PROSPECTUS Filed pursuant to Rule 424(b)(3)
December 23, 1997 File No. 333-42463
6,392,742 SHARES
UNITED STATES FILTER CORPORATION
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
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This Prospectus relates to 6,392,742 shares (the "Shares") of the Common
Stock, par value $.01 per share ("Company Common Stock"), of United States
Filter Corporation (the "Company") which may be offered and issued by the
Company from time to time in connection with the acquisition by the Company
directly, or indirectly through subsidiaries, of various businesses or assets,
or interests therein. The Shares may be issued in mergers or consolidations, in
exchange for shares of capital stock, partnership interests or other assets
representing an interest, direct or indirect, in other companies or other
entities, or in exchange for tangible or intangible assets, including, without
limitation, assets constituting all or substantially all of the assets and
businesses of such entities. Shares may also be reserved for issuance pursuant
to, or offered, issued and sold upon exercise or conversion of, warrants,
options, convertible debt obligations, equity securities, contingent rights or
other similar instruments or rights issued by the Company from time to time in
connection with any such acquisition. In certain instances, the Company may
guaranty that some or all of the aggregate net proceeds from the sale of Shares
during a limited period following their issuance will not be less than the
valuation used for purposes of their issuance, or a specific amount related to
such valuation, and may make up any shortfall (including any shortfall
attributable to brokers' commissions and selling expenses) by issuing additional
Shares under this Prospectus or in cash.
It is expected that the terms of acquisitions involving the issuance of
Shares will be determined by direct negotiations with the owners or controlling
persons of the businesses or assets to be acquired, and that the Shares so
issued will be valued at prices based on or related to market prices for the
Common Stock on the New York Stock Exchange, Inc. (the "NYSE") at or about the
time the terms of an acquisition are agreed upon or at or about the time of
delivery of such Shares, or based on average market prices for periods ending at
or about such times. No underwriting discounts or commissions will be paid,
although brokers' or finders' fees may be paid from time to time with respect to
specific acquisitions; under some circumstances, the Company may issue Shares in
full or partial payment of such fees. Any person receiving any such fees may be
deemed to be an underwriter within the meaning of the United States Securities
Act of 1933, as amended (the "Securities Act").
With the consent of the Company, this Prospectus may also be used by
persons ("Selling Stockholders") who have received or will receive Shares in
connection with acquisitions and who may wish to sell such Shares under
circumstances requiring or making desirable its use. See "Resales of Shares."
The Shares will, prior to their issuance, be listed on the NYSE subject
to official notice of issuance. The Common Stock is traded under the symbol
"USF." The last reported sale price of the Common Stock on the NYSE on December
23, 1997 was $29.375 per share.
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SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR CERTAIN CONSIDERATIONS RELEVANT
TO AN INVESTMENT IN THE COMMON STOCK.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the United
States Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files periodic reports, proxy solicitation materials and
other information with the United States Securities and Exchange Commission (the
"Commission"). Such reports, proxy solicitation materials and other information
can be inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549
and at the Commission's Regional Offices located at Seven World Trade Center,
Suite 1300, New York, New York 10048 and Citicorp Center 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such materials can
be obtained from the Public Reference Section of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission
maintains a Web site that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission. Such reports, proxy and information statements and other information
may be found on the Commission's site address, http://www.sec.gov. The Common
Stock is listed on the NYSE. Such reports, proxy solicitation materials and
other information can also be inspected and copied at the NYSE at 20 Broad
Street, New York, New York 10005.
The Company has filed with the Commission registration statements on Form
S-4 (herein, together with all amendments and exhibits, referred to as the
"Registration Statements") under the Securities Act with respect to the offering
made hereby. This Prospectus does not contain all of the information set forth
in the Registration Statements, certain portions of which are omitted in
accordance with the rules and regulations of the Commission. Such additional
information may be obtained from the Commission's principal office in
Washington, D.C. as set forth above. For further information, reference is
hereby made to the Registration Statements, including the exhibits filed as a
part thereof or otherwise incorporated herein. Statements made in this
Prospectus as to the contents of any documents referred to are not necessarily
complete, and in each instance reference is made to such exhibit for a more
complete description and each such statement is modified in its entirety by such
reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company (File No. 1-10728) with the
Commission pursuant to the Exchange Act are incorporated by reference herein:
the Company's Annual Report on Form 10-K for the fiscal year ended March 31,
1997; the Company's Quarterly Reports for the quarters ended June 30, 1997 (as
amended on Form 10-Q/A dated August 22, 1997) and September 30, 1997; the
Company's Current Reports on Form 8-K dated August 4, 1997, September 17, 1997
and September 19, 1997; and the description of the Common Stock contained in the
Company's Registration Statement on Form 8-A, as the same may be amended.
