<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 12, 1998
REGISTRATION NO. 333-63529
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 3
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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UNITED STATES FILTER CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 3589 33-0266015
(State or Other (Primary Standard (I.R.S. Employer
Jurisdiction of Industrial Identification Number)
Incorporation or Classification Code
Organization) Number)
40-004 COOK STREET
PALM DESERT, CALIFORNIA 92211
(760) 340-0098
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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DAMIAN C. GEORGINO
EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL
AND CORPORATE SECRETARY
UNITED STATES FILTER CORPORATION
40-004 COOK STREET
PALM DESERT, CALIFORNIA 92211
(760) 340-0098
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copy to:
JANICE C. HARTMAN
KIRKPATRICK & LOCKHART LLP
1500 OLIVER BUILDING
PITTSBURGH, PENNSYLVANIA 15222
(412) 355-6500
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: From time to time after this registration statement becomes effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, 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(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED NOVEMBER 12, 1998
PROSPECTUS
OFFERS TO EXCHANGE
$500,000,000 6.375% EXCHANGE REMARKETABLE OR REDEEMABLE SECURITIES (ROARSSM)
DUE 2011 (REMARKETING DATE MAY 15, 2001) AND $400,000,000 6.50% EXCHANGE
REMARKETABLE OR REDEEMABLE SECURITIES (ROARSSM) DUE 2013 (REMARKETING DATE MAY
15, 2003)
UNITED STATES FILTER CORPORATION
THE EXCHANGE OFFERS WILL EXPIRE AT P.M., NEW YORK CITY TIME, ON , 1998,
UNLESS EXTENDED.
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United States Filter Corporation, a Delaware corporation (the "Company"), is
hereby offering (the "Exchange Offers"), upon the terms and subject to the
conditions set forth in this Prospectus and the accompanying Letters of
Transmittal (the "Letters of Transmittal"), to exchange an aggregate principal
amount of up to $500,000,000 of its 6.375% Exchange Remarketable or Redeemable
Securities (ROARSSM) due May 15, 2011 (the "Exchange 6.375% ROARS") for its
6.375% ROARS due May 15, 2011 (the "Private 6.375% ROARS" and, with the
Exchange 6.375% ROARS, the "6.375% ROARS") and an aggregate principal amount of
up to $400,000,000 of its 6.50% Exchange ROARS due May 15, 2013 (the "Exchange
6.50% ROARS" and, with the Exchange 6.375% ROARS, the "Exchange ROARS") for its
6.50% ROARS due May 15, 2013 (the "Private 6.50% ROARS" and, with the Exchange
6.50% ROARS, the "6.50% ROARS" and, with the Private 6.375% ROARS, the "Private
ROARS"), which exchange has been registered under the U.S. Securities Act of
1933, as amended (the "Securities Act"), pursuant to a registration statement
of which this Prospectus is a part. The Private ROARS were issued on May 19,
1998 (the "Closing Date"). The forms and terms of the Exchange ROARS and the
corresponding Private ROARS are identical in all material respects except that
(i) the exchange has been registered under the Securities Act and, therefore,
the Exchange ROARS will not bear legends restricting the transfer thereof; (ii)
the Exchange ROARS will not provide for any Liquidated Damages (as defined
herein); and (iii) the holders of Exchange ROARS (other than certain broker-
dealers) will not be entitled to any rights that holders ("Holders") of the
Private ROARS have under the Registration Rights Agreement (as defined herein),
certain of which rights will terminate upon consummation of the Exchange
Offers. The Exchange ROARS will evidence the same indebtedness as the
corresponding Private ROARS (which they will replace) and will be entitled to
the benefits of an indenture and a supplemental indenture, each dated as of May
19, 1998, governing the Private ROARS and the Exchange ROARS (together, the
"Indenture"). The Private ROARS and the Exchange ROARS are sometimes referred
to herein collectively as the "ROARS." See "The Exchange Offers" and
"Description of the ROARS."
Upon the terms and subject to the conditions set forth herein and in the
applicable Letter of Transmittal, the Company will accept for exchange any and
all validly tendered Private ROARS not withdrawn prior to p.m., New York City
time, on , 1998 from any holder; provided, that such holder (i) is not an
affiliate of the Company; (ii) is not a broker-
(Continued on following page)
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SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR CERTAIN CONSIDERATIONS RELEVANT TO
HOLDERS WHO ARE CONSIDERING WHETHER TO TENDER THEIR PRIVATE ROARS FOR EXCHANGE
ROARS.
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 , 1998.
SM Service Mark of NationsBanc Montgomery Securities LLC
<PAGE>
dealer tendering Private ROARS acquired directly from the Company to resell
pursuant to Rule 144A or any other available exemption under the Securities
Act; (iii) acquires the Exchange ROARS in the ordinary course of such holder's
business; and (iv) has no arrangements or understandings with any person to
participate in a distribution, within the meaning of the Securities Act, of
Exchange ROARS. The Exchange Offers are not conditioned upon any minimum
principal amount of Private ROARS being tendered for exchange. Private ROARS
may be tendered only in integral multiples of $1,000. In the event that the
Company terminates the Exchange Offers and does not accept for exchange any
Private ROARS, the Company will promptly return all previously tendered
Private ROARS to the holders thereof.
Prior to the Exchange Offers, there has been no public market for the
Exchange ROARS. The Company does not intend to list the Exchange ROARS on any
securities exchange or to seek approval for quotation through any automated
quotation system. There can be no assurances that an active market for the
Exchange ROARS will develop. To the extent that a market for the Exchange
ROARS does develop, the market value of the Exchange ROARS will depend on many
factors, including, among other things, prevailing interest rates, the
Company's operating results, and the market for similar securities. Such
factors might cause the Exchange ROARS, to the extent that they are traded, to
trade at a significant discount to face value. See "Risk Factors--Absence of
Public Market for the Exchange ROARS."
The Exchange ROARS are being offered hereunder in order to satisfy certain
obligations of the Company under the Registration Rights Agreement. See "Risk
Factors--Consequences of Failure to Exchange and Requirements for Transfer of
Exchange ROARS" for a discussion of the Company's belief, based on existing
interpretations by the staff (the "Staff") of the U.S. Securities and Exchange
Commission (the "Commission") as set forth in no-action letters issued to
third parties, as to the transferability of the Exchange ROARS upon
satisfaction of certain conditions. Each broker-dealer that receives Exchange
ROARS for its own account in exchange for Private ROARS, where such Private
ROARS were acquired by such broker-dealer as a result of market-making
activities or other trading activities, must acknowledge that it will deliver
a prospectus in connection with any resale of such Exchange ROARS. Each Letter
of Transmittal states that by so acknowledging and by delivering a prospectus,
a broker-dealer will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used for a period of 60 days following
the applicable Expiration Date (as defined herein) by a broker-dealer in
connection with resales of Exchange ROARS received in exchange for Private
ROARS acquired by such broker-dealer as a result of market-making activities
or other trading activities. See "Plan of Distribution."
The Company will not receive any proceeds from, and has agreed to bear the
expenses of, the Exchange Offers. No underwriter is being used in connection
with the Exchange Offers.
On May 15, 2001 (the "6.375% ROARS Remarketing Date") and May 15, 2003 (the
"6.50% ROARS Remarketing Date" and, with the 6.375% ROARS Remarketing Date,
each a "Remarketing Date"), the applicable series of ROARS will either be (i)
mandatorily tendered to and purchased by NationsBanc Montgomery Securities LLC
("NationsBanc") or its successor as Remarketing Dealer (the "Remarketing
Dealer"), in which case the Remarketing Dealer will pay 100% of the principal
amount of such series of ROARS and the Company will pay accrued interest, if
any, thereon to the applicable Remarketing Date, or (ii) redeemed by the
Company at 100% of the principal amount of such series of ROARS plus accrued
interest, if any, thereon to such Remarketing Date.
THE EXCHANGE OFFERS ARE NOT BEING MADE TO, NOR WILL THE COMPANY ACCEPT
SURRENDERS FOR EXCHANGE FROM, HOLDERS OF PRIVATE ROARS IN ANY JURISDICTION IN
WHICH THE EXCHANGE OFFERS OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE
WITH THE SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION.
This Prospectus and the documents incorporated herein by reference contain
statements which constitute forward-looking statements within the meaning of
the U.S. Private Securities Litigation Reform Act of 1995. These statements
can be identified by the use of forward-looking terminology such as
"believes," "contemplates," "expects," "may," "will," "could," "should,"
"would," "anticipates," or "continues" or the negatives thereof or other
variations thereon or comparable terminology. These statements are based on
the intent, belief or expectation of the Company as of the date of the
document in which such statements appear. Prospective holders of the Exchange
ROARS are cautioned that any such forward-looking statements are not
guarantees of future performance and may involve risks and uncertainties which
are outside the control of the Company. Actual results may vary materially
from the forward-looking statements contained in such documents as a result of
changes in United States or international economic conditions, governmental
regulations and other factors, including the factors set forth under "Risk
Factors." The Company expressly disclaims any obligation or understanding to
release publicly any updates or revisions to any forward-looking statement
contained herein or in any such document to reflect any change in the
Company's expectations with regard thereto or any change in events, conditions
or circumstances on which any such statements are based.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the information requirements of the U.S.
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 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, upon payment of 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, par
value $.01 per share (the "Common Stock"), of the Company is listed on The New
York Stock Exchange (the "NYSE"). The Company's 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 a registration statement on Form
S-4 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act with respect to the
Exchange Offers. This Prospectus does not contain all of the information set
forth in the Registration Statement, 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 Statement, including the exhibits filed as a
part thereof or otherwise incorporated therein. 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 the applicable 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 herein by reference:
the Company's Annual Report on Form 10-K for the fiscal year ended March 31,
1998; the Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 1998 (as amended by a Form 10-Q/A dated November 9, 1998); the Company's
Current Reports on Form 8-K dated December 9, 1997, January 16, 1998, May 12,
1998, May 19, 1998, June 15, 1998, August 14, 1998, November 9, 1998 and
November 10, 1998; the Company's Current Reports on Form 8-K/A dated February
6, 1998 and March 4, 1998 (amending the Current Report on Form 8-K dated
December 9, 1997), February 6, 1998, March 4, 1998, May 12, 1998 and May 14,
1998 (amending the Current Report on Form 8-K dated January 16, 1998), May 14,
1998 (amending the Current Report on Form 8-K dated May 12, 1998), August 17,
1998 (amending the Current Report on Form 8-K dated August 14, 1998) and
September 18, 1998 (amending the Current Report on Form 8-K dated June 15,
1998); and the Company's Definitive Proxy Statement on Schedule 14A dated July
7, 1998.
All documents and reports filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of the initial filing of
the Registration Statement and prior to effectiveness of the Registration
Statement and after the date of this Prospectus and prior to the termination
of the offers made by or pursuant to 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.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS (OTHER THAN THE EXHIBITS TO SUCH
DOCUMENTS, UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE
INTO SUCH DOCUMENTS) ARE AVAILABLE, WITHOUT CHARGE, UPON THE WRITTEN OR ORAL
REQUEST OF A PERSON TO WHOM A COPY OF THIS PROSPECTUS IS DELIVERED, BY SENDING
SUCH A REQUEST TO THE GENERAL COUNSEL, UNITED STATES FILTER CORPORATION, 40-
004 COOK STREET, PALM DESERT, CALIFORNIA 92211 (TELEPHONE (760) 340-0098). IN
ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE
BY NOVEMBER , 1998.
