<PAGE>
Filed Pursuant to Rule
424(b)(2)
Registration No. 33-58891
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JUNE 23, 1995
10,000,000 SECURITIES
BROWNING-FERRIS INDUSTRIES, INC.
7.25% AUTOMATIC COMMON EXCHANGE SECURITIES
LOGO
[LOGO OF BFI APPEARS HERE] ----------------
Each Security has a Stated Amount of $35.625. Payments of 7.25% of the Stated
Amount per annum will be made on each Security on June 30 and December 31 of
each year, commencing December 31, 1995, until the Final Settlement Date of
June 30, 1998. These payments will consist of interest on Treasury Notes
payable by the United States Government at the rate of 5.125% per annum and
unsecured Contract Fees payable by the Company at the rate of 2.125% per annum.
On the Final Settlement Date, the Stated Amount will automatically be applied
to the purchase of between .8333 of a share and one share of Common Stock of
the Company (depending on the Applicable Market Value of the Common Stock on
the Final Settlement Date, as described herein), subject to adjustment under
certain circumstances. The last reported per share sale price of the Common
Stock on the New York Stock Exchange on June 28, 1995 was equal to the Stated
Amount. See "Price Range of Common Stock and Dividends".
Each Security will consist of (a) a Purchase Contract under which (i) the
holder will purchase from the Company on the Final Settlement Date, for an
amount in cash equal to the Stated Amount, a number of shares of Common Stock
equal to the Settlement Rate described herein and (ii) the Company will pay the
holder the Contract Fees described herein, and (b) 5.125% United States
Treasury Notes having a principal amount equal to the Stated Amount and
maturing on the Final Settlement Date. The Treasury Notes will be pledged with
the Collateral Agent to secure the holder's obligation to purchase Common Stock
under the Purchase Contract. Unless a holder of Securities settles the
underlying Purchase Contracts early through the delivery of cash to the
Purchase Contract Agent in the manner described herein, principal of the
Treasury Notes underlying such Securities, when paid at maturity, will
automatically be applied to satisfy in full the holder's obligation to purchase
Common Stock under the Purchase Contracts. For so long as a Purchase Contract
remains in effect, such Purchase Contract and the Treasury Notes securing it
will not be separable and may be transferred only as an integrated Security.
See "Description of the Securities".
SEE "CERTAIN CHARACTERISTICS OF THE SECURITIES" FOR CERTAIN CONSIDERATIONS
RELEVANT TO AN INVESTMENT IN THE SECURITIES.
Prior to the offering made hereby there has been no public market for the
Securities. The Securities have been approved for listing on the New York Stock
Exchange (subject to notice of issuance) under the symbol "BFE".
----------------
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
SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
<TABLE>
<CAPTION>
PURCHASE
INITIAL PUBLIC UNDERWRITING PRICE OF PROCEEDS (DEFICIT)
OFFERING PRICE COMMISSION(1) TREASURY NOTES TO THE COMPANY(2)
-------------- ------------- -------------- -----------------
<S> <C> <C> <C> <C>
Per Security.... $35.625 $1.07 $35.07 $(.52)
Total(3)........ $356,250,000 $10,687,500 $350,717,664 $(5,155,164)
</TABLE>
- --------
(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
(2) Before deducting estimated expenses of $450,000 payable by the Company.
Does not include proceeds per Security and total proceeds of $35.625 and
$356,250,000, respectively ($35.625 and $409,687,500, respectively, if the
Underwriters' over-allotment option is exercised in full), receivable by
the Company upon settlement of Purchase Contracts.
(3) The Company has granted the Underwriters an option for 30 days with respect
to an additional 1,500,000 Securities, solely to cover over-allotments. If
such option is exercised in full, the total initial public offering price,
underwriting commission and proceeds (deficit) to the Company will be
$409,687,500, $12,290,625 and $(5,928,439), respectively. See
"Underwriting".
----------------
The Securities are offered severally by the Underwriters, as specified
herein, subject to receipt and acceptance by them and subject to their right to
reject any order in whole or in part. It is expected that the Securities will
be ready for delivery in book entry form only through the facilities of The
Depository Trust Company in New York, New York, on or about July 5, 1995.
GOLDMAN, SACHS & CO. CS FIRST BOSTON
----------------
The date of this Prospectus Supplement is June 28, 1995
<PAGE>
IN CONNECTION WITH THE OFFERING MADE HEREBY, THE UNDERWRITERS MAY OVER-ALLOT
OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
SECURITIES, THE COMMON STOCK OR OTHER SECURITIES OF THE COMPANY AT A LEVEL
ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS
MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, THE CHICAGO STOCK EXCHANGE, THE
PACIFIC STOCK EXCHANGE OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
S-2
<PAGE>
PROSPECTUS SUPPLEMENT SUMMARY
The following summary is qualified in its entirety by, and shall be read in
conjunction with, the other information appearing elsewhere in this Prospectus
Supplement, in the accompanying Prospectus and in the documents incorporated by
reference therein. Unless otherwise indicated, all numbers of Securities
appearing in this Prospectus Supplement are presented assuming no exercise of
the Underwriters' over-allotment option. The Company's operations are conducted
through its subsidiaries and affiliates. The terms "BFI" and "Company" refer to
Browning-Ferris Industries, Inc., a Delaware corporation, and its subsidiaries
and affiliates, unless the context requires otherwise.
THE COMPANY
The Company is one of the largest publicly-held companies engaged in
providing waste services. The Company collects, transports, treats and/or
processes, recycles and disposes of commercial, residential and municipal solid
waste and industrial wastes. The Company is also involved in resource recovery,
medical waste services, portable restroom services and municipal and commercial
sweeping operations. The Company (including unconsolidated affiliates) operates
in approximately 430 locations in North America and approximately 280 locations
outside of North America, and employs approximately 40,000 persons. In addition
to operations in the United States, Canada and Puerto Rico, the Company has
operations in Australia, the Dominican Republic, Finland, Germany, Hong Kong,
Israel, Italy, Kuwait, the Netherlands, New Zealand, Spain, Switzerland and the
United Kingdom.
The business strategies currently being implemented by BFI management are
designed to:
. Continue expansion, both domestically and internationally, through an
aggressive acquisition and business development program.
. Capitalize on opportunities resulting from regulatory, legislative,
competitive and economic developments.
. Expand participation and pursue new business opportunities (such as
recycling, composting and medical waste) resulting from the continued
segmentation of the municipal and industrial waste streams.
. Continue to improve both operating efficiencies and management of costs
while effectively allocating resources.
. Continue to focus on the quality of pricing across all service lines.
. Continue to selectively implement uniform operating procedures when
management believes it will improve operating efficiency.
S-3
<PAGE>
SELECTED FINANCIAL DATA
The following is a summary of certain consolidated financial information
regarding the Company for the periods indicated. The selected financial
information set forth below for the years ended September 30, 1990 through 1994
is summarized or prepared from the Company's audited consolidated financial
statements for such periods. The financial information set forth for the six
months ended March 31, 1994 and 1995 is summarized or prepared from the
Company's unaudited consolidated financial statements for such periods, which
have been prepared on a basis substantially consistent with the audited
consolidated financial statements, and reflect, in the opinion of management,
all adjustments (which include only normal recurring adjustments) necessary to
a fair presentation of the financial position and results of operations for
such periods. The results for the six months ended March 31, 1995 are not
necessarily indicative of the results for the full year. The data presented
below should be read in conjunction with the Company's consolidated financial
statements and the notes thereto incorporated by reference herein. See
"Incorporation of Certain Documents by Reference" in the accompanying
Prospectus.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
MARCH 31, YEAR ENDED SEPTEMBER 30,
------------- -------------------------------------------
1995 1994 1994 1993 1992 1991 1990
------ ------ ------ ------ ------ ------ ------
(IN MILLIONS, EXCEPT FOR RATIOS AND PER SHARE
AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING STATEMENT
DATA:
Revenues(1)........... $2,702 $1,912 $4,315 $3,479 $3,278 $3,175 $2,958
Income from continuing
operations before
special charges and
extraordinary item... $ 182 $ 121 $ 284 $ 214 $ 176 $ 222 $ 298
Income from continuing
operations before
extraordinary item... $ 182 $ 121 $ 284 $ 197 $ 176 $ 65 $ 257
Net income (loss)..... $ 182 $ 116 $ 279 $ 197 $ 176 $ 65 $ (45)
Income (loss) per
common and common
equivalent share--
Income from
continuing
operations before
extraordinary item. $ .92 $ .68 $ 1.52 $ 1.15(3) $ 1.11 $ .42(4) $ 1.68(5)
Net income (loss)... $ .92 $ .65(2) $ 1.49(2) $ 1.15 $ 1.11 $ .42 $ (.29)
Cash dividends per
common share......... $ .34 $ .34 $ .68 $ .68 $ .68 $ .68 $ .64
CASH FLOW DATA:
Capital expenditures--
continuing
operations........... $ 427 $ 321 $ 694 $ 606 $ 531 $ 478 $ 441
Cash flows from
operating activities. $ 425 $ 279 $ 694 $ 614 $ 577 $ 686 $ 593
BALANCE SHEET DATA:
Property and
equipment, net....... $3,496 $2,889 $3,050 $2,516 $2,264 $2,140 $1,988
Total assets.......... $7,270 $5,441 $5,797 $4,296 $4,068 $3,656 $3,574
Senior long-term debt,
excluding current
maturities........... $1,704 $ 499 $ 714 $ 334 $ 349 $ 407 $ 448
Convertible
subordinated
debentures........... $ 745 $ 745 $ 745 $ 745 $ 745 $ 745 $ 745
Common stockholders'
equity............... $2,639 $2,180 $2,392 $1,533 $1,460 $1,114 $1,162
OTHER DATA:
Ratio of earnings to
fixed charges (6).... 4.01 3.95 4.25 3.31(7) 3.08 1.76(8) 4.21
</TABLE>
(footnotes on next page)
S-4
<PAGE>
- --------
(1) Certain reclassifications have been made in prior period amounts to conform
to the current year presentation.
