<PAGE>
As filed with the Securities and Exchange Commission on November 8, 1995
Registration No. 33-63281
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
----------------
UNITED STATES FILTER CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 33-0266015
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
73-710 Fred Waring Drive
Palm Desert, California 92260
(619) 340-0098
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
----------------
DAMIAN C. GEORGINO
Vice President, General Counsel and Secretary
United States Filter Corporation
73-710 Fred Waring Drive
Palm Desert, California 92260
(619) 340-0098
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Approximate date of commencement of proposed sale to public: From time to
time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
<PAGE>
PROSPECTUS
UNITED STATES FILTER CORPORATION
$140,000,000
6% Convertible Subordinated Notes Due 2005
and
Shares of Common Stock
Issuable Upon Conversion Thereof
This Prospectus covers the resale from time to time by the holders (the
"Selling Securityholders") of up to $140,000,000 aggregate principal amount of
6% Convertible Subordinated Notes due 2005 (the "Notes") of United States Filter
Corporation (the "Company"). This Prospectus also covers sales by the Selling
Securityholders from time to time of shares of common stock, $.01 par value (the
"Common Stock"), of the Company into which the Notes are convertible (the
"Conversion Shares").
The Notes are convertible at the option of the holder into shares of Common
Stock of the Company, at any time at or prior to maturity, unless previously
redeemed, at a conversion price of $27.50 per share (equivalent to a conversion
rate of 36.36 shares per $1,000 principal amount of Notes), subject to
adjustment in certain events. Interest on the Notes is payable semi-annually on
March 15 and September 15 of each year, commencing on March 15, 1996.
The Notes are redeemable, in whole or in part, at the option of the Company,
at any time on or after September 23, 1998, at the redemption prices set forth
herein, plus accrued and unpaid interest to the date of redemption. The Company
is required to offer to purchase the Notes upon a Change of Control (as
defined), at 101% of the principal amount thereof, plus accrued and unpaid
interest to the date of purchase.
The Notes are unsecured general obligations of the Company, subordinated in
right of payment to all existing and future Senior Indebtedness of the Company,
and are structurally subordinated to all liabilities (including trade payables)
of the Company's subsidiaries. The Indenture does not restrict the incurrence of
Senior Indebtedness or other indebtedness by the Company or its subsidiaries. At
September 30, 1995 the Company had approximately $14,573,000 of Senior
Indebtedness, and the Company's subsidiaries had approximately $119,822,000 of
trade payables and accrued liabilities. See "Description of Notes."
The Notes were issued by the Company on September 18, 1995 in a private
placement and were resold by the initial purchaser thereof to qualified
institutional buyers or other accredited institutional investors in transactions
exempt from registration under the Securities Act of 1933, as amended (the
"Securities Act"), and in sales outside the United States within the meaning of
Regulation S under the Securities Act.
The Selling Securityholders may offer Notes or Conversion Shares from time to
time to purchasers directly or through underwriters, dealers or agents. Such
Notes or Conversion Shares may be sold at market prices prevailing at the time
of sale or at negotiated prices. Each Selling Securityholder will be
responsible for payment of any and all commission to brokers, which will be
negotiated on an individual basis.
The Notes have been designated for trading in the Private Offerings, Resales
and Trading through Automated Linkages ("PORTAL") Market. The Common Stock is
listed on the New York Stock Exchange (the "NYSE") under the trading symbol USF.
On November 7, 1995, the last reported sale price of the Common Stock as
reported on the NYSE was $21 7/8 per share. The Conversion Shares have been
listed on the NYSE. For a description of certain federal income tax consequences
to the holders of the Notes, see "Certain Federal Income Tax Consequences."
The Company will not receive any of the proceeds from the sale of any Notes
or Conversion Shares by the Selling Securityholders. Expenses of preparing and
filing the registration statement to which this Prospectus relates and all post-
effective amendments will be borne by the Company. See "Plan of Distribution"
for a description of the indemnification arrangements between the Company and
the Selling Securityholders.
See "Risk Factors" on pages 3 through 6 of the Prospectus for certain
information relevant to this offering.
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.
The date of this Prospectus is November __, 1995.
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (together with all
amendments and exhibits, referred to as the "Registration Statement") under
the Securities Act with respect to the Notes and Conversion Shares offered by
this Prospectus. This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the Rules and Regulations of the Commission. For further
information with respect to the Company and the securities offered hereby,
reference is made to the Registration Statement and the exhibits and schedules
thereto, all of which may be obtained from the Commission in Washington, D.C.
as described below.
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 periodic reports, proxy materials and other information with
the Commission. Such reports, proxy materials and other information may be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and
at the following regional offices of the Commission: Seven World Trade Center,
New York, New York 10048 and 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies may also be obtained from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. In addition, such reports, proxy materials and other
information may be inspected and copied at the New York Stock Exchange, 20
Broad Street, New York, New York 10005.
The Company will make available to any prospective purchaser of the Notes
copies of the Indenture and Registration Rights Agreement, and the reports,
proxy material or other information filed with the Commission under the
Exchange Act and such additional information reasonably requested in
connection with the consideration of an investment in the Notes. Any such
request should be directed to the General Counsel of the Company at 73-710
Fred Waring Drive, Suite 222, Palm Desert, California 92260 (telephone number:
(619) 340-0098).
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company (Commission File No. 1-10728)
with the Commission under the Exchange Act are incorporated in this Offering
Memorandum by reference: (a) the Company's Annual Report on Form 10-K for the
fiscal year ended March 31, 1995; (b) the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1995; and (c) the Company's current
reports on Form 8-K dated April 3, 1995 (two reports on that date), May 3,
1995, May 4, 1995 (as amended on Form 8-KA on October 6, 1995), June 12, 1995,
June 27, 1995, July 13, 1995, August 11, 1995, August 30, 1995, September 7,
1995, September 18, 1995, October 2, 1995, October 5, 1995, November 1, 1995
and November 2, 1995 and all other reports filed pursuant to Section 13(a)
or 15(d) of the Exchange Act since March 31, 1995.
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 and any amendment or supplement
hereto to the extent that a statement contained herein (or in any other
subsequently filed document which also is, or is deemed to be, incorporated by
reference herein) 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 or any such amendment or
supplement.
On request, the Company will provide, without charge, to each person,
including any beneficial owner, to whom this Prospectus is delivered a copy of
any or all of the documents incorporated by reference (other than exhibits to
such documents that are not specifically incorporated by reference in such
documents). Requests for such copies should be directed to Dorrie B. Osborne,
Assistant Secretary and Director of Stockholder Relations, United States
Filter Corporation, 73-710 Fred Waring Drive, Palm Desert, Suite 222,
California 92260 (telephone number (619) 340-0098).
2.
<PAGE>
THE COMPANY
The Company is a leading global provider of industrial and commercial
water treatment systems and services, with an installed base of more than
90,000 systems in the United States, Europe, Latin America and the Far East.
The Company offers a single-source solution to its industrial, commercial and
municipal customers through what the Company believes to be the industry's
broadest range of cost-effective water treatment systems, services and proven
technologies. The Company capitalizes on its substantial installed base to
sell additional systems and utilizes its global network of 124 sales and
service facilities, including 12 manufacturing plants, to provide customers
with ongoing service and maintenance. In addition, the Company is a leading
international provider of service deionization ("SDI") and outsourced water
services, including operation of water purification and wastewater treatment
systems at customer sites.
The Company's principal executive offices are located at 73-710 Fred
Waring Drive, Suite 222, Palm Desert, California 92260. The Company's
telephone number is (619) 340-0098. References herein to the Company shall
mean United States Filter Corporation and its subsidiaries, unless the context
requires otherwise.
RISK FACTORS
Prospective purchasers should carefully consider the following factors
relating to the business of the Company and the Notes, together with the
information and financial data included or incorporated by reference in this
Prospectus, before purchasing Notes and Conversion Shares offered hereby.
Acquisition Strategy
In pursuit of its strategic objective of becoming the leading global
single-source provider of water treatment systems and services the Company
has, since 1991, acquired and successfully integrated more than 18 domestic
and international businesses with strong market positions and substantial
water treatment expertise. The Company's acquisition strategy entails the
potential risks inherent in assessing the value, strengths, weaknesses,
contingent or other liabilities and potential profitability of acquisition
candidates and in integrating the operations of acquired companies. Although
the Company generally has been successful in pursuing these acquisitions,
there can be no assurance that acquisition opportunities will continue to be
available, that the Company will have access to the capital required to
finance potential acquisitions, that the Company will continue to acquire
businesses or that any business acquired will be integrated successfully or
prove profitable. The Company has no current plans regarding any material
acquisitions.
International Transactions
The Company has made and expects it will continue to make acquisitions and
to obtain contracts in Europe, Latin America, the Far East and other areas
outside the United States. While these activities may provide important
opportunities for the Company to offer its products and services
internationally, they also entail the risks associated with conducting
business internationally, including the risk of currency fluctuations, slower
payment of invoices and possible social, political and economic
instability.
Reliance on Key Personnel
The Company's operations are dependent on the continued efforts of senior
management, in particular Richard J. Heckmann, its Chairman, Chief Executive
Officer and President. Should any of the senior managers be unable to
continue in their present roles, the Company's prospects could be adversely
affected.
Profitability of Fixed Price Contracts
A significant portion of the Company's revenues are generated under fixed
price contracts. To the extent that original cost estimates are inaccurate,
costs to complete increase, delivery schedules are delayed or progress under a
contract is otherwise impeded, revenue recognition and profitability from a
particular contract may be adversely affected. The Company routinely records
upward or downward adjustments
3.
<PAGE>
with respect to fixed price contracts due to changes in estimates of costs to
complete such contracts. There can be no assurance that future downward
adjustments will not be material.
Cyclicality of Capital Equipment Sales
The sale of capital equipment within the water treatment industry is
cyclical and influenced by various economic factors including interest rates
and general fluctuations of the business cycle. The Company's revenues from
capital equipment sales were approximately 60% of total revenues for the
fiscal year ended March 31, 1995 and 48% for the three months ended June 30,
1995. While the Company sells capital equipment to customers in diverse
industries and in domestic and international markets, cyclicality of capital
equipment sales and instability of general economic conditions could have an
adverse effect on the Company's revenues and profitability.
Potential Environmental Risks
The Company's business and products may be significantly influenced by the
constantly changing body of environmental laws and regulations, which require
that certain environmental standards be met and impose liability for the
failure to comply with such standards. While the Company endeavors at each of
its facilities to assure compliance with environmental laws and regulations,
there can be no assurance that the Company's operations or activities, or
historical operations by others at the Company's locations, will not result in
civil or criminal enforcement actions or private actions that could have a
materially adverse effect on the Company. In particular, the Company's
activities as owner and operator of a hazardous waste treatment and recovery
facility are subject to stringent laws and regulations and compliance reviews.
Failure of this facility to comply with those regulations could result in
substantial fines and the suspension or revocation of the facility's hazardous
waste permit. In addition, to some extent, the liabilities and risks imposed
by such environmental laws on the Company's customers may adversely impact
demand for certain of the Company's products or services or impose greater
liabilities and risks on the Company, which could also have an adverse effect
on the Company's competitive or financial position.
Competition
The water purification and wastewater treatment industry is fragmented and
highly competitive. The Company competes with many domestic and international
companies in its global markets. The principal methods of competition in the
markets in which the Company competes are technology, service, price, product
specifications, customized design, product knowledge and reputation, ability
to obtain sufficient performance bonds, timely delivery, the relative ease of
system operation and maintenance, and the prompt availability of replacement
parts. In the municipal contract bid process, pricing and ability to meet bid
specifications are the primary considerations. While no competitor is
considered dominant, there are competitors that are larger and have
significantly greater resources than the Company, which, among other things,
could be a competitive disadvantage to the Company in securing certain
projects.
Technological and Regulatory Change
The water purification and wastewater treatment business is characterized
by changing technology, competitively imposed process standards and regulatory
requirements, each of which influences the demand for the Company's products
and services. Changes in regulatory or industrial requirements may render
certain of the Company's purification and treatment products and processes
obsolete. Acceptance of new products may also be affected by the adoption of
new government regulations requiring stricter standards. The Company's
ability to anticipate changes in technology and regulatory standards and to
successfully develop and introduce new and enhanced products on a timely basis
will be a significant factor in the Company's ability to grow and to remain
competitive. There can be no assurance that the Company will be able to
achieve the technological advances that may be necessary for it to remain
competitive or that certain of its products will not become obsolete. In
addition, the Company is subject to the risks generally associated with new
product introductions and applications, including lack of market acceptance,
delays in development or failure of products to operate properly.
