<PAGE>
Filed Pursuant to Rule 424(b)(2)
Registration No. 33-65055
PROSPECTUS SUPPLEMENT
(To Prospectus dated January 11, 1996)
[LOGO OF BROWNING FERRIS INDUSTRIES APPEARS HERE]
$200,000,000
6.10% Senior Notes due January 15, 2003
Interest payable January 15 and July 15
ISSUE PRICE: 99.877%
$200,000,000
6.375% Senior Notes due January 15, 2008
Interest payable January 15 and July 15
ISSUE PRICE: 99.859%
Interest on the 6.10% Senior Notes due January 15, 2003 and on the 6.375%
Senior Notes due January 15, 2008 (collectively, the "Notes") is payable
semiannually on January 15 and July 15, commencing July 15, 1996. The Notes are
not redeemable prior to maturity. The Notes will be represented by one or more
global securities registered in the name of a nominee of The Depository Trust
Company, as Depositary. Beneficial interests in the Notes will be shown on, and
transfers thereof will be effected only through, records maintained by the
Depositary and its participants. Except as described herein, the Notes will not
be issued in definitive form. See "Description of the Notes."
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. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS (2) COMPANY(1)(3)
- -----------------------------------------------------------
<S> <C> <C> <C>
Per 6.10% Note 99.877% .625% 99.252%
- -----------------------------------------------------------
Total $199,754,000 $1,250,000 $198,504,000
- -----------------------------------------------------------
Per 6.375% Note 99.859% .675% 99.184%
- -----------------------------------------------------------
Total $199,718,000 $1,350,000 $198,368,000
- -----------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from January 17, 1996.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933. See
"Underwriting".
(3) Before deducting expenses payable by the Company estimated at $250,000.
The Notes are offered, subject to prior sale, when, as and if accepted by the
Underwriters. It is expected that delivery of the Notes will be made on or
about January 17, 1996, through the facilities of the Depositary, against
payment therefor in same-day funds.
J.P. MORGAN SECURITIES INC.
CS FIRST BOSTON
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
MORGAN STANLEY & CO.
INCORPORATED
January 11, 1996
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
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 Supplement or 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 an 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
or the Prospectus nor any sale made hereunder shall, under any circumstances,
create any implication that there has been no change in the affairs of the
Company since the date hereof or that the information contained herein is
correct as of any time subsequent to its date.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
Selected Financial Data.................................................... S-3
Application of Proceeds.................................................... S-4
Description of the Notes................................................... S-4
Underwriting............................................................... S-6
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.............................................................. 12
Description of Warrants.................................................... 15
Description of Stock Purchase Contracts and Stock Purchase Units........... 16
Plan of Distribution....................................................... 16
Legal Opinion.............................................................. 17
Experts.................................................................... 17
</TABLE>
S-2
<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, 1991 through
1995 is summarized or prepared from the Company's audited consolidated
financial statements for such periods. 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>
YEAR ENDED SEPTEMBER 30,
----------------------------------------
1995 1994 1993 1992 1991
------ ------ ------ ------ ------
(IN MILLIONS, EXCEPT FOR RATIOS
AND PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
OPERATING STATEMENT DATA:
Revenues(1)...................... $5,779 $4,315 $3,479 $3,278 $3,175
Income before special charges and
extraordinary item.............. $ 385 $ 284 $ 214 $ 176 $ 222
Income before extraordinary item. $ 385 $ 284 $ 197 $ 176 $ 65
Net income....................... $ 385 $ 279 $ 197 $ 176 $ 65
Income per common and common
equivalent share--
Income before extraordinary
item.......................... $ 1.93 $ 1.52 $ 1.15(2) $ 1.11 $ .42(3)
Net income..................... $ 1.93 $ 1.49(4) $ 1.15 $ 1.11 $ .42
Cash dividends per common share.. $ .68 $ .68 $ .68 $ .68 $ .68
CASH FLOW DATA:
Capital expenditures--continuing
operations...................... $ 930 $ 694 $ 606 $ 531 $ 478
Cash flows from operating
activities...................... $1,030 $ 694 $ 614 $ 577 $ 686
BALANCE SHEET DATA:
Property and equipment, net...... $3,722 $3,050 $2,516 $2,264 $2,140
Total assets..................... $7,460 $5,797 $4,296 $4,068 $3,656
Senior long-term debt, excluding
current maturities.............. $1,666 $ 714 $ 334 $ 349 $ 407
Convertible subordinated
debentures...................... $ 745 $ 745 $ 745 $ 745 $ 745
Common stockholders' equity...... $2,742 $2,392 $1,533 $1,460 $1,114
OTHER DATA:
Ratio of earnings to fixed
charges (5)..................... 4.04 4.25 3.31(6) 3.08 1.76(7)
</TABLE>
- --------
(1) Certain reclassifications have been made in prior period amounts to
conform to the current year presentation.