All documents and reports subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering made by this Prospectus
shall be deemed to be incorporated by reference herein. Any statement contained
herein or in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any
subsequently filed document which 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.
The Company will provide to each person to whom a copy of this Prospectus
is delivered, upon the written or oral request of such person, without charge, a
copy of any or all of the documents that are incorporated herein by reference,
other than exhibits to such information (unless such exhibits are specifically
incorporated by reference into such documents). Requests should be directed to
General Counsel, United States Filter Corporation, 40-004 Cook Street, Palm
Desert, California 92211 (telephone (760) 340-0098).
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THE COMPANY
The Company is a leading global provider of industrial and municipal water
and wastewater treatment systems, products and services, with an installed base
of systems that the Company believes is one of the largest worldwide. The
Company is also a leading provider of service deionization and outsourced water
services, including the operation of water and wastewater treatment systems at
customer sites. It is actively involved in the development of privatization
initiatives for municipal wastewater treatment facilities in the United States,
Mexico and Canada. The Company sells equipment and provides services to its
customers through more than 450 locations throughout the world. The Company also
markets a broad line of water distribution and sewer and stormwater equipment
and supplies through a network of over 110 service centers in the United States.
In addition, the Company sells, installs and services a wide range of water
treatment and water-related products for the residential and consumer markets.
The Company's principal executive offices are located at 40-004 Cook
Street, Palm Desert, California 92211, and its telephone number is (760)
340-0098. References herein to the Company refer to United States Filter
Corporation and its subsidiaries, unless the context requires otherwise.
RISK FACTORS
PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY THE FOLLOWING FACTORS
RELATING TO THE BUSINESS OF THE COMPANY, TOGETHER WITH THE OTHER INFORMATION AND
FINANCIAL DATA INCLUDED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS, BEFORE
ACQUIRING THE SECURITIES OFFERED HEREBY. INFORMATION CONTAINED OR INCORPORATED
BY REFERENCE IN THIS PROSPECTUS INCLUDES "FORWARD-LOOKING STATEMENTS" WHICH CAN
BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS "BELIEVES,"
"CONTEMPLATES," "EXPECTS," "MAY," "WILL," "COULD," "SHOULD," "WOULD" OR
"ANTICIPATES" OR THE NEGATIVE THEREOF OR OTHER VARIATIONS THEREON OR COMPARABLE
TERMINOLOGY. NO ASSURANCE CAN BE GIVEN THAT THE FUTURE RESULTS COVERED BY THE
FORWARD-LOOKING STATEMENTS WILL BE ACHIEVED. THE FOLLOWING MATTERS CONSTITUTE
CAUTIONARY STATEMENTS IDENTIFYING IMPORTANT FACTORS WITH RESPECT TO SUCH
FORWARD-LOOKING STATEMENTS, INCLUDING CERTAIN RISKS AND UNCERTAINTIES, THAT
COULD CAUSE ACTUAL RESULTS TO VARY MATERIALLY FROM THE FUTURE RESULTS COVERED IN
SUCH FORWARD-LOOKING STATEMENTS. OTHER FACTORS COULD ALSO CAUSE ACTUAL RESULTS
TO VARY MATERIALLY FROM THE FUTURE RESULTS COVERED IN SUCH FORWARD-LOOKING
STATEMENTS, INCLUDING THOSE WHICH MAY BE SET FORTH FROM TIME TO TIME UNDER THE
CAPTION "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - CERTAIN TRENDS AND UNCERTAINTIES" IN FILINGS MADE BY THE COMPANY
UNDER THE EXCHANGE ACT.