4.
<PAGE>
Shares Eligible for Future Sale
The market price of the Company's Common Stock could be adversely affected
by the availability for sale of shares held on November 1, 1995 by current
securities holders of the Company, including (i) up to 2,965,829 shares which
may be delivered by Laidlaw Inc. or its affiliates ("Laidlaw"), at Laidlaw's
option in lieu of cash, at maturity pursuant to the terms of Exchangeable
Notes due 2000 of Laidlaw (the "Exchangeable Notes") (the amount of shares or
cash delivered or paid to be dependent within certain limits upon the value of
the Company's Common Stock at maturity), which Exchangeable Notes are being
offered to the public by Laidlaw, (ii) 3,041,092 shares which are being
offered to the public by a subsidiary of Eastern Enterprises (the "Eastern
Shares") concurrently with, but not as a condition to, the offering of the
Exchangeable Notes, (iii) 2,926,829 shares issuable upon conversion of
convertible debentures of the Company at a conversion price of $20.50 per
share of Common Stock that are currently registered for sale under the
Securities Act pursuant to a shelf registration statement, (iv) 2,353,729
outstanding shares that are covered by three shelf registration statements
filed under the Securities Act, including 371,229 shares owned by Anjou
International Company which are subject to an over-allotment option granted to
the underwriters of the Eastern Shares, (v) 1,320,000 shares issuable upon
conversion of shares of preferred stock of the Company, which are subject to
an agreement pursuant to which the holder has certain rights to request the
Company to register the sale of such holder's Common Stock under the
Securities Act and, subject to certain conditions, to include certain
percentages of such shares in other registration statements filed by the
Company ("Registration Rights"), and (vi) 334,626 outstanding shares subject
to Registration Rights. In addition, the Company has registered for sale under
the Securities Act 2,000,000 shares which may be issuable by the Company from
time to time in connection with acquisitions of businesses or assets from
third parties.
Subordination
The Notes are subordinated in right of payment to all existing and future
Senior Indebtedness and are structurally subordinated to all liabilities
(including trade payables) of the Company's subsidiaries. The Indenture does
not restrict the incurrence of Senior Indebtedness or other indebtedness by
the Company or its subsidiaries. At September 30, 1995 the Company had
approximately $14.6 million of Senior Indebtedness outstanding. By reason of
such subordination of the Notes, in the event of the insolvency, bankruptcy,
liquidation, reorganization, dissolution or winding up of the business of the
Company or upon a default in payment with respect to any indebtedness of the
Company or an event of default with respect to such indebtedness resulting in
the acceleration thereof, the assets of the Company will be available to pay
the amounts due on the Notes only after all Senior Indebtedness has been paid
in full. The Notes rank pari passu in all respects with other unsecured
subordinated obligations of the Company, including the Company's 5%
Convertible Subordinated Debentures due 2000 (as defined). See "Description of
the Notes-Subordination."
The Company conducts its operations through its subsidiaries.
Accordingly, the Company's ability to meet its cash obligations is dependent
in part upon the ability of its subsidiaries to make cash distributions to the
Company. The ability of its subsidiaries to make distributions to the Company
is and will continue to be restricted by, among other limitations, applicable
provisions of the laws of national or state governments and contractual
provisions. The Indenture does not limit the ability of the Company's
subsidiaries to incur such restrictions in the future. The right of the
Company to participate in the assets of any subsidiary (and thus the ability
of holders of the Notes to benefit indirectly from such assets) are generally
subject to the prior claims of creditors, including trade creditors, of that
subsidiary except to the extent that the Company is recognized as a creditor
of such subsidiary, in which case the Company's claims would still be subject
to any security interest of other creditors of such subsidiary. The Notes,
therefore, are structurally subordinated to creditors, including trade
creditors, of subsidiaries of the Company with respect to the assets of the
subsidiaries against which such creditors have a claim. At September 30,
1995 the Company's subsidiaries had approximately $119.8 million of trade
payables and accrued liabilities.
Absence of Existing Market for Notes
There is no established public trading market for the Notes. The Company
does not intend to list the Notes on any national securities exchange or to
seek the admission thereof to trading in the National Association of
Securities Dealers Automated Quotation system. The Company has been advised
by Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ") and PaineWebber
Incorporated ("PaineWebber"), the initial purchasers of the Notes (the
"Initial Purchasers"), that DLJ and PaineWebber are making and currently
intend to continue making a market in the Notes. However, DLJ and
5.
<PAGE>
PaineWebber are not obligated to make such a market and any market-making
activities may be discontinued at any time without notice. In addition, such
market-making activity is subject to the limits imposed by the Securities Act
and the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
may be limited during the pendency of the shelf registration statement to
which this Prospectus relates. See "Description of the Notes-Registration
Rights; Liquidated Damages." Although the Notes have been designated for
trading through PORTAL, no assurance can be given that an active trading
market for the Notes will develop or, if such market develops, as to the
liquidity or sustainability of such market. If a trading market does not
develop or is not maintained, holders of the Notes may experience difficulty
in reselling the Notes or may be unable to sell them at all. If a market for
the Notes develops, any such market may be discontinued at any time. If a
public trading market develops for the Notes, future trading prices of the
Notes will depend on many factors, including, among other things, prevailing
interest rates, the Company's results of operations and the market for similar
securities. Depending on prevailing interest rates, the market for similar
securities and other factors, including the financial condition of the
Company, the Notes may trade at a discount from their principal amount.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Six Months
Year Ended March 31, ended September 30,(1)
---------------------------- ----------------------
1991 1992 1993 1994 1995 1994 1995
---- ---- ---- ---- ---- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed
Charges(2)............. -- -- 1.3x -- 3.3x 2.8x 2.8x
</TABLE>
- -------------
(1) The historical consolidated financial data from which the Ratios of
Earnings to Fixed Charges were derived for the fiscal years ended March
31, 1991 through March 31, 1994 and for the six months ended September
30, 1994 has been restated to include the accounts and operations of
Liquipure, which was merged with the Company in July 1994 and accounted
for as a pooling of interests.
(2) The ratio of earnings to fixed charges has been computed by dividing
earnings available for fixed charges (income before interest expense,
interest income and income taxes, plus fixed charges) by fixed charges.
Fixed charges consist of interest expense (including amortization of
deferred financing costs) and the portion of rental expense that is
representative of the interest factor (deemed by the Company to be one-
third). Fixed charges exceeded loss before fixed charges by $1,848,000,
$6,290,000 and $4,874,000 for the years ended March 31, 1991, 1992 and
1994, respectively.
USE OF PROCEEDS
The Selling Securityholders will receive all of the net proceeds from the
sale of the Notes and Conversion Shares offered hereby. The Company will not
receive any of the proceeds from any such sale.
6.
<PAGE>
DESCRIPTION OF THE NOTES
Set forth below is a summary of certain provisions of the Notes. The
Notes were issued pursuant to an indenture (the "Indenture") dated as of
September 18, 1995, by and between the Company and The First National Bank of
Boston, as trustee (the "Trustee"). State Street Bank and Trust Company is
the successor to The First National Bank of Boston, as Trustee. The following
summary of the Notes, the Indenture and the Registration Rights Agreement does
not purport to be complete and is subject to, and is qualified in its entirety
by, reference to all of the provisions of the Indenture and the Registration
Rights Agreement, including the definitions thereof. Copies of the Indenture
and the Registration Rights Agreement can be obtained from the Company upon
request. Capitalized terms used herein without definition have the meanings
ascribed to them in the Indenture or the Registration Rights Agreement, as
appropriate. As used in this section, "the Company" refers to United States
Filter Corporation, exclusive of its subsidiaries. Wherever particular
provisions of the Indenture are referred to in this summary, such provisions
are incorporated by reference as a part of the statements made and such
statements are qualified in their entirety by such reference.
General
The Notes are unsecured, subordinated, general obligations of the Company,
limited in aggregate principal amount to $140,000,000. The Notes are
subordinated in right of payment to all Senior Indebtedness of the Company, as
described under "Subordination" below. The Notes were issued only in fully
registered form, without coupons, in denominations of $1,000 and integral
multiples thereof.
The Notes mature on September 15, 2005. The Notes bear interest at 6% per
annum from the date of issuance or from the most recent Interest Payment Date
to which interest has been paid or provided for, payable semi-annually on
March 15 and September 15 of each year, commencing March 15, 1996, to the
persons in whose names such Notes are registered at the close of business on
March 1 or September 1 immediately preceding such Interest Payment Date.
Principal of, premium, if any, and interest on, and liquidated damages with
respect to, the Notes will be payable, the Notes will be convertible and the
Notes may be presented for registration of transfer or exchange, at the office
or agency of the Company maintained for such purpose, which office or agency
shall be maintained in the Borough of Manhattan, The City of New York.
Interest will be calculated on the basis of a 360-day year consisting of
twelve 30-day months.
At the option of the Company, payment of interest and liquidated damages
may be made by check mailed to the Holders of the Notes at the addresses set
forth upon the registry books of the Company. No service charge will be made
for any registration of transfer or exchange of Notes, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. Until otherwise designated by the
Company, the Company's office or agency is the corporate trust office of the
Trustee presently located at 150 Royall Street, Canton, Massachusetts 02021.
Conversion Rights
The Holder of any Notes has the right, at the Holder's option, to convert
any portion of the principal amount thereof that is an integral multiple of $
1,000 into shares of Common Stock at any time prior to the second Business Day
prior to the Stated Maturity of the Note (unless earlier redeemed or
repurchased) at the Conversion Price of $27.50 per share (equivalent to a
conversion rate of 36.36 shares per $1,000 principal amount of Notes) (subject
to adjustment as described below). The right to convert a Note called for
redemption or delivered for repurchase will terminate at the close of business
on the fifth or second Business Day, respectively, prior to the Redemption
Date or Repurchase Date for such Note, unless the Company subsequently fails
to pay the applicable Redemption Price or Repurchase Price, as the case may
be.
In the case of any Note that has been converted after any Record Date, but
on or before the next Interest Payment Date, interest the stated due date of
which is on such Interest Payment Date shall be payable on such Interest
Payment Date notwithstanding such conversion, and such interest shall be paid
7.
<PAGE>
to the Holder of such Note who is a Holder on such Record Date. Any Note so
converted must be accompanied by payment of an amount equal to the interest
payable on such Interest Payment Date on the principal amount of Notes being
surrendered for conversion. No fractional shares will be issued upon
conversion but, in lieu thereof, an appropriate amount will be paid in cash by
the Company based on the market price of Common Stock (as determined in
accordance with the Indenture) at the close of business on the day of
conversion.
The Conversion Price is subject to adjustment in certain events,
including: (a) any payment of a dividend (or other distribution) payable in
Common Stock on any class of Capital Stock of the Company, (b) any issuance to
all holders of Common Stock of rights, options or warrants entitling them to
subscribe for or purchase Common Stock at less than the then current market
price (as determined in accordance with the Indenture) of Common Stock,
provided, however, that if such options or warrants are only exercisable upon
the occurrence of certain triggering events, then the conversion price will
not be adjusted until such triggering events occur, (c) any subdivision,
combination or reclassification of Common Stock, (d) any distribution to all
holders of Common Stock of evidences of indebtedness, shares of Capital Stock
other than Common Stock, cash or other assets (including securities, but
excluding those dividends, rights, options, warrants and distributions
referred to above and excluding dividends and distributions paid exclusively
in cash), (e) any distribution consisting exclusively of cash (excluding any
cash portion of distributions referred to in (d) above, or cash distributed
upon a merger or consolidation to which the second succeeding paragraph
applies) to all holders of Common Stock in an aggregate amount that, combined
together with (i) all other such all-cash distributions made within the then
preceding 12 months in respect of which no adjustment has been made and (ii)
any cash and the fair market value of other consideration paid or payable in
respect of any tender offer by the Company or any of its subsidiaries for
Common Stock concluded within the preceding 12 months in respect of which no
adjustment has been made, exceeds 15% of the Company's market capitalization
(defined as being the product of the then current market price of the Common
Stock times the number of shares of Common Stock then outstanding) on the
record date of such distribution, and (f) the completion of a tender offer
made by the Company or any of its Subsidiaries for Common Stock that involves
an aggregate consideration that, together with (i) any cash and other
consideration payable in a tender offer by the Company or any of its
Subsidiaries for Common Stock expiring within the 12 months preceding the
expiration of such tender offer in respect of which no adjustment has been
made and (ii) the aggregate amount of any such all-cash distributions referred
to in (e) above to all holders of Common Stock within the 12 months preceding
the expiration of such tender offer in respect of which no adjustments have
been made, exceeds 15% of the Company's market capitalization on the
expiration of such tender offer. The Company reserves the right to make such
reductions in the conversion price in addition to those required in the
foregoing provisions as it considers to be advisable in order that any event
treated for Federal income tax purposes as a dividend of stock or stock rights
will not be taxable to the recipients. No adjustment of the conversion price
is required to be made until the cumulative adjustments amount to 1.0% or more
of the conversion price as last adjusted.