(2) $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.
(3) $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.
(4) Includes extraordinary charge of $5 million, net of tax ($.03 per share)
related to the loss on early retirement of debt in fiscal 1994.
(5) For the purposes of computing the ratio of earnings to fixed charges,
"earnings" has been calculated by adding to the 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 50%-owned subsidiaries and has
been reduced by capitalized interest income earned on proceeds primarily
from tax-exempt financings of such 50%-owned subsidiaries.
(6) 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.
(7) Excluding the effects of the fiscal year 1991 special charge of $246.5
million, the ratio of earnings to fixed charges for fiscal year 1991 was
3.63.
S-3
<PAGE>
APPLICATION OF PROCEEDS
The entire net proceeds received by the Company from the sale of the Notes
will be applied to repayment of a portion of the Company's 6-1/4% Convertible
Subordinated Debentures Due 2012 and 6-3/4% Convertible Subordinated Debentures
Due 2005 in the aggregate principal amount of approximately $745 million,
called for redemption on February 2, 1996. Such indebtedness bears interest at
a current weighted average interest rate of 6.52%. Additional funds required
for such redemption will be provided from sales of commercial paper and
internally generated funds. Such redemption is expected to result in an
extraordinary after-tax charge of approximately $11 million during the quarter
ending March 31, 1996.
Pending such uses, the proceeds will be used to repay commercial paper and
purchase short-term investments.
DESCRIPTION OF THE NOTES
The following description of the particular terms of the Notes offered hereby
(referred to in the accompanying Prospectus as the "Offered Debt Securities")
supplements, and to the extent inconsistent therewith replaces, the description
of the general terms and provisions of Debt Securities set forth in the
Prospectus, to which description reference is hereby made. The Notes will be
issued under the Senior Indenture. Except as otherwise defined herein,
capitalized terms used herein have the meanings specified in the accompanying
Prospectus.
GENERAL
The 6.10% Senior Notes due January 15, 2003 (the "6.10% Notes") will be
limited to $200,000,000 in aggregate principal amount and will mature on
January 15, 2003. The 6.375% Senior Notes due January 15, 2008 (the "6.375%
Notes") will be limited to $200,000,000 in aggregate principal amount and will
mature on January 15, 2008. The Notes will bear interest from January 17, 1996,
at the rates per annum stated on the cover page of this Prospectus Supplement,
payable semiannually on January 15 and July 15, commencing July 15, 1996, to
holders of record at the close of business on first day of the month
immediately preceding the month in which such interest payment is due, except
as otherwise provided in the Senior Indenture.
The Notes are not redeemable prior to maturity and are not subject to any
sinking fund. The Notes will be sold in minimum denominations of $1,000 and
integral multiples thereof.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made in same-day funds. All payments of
principal and interest will be made by the Company in immediately available
funds. To the extent any Notes are held by The Depository Trust Company
("DTC"), such Notes will trade in DTC's Same-Day Funds Settlement System until
maturity, and therefore DTC will require secondary trading activity in the
Notes to be settled in immediately available funds. Secondary trading in long-
term notes and debentures of corporate issuers is generally settled in
clearing-house or next-day funds. No assurance can be given as to the effect,
if any, of settlement in immediately available funds on trading activity in the
Notes.
BOOK-ENTRY, DELIVERY AND FORM
The Notes will be issued in the form of one or more fully registered Global
Notes (referred to herein as the "Global Notes" and in the Prospectus as the
"Global Securities") which will be deposited with, or on behalf of, the
Depositary and registered in the name of the Depositary's nominee. Except as
set forth below, the Global Notes may be transferred, in whole and not in part,
only to another nominee of the Depositary or to a successor of the Depositary
or its nominee.