ACQUISITION STRATEGY
In pursuit of its strategic objective of becoming the leading global
single-source provider of water and wastewater treatment systems and services,
the Company has, since 1991, acquired and successfully integrated more than 100
United States based and international businesses with strong market positions
and substantial water and wastewater treatment expertise. The Company plans to
continue to pursue acquisitions that expand the segments of the water and
wastewater treatment and water-related industries in which it participates,
complement its technologies, products or services, broaden its customer base and
geographic areas served and/or expand its global distribution network, as well
as acquisitions which provide opportunities to further and implement the
Company's one stop shop approach in terms of technology, distribution or
service. 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.
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INTERNATIONAL TRANSACTIONS
The Company has made and expects it will continue to make acquisitions and
expects to obtain contracts in markets 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, nationalization 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, the Company's Chairman of the
Board, President and Chief Executive Officer. The Company does not presently
have employment agreements with most members of senior management, including Mr.
Heckmann. Should any of the senior managers be unable or choose not 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 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 AND SEASONALITY
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. A significant portion of the
Company's revenues are derived from capital equipment sales. While the Company
sells capital equipment to customers in diverse industries and in global
markets, cyclicality of capital equipment sales and instability of general
economic conditions could have an adverse effect on the Company's revenues and
profitability.
The sale of water and wastewater distribution equipment and supplies is
also cyclical and influenced by various economic factors including interest
rates, land development and housing construction industry cycles. Sales of such
equipment and supplies are also subject to seasonal fluctuation in northern
climates. The sale of water and wastewater distribution equipment and supplies
is a significant component of the Company's business. Cyclicality and
seasonality of water and wastewater distribution equipment and supplies sales
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. The Company is also subject to inherent risks
associated with environmental conditions at facilities owned, and the state of
compliance with environmental laws, by businesses acquired by the Company. 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 cleanup obligations, civil or criminal enforcement
actions or private actions that could have a material adverse effect on the
Company. In that regard,
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United States federal and state environmental regulatory authorities have issued
certain notices of violation related to alleged multiple violations of
applicable wastewater pretreatment standards by a wholly owned subsidiary of the
Company at a Connecticut ion exchange resin regeneration facility acquired by
the Company in October 1995 from Anjou International Company ("Anjou"). A grand
jury investigation is pending which is believed to relate to the same conditions
that were the subject of the notices of violation. The Company has certain
rights of indemnification from Anjou which may be available with respect to
these matters. In addition, the Company's activities as owner and operator of
certain hazardous waste treatment and recovery facilities are subject to
stringent laws and regulations and compliance reviews. Failure of these
facilities to comply with those regulations could result in substantial fines
and the suspension or revocation of the facility's hazardous waste permit. In
other matters, the Company has been notified by the United States Environmental
Protection Agency that it is a potentially responsible party under the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980
("CERCLA") at certain sites to which the Company or its predecessors allegedly
sent waste in the past. It is possible that the Company could receive other such
notices under CERCLA or analogous state laws in the future. The Company does not
believe that its liability, if any, relating to such matters will be material.
However, there can be no assurance that such matters will not be material. In
addition, to some extent, the liabilities and risks imposed by 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
All of the markets in which the Company competes are highly competitive.
Due to the nature of these markets, many of which are fragmented and include an
array of different sources of competition, the Company knows of no reliable
statistics that provide a basis from which to estimate the Company's relative
competitive position. There are competitors of the Company in certain markets
that are divisions or subsidiaries of large companies that have significantly
greater resources than the Company. In connection with the marketing of water
distribution equipment and supplies, the Company competes not only with a large
number of independent wholesalers and with other distribution chains similar to
the Company, but also with manufacturers who sell directly to customers. In the
residential water market, the Company competes with companies with national
distribution networks, businesses with regional scope and local product
assemblers or service companies, as well as retail outlets. The Company believes
that there are thousands of participants in the household water market.