(2) Includes extraordinary charge of $5 million, net of tax ($.03 per share)
related to the loss on early retirement of debt.
(3) $1.25 per share before a special charge of $.10 per share taken in fiscal
1993 to cover the estimated expense of reorganizing the Company's regional
structure in the United States.
(4) $1.44 per share before a special charge of $1.02 per share taken in fiscal
1991 to establish additional landfill closure and post-closure accruals.
(5) $1.94 per share before special charges of $.27 per share taken in fiscal
1990 to provide primarily for additional landfill market development
reserves and in connection with the settlement of a series of private civil
lawsuits.
(6) For the purposes of computing the ratio of earnings to fixed charges,
"earnings" has been calculated by adding to the income statement caption
"income before income taxes, minority interest and extraordinary item",
fixed charges, excluding capitalized interest, and by deducting equity in
earnings of affiliates less than 50% owned. "Fixed Charges" consists of
interest expense whether capitalized or expensed, amortization of debt
costs, and one-third of rental expense, which the Company considers
representative of the interest factor in the rentals. The interest expense
portion of fixed charges includes interest expense and interest costs
capitalized related to the Company's proportionate share of unconsolidated
50%-owned affiliates and has been reduced by capitalized interest income
earned on proceeds primarily from tax-exempt financings of certain of such
50%-owned affiliates.
(7) Excluding the effects of the fiscal 1993 reorganization charge of $27.0
million, the ratio of earnings to fixed charges for fiscal 1993 was 3.51.
(8) Excluding the effects of the fiscal 1991 special charge of $246.5 million,
the ratio of earnings to fixed charges for fiscal 1991 was 3.63.
S-5
<PAGE>
THE OFFERING
Securities Offered.......... 10,000,000 7.25% Automatic Common Exchange
Securities
Stated Amount............... $35.625 per Security
Payments.................... 7.25% of the Stated Amount per annum, payable
semi-annually in arrears. These payments will
consist of interest on the Treasury Notes (as
defined below) payable by the United States
Government at the rate of 5.125% of the Stated
Amount per annum and unsecured Contract Fees (as
defined below) payable semi-annually by the
Company at the rate of 2.125% of the Stated
Amount per annum ("Contract Fees"). The Contract
Fees payable on the first Payment Date (as
defined below) will be adjusted so that the
aggregate of the Contract Fees and interest on
Treasury Notes payable on such date will be the
equivalent of 7.25% of the Stated Amount per
annum accruing from July 5, 1995. See "Certain
Characteristics of the Securities--Right to Defer
Contract Fees".
Payment Dates............... June 30 and December 31 of each year, commencing
December 31, 1995, through and including the
Final Settlement Date referred to below (each, a
"Payment Date").
Final Settlement Date....... June 30, 1998 (the "Final Settlement Date"). On
the Final Settlement Date, the Stated Amount per
Security will automatically be applied to the
purchase of between .8333 of a share and one
share of Common Stock, par value $.16 2/3 per
share ("Common Stock"), of the Company (depending
on the Applicable Market Value of the Common
Stock on the Final Settlement Date, as described
below), subject to adjustment under certain
circumstances.
Components of the The Securities will be issued under a Purchase
Securities.................. Contract Agreement, dated as of June 28, 1995
(the "Purchase Contract Agreement"), between the
Company and The First National Bank of Chicago,
as agent for the holders of the Securities
(together with any successor thereto in such
capacity, the "Purchase Contract Agent").
Each Security offered hereby (each, a "Security"
and collectively, the "Securities") will consist
of (a) a purchase contract ("Purchase Contract")
under which (i) the holder will purchase from the
Company on the Final Settlement Date, for an
amount in cash equal to the Stated Amount, a
number of shares of Common Stock equal to the
Settlement Rate described below and (ii) the
Company will pay Contract Fees to the holder, and
(b) 5.125% United States Treasury Notes due June
30, 1998 ("Treasury Notes") having a principal
amount equal to the Stated Amount and maturing on
the Final Settlement Date. The Treasury Notes
will be pledged with Texas Commerce Bank National
Association, as collateral agent for the Company
(together with any successor thereto
S-6
<PAGE>
in such capacity, the "Collateral Agent"), to
secure the holder's obligation to purchase Common
Stock under the Purchase Contract. Unless a
holder of Securities settles the underlying
Purchase Contracts early through the delivery of
cash to the Purchase Contract Agent in the manner
described below, principal of the Treasury Notes
underlying such Securities, when paid at
maturity, will automatically be applied to
satisfy in full the holder's obligation to
purchase Common Stock under the Purchase
Contracts. For so long as a Purchase Contract
remains in effect, such Purchase Contract and the
Treasury Notes securing it will not be separable
and may be transferred only as an integrated
Security. See "Certain Characteristics of the
Securities" and "Description of the Securities".
Settlement Rate............. The number of shares of Common Stock issuable
upon settlement of each Purchase Contract (the
"Settlement Rate") will be calculated as follows
(subject to adjustment under certain
circumstances): (a) if the Applicable Market
Value (as defined below) is greater than $42.75
(the "Threshold Appreciation Price"), the
Settlement Rate will be .8333, (b) if the
Applicable Market Value is less than or equal to
the Threshold Appreciation Price but greater than
the Stated Amount, the Settlement Rate will equal
the Stated Amount divided by the Applicable
Market Value and (c) if the Applicable Market
Value is less than or equal to the Stated Amount,
the Settlement Rate will be one. "Applicable
Market Value" means the average of the Closing
Prices (as defined) per share of Common Stock on
each of the twenty consecutive Trading Days (as
defined) ending on the last Trading Day
immediately preceding the Final Settlement Date.
Early Settlement............ A holder of Securities may settle the underlying
Purchase Contracts prior to the Final Settlement
Date in the manner described herein, but only in
integral multiples of 1,600 Securities. Upon such
early settlement, (a) the holder will purchase,
for an amount in cash equal to the Stated Amount
per Security minus any deferred Contract Fees
payable thereon, .8333 of a share of Common Stock
per Security (regardless of the market price of
the Common Stock on the date of purchase),
subject to adjustment under certain
circumstances, (b) the Treasury Notes underlying
such Securities will thereupon be transferred to
the holder free and clear of the Company's
security interest therein and (c) the holder's
right to receive additional Contract Fees will
terminate and, except as contemplated by clause
(a) above, no payment or adjustment will be made
to or for the holder on account of current or
deferred amounts accrued in respect thereof.
Termination................. The Purchase Contracts (including the right to
receive accrued or deferred Contract Fees and the
obligation to purchase
S-7
<PAGE>
Common Stock) will automatically terminate upon
the occurrence of certain events of bankruptcy,
insolvency or reorganization with respect to the
Company. Upon such termination, the Collateral
Agent will release the Treasury Notes held by it
to the Purchase Contract Agent for distribution
to the holders.
Relationship to Common The aggregate of the Contract Fees and interest
Stock....................... payments on the Treasury Notes will be paid at a
rate per annum that is greater than the current
dividend yield on the Common Stock. However,
since the number of shares of Common Stock
issuable upon settlement of each Purchase
Contract may decline by up to 16.7% as the
Applicable Market Value increases, the
opportunity for equity appreciation afforded by
an investment in the Securities is less than that
afforded by a direct investment in the Common
Stock.
Listing..................... The Securities have been approved for listing on
the New York Stock Exchange, subject to notice of
issuance, under the symbol "BFE".
Federal Income Tax Holders will include interest on the Treasury
Consequences................ Notes in income when received or accrued, in
accordance with the holder's method of
accounting. The Company intends to report the
Contract Fees as income to holders, but holders
should consult their tax advisors concerning the
possibility that the Contract Fees may be treated
as a reduction in the holders' basis in the
Securities rather than included in income on a
current basis. Additional income, gain or loss
may be realized on maturity of the Treasury Notes
to the extent that the Treasury Notes are
purchased at a premium or discount, and certain
elections should be considered in this regard.
See "Certain Federal Income Tax Consequences".
Use of Proceeds............. Substantially all of the proceeds from the sale
of the Securities offered hereby will be used by
the Underwriters to purchase the underlying
Treasury Notes, and the Company will receive no
proceeds from such sale. Amounts received by the
Company upon settlement of Purchase Contracts are
expected to be used for general corporate
purposes. See "Use of Proceeds".
S-8
<PAGE>
CERTAIN CHARACTERISTICS OF THE SECURITIES
Prospective purchasers of Securities should consider, in addition to the
other information contained or incorporated by reference in this Prospectus
Supplement or the accompanying Prospectus, the following characteristics of the
Securities.
INVESTMENT IN SECURITIES WILL BECOME INVESTMENT IN COMMON STOCK
Although holders of Securities will be the beneficial owners of the
underlying Treasury Notes prior to the Final Settlement Date, principal of the
Treasury Notes, when paid at maturity, will automatically be applied to the
purchase of a specified number of shares of Common Stock on behalf of such
holders. Thus, following the Final Settlement Date, holders will own shares of
Common Stock rather than a beneficial interest in Treasury Notes, and the
market value of those shares of Common Stock on the Final Settlement Date may
be materially different than the principal amount of such Treasury Notes.