S-4
<PAGE>
The Depositary has advised the Company and the Underwriters as follows: The
Depositary is a limited- purpose trust company organized under the laws of the
State of New York, a "banking corporation" within the meaning of the New York
banking law, 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 the provisions of Section 17A of the Securities
Exchange Act of 1934. The Depositary was created to hold securities of its
Participants and to facilitate the clearance and settlement of securities
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 securities certificates. The Depositary's Participants
include securities brokers and dealers (including the Underwriters), banks
(including the Trustee), 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.
Neither the Company, the Trustee, any Paying Agent nor the Security Registrar
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 Notes, or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
See "Description of Debt Securities--Provisions Applicable to Both Senior and
Subordinated Debt Securities--Global Securities" in the accompanying Prospectus
for additional information concerning the arrangements for book-entry
registration and transfer of the Notes.
DEFEASANCE
The Company at any time may satisfy its obligations with respect to payments
of principal of and interest on the Notes by depositing in trust with the
Trustee money or U.S. government obligations or a combination thereof
sufficient to make such payments when due. All obligations of the Company with
respect to the Notes and the Senior Indenture insofar as they relate to the
Notes will be discharged and terminated (except as to the Company's obligations
to compensate, reimburse and indemnify the Trustee pursuant to the Senior
Indenture) only if (i) such deposit is sufficient to pay when due the principal
of and interest on all outstanding Notes, and (ii) the Company delivers to the
Trustee an opinion of counsel to the effect that the holders of the Notes will
not recognize income, gain or loss for United States federal income tax
purposes as a result of such treatment of such holder's principal and interest
payments on the Notes (such opinion must be based on a ruling of the Internal
Revenue Service or a change in United States federal income tax law occurring
after the date hereof, since such a result would not occur under current tax
law). In the event of any such defeasance, holders of the Notes would be able
to look only to such trust fund for payments of principal of and interest on
the Notes until maturity.
See "Description of Debt Securities" in the accompanying Prospectus for
additional information concerning the Notes and the Indenture under which they
are to be issued.
S-5
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement,
dated the date hereof, the Company has agreed to sell to each of the
Underwriters named below, and each of the Underwriters has severally agreed to
purchase, the principal amount of Notes set forth opposite its name below:
<TABLE>
<CAPTION>
UNDERWRITER PRINCIPAL AMOUNT OF NOTES
----------- -------------------------
6.10% NOTES 6.375% NOTES
------------ ------------
<S> <C> <C>
J.P. Morgan Securities Inc........................... $ 40,000,000 $ 40,000,000
CS First Boston Corporation.......................... 40,000,000 40,000,000
Goldman, Sachs & Co.................................. 40,000,000 40,000,000
Lehman Brothers Inc.................................. 40,000,000 40,000,000
Morgan Stanley & Co. Incorporated.................... 40,000,000 40,000,000
------------ ------------
Total............................................ $200,000,000 $200,000,000
============ ============
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are obligated to take and pay for all the Notes if any are taken.
The Underwriters propose to offer the Notes directly to the public at the
initial public offering prices set forth on the cover page of this Prospectus
Supplement and to certain dealers at such price less a concession not in excess
of .375% of the principal amount of the 6.10% Notes and .40% of the principal
amount of the 6.375% Notes. The Underwriters may allow, and such dealers may
re-allow, a concession not in excess of .25% of the principal amount of the
6.10% Notes or the 6.375% Notes to certain other dealers. After the initial
public offering, the public offering price and such concessions may be changed
by the Underwriters.
The Notes are new issues of securities with no established trading market.
The Company has been advised by the Underwriters that the Underwriters intend
to make a market in the Notes but are not obligated to do so and may
discontinue market making at any time without notice. No assurance can be given
as to the liquidity of the trading market for the Notes.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
In the ordinary course of their respective businesses, the Underwriters and
their respective affiliates have engaged and may in the future engage in
commercial banking and investment banking transactions with the Company.
S-6
<PAGE>
PROSPECTUS
[LOGO OF BFI 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 $1,142,227,500 (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").
