limitations relating to the
exchange and exercise of such Debt Warrants.
STOCK WARRANTS
The applicable Prospectus Supplement will describe the terms of any Stock
Warrants, including the following: (i) the title of such Stock Warrants; (ii)
the offering price of such Stock Warrants, if any; (iii) the aggregate number of
such Stock Warrants; (iv) the designation and terms of the Common Stock or
Preferred Stock purchasable upon exercise of such Stock Warrants; (v) if
applicable, the designation and terms of the Securities with which such Stock
Warrants are issued and the number of such Stock Warrants issued with each such
Security; (vi) if applicable, the date from and after which such Stock Warrants
and any Securities issued therewith will be separately transferrable; (vii) the
number of shares of Common Stock or Preferred Stock purchasable upon exercise of
a Stock Warrant and the price at which such shares may be purchased upon
exercise; (viii) the date on which the right to exercise such Stock Warrants
shall commence and the date on which such right shall expire; (ix) if
applicable, the minimum or maximum amount of such Stock Warrants that may be
exercised at any one time; (x) the currency, currencies or currency units in
which the offering price, if any, and the exercise price are payable; (xi) if
applicable, a discussion of certain United States federal income tax
considerations; (xii) the antidilution provisions of such Stock Warrants, if
any; (xiii) the redemption or call provisions, if any, applicable to such Stock
Warrants; and (xiv) any additional terms of such Stock Warrants, including
terms, procedures and limitations relating to the exchange and exercise of such
Stock Warrants.
PLAN OF DISTRIBUTION
The Company may sell the Securities being offered hereby in and/or outside
the United States (i) through underwriters or a group of underwriters or
dealers, (ii) through agents designated from time to time or (iii) directly to
purchasers.
If an underwriter or underwriters are utilized in the sale, the Company
will enter into an underwriting agreement with such underwriters at the time of
sale to them, and the names of the underwriters and the terms and conditions of
the transaction (including underwriting discounts and commissions and other
items constituting underwriting compensation and discounts and commissions to be
allowed or paid to any dealers) will be set forth in the Prospectus Supplement,
which will be used by the underwriters to make sales of the Offered Securities
in respect of which this Prospectus is delivered to the public. The underwriters
may be entitled, under the underwriting agreement, to indemnification by the
Company against certain civil liabilities, including liabilities under the
Securities Act. Only underwriters named in the Prospectus Supplement are deemed
to be underwriting in connection with the Offered Securities in respect of which
such Prospectus Supplement and this Prospectus are delivered and any firms not
named therein are not parties to the underwriting agreement in respect of such
Offered Securities and will have no direct or indirect participation in the
underwriting thereof, although they may participate in the distribution of such
Securities under circumstances where they may be entitled to a dealer's
commission.
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters to solicit offers by certain institutions to purchase Offered
Securities from the Company at the price set forth in the Prospectus Supplement
pursuant to delayed delivery contracts for payment and delivery at a future
date. The Prospectus Supplement will set forth the commission payable to the
underwriters for solicitation of such contracts.
Offers to purchase Offered Securities may be solicited directly by the
Company or by agents designated by the Company from time to time. Unless
otherwise indicated in the Prospectus Supplement, any such agent will be acting
on a best efforts basis for the period of its appointment. Agents may be
entitled under agreements which may be entered into with the Company to
indemnification by the Company against certain civil liabilities, including
liabilities under the Securities Act.
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If an agent or agents are utilized in the sale, such persons may be deemed
to be "underwriters", and any discounts, commissions or concessions received by
them from the Company or any profit on the resale of Offered Securities by them
may be deemed to be underwriting discounts and commissions under the Securities
Act. Any such person who may be deemed to be an underwriter and any such
compensation received from the Company will be described in the Prospectus
Supplement.
The time and place for delivery of the Offered Securities in respect of
which this Prospectus is delivered are set forth in the Prospectus Supplement.
LEGAL OPINIONS
The legality of the Securities to be offered hereby will be passed upon for
the Company by Fulbright & Jaworski L.L.P., 1301 McKinney Street, Houston, Texas
77010, and for any underwriters or agents of a particular issue of Offered
Securities, by Vinson & Elkins L.L.P., 1001 Fannin Street, First City Tower,
Houston, Texas 77002 or by other counsel identified in the relevant Prospectus
Supplement as passing on the same for any such underwriters and agents. Vinson &
Elkins L.L.P. has represented the Company in various legal matters from time to
time.
EXPERTS
The consolidated financial statements and schedules included in the Annual
Report of the Company on Form 10-K for the year ended September 30, 1993
incorporated herein by reference, have been audited by Arthur Andersen & Co.,
independent public accountants, as indicated in their report with respect
thereto, and are incorporated herein by reference in reliance upon the authority
of said firm as experts in giving said report.
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