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<PAGE>
RISK FACTORS
Prospective holders of Exchange ROARS should consider carefully all of the
information set forth or incorporated by reference in this Prospectus and, in
particular, should evaluate the considerations set forth below before making a
decision whether to tender their Private ROARS in the Exchange Offers.
CONSEQUENCES OF FAILURE TO EXCHANGE AND REQUIREMENTS FOR TRANSFER OF EXCHANGE
ROARS
Holders of Private ROARS who do not exchange their Private ROARS for
corresponding Exchange ROARS pursuant to the Exchange Offers will continue to
be subject to the provisions in the Indenture regarding transfer and exchange
of Private ROARS and the restrictions on transfer of Private ROARS set forth
in the legend thereon as a consequence of the issuance of the Private ROARS
pursuant to exemptions from, or in transactions not subject to, the
registration requirements of the Securities Act and applicable state
securities laws. The Company does not currently anticipate that it will
register the sale or other disposition of Private ROARS under the Securities
Act except to the extent required by the Registration Rights Agreement. See
"Description of the ROARS--Registration Rights."
Based on existing interpretations by the Staff as set forth in no-action
letters issued to third parties, subject to the limitations described in the
immediately following sentence, the Company believes that Exchange ROARS
issued pursuant to the Exchange Offers in exchange for Private ROARS may be
offered for resale, resold and otherwise transferred by the holders thereof
(other than holders who are broker-dealers) without further compliance with
the registration and prospectus delivery provisions of the Securities Act.
However, any Holder of Private ROARS who is an affiliate of the Company within
the meaning of Rule 405 under the Securities Act (an "Affiliate") or who
intends to participate in the Exchange Offers for the purpose of distributing
(as defined for purposes of the Securities Act) Exchange ROARS or any broker-
dealer who purchased Private ROARS from the Company to resell pursuant to Rule
144A under the Securities Act ("Rule 144A") or any other available exemption
under the Securities Act, (i) will not be able to rely on the interpretations
of the Staff set forth in those no-action letters; (ii) will not be entitled
to tender Private ROARS in the Exchange Offers; and (iii) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any sale or transfer unless such sale or transfer is made
pursuant to an exemption from such requirements. The Company does not intend
to request that the Commission consider, and the Commission has not
considered, the Exchange Offers in the context of a request for a no-action
letter, and there can be no assurances that the Staff would make a
determination with respect to the Exchange Offers similar to the ones it has
made in such other circumstances.
Each Holder of Private ROARS who wishes to exchange Private ROARS for
Exchange ROARS in the Exchange Offers will be required to represent that (i)
it is not an Affiliate of the Company; (ii) it is not a broker-dealer
tendering Private ROARS acquired directly from the Company to resell pursuant
to Rule 144A or any other available exemption under the Securities Act; (iii)
the Exchange ROARS to be received by it will be acquired in the ordinary
course of its business; and (iv) it has no arrangements or understandings with
any person to participate in a distribution, within the meaning of the
Securities Act, of Exchange ROARS. Each broker-dealer that receives Exchange
ROARS for its own account in exchange for Private ROARS, where such Private
ROARS were acquired by such broker-dealer as a result of market-making
activities or other trading activities, must acknowledge that it will deliver
a prospectus in connection with any resale of such Exchange ROARS. See "Plan
of Distribution." The Letters of Transmittal state that, by so acknowledging
and by delivering a prospectus, a broker-dealer will not be deemed to admit
that it is an "underwriter" within the meaning of the Securities Act. This
Prospectus, as it may be amended or supplemented from time to time, may be
used for a period of 60 days following the applicable Expiration Date by a
broker-dealer in connection with resales of Exchange ROARS received in
exchange for Private ROARS acquired by such broker-dealer as a result of
market-making activities or other trading activities. See "Plan of
Distribution." The information set forth above concerning certain
interpretations of and positions taken by the Staff is not intended to
constitute legal advice, and Holders of Private ROARS who are considering
tendering them in the Exchange Offers should consult their own legal advisors
with respect to such matters.
3
<PAGE>
ABSENCE OF PUBLIC MARKET FOR THE EXCHANGE ROARS
There is no public market for the Exchange ROARS and there can be no
assurances that a market will develop for the Exchange ROARS, of the ability
of the holders of Exchange ROARS to sell their Exchange ROARS or of the prices
at which holders would be able to sell their Exchange ROARS. Future trading
prices of the Exchange ROARS will depend on many factors, including, among
other things, prevailing interest rates, the Company's operating results and
the market for similar securities. The Company has been advised by
NationsBanc, Donaldson, Lufkin & Jenrette Securities Corporation, and Salomon
Brothers Inc (the "Initial Purchasers") that they intend to make a market in
the Exchange ROARS. However they are not obligated to do so and may
discontinue such market-making at any time without notice. Therefore, no
assurance can be given as to the liquidity of any trading market for the
Exchange ROARS.
EXCHANGE OFFER PROCEDURES
Delivery of Exchange ROARS in exchange for corresponding Private ROARS
tendered and accepted for exchange pursuant to the Exchange Offers will be
made only after timely receipt by the Exchange Agent (as defined herein) of
(i) a Book-Entry Confirmation (as defined herein) evidencing the tender of
such Private ROARS through the Automated Tender Offer Program ("ATOP") of The
Depository Trust Company ("DTC") or (ii) certificates representing such
Private ROARS, a properly completed and duly executed Letter of Transmittal,
with any required signature guarantees, and all other required documents. See
"The Exchange Offers--Procedures for Tendering Private ROARS." Therefore,
Holders of Private ROARS desiring to tender such Private ROARS in exchange for
corresponding Exchange ROARS should allow sufficient time to ensure timely
delivery. The Company is under no duty to give notification of defects or
irregularities with respect to tenders of Private ROARS for exchange. Private
ROARS that are not tendered or that are tendered but not accepted by the
Company for exchange will, following consummation of the Exchange Offers,
continue to be subject to the existing restrictions upon transfer thereof
under the Securities Act and, upon consummation of the Exchange Offers,
certain registration rights under the Registration Rights Agreement will
terminate.
EARNINGS VARIATION DUE TO BUSINESS CYCLES AND SEASONAL FACTORS
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, including those currently unfolding in Asian and certain
other markets, could have a material 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 temperate
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 a material adverse effect on the Company's revenues and
profitability.
The Company's high-purity process piping systems have been sold principally
to companies in the semiconductor and, to a lesser extent, pharmaceutical and
biotechnology industries, and sales of those systems are critically dependent
on these industries. The success of customers and potential customers for
high-purity process piping systems is linked to economic conditions in these
respective industries, which in turn are each subject to intense competitive
pressure and are affected by overall economic conditions. The semiconductor
industry in particular has historically been, and will likely continue to be,
cyclical in nature and vulnerable to general downturns in the economy. The
semiconductor and pharmaceutical industries also represent significant markets
for the Company's water and wastewater treatment systems. Downturns in these
industries could have a material adverse effect on the Company's revenues and
profitability.
4
<PAGE>
Operating results from the sale of high-purity process piping systems also
can be expected to fluctuate significantly as a result of the limited pool of
existing and potential customers for these systems, the timing of new
contracts, possible deferrals or cancellations of existing contracts and the
evolving and unpredictable nature of the markets for high-purity process
piping systems.
As a result of these and other factors, the Company's operating results may
be subject to quarterly or annual fluctuations. There can be no assurance that
at any given time the Company's operating results will meet or exceed stock
market analysts' expectations.
PROFIT UNCERTAINTY IN 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,
scheduled deliveries 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.
COMPETITION
All of the markets in which the Company competes are highly competitive, and
most are fragmented, with numerous regional and local participants. There are
competitors of the Company in certain markets that are divisions or
subsidiaries of companies that have significantly greater resources than the
Company. The Company's process water treatment business competes in the United
States and internationally principally on the basis of product quality and
specifications, technology, reliability, price, customized design and
technical qualifications, reputation and prompt availability of local service.
The Company's wastewater treatment business competes in the United States and
internationally largely on the basis of the same factors, except that pricing
considerations can be predominant among competitors that have sufficient
technical qualifications, particularly in the municipal contract bid process.
The Company's filtration and separation business competes in the United States
and internationally principally on the basis of price, technical expertise,
product quality and responsiveness to customer needs, including service and
technical support. The Company's industrial products and services business
competes in the United States and internationally principally on the basis of
quality, service and price. In connection with the marketing of waterworks
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. The principal methods of competition for the Company's waterworks
distribution business include prompt local service capability, product
knowledge by the sales force and service branch management, and price. The
Company's consumer products business 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 residential water
business. The consumer products business competes principally on the basis of
price, product quality and "taste," service, distribution capabilities,
geographic presence and reputation. Competitive pressures, including those
described above, and other factors could cause the Company to lose market
share or could result in significant price erosion, either of which could have
a material adverse effect upon the Company's financial position, results of
operations and cash flows.
RISKS RELATED TO ACQUISITIONS
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 more than 150 United States based and
international businesses. 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
5
<PAGE>
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. In addition, the Company's acquisition of Memtec Limited
("Memtec") was accomplished through an unsolicited tender offer, and the
Company could make other such acquisitions. The level of risk associated with
such acquisitions is generally greater because frequently they are
accomplished, as was the case with the acquisition of Memtec, without the
customary representations or due diligence typical of negotiated transactions.
Although the Company generally has been successful in pursuing 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.
RISKS OF DOING BUSINESS IN OTHER COUNTRIES
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, the lack in some jurisdictions of
well-developed legal systems, nationalization and possible social, political
and economic instability. In particular, the Company has significant
operations in Asia and Latin America which have been and may in the future be
adversely affected by current economic conditions in those regions. While the
full impact of this economic instability cannot be predicted, it could have a
material adverse effect on the Company's revenues and profitability.
IMPORTANCE OF KEY PERSONNEL
The operations of the Company 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 has entered
into various agreements and compensation arrangements with its senior
management, including Mr. Heckmann, designed to encourage their retention.
There can be no assurance, however, that members of the Company's senior
management will continue in their present roles, and should any of the
Company's senior managers be unable or choose not to do so, the Company's
prospects could be adversely affected.
YEAR 2000 RISKS
The Year 2000 issue concerns the potential exposures related to the
automated generation of business and financial misinformation resulting from
the application of computer programs which have been written using six digits
(e.g., 12/31/99), rather than eight (e.g., 12/31/1999), to define the
applicable date of business transactions. Many products and systems could
experience malfunctions when attempting to process certain dates, such as
January 1, 2000 or September 9, 1999 (a date programmers sometimes used as a
default date). The Company is currently identifying which of its information
technology ("IT") and non-IT systems will be affected by Year 2000 issues.
Most of the Company's IT systems with Year 2000 issues have been modified to
address those issues. The Company has also commenced identification and
assessment of its non-IT systems, which include, among other things,
components found in water and wastewater treatment plants and process water
treatment systems operated and/or owned under contract by the Company and in
the Company's hazardous waste treatment facilities, as well as components of
equipment in the Company's manufacturing facilities.
The Company's Year 2000 compliance program consists of three phases:
identification and assessment; remediation; and testing. For any given system,
the phases occur in sequential order, from identification and assessment of
Year 2000 problems, to remediation, and, finally, to testing the Company's
solutions. However, as the Company acquires additional businesses, each IT and
non-IT system of the acquired business must be independently identified and
assessed. As a result, all three phases of the Company's Year 2000 compliance
6
<PAGE>
program may be occurring simultaneously as they relate to different systems,
with varying timetables to completion, depending upon the system and the date
when a particular business was acquired by the Company.