In the event that the Company distributes rights or warrants (other than
those referred to in (b) in the preceding paragraph) pro rata to holders of
Common Stock, so long as any such rights or warrants have not expired or been
redeemed by the Company, the Holder of any Note surrendered for conversion is
entitled to receive upon such conversion, in addition to the shares of Common
Stock issuable upon such conversion (the "Conversion Shares"), a number of
rights or warrants to be determined as follows: (i) if such conversion occurs
on or prior to the date for the distribution to the holders of rights or
warrants of separate certificates evidencing such rights or warrants (the
"Distribution Date"), the same number of rights or warrants to which a holder
of a number of shares of Common Stock equal to the number of Conversion Shares
is entitled at the time of such conversion in accordance with the terms and
provisions of and applicable to the rights or warrants, and (ii) if such
conversion occurs after such Distribution Date, the same number of rights or
warrants to which a holder of the number of shares of Common Stock into which
such Note was convertible immediately prior to such Distribution Date would
have been entitled on such Distribution Date in accordance with the terms and
provisions of and applicable to the rights or warrants. The conversion price
of the Notes is not subject to adjustment on account of any declaration,
distribution or exercise of such rights or warrants.
8.
<PAGE>
In case of any reclassification, consolidation or merger of the Company
with or into another Person or any merger of another Person with or into the
Company (with certain exceptions), or in case of any sale, transfer or
conveyance of all or substantially all of the assets of the Company (computed
on a consolidated basis), each Note then outstanding will, without the consent
of any Holder of Notes, become convertible only into the kind and amount of
securities, cash and other property receivable upon such reclassification,
consolidation, merger, sale, transfer or conveyance by a holder of the number
of shares of Common Stock into which such Note was convertible immediately
prior thereto, after giving effect to any adjustment event, who failed to
exercise any rights of election and received per share the kind and amount
received per share by a plurality of non-electing shares.
The Company will use its best efforts to cause all registrations with, and
to obtain any approvals by, any governmental authority under any Federal or
state law of the United States that may be required in connection with the
conversion of the Notes into Common Stock. If at any time during the three-
year period following September 18, 1995, a registration statement under the
Securities Act covering the shares of Common Stock issuable upon conversion of
the Notes is not effective, shares of Common Stock issued upon conversion of
the Notes ("Restricted Shares") may not be sold or otherwise transferred
except in accordance with or pursuant to an exemption from, or otherwise in a
transaction not subject to, the registration requirements of the Securities
Act and, if a registration statement under the Securities Act is not effective
at the time of a conversion, the Restricted Shares will bear a legend to that
effect. The Transfer Agent for the Common Stock is not required to accept for
registration or transfer any Restricted Shares, except upon presentation of
satisfactory evidence that these restrictions on transfer have been complied
with, all in accordance with such reasonable regulations as the Company may
from time to time agree with the Transfer Agent. Under certain circumstances,
the holders of the Notes are entitled to liquidated damages during such
period. See "Description of the Notes-Registration Rights; Liquidated
Damages."
Subordination
The Notes are general, unsecured obligations of the Company, subordinated
in right of payment to all existing and future Senior Indebtedness of the
Company and rank pari passu in all respects with other unsecured subordinated
indebtedness of the Company, including the 5% Convertible Subordinated
Debentures due 2000. The Notes are structurally subordinated in right of
payment to all liabilities (including trade payables and capitalized lease
obligations) of the Company's subsidiaries. At September 30, 1995 the Company
had $14,573,000 of Senior Indebtedness outstanding. The rights of Holders are
subordinated by operation of law to all existing and future indebtedness of
the Company's subsidiaries, which as of September 30, 1995 was approximately
$119,822,000 of trade payables and accrued liabilities. The Indenture does not
restrict the incurrence of Senior Indebtedness or other indebtedness by the
Company or its Subsidiaries.
The Indenture provides that no payment may be made by the Company on
account of the principal of, premium, if any, interest on, or liquidated
damages with respect to, the Notes, or to acquire any of the Notes (including
repurchases of Notes at the option of the Holder) for cash or property (other
than Junior Securities), or on account of the redemption provisions of the
Notes, (i) upon the maturity of any Senior Indebtedness of the Company by
lapse of time, acceleration (unless waived) or otherwise, unless and until all
principal of, premium, if any, and interest on such Senior Indebtedness are
first paid in full (or such payment is duly provided for), or (ii) in the
event of default in the payment of any principal of, premium, if any, or
interest on any Senior Indebtedness of the Company when it becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise (a "Payment Default"), unless and until such Payment
Default has been cured or waived or otherwise has ceased to exist.
9.
<PAGE>
Upon (i) the happening of an event of default (other than a Payment
Default) that permits the holders of Senior Indebtedness or their
representative immediately to accelerate its maturity and (ii) written notice
of such event of default given to the Company and the Trustee by the holders
of an aggregate of at least $20,000,000 principal amount outstanding of such
Senior Indebtedness or their representative (a "Payment Notice"), then, unless
and until such event of default has been cured or waived or otherwise has
ceased to exist, no payment (by setoff or otherwise) may be made by or on
behalf of the Company on account of the principal of, premium, if any,
interest on, or liquidated damages with respect to, the Notes, or to acquire
or repurchase any of the Notes for cash or property, or on account of the
redemption provisions of the Notes, in any such case other than payments made
with Junior Securities of the Company. Notwithstanding the foregoing, unless
(i) the Senior Indebtedness in respect of which such event of default exists
has been declared due and payable in its entirety within 179 days after the
Payment Notice is delivered as set forth above (the "Payment Blockage
Period"), and (ii) such declaration has not been rescinded or waived, at the
end of the Payment Blockage Period, the Company shall be required to pay all
sums not paid to the Holders of the Notes during the Payment Blockage Period
due to the foregoing prohibitions and to resume all other payments as and when
due on the Notes. Any number of Payment Notices may be given; provided,
however, that (i) not more than one Payment Notice shall be given within a
period of any 360 consecutive days, and (ii) no default that existed upon the
date of such Payment Notice or the commencement of such Payment Blockage
Period (whether or not such event of default is on the same issue of Senior
Indebtedness) shall be made the basis for the commencement of any other
Payment Blockage Period.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company (other than Junior Securities) shall be
received by the Trustee or the Holders at a time when such payment or
distribution is prohibited by the foregoing provisions, such payment or
distribution shall be held in trust for the benefit of the holders of Senior
Indebtedness of the Company, and shall be paid or delivered by the Trustee or
such Holders, as the case may be, to the holders of the Senior Indebtedness of
the Company remaining unpaid or unprovided for or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any of such Senior Indebtedness of the
Company may have been issued, ratably according to the aggregate amounts
remaining unpaid on account of the Senior Indebtedness of the Company held or
represented by each, for application to the payment of all Senior Indebtedness
of the Company remaining unpaid, to the extent necessary to pay or to provide
for the payment of all such Senior Indebtedness in full after giving effect to
any concurrent payment or distribution to the holders of such Senior
Indebtedness.
Upon any distribution of assets of the Company upon any dissolution,
winding up, total or partial liquidation or reorganization of the Company,
whether voluntary or involuntary, in bankruptcy, insolvency, receivership or a
similar proceeding or upon assignment for the benefit of creditors or any
marshalling of assets or liabilities, (i) the holders of all Senior
Indebtedness of the Company will first be entitled to receive payment in full
(or have such payment duly provided for) before the Holders are entitled to
receive any payment on account of the principal of, premium, if any, interest
on, and liquidated damages with respect to, the Notes (other than Junior
Securities) and (ii) any payment or distribution of assets of the Company of
any kind or character, whether in cash, property or securities (other than
Junior Securities) to which the Holders or the Trustee on behalf of the
Holders would be entitled (by setoff or otherwise), except for the
subordination provisions contained in the Indenture, will be paid by the
liquidating trustee or agent or other person making such a payment or
distribution directly to the holders of Senior Indebtedness of the Company or
their representative to the extent necessary to make payment in full of all
such Senior Indebtedness remaining unpaid, after giving effect to any
concurrent payment or distribution to the holders of such Senior Indebtedness.
No provision contained in the Indenture or the Notes affects the
obligation of the Company, which is absolute and unconditional, to pay, when
due, principal of, premium, if any, interest on, and liquidated damages with
respect, to the Notes. The subordination provisions of the Indenture and the
Notes do not prevent the occurrence of any Default or Event of Default under
the Indenture or limit the rights of the Trustee or any Holder, subject to the
two preceding previous paragraphs, to pursue any other rights or remedies with
respect to the Notes.
10.
<PAGE>
As a result of these subordination provisions, in the event of the
liquidation, bankruptcy, reorganization, insolvency, receivership or similar
proceeding or an assignment for the benefit of the creditors of the Company or
any of its Subsidiaries or a marshalling of assets or liabilities of the
Company and its Subsidiaries, Holders of the Notes may receive ratably less
than other creditors.
The Company conducts its operations through its Subsidiaries.
Accordingly, the Company's ability to meet its cash obligations is dependent
upon the ability of its Subsidiaries to make cash distributions to the
Company. The ability of its Subsidiaries to make distributions to the Company
is and will continue to be restricted by, among other limitations, applicable
provisions of the laws of national and state governments and contractual
provisions. The Indenture does not limit the ability of the Company's
subsidiaries to incur such restrictions in the future. The right of the
Company to participate in the assets of any Subsidiary (and thus the ability
of holders of the Notes to benefit indirectly from such assets) is generally
subject to the prior claims of creditors, including trade creditors, of that
Subsidiary except to the extent that the Company is recognized as a creditor
of such Subsidiary, in which case the Company's claims would still be subject
to any security interest of other creditors of such Subsidiary. The Notes,
therefore, are structurally subordinated to creditors, including trade
creditors, of Subsidiaries of the Company with respect to the assets of the
Subsidiaries against which such creditors have a claim.
Redemption at the Company's Option
The Notes are not subject to redemption prior to September 23, 1998 and
are redeemable on such date and thereafter at the option of the Company, in
whole or in part, upon not less than 30 nor more than 60 days' notice to each
Holder, at the following redemption prices (expressed as percentages of the
principal amount) if redeemed during the 12-month period commencing September
15 of the years indicated below, in each case (subject to the right of Holders
of record on a Record Date to receive interest due on an Interest Payment Date
that is on or prior to such Redemption Date) together with accrued and unpaid
interest and liquidated damages, if any, to the Redemption Date:
<TABLE>
<CAPTION>
Year............................... Percentage
----............................... ----------
<S>................................ <C>
1998............................... 103.75%
1999............................... 103.00%
2000............................... 102.25%
2001............................... 101.50%
2002............................... 100.75%
2003 and thereafter................ 100%
</TABLE>
In the case of a partial redemption, the Trustee shall select the Notes or
portions thereof for redemption on a pro rata basis, by lot or in such other
manner it deems appropriate and fair. The Notes may be redeemed in part in
multiples of $1,000 only.
The Notes will not have the benefit of any sinking fund.
Notice of any redemption will be sent, by first-class mail, at least 30
days and not more than 60 days prior to the date fixed for redemption, to the
Holder of each Note to be redeemed to such Holder's last address as then shown
upon the registry books of the Registrar. The notice of redemption must state
the Redemption Date, the Redemption Price and the amount of accrued interest
to be paid. Any notice that relates to a Note to be redeemed in part only
must state the portion of the principal amount equal to the unredeemed portion
thereof and must state that on and after the Redemption Date, upon surrender
of such Note, a new Note or Notes in principal amount equal to the unredeemed
portion thereof will be issued. On and after the Redemption Date, interest
will cease to accrue on the Notes or portions thereof called for redemption,
unless the Company defaults in its obligations with respect thereto.
11.