LESS APPRECIATION POTENTIAL
Since the number of shares of Common Stock issuable upon settlement of each
Purchase Contract may decline by up to 16.7% as the Applicable Market Value
increases, the opportunity for equity appreciation afforded by an investment in
the Securities is less than that afforded by a direct investment in the Common
Stock.
TREASURY NOTES ENCUMBERED
Although holders of Securities will be beneficial owners of the underlying
Treasury Notes, those Treasury Notes will be pledged with the Collateral Agent
to secure the obligations of the holders under the Purchase Contracts. Thus,
rights of the holders to their Treasury Notes will be subject to the Company's
security interest and no holder will be permitted to withdraw Treasury Notes
except in connection with the early settlement or termination of the related
Purchase Contracts.
RIGHT TO DEFER CONTRACT FEES
The Company may, at its option, defer the payment of Contract Fees on the
Purchase Contracts until the Final Settlement Date or, with respect to any
particular Purchase Contract, earlier settlement. However, deferred
installments of Contract Fees will bear additional Contract Fees at the rate of
7.25% per annum (compounding on each succeeding Payment Date) until paid. If
the Purchase Contracts are terminated (upon the occurrence of certain events of
bankruptcy, insolvency or reorganization with respect to the Company), the
right to receive Contract Fees, including deferred installments of Contract
Fees, will terminate.
PURCHASE CONTRACT AGREEMENT NOT QUALIFIED UNDER TRUST INDENTURE ACT; LIMITED
OBLIGATIONS OF PURCHASE CONTRACT AGENT
The Purchase Contract Agreement will not be qualified as an indenture under
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and
the Purchase Contract Agent will not be required to qualify as a trustee
thereunder. Accordingly, holders of the Securities will not have the benefits
of the protections of the Trust Indenture Act. Under the terms of the Purchase
Contract Agreement, the Purchase Contract Agent will have only limited
obligations to the holders of the Securities. See "Certain Provisions of the
Purchase Contract Agreement and the Pledge Agreement--Information Concerning
the Purchase Contract Agent".
S-9
<PAGE>
THE COMPANY
GENERAL
The Company is one of the largest publicly-held companies engaged in
providing waste services. The Company collects, transports, treats and/or
processes, recycles and disposes of commercial, residential and municipal solid
waste and industrial wastes. The Company is also involved in resource recovery,
medical waste services, portable restroom services and municipal and commercial
sweeping operations. The Company (including unconsolidated affiliates) operates
in approximately 430 locations in North America and approximately 280 locations
outside of North America, and employs approximately 40,000 persons. In addition
to operations in the United States, Canada and Puerto Rico, the Company has
operations in Australia, the Dominican Republic, Finland, Germany, Hong Kong,
Israel, Italy, Kuwait, the Netherlands, New Zealand, Spain, Switzerland and the
United Kingdom.
The business strategies currently being implemented by BFI management are
designed to:
. Continue expansion, both domestically and internationally, through an
aggressive acquisition and business development program.
. Capitalize on opportunities resulting from regulatory, legislative,
competitive and economic developments.
. Expand participation and pursue new business opportunities (such as
recycling, composting and medical waste) resulting from the continued
segmentation of the municipal and industrial waste streams.
. Continue to improve both operating efficiencies and management of costs
while effectively allocating resources.
. Continue to focus on the quality of pricing across all service lines.
. Continue to selectively implement uniform operating procedures when
management believes it will improve operating efficiency.
The table below reflects the total revenues contributed by the Company's
principal lines of business for the periods indicated.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
MARCH 31, YEAR ENDED SEPTEMBER 30,(1)
----------------- -------------------------------
1995 1994(1) 1994 1993 1992
------ ------- --------- --------- ---------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C>
NORTH AMERICAN OPERATIONS
(INCLUDING CANADA)--
Collection Services--Solid
Waste...................... $1,334 $1,143 $ 2,360 $ 2,138 $ 2,038
Disposal and Transfer--Solid
Waste...................... 492 391 885 787 753
Medical Waste Services...... 92 80 161 146 119
Recycling Services.......... 290 144 359 240 175
Services Group and Other.... 39 35 83 79 106
Elimination of Affiliated
Companies' Revenues........ (230) (176) (392) (339) (304)
------ ------ --------- --------- ---------
Total North American
Operations................. 2,017 1,617 3,456 3,051 2,887
INTERNATIONAL OPERATIONS.... 685(2) 295 859 428 391
------ ------ --------- --------- ---------
Total Company............. $2,702 $1,912 $ 4,315 $ 3,479 $ 3,278
====== ====== ========= ========= =========
</TABLE>
- --------
(1) Certain reclassifications have been made in prior years' amounts to conform
to the current year presentation.
(2) The largest international markets for the six months ended March 31, 1995
were: Germany--$317 million; the Netherlands--$151 million; and the United
Kingdom--$75 million.
S-10
<PAGE>
SOLID WASTE SERVICES
Collection. BFI collects solid waste in approximately 470 operating locations
in 45 states, Australia, Canada, the Dominican Republic, Finland, Germany,
Israel, Italy, Kuwait, the Netherlands, New Zealand, Puerto Rico, Spain,
Switzerland and the United Kingdom. These operations provide solid waste
collection services for numerous commercial establishments, industrial plants
and governmental and residential units. BFI uses approximately one million
steel containers and approximately 14,000 specially equipped collection trucks
in its waste collection operations.
Transfer and Disposal. BFI operates 121 solid waste transfer stations, 50 of
which it owns, where solid waste is compacted for transfer to final disposal
facilities. Transfer stations are used for the purpose of (i) reducing costs
associated with transporting waste to final disposal sites, and (ii) better
utilizing the Company's disposal sites. Where practical, transfer and recycling
functions are combined at the same transfer station to form
"Trancycleries."(TM)
Sanitary landfilling is the primary method employed by the Company for final
disposal of the solid waste stream which is not recycled. BFI currently
operates 102 solid waste sanitary landfill sites in North America, 73 of which
are wholly-owned. Four are either owned jointly with others or partially owned
and partially leased; the remainder are leased or operated pursuant to various
agreements. BFI currently operates 69 solid waste sanitary landfill sites in
its international operations (including those operated through unconsolidated
affiliates).
MEDICAL WASTE
The Company is the largest provider of medical waste services in North
America. Approximately 100 of the Company's operating locations provide medical
waste services involving the collection and disposal of infectious and
pathological waste materials from approximately 130,000 customers. In the last
five years, most states have enacted laws regulating medical waste, and the
Company is pursuing new opportunities to provide needed services created by
these regulations. The Company owns or operates 34 medical waste processing
sites using either incineration or autoclaving (steam decontamination)
technology.
RECYCLING
The Company provides recycling collection services for certain materials
streams in approximately 250 of its North American operating locations for
approximately 6.4 million households, including curbside customers. Recycling
continued as one of the fastest-growing parts of the Company's business in
fiscal 1994 and the first six months of fiscal 1995. The Company's recycling
business has 132 recycleries in North American and approximately 30 such
facilities in its international operations. The Company also engages in the
organic materials recycling and/or disposal business, tire recycling and other
alternative energy concepts such as biomass fuels.
OTHER SERVICES
The Company is also involved in street and parking lot sweeping and the
rental and servicing of portable restroom facilities. During fiscal 1993 and
the first quarter of 1994, the Company sold a portion of its portable restroom
and sweeping businesses, but has retained most of those operations located on
the southern and western coasts of the United States. These locations are
operated as part of the solid waste regions.
INTERNATIONAL OPERATIONS
The Company is involved in waste collection, processing, disposal and/or
recycling operations in approximately 280 locations (including unconsolidated
affiliates) in Australia, the Dominican Republic, Finland, Germany, Israel,
Italy, Hong Kong, Kuwait, the Netherlands, New Zealand, Spain, Switzerland and
the United Kingdom.
S-11
<PAGE>
RESOURCE RECOVERY
The Company and Air Products and Chemicals, Inc. jointly market their
combined capabilities to design, build, own and operate facilities that burn
unprocessed solid waste and recover energy and other materials under the name
American Ref-Fuel Company(TM) ("American Ref-Fuel"). American Ref-Fuel
currently operates four facilities and is evaluating a number of other domestic
and international development projects.
CERTAIN LEGAL AND ENVIRONMENTAL MATTERS
The Company is involved in a number of legal, administrative and other
proceedings relating to various matters, including environmental matters. While
the final resolution of any such matter may have an impact on the Company's
consolidated financial results for a particular reporting period, the Company
believes that the ultimate disposition of these matters will not have a
materially adverse effect upon the consolidated financial position of the
Company.
USE OF PROCEEDS
Substantially all of the proceeds from the sale of the Securities offered
hereby will be used by the Underwriters to purchase the underlying Treasury
Notes, and the Company will receive no proceeds from the sale of the
Securities. The proceeds to be received by the Company upon settlement of the
Purchase Contracts are expected to be used for general corporate purposes,
including reduction of indebtedness, acquisitions and capital expenditures.
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
The Common Stock is listed on the New York, Chicago and Pacific Stock
Exchanges and traded under the symbol "BFI". The Common Stock is also listed on
The International Stock Exchange of the United Kingdom and Republic of Ireland
Ltd. The following table sets forth, for the periods indicated, (i) the high
and low sales prices of the Common Stock as reported on the New York Stock
Exchange Composite Tape, and (ii) the dividends declared on the Common Stock.