The Company has completed the identification and assessment of most of its
IT systems, and those systems have been modified to address Year 2000
problems. The Company will continue to assess the IT systems of businesses
that it has recently acquired and that it may acquire in the future. The
Company is in the identification and assessment phase with respect to all non-
IT systems, which is projected to continue until September 1999 for currently-
owned businesses. All phases are expected to be completed by mid-1999,
although there can be no assurance that all phases for all businesses will be
completed by that date. In particular, there can be no assurance that acquired
businesses will be Year 2000 compliant, although the Company currently has a
policy that requires an acquisition candidate to represent that such business
is Year 2000 compliant and the Company reviews the Year 2000 status of
acquisition candidates to the extent feasible prior to completing an
acquisition. In addition to its internal systems, the Company has begun to
assess the level of Year 2000 problems associated with various suppliers,
customers and creditors of the Company. To test the Year 2000 compliance
status of its suppliers, the Company plans to submit hypothetical orders to
its suppliers dated after December 31, 1999 requesting confirmation that the
orders have been correctly processed. The Company's costs to date for its Year
2000 compliance program, excluding the salaries of its employees, has not been
material. Although the Company has not completed its assessment, it does not
currently believe that the future costs associated with its Year 2000
compliance program will be material.
The Company is currently unable to determine its most reasonably likely
worst case Year 2000 scenario, as it has not identified and assessed all of
its systems, particularly its non-IT systems. As the Company completes its
identification and assessment of internal and third-party systems, it expects
to develop contingency plans for various worst case scenarios. The Company
expects to have such contingency plans in place by September 1999. A failure
to address Year 2000 issues successfully could have a material adverse effect
on the Company's business, financial condition or results of operations.
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.
The Company has been notified by the USEPA 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. In particular, in 1995, Culligan Water
Technologies, Inc., a wholly owned subsidiary of the Company ("Culligan"),
purchased an equity interest in Anvil Holdings, Inc. ("Anvil"). As a result of
this transaction, Culligan assumed certain environmental liabilities
associated with soil and groundwater contamination at Anvil Knitwear's
Asheville Dyeing and Finishing Plant (the "Plant") in Swannanoa, North
Carolina. Since 1990, Culligan and Anvil have delineated and monitored the
contamination pursuant to an Administrative Consent Order entered into with
the North Carolina Department of Environment, Health and Natural Resources
related to the closure of an underground storage tank at the site. Groundwater
testing at the Plant and at two adjoining properties has shown levels of a
cleaning solvent believed to be from the Plant that are above action levels
under state guidelines. The Company has begun remediation of the
contamination. The Company currently estimates that the costs of future site
remediation will range from $1.0 million to $1.8 million and that it has
sufficient reserves for the site
7
<PAGE>
cleanup. The Company anticipates that the potential costs of further
monitoring and corrective measures to address the groundwater problem under
applicable laws will not have a material adverse effect on the financial
position or the results of operations of the Company. However, because the
full extent of the required cleanup has not been determined, there can be no
assurance that this matter will not have a material adverse effect on the
Company's financial position or results of operations. Based on sites which
are currently known to the Company that may require remediation, including the
Anvil site, the Company does not believe that its liability, if any, relating
to such sites will be material. However, there can be no assurance that such
matters will not be material.
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. The Company serves as
contract operator of various municipal and industrial wastewater collection
and treatment facilities, which were developed and are owned by governmental
or private entities. The Company also operates other facilities, including
service deionization centers and manufacturing facilities, that discharge
wastewater in connection with routine operations. Under certain service
contracts and applicable environmental laws, the Company as operator of such
facilities may incur certain liabilities in the event those facilities
experience malfunctions or discharge wastewater which does not meet applicable
permit limits and regulatory requirements. In some cases, the potential for
such liabilities depends upon design or operational conditions over which the
Company has limited, if any, control.
Certain of the Company's facilities contain or in the past contained
underground storage tanks which may have caused soil or groundwater
contamination. At one site formerly owned by Culligan, the Company is
investigating, and has taken certain actions to correct, contamination that
may have resulted from a former underground storage tank. Based on the amount
of contamination believed to have been present when the tank was removed, and
the probability that some of the contamination may have originated from nearby
properties, the Company believes, although there can be no assurance, that
this matter will not have a material adverse effect on the Company's financial
position or results of operations.
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
and financial position.
RISKS RELATED TO MUNICIPAL WATER AND WASTEWATER BUSINESS
A significant percentage of the Company's revenues is derived from municipal
customers. While municipalities represent an important part of 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 resources and greater lead times than industrial
projects. In addition, this segment 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.
TECHNOLOGICAL AND REGULATORY RISKS
Portions of the water and wastewater treatment business are 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 technological 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
8
<PAGE>
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. The market growth potential of
acquired in-process research and development is subject to certain risks,
including costs to develop and commercialize such products, the cost and
feasibility of production of products utilizing the applicable technologies,
introduction of competing technologies and market acceptance of the products
and technologies involved.
There can be no assurance that the Company's existing or any future
trademarks or patents will be enforceable or will provide substantial
protection from competition or be of commercial benefit to the Company. In
addition, the laws of certain non-United States countries may not protect
proprietary rights to the same extent as do the laws of the United States.
Successful challenges to certain of the Company's patents or trademarks could
materially adversely affect its competitive and financial position.
RISKS RELATED TO WATER RIGHTS AND TRANSFERS OF WATER
The Company owns 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"). 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,
conveyance risks from unavailable or inadequate transportation facilities,
risks presented by allocations of water under existing and prospective
priorities, and risks of adverse changes to or interpretations of U.S.
federal, state and local laws, regulations and policies. The IID holds title
to all of the water rights within the IID in trust for the landowners and
would control the timing and terms of any transfers of IID Water by the
Company. 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, U.S. federal and state
laws and regulations, and contractual arrangements and, in times of drought,
water deliveries could be curtailed by the U.S. government. Further, any
transfers of IID Water would require the approval of the U.S. Secretary of the
Interior. Additionally, the Metropolitan Water District of Southern
California, a quasi-governmental agency, owns the Colorado River Aqueduct and
could restrict its use. Even if a transfer were approved, other 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 U.S.
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 the IID Water
Rights and the ability to transfer IID Water. The uncertainties associated
with water rights could have a material adverse effect on the Company's future
profitability.
9
<PAGE>
THE COMPANY
The Company is a leading global provider of industrial, municipal,
commercial and consumer 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 offers a single-source solution to its
customers through what the Company believes is the industry's broadest range
of cost-effective systems, products, services and proven technologies. In
addition, the Company markets a broad line of waterworks distribution products
and services. The Company has one of the industry's largest networks of sales
and service and distribution facilities through approximately 1,500 locations,
including over 600 franchised dealerships, and approximately 850 Company-owned
or leased facilities, including manufacturing plants. The Company capitalizes
on its large installed base, extensive distribution network and manufacturing
capabilities to provide customers with ongoing local service and maintenance.
The Company is a leading provider of outsourced water services, including the
operation of water and wastewater treatment systems at customer sites. In
addition, the Company is actively involved in the development of privatization
initiatives for municipal water treatment facilities throughout the world and,
specifically, in the Unites States, Mexico and Canada. The Company also owns a
significant amount of properties with appurtenant water rights in the Western
and Southwestern United States, substantially all of which are leased to
agricultural tenants.
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. In
this Prospectus, references to the Company mean United States Filter
Corporation and its subsidiaries, unless the context requires otherwise.
Since 1991, the Company has acquired more than 150 United States based and
international businesses. These acquisitions have enabled the Company to
expand significantly the segments of the water and wastewater treatment
industry and water-related industries in which it participates, to complement
its technologies, products or services, to enter into additional geographic
areas and serve additional industries, municipalities, governmental and other
customers and to expand its installed base, service network, range of products
and technologies and global distribution network. The Company intends to
actively seek additional acquisitions that enhance its geographic network,
customer base, and range of product offerings, technologies, markets and
industries served, or that provide opportunities to implement the Company's
one-stop-shop approach in terms of technology, distribution or service.
Kinetics. Effective December 31, 1997, the Company acquired The Kinetics
Group, Inc. ("Kinetics") in exchange for 5,803,803 shares of Common Stock.
Kinetics is a leading United States manufacturer and supplier of sophisticated
high-purity process piping systems for the handling of gases, water and
chemicals. Such systems are provided primarily to the microelectronics,
pharmaceutical and biotechnology industries, and are critical to these
operations. For its fiscal year ended September 30, 1997, Kinetics' revenues
were $387.8 million.
Memtec. The Company completed the acquisition of Memtec in December 1997 for
a total cash purchase price of $397.2 million. Memtec designs and manufactures
large volume membrane-based systems featuring Memtec's proprietary
microfiltration technology. It also designs and manufactures an extensive
range of products and systems worldwide that are used in the filtration of
liquid and gas streams in a wide variety of industrial, municipal and
commercial applications. For its fiscal year ended June 30, 1997, Memtec's
revenues were $243.6 million.
Culligan. On June 15, 1998, the Company acquired Culligan, a leading
manufacturer and distributor of water purification and treatment products and
services for consumer, commercial and industrial applications. Products and
services offered by Culligan range from those designed to solve residential
water problems, such as filters for tap water and household water softeners,
to equipment and services for commercial and industrial customers, such as
ultrafiltration and microfiltration products. Culligan also offers
desalination systems and portable deionization services designed for
commercial and industrial applications. In addition, Culligan sells and
licenses dealers to sell five-gallon bottled water under the Culligan
trademark. Culligan has been an active participant in the water purification
and treatment industry since 1936, and its Culligan(R), Everpure(R), Ametek(R)
10
<PAGE>
and Bruner(R) brands are among the most recognized in the industry. For its
fiscal year ended January 31, 1998, Culligan's revenues were $505.7 million.
Bass Properties. In September 1997, the Company acquired the Properties
(including appurtenant water rights) in the Western and Southwestern United
States from interests principally owned by affiliates of certain members of
the Bass family of Fort Worth, Texas. The Properties were acquired in exchange
for 8,000,000 shares of Common Stock and non-transferable warrants to purchase
1,200,000 shares of Common Stock. The substantial majority of the Properties
are located in Imperial County, California within the Imperial Irrigation
District, and substantially all of the Properties are currently leased to
agricultural tenants.
USE OF PROCEEDS
The net proceeds of approximately $913.6 million from the sale of the
Private ROARS were used to repay indebtedness outstanding under the Company's
senior credit facility, including approximately $397.2 million of indebtedness
incurred to fund the Company's acquisition of Memtec and pay related expenses
and approximately $134.0 million of indebtedness incurred to refinance Memtec
and Kinetics debt assumed by the Company in connection with the acquisitions
of those companies (which indebtedness had an effective current interest rate
of 5.92%). The remaining net proceeds were subsequently used to repay a
portion of indebtedness under a revolving credit facility assumed upon
consummation of the Company's acquisition of Culligan.
The Company will not receive any cash proceeds from the issuance of the
Exchange ROARS offered hereby. In consideration for issuing the Exchange ROARS
as described in this Prospectus, the Company will receive tendered Private
ROARS in like principal amount, the terms of which are identical in all
material respects to those of the Exchange ROARS. The Private ROARS
surrendered in exchange for the Exchange ROARS will be retired and canceled
and cannot be reissued. Accordingly, the issuance of the Exchange ROARS will
not result in any change in the indebtedness of the Company.