<PAGE>
Repurchase of Notes at the Option of the Holder Upon a Change of Control
The Indenture provides that in the event that a Change of Control (as
defined) has occurred, each Holder of Notes will have the right, at such
Holder's option, pursuant to an irrevocable and unconditional offer by the
Company (the "Repurchase Offer"), to require the Company to repurchase all or
any part of such Holder's Notes (provided, that the principal amount of such
Notes must be $1,000 or an integral multiple thereof) on the date (the
"Repurchase Date") that is no later than 40 Business Days after the occurrence
of such Change of Control at a cash price (the "Repurchase Price") equal to
101% of the principal amount thereof, together with accrued and unpaid
interest to the Repurchase Date. The Repurchase Offer shall be made within 15
Business Days following a Change of Control and shall remain open for 20
Business Days following its commencement (the "Repurchase Offer Period").
Upon expiration of the Repurchase Offer Period, the Company shall purchase all
Notes tendered in response to the Repurchase Offer. If required by applicable
law, the Repurchase Date and the Repurchase Offer Period may be extended as so
required; however, if so extended, it shall nevertheless constitute an Event
of Default if the Repurchase Date does not occur within 60 Business Days of
the Change of Control.
The Indenture provides that a "Change of Control" occurs (i) upon any
merger or consolidation of the Company with or into any person or any sale,
transfer or other conveyance, whether direct or indirect, of all or
substantially all of the assets of the Company, on a consolidated basis, in
one transaction or a series of related transactions, if, immediately after
giving effect to such transaction, any "person" or "group" (as such terms are
used for purposes of Sections 13(d) and 14(d) of the Exchange Act, whether or
not applicable) is or becomes the "beneficial owner," directly or indirectly,
of more than 50% of the total voting power in the aggregate normally entitled
to vote in the election of directors, managers, or trustees, as applicable, of
the transferee or surviving entity, (ii) when any "person's or "group" (as
such terms are used for purposes of Sections 13(d) and 14(d) of the Exchange
Act, whether or not applicable) is or becomes the "beneficial owner," directly
or indirectly, of more than 50% of the total voting power in the aggregate
normally entitled to vote in the election of directors of the Company, or
(iii) when, during any period of 12 consecutive months after the Issue Date,
individuals who at the beginning of any such 12-month period constituted the
Board of Directors of the Company (together with any new directors whose
election by such Board or whose nomination for election by the shareholders of
the Company was approved by a vote of a majority of the directors then still
in office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved), cease for any
reason to constitute a majority of the Board of Directors of the Company then
in office.
On or before the Repurchase Date, the Company will (i) accept for payment
Notes or portions thereof properly tendered pursuant to the Repurchase Offer,
(ii) deposit with the Paying Agent cash sufficient to pay the Repurchase Price
(together with accrued and unpaid interest) of all Notes so tendered and (iii)
deliver to the Trustee Notes so accepted, together with an Officers'
Certificate listing the Notes or portions thereof being purchased by the
Company. The Paying Agent will promptly mail to the Holders of Notes so
accepted payment in an amount equal to the Repurchase Price (together with
accrued and unpaid interest), and the Trustee will promptly authenticate and
mail or deliver to such Holders a new Note or Notes equal in principal amount
to any unpurchased portion of the Notes surrendered. Any Notes not so
accepted will be promptly mailed or delivered by the Company to the Holder
thereof. The Company will publicly announce the results of the Repurchase
Offer on or as soon as practicable after the Repurchase Date.
The phrase "all or substantially all" of the assets of the Company is
likely to be interpreted by reference to applicable state law at the relevant
time, and will be dependent on the facts and circumstances existing at such
time. As a result, there may be a degree of uncertainty in ascertaining
whether a sale or transfer of "all or substantially all" of the assets of the
Company has occurred. In addition, no assurances can be given that the
Company will be able to acquire the Notes tendered upon the occurrence of a
Change of Control.
For purposes of this definition, (i) the terms "person" and "group" shall
have the meaning used for purposes of Rules 13d-3 and 13d-5 of the Exchange
Act as in effect on the Issue Date, whether or not applicable; and (ii) the
term "beneficial owner" shall have the meaning used in Rules 13d-3 and 13d-5
12.
<PAGE>
under the Exchange Act as in effect on the Issue Date, whether or not
applicable, except that a "person" shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire,
whether such right is exercisable immediately or only after the passage of
time or upon the occurrence of certain events.
The Change of Control purchase feature of the Notes may make more
difficult or discourage a takeover of the Company, and, thus, the removal of
incumbent management. The Change of Control purchase feature resulted from
negotiations between the Company and the Initial Purchasers.
The provisions of the Indenture relating to a Change of Control may not
afford the Holders protection in the event of a highly leveraged transaction,
reorganization, restructuring, merger, spin-off or similar transaction that
may adversely affect Holders, if such transaction does not constitute a Change
of Control, as set forth above. In addition, the Company may not have
sufficient financial resources available to fulfill its obligation to
repurchase the Notes upon a Change of Control or to repurchase other debt
securities of the Company or its Subsidiaries providing similar rights to the
holders thereof.
To the extent applicable and if required by law, the Company will comply
with Section 14 of the Exchange Act and the provisions of Regulation 14E and
any other tender offer rules under the Exchange Act and any other securities
laws, rules and regulations that may then be applicable to any offer by the
Company to purchase the Notes at the option of Holders upon a Change of
Control.
The right to require the Company to repurchase Notes as a result of the
occurrence of a Change of Control could create an event of default under
Senior Indebtedness as a result of which any repurchase could, absent a
waiver, be blocked by the subordination provision of the Notes. See "-
Subordination." Failure of the Company to repurchase the Notes when required
would result in an Event of Default with respect to the Notes whether or not
such repurchase is permitted by the subordination provisions.
Rule 144A Information Requirement
The Company has agreed to furnish to the Holders or beneficial holders of
the Notes or the underlying Common Stock and prospective purchasers of the
Notes or the underlying Common Stock designated by the Holders of the Notes or
the underlying Common Stock, upon their request, the information required to
be delivered pursuant to Rule 144A(d)(4) under the Securities Act until such
time as such securities are no longer "restricted securities" within the
meaning of Rule 144 under the Securities Act.
Limitation on Merger, Sale or Consolidation
The Indenture provides that the Company may not, directly or indirectly,
consolidate with or merge with or into another person or sell, lease, convey
or transfer all or substantially all of its assets (computed on a consolidated
basis), whether in a single transaction or a series of related transactions,
to another Person or group of affiliated Persons, unless (i) either (a) in the
case of a merger or consolidation the Company is the surviving entity or (b)
the resulting, surviving or transferee entity is a corporation organized under
the laws of the United States, any state thereof or the District of Columbia
and expressly assumes by supplemental indenture all of the obligations of the
Company in connection with the Notes and the Indenture; and (ii) no Default or
Event of Default shall exist or shall occur immediately after giving effect on
a pro forma basis to such transaction.
Upon any consolidation or merger or any transfer of all or substantially
all of the assets of the Company in accordance with the foregoing, the
successor corporation formed by such consolidation or into which the Company
is merged or to which such transfer is made, shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
the Indenture with the same effect as if such successor corporation had been
named therein as the Company, and the Company will be released from its
obligations under the Indenture and the Notes, except as to any obligations
that arise from or as a result of such transaction.
13.
<PAGE>
Reports
Whether or not the Company is subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, the Company shall deliver to the
Trustee and to each Holder, within 15 days after it is or would have been
required to file such with the SEC, annual and quarterly consolidated
financial statements substantially equivalent to financial statements that
would have been included in reports filed with the SEC if the Company was
subject to the requirements of Section 13 or 15(d) of the Exchange Act,
including, with respect to annual information only, a report thereon by the
Company's certified independent public accountants as such would be required
in such reports to the SEC and, in each case, together with a management's
discussion and analysis of financial condition and results of operations as
such would be so required.
Events of Default and Remedies
The Indenture defines an Event of Default as (i) the failure by the
Company to pay any installment of interest on, or liquidated damages with
respect to, the Notes as and when due and payable and the continuance of any
such failure for 30 days, (ii) the failure by the Company to pay all or any
part of the principal of, or premium, if any on the Notes when and as the same
become due and payable at maturity, redemption, by acceleration or otherwise,
including, without limitation, pursuant to any Repurchase Offer or otherwise,
(iii) the failure of the Company to perform any conversion of Notes required
under the Indenture and the continuance of any such failure for 30 days, (iv)
the failure by the Company to observe or perform any other covenant or
agreement contained in the Notes or the Indenture and, subject to certain
exceptions, the continuance of such failure for a period of 60 days after
written notice is given to the Company by the Trustee or to the Company and
the Trustee by the Holders of at least 25% in aggregate principal amount of
the Notes outstanding, (v) certain events of bankruptcy, insolvency or
reorganization in respect of the Company or any of its Subsidiaries, (vi) a
default in the payment of principal, premium or interest when due that extends
beyond any stated period of grace applicable thereto or an acceleration for
any other reason of the maturity of any Indebtedness of the Company or any of
its Subsidiaries with an aggregate principal amount in excess of $15 million,
and (vii) final unsatisfied judgments not covered by insurance aggregating in
excess of $15 million, at any one time rendered against the Company or any of
its Subsidiaries and not stayed, bonded or discharged within 75 days. The
Indenture provides that if a Default occurs and is continuing, the Trustee
must, within 90 days after the occurrence of such default, give to the Holders
notice of such default.
The Indenture provides that if an Event of Default occurs and is
continuing (other than an Event of Default specified in clause (v) above),
then in every such case, unless the principal of all of the Notes shall have
already become due and payable, either the Trustee or the Holders of 25% in
aggregate principal amount of the Notes then outstanding, by notice in writing
to the Company (and to the Trustee if given by Holders) (an "Acceleration
Notice"), may declare all principal and accrued interest thereon to be due and
payable immediately. If an Event of Default specified in clause (v) above
occurs, all principal and accrued interest thereon will be immediately due and
payable on all outstanding Notes without any declaration or other act on the
part of the Trustee or the Holders. The Holders of no less than a majority in
aggregate principal amount of Notes generally are authorized to rescind such
acceleration if all existing Events of Default, other than the non-payment of
the principal of, premium, if any, and interest on, and liquidated damages
with respect to, the Notes that have become due solely by such acceleration,
have been cured or waived.
Prior to the declaration of acceleration of the maturity of the Notes, the
Holders of a majority in aggregate principal amount of the Notes at the time
outstanding may waive on behalf of all the Holders any default, except a
default in the payment of principal of or interest on any Note not yet cured,
or a default with respect to any covenant or provision that cannot be modified
or amended without the consent of the Holder of each outstanding Note
affected. Subject to the provisions of the Indenture relating to the duties
of the Trustee, the Trustee is under no obligation to exercise any of its
rights or powers under the Indenture at the request, order or direction of any
of the Holders, unless such Holders have offered to the Trustee reasonable
security or indemnity. Subject to all provisions of the Indenture and
applicable law, the Holders of a majority in aggregate principal amount of the
Notes at the time outstanding have the right
14.
<PAGE>
to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred on
the Trustee.
Amendments and Supplements
The Indenture contains provisions permitting the Company and the Trustee
to enter into a supplemental indenture for certain limited purposes without
the consent of the Holders. With the consent of the Holders of not less than
a majority in aggregate principal amount of the Notes at the time outstanding,
the Company and the Trustee are permitted to amend or supplement the Indenture
or any supplemental indenture or modify the rights of the Holders; provided,
that no such modification may, without the consent of each Holder affected
thereby: (i) change the Stated Maturity of any Note or reduce the principal
amount thereof or the rate (or extend the time for payment) of interest
thereon or any premium payable upon the redemption thereof, or change the
place of payment where, or the coin or currency in which, any Note or any
premium or the interest thereon is payable, or impair the right to institute
suit for the enforcement of any such payment or the conversion of any Note on
or after the due date thereof (including, in the case of redemption, on or
after the Redemption Date), or reduce the Repurchase Price, or alter the
Repurchase Offer or redemption provisions in a manner adverse to the Holders,
or (ii) reduce the percentage in principal amount of the outstanding Notes,
the consent of whose Holders is required for any such amendment, supplemental
indenture or waiver provided for in the Indenture, or (iii) adversely affect
the right of such Holder to convert Notes, or (iv) modify any of the waiver
provisions, except to increase any required percentage or to provide that
certain other provisions of the Indenture cannot be modified or waived without
the consent of the Holder of each outstanding Note affected thereby.
No Personal Liability of Stockholders, Officer, Directors and Employees
The Indenture provides that no stockholder, employee, officer or director,
as such, past, present or future of the Company or any successor corporation
shall have any personal liability in respect of the obligations of the Company
under the Indenture or the Notes by reason of his, her or its status as such
stockholder, employee, officer or director.