<TABLE>
<CAPTION>
PRICE RANGE
---------------
HIGH LOW DIVIDENDS
------- ------- ---------
<S> <C> <C> <C>
Fiscal Year Ended September 30, 1993
First Quarter....................................... $27 1/8 $21 5/8 $.17
Second Quarter...................................... 28 5/8 25 3/4 .17
Third Quarter....................................... 28 24 .17
Fourth Quarter...................................... 27 7/8 22 3/8 .17
Fiscal Year Ended September 30, 1994
First Quarter....................................... $27 1/2 $20 7/8 $.17
Second Quarter...................................... 30 1/4 24 1/4 .17
Third Quarter....................................... 32 1/4 24 5/8 .17
Fourth Quarter...................................... 32 7/8 29 .17
Fiscal Year Ending September 30, 1995
First Quarter....................................... $32 3/8 $25 5/8 $.17
Second Quarter...................................... 34 1/4 27 1/8 .17
Third Quarter (through June 28, 1995)............... 37 7/8 32 3/4 .17
</TABLE>
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<PAGE>
For a recent closing sales price for the Common Stock, as reported on the New
York Stock Exchange, see the cover page of this Prospectus Supplement. As of
June 8, 1995, the approximate number of holders of record of Common Stock was
19,000.
The Company has paid cash dividends on its Common Stock each year since 1950
and intends to continue the payment of dividends, although future dividend
payments will depend upon the Company's level of earnings, financial
requirements and other relevant factors, including dividend restrictions
contained in the Company's debt instruments. The amount available for payment
of dividends on the Common Stock pursuant to the most restrictive of such
limits was approximately $1.07 billion at March 31, 1995, after giving effect
to cash dividends paid or declared through March 31, 1995.
DESCRIPTION OF THE SECURITIES
The following description of certain terms of the Securities offered hereby
supplements, and to the extent inconsistent therewith replaces, the description
of the general terms and provisions of the Securities set forth in the
accompanying Prospectus, to which reference is hereby made. The summaries of
certain provisions of documents described below do not purport to be complete
and are subject to, and are qualified in their entirety by reference to, all of
the provisions of such documents (including the definitions therein of certain
terms), forms of which are on file with the Commission. Wherever particular
Sections of, or terms defined in, such documents are referred to herein, such
Sections or defined terms are incorporated by reference herein. Capitalized
terms not defined herein have the meanings assigned to such terms in the
accompanying Prospectus.
GENERAL
Each Security will have a Stated Amount of $35.625 and will be issued under
the Purchase Contract Agreement between the Company and the Purchase Contract
Agent. Each Security will consist of (a) a Purchase Contract under which (i)
the holder will purchase from the Company on the Final Settlement Date of June
30, 1998, for an amount in cash equal to the Stated Amount, a number of shares
of Common Stock equal to the Settlement Rate described below and (ii) the
Company will pay Contract Fees to the holder, and (b) Treasury Notes having a
principal amount equal to the Stated Amount and maturing on the Final
Settlement Date. The Treasury Notes will be pledged with the Collateral Agent
to secure the holder's obligation to purchase Common Stock under the Purchase
Contract. Unless a holder of Securities settles the underlying Purchase
Contracts early through the delivery of cash to the Purchase Contract Agent in
the manner described below, principal of the Treasury Notes underlying such
Securities, when paid at maturity, will automatically be applied to satisfy in
full the holder's obligation to purchase Common Stock under the Purchase
Contracts. For so long as a Purchase Contract remains in effect, such Purchase
Contract and the Treasury Notes securing it will not be separable and may be
transferred only as an integrated Security.
The semi-annual payments on the Securities set forth on the cover page of
this Prospectus Supplement will consist of interest on the Treasury Notes
payable by the United States Government at the rate of 5.125% of the Stated
Amount per annum and unsecured Contract Fees payable semi-annually on each
Payment Date by the Company at the rate of 2.125% of the Stated Amount per
annum. The Contract Fees payable on the first Payment Date will be adjusted so
that the aggregate of the Contract Fees and interest on Treasury Notes payable
on such date will be the equivalent of 7.25% of the Stated Amount per annum
accruing from July 5, 1995. The Company may, at its option, defer the payment
of Contract Fees on the Purchase Contracts until the Final Settlement Date or,
with respect to any particular Purchase Contract, earlier settlement thereof.
However, deferred installments of Contract Fees will bear additional Contract
Fees at the rate of 7.25% per annum (compounding on each succeeding Payment
Date) until paid.
DESCRIPTION OF THE PURCHASE CONTRACTS
GENERAL
Each Purchase Contract underlying a Security (unless earlier terminated or
settled at the holder's option) will obligate the holder of the Security to
purchase, and the Company to sell, on the Final
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Settlement Date, for an amount in cash equal to the Stated Amount, a number of
shares of Common Stock equal to the Settlement Rate. The Settlement Rate will
be calculated as follows (subject to adjustment under certain circumstances):
(a) if the Applicable Market Value is greater than the Threshold Appreciation
Price of $42.75, the Settlement Rate will be .8333, (b) if the Applicable
Market Value is less than or equal to the Threshold Appreciation Price but
greater than the Stated Amount, the Settlement Rate will equal the Stated
Amount divided by the Applicable Market Value and (c) if the Applicable Market
Value is less than or equal to the Stated Amount, the Settlement Rate will be
one. "Applicable Market Value" means the average of the Closing Prices (as
defined) per share of Common Stock on each of the twenty consecutive Trading
Days (as defined) ending on the last Trading Day immediately preceding the
Final Settlement Date.
No fractional shares of Common Stock will be issued by the Company pursuant
to the Purchase Contracts. In lieu of fractional shares otherwise issuable in
respect of Purchase Contracts being settled by a holder of Securities, the
holder will be entitled to receive an amount of cash equal to the value of such
fractional shares at the Closing Price per share on the Trading Day immediately
preceding the date of purchase.
Unless a holder of Securities settles the underlying Purchase Contracts prior
to the Final Settlement Date through the delivery of cash to the Purchase
Contract Agent in the manner described under "--Early Settlement" below or an
event described under "--Termination" below occurs, principal of the Treasury
Notes underlying such Securities, when paid at maturity, will automatically be
transferred to the Company to satisfy in full the holder's obligation to
purchase Common Stock under the Purchase Contracts. Such stock will then be
issued and delivered to such holder or such holder's designee, upon
presentation and surrender of the certificate evidencing such Securities (a
"Security Certificate") and payment by the holder of any transfer or similar
taxes payable in connection with the issuance of the stock to any person other
than such holder.
Prior to the date on which shares of Common Stock are issued in settlement of
a Purchase Contract, the Common Stock underlying the related Security will not
be deemed to be outstanding for any purpose and the holder thereof will not
have any voting rights, rights to dividends or other distributions or other
rights or privileges of a stockholder by virtue of holding such Security.
Each holder of Securities, by acceptance thereof, will under the terms of the
Purchase Contract Agreement and the Securities be deemed to have (a)
irrevocably agreed to be bound by the terms of the related Purchase Contracts
for so long as such holder remains a holder of such Securities and (b)
irrevocably appointed the Purchase Contract Agent as such holder's attorney-in-
fact to enter into and perform the related Purchase Contracts on behalf of and
in the name of such holder.
EARLY SETTLEMENT
A holder of Securities may settle the underlying Purchase Contracts prior to
the Final Settlement Date by presenting and surrendering the Security
Certificate evidencing such Securities at the offices of the Purchase Contract
Agent with the form of "Election to Settle Early" on the reverse side of the
certificate completed and executed as indicated, accompanied by payment (in the
form of a certified or cashier's check payable to the order of the Company in
immediately available funds) of an amount equal to (a) the Stated Amount times
the number of Purchase Contracts being settled less (b) the aggregate amount of
any deferred Contract Fees payable thereon. So long as the Securities are
evidenced by one or more global security certificates deposited with the
Depositary (as defined below), procedures for early settlement will also be
governed by standing arrangements between the Depositary and the Purchase
Contract Agent. HOLDERS MAY SETTLE SECURITIES EARLY ONLY IN INTEGRAL MULTIPLES
OF 1,600 SECURITIES.
Upon early settlement of Purchase Contracts underlying any Securities, (a)
the holder will receive .8333 of a share of Common Stock per Security
(regardless of the market price of the Common Stock on the date of purchase),
subject to adjustment under certain circumstances, (b) the Treasury Notes
underlying such Securities will thereupon be transferred to the holder free and
clear of the Company's security interest therein and (c) the holder's right to
receive additional Contract Fees will terminate and,
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<PAGE>
except as contemplated by the first sentence of the preceding paragraph, no
payment or adjustment will be made to or for the holder on account of current
or deferred amounts accrued in respect thereof.
If the Purchase Contract Agent receives the Security Certificate, accompanied
by the completed Election to Settle Early and requisite check, from a holder of
Securities by 5:00 p.m., New York City time, on a Business Day, that day will
be considered the settlement date. If the Purchase Contract Agent receives the
foregoing after 5:00 p.m., New York City time, on a Business Day or at any time
on a day that is not a Business Day, the next Business Day will be considered
the settlement date.
Upon early settlement of Purchase Contracts in the manner described above,
presentation and surrender of the Security Certificate evidencing the related
Securities and payment of any transfer or similar taxes payable by the holder
in connection with the issuance of the stock to any person other than the
holder of such Securities, the Company will cause the shares of Common Stock
being purchased to be issued, and the Treasury Notes securing such Purchase
Contracts to be released from the pledge under the Pledge Agreement described
below and transferred, within three Business Days following the settlement
date, to the purchasing holder or such holder's designee.