11
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data of the Company set forth below are
derived from the Company's audited consolidated financial statements and
related notes thereto except as noted. Each fiscal year of the Company is
ended March 31. The financial data as of and for the three months ended June
30, 1997 and 1998 are derived from unaudited consolidated financial statements
of the Company which, in the opinion of the Company, reflect all adjustments
(consisting principally of normal, recurring amounts) necessary for the fair
statement of the financial position and results of operations for the periods
presented and are not necessarily indicative of the results for any other
interim period or for the full fiscal year. The selected consolidated
financial data should be read in conjunction with and is qualified in its
entirety by the Company's consolidated financial statements and related notes
thereto and other financial information incorporated herein by reference.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
FISCAL YEAR ENDED MARCH 31,(1) JUNE 30,(1)
-------------------------------------------------------- ----------------------
1994(2) 1995(3) 1996(4) 1997(5) 1998(6) 1997(7) 1998(8)
-------- ---------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT
OF OPERATIONS DATA:
Revenues................ $884,782 $1,110,816 $1,395,247 $2,135,424 $3,740,324 $ 792,936 $1,119,331
Cost of sales........... 648,737 814,663 1,005,336 1,582,196 2,740,787 597,573 788,169
-------- ---------- ---------- ---------- ---------- ---------- ----------
Gross Profit........... 236,045 296,153 389,911 553,228 999,537 195,363 331,162
Selling, general and
administrative
expenses............... 228,047 262,985 326,912 447,644 725,249 154,250 223,164
Purchased in-process
research and
development............ -- -- -- -- 355,308 -- 3,558
Merger, restructuring,
acquisition and other
related charges........ -- 5,917 -- 5,581 150,582 -- 257,920
-------- ---------- ---------- ---------- ---------- ---------- ----------
228,047 268,902 326,912 453,225 1,231,139 154,250 484,642
-------- ---------- ---------- ---------- ---------- ---------- ----------
Operating income
(loss)................ 7,998 27,251 62,999 100,003 (231,602) 41,113 (153,480)
Other income (expenses):
Interest expense....... (18,185) (27,892) (28,706) (31,999) (63,790) (10,995) (25,648)
Interest and other
income................ (3,036) 3,448 10,366 11,334 38,212 32,593 4,127
-------- ---------- ---------- ---------- ---------- ---------- ----------
(21,221) (24,444) (18,340) (20,665) (25,578) 21,598 (21,521)
-------- ---------- ---------- ---------- ---------- ---------- ----------
Income (loss) before
income tax
expense (benefit)..... (13,223) 2,807 44,659 79,338 (257,180) 62,711 (175,001)
Income tax expense
(benefit).............. 2,070 14,582 35,239 30,945 48,221 23,416 (19,604)
-------- ---------- ---------- ---------- ---------- ---------- ----------
Net income (loss)...... $(15,293) $ (11,775) $ 9,420 $ 48,393 $ (305,401) $ 39,295 $ (155,397)
======== ========== ========== ========== ========== ========== ==========
PER COMMON SHARE
DATA:(9)
Basic:
Net income (loss)...... $ (0.26) $ (0.19) $ 0.11 $ 0.47 $ (2.18) $ 0.31 $ (0.98)
======== ========== ========== ========== ========== ========== ==========
Weighted average number
of common
shares outstanding.... 61,060 64,991 78,953 102,250 139,867 126,087 158,524
======== ========== ========== ========== ========== ========== ==========
Diluted:
Net income (loss)...... $ (0.26) $ (0.19) $ 0.11 $ 0.45 $ (2.18) $ 0.30 $ (0.98)
======== ========== ========== ========== ========== ========== ==========
Weighted average number
of common
shares outstanding.... 61,060 64,991 80,252 106,609 139,867 146,472 158,524
======== ========== ========== ========== ========== ========== ==========
CONSOLIDATED BALANCE
SHEET DATA
(END OF PERIOD):
Working capital......... $158,957 $ 155,683 $ 214,205 $ 594,575 $ 704,423 $ 589,824 $ 870,277
Total assets............ $761,241 $ 887,064 $1,295,886 $2,734,925 $4,465,445 $2,938,663 $4,688,255
Notes payable and long-
term debt, including
current portion........ $200,802 $ 200,685 $ 123,172 $ 134,711 $1,098,071 $ 145,422 $ 424,728
Convertible subordinated
debt................... $ 60,000 $ 105,000 $ 200,000 $ 554,000 $ 554,000 $ 554,000 $ 554,000
ROARS................... $ -- $ -- $ -- $ -- $ -- $ -- $ 900,000
Shareholders' equity.... $224,059 $ 248,792 $ 526,479 $1,219,470 $1,591,438 $1,368,616 $1,458,176
OTHER DATA:
EBITDA (10)............. $ 53,005 $ 102,177 $ 143,679 $ 183,840 $ 387,893 $ 68,158 $ 146,463
Ratio of earnings to
fixed charges(11)...... N/A 1.1x 2.4x 3.1x N/A 5.3x N/A
</TABLE>
12
<PAGE>
- --------
(1) The historical consolidated financial data for the fiscal years ended
March 31, 1994, 1995, 1996, 1997 and 1998 and for the three months ended
June 30, 1997 and 1998 have been restated to include the accounts and
operations of Culligan which was merged with the Company in June 1998 and
accounted for as a pooling of interests. Separate results of operations of
the Company and Culligan for the years ended March 31, 1994 through March
31, 1998 and for the three months ended June 30, 1997 and 1998 are
presented below:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
FISCAL YEAR ENDED MARCH 31, JUNE 30,
------------------------------------------------------- -------------------
1994(2) 1995(3) 1996(4) 1997(5) 1998(6) 1997(7) 1998(8)
-------- ---------- ---------- ---------- ---------- -------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUES
Company (as previously
reported).............. $620,709 $ 830,765 $1,090,745 $1,764,406 $3,234,580 $693,553 $1,119,331
Culligan................ 264,073 280,051 304,502 371,018 505,744 99,403 --
-------- ---------- ---------- ---------- ---------- -------- ----------
$884,782 $1,110,816 $1,395,247 $2,135,424 $3,740,324 $792,956 $1,119,331
======== ========== ========== ========== ========== ======== ==========
OPERATING INCOME (LOSS)
Company (as previously
reported).............. $ 3,999 $ 40,721 $ 61,385 $ 66,020 $ (235,209) $ 27,029 $ (153,480)
Culligan................ 3,999 (13,470) 1,614 33,983 3,607 14,084 --
-------- ---------- ---------- ---------- ---------- -------- ----------
$ 7,998 $ 27,251 $ 62,999 $ 100,003 $ (231,602) $ 41,113 $ (153,480)
======== ========== ========== ========== ========== ======== ==========
NET INCOME (LOSS)
Company (as previously
reported).............. $ (2,773) $ 24,621 $ 30,699 $ 32,508 $ (299,779) $ 12,703 $ (155,397)
Culligan................ (12,520) (36,396) (21,279) 15,885 (5,622) 26,592 --
-------- ---------- ---------- ---------- ---------- -------- ----------
$(15,293) $ (11,775) $ 9,420 $ 48,393 $ (305,401) $ 39,295 $ (155,397)
======== ========== ========== ========== ========== ======== ==========
NET INCOME (LOSS) PER COMMON
SHARE(7):
Basic:
As previously
reported............ $ (0.11) $ 0.68 $ 0.62 $ 0.51 $ (3.13) $ 0.15 $ --
As restated.......... $ (0.26) $ (0.19) $ 0.11 $ 0.47 $ (2.18) $ 0.31 $ (0.98)
Diluted:
As previously
reported............ $ (0.11) $ 0.66 $ 0.61 $ 0.49 $ (3.13) $ 0.15 $ --
As restated.......... $ (0.26) $ (0.19) $ 0.11 $ 0.45 $ (2.18) $ 0.30 $ (0.98)
</TABLE>
(2) The fiscal year ended March 31, 1994 includes four months of results of
Ionpure Technologies Corporation and IP Holding Company ("Ionpure"),
acquired December 1, 1993 and accounted for as a purchase. Selling,
general and administrative expenses for the year ended March 31, 1994
reflect four months of integration of Ionpure, certain charges totaling
$2.4 million related to the rationalization of certain wastewater
operations and the write-off of certain intangibles in the Company's
Continental Penfield subsidiary totaling $3.7 million. In addition, the
year ended March 31, 1994 includes a charge of $8.9 million to reflect a
plan to shutdown and reorganize certain operations of Davis Water & Waste
Industries, Inc. ("Davis"). Fiscal 1994 includes seven months of
operations of Culligan and five months of operations of its predecessor.
(3) The fiscal year ended March 31, 1995 includes the results of operations of
Smogless S.p.A., Crouzat S.A., Sation S.A., Seral Erich Alhauser GmbH and
the Cereflo ceramic product line from the dates of their respective
acquisitions, accounted for as purchases. Results for this period include
expenses incurred of $5.9 million related to a restructuring plan to
consolidate the production facilities and administrative functions of
certain Culligan operations in Europe.
(4) The fiscal year ended March 31, 1996 includes the results of operations of
The Permutit Company Limited and The Permutit Company Pty Ltd., Interlake
Water Systems, Arrowhead Industrial Water Inc. and Polymetrics Inc. from
the dates of their respective acquisitions, accounted for as purchases.
Selling, general and administrative expenses for the year ended March 31,
1996 includes charges totaling $3.2 million related to the write-down of
certain patents and equipment of Zimpro Environmental, Inc.
(5) The fiscal year ended March 31, 1997 includes the results of operations of
The Utility Supply Group, Inc., WaterPro Supplies Corporation, the Systems
and Manufacturing Group of Wheelabrator Technologies Inc. and the
businesses of the Process Equipment Division of United Utilities Plc from
the dates of their respective acquisitions, accounted for as purchases.
The year ended March 31, 1997 also includes merger expenses of $5.6
million, related to the acquisition of Davis, which was accounted for as a
pooling of
13
<PAGE>
interests. Costs of goods sold for the year ended March 31, 1997 includes
charges recorded by Kinetics totaling $26.0 million related to certain
unreimbursed project costs. Selling, general and administrative expenses for
the year ended March 31, 1997 includes charges totaling $6.8 million for
increases in Kinetics allowance for doubtful accounts, the write-off of
certain receivables, the write-down of certain assets and the establishment
of certain accruals.
(6) The fiscal year ended March 31, 1998 includes the results of operations for
Memtec from the date of its acquisition on December 9, 1997, accounted for
as a purchase. The year ended March 31, 1998 also includes a charge of
$299.5 million related to the acquisition from Memtec of certain in-process
research and development projects that had not reached technological
feasibility and that had no alternative future uses. Additionally the
Company recorded charges totaling $141.1 million related to a restructuring
plan that the Company implemented concurrent with the acquisitions of
Memtec and Kinetics. Cost of goods sold for the year ended March 31, 1998
includes charges recorded by Kinetics totaling $13.7 million related to
certain unreimbursed project costs. Selling, general and administrative
expenses for the year ended March 31, 1998 includes charges recorded by
Kinetics totaling $3.6 million related to increases in Kinetics allowance
for doubtful accounts, the write-off of certain receivables, the write down
of certain assets and the establishment of certain accruals. This period
also includes the results of the Water Filtration Business of Ametek, Inc.