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 JANUARY 11, 1996
<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, Northwest Atrium 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, 1995;
(b) The Company's Current Report on Form 8-K dated January 24, 1995, as
amended, relating to the acquisition by the Company of Attwoods plc,
including the consolidated financial statements of Attwoods plc for the
year ended July 31, 1994 and the unaudited pro forma combined statement of
operations of the Company for the year ended September 30, 1994; and
(c) The Company's Current Report on Form 8-K dated March 2, 1995,
including the unaudited pro forma combined statement of operations of the
Company for the quarter ended December 31, 1994.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus, and prior to the termination of the offering of the Securities,
shall be deemed to be incorporated by reference in the Prospectus and to be a
part hereof from
2
<PAGE>
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 that engages,
through its subsidiaries and affiliates, in providing waste services. The
Company collects, transports, treats and/or processes, recycles and disposes of
commercial, residential and municipal solid wastes and industrial wastes. The
Company is also involved in waste-to-energy conversion, medical waste services,
portable restroom services and municipal and commercial sweeping operations.
The Company (including unconsolidated affiliates) operates in approximately 450
locations in North America and approximately 320 locations outside of North
America, and employs approximately 43,000 persons. In addition to operations in
the United States, Canada and Puerto Rico, the Company owns interests in
subsidiaries or affiliates with operations in Australia, the Dominican
Republic, Finland, Germany, Hong Kong, Italy, Israel, 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 applied to reduce certain outstanding debt and for general
corporate purposes, including capital expenditures and acquisitions.
DESCRIPTION OF DEBT SECURITIES
The following description of the Debt Securities sets forth certain general
terms and provisions of the Debt Securities to which any Prospectus Supplement
may relate ("Offered Debt Securities"). The particular terms of the Offered
Debt Securities and the extent to which such general provisions may apply will
be described in a Prospectus Supplement relating to such Offered Debt
Securities.
The Debt Securities will be general unsecured obligations of the Company and
will constitute either senior debt securities or subordinated debt securities.
In the case of Debt Securities that will be senior debt securities ("Senior
Debt Securities" and "Offered Senior Debt Securities"), the Debt Securities
will be issued under a Restated Indenture dated as of September 1, 1991 (the
"Senior Indenture"), 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"). 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 The Bank of New
3
<PAGE>
York, as Trustee (successor trustee to NationsBank of Texas, National
Association, which was successor trustee to First RepublicBank Houston,
National Association) (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)
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 10161 Centurion Parkway, Jacksonville,
Florida 32256. (Sections 301, 305 and 1002)
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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.
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
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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
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,
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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)
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
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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 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
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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 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 paragraph under
the caption "Limitation on Sale and Leaseback Transactions" herein), does not
exceed 10% of the Consolidated Net Tangible Assets. (Section 1005)
LIMITATION ON SALE AND LEASEBACK TRANSACTIONS. The Senior Indenture provides,
in general, that the Company will not itself, and will not permit any
Restricted Subsidiary to, enter into any arrangements with any bank, insurance
company or other lender or investor (other than the Company or another
Restricted Subsidiary) providing for the leasing as lessee by the Company or
any such Restricted Subsidiary of any Principal Property (except a lease for a
temporary period not to exceed three years by the end of which it is intended
the use of such Principal Property by the lessee will be discontinued), which
was or is owned by the Company or a Restricted Subsidiary and which has been or
is to be sold or transferred by the Company or a Restricted Subsidiary, more
than 180 days after the completion of construction and commencement of full
operation thereof by the Company or such Restricted Subsidiary, to such lender
or investor or to any person to whom funds have been or are to be advanced by
such lender or investor on the security of such Principal Property (herein
called a "Sale and Leaseback Transaction") unless: (a) the Company or such
Restricted Subsidiary would (at the time of entering into such arrangement) be
entitled, as described in clauses (1) through (9) of the first paragraph under
the caption "Limitations on Liens" herein, without equally and ratably securing
the Senior Debt Securities, to issue, assume or guarantee indebtedness secured
by a Lien on such Principal Property, or (b) such Sale and Leaseback
Transaction relates to a landfill or other waste disposal site (excluding any
plant or similar facility located thereon) owned by the Company or such
Restricted Subsidiary or which the Company or such Restricted Subsidiary has
the right to use, or (c) the Attributable Debt of the Company and its
Restricted Subsidiaries in respect of such Sale and Leaseback Transaction and
all other Sale and Leaseback Transactions entered into after January 15, 1985
(other than such Sale and Leaseback Transactions as are referred to in clauses
(a), (b) or (d) of this paragraph), plus the aggregate principal amount of Debt
secured by Liens on Principal Properties then outstanding (excluding any such
Debt secured by Liens described in clauses (1) through (9) of the first
paragraph under the caption "Limitations on Liens" herein) which do not equally
and ratably secure the Senior Debt Securities, would not exceed 10% of
Consolidated Net Tangible Assets or (d) the Company, within 180 days after the
sale or transfer, applies or causes a Restricted Subsidiary to apply (subject
to certain reductions described in the Senior Indenture) an amount equal to the
greater of the net proceeds of such sale or transfer or fair market value of
the Principal Property so sold and leased back at the time of entering into
such Sale and Leaseback Transaction to the retirement of Senior Debt Securities
or other indebtedness of the Company (other than indebtedness subordinated to
the Senior Debt Securities) or indebtedness of a Restricted Subsidiary, for
money borrowed, having a stated maturity more than 12 months from the date of
such application or which is extendible at the option of the obligor thereon to
a date more than 12 months from the date of such application. (Section 1006)
DEFINITIONS. Certain terms used in the above described restrictions are given
the following definitions in Section 101 of the Senior Indenture:
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"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.