CONTRACT FEES
Contract Fees will be payable semi-annually on each Payment Date to the
persons in whose names the related Securities are registered at the close of
business on the Business Day (as defined below) immediately preceding such
Payment Date (the "Record Date"). Contract Fees will be computed on the basis
of actual days elapsed in a year of 365 or 366 days, as the case may be. If a
Payment Date falls on a day that is not a Business Day, the Contract Fee may be
paid on the next succeeding Business Day with the same force and effect as if
made on such Payment Date, and no additional amounts will accrue as a result of
such delayed payment. "Business Day" means any day that is not a Saturday, a
Sunday or a day on which the New York Stock Exchange or banking institutions or
trust companies in The City of New York are authorized or obligated by law or
executive order to be closed.
The Company may, at its option and upon prior written notice to the holders
of Securities and the Purchase Contract Agent, defer the payment of Contract
Fees on the Purchase Contracts until the Final Settlement Date or, with respect
to any particular Purchase Contract, earlier settlement thereof. However,
deferred installments of Contract Fees will bear additional Contract Fees at
the rate of 7.25% per annum (compounding on each succeeding Payment Date) until
paid.
ANTI-DILUTION ADJUSTMENTS
The formula for determining the Settlement Rate will be subject to adjustment
upon the occurrence of certain events, including: (a) the payment of dividends
(and other distributions) of Common Stock on Common Stock; (b) the issuance to
all holders of Common Stock of rights, warrants or options entitling them, for
a period of up to 45 days, to subscribe for or purchase Common Stock at less
than the Current Market Price (as defined) thereof; (c) subdivisions and
combinations of Common Stock; (d) distributions to all holders of Common Stock
of evidences of indebtedness of the Company, shares of capital stock,
securities, cash or property (excluding any dividend or distribution covered by
clause (a) or (b) above and any dividend or distribution paid exclusively in
cash); (e) distributions consisting exclusively of cash to all holders of
Common Stock in an aggregate amount that, together with (i) other all-cash
distributions made within the preceding 12 months and (ii) any cash and the
fair market value, as of the expiration of the tender or exchange offer
referred to below, of consideration payable in respect of any tender or
exchange offer by the Company or a subsidiary for the Common Stock concluded
within the preceding 12 months, exceeds 10% of the Company's aggregate market
capitalization (such aggregate market capitalization being the product of the
Current Market Price (as defined) of the Common Stock multiplied by the number
of shares of Common Stock then outstanding) on the date of such distribution;
and (f)
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<PAGE>
the successful completion of a tender or exchange offer made by the Company or
any subsidiary for the Common Stock which involves an aggregate consideration
that, together with (i) any cash and the fair market value of other
consideration payable in respect of any tender or exchange offer by the Company
or a subsidiary for the Common Stock concluded within the preceding 12 months
and (ii) the aggregate amount of any all-cash distributions to all holders of
the Company's Common Stock made within the preceding 12 months, exceeds 10% of
the Company's aggregate market capitalization on the expiration of such tender
or exchange offer.
In the case of certain reclassifications, consolidations, mergers, sales or
transfers of assets or other transactions pursuant to which the Common Stock is
converted into the right to receive other securities, cash or property, each
Purchase Contract then outstanding would, without the consent of the holders of
Securities, become a contract to purchase only the kind and amount of
securities, cash and other property receivable upon the transaction by a holder
of the number of shares of Common Stock which would have been received by the
holder of the related Security immediately prior to such transaction if such
holder had then settled such Purchase Contract.
If at any time the Company makes a distribution of property to its
stockholders which would be taxable to such stockholders as a dividend for
federal income tax purposes (i.e., distributions of evidences of indebtedness
or assets of the Company, but generally not stock dividends or rights to
subscribe to capital stock) and, pursuant to the Settlement Rate adjustment
provisions of the Purchase Contract Agreement, the Settlement Rate is
increased, such increase may be deemed to be the receipt of taxable income to
holders of Securities. See "Certain Federal Income Tax Consequences--Adjustment
of Settlement Rate."
In addition, the Company may make such increases in the Settlement Rate as
the Board of Directors of the Company deems advisable to avoid or diminish any
income tax to holders of shares of Common Stock resulting from any dividend or
distribution of stock (or rights to acquire stock) or from any event treated as
such for income tax purposes or for any other reasons.
Adjustments to the Settlement Rate will be calculated to the nearest
1/10,000th of a share. No adjustment in the Settlement Rate shall be required
unless such adjustment would require an increase or decrease of at least one
percent in the Settlement Rate; provided, however, that any adjustments which
by reason of the foregoing are not required to be made shall be carried forward
and taken into account in any subsequent adjustment.
The Company will be required, within ten Business Days following the
occurrence of an event that requires or permits an adjustment in the Settlement
Rate, to provide written notice to the Purchase Contract Agent of the
occurrence of such event and a statement in reasonable detail setting forth the
method by which the adjustment to the Settlement Rate was determined and
setting forth the revised Settlement Rate.
Each adjustment to the Settlement Rate will result in a corresponding
adjustment to the number of shares of Common Stock issuable upon early
settlement of a Purchase Contract.
TERMINATION
The Purchase Contracts, and the rights and obligations of the Company and of
the holders of the Securities thereunder (including the right to receive
accrued or deferred Contract Fees and the right and obligation to purchase
Common Stock), will automatically terminate upon the occurrence of certain
events of bankruptcy, insolvency or reorganization with respect to the Company.
Upon such termination, the Collateral Agent will release the Treasury Notes
held by it to the Purchase Contract Agent for distribution to the holders.
TREASURY NOTES AND PLEDGE AGREEMENT; INTEREST ON TREASURY NOTES
The Treasury Notes underlying the Securities will be pledged to the
Collateral Agent, for the benefit of the Company, pursuant to a pledge
agreement, to be dated as of June 28, 1995 (the "Pledge
S-16
<PAGE>
Agreement"), to secure the obligations of the holders to purchase Common Stock
under the Purchase Contracts. The rights of holders of Securities to the
underlying Treasury Notes will be subject to the Company's security interest
therein created by the Pledge Agreement; no holder of Securities will be
permitted to withdraw the Treasury Notes underlying such Securities from the
pledge arrangement except upon the termination or early settlement of the
related Purchase Contracts. Subject to such security interest, however, holders
of Securities will have full beneficial ownership of the underlying Treasury
Notes. The Company will have no interest in the Treasury Notes other than its
security interest.
The Collateral Agent will, upon receipt of interest payments on the Treasury
Notes, distribute such payments to the Purchase Contract Agent who will in turn
distribute those payments to the persons in whose names the related Securities
are registered at the close of business on the Record Date immediately
preceding the date of such distribution.
THE TREASURY NOTES WILL BE OBLIGATIONS OF THE UNITED STATES GOVERNMENT AND
NOT OF THE COMPANY.
BOOK-ENTRY SYSTEM
The Securities will be issued in the form of one or more global security
certificates (the "Global Security Certificates") deposited with The Depository
Trust Company (the "Depositary") and registered in the name of a nominee of the
Depositary and will bear a legend regarding the restrictions on exchanges and
registration of transfer thereof referred to below.
The Depositary has advised the Company as follows: The Depositary is a
limited-purpose trust company organized under the Banking Law of the State of
New York, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code and a "clearing
agency" registered pursuant to Section 17A of the Exchange Act. The Depositary
was created to hold securities of its participants (defined below) and to
facilitate the clearance and settlement of transactions among its participants
in such securities through electronic book-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of
certificates. The Depositary's participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations, some of whom (and/or their representatives) own the Depositary.
Access to the Depositary's book-entry system is also available to others, such
as banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a participant, either directly or indirectly.
No Securities represented by Global Security Certificates may be exchanged in
whole or in part for Securities registered, and no transfer of Global Security
Certificates in whole or in part may be registered, in the name of any person
other than the Depositary or any nominee of the Depositary unless the
Depositary has notified the Company that it is unwilling or unable to continue
as depositary for such Global Security Certificates or has ceased to be
qualified to act as such as required by the Purchase Contract Agreement or
there shall have occurred and be continuing a default by the Company in respect
of its obligations under one or more Purchase Contracts. All Securities
represented by one or more Global Security Certificates or any portion thereof
will be registered in such names as the Depositary may direct.
The laws of some jurisdictions require that certain potential purchasers of
Securities take physical delivery of such Securities in definitive form. Such
laws may impair the ability to transfer beneficial interests in Securities so
long as such Securities are represented by Global Security Certificates.
As long as the Depositary, or its nominee, is the registered owner of the
Global Security Certificates, such Depositary or such nominee, as the case may
be, will be considered the sole owner and holder of the Global Security
Certificates and all Securities represented thereby for all purposes under the
Securities and the Purchase Contract Agreement. Except in the limited
circumstances
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referred to above, owners of beneficial interests in Global Security
Certificates will not be entitled to have such Global Security Certificates or
the Securities represented thereby registered in their names, will not receive
or be entitled to receive physical delivery of Security Certificates in
exchange therefor and will not be considered to be owners or holders of such
Global Security Certificates or any Securities represented thereby for any
purpose under the Securities or the Purchase Contract Agreement. All payments
on the Securities represented by the Global Security Certificates and all
transfers and deliveries of Treasury Notes and Common Stock with respect
thereto will be made to the Depositary or its nominee, as the case may be, as
the holder thereof.