(the "Water Filtration Business" or "Ametek") and Protean plc ("Protean")
from the date of their acquisitions on August 1, 1997 and December 2, 1997,
respectively, by Culligan accounted for as purchases. Culligan acquired
from Ametek and Protean certain in-process research and development
projects that had not reached technological feasibility and that had no
alternative future uses. The estimated market value of such in-process
research and development projects was approximately $55.8 million and was
expensed during fiscal 1998. The year ended March 31, 1998 also includes a
$31.1 million pre-tax gain recorded by Culligan on the sale of its
investment in Anvil Holdings, Inc. for total cash proceeds of $50.9
million. The gain is included in other income in the fiscal year ended
March 31, 1998. In addition, Culligan recorded charges totaling $9.5
million related to a restructuring plan that Culligan implemented
concurrent with its acquisition of Ametek.
(7) The three months ended June 30, 1997 includes a $31.1 million pre-tax gain
recorded by Culligan on the sale of its investment in Anvil Holdings, Inc.
for total cash proceeds of $50.9 million. The gain is included in other
income in the three months ended June 30, 1997.
(8) During the three months ended June 30, 1998, the Company recorded charges
totaling $257.9 million related to a restructuring plan that the Company
implemented concurrent with the acquisition of Culligan. Included in the
restructuring charges is approximately $49.2 million of merger expenses
incurred to consummate the Culligan transaction. In addition, the three
months ended June 30, 1998 includes a charge of $3.6 million for purchased
in-process research and development projects at the Analytical and Thermal
Division of Protean. These projects had not reached technological
feasibility and had no alternative future uses.
(9) Net income (loss) per common share amounts are computed in accordance with
SFAS 128 after dividends on the Series A Preferred Stock of $0.7 million
for the fiscal year ended March 31, 1994, $0.7 million for the fiscal year
ended March 1995 and $0.5 million for the fiscal year ended March 31, 1997.
The Series A Preferred Stock was converted into shares of Common Stock in
March 1996.
(10) EBITDA is defined as income before interest and taxes, excluding certain
nonrecurring items, plus depreciation and amortization. EBITDA data is
presented because such data is used by certain investors to determine the
Company's ability to meet debt service requirements. However, such
information should not be considered as an alternative to net income,
operating profit, cash flows from operations, or any other operating or
liquidity performance measure prescribed by generally accepted accounting
principles. The EBITDA measure presented by the Company may not be
comparable to similarly titled measures by other companies.
(11) In the ratio of earnings to fixed charges, earnings are computed by adding
"income (loss) before income tax expense (benefit)" to fixed charges.
Fixed charges are computed by adding interest expense to one-third of rent
expense, which is the portion of rent expense that the Company has
determined to be fixed in nature. For the fiscal years ended March 31,
1994 and 1998 as well as for the three months ended June 30, 1998,
earnings were inadequate to cover fixed charges.
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FIRST CALL CONSENSUS EARNINGS ESTIMATES
The following consensus earnings estimates and the footnotes thereto (the
"First Call Estimates") were calculated by First Call Corporation ("First
Call") as of November 6, 1998, based on the earnings projections made by
analysts who cover the Company. The First Call Estimates are provided for
informational purposes only, as a result of the views of the Staff of the
Commission, in light of the inclusion of the First Call Estimates on the
Company's website prior to November 10, 1998. Any opinions, estimates or
forecasts regarding the Company's performance made by these analysts (and
therefore the First Call Estimates) are theirs alone and do not represent
opinions, forecasts or predictions of the Company or its management. The
Company does not by its inclusion of the First Call Estimates imply that it is
endorsing or concurring with the First Call Estimates. The First Call
Estimates are "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. No assurance can be given that the
earnings projected, estimated or implied by such forward-looking statements
will be achieved. See the section entitled "Risk Factors" for 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 matters covered in such forward-looking
statements. The Company does not undertake any obligation to publicly release
any revisions to these forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
FIRST CALL CORPORATION
CONSENSUS EARNINGS PER SHARE ESTIMATE SUMMARY(1)
NOVEMBER 6, 1998
<TABLE>
<CAPTION>
QUARTER QUARTER QUARTER QUARTER FISCAL YEAR
FISCAL ENDED ENDED ENDED ENDED ENDED
YEAR JUNE 30 SEPTEMBER 30 DECEMBER 31 MARCH 31 MARCH 31
------ ------- ------------ ----------- -------- -----------
<S> <C> <C> <C> <C> <C>
2000 $0.37(2) $0.40(2) $0.41(2) $0.41(2) $1.61(2)
1999(3) -- -- 0.36(4) 0.37(4) 1.44(4)
</TABLE>
- --------
(1) The First Call consensus 5-year growth rate for the Company is 15%.
(2) Includes estimates from 14 brokers.
(3) For the calendar year ended December 31, 1999, the consensus annual
earnings per share estimate is $1.55. This includes estimates from 3
brokers.
(4) Includes estimates from 15 brokers.
15
<PAGE>
THE EXCHANGE OFFERS
PURPOSE OF THE EXCHANGE OFFERS
The Private ROARS were sold by the Company on the Closing Date to the
Initial Purchasers pursuant to a Purchase Agreement among the Company and the
Initial Purchasers, dated as of May 14, 1998 (the "Purchase Agreement"). The
Initial Purchasers subsequently sold the Private ROARS to "qualified
institutional buyers," as defined in Rule 144A, in reliance on Rule 144A. As a
condition to the sale of the Private ROARS, the Company and the Initial
Purchasers entered into a Registration Rights Agreement, dated as of May 19,
1998 (the "Registration Rights Agreement"). Pursuant to the Registration
Rights Agreement, the Company agreed that, unless the Exchange Offers were not
permitted by applicable law or Commission policy, it would file with the
Commission a registration statement under the Securities Act with respect to
the Exchange ROARS and use its reasonable efforts to cause such registration
statement to become effective under the Securities Act within 180 days after
the Closing Date. A copy of the Registration Rights Agreement has been filed
as an exhibit to the Registration Statement. The Registration Statement is
intended to satisfy certain of the Company's obligations under the
Registration Rights Agreement and the Purchase Agreement.
As of the date of this Prospectus, $500,000,000 aggregate principal amount
of the Private 6.375% ROARS and $400,000,000 aggregate principal amount of the
Private 6.50% ROARS are outstanding. This Prospectus, together with the
applicable Letter of Transmittal, is first being sent on or about , 1998
to all holders of Private ROARS known to the Company. The Company's obligation
to accept Private ROARS for exchange pursuant to the Exchange Offers are
subject to certain conditions as set forth below under "--Certain Conditions
to the Exchange Offers."
TERMS OF THE EXCHANGE OFFER
The Company is hereby offering Exchange ROARS in exchange for surrender of
the corresponding Private ROARS. The Company will keep the Exchange Offers
open for not less than 20 business days (or longer if required by applicable
law) after the date on which this Prospectus is mailed to the holders of the
Private ROARS. For each Private ROAR validly tendered to the Company pursuant
to the Exchange Offers and not withdrawn by the Holder thereof, the Holder of
such Private ROAR will receive a corresponding Exchange ROAR having a
principal amount equal to the principal amount of such surrendered Private
ROAR. The Exchange ROARS will bear interest from the most recent date to which
interest has been paid on the Private ROARS or, if no interest has been paid,
from May 19, 1998. Accordingly, if the relevant record date for interest
payment occurs after the consummation of either Exchange Offer, registered
holders of the applicable Exchange ROARS on such record date will receive
interest accruing from the most recent date to which interest has been paid
or, if no interest has been paid, from May 19, 1998. If, however, the relevant
record date for interest payment occurs prior to the consummation of either
Exchange Offer, registered holders of the applicable Private ROARS on such
record date will receive interest accruing from the most recent date to which
interest has been paid or, if no interest has been paid, from May 19, 1998.
Holders of Private ROARS whose Private ROARS are accepted for exchange will
not receive any payment in respect of accrued interest on such Private ROARS
otherwise payable on any interest payment date the record date for which
occurs at or after consummation of the Exchange Offers. The Exchange ROARS
evidence the same debt as the corresponding Private ROARS and are issued under
and are entitled to the same benefits under the Indenture as the Private
ROARS.
ACCEPTANCE OF PRIVATE ROARS FOR EXCHANGE; DELIVERY OF EXCHANGE ROARS
Upon the terms and subject to the conditions set forth in this Prospectus
and in the applicable Letter of Transmittal (including, if either Exchange
Offer is extended or amended, the terms and conditions of such Exchange Offer
as so extended or amended), the Company will accept for exchange, and will
exchange the corresponding Exchange ROARS for, all Private ROARS validly
tendered and not properly withdrawn prior to the applicable Expiration Date as
soon as practicable after such Expiration Date.
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<PAGE>
For purposes of the Exchange Offers, the Company will be deemed to have
accepted for exchange Private ROARS validly tendered and not withdrawn as, if
and when the Company gives oral or written notice to the Exchange Agent of the
Company's acceptance of such Private ROARS for exchange pursuant to the
Exchange Offers. In all cases, delivery of Exchange ROARS for Private ROARS
accepted for exchange pursuant to the Exchange Offers will be made by the
Exchange Agent.
If any tendered Private ROARS are not accepted pursuant to the Exchange
Offers for any reason, or if certificates are submitted representing more
Private ROARS than are tendered, certificates representing unaccepted or
untendered Private ROARS will be returned, without expense to the tendering
Holder (or, in the case of Private ROARS delivered by book-entry transfer into
the Exchange Agent's account at DTC pursuant to the procedure set forth below,
such Private ROARS will be credited to an account maintained within DTC), as
promptly as practicable following the expiration, termination or withdrawal of
the Exchange Offers.
In all cases, delivery of the corresponding Exchange ROARS for the Private
ROARS accepted for exchange pursuant to the Exchange Offers will be made only
after timely receipt by the Exchange Agent of (i) certificates representing
such Private ROARS or timely confirmation (a "Book-Entry Confirmation") of the
book-entry transfer of such Private ROARS into the Exchange Agent's account at
DTC pursuant to the procedures set forth below; (ii) the appropriate Letter of
Transmittal, properly completed and duly executed, with any required signature
guarantees, or an Agent's Message (as defined herein) in connection with a
book-entry transfer; and (iii) any other documents required by such Letter of
Transmittal.
The term "Agent's Message" means a message transmitted by DTC to, and
received by, the Exchange Agent and forming a part of a Book-Entry
Confirmation, which states that DTC has received an express acknowledgment
from the participant in DTC when tendering the Private ROARS which are the
subject of such Book-Entry Confirmation that such participant has received and
agrees to be bound by the terms of the applicable Letter of Transmittal and
that the Company may enforce such agreement against such participant.
PERIOD FOR TENDERING PRIVATE ROARS
Upon the terms and subject to the conditions set forth in this Prospectus
and in the applicable Letter of Transmittal (including, if either Exchange
Offer is extended or amended, the terms and conditions of such Exchange Offer
as so extended or amended), the Company will accept for exchange, and exchange
the corresponding Exchange ROARS for, all Private ROARS that are properly
tendered at or prior to the Expiration Date and not withdrawn as permitted
below. As used herein, the term "Expiration Date" means p.m., New York City
time, on , 1998; provided, however, that if the Company, in its sole
discretion, has extended the period of time for which either of the Exchange
Offers is open, the term "Expiration Date" means the latest time and date at
which the applicable Exchange Offer, as so extended, shall expire. If, at any
Expiration Date, the conditions to the Exchange Offers described below shall
not have been satisfied or waived, the Company reserves the right (but shall
not be obligated) to extend the Exchange Offers from time to time by giving
oral or written notice to the Exchange Agent. During any such extension, all
Private ROARS previously tendered and not withdrawn will remain subject to the
Exchange Offers, subject to the right of a tendering Holder to withdraw such
Holder's Private ROARS.