Transfer and Exchange
A Holder may transfer or exchange the Notes in accordance with the
Indenture. The Company may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents, and to pay any taxes and fees
required by law or permitted by the Indenture. The Company is not required to
transfer or exchange any Notes selected for redemption. Also, the Company is
not required to transfer or exchange any Notes for a period of 15 days before
a selection of Notes to be redeemed.
The registered holder of a Note may be treated as the owner of it for all
purposes.
Book-Entry, Delivery and Form
Except as set forth below, the Notes were initially issued in the form of
registered Notes in global form (the "Global Notes"). Each Global Note was
deposited on the date of the closing of the sale of the Notes (the "Closing
Date") with, or on behalf of, The Depository Trust Company (the "Depositary")
and registered in the name of Cede & Co., as nominee of the Depositary.
Interests in Global Notes are available for purchase only by "qualified
institutional buyers," as defined in Rule 144A under the Securities Act
("QIBs").
Notes that were (i) originally issued to or transferred to institutional
"accredited investors," as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act, who are not QlBs or to any other persons who are not QIBs
or (ii) issued as described below under "Certificated Notes," were issued in
the form of registered definitive securities ("Certificated Notes"). Upon the
transfer to a QIB of Certificated Notes, such Certificated Notes will, unless
the Global Note has previously been exchanged for Certificated
15.
<PAGE>
Notes, be exchanged for an interest in the Global Note representing the
principal amount of Notes being transferred.
The Depositary has advised the Company that it is a limited-purpose trust
company that was created to hold securities for its participating
organizations (collectively, the "Participants") and to facilitate the
clearance and settlement of transactions in such securities between
Participants through electronic book-entry changes in accounts of its
Participants. The Depositary's Participants include securities brokers and
dealers (including the Initial Purchasers), banks and trust companies,
clearing corporations and certain other organizations. Access to the
Depositary's system is also available to other entities such as banks,
brokers, dealers and trust companies (collectively, "Indirect Participants")
that clear through or maintain a custodial relationship with a Participant,
either directly or indirectly. QIBs may elect to hold Notes purchased by them
through the Depositary. QIBs who are not Participants may beneficially own
securities held by or on behalf of the Depositary only through Participants or
Indirect Participants. Persons that are not QIBs may not hold Notes through
the Depositary.
The Company expects that pursuant to procedures established by the
Depositary (i) upon deposit of the Global Notes, the Depositary will credit
the accounts of Participants designated by the Initial Purchasers with an
interest in the Global Note and (ii) ownership of the Notes evidenced by the
Global Note will be shown on, and the transfer of ownership thereof will be
effected only through, records maintained by the Depositary (with respect to
the interests of Participants), the Participants and the Indirect
Participants. The laws of some states require that certain persons take
physical delivery in definitive form of securities that they own and that
security interests in negotiable instruments can only be perfected by delivery
of certificates representing the instruments. Consequently, the ability to
transfer Notes evidenced by the Global Note will be limited to such extent.
So long as the Depositary or its nominee is the registered owner of a
Note, the Depositary or such nominee, as the case may be, will be considered
the sole owner or holder of the Notes represented by the Global Note for all
purposes under the Indenture. Except as provided below, owners of beneficial
interests in a Global Note will not be entitled to have Notes represented by
such Global Note registered in their names, will not receive or be entitled to
receive physical delivery of Certificated Notes, and will not be considered
the owners or holders thereof under the Indenture for any purpose, including
with respect to the giving of any directions, instructions or approvals to the
Trustee thereunder. As a result, the ability of a person having a beneficial
interest in Notes represented by a Global Note to pledge such interest to
persons or entities that do not participate in the Depositary's system, or to
otherwise take actions with respect to such interest, may be affected by the
lack of a physical certificate evidencing such interest.
Neither the Company nor the Trustee has any responsibility or liability
for any aspect of the records relating to or payments made on account of Notes
by the Depositary, or for maintaining, supervising or reviewing any records of
the Depositary relating to such Notes.
Payments with respect to the principal of, premium, if any, interest on,
and liquidated damages with respect to, any Note represented by a Global Note
registered in the name of the Depositary or its nominee on the applicable
record date are payable by the Trustee to or at the direction of the
Depositary or its nominee in its capacity as the registered Holder of the
Global Note representing such Notes under the Indenture. Under the terms of
the Indenture, the Company and the Trustee may treat the persons in whose
names the Notes, including the Global Notes, are registered as the owners
thereof for the purpose of receiving such payments and for any and all other
purposes whatsoever. Consequently, neither the Company nor the Trustee has or
will have any responsibility or liability for the payment of such amounts to
beneficial owners of Notes (including principal, premium, if any, interest, or
liquidated damages with respect thereto), or to immediately credit the
accounts of the relevant Participants with such payment, in amounts
proportionate to their respective holdings in principal amount of beneficial
interests in the Global Note as shown on the records of the Depositary.
Payments by the Participants and the Indirect Participants to the beneficial
owners of Notes are governed by standing instructions and customary practice
and are the responsibility of the Participants or the Indirect Participants.
16.
<PAGE>
Certificated Notes
If (i) the Company notifies the Trustee in writing that the Depositary is
no longer willing or able to act as a depositary and the Company is unable to
locate a qualified successor within 90 days, or (ii) the Company, at its
option, notifies the Trustee in writing that it elects to cause the issuance
of Notes in definitive form under the Indenture, then, upon surrender by the
Depositary of the Global Notes, Certificated Notes will be issued to each
person that the Depositary identifies as the beneficial owner of the Notes
represented by Global Notes. In addition, subject to certain conditions, any
person having a beneficial interest in a Global Note may, upon request to the
Trustee, exchange such beneficial interest for Notes in the form of
Certificated Notes. Upon any such issuance, the Trustee is required to
register such Certificated Notes in the name of such person or persons (or the
nominee of any thereof), and cause the same to be delivered thereto.
Neither the Company nor the Trustee shall be liable for any delay by the
Depositary or any Participant or Indirect Participant in identifying the
beneficial owners of the Notes, and the Company and the Trustee may
conclusively rely on, and shall be protected in relying on, instructions from
the Depositary for all purposes (including with respect to the registration
and delivery, and the respective principal amounts, of the Notes to be
issued).
Same-Day Funds Settlement and Payment
The Indenture requires that payments in respect of the Notes represented
by the Global Notes (including principal, premium, if any, interest and
liquidated damages with respect thereto) be made by wire transfer of
immediately available funds to the accounts specified by the Depositary. With
respect to Notes represented by Certificated Notes, the Company will make all
payments of principal, premium, if any, interest and liquidated damages with
respect thereto, by mailing a check to each such Holder's registered address.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearing-house or next-day funds. In contrast, the Notes
represented by the Global Notes have been designated for trading in the PORTAL
market and to trade in the Depositary's Same-Day Funds Settlement System, and
any permitted secondary market trading activity in such Notes will, therefore,
be required by the Depositary to be settled in immediately available funds.
The Company expects that secondary trading in the Certificated Notes will also
be settled in immediately available funds.
Registration Rights; Liquidated Damages
The Company and the Initial Purchasers have entered into a Registration
Rights Agreement dated as of September 18, 1995 (the "Registration Rights
Agreement").
Pursuant to the Registration Rights Agreement, the Company has filed with
the SEC a shelf registration statement under the Securities Act (the "Shelf
Registration Statement") on Form S-3, to cover resales of Transfer Restricted
Securities by the holders thereof who satisfy certain conditions relating to
the provision of information in connection with the Shelf Registration
Statement. The Company will use its best efforts to cause the applicable
registration statement to be declared effective by the SEC as soon as
practicable after the date of filing and to keep such registration statement
effective until September 18, 1998, three years after the date of original
issue of the Notes, or until the Shelf Registration Statement is no longer
required for transfer of the Notes or the underlying Common Stock. For
purposes of the foregoing, "Transfer Restricted Securities" means each Note
and share of Common Stock issued upon conversion thereof until the date on
which such Note or share of Common Stock has been effectively registered under
the Securities Act and disposed of in accordance with the Shelf Registration
Statement or the date on which such Note or share of Common Stock is
distributed to the public pursuant to Rule 144 under the Securities Act or is
salable pursuant to Rule 144(k) under the Securities Act (or any similar
provisions then in force).
The Registration Rights Agreement provides that (i) the Company will file
the Shelf Registration Statement with the SEC on or prior to 90 days after the
Closing Date and (ii) the Company will use its best efforts to cause the Shelf
Registration Statement to be declared effective by the SEC on or prior to 120
17.
<PAGE>
days after the Closing Date (the "Effectiveness Target Date"). If (i) the
Shelf Registration Statement is not filed with the SEC on or prior to 90 days
after the Closing Date, (ii) the Shelf Registration Statement has not been
declared and effective by the SEC within 120 days after the Closing Date, or
(iii) the Shelf Registration Statement is filed and declared effective but
shall thereafter cease to be effective (without being succeeded immediately by
an additional Shelf Registration Statement filed and declared effective) for a
period of time which shall exceed 90 days in the aggregate per year (each such
event referred to in clauses (i) through (iii), a "Registration Default"), the
Company will pay liquidated damages to each Holder of Transfer Restricted
Securities, during the first 90-day period immediately following the
occurrence of such Registration Default, in an amount equal to $0.05 per week
per $1,000 principal amount of Notes and, if applicable, $0.01 per week per
share (subject to adjustment in the event of stock splits, stock
recombinations, stock dividends and the like) of Common Stock constituting
Transfer Restricted Securities held by such Holder. The amount of the
liquidated damages will increase by an additional $0.05 per week per $1,000
principal amount or $0.01 per week per share (subject to adjustment as set
forth above) of Common Stock constituting Transfer Restricted Securities for
each subsequent 90-day period until the applicable Registration Statement is
filed and the applicable Registration Statement is declared effective, or the
Shelf Registration Statement again becomes effective, as the case may be, up
to a maximum amount of liquidated damages with respect to any Registration
Default of $0.25 per week per $1,000 principal amount of Notes or $0.05 per
week per share (subject to adjustment as set forth above) of Common Stock
constituting Transfer Restricted Securities. All accrued liquidated damages
shall be paid to holder of Notes by wire transfer of immediately available
funds or by Federal funds check by the Company on each Damages Payment Date.
Following the cure of a Registration Default, liquidated damages will cease to
accrue with respect to such Registration Default.
So long as the Notes and Common Stock are outstanding, the Company will
continue to provide to holders of the Notes and Common Stock and to
prospective purchasers of the Notes and Common Stock the information required
by Rule 144A(d) (4), if applicable. The Shelf Registration Statement will
remain effective until the earlier of three years following the Closing or
until the Shelf Registration Statement is no longer required for transfer of
the Notes or the underlying Common Stock.
Certain Definitions
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to close.
"Capital Stock" means, with respect to any corporation, any and all
shares, interests, rights to purchase (other than convertible or exchangeable
indebtedness), warrants, options, participations or other equivalents of or
interests (however designated) in stock issued by that corporation.
"Indebtedness" of any person means, without duplication, (a) all
liabilities and obligations, contingent or otherwise, of any such person, (i)
in respect of borrowed money (whether or not the recourse of the lender is to
the whole of the assets of such person or only to a portion thereof), (ii)
evidenced by bonds, notes, debentures or similar instruments, (iii)
representing the balance deferred and unpaid of the purchase price of any
property or services, except such as would constitute trade payables to trade
creditors in the ordinary course of business that are not more than 90 days
past their original due date, (iv) evidenced by bankers' acceptances or
similar instruments issued or accepted by banks, (v) for the payment of money
relating to a Capitalized Lease Obligation, or (vi) evidenced by a letter of
credit or a reimbursement obligation of such person with respect to any letter
of credit; (b) all net obligations of such person under Interest Swap and
Hedging Obligations; (c) all liabilities of others of the kind described in
the preceding clauses (a) or (b) that such person has guaranteed or that is
otherwise its legal liability and all obligations to purchase, redeem or
acquire any Capital Stock; and (d) any and all deferrals, renewals,
extensions, refinancings and refundings (whether direct or indirect) of any
liability of the kind described in any of the preceding clauses (a), (b) or
(c), or this clause (d), whether or not between or among the same parties.
18.
<PAGE>
"Issue Date" or "Closing Date" means the date of first issuance of the
Notes under the Indenture.
"Junior Securities" of any Person means any Qualified Capital Stock and
any Indebtedness of such Person that is subordinated in right of payment to
the Notes and has no scheduled installment of principal due, by redemption,
sinking fund payment or otherwise, on or prior to the Stated Maturity of the
Notes.