Ownership of beneficial interests in the Global Security Certificates will be
limited to participants or persons that may hold beneficial interests through
institutions that have accounts with the Depositary or its nominee
("participants"). Ownership of beneficial interests in Global Security
Certificates will be shown only on, and the transfer of those ownership
interests will be effected only through, records maintained by the Depositary
or its nominee (with respect to participants' interests) or any such
participant (with respect to interests of persons held by such participants on
their behalf). Procedures for settlement of Purchase Contracts on the Final
Settlement Date or upon Early Settlement will be governed by arrangements among
the Depositary, participants and persons that may hold beneficial interests
through participants designed to permit such settlement without the physical
movement of certificates. Payments, transfers, deliveries, exchanges and other
matters relating to beneficial interests in Global Security Certificates may be
subject to various policies and procedures adopted by the Depositary from time
to time. None of the Company, the Purchase Contract Agent or any agent of the
Company or the Purchase Contract Agent will have any responsibility or
liability for any aspect of the Depositary's or any participant's records
relating to, or for payments made on account of, beneficial interests in Global
Security Certificates, or for maintaining, supervising or reviewing any of the
Depositary's records or any participant's records relating to such beneficial
ownership interests.
CERTAIN PROVISIONS OF THE PURCHASE CONTRACT AGREEMENT AND THE PLEDGE AGREEMENT
PAYMENT OF INTEREST AND CONTRACT FEES; TRANSFER OF SECURITIES;
DELIVERY OF COMMON STOCK OR TREASURY NOTES
Interest on the Treasury Notes and Contract Fees will be payable, Purchase
Contracts (and documents related thereto) will be settled and transfers of the
Securities will be registrable at the office of the Purchase Contract Agent in
the Borough of Manhattan, The City of New York. In addition, in the event that
the Securities do not remain in book-entry form, payment of interest on the
Treasury Notes and Contract Fees may be made, at the option of the Company, by
check mailed to the address of the person entitled thereto as shown on the
Security Register.
Payments in respect of principal of the Treasury Notes on the Final
Settlement Date will be applied in satisfaction of the obligations of the
holders of the Securities under the Purchase Contracts and shares of Common
Stock will be delivered, or, if the Purchase Contracts have terminated,
Treasury Notes will be delivered, in each case upon presentation and surrender
of the Security Certificates evidencing the related Securities at the office of
the Purchase Contract Agent.
If a holder of outstanding Securities fails to present and surrender the
Security Certificate evidencing such Securities to the Purchase Contract Agent
on the Final Settlement Date, the shares of Common Stock issuable in settlement
of the applicable Purchase Contract will be registered in the name of the
Purchase Contract Agent and, together with any distributions thereon, shall be
held by the Purchase Contract Agent in trust for the benefit of such holder,
until such Security Certificate is presented and surrendered or the holder
provides satisfactory evidence that such certificate has been destroyed, lost
or stolen, together with any indemnity that may be required by the Purchase
Contract Agent and the Company.
If the Purchase Contracts have terminated prior to the Final Settlement Date,
the Treasury Notes have been transferred to the Purchase Contract Agent for
distribution to the holders entitled thereto
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<PAGE>
and a holder fails to present and surrender the Security Certificate evidencing
such holder's Securities to the Purchase Contract Agent, the Treasury Notes
delivered to the Purchase Contract Agent and payments thereon shall be held by
the Purchase Contract Agent in trust, for the benefit of such holder, until
such Security Certificate is presented or the holder provides the evidence and
indemnity described above.
The Purchase Contract Agent will have no obligation to invest or to pay
interest on any amounts held by the Purchase Contract Agent pending
distribution, as described above.
No service charge will be made for any registration of transfer or exchange
of the Securities, except for any tax or other governmental charge that may be
imposed in connection therewith.
MODIFICATION
The Purchase Contract Agreement and the Pledge Agreement will contain
provisions permitting the Company and the Purchase Contract Agent or Collateral
Agent, as the case may be, with the consent of the holders of not less than 66
2/3% of the Securities at the time outstanding, to modify the terms of the
Purchase Contracts, the Purchase Contract Agreement and the Pledge Agreement,
except that no such modification may, without the consent of the holder of each
outstanding Security affected thereby, (a) change any Payment Date, (b) change
the amount or type of Treasury Notes underlying a Security, impair the right of
the holder of any Security to receive interest payments on the underlying
Treasury Notes or otherwise adversely affect the holder's rights in or to such
Treasury Notes, (c) change the place or currency of payment or reduce any
Contract Fees, (d) impair the right to institute suit for the enforcement of
any Purchase Contract, (e) reduce the amount of Common Stock purchasable under
any Purchase Contract, increase the price to purchase Common Stock on
settlement of any Purchase Contract, change the Final Settlement Date or
otherwise adversely affect the holder's rights under any Purchase Contract or
(f) reduce the above-stated percentage of outstanding Securities, the consent
of whose holders is required for the modification or amendment of the
provisions of the Purchase Contracts, the Purchase Contract Agreement or the
Pledge Agreement.
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
The Company will covenant in the Purchase Contract Agreement that it will not
merge or consolidate with any other entity or sell or convey all or
substantially all of its assets to any person, firm or corporation unless the
Company is the continuing corporation or the successor corporation is a
corporation organized under the laws of the United States of America or a state
thereof and such corporation expressly assumes the obligations of the Company
under the Purchase Contracts, the Purchase Contract Agreement and the Pledge
Agreement, and the Company or such successor corporation is not, immediately
after such merger, consolidation, sale or conveyance, in default in the
performance of any of its obligations thereunder.
TITLE
The Company, the Purchase Contract Agent and the Collateral Agent may treat
the registered owner of any Security as the absolute owner thereof for the
purpose of making payment and settling the Purchase Contracts and for all other
purposes.
REPLACEMENT OF SECURITY CERTIFICATES
Any mutilated Security Certificate will be replaced by the Company at the
expense of the holder upon surrender of such certificate to the Purchase
Contract Agent. Security Certificates that become destroyed, lost or stolen
will be replaced by the Company at the expense of the holder upon delivery to
the Company and the Purchase Contract Agent of evidence of the destruction,
loss or theft thereof satisfactory to the Company and the Purchase Contract
Agent. In the case of a destroyed, lost or stolen
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Security Certificate, an indemnity satisfactory to the Purchase Contract Agent
and the Company may be required at the expense of the holder of the Securities
evidenced by such certificate before a replacement will be issued.
Notwithstanding the foregoing, the Company will not be obligated to issue any
Security on or after the Final Settlement Date or after the Purchase Contracts
have terminated. The Purchase Contract Agreement will provide that, in lieu of
the delivery of a replacement Security Certificate following the Final
Settlement Date, the Purchase Contract Agent, upon delivery of the evidence and
indemnity described above, will deliver the Common Stock issuable pursuant to
the Purchase Contracts included in the Securities evidenced by such
certificate, or, if the Purchase Contracts have terminated prior to the Final
Settlement Date, transfer the principal amount of the Treasury Notes included
in the Securities evidenced by such certificate.
GOVERNING LAW
The Purchase Contract Agreement, the Pledge Agreement and the Purchase
Contracts will be governed by, and construed in accordance with, the laws of
the State of New York.
INFORMATION CONCERNING THE PURCHASE CONTRACT AGENT
The First National Bank of Chicago will be the Purchase Contract Agent. The
Purchase Contract Agent will act as the agent for the holders of Securities
from time to time. The Purchase Contract Agreement will not obligate the
Purchase Contract Agent to exercise any discretionary actions in connection
with a default under the terms of the Securities or the Purchase Contract
Agreement.
The Purchase Contract Agreement will contain provisions limiting the
liability of the Purchase Contract Agent. The Purchase Contract Agreement will
contain provisions under which the Purchase Contract Agent may resign or be
replaced. Such resignation or replacement would be effective upon the
appointment of a successor.
First Chicago Trust Company of New York, an affiliate of the Purchase
Contract Agent, is the transfer agent and registrar for the Common Stock.
INFORMATION CONCERNING THE COLLATERAL AGENT
Texas Commerce Bank National Association will be the Collateral Agent. The
Collateral Agent will act solely as the agent of the Company and will not
assume any obligation or relationship of agency or trust for or with any of the
holders of the Securities except for the obligations owed by a pledgee of
property to the owner thereof under the Pledge Agreement and applicable law.
The Pledge Agreement will contain provisions limiting the liability of the
Collateral Agent. The Pledge Agreement will contain provisions under which the
Collateral Agent may resign or be replaced. Such resignation or replacement
would be effective upon the appointment of a successor.
For information concerning the relationship between the Company and Texas
Commerce Bank National Association, see "Description of Debt Securities--
Provisions Applicable to Senior Debt Securities--Regarding the Senior Trustee"
in the accompanying Prospectus.
LISTING
The Securities have been approved for listing on the New York Stock Exchange
(subject to notice of issuance) under the symbol "BFE".
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CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the principal U.S. federal income tax
consequences of the purchase, ownership and disposition of Securities. The
summary represents the opinion of Sullivan & Cromwell, special tax counsel to
the Company and the Underwriters, insofar as it relates to matters of law and
legal conclusions. The summary deals only with Securities held as capital
assets by purchasers who or which are (i) citizens or residents of the United
States, (ii) domestic corporations or (iii) otherwise subject to U.S. federal
income taxation on a net income basis in respect of income and gain from
securities. It does not deal with Securities held by specially treated classes
of holders, such as dealers in securities or life insurance companies.
Prospective purchasers of Securities should consult their own tax advisors
concerning the U.S. federal income tax consequences to Security holders in
their particular situations, as well as any consequences under the laws of any
other taxing jurisdiction.
The following summary assumes that the Treasury Notes will be purchased on,
or approximately on, an interest payment date for such Treasury Notes and will,
therefore, not include any right to accrued interest.