POTENTIAL RISKS RELATED TO WATER RIGHTS AND WATER TRANSFERS
The Company recently acquired more than 47,000 acres of agricultural land
(the "Properties"), situated in the Southwestern United States, the substantial
majority of which are in Imperial County, California (the "IID Properties")
located within the Imperial Irrigation District (the "IID"). Substantially all
of the Properties are currently leased to third party agricultural tenants,
including prior owners of the Properties. The Company acquired the Properties
with appurtenant water rights, and is actively seeking to acquire additional
properties with water rights, primarily in the Southwestern and Western United
States. The Company may seek in the future to transfer water attributable to
water rights appurtenant to the Properties, particularly the IID Properties (the
"IID Water"). However, since the IID holds title to all of the water rights
within the IID in trust for the landowners, the IID would control the timing and
terms of any transfers of IID Water by the Company. The circumstances under
which transfers of water can be made and the profitability of any transfers are
subject to significant uncertainties, including hydrologic risks of variable
water supplies, risks presented by allocations of water under existing and
prospective priorities, and risks of adverse changes to or interpretations of
United States federal, state and local laws, regulations and policies. Transfers
of IID Water attributable to water rights appurtenant to the IID Properties (the
"IID Water Rights") are subject to additional uncertainties. Allocations of
Colorado River water, which is the source of all water deliveries to the IID
Properties, are subject to limitations under complex international treaties,
interstate compacts, United States federal and state laws and regulations, and
contractual arrangements and, in times of drought, water deliveries could be
curtailed by the United States government. Further, any transfers of IID Water
would require the approval of the United States Secretary of the Interior. Even
if a transfer were approved, other
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California water districts and users could assert claims adverse to the IID
Water Rights, including but not limited to claims that the IID has failed to
satisfy United States federal law and California constitutional requirements
that IID Water must be put to reasonable and beneficial use. A finding that the
IID's water use is unreasonable or nonbeneficial could adversely impact title to
IID Water Rights and the ability to transfer IID Water. Water transferred by the
IID to metropolitan areas of Southern California, such as San Diego, would be
transported through aqueducts owned or controlled by the Metropolitan Water
District, a quasi-governmental agency (the "MWD"). The transportation cost for
any transfer of IID Water and the volume of water which the MWD can be required
to transport at any time are subject to California laws of uncertain
application, some aspects of which are currently in litigation. The
uncertainties associated with water rights could have a material adverse effect
on the Company's profitability.
TECHNOLOGICAL AND REGULATORY CHANGE
The water 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 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 develop successfully 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.
MUNICIPAL AND WASTEWATER MARKET
A significant percentage of the Company's revenues is derived from
municipal customers. While municipalities represent an important market in the
water and wastewater treatment industry, contractor selection processes and
funding for projects in the municipal sector entail certain additional risks not
typically encountered with industrial customers. Competition for selection of a
municipal contractor typically occurs through a formal bidding process which can
require the commitment of significant resources and greater lead times than
industrial projects. In addition, demand in the municipal market is dependent
upon the availability of funding at the local level, which may be the subject of
increasing pressure as local governments are expected to bear a greater share of
the cost of public services.
SHARES ELIGIBLE FOR FUTURE SALE
The market price of the Common Stock could be adversely affected by the
availability for public sale of shares held on November 25, 1997 by security
holders of the Company, including: (i) up to 3,646,783 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 5-3/4% Exchangeable Notes due
2000 of Laidlaw (the amount of shares or cash delivered or paid to be dependent
within certain limits upon the value of the Common Stock at maturity), or sold
from time to time in accordance with Rule 144(k) under the Securities Act; (ii)
7,636,363 shares issuable upon conversion of the Company's 6% Convertible
Subordinated Notes due 2005 at a conversion price of $18.33 per share of Common
Stock; (iii) 9,113,924 shares issuable upon conversion of the Company's 4-1/2%
Convertible Subordinated Notes due 2001 at a conversion price of $39.50 per
share of Common Stock; (iv) 1,200,000 shares issuable upon exercise of warrants,
600,000 at an exercise price of $50.00 per share and 600,000 at an exercise
price of $60.00 per share, in each case expiring on September 17, 2007 and
exercisable at any time after the first sale of water from water rights
appurtenant to the Properties (the "Warrants"); (v) 2,719,618 outstanding shares
that are currently registered for sale under the Securities Act, pursuant to one
shelf registration statement; and (vi) 8,496,157 outstanding shares which
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are subject to agreements pursuant to which the holders have certain rights to
request the Company to register the sale of such holders' Common Stock under the
Securities Act and/or, subject to certain conditions, to include certain
percentages of such shares in other registration statements filed by the
Company, of which such rights as to 8,000,000 shares are not exercisable until
February 17, 2000.