"Senior Indebtedness" of the Company means any Indebtedness of the
Company, whether outstanding on the date of the Indenture or thereafter
created, incurred, assumed, guaranteed or in effect guaranteed by the Company,
unless the instrument creating or evidencing such Indebtedness provides that
such Indebtedness is not senior or superior in right of payment to the Notes
or to other Indebtedness which is pari passu with, or subordinated to, the
Notes; provided that in no event shall Senior Indebtedness include (a)
Indebtedness of the Company owed or owing to any Subsidiary of the Company or
any officer, director or employee of the Company or any Subsidiary of the
Company, (b) Indebtedness to trade creditors, (c) the Company's 5% Convertible
Subordinated Debentures due 2000, or (d) any liability for taxes owed or owing
by the Company.
"Stated Maturity" when used with respect to any Note, means September 15,
2005.
"Subsidiary," with respect to any person, means (i) a corporation a
majority of whose Capital Stock with voting power normally entitled to vote in
the election of directors is at the time, directly or indirectly, owned by
such person, by such person and one or more Subsidiaries of such person or by
one or more Subsidiaries of such person, (ii) a partnership in which such
Person or a subsidiary of such Person is, at the time, a general partner, or
(iii) any other person (other than a corporation) in which such person, one or
more Subsidiaries of such person, or such person and one or more subsidiaries
of such person, directly or indirectly, at the date of determination thereof
has at least majority ownership interest.
SELLING SECURITYHOLDERS
The Notes and Conversion Shares that may be offered pursuant to this
Prospectus will be offered by the Selling Securityholders identified in the
table below. The following table sets forth information with respect to the
Selling Securityholders and the principal amount of Notes owned, all of which
may be sold hereunder, and the percentage of all outstanding Notes held by the
Selling Securityholders, all as of September 22, 1995:
<TABLE>
<CAPTION>
Principal
Amount of
Name of Selling Notes Percent of Total
Securityholder Owned Outstanding Notes
- -------------------------------------- ------------ ------------------
<S> <C> <C>
Investors Diversified Services $ 20,000,000 14.3%
Trust Company of the West 12,000,000 8.6
Fidelity Management 10,000,000 7.1
Lynch & Mayer 3,000,000 2.1
Oppenheimer Mgmt-Funds 3,000,000 2.1
Phoenix Insurance 3,000,000 2.1
General Motors Corp. 2,500,000 1.7
Keystone Funds Inc. 2,500,000 1.7
Oak Tree Capital 2,500,000 1.7
Peck Associates 2,500,000 1.7
Aim Investment Mgmt 2,000,000 1.4
Janus Fund 2,000,000 1.4
Massachusetts Investors Trust 2,000,000 1.4
Morgan Guaranty Tr. Co. 2,000,000 1.4
Putnam Management 2,000,000 1.4
Strong Associates 2,000,000 1.4
Allstate Insurance Co. 1,500,000 1.1
Franklin Asset Management 1,500,000 1.1
</TABLE>
19.
<PAGE>
<TABLE>
<CAPTION>
Principal
Amount of
Name of Selling Notes Percent of Total
Securityholder Owned Outstanding Notes
- -------------------------------------- ------------ ------------------
<S> <C> <C>
Vance Sanders 1,500,000 1.1
American Capital Mgmt 1,000,000 0.7
AON Corporation 1,000,000 0.7
Sea Associates 1,000,000 0.7
Delaware Management 1,000,000 0.7
Fiduciary Trust Co Of New York 1,000,000 0.7
Merrill Lynch Asset Management 1,000,000 0.7
New York Life Insurance 1,000,000 0.7
Pacific Mutual - L.A. 1,000,000 0.7
Tennessee State Ret 1,000,000 0.7
Dean Witter Intercapital 1,000,000 0.7
Fred Alger Mgmt-N.Y. 500,000 0.4
Bass Brothers Enterprises Inc. 500,000 0.7
Bank of America Capital Mgmt. 500,000 0.4
Harris Trust & Savings Bank 500,000 0.4
Neuberger Berman 500,000 0.4
Pallisade 500,000 0.4
Rochester Funds 500,000 0.4
Stein Roe & Farnham 500,000 0.4
Value Line 500,000 0.4
B.A.I.I. 3,000,000 2.1
Kuwait Financial Trading Contracting 1,000,000 0.7
Aveco Berne 750,000 0.5
Gulf Investment Partners 500,000 0.4
Vereinsbk Hamburg 500,000 0.4
Maap 400,000 0.3
Abn Amro Bank Zurich 350,000 0.3
Lloyds Geneve 350,000 0.3
Barclays Biarritz 300,000 0.2
Barque Lazard Freres 300,000 0.2
Kantonale Bank Zurich 300,000 0.2
Atag Berne 250,000 0.1
Banque Indosuez 200,000 0.1
B.S.I. (Intl.) 200,000 0.1
Capital Trust 200,000 0.1
Paribas Lugano 200,000 0.1
Rominvest 200,000 0.1
Unione Banche Svizzera 200,000 0.1
United Gulf 200,000 0.1
Banca Commerciale Lugano 100,000 0.1
Clayvard 100,000 0.1
Daiwa Inv. Trust Mgmt 100,000 0.1
Gen De Banque Brux 100,000 0.1
Paribas-Bruxelles (Intl) 100,000 0.1
Sempione 100,000 0.1
Cincinnati Financial 1,500,000 1.1
Everglades Partners 100,000 0.1
Pacific Capital 100,000 0.1
Mass Mutual Life Insurance Co. 3,000,000 2.1
Gen Capital 1,500,000 1.1
Royal Trust 1,300,000 0.9
Templeton Investment Counsel 1,000,000 0.7
</TABLE>
20.
<PAGE>
<TABLE>
<CAPTION>
Principal
Amount of
Name of Selling Notes Percent of Total
Securityholder Owned Outstanding Notes
- -------------------------------------- ------------ ------------------
<S> <C> <C>
Sahuaro Comm. 100,000 0.1
Calamos 1,500,000 1.1
State of Montana 1,500,000 1.1
Koch Industries 500,000 0.4
Camden Asset 1,500,000 1.1
Sage Capital 1,000,000 0.7
Hermes Capital 250,000 0.2
Froley Revx Investments 3,000,000 2.1
Nicholas Applegate Capital Mgmt 3,000,000 2.1
Desai Capital Mgmt 1,500,000 1.1
Orion 1,500,000 1.1
Solomon 1,500,000 1.1
Bass Brothers 1,000,000 0.7
Hull 1,000,000 0.7
Society Nat'l. Bk. 1,000,000 0.7
Baker Nye 500,000 0.4
Highbridge 500,000 0.4
Latterman 500,000 0.4
Paloma 500,000 0.4
Simon 500,000 0.4
Lipco Partners 350,000 0.3
Firebird 250,000 0.2
Forest Hills 250,000 0.2
Gabelli Asset Management 250,000 0.2
Q Investments 250,000 0.2
Carret & Co. 100,000 0.1
Gordon Mgt 100,000 0.1
Lindner Dividend Fund Inc. 5,200,000 3.6
Willougby Houn Harris & Rentner 300,000 0.2
Mctash & Hill 100,000 0.1
------------
Total $140,000,000
============
</TABLE>
The preceding table has been prepared based upon information furnished to
the Company by The Depository Trust Company ("DTC"), State Street Bank and
Trust Company, trustee under the Indenture, and by or on behalf of the Selling
Securityholders.
Other than as a result of the ownership of Notes, none of the Selling
Securityholders listed above had any material relationship with the Company
within the three year period ending on the date of this Prospectus.
Because the Selling Securityholders may offer all or some of the Notes
that they hold and/or Conversion Shares pursuant to the offering contemplated
by this Prospectus, and because there are currently no agreements,
arrangements or understandings with respect to the sale of any of the Notes or
Conversion Shares by the Selling Securityholders, no estimate can be given as
to the principal amount of Notes or Conversion Shares that will be held by the
Selling Securityholders after completion of this offering. See "Plan of
Distribution."
21.
<PAGE>
PLAN OF DISTRIBUTION
The Company will not receive any of the proceeds from this offering. The
Notes and Conversion Shares offered hereby may be sold from time to time by or
for the account of any of the Selling Securityholders or by their pledgees,
donees or transferees or other successors in interest to the Selling
Securityholders. The Notes and the Conversion Shares may be sold hereunder
directly to purchasers by the Selling Securityholders, in negotiated
transactions; by or through brokers or dealers in ordinary brokerage
transactions or transactions in which the broker solicits purchasers; block
trades in which the broker or dealer will attempt to sell Notes or Conversion
Shares as agent but may position and resell a portion of the block as
principal; transactions in which a broker or dealer purchases as principal for
resale for its own account; or through underwriters or agents. The Notes or
Conversion Shares may be sold at a fixed offering price, which may be changed,
at the prevailing market price at the time of sale, at prices related to such
prevailing market price or at negotiated prices. Any brokers, dealers,
underwriters or agents may arrange for others to participate in any such
transaction and may receive compensation in the form of discounts, commissions
or concessions from the Selling Securityholders and/or the purchasers of Notes
or Conversion Shares. Each Selling Securityholder will be responsible for
payment of any and all commissions to brokers. To the extent required, the
name of any such broker, dealer, agent or underwriter and any applicable
commissions with respect to a particular offer, including required information
pertaining to that offer, will be set forth in an accompanying Prospectus
Supplement. The aggregate proceeds to the Selling Securityholders from the
sale of the Notes and Conversion Shares offered by the Selling Securityholders
hereby will be the purchase price of such Notes and Conversion Shares less any
broker's commissions.
The Company has been advised by DLJ and PaineWebber, the Initial
Purchasers, that DLJ and PaineWebber are making and currently intend to
continue making a market in the Notes. However, DLJ and PaineWebber are not
obligated to make such a market and any market-making activities may be
discontinued at any time without notice. There can be no assurance that an
active market for the Notes will develop or continue. The Company does not
intend to apply for listing of the Notes on any securities exchange or for
quotation through the National Association of Securities Dealers Automated
Quotation System. The Common Stock is listed and principally traded on the
New York Stock Exchange.
In order to comply with the securities laws of certain states, if
applicable, the Notes and Conversion Shares will be sold in such jurisdiction
only through registered or licensed brokers or dealers. In addition, in
certain states the Notes and Conversion Shares may not be sold unless they
have been registered or qualified for sale in the applicable state or an
exemption from the registration or qualification requirement is available and
is complied with.
The Selling Securityholders and any broker-dealers, agents or underwriters
that participate with the Selling Securityholders in the distribution of the
Notes or Conversion Shares may be deemed to be "underwriters" within the
meaning of the Securities Act, in which event any commissions received by such
broker-dealers, agents or underwriters and any profit on the resale of the
Notes or Conversion Shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.
Under applicable rules and regulations under the Exchange Act, any persons
engaged in the distribution of the Notes or the Conversion Shares offered
hereby may not simultaneously engage in market making activities with respect
to either the Notes or the Conversion Shares for a period of nine business
days (two business days in the case of Conversion Shares) prior to the
commencement of such distribution. In addition, and without limiting the
foregoing, each Selling Securityholder will be subject to applicable
provisions of the Exchange Act and the rules and regulations thereunder,
including, without limitation, Rules 10b-2, 10b-5, 10b-6 and 10b-7, which
provisions may limit the timing of purchases and sales of Notes or Conversion
Shares by the Selling Securityholders.
In addition, any securities covered by this Prospectus which qualify for
sale pursuant to Rule 144 or Rule 144A of the Securities Act may be sold under
Rule 144 or Rule 144A rather than pursuant to this Prospectus. There is no
assurance that any Selling Securityholder will sell any or all of the Notes or
22.
<PAGE>
Conversion Shares described herein, and any Selling Securityholder may
transfer, devise or gift such securities by other means not described herein.
The Notes were originally sold to DLJ and PaineWebber in September 1995 in
a private placement. The Company agreed to indemnify and hold DLJ and
PaineWebber harmless against certain liabilities under the Securities Act that
could arise in connection with the sale of the Notes by DLJ and PaineWebber.
The Company and the Selling Securityholders are obligated to indemnify each
other against certain liabilities arising under the Securities Act.
The Company will use its best efforts to cause the registration statement
to which this Prospectus relates to become effective as promptly as is
practicable and to keep the registration statement effective until September
18, 1998, three years after the date of original issue of the Notes, or until
the Shelf Registration Statement is no longer required for transfer of the
Notes or the underlying Common Stock. The Company is permitted to suspend the
use of this Prospectus in connection with sales of Notes and Conversion Shares
by holders during certain periods of time under certain circumstances relating
to pending corporate developments and public filings with the Commission and
similar events. Expenses of preparing and filing the registration statement
and all post-effective amendments will be borne by the Company.