Subject to the applicable regulations of the Commission, the Company also
expressly reserves the right, in its sole discretion, at any time or from time
to time, to (i) terminate the Exchange Offers if any condition referred to
below has not been satisfied by any Expiration Date and return all tendered
Private ROARS; (ii) waive any condition; or (iii) except as set forth in the
Registration Rights Agreement, otherwise amend the Exchange Offers in any
respect, in each case, by giving oral or written notice of such termination,
waiver or amendment to the Exchange Agent.
Any such extension, termination or amendment will be followed as promptly as
practicable by public announcement thereof, and such announcement in the case
of an extension will be made no later than 9:00 am, New York City time, on the
next business day after the previously scheduled Expiration Date. Without
limiting
17
<PAGE>
the manner in which the Company may choose to make any public announcement,
subject to applicable law, the Company shall have no obligation to publish,
advertise or otherwise communicate any such public announcement other than by
issuing a release to the Dow Jones News Service.
If the Company makes a material change in the terms of either of the
Exchange Offers, or if it waives a material condition to either of the
Exchange Offers, the Company will extend the applicable Exchange Offer and
disseminate additional tender offer materials to the extent required by Rule
14e-1 under the Exchange Act. The minimum period during which an offer must
remain open following material changes in the terms of that offer, other than
a change in price or a change in the percentage of securities sought, will
depend upon the facts and circumstances, including the materiality of the
changes. In the Commission's view, an offer should remain open for a minimum
of five business days from the date the material change is first published,
sent or given to securityholders, and, if material changes are made with
respect to information that approaches the significance of price and the
percentage of securities sought, a minimum of ten business days may be
required to allow for adequate dissemination and investor response. With
respect to a change in price, a minimum ten-business day period from the date
of such change is generally required under applicable Commission rules and
regulations to allow for adequate dissemination to securityholders. For
purposes of the Exchange Offers, a "business day" means any day other than a
Saturday, Sunday or a U.S. federal holiday and consists of the time period
from 12:01 a.m. through 12:00 midnight, New York City time.
PROCEDURES FOR TENDERING PRIVATE ROARS
The tender to the Company of Private ROARS by a Holder thereof as set forth
below and the acceptance thereof by the Company will constitute a binding
agreement between the tendering Holder and the Company upon the terms and
subject to the conditions set forth in this Prospectus and in the applicable
Letter of Transmittal.
Valid Tender of Shares. Except as set forth below, in order for Private
ROARS to be validly tendered pursuant to the Exchange Offers, either (i) the
applicable Letter of Transmittal, properly completed and duly executed,
together with any required signature guarantees, or an Agent's Message in
connection with a book-entry transfer of Private ROARS, and any other
documents required by the Letter of Transmittal must be received by the
Exchange Agent at one of its addresses set forth under "--Exchange Agent" at
or prior to the Expiration Date and certificates representing the tendered
Private ROARS must be received by the Exchange Agent or such Private ROARS
must be tendered pursuant to the procedure for book-entry transfer set forth
below and a Book-Entry Confirmation must be received by the Exchange Agent, in
each case at or prior to the Expiration Date, or (ii) the guaranteed delivery
procedures set forth below must be complied with.
A beneficial owner of Private ROARS that are held by or registered in the
name of a broker, dealer, commercial bank, trust company or other nominee or
custodian is urged to contact such entity promptly if such beneficial owner
wishes to participate in the Exchange Offers.
THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
HOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN SUCH DOCUMENTS ARE ACTUALLY
RECEIVED BY THE EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Book Entry Transfer. For purposes of the Exchange Offers, the Exchange Agent
will establish an account with respect to the Private ROARS at DTC within two
business days after the date of this Prospectus. Any tendering financial
institution that is a participant in DTC must make a book-entry delivery of
its Private ROARS by causing DTC to transfer such Private ROARS into the
Exchange Agent's account at DTC in accordance with ATOP. Such holder of
Private ROARS using ATOP should transmit its acceptance to DTC at or prior to
the Expiration Date or the guaranteed delivery procedures set forth below must
be complied with. DTC will verify
18
<PAGE>
such acceptance, execute a book-entry transfer of the tendered Private ROARS
into the Exchange Agent's account at DTC and then send to the Exchange Agent a
Book-Entry Confirmation, including an Agent's Message.
Certificates. If the tender is not made through ATOP, certificates
representing Private ROARS, as well as the applicable Letter of Transmittal,
properly completed and duly executed, with any required signature guarantees,
and any other documents required by the Letter of Transmittal must be received
by the Exchange Agent at one of its addresses set forth under "--Exchange
Agent" at or prior to the Expiration Date in order for such tender to be
effective or the guaranteed delivery procedures set forth below must be
complied with.
If less than all of the Private ROARS owned by any Holder are being
tendered, a tendering Holder should fill in the amount of Private ROARS being
tendered in the appropriate box on the applicable Letter of Transmittal. The
entire amount of Private ROARS delivered to the Exchange Agent will be deemed
to have been tendered unless otherwise indicated.
Signature Guarantees. Signatures on a Letter of Transmittal must be
guaranteed unless the Private ROARS surrendered for exchange pursuant thereto
are tendered (i) by a registered holder of such Private ROARS who has not
completed the box entitled "Special Issuance Instructions" or "Special
Delivery Instructions" on such Letter of Transmittal or (ii) for the account
of a financial institution (including most commercial banks, savings and loan
associations, credit unions and brokerage houses) that is a participant in the
Securities Transfer Agents Medallion Program (each, an "Eligible Institution"
and, collectively, "Eligible Institutions"). In the event that signatures on a
Letter of Transmittal are required to be guaranteed, such guarantee must be by
an Eligible Institution. If the Private ROARS being tendered pursuant to a
Letter of Transmittal are registered in the name of a person other than the
signer of such Letter of Transmittal, the Private ROARS surrendered for
exchange therewith must be endorsed by, or be accompanied by a written
instrument or instruments of transfer or exchange, in satisfactory form as
determined by the Company, in its sole discretion, duly executed by, the
registered Holder with the signature thereon guaranteed by an Eligible
Institution.
Determination of Validity. All questions as to the form of documents, the
validity and eligibility (including time of receipt) of any tender and the
acceptance of Private ROARS tendered for exchange will be determined by the
Company, in its sole discretion, which determination shall be final and
binding on all parties. The Company reserves the absolute right to reject any
or all tenders of any particular Private ROARS not properly tendered or to not
accept any particular Private ROARS, the acceptance of which might, in the
judgment of the Company or its counsel, be unlawful. The Company also reserves
the absolute right to waive any defects or irregularities in tenders or
conditions of the Exchange Offers as to any particular Private ROARS either
before or after the Expiration Date (including the right to waive the
ineligibility of any Holder who seeks to tender Private ROARS in the Exchange
Offers). The Company's interpretation of the terms and conditions of the
Exchange Offers shall be final and binding on all parties. Unless waived, any
defects or irregularities in connection with tenders of Private ROARS must be
cured within such reasonable period of time as the Company shall determine.
Neither the Company, the Exchange Agent nor any other person shall be under
any duty to give notification of any defect or irregularity with respect to
any tender of Private ROARS, nor shall any of them incur any liability for
failure to give such notification.
If a Letter of Transmittal is signed by a person or persons other than the
registered holder or holders of the Private ROARS being tendered thereby, such
Private ROARS must be endorsed or accompanied by appropriate powers of
attorney, in either case signed exactly as the name or names of the registered
holder or holders that appear on such Private ROARS.
If a Letter of Transmittal or any Private ROARS or powers of attorney are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and, unless waived by
the Company, proper evidence satisfactory to the Company of their authority to
so act must be submitted.
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<PAGE>
By tendering, a Holder of Private ROARS will represent to the Company that,
among other things, (i) it is not an Affiliate of the Company, (ii) the
Exchange ROARS to be received by it will be acquired in the ordinary course of
its business, and (iii) it has no arrangement with any person to participate
in a distribution of Exchange ROARS. If any Holder is an Affiliate of the
Company or intends to participate in the Exchange Offers for the purpose of
distributing Exchange ROARS or is a broker-dealer who purchased Private ROARS
from the Company to resell pursuant to Rule 144A or any other available
exemption under the Securities Act, it (x) will not be able to rely on the
interpretations of the Staff referred to under "Risk Factors--Consequences of
Failure to Exchange and Requirements for Transfer of Exchange ROARS," (y) will
not be entitled to tender its Private ROARS in the Exchange Offers, and (z)
must comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any sale or transfer of its Private ROARS
unless such sale or transfer is made pursuant to an exemption from such
requirements. Each broker-dealer that receives Exchange ROARS for its own
account in exchange for Private ROARS, where such Private ROARS were acquired
by such broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange ROARS. See "Plan of Distribution." Each
Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
GUARANTEED DELIVERY PROCEDURES
If a registered holder of Private ROARS desires to tender such Private ROARS
and such Private ROARS are not immediately available, or time will not permit
such Holder's certificates for such Private ROARS or other required documents
to reach the Exchange Agent before the applicable Expiration Date, or the
procedure for book-entry transfer cannot be completed on a timely basis, a
tender may be effected if (i) the tender is made by or through an Eligible
Institution, (ii) prior to the applicable Expiration Date, the Exchange Agent
receives from such Eligible Institution a properly completed and duly executed
Notice of Guaranteed Delivery, substantially in the form provided by the
Company by telegram, telex, facsimile transmission, mail or hand delivery,
setting forth the name and address of such holder of Private ROARS and the
amount of Private ROARS tendered, stating that the tender is being made
thereby and guaranteeing that within five NYSE trading days after the date of
execution of such Notice of Guaranteed Delivery, the certificates for all
physically tendered Private ROARS, in proper form for transfer, or a Book-
Entry Confirmation, as the case may be, and any other documents required by
the applicable Letter of Transmittal will be delivered by the Eligible
Institution to the Exchange Agent, and (iii) (a) such Book-Entry Confirmation
or (b) the certificates for all such physically tendered Private ROARS, in
proper form for transfer, and a duly executed applicable Letter of
Transmittal, with any required signature guarantees, and all other documents
required by such Letter of Transmittal, are received by the Exchange Agent
within five NYSE trading days after the date of execution of such Notice of
Guaranteed Delivery.
WITHDRAWAL RIGHTS
Tenders of Private ROARS may be withdrawn at any time prior to the
applicable Expiration Date. In order for a withdrawal to be effective, a
written notice of withdrawal by telegram, facsimile transmission (receipt
confirmed by telephone) or letter must be received by the Exchange Agent at
one of its addresses as set forth under "--Exchange Agent" at or prior to the
applicable Expiration Date. Any such notice of withdrawal must specify the
name of the person who tendered the Private ROARS to be withdrawn, identify
the Private ROARS to be withdrawn (including the series and the principal
amount of such Private ROARS), and, where certificates for Private ROARS have
been transmitted, specify the name in which such Private ROARS are registered,
if different from that of the withdrawing holder. If certificates for Private
ROARS have been delivered or otherwise identified to the Exchange Agent, then,
prior to the physical release of such certificates, the withdrawing holder
must also submit the certificate numbers of the particular certificates to be
withdrawn and the signatures on the notice of withdrawal must be guaranteed by
an Eligible Institution, unless such holder is an Eligible Institution. If
Private ROARS have been tendered pursuant to the procedure for book-entry
transfer described above, any notice of withdrawal must specify the name and
number of the account at DTC to be credited with the withdrawn Private ROARS
and otherwise comply with the procedures of DTC. All questions as to the form
and validity
20
<PAGE>
(including time of receipt) of any such notice of withdrawal will be
determined by the Company, in its sole discretion, which determination shall
be final and binding on all parties. Neither the Company, the Exchange Agent
nor any other person shall be under any duty to give notification of any
defect or irregularity in any notice of withdrawal, nor shall any of them
incur any liability for failure to give such notification.