RESALES OF SHARES
With the consent of the Company, this Prospectus may be used by Selling
Stockholders who have received or will receive Shares in connection with
acquisitions and who may wish to sell such Shares under circumstances requiring
or making desirable its use. The Company may consent to the use of this
Prospectus by Selling Stockholders for a limited period of time and subject to
limitations and conditions which may be varied by agreement between the Company
and one or more Selling Stockholders. Agreements with Selling Stockholders
permitting use of this Prospectus may provide that an offering of Shares be
effected in an orderly manner through securities dealers, acting as broker or
dealer, selected by the Company; that Selling Stockholders enter into custody
agreements with one or more banks with respect to such Shares; and that sales be
made only by one or more of the methods described in this Prospectus, as
appropriately supplemented or amended when required. Other than in circumstances
where the Company may receive certain benefits in connection with price guaranty
arrangements, the Company will not receive any of the proceeds from any sale of
Shares offered hereby by a Selling Stockholder.
Shares may be sold by Selling Stockholders hereunder on one or more
exchanges or otherwise; directly to purchasers in negotiated transactions; by or
through brokers or dealers, in ordinary brokerage transactions or transactions
in which the broker solicits purchasers; in block trades in which the broker or
dealer will attempt to sell Shares as agent but may position and resell a
portion of the block as principal; in transactions in which a broker or dealer
purchases as principal for resale for its own account; through underwriters or
agents; or in any combination of the foregoing methods. 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 Selling Stockholders
and/or the purchasers of Shares. The proceeds to a Selling Stockholder from any
sale of Shares will be net of any such compensation and of any expenses to be
borne by the Selling Stockholder. If required at the time that a particular
offer of Shares is made, a supplement to this Prospectus will be delivered that
describes any material arrangements for the distribution of Shares and the terms
of the offering, including, without limitation, the names of any underwriters,
brokers, dealers or agents and any discounts, commissions or concessions and
other items constituting compensation from the Selling Stockholder.
Selling Stockholders and any brokers, dealers, underwriters or agents that
participate with a Selling Stockholder in the distribution of Shares may be
deemed to be "underwriters" within the meaning of the Securities Act, in which
event any discounts, commissions or concessions received by any such brokers,
dealers, underwriters or agents and any profit on the resale of the Shares
purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act.
The Company may agree to indemnify Selling Stockholders and/or any such
brokers, dealers, underwriters or agents against certain civil liabilities,
including liabilities under the Securities Act, and to reimburse them for
certain expenses in connection with the offering and sale of Shares.
Selling Stockholders may also offer shares of Common Stock issued in past
and future acquisitions by means of prospectuses under other available
registration statements or pursuant to exemptions from the registration
requirements of the Securities Act, including sales which meet the requirements
of Rule 144 or Rule 145(d) under the Securities Act.
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DESCRIPTION OF CAPITAL STOCK
GENERAL
As of November 25, 1997, the Company was authorized to issue 300,000,000
shares of Common Stock, par value $.01 per share, of which 95,539,684 shares
were issued and outstanding, and 3,000,000 shares of preferred stock, par value
$.10 per share, of which none were issued and outstanding. Of the unissued
shares of the Company Common Stock, 7,636,364 shares were reserved for issuance
upon conversion of the Company's 6% Convertible Subordinated Notes due 2005,
9,113,924 shares were reserved for issuance upon conversion of the Company's
4-1/2% Convertible Subordinated Notes due 2001, 1,200,000 shares were reserved
for issuance upon exercise of the Warrants expiring September 17, 2007 and an
aggregate of 2,910,326 shares were reserved for issuance upon exercise of
options either outstanding or available for grant under the Company's stock
option plans for employees and directors.