DESCRIPTION OF CAPITAL STOCK
General. As of October 3, 1995, the Company was authorized to issue
75,000,000 shares of Common Stock, par value $.01 per share, of which
25,509,909 shares were issued and outstanding, and 3,000,000 shares of
preferred stock, par value $.10 per share, of which 880,000 shares have been
designated Series A Voting Cumulative Convertible Preferred Stock ("Series A
Preferred Stock"), all of which were issued and outstanding, and of which
64,815 have been designated Series B Voting Convertible Preferred Stock, of
which none were issued and outstanding. Of the unissued shares of Common
Stock, 1,320,000 shares were reserved for issuance upon conversion of the
Series A Preferred Stock, 2,926,829 shares were reserved for issuance upon
conversion of the Company's 5% Convertible Subordinated Debentures due 2000,
5,090,909 shares were reserved for issuance upon conversion of the Notes, an
aggregate of 2,214,669 shares were reserved for issuance pursuant to the
Company's 1991 Employee Stock Option Plan, and 327,000 shares were reserved
for issuance pursuant to the Company's 1991 Directors Stock Option Plan.
Common Stock. The holders of Common Stock are entitled to one vote for
each share held of record by them on all matters to be voted on by
stockholders. There is no cumulative voting with respect to the election of
directors; thus, the holders of shares having more than 50% of the Company's
voting power (including both common and voting preferred shares) voting for
the election of directors can elect all of the directors. The holders of
Common Stock are entitled to receive dividends when, as and if declared by the
Board of Directors out of funds legally available therefor, subject to the
prior rights of preferred stockholders. In the event of liquidation,
dissolution or a winding up of the Company's affairs, the holders of Common
Stock are entitled to share ratably in all assets remaining available for
distribution to them after payment of liabilities and after provision has been
made for each class of stock, including any preferred stock, that has
preference over the Common Stock. Except as described below under "Stock
Purchase Rights," holders of shares of Common Stock, as such, have no
conversion, preemptive or other subscription rights, and there are no
redemption or sinking fund provisions applicable to the Common Stock. All of
the outstanding shares of Common Stock are, and the Shares when issued will
be, validly issued, fully paid and nonassessable.
The Company currently intends to retain earnings to provide funds for the
operation and expansion of its business and accordingly does not anticipate
paying cash dividends on the Common Stock in the foreseeable future. Any
payment of cash dividends on the Common Stock in the future will depend upon
the Company's financial condition, earnings, capital requirements and such
other factors as the Board of Directors deems relevant. Dividends on the
Common Stock are subject to the prior payment of dividends on the Series A
Preferred Stock. In addition, under the Company's credit agreement with The
First
23.
<PAGE>
National Bank of Boston and First Interstate Bank of California, no dividends
may be paid on the Common Stock without the consent of those banks.
Preferred Stock. Shares of preferred stock may be issued without
stockholder approval. The Board of Directors is authorized to issue such
shares in one or more series and to fix the rights, preferences, privileges,
qualifications, limitations and restrictions thereof, including dividend
rights and rates, conversion rights, voting rights, terms of redemption,
redemption prices, liquidation preferences and the number of shares
constituting any series or the designation of such series, without any vote or
action by the stockholders. The Company has no current plans for the issuance
of any additional shares of preferred stock. Any preferred stock to be issued
could rank prior to the Common Stock with respect to dividend rights and
rights on liquidation. The Board of Directors, without stockholder approval,
may issue preferred stock with voting and conversion rights that could
adversely affect the voting power of holders of Common Stock or create
impediments to persons seeking to gain control of the Company.
Series A Preferred Stock. Each share of Series A Preferred Stock is
currently convertible into 1.5 shares of Common Stock subject to certain
events, and votes together with the Common Stock on an "as converted" basis,
except with respect to certain actions for which the Series A Preferred Stock
is entitled to vote as a class. The Series A Preferred Stock automatically
converts into Common Stock if the closing price of the Common Stock is at
least 150% of an amount equal to $25.00 divided by the number of shares into
which each share is convertible at that time. A cumulative dividend is
payable on the Series A Preferred Stock at the rate of $.812 per share
annually, subject to adjustment under certain circumstances. The Series A
Preferred Stock has a preference in liquidation over holders of common stock
of $25 per share plus accrued dividends. The Company, at its option, may
redeem shares of the Series A Preferred Stock, subject to certain conditions,
at a price of $30 per share (and, under certain circumstances, at a price of
$25.00 per share) plus accrued dividends. Reacquired or redeemed shares are
required to be retired and cancelled.
Stock Purchase Rights. Eastern Associated Securities Corporation
(collectively with its affiliates, including Eastern Enterprises, "Eastern"),
which currently hold 3,041,092 shares of Common Stock, Laidlaw Inc. and its
affiliates ("Laidlaw"), which currently hold 2,965,829 shares of Common Stock,
and Aluminum Company of America, which currently holds 880,000 shares of
Series A Preferred Stock, have certain rights to purchase voting securities of
the Company in order to maintain their respective percentage voting interests.
Except in connection with mergers or other acquisitions or in the ordinary
course under an employee stock option or stock bonus plan, in the event the
Company proposes to sell or issue shares of voting securities, each of these
holders has the right to purchase, on the same terms as the proposed sale or
issuance, that number of shares or rights as will maintain such holder's
percentage interest in the voting securities of the Company, assuming the
conversion of all convertible securities and the exercise of all options and
warrants then outstanding. In addition, these holders have other purchase
rights with respect to sales or issuances of securities by the Company at
prices below 85% of current market price at the time of sale or issuance or
the prevailing customary price for such securities or their equivalent.
Certain Voting Arrangements. Pursuant to the agreements whereby the
Company acquired Ionpure Technologies Corporation and IP Holding Company
"Ionpure") from Eastern Enterprises in 1993, the Company agreed, so long as
Eastern owns at least 5% of the Company's voting securities, to nominate J.
Atwood Ives (or his successor at Eastern) for election to the Board and, so
long as Eastern owns at least 10% of the Company's voting securities, Eastern
has the right to designate a second member of the Board. The Company also
agreed that Mr. Ives (or his successor) will be a member of the Audit
Committee of the Board and that, upon request and with the consent of the
Board, Mr. Ives will also be appointed to the Compensation Committee or any
other committee of the Board, other than the Nominating Committee. Pursuant
to the agreements whereby the Company acquired Smogless S.p.A. ("Smogless") in
September 1994, the Company agreed, so long as Laidlaw owns at least 5% of the
Company's voting securities, to nominate a person designated by Laidlaw for
election to the Board. In addition, Eastern and Laidlaw agreed to vote all
shares owned by them for the Board's nominees for election to the Board and on
all other matters in the same proportion as the votes cast by the other
holders of voting securities, other than those that relate to any business
combination or similar transaction involving the Company or any amendment to
the Company's Certificate of Incorporation or Bylaws.
24.
<PAGE>
Eastern and Laidlaw have also agreed not to (i) solicit proxies in
opposition to a recommendation of the Board, (ii) join a group for the purpose
of acquiring, voting or disposing of voting securities of the Company or (iii)
solicit stockholders for the approval of one or more stockholder proposals.
Eastern and Laidlaw have each separately agreed not to acquire voting
securities of the Company during the six-year period following the date of the
Ionpure acquisition in the case of Eastern or the Smogless acquisition in the
case of Laidlaw if, after the acquisition, its percentage share of the
Company's voting power would exceed its percentage share on the date of
consummation of the Ionpure or the Smogless acquisition, as the case may be,
except under certain circumstances, including if any person makes (a) an offer
to acquire voting securities of the Company that would result in such person
owning 20% or more of the voting power of the Company or (b) a formal proposal
for a business combination involving control of the Company, which proposal is
either (i) not withdrawn or terminated or rejected by the Board within 30 days
after such proposal is made, or (ii) accepted by the Board.
Certain Charter and Bylaw Provisions. The Company's Certificate of
Incorporation (the "Certificate") places certain restrictions on the voting
rights of a "Related Person," defined therein as any person who directly or
indirectly owns 5% or more of the outstanding voting stock of the Company.
The founders and the original directors of the Company are excluded from the
definition of "Related Persons," as are seven named individuals including
Richard J. Heckmann, the Chairman of the Board, President and Chief Executive
Officer of the Company. These voting restrictions apply in two situations.
First, the vote of a director who is also a Related Person is not counted in
the vote of the Board of Directors to call a meeting of stockholders where
that meeting will consider a proposal made by the Related Person director.
Second, any amendments to the Certificate that relate to specified Articles
therein (those dealing with corporate governance, limitation of director
liability or amendments to the Certificate), in addition to being approved by
the Board of Directors and a majority of the Company's outstanding voting
stock, must also be approved by either (i) a majority of directors who are not
Related Persons, or (ii) the holders of at least 80% of the Company's
outstanding voting stock, provided that if the change was proposed by or on
behalf of a Related Person, then approval by the holders of a majority of the
outstanding voting stock not held by Related Persons is also required. In
addition, any amendment to the Company's Bylaws must be approved by one of the
methods specified in clauses (i) and (ii) in the preceding sentence.
The Certificate and the Company's Bylaws provide that the Board of
Directors shall fix the number of directors and that the Board shall be
divided into three classes, each consisting of one-third of the total number
of directors (or as nearly as may be possible). Stockholders may not take
action by written consent. Meetings of stockholders may be called only by the
Board of Directors (or by a majority of its members). Stockholder proposals,
including director nominations, may be considered at a meeting only if written
notice of that proposal is delivered to the Company from 30 to 60 days in
advance of the meeting, or within ten days after notice of the meeting is
first given to stockholders.
Delaware Anti-Takeover Law. Section 203 of the Delaware General
Corporation Law ("Section 203") provides, in general, that a stockholder
acquiring more than 15% of the outstanding voting shares of a corporation
subject to the statute (an "Interested Stockholder"), but less than 85% of
such shares, may not engage in certain "Business Combinations" with the
corporation for a period of three years subsequent to the date on which the
stockholder became an Interested Stockholder unless (i) prior to such date the
corporation's board of directors has approved either the Business Combination
or the transaction in which the stockholder became an Interested Stockholder
or (ii) the Business Combination is approved by the corporation's board of
directors and authorized by a vote of at least two-thirds of the outstanding
voting stock of the corporation not owned by the Interested Stockholder.
Section 203 defines the term "Business Combination" to encompass a wide
variety of transactions with or caused by an Interested Stockholder in which
the Interested Stockholder receives or could receive a benefit on other than a
pro rata basis with other stockholders, including mergers, certain asset
sales, certain issuances of additional shares to the Interested Stockholder,
transactions with the corporation that increase the proportionate interest of
the Interested Stockholder or transactions in which the Interested Stockholder
receives certain other benefits.
25.
<PAGE>
These provisions could have the effect of delaying, deferring or
preventing a change of control of the Company. The Company's stockholders, by
adopting an amendment to the Certificate or Bylaws of the Company, may elect
not to be governed by Section 203, effective twelve months after adoption.
Neither the Certificate nor the Bylaws of the Company currently excludes the
Company from the restrictions imposed by Section 203.
DESCRIPTION OF CERTAIN INDEBTEDNESS
The following summarizes the material long-term indebtedness of the
Company. At June 30, 1995, the Company's total consolidated long-term debt
(including current maturities), after giving effect to the exercise of certain
warrants to purchase Common Stock and related delivery of $45 million of
Subordinated Notes due 2001 and sale of the Notes and the application of the
net proceeds therefrom accounted for 41.5 of its total capitalization. This
summary does not include a description of the Notes and is not a complete
description of the indebtedness described. The description set forth herein
is qualified in its entirety by reference to the material agreements relating
to such indebtedness.