INCOME FROM SECURITIES
A holder will include interest on the Treasury Notes in income when received
or accrued, in accordance with the holder's method of accounting.
There is no authority for the treatment of the Contract Fees under current
law, but the Company intends to file information returns on the basis that the
Contract Fees are income to holders. Holders should consult their own tax
advisors concerning the treatment of Contract Fees, including the possibility
that Contract Fees may be treated as a reduction in the holders' basis in the
Securities, rather than included in income upon receipt, by analogy to the
treatment of rebates or of option premiums. The Company does not intend to
deduct the Contract Fees for federal income tax purposes because it views them
as a cost of issuing the Common Stock. Contract Fees received by a regulated
investment company should be treated as income derived with respect to the
company's business of investing in stock and securities.
SALE OR DISPOSITION OF SECURITIES
If a holder sells, exchanges or otherwise disposes of a Security before the
maturity of the Treasury Notes, the holder will generally recognize capital
gain or loss equal to the difference between the holder's tax basis in the
Security (generally equal to the amount paid for the Security, reduced by the
sum of any Contract Fees received by the holder and not previously included in
income) and the amount realized from the disposition of the Security. If a
holder sells a Security between interest payment dates, a portion of the
proceeds of the sale will be treated as a receipt of interest accrued since the
last interest payment date, rather than as an amount realized from the sale of
the Security, consistent with the general treatment of proceeds from the sale
of debt instruments such as Treasury Notes.
GAIN OR LOSS ON MATURITY OF THE TREASURY NOTES
The tax basis of the Treasury Notes will equal the fair market value of the
Treasury Notes at the time of purchase of a Security. If such fair market value
equals the amount payable at maturity of the Treasury Notes, the holder will
not realize gain or loss upon payment of the Treasury Notes at maturity. If
such fair market value is less than the amount payable at maturity of the
Treasury Notes, the holder will generally realize gain equal to the difference
upon payment of the Treasury Notes at maturity. This gain will be treated as
ordinary interest income (i.e., market discount) unless it is "de minimis", in
which case it will be treated as capital gain. The gain will be "de minimis" if
it is less than 1/4 of one percent of the amount payable at maturity of the
Treasury Notes multiplied by the number of complete years
S-21
<PAGE>
remaining to maturity of the Treasury Notes. A holder may instead elect to
accrue market discount into income on a current basis over the remaining life
of the Treasury Notes.
If such fair market value is greater than the amount payable at maturity of
the Treasury Notes, the excess will be "bond premium". A holder may either
recognize the bond premium as a capital loss upon payment of the Treasury Notes
at maturity or make an election to amortize it over the term of the Treasury
Notes. If the election is made, the bond premium will generally reduce the
interest income on the Treasury Notes on a constant yield basis over the
remaining term of the Treasury Notes and will reduce the basis of the Treasury
Notes by the amount of the amortization. An election to amortize bond premium
may apply to other debt instruments acquired at a premium by the holder, and a
holder should consult a tax advisor before making the election.
TAX BASIS OF COMMON STOCK ACQUIRED UNDER THE PURCHASE CONTRACT
The tax basis of the Common Stock acquired under the Purchase Contract will
equal the amount paid for the Security (a) increased by the amount of any gain
recognized on receipt of principal of the Treasury Notes, or market discount
included in income, as set forth above, (b) reduced by the amount of any loss
recognized on receipt of principal of the Treasury Notes, or bond premium
amortized over the term of the Treasury Notes, as set forth above, (c) reduced
by the amount of any Contract Fees received by the holder and not previously
included in income, and (d) reduced by the amount of any cash received in lieu
of fractional shares of Common Stock.
OWNERSHIP OF COMMON STOCK ACQUIRED UNDER THE PURCHASE CONTRACT
Assuming that the Company has current or accumulated earnings and profits at
least equal to the amount of the dividends, a holder will include a dividend on
the Common Stock in income when paid, and the dividend will be eligible for the
dividends received deduction if received by an otherwise qualifying corporate
holder which meets the holding period and other requirements for the dividends
received deduction.
Upon the sale, exchange or other disposition of Common Stock, the holder will
recognize gain or loss equal to the difference between the holder's tax basis
in the Common Stock and the amount realized on the disposition. The gain or
loss will be capital gain or loss, and will be long-term capital gain or loss
if the holder has held the stock for more than one year at the time of
disposition.
ADJUSTMENT OF SETTLEMENT RATE
Holders of Securities might be treated as receiving a constructive
distribution from the Company if (i) the Settlement Rate is adjusted and as a
result of such adjustment, the proportionate interest of holders of Securities
in the assets or earnings and profits of the Company is increased, and (ii) the
adjustment is not made pursuant to a bona fide, reasonable antidilution
formula. An adjustment in the Settlement Rate would not be considered made
pursuant to such a formula if the adjustment were made to compensate for
certain taxable distributions with respect to Common Stock. Thus, under certain
circumstances, an increase in the Settlement Rate is likely to be taxable to
holders of Securities as a dividend to the extent of the current or accumulated
earnings and profits of the Company. Holders of Securities would be required to
include their allocable share of such constructive dividend in gross income but
would not receive any cash related thereto.
S-22
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, (a) the
Company has agreed to (i) enter into the Purchase Contracts with each of the
Underwriters named below (the "Underwriters") underlying the respective number
of Securities set forth opposite its name below and (ii) pay to such
Underwriters an amount (including underwriting commission) equal to the deficit
to the Company in respect of such Securities as set forth on the cover page of
this Prospectus, and (b) each of such Underwriters, for whom Goldman, Sachs &
Co. and CS First Boston Corporation are acting as representatives, has
severally agreed to enter into such Purchase Contracts and purchase and pledge
under the Pledge Agreement the Treasury Notes underlying such Securities:
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SECURITIES
----------- ----------
<S> <C>
Goldman, Sachs & Co. ........................................... 2,700,500
CS First Boston Corporation..................................... 2,700,500
Alex. Brown & Sons Incorporated................................. 196,000
Dillon, Read & Co. Inc. ........................................ 196,000
Donaldson, Lufkin & Jenrette Securities Corporation............. 196,000
A.G. Edwards & Sons, Inc. ...................................... 196,000
Kemper Securities, Inc. ........................................ 196,000
C.J. Lawrence/Deutsche Bank Securities Corporation.............. 196,000
Lehman Brothers Inc. ........................................... 196,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated.............. 196,000
J.P. Morgan Securities Inc. .................................... 196,000
Morgan Stanley & Co. Incorporated............................... 196,000
NatWest Securities Corporation.................................. 196,000
Oppenheimer & Co., Inc. ........................................ 196,000
Prudential Securities Incorporated.............................. 196,000
Salomon Brothers Inc............................................ 196,000
Smith Barney Inc. .............................................. 196,000
UBS Securities Inc. ............................................ 196,000
Advest, Inc. ................................................... 122,000
J.C. Bradford & Co. ............................................ 122,000
Edward D. Jones & Co. .......................................... 122,000
Morgan Keegan & Company, Inc. .................................. 122,000
Rauscher Pierce Refsnes, Inc. .................................. 122,000
Raymond James & Associates, Inc. ............................... 122,000
Stephens Inc. .................................................. 122,000
Sutro & Co. Incorporated........................................ 122,000
Tucker Anthony Incorporated..................................... 122,000
Crowell, Weedon & Co. .......................................... 73,000
Fahnestock & Co. Inc. .......................................... 73,000
Johnston, Lemon & Co. Incorporated.............................. 73,000
Scott & Stringfellow, Inc. ..................................... 73,000
Stifel, Nicolaus & Company, Incorporated........................ 73,000
----------
Total......................................................... 10,000,000
==========
</TABLE>
S-23
<PAGE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to enter into Purchase Contracts and purchase and
pledge Treasury Notes underlying all of the Securities offered hereby, if any
Purchase Contracts are entered into.
The Underwriters propose to offer the Securities in part directly to the
public at the initial public offering price set forth on the cover page of this
Prospectus Supplement, and in part to certain securities dealers at such price
less a concession of $.64 per Security. The Underwriters may allow, and such
dealers may reallow, a concession not in excess of $.10 per Security to certain
brokers and dealers. After the Securities are released for sale to the public,
the offering price and other selling terms may from time to time be varied by
the representatives.
The Company has granted the Underwriters an option exercisable for 30
calendar days after the date of this Prospectus Supplement to enter into
Purchase Contracts underlying up to an aggregate of 1,500,000 additional
Securities solely to cover over-allotments, if any; if Purchase Contracts
underlying any such additional Securities are entered into, the Underwriters
would purchase and pledge under the Pledge Agreement the Treasury Notes
underlying such Securities and the Company or the Underwriters, as appropriate,
would pay a net amount equal to the proceeds (deficit) to the Company in
respect of such Securities as set forth on the cover page of this Prospectus
Supplement. If the Underwriters exercise their over-allotment option, each of
the Underwriters has severally agreed, subject to certain conditions, to effect
the foregoing transactions with respect to approximately the same percentage of
such Securities that the respective number of Securities set forth opposite its
name in the foregoing table bears to the 10,000,000 Securities offered hereby.
The price to the Underwriters of the Treasury Notes underlying Securities with
respect to which an over-allotment option is exercised may be different from
that set forth on the cover page of this Prospectus Supplement. Any such
difference will be for the account of the Underwriters and will not affect the
amount of the proceeds (deficit) to the Company in respect of such Securities
as shown on the cover page of this Prospectus Supplement. The Underwriters may
enter into certain hedge transactions for their own account to reduce or
eliminate their risk in this regard.