"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 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.
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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 funds or interest on
the Subordinated Debt Securities until all such payments due in respect of such
Senior Debt have been paid full. (Sections 1301 and 1304)
By reason of such subordination, creditors of the Company who are not holders
of Senior Debt may, subject to any subordination provisions that may be
applicable to such creditors, recover more ratably than holders of the
Subordinated Debt Securities.
As of September 30, 1995, the Company had outstanding approximately $1.8
billion principal amount of indebtedness which would constitute "Senior Debt".
The Company also has unused lines of credit for up to a maximum of $1.7 billion
at November 30, 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;
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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)
REGARDING THE SUBORDINATED TRUSTEE. The Company 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.
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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 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 Directors and
Corporate Governance Committee of the Company prior to a meeting of
stockholders; provide that directors may be removed only for cause and only by
a supermajority vote (80% of shares outstanding) of the stockholders (a
"Supermajority Vote"), including a majority in interest of the holders
("Minority Holders") of voting stock held by persons other than any person who,
together with its affiliates and associates, owns more than 10% of the voting
stock; provide for certain minimum price and procedural requirements in
connection with certain business combinations, in the absence of which the
business combination would require approval by a Supermajority Vote, including
a majority in interest of the Minority Holders; require a Supermajority Vote,
including a majority in interest of the Minority Holders, for the amendment of
any of the foregoing provisions unless approved by a majority of the Board of
Directors in certain events; and authorize the Board of Directors to establish
one or more series of Preferred Stock, without any further stockholder
approval, having rights, preferences, privileges and limitations that could
impede or discourage the acquisition of control of the Company.
DESCRIPTION OF COMMON STOCK. At December 14, 1995, 212,660,643 shares of
Common Stock were issued and outstanding and approximately 46 million 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, (iii) pursuant to outstanding stock purchase
contracts and (iv) 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.
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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;
(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 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.
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DESCRIPTION OF WARRANTS
The Company may issue Warrants, including Warrants to purchase Debt
Securities ("Debt Warrants") and Warrants to purchase Common Stock or Preferred
Stock ("Stock Warrants"). Warrants may be issued independently of or together
with any other Securities and may be attached to or separate from such
Securities. Each series of Warrants will be issued under a separate Warrant
Agreement (each a "Warrant Agreement") to be entered into between the Company
and a Warrant Agent ("Warrant Agent"). The Warrant Agent will act solely as an
agent of the Company in connection with the Warrant of such series and will not
assume any obligation or relationship of agency for or with holders or
beneficial owners of Warrants. The following sets forth certain general terms
and provisions of the Warrants offered hereby. Further terms of the Warrants
and the applicable Warrant Agreement will be set forth in the applicable
Prospectus Supplement.