5% Convertible Subordinated Debentures Due 2000. The Company has
outstanding $60,000,000 principal amount of 5% Convertible Subordinated
Debentures due 2000, which are due on October 15, 2000. Interest on the 5%
Convertible Subordinated Debentures due 2000 is payable semi-annually. The 5%
Convertible Subordinated Debentures due 2000 are redeemable in whole or in
part at the option of the Company at any time on or after October 25, 1996 at
a price, expressed as a percentage of the principal amount, ranging from
102.86% in 1996 to 100.71% in 1999, plus accrued interest. The 5% Convertible
Subordinated Debentures due 2000 are unsecured subordinated obligations of the
Company and will rank pari passu in all respects with other unsecured
subordinated obligations of the Company, including the Notes. Upon certain
changes in control of the Company, holders of the 5% Convertible Subordinated
Debentures due 2000 have the right to require the Company to repurchase all or
a portion of their 5% Convertible Subordinated Debentures due 2000 at 100% of
principal amount plus accrued interest. The 5% Convertible Subordinated
Debentures due 2000 are convertible into Common Stock, currently at a
conversion price of $20.50 per share, subject to adjustment upon the
occurrence of certain events. The Company has filed and is maintaining the
effectiveness of a shelf registration statement covering resales by the
holders of all 5% Convertible Subordinated Debentures due 2000 and the Common
Stock issuable upon conversion thereof.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of certain Federal income tax considerations
for purchasers of the Notes and is based on the Federal income tax law now in
effect, which is subject to change, possibly retroactively. This summary does
not discuss all aspects of Federal income taxation that may be relevant to
particular holders of Notes in light of their individual investment
circumstances or to certain types of investors subject to special tax rules
(e.g., financial institutions, insurance companies, tax-exempt organizations
and foreign taxpayers), nor does it discuss any aspects of state, local or
foreign tax law consequences. This summary assumes that investors will hold
their Notes as "capital assets" (generally, property held for investment)
under the Internal Revenue Code of 1986, as amended. Prospective purchasers
are urged to consult their tax advisors regarding the specific Federal, state,
local and foreign income and other tax consequences of purchasing, holding and
disposing of the Notes.
Sale or Exchange
A holder will recognize capital gain or loss upon the sale or other
disposition of a Note in an amount equal to the difference between the amount
realized from such disposition and his tax basis in the Note. Such gain or
loss will be long-term if the Note has been held for more than one year.
26.
<PAGE>
Conversion
A holder's conversion of a Note into Common Stock is generally not a
taxable event (except with respect to cash received in lieu of a fractional
share). The holder's tax basis in the Common Stock received on conversion of
a Note will be the same as the holder's tax basis in the Note at the time of
conversion (exclusive of any tax basis allocable to a fractional share), and
the holding period for the Common Stock received on conversion will include
the holding period of the Note converted.
Constructive Dividend
If at any time the Company makes a distribution of property to
shareholders that would be taxable to such shareholders as a dividend for
Federal income tax purposes and, in accordance with the antidilution
provisions of the Notes, the Conversion Price of the Notes is decreased, the
amount of such decrease may be deemed to be the payment of a taxable dividend
to holders. For example, a decrease in the Conversion Price in the event of
distributions of evidence of indebtedness or assets of the Company will
generally result in deemed dividend treatment to holders, but generally a
decrease in the event of stock dividends or the distribution of rights to
subscribe for shares will not. See "Description of the Notes-Conversion
Rights."
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon the
Company by Damian C. Georgino, Vice President and General Counsel of the
Company. Mr. Georgino presently holds 100 shares of the Company's Common
Stock and options granted under the Company's 1991 Employee Stock Option Plan
to purchase an aggregate of 10,000 shares of the Common Stock.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The consolidated financial statements of United States Filter Corporation
and its subsidiaries as of March 31, 1994 and 1995 and for each of the years
in the three-year period ended March 31, 1995, have been incorporated by
reference in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated by reference and upon the authority
of said firm as experts in accounting and auditing.
The financial statements of Arrowhead Industrial Water, Inc. as of
December 31, 1994 and 1993 and for each of the years in the two-year period
ended December 31, 1994, have been incorporated by reference in reliance upon
the report of KPMG Peat Marwick LLP, independent certified public accountants,
incorporated by reference and upon the authority of said firm as experts in
accounting and auditing.
The financial statements of Continental H2O Services, Inc. and Evansville
Water Corporation d/b/a Interlake Water Systems as of December 31, 1994 and
for the year then ended have been incorporated by reference in reliance upon
the report of KPMG Peat Marwick LLP, independent certified public accountants,
incorporated by reference and upon the authority of said firm as experts in
accounting and auditing.
The financial statements of Polymetrics, Inc. and subsidiaries as of
December 31, 1994 and for the year then ended have been incorporated by
reference in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated by reference and upon the authority
of said firm as experts in accounting and auditing.
27.
<PAGE>
================================================================================
No person has been authorized in connection with the offering made hereby to
give any information or to make any representation not contained in this
Prospectus and, if given or made, such information or representation must not be
relied upon as having been authorized by the Company or any Underwriter. This
Prospectus does not constitute an offer to sell or a solicitation of any offer
to buy any of the securities offered hereby to any person or by anyone in any
jurisdiction in which it is unlawful to make such offer or solicitation. Neither
the delivery of this Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that the information contained herein is
correct as of any date subsequent to the date hereof.
-------------
TABLE OF CONTENTS
Page
Available Information.............................................. 2
Incorporation of Certain Documents
by Reference...................................................... 2
The Company........................................................ 3
Risk Factors....................................................... 3
Ratio of Earnings to Fixed Charges................................. 6
Use of Proceeds.................................................... 6
Description of the Notes........................................... 7
Selling Securityholders............................................ 19
Plan of Distribution............................................... 22
Description of Capital Stock....................................... 23
Description of Certain Indebtedness................................ 26
Certain Federal Income Tax
Consequences...................................................... 26
Legal Matters...................................................... 27
Independent Certified Public
Accountants....................................................... 27
UNITED STATES
FILTER CORPORATION
$140,000,000
6% Convertible Subordinated Notes Due 2005
and
Shares of Common Stock
Issuable Upon Conversion Thereof
--------------
PROSPECTUS
--------------
November __, 1995
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 16. Exhibits
4.1 Specimen Common Stock Certificate.(1)
4.2 Form of Note (previously filed).
4.3 Indenture dated as of September 18, 1995 between the Company and The
First National Bank of Boston, as Indenture Trustee (previously
filed).
4.4 Registration Rights Agreement dated as of September 18, 1995 among
the Company, Donaldson, Lufkin & Jenrette Securities Corporation and
PaineWebber Incorporated (previously filed).
5.1 Opinion of Damian C. Georgino, Esq., as to the legality of shares of
Common Stock and Notes registered hereby (previously filed).
12.1 Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Damian C. Georgino, Esq. (to be included in Exhibit 5.1).
23.2 Consents of KPMG Peat Marwick LLP.
24.1 Power of Attorney (previously filed).
25.1 Statement of eligibility of Indenture Trustee on Form T-1 (previously
filed).
- -------------
(1) Previously filed as Exhibit 4.1 to the Company's Registration Statement on
Form S-1 (Reg. No. 33-41089), filed on June 21, 1991, and incorporated
herein by reference.
II-1
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has duly caused this amendment to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Palm Desert, State of
California, on November 7, 1995.
UNITED STATES FILTER CORPORATION
By /s/Richard J. Heckmann
--------------------------------------
Richard J. Heckmann
Chairman of the Board,
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
amendment has been signed by the following persons in the capacities and on the
dates indicated.
Signature Title Date
--------- ----- ----
/s/Richard J. Heckmann Chairman of the Board, November 7, 1995
- ---------------------- President and Chief
Richard J. Heckmann Executive Officer
(Principal Executive
Officer) and a Director
/s/Kevin L. Spence Vice President and Chief November 7, 1995
- ------------------ Financial Officer
Kevin L. Spence (Principal Financial and
Accounting Officer)
* Director November 7, 1995
- ---------------------
Michael J. Reardon
* Director November 7, 1995
- ---------------
Tim L. Traff
* Director November 7, 1995
- -------------------
James R. Bullock
* Director November 7, 1995
- -----------------
James E. Clark
II-2
<PAGE>
- --------------------
John L. Diederich Director
* Director November 7, 1995
- -----------------
J. Atwood Ives
* Director November 7, 1995
- -------------------
Arthur B. Laffer
* Director November 7, 1995
- -------------------------
Alfred E. Osborne, Jr.
* Director November 7, 1995
- -------------------------
C. Howard Wilkins, Jr.
* By: /s/Damian C. Georgino November 7, 1995
------------------------
Damian C. Georgino
Attorney-In-Fact
II-3
<PAGE>
EXHIBIT INDEX
4.1 Specimen Common Stock Certificate.(1)
4.2 Form of Note (previously filed).
4.3 Indenture dated as of September 18, 1995 between the Company and The
First National Bank of Boston, as Indenture Trustee (previously filed).
4.4 Registration Rights Agreement dated as of September 18, 1995 among the
Company, Donaldson, Lufkin & Jenrette Securities Corporation and
PaineWebber Incorporated (previously filed).
5.1 Opinion of Damian C. Georgino, Esq., as to the legality of shares of
Common Stock and Notes registered hereby (previously filed).
12.1 Computation of Ratio of Earnings to Fixed Charges.
23.1 Consents of Damian C. Georgino, Esq. (to be included in Exhibit 5.1).
23.2 Consents of KPMG Peat Marwick LLP.
24.1 Power of Attorney (previously filed).
25.1 Statement of eligibility of Indenture Trustee on Form T-1 (previously
filed).
- -------------
(1) Previously filed as Exhibit 4.1 to the Company's Registration Statement on
Form S-1 (Reg. No. 33-41089), filed on June 21, 1991, and incorporated
herein by reference.
II-4
<PAGE>
EXHIBIT 12.1
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in thousands)
<TABLE>
<CAPTION>
Six Months
Ended
Fiscal Year Ended March 31, September 30,
----------------------------------------------------------- ---------------------
1991 1992 1993 1994 1995 1994 1995
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Income before income taxes $ (1,848) (6,290) 648 (4,874) 14,585 4,273 10,633
Interest expense 763 1,016 1,327 2,077 5,384 2,116 5,469
Portion of rental expense deemed
to represent interest 315 462 628 695 855 280 521
-------- -------- -------- -------- -------- ----- ------
Earnings (loss) before fixed charges $ (770) (4,812) 2,603 (2,102) 20,824 6,669 16,623
======== ======== ======== ======== ======== ===== ======
Interest expense $ 763 1,016 1,327 2,077 5,384 2,116 5,469
Portion of rental expense deemed
to represent interest 315 462 628 695 855 280 521
-------- -------- -------- -------- -------- ----- ------
Fixed charges $ 1,078 1,478 1,955 2,772 6,239 2,396 5,990
======== ======== ======== ======== ======== ===== ======
Ratio of earnings to fixed charges n/a n/a 1.3x n/a 3.3x 2.8x 2.8x
======== ======== ======== ======== ======== ===== ======
Deficiency of earnings to fixed charges $ (1,848) (6,290) n/a (4,874) n/a n/a n/a
======== ======== ======== ======== ======== ===== ======
</TABLE>
<PAGE>
Exhibit 23.2
1 of 3
Accountants' Consent
To the Board of Directors and Shareholders
United States Filter Corporation:
We consent to incorporation by reference in the Registration Statement on Form
S-3 of United States Filter Corporation of our report dated June 1, 1995,
relating to the consolidated balance sheets of United States Filter Corporation
as of March 31, 1994 and 1995, and the related consolidated statements of
operations, shareholders' equity, and cash flows for each of the years in the
three-year period ended March 31, 1995 and to the reference of our firm under
the heading "Independent Certified Public Accountants" in the prospectus.
KPMG PEAT MARWICK LLP
Orange County, California
November 8, 1995
<PAGE>
Exhibit 23.2
2 of 3
Accountants' Consent
To the Board of Directors and Shareholders
United States Filter Corporation:
We consent to incorporation by reference in the Registration Statement on Form
S-3 of United States Filter Corporation of our report dated August 11, 1995,
relating to the consolidated balance sheet of Polymetrics, Inc. and subsidiaries
as of December 31, 1994, and the related consolidated statements of operations,
stockholder's equity and cash flows for the year then ended and to the reference
of our firm under the heading "Independent Certified Public Accountants" in the
prospectus.
KPMG PEAT MARWICK LLP
San Francisco, California
November 8, 1995
<PAGE>
Exhibit 23.2
3 of 3
Accountants' Consent
To the Board of Directors and Shareholders
United States Filter Corporation:
We consent to incorporation by reference in the Registration Statement on Form
S-3 of United States Filter Corporation of our report dated September 29, 1995,
relating to the statements of assets acquired and liabilities assumed of
Arrowhead Industrial Water, Inc. as of December 31, 1994 and 1993 and the
related statements of revenues and expenses for the years then ended and of our
report dated June 29, 1995 relating to the combined balance sheet of Continental
H\2\O Services, Inc. and Evansville Water Corporation d/b/a Interlake Water
Systems as of December 31, 1994 and the related combined statements of
operations, stockholders' equity and cash flows for the year then ended and to
the reference of our firm under the heading "Independent Certified Public
Accountants" in the prospectus.
KPMG PEAT MARWICK LLP
Chicago, Illinois
November 8, 1995