Withdrawals may not be rescinded. Any Private ROARS that are withdrawn will
be deemed not to have been validly tendered for exchange for purposes of the
Exchange Offers. Any Private ROARS which have been withdrawn for any reason
will be returned to the Holder thereof without cost to such Holder or, in the
case of Private ROARS tendered by book-entry transfer into the Exchange
Agent's account at DTC pursuant to the book-entry transfer procedure described
above, such Private ROARS will be credited to an account maintained with DTC
as soon as practicable after such withdrawal. Properly withdrawn Private ROARS
may be retendered by following one of the procedures described under "--
Procedures for Tendering Private ROARS" above at any time at or prior to the
applicable Expiration Date.
If, for any reason whatsoever, acceptance for exchange of any Private ROARS
tendered pursuant to the Exchange Offers is delayed, or the Company is unable
to accept for exchange tendered Private ROARS pursuant to the Exchange Offers,
then, without prejudice to the Company's rights set forth herein, the Exchange
Agent may, nevertheless, on behalf of the Company, retain tendered Private
ROARS and such Private ROARS may not be withdrawn except to the extent that
the tendering Holder is entitled to and duly exercises withdrawal rights as
described herein. Any such delay will be by an extension of the Exchange
Offers to the extent required by law.
CERTAIN CONDITIONS TO THE EXCHANGE OFFERS
Notwithstanding any other provisions of the applicable Exchange Offer, the
Company shall not be required to accept for exchange, or to issue Exchange
ROARS in exchange for, any applicable Private ROARS and may terminate such
Exchange Offer, if at any time before the acceptance of such Private ROARS for
exchange or the exchange of the applicable Exchange ROARS for such Private
ROARS, any of the following events shall occur:
(a) there shall be threatened, instituted or pending any action or
proceeding before, or any injunction, order or decree shall have been
issued by, any court or governmental agency or other regulatory or
administrative agency or commission with respect to such Exchange
Offer; or
(b) such acceptance or issuance would violate applicable law or any
applicable interpretation of the Staff; or
(c) there shall have occurred (i) any general suspension of trading in, or
general limitation on prices for, securities on any national securities
exchange or in the over-the-counter market, (ii) a declaration of a
banking moratorium or any suspension of payments in respect of banks in
the United States or any limitation by any governmental agency or
authority which adversely affects the extension of credit, or (iii) a
commencement of a war, armed hostilities or other similar international
calamity directly or indirectly involving the United States, or, in the
case of any of the foregoing existing at the time of the commencement
of the Exchange Offers, a material acceleration or worsening thereof;
or
(d) any change (or any development involving a prospective change) shall
have occurred or be threatened in the business, properties, assets,
liabilities, financial condition, operations, results of operations or
prospects of the Company taken as a whole that is or may be adverse to
the Company, or the Company shall have become aware of facts that have
or may have adverse significance with respect to the value of any of
the Private ROARS or the Exchange ROARS;
which, in the sole judgment of the Company in any case, and regardless of the
circumstances (including any action by the Company) giving rise to any event
described above, prohibits the Company from or makes it inadvisable for the
Company to proceed with either of the Exchange Offers and/or with such
acceptance for exchange or with such exchange.
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The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances giving rise to any
such condition or may be waived by the Company in whole or in part at any time
and from time to time in its sole discretion. The failure by the Company at
any time to exercise any of the foregoing rights shall not be deemed a waiver
of any such right and each such right shall be deemed an ongoing right which
may be asserted at any time and from time to time.
In addition, the Company will not accept for exchange any Private ROARS
tendered, and no Exchange ROARS will be issued in exchange for any such
Private ROARS, if at such time any stop order shall be threatened or in effect
with respect to the Registration Statement or the qualification of the
Indenture under the Trust Indenture Act of 1939, as amended (the "TIA").
EXCHANGE AGENT
The Bank of New York has been appointed as the exchange agent (the "Exchange
Agent") for the Exchange Offers. All executed Letters of Transmittal should be
directed to the Exchange Agent as set forth below. Questions and requests for
assistance, requests for additional copies of this Prospectus or of the
applicable Letter of Transmittal and requests for Notices of Guaranteed
Delivery should be directed to the Exchange Agent addressed as follows:
By Registered or By Hand Only: By Overnight Delivery:
Certified Mail:
The Bank of New York The Bank of New York The Bank of New York
55 Water Street, Room 55 Water Street, Room 55 Water Street, Room
234 234 234
New York, New York 10041 New York, New York 10041 New York, New York 10041
Attention: Lewis Padilla (United States Filter Attention: Lewis Padilla
(United States Filter Corporation,
Corporation, 6.375% and 6.50% Private (United States Filter
6.375% and 6.50% Private ROARS) Corporation,
ROARS) 6.375% and 6.50% Private
ROARS)
Facsimile Transmission:
(For Eligible Institutions Only)
(212) 638-7375
or
(212) 638-7380
To Confirm By Telephone or For
Information:
(212) 638-0458
DELIVERY OF LETTERS OF TRANSMITTAL OR OTHER REQUIRED DOCUMENTS TO AN ADDRESS
OTHER THAN ONE SET FORTH ABOVE OR VIA FACSIMILE TRANSMISSION TO A NUMBER OTHER
THAN ONE SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
FEES AND EXPENSES
The Company will not make any payment to brokers, dealers or others for
soliciting acceptance of the Exchange Offers. The Company will pay certain
other expenses to be incurred in connection with the Exchange Offers,
including the fees and expenses of the Exchange Agent, accounting fees and
certain legal fees.
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TRANSFER TAXES
Holders who tender their Private ROARS for exchange will not be obligated to
pay any transfer taxes in connection therewith, except that Holders who
instruct the Company to register Exchange ROARS in the name of, or request
that Private ROARS not tendered or not accepted in the Exchange Offers be
returned to, a person other than the registered tendering Holder will be
responsible for the payment of any applicable transfer tax thereon.
CONSEQUENCES OF FAILURE TO EXCHANGE AND REQUIREMENTS FOR TRANSFER OF EXCHANGE
ROARS
Holders of Private ROARS who do not exchange their Private ROARS for
corresponding Exchange ROARS pursuant to the Exchange Offers will continue to
be subject to the provisions in the Indenture regarding transfer and exchange
of Private ROARS and the restrictions on transfer of such Private ROARS set
forth in the legend thereon as a consequence of the issuance of the Private
ROARS pursuant to exemptions from, or in transactions not subject to, the
registration requirements of the Securities Act and applicable state
securities laws. In general, Private ROARS may not be offered or sold, unless
such transaction is registered under the Securities Act, except pursuant to an
exemption from, or in a transaction not subject to, the Securities Act and
applicable state securities laws. The Company does not currently anticipate
that it will register the sale or other disposition of Private ROARS under the
Securities Act except to the extent required by the Registration Rights
Agreement. See "Description of the ROARS--Registration Rights."
DESCRIPTION OF THE ROARS
GENERAL
The Private ROARS were issued and the Exchange ROARS will be issued pursuant
to an Indenture, dated as of May 19, 1998, between the Company and The Bank of
New York, as trustee (the "Trustee"), and a First Supplemental Indenture
thereto, dated as of May 19, 1998 (together, the "Indenture"), copies of which
are filed as exhibits to the Registration Statement of which this Prospectus
constitutes a part. Upon the effectiveness of the Registration Statement, the
Indenture will be subject to and governed by the TIA. Each of the 6.375% ROARS
and the 6.50% ROARS constitute a single series of Securities under the
Indenture and holders thereof are entitled to the benefit of the Indenture.
Accordingly, unless specifically stated to the contrary, the following
description applies equally to all ROARS. The following summary of certain
provisions of the Indenture and the ROARS does not purport to be complete and
such summary is subject to the detailed provisions of the Indenture to which
reference is hereby made for a full description of such provisions, including
the definition of certain terms used herein, and for other information
regarding the ROARS. Wherever particular sections or defined terms of the
Indenture are referred to, such sections and defined terms are incorporated
herein by reference as part of the statement made, and such statement is
qualified in its entirety by such reference. As used in this section of the
Prospectus, the term "Company" means United States Filter Corporation and not
any of its subsidiaries, unless otherwise expressly stated or the context
otherwise requires.
The 6.375% ROARS will mature on May 15, 2011 (the "6.375% ROARS Stated
Maturity Date") and are limited to $500,000,000 in aggregate principal amount.
The 6.50% ROARS will mature on May 15, 2013 (the "6.50% ROARS Stated Maturity
Date" and, together with the 6.375% ROARS Stated Maturity Date, each a "Stated
Maturity Date") and are limited to $400,000,000 in aggregate principal amount.
The Exchange ROARS will be general unsecured obligations of the Company and
will rank pari passu in right of payment with all other unsubordinated
indebtedness of the Company and will rank senior in right of payment to all
subordinated indebtedness of the Company. The secured indebtedness of the
Company to the extent of such security and all indebtedness and other
obligations (including trade payables) of the Company's subsidiaries will
effectively be structurally senior to the Exchange ROARS. As of June 30, 1998,
the Company had approximately $2.2 billion of outstanding indebtedness and the
Company's subsidiaries had approximately $109.3 million of outstanding
indebtedness, excluding $367.6 million of trade payables. As of such date,
approximately $554.0 million of the
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Company's outstanding indebtedness would have been subordinated in right of
payment to the Exchange ROARS. The Exchange ROARS will be issued in
denominations of $100,000 and integral multiples of $1,000 in excess thereof.
All payments on the Exchange ROARS will be made in U.S. dollars. After the
Remarketing Date applicable to a series of ROARS, such series of ROARS will be
subject to the legal defeasance provisions of the Indenture.
On May 15, 2001 (the "6.375% ROARS Remarketing Date") and May 15, 2003 (the
"6.50% ROARS Remarketing Date" and, together with the 6.375% ROARS Remarketing
Date, each a "Remarketing Date"), each of the 6.375% ROARS and the 6.50%
ROARS, respectively, will either be (i) mandatorily tendered to and purchased
by NationsBanc or its successor as Remarketing Dealer (the "Remarketing
Dealer"), in which case the Remarketing Dealer will pay 100% of the principal
amount of the applicable series of ROARS (the "ROARS Purchase Price") and the
Company will pay accrued interest, if any, thereon to such Remarketing Date,
or (ii) redeemed by the Company at 100% of the principal amount of such series
of ROARS plus accrued interest, if any, thereon to such Remarketing Date.
INTEREST AND INTEREST PAYMENT DATES
The 6.375% ROARS and the 6.50% ROARS will bear interest at 6.375% and 6.50%
per annum, respectively, for the period from May 19, 1998 to the Remarketing
Date applicable to such series of ROARS. If a series of ROARS is purchased by
the Remarketing Dealer on the applicable Remarketing Date, on and after such
Remarketing Date such series of ROARS will bear interest at the rate
determined by the Remarketing Dealer in accordance with the procedures
described below (the "Interest Rate to Maturity"). See "--Interest Rate to
Maturity."