DEBT WARRANTS
The applicable Prospectus Supplement will describe the terms of any Debt
Warrants, including the following: (i) the title of such Debt Warrants; (ii)
the offering price for such Debt Warrants, if any; (iii) the aggregate number
of such Debt Warrants; (iv) the designation and terms of the Debt Securities
purchasable upon exercise of such Debt Warrants; (v) if applicable, the
designation and terms of the Securities with which such Debt Warrants are
issued and the number of such Debt Warrants issued with each such Security;
(vi) if applicable, the date from and after which such Debt Warrants and any
Securities issued therewith will be separately transferable; (vii) the
principal amount of Debt Securities purchasable upon exercise of a Debt Warrant
and the price at which such principal amount of Debt Securities may be
purchased upon exercise; (viii) the date on which the right to exercise such
Debt Warrants shall commence and the date on which such right shall expire;
(ix) if applicable, the minimum or maximum amount of such Debt Warrants that
may be exercised at any one time; (x) whether the Debt Warrants represented by
the Debt Warrant certificates or Debt Securities that may be issued upon
exercise of the Debt Warrants will be issued in registered or bearer form; (xi)
information with respect to book-entry procedures, if any; (xii) the currency,
currencies or currency units in which the offering price, if any, and the
exercise price are payable; (xiii) if applicable, a discussion of certain
United States federal income tax considerations; (xiv) the antidilution
provisions of such Debt Warrants, if any; (xv) the redemption or call
provisions, if any, applicable to such Debt Warrants; and (xvi) any additional
terms of 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.
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DESCRIPTION OF STOCK PURCHASE CONTRACTS
AND STOCK PURCHASE UNITS
The Company may issue Stock Purchase Contracts, consisting of contracts
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.
PLAN OF DISTRIBUTION
The Company may sell the Securities being offered hereby in and/or outside
the United States (i) through underwriters or a group of underwriters or
dealers, (ii) through agents designated from time to time or (iii) directly to
purchasers.
If an underwriter or underwriters are utilized in the sale, the Company will
enter into an underwriting agreement with such underwriters at the time of sale
to them, and the names of the underwriters and the terms and conditions of the
transaction (including underwriting discounts and commissions and other items
constituting underwriting compensation and discounts and commissions to be
allowed or paid to any dealers) will be set forth in the Prospectus Supplement,
which will be used by the underwriters to make sales of the Offered Securities
in respect of which this Prospectus is delivered to the public. The
underwriters may be entitled, under the underwriting agreement, to
indemnification by the Company against certain civil liabilities, including
liabilities under the Securities Act. Only underwriters named in the Prospectus
Supplement are deemed to be underwriting in connection with the Offered
Securities in respect of which such Prospectus Supplement and this Prospectus
are delivered and any firms not named therein are not parties to the
underwriting agreement in respect of such Offered Securities and will have no
direct or indirect participation in the underwriting thereof, although they may
participate in the distribution of such Securities under circumstances where
they may be entitled to a dealer's commission.
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters to solicit offers by certain institutions to purchase Offered
Securities from the Company at the price set forth in the Prospectus Supplement
pursuant to delayed delivery contracts for payment and delivery at a future
date. The Prospectus Supplement will set forth the commission payable to the
underwriters for solicitation of such contracts.
Offers to purchase Offered Securities may be solicited directly by the
Company or by agents designated by the Company from time to time. Unless
otherwise indicated in the Prospectus Supplement, any such agent will be acting
on a best efforts basis for the period of its appointment. Agents may be
entitled under agreements which may be entered into with the Company to
indemnification by the Company against certain civil liabilities, including
liabilities under the Securities Act.
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If an agent or agents are utilized in the sale, such persons may be deemed to
be "underwriters", and any discounts, commissions or concessions received by
them from the Company or any profit on the resale of Offered Securities by them
may be deemed to be underwriting discounts and commissions under the Securities
Act. Any such person who may be deemed to be an underwriter and any such
compensation received from the Company will be described in the Prospectus
Supplement.
The time and place for delivery of the Offered Securities in respect of which
this Prospectus is delivered are set forth in the Prospectus Supplement.
LEGAL OPINIONS
The legality of the Securities to be offered hereby will be passed upon for
the Company by Fulbright & Jaworski L.L.P., 1301 McKinney Street, Houston,
Texas 77010, and for any underwriters or agents of a particular issue of
Offered Securities, by Vinson & Elkins L.L.P., 1001 Fannin Street, First City
Tower, Houston, Texas 77002 or by other counsel identified in the relevant
Prospectus Supplement as passing on the same for any such underwriters and
agents. Vinson & Elkins L.L.P. has represented the Company in various legal
matters from time to time.
EXPERTS
The consolidated financial statements and schedule included in the Annual
Report of the Company on Form 10-K for the year ended September 30, 1995
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 by reference in reliance upon the authority of said firm as
experts in giving said report.
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