The Company has agreed that, for a period of 90 days after the date of this
Prospectus Supplement, it will not, and it will use its best efforts to cause
its executive officers and directors and Otto Holding International B.V. not
to, offer, sell, contract to sell or otherwise dispose of any Securities or
shares of Common Stock or any rights to purchase or acquire Securities or
Common Stock without the prior written consent of the representatives of the
Underwriters, except pursuant to the conversion of existing convertible
securities, the Company's Dividend Reinvestment Plan, existing employee benefit
or stock option plans or the acquisition of any business or properties in the
Company's ongoing acquisition program and except for the shares of Common Stock
underlying the Purchase Contracts.
The Company has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
LEGAL MATTERS
The validity of the Purchase Contracts and the Common Stock issuable upon
settlement thereof and of the interest of Holders of Securities in the Treasury
Notes pursuant to the Pledge Agreement will be passed upon for the Company by
Fulbright & Jaworski L.L.P., Houston, Texas, and certain legal matters will be
passed upon for the Underwriters by Vinson & Elkins L.L.P., Houston, Texas.
Fulbright & Jaworski L.L.P. has represented certain of the Underwriters in
various legal matters from time to time. Vinson & Elkins L.L.P. has represented
the Company in various legal matters from time to time. In addition, Sullivan &
Cromwell, New York, New York, acted as special tax counsel for the Company and
the Underwriters, and special counsel for the Underwriters with respect to
certain corporate law matters, in connection with the Securities.
S-24
<PAGE>
PROSPECTUS
LOGO
(LOGO OF BROWNING-FERRIS INDUSTRIES, INC. APPEARS HERE)
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
WARRANTS
STOCK PURCHASE CONTRACTS
STOCK PURCHASE UNITS
Browning-Ferris Industries, Inc. (the "Company") may offer and sell 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 $949,775,000 (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"), (iv) Warrants ("Warrants") to purchase Debt
Securities, Preferred Stock or Common Stock, (v) Stock Purchase Contracts
("Stock Purchase Contracts") to purchase Preferred Stock or Common Stock or
(vi) Stock Purchase Units ("Stock Purchase Units"), each representing ownership
of a Stock Purchase Contract and Debt Securities or debt obligations of third
parties, including U.S. Treasury securities, securing the holder's obligation
to purchase the Preferred Stock or Common Stock under the Stock Purchase
Contract (the Debt Securities, Preferred Stock, Common Stock, Warrants, Stock
Purchase Contracts and Stock Purchase Units are collectively referred to as
"Securities"). A minimum of $100,000,000 of the aggregate securities that may
be offered hereunder must be offered in the form of Debt 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 net proceeds to
the Company 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 or subordinated debt, authorized
denomination, maturity, rate or rates of interest (or method of calculation
thereof) and dates for payment thereof, any exchangeability, conversion,
redemption, prepayment or sinking fund provisions, and 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, (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, (v) in the case of Stock Purchase Contracts, the
designation and number of shares of Preferred Stock or Common Stock issuable
thereunder, the purchase price of the Preferred Stock or Common Stock, the date
or dates on which the Preferred Stock or Common Stock is required to be
purchased by the holders of the Stock Purchase Contracts, any periodic payments
required to be made by the Company to the holders of the Stock Purchase
Contract or visa versa, and the terms of the offering and sale thereof, and
(vi) in the case of Stock Purchase Units, the specific terms of the Stock
Purchase Contracts and any Debt Securities or debt obligations of third parties
securing the holder's obligation to purchase the Preferred Stock or Common
Stock under the Stock Purchase Contracts, and the terms of the offering and
sale 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.
--------------
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.
--------------
This Prospectus may not be used to consummate sales of the Securities unless
accompanied by a Prospectus Supplement.
THE DATE OF THIS PROSPECTUS IS JUNE 23, 1995
<PAGE>
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.
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., Room 1024, 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, Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material
may also 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, Inc., 440 S. LaSalle Street,
Chicago, Illinois 60605, and at the offices of the Pacific Stock Exchange,
Inc., 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 following documents, heretofore filed with the Commission by the Company
pursuant to the Exchange Act, are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1994;
(b) The Company's Quarterly Reports on Form 10-Q for the quarters ended
December 31, 1994 and March 31, 1995 (as amended); and
(c) The Company's Current Reports on Form 8-K dated January 24, 1995 (as
amended), dated March 2, 1995 and dated March 14, 1995.
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
2
<PAGE>
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 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 Secretary's Department at (713) 870-7027.
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, medical waste services, portable restroom services and
municipal and commercial sweeping operations. The Company's subsidiaries and
affiliates (including unconsolidated affiliates) operate in approximately 430
locations in North America and approximately 280 locations outside of North
America, and employ approximately 40,000 persons. 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, the
Dominican Republic, Finland, Germany, Hong Kong, Israel, Italy, Kuwait, the
Netherlands, New Zealand, Spain, Switzerland and the United Kingdom.
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 used for general corporate purposes, including reduction of
indebtedness, acquisitions and capital expenditures.
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
3
<PAGE>
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, 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. Other than as may be set forth in any Prospectus Supplement,
the Indentures and the Debt Securities will not contain any covenants or other
provisions that are intended to afford holders of the Debt Securities special
protection in the event of a highly leveraged transaction by the Company.
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 the 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)
4
<PAGE>
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 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.
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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 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
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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 with 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 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)
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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)
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
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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 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
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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 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.
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"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. Marc
J. Shapiro, a director of the Company, is also the President and Chief
Executive Officer of the Senior Trustee and an executive officer of Chemical
Banking Corporation, the parent corporation of the Senior Trustee. William D.
Ruckelshaus, Chairman of the Board of Directors and Chief Executive Officer of
the Company, is also an advisory director of the Senior Trustee. Marina v.N.
Whitman, a director of the Company, is also a director of Chemical Banking
Corporation.
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)
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
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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 March 31, 1995, the Company had outstanding approximately $2.6 billion
principal amount of indebtedness which would constitute "Senior Debt". The
Company also has unused lines of credit for up to a maximum of $1.5 billion at
March 31, 1995. 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 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)
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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.
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
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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 March 31, 1995, 212,648,092 shares of Common
Stock were issued and outstanding and 35,504,439 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, Mail Suite 4694, Post Office Box 2536,
Jersey City, New Jersey 07303-2536.
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;
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(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;
(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
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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 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.
DESCRIPTION OF STOCK PURCHASE CONTRACTS
AND STOCK PURCHASE UNITS
The Company may issue Stock Purchase Contracts, including contacts obligating
holders to purchase from the Company, and the Company to sell to the holders, a
specified number of shares of Common Stock or Preferred Stock at a future date
or dates. The price per share of Preferred Stock or Common Stock may be fixed
at the time the Stock Purchase Contracts are issued or may be determined by
reference to a specific formula set forth in the Stock Purchase Contracts. The
Stock Purchase Contracts may be issued separately or as a part of units ("Stock
Purchase Units") consisting of a Stock Purchase Contract and Debt Securities or
debt obligations of third parties, including U.S. Treasury securities, securing
the holders' obligations to purchase the Preferred Stock or the Common Stock
under the Purchase Contracts. The Stock Purchase Contracts may require the
Company to make periodic payments to the holders of the Stock Purchase Units or
visa versa, and such payments may be unsecured or prefunded on some basis. The
Stock Purchase Contracts may require holders to secure their obligations
thereunder in a specified manner.
The applicable Prospectus Supplement will describe the terms of any Stock
Purchase Contracts or Stock Purchase Units. The description in the Prospectus
Supplement will not purport to be complete and will be qualified in its
entirety by reference to the Stock Purchase Contracts, and, if applicable,
collateral arrangements and depositary arrangements, relating to such Stock
Purchase Contracts or Stock Purchase Units.
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<PAGE>
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.
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.
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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, 1994
incorporated herein by reference, have been audited by Arthur Andersen LLP,
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.
The consolidated financial statements of Attwoods plc included in the
Company's Current Report on Form 8-K dated January 24, 1995 incorporated herein
by reference have been audited by Binder Hamlyn, Chartered Accountants,
Registered Auditors, as indicated in their report with respect thereto, and are
incorporated herein in reliance upon the authority of said firm as experts in
giving said report.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT AND
THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND
THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH THEY RELATE OR
ANY OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY
CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE
DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS 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 ITS DATE.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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PROSPECTUS SUPPLEMENT
<S> <C>
Prospectus Supplement Summary.............................................. S-3
Certain Characteristics of the Securities.................................. S-9
The Company................................................................ S-10
Use of Proceeds............................................................ S-12
Price Range of Common Stock and
Dividends................................................................. S-12
Description of the Securities.............................................. S-13
Certain Federal Income Tax Consequences.................................... S-21
Underwriting............................................................... S-23
Legal Matters.............................................................. S-24
PROSPECTUS
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
The Company................................................................ 3
Application of Proceeds.................................................... 3
Description of Debt Securities............................................. 3
Capital Stock.............................................................. 13
Description of Warrants.................................................... 15
Description of Stock Purchase Contracts
and Stock Purchase Units.................................................. 16
Plan of Distribution....................................................... 17
Legal Opinions............................................................. 17
Experts.................................................................... 18
</TABLE>
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10,000,000 SECURITIES
BROWNING-FERRIS INDUSTRIES, INC.
7.25% AUTOMATIC COMMON EXCHANGE SECURITIES
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LOGO
[LOGO OF BFI APPEARS HERE]
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GOLDMAN, SACHS & CO.
CS FIRST BOSTON
REPRESENTATIVES OF THE UNDERWRITERS
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