The ROARS will bear interest from May 19, 1998 payable semi-annually on May
15 and November 15 of each year (each, an "Interest Payment Date"), commencing
November 15, 1998, to the persons in whose names the ROARS are registered at
the close of business on the preceding May 1 and November 1, respectively
(whether or not a Business Day) (each, a "Regular Record Date"); provided,
however, that interest payable on the applicable Remarketing Date and on the
applicable Stated Maturity Date will be paid to the person to whom principal
is payable. Interest payments will be in the amount of interest accrued from
and including the next preceding Interest Payment Date (or from and including
May 19, 1998 if no interest has been paid or duly provided for with respect to
the ROARS) to but excluding the relevant Interest Payment Date, Remarketing
Date or Stated Maturity Date, as the case may be. Interest on the ROARS will
be computed on the basis of a 360-day year of twelve 30-day months. "Business
Day" means any day 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.
INTEREST RATE TO MATURITY
The Interest Rate to Maturity of a series of ROARS purchased by the
Remarketing Dealer on the applicable Remarketing Date will be determined by
the Remarketing Dealer by 3:30 p.m., New York City time, on the third Business
Day immediately preceding such Remarketing Date (the "Determination Date") to
the nearest one hundred-thousandth (0.00001) of one percent per annum, and
will be equal to the sum of 5.6825% per annum in the case of the 6.375% ROARS
(the "6.375% ROARS Base Rate") and 5.6825% per annum in the case of the 6.50%
ROARS (the "6.50% ROARS Base Rate" and, together with the 6.375% ROARS Base
Rate, each a "Base Rate") and the Applicable Spread (as defined herein), which
will be based on the Dollar Price (as defined herein) of the applicable series
of ROARS. Under certain circumstances, the Interest Rate to Maturity for a
series of ROARS may be redetermined by the Remarketing Dealer after the
relevant Determination Date. See "--Remarketing Dealer."
For this purpose, the following terms have the following meanings:
"Applicable Spread" for a series of ROARS will be the lowest Bid, expressed
as a spread (in the form of a percentage or in basis points) above the Base
Rate for that series of ROARS, obtained by the Remarketing Dealer
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at 3:30 p.m., New York City time, on the relevant Determination Date from the
Bids quoted to the Remarketing Dealer by five Reference Corporate Dealers (as
defined herein). A "Bid" will be an irrevocable offer to purchase the total
aggregate outstanding principal amount of the applicable series of ROARS at
the relevant Dollar Price (as defined herein), assuming (i) an issue date that
is the Remarketing Date for such series of ROARS, with settlement on such date
without accrued interest, (ii) a maturity date that is the Stated Maturity
Date for such series of ROARS, and (iii) a stated annual interest rate equal
to the relevant Base Rate plus the spread bid by the applicable Reference
Corporate Dealer. If fewer than five Reference Corporate Dealers submit Bids
as described above, then the Applicable Spread will be the lowest such Bid
obtained as described above. The Interest Rate to Maturity for a series of
ROARS announced by the Remarketing Dealer, absent manifest error, will be
binding and conclusive upon the holders of beneficial interests in such series
of ROARS (the "Beneficial Owners"), the Company and the Trustee.
"Comparable Treasury Issues" for a series of ROARS means the U.S. Treasury
security or securities selected by the Remarketing Dealer as having an actual
or interpolated maturity or maturities comparable to the remaining term of
such series of ROARS.
"Comparable Treasury Price" for a series of ROARS means, with respect to the
applicable Remarketing Date, (i) the offer prices for the Comparable Treasury
Issues (expressed in each case as percentages of their principal amounts) at
12:00 noon, New York City time, on the applicable Determination Date, as set
forth on "Telerate Page 500" (or such other page as may replace Telerate Page
500); or (ii) if such page (or any successor page) is not displayed or does
not contain such offer prices on such Determination Date, (a) the average of
the Reference Treasury Dealer Quotations for such Remarketing Date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(b) if the Remarketing Dealer obtains fewer than four such Reference Treasury
Dealer Quotations, the average of all such Reference Treasury Dealer
Quotations. "Telerate Page 500" means the display designated as "Telerate Page
500" on Dow Jones Markets (or such other page as may replace Telerate Page 500
on such service) or such other service displaying the offer prices described
in clause (i) above as may replace Dow Jones Markets. "Reference Treasury
Dealer Quotations" means, with respect to each Reference Treasury Dealer (as
defined herein) and the applicable Remarketing Date, the offer prices for the
Comparable Treasury Issues (expressed in each case as percentages of their
principal amounts) quoted in writing to the Remarketing Dealer by such
Reference Treasury Dealer by 3:30 p.m., New York City time, on the applicable
Determination Date.
"Dollar Price" means, with respect to each series of ROARS, the present
value, as of the applicable Remarketing Date, of the Remaining Scheduled
Payments (as defined herein) for such series of ROARS discounted to the
applicable Remarketing Date on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Treasury Rate (as defined herein).
"Reference Corporate Dealer" means five leading dealers of publicly traded
debt securities, including debt securities of the Company, which will be
selected by the Company. The Company will advise the Remarketing Dealer of its
selection of the Reference Corporate Dealers no later than five Business Days
prior to the applicable Remarketing Date. One of such Reference Corporate
Dealers selected by the Company will be NationsBanc if it then is the
Remarketing Dealer.
"Reference Treasury Dealer" means each of NationsBanc; Donaldson, Lufkin &
Jenrette Securities Corporation; Salomon Brothers Inc; Merrill Lynch, Pierce,
Fenner & Smith Incorporated and another dealer to be selected by the Company
and their respective successors; provided, that if any of the foregoing or
their affiliates ceases to be a primary U.S. Government securities dealer (a
"Primary Treasury Dealer"), the Remarketing Dealer will substitute therefor
another Primary Treasury Dealer.
"Remaining Scheduled Payments" means, with respect to a series of ROARS, the
remaining scheduled payments of the principal thereof and interest thereon,
calculated at the Base Rate applicable to such series, that would be due after
the applicable Remarketing Date to and including the applicable Stated
Maturity Date; provided, that if the applicable Remarketing Date is not an
Interest Payment Date with respect to such series of
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ROARS, the amount of the next succeeding scheduled interest payment thereon,
calculated at the Base Rate applicable to such series will be reduced by the
amount of interest accrued thereon, calculated at such Base Rate, to such
Remarketing Date.
"Treasury Rate" for a series of ROARS means, with respect to the applicable
Remarketing Date, the rate per annum equal to the semi-annual equivalent yield
to maturity or interpolated (on a day count basis) yield to maturity of the
Comparable Treasury Issues, assuming prices for the Comparable Treasury Issues
(expressed as percentages of their principal amounts) equal to the Comparable
Treasury Price for such Remarketing Date.
MANDATORY TENDER
If the Remarketing Dealer gives notice to the Company and the Trustee no
earlier than the tenth Business Day and no later than 4:00 p.m., New York City
time, on the fifth Business Day prior to the Remarketing Date applicable to a
series of ROARS of its intention to purchase such series of ROARS for
remarketing (the "Notification Date"), each of the ROARS in such series will
be automatically tendered, or deemed tendered, to the Remarketing Dealer for
purchase on such Remarketing Date, except in certain circumstances described
under "--Mandatory Redemption" or "--Optional Redemption." The applicable
ROARS Purchase Price will be paid by the Remarketing Dealer and the Company
will pay accrued interest, if any, on such series of ROARS to such Remarketing
Date. See "--Settlement."
If a series of ROARS is tendered for remarketing, the Remarketing Dealer
will sell the total aggregate principal amount of such series of ROARS on the
applicable Remarketing Date for the applicable Dollar Price to the Reference
Corporate Dealer providing the lowest Bid. If two or more Reference Corporate
Dealers provide the lowest Bid, the Remarketing Dealer will sell such series
of ROARS to such of those Reference Corporate Dealers as it determines in its
sole discretion.
If the Remarketing Dealer elects to remarket a series of ROARS, the
obligation of the Remarketing Dealer to purchase such series of ROARS on the
applicable Remarketing Date is subject to certain conditions set forth in the
Remarketing Agreement (as defined herein).
If for any reason the Remarketing Dealer does not purchase all of a series
of ROARS on the applicable Remarketing Date, the Company will be required to
redeem such series of ROARS at a price equal to the principal amount thereof
plus all accrued and unpaid interest, if any, on such series of ROARS to such
Remarketing Date. See "--Mandatory Redemption."
NOTIFICATION OF INTEREST RATE TO MATURITY
If the Remarketing Dealer has previously notified the Company and the
Trustee on the relevant Notification Date of its intention to purchase a
series of ROARS on the applicable Remarketing Date, the Remarketing Dealer
will notify the Company, the Trustee and DTC by telephone, confirmed in
writing, by 4:00 p.m., New York City time, on the applicable Determination
Date of the Interest Rate to Maturity for such series of ROARS.
MANDATORY REDEMPTION
The Company will be required to redeem a series of ROARS as a whole on the
applicable Remarketing Date at a price equal to 100% of the aggregate
principal amount of such series of ROARS plus all accrued and unpaid interest,
if any, on such series of ROARS to the applicable Remarketing Date in the
event that (i) the Remarketing Dealer for any reason does not notify the
Company of the Interest Rate to Maturity by 4:00 p.m., New York City time, on
the applicable Determination Date; (ii) prior to such Remarketing Date, the
Remarketing Dealer has resigned and no successor has been appointed on or
before such Determination Date; (iii) at any time after the Remarketing Dealer
elects on the applicable Notification Date to remarket such series of ROARS,
the Remarketing Dealer elects to terminate the Remarketing Agreement in
accordance with the terms thereof; (iv) the Remarketing Dealer does not give
notice to the Company and the Trustee on such Notification Date of its
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intention to purchase such series of ROARS for remarketing on such Remarketing
Date; (v) the Remarketing Dealer for any reason does not deliver the
applicable ROARS Purchase Price to the Trustee by 2:00 p.m., New York City
time, on the Business Day immediately preceding such Remarketing Date or does
not purchase all of such series of ROARS by 2:00 p.m., New York City time, on
such Remarketing Date; or (vi) the Company for any reason fails to redeem such
series of ROARS following its election to effect such redemption as described
under "--Optional Redemption." In any such case, payment will be made by the
Company to the participant in DTC (each a "Participant") of each Beneficial
Owner of the applicable series of ROARS, by book-entry through DTC by the
close of business on the applicable Remarketing Date, against delivery through
DTC of such Beneficial Owner's ROARS. If the Company redeems a series of
ROARS, it may not subsequently offer such series for resale.
OPTIONAL REDEMPTION
Except in the limited circumstances described below, the ROARS are not
subject to redemption at the option of the Company. If the Remarketing Dealer
elects to remarket a series of ROARS, the Company will notify the Remarketing
Dealer and the Trustee, not later than 4:00 p.m., New York City time, on the
Business Day immediately preceding the applicable Determination Date, if the
Company irrevocably elects to exercise its right to redeem such series of
ROARS, in whole, on the applicable Remarketing Date. If the Company so elects
to redeem a series of ROARS, the Company will redeem such series of ROARS as a
whole on the applicable Remarketing Date at a price equal to 100% of the
aggregate principal amount of such series of ROARS plus all accrued and unpaid
interest, if any, on such series of ROARS to such Remarketing Date. In any
such case, payment will be made by the Company to the Participant of each
Beneficial Owner of the applicable series of ROARS, by book-entry through DTC
by the close of business on the applicable Remarketing Date, against delivery
through DTC of such Beneficial Owner's ROARS. If the Company redeems a series
of ROARS, it may not subsequently offer such series for resale.
SETTLEMENT
If a series of ROARS is automatically tendered, or deemed tendered, to the
Remarketing Dealer for purchase on the applicable Remarketing Date, all of
such series of ROARS will be delivered automatically to the account of the
Trustee, by book-entry through DTC pending