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, if any) 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 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.
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.
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 shares of preferred stock. Any preferred
stock to be issued could rank prior to the Common Stock with respect to dividend
rights and rights of 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.
STOCK PURCHASE RIGHTS
Laidlaw, which, as of November 21, 1997, held 3,646,783 shares of Common
Stock, has certain rights to purchase voting securities of the Company in order
to maintain its percentage voting interest. 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, Laidlaw has the right to purchase, on the same terms as the
proposed sale or issuance, that number of shares or rights as will maintain its
percentage interest in the voting securities of the Company, assuming the
conversion of all convertible securities and the exercise of all
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options and warrants then outstanding. In addition, Laidlaw has 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 Smogless S.p.A. in
September 1994, Laidlaw has agreed to vote all shares owned by it for the
nominees of the Company's Board for election to the Board, and on all other
matters in the same proportion as the votes cast by 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 (the "Company Certificate") or By-laws.
Pursuant to the agreement whereby the Company acquired the Properties in
exchange for 8,000,000 shares of Company Common Stock and the Warrants in
September 1997, the Company has agreed, so long as the parties from whom the
Properties were acquired (the "Parties") own at least 5% of the outstanding
Company Common Stock, to nominate a person designated by the Parties for
election to the Company Board (the "Designee"). If a vacancy occurs in the
Company's Board of Directors while the Parties own at least 7 1/2% of the
outstanding Company Common Stock and such vacancy is the result of the cessation
to serve of a non-employee director of the Company (other than the cessation of
service of a Designee, which vacancy shall be filled with a successor Designee),
the Parties must also approve the filling of such vacancy. In addition, the
Parties have agreed to vote all shares owned by them as recommended by a
majority of the members of the Company's Board of Directors, except with respect
to certain fundamental transactions, transactions involving the issuance by the
Company of Company Common Stock representing 20% or more of the outstanding
Company Common Stock (or equivalents) or amendment of the Company Certificate or
By-laws.
CERTAIN CHARTER AND BY-LAW PROVISIONS
The Company 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
Company Certificate that relate to specified Articles therein (those dealing
with corporate governance, limitation of director liability or amendments to the
Company 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 By-laws
must be approved by one of the methods specified in clauses (i) and (ii) in the
preceding sentence.
The Company Certificate and the Company's By-laws 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.
9
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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.
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 Company Certificate or By-laws of the Company, may
elect not to be governed by Section 203, effective twelve months after adoption.
Neither the Certificate nor the By-laws of the Company currently excludes the
Company from the restrictions imposed by Section 203.
VALIDITY OF COMMON STOCK
The validity of the Shares will be passed upon for the Company by
Kirkpatrick & Lockhart LLP, counsel to the Company.
EXPERTS
The consolidated financial statements of United States Filter Corporation
and its subsidiaries as of March 31, 1996 and 1997 and for each of the three
years in the period ended March 31, 1997 have been incorporated by reference
herein and in the registration statement in reliance upon the report of KPMG
Peat Marwick LLP, independent certified public accountants, incorporated by
reference herein, and upon the authority of said firm as experts in accounting
and auditing.
10
<PAGE>
====================================== =======================================
NO PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE
ANY REPRESENTATIONS OTHER THAN 6,392,742 SHARES
THOSE CONTAINED IN THIS
PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR UNITED STATES FILTER CORPORATION
REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES COMMON STOCK
NOT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER
TO BUY ANY SECURITIES OTHER THAN
THE SECURITIES TO WHICH IT
RELATES OR AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO
BUY SUCH SECURITIES IN ANY
CIRCUMSTANCES IN WHICH SUCH
OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY
OF THIS PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN
NO CHANGE IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF OR -----------------
THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE. PROSPECTUS
------------- -----------------
TABLE OF CONTENTS
PAGE
Available Information.......... 2
Incorporation of Certain
Documents by Reference....... 2
The Company.................... 3
Risk Factors................... 3
Resales of Shares.............. 7
Description of Capital Stock... 8
Validity of Common Stock.......10
Experts........................10 December 23, 1997
====================================== =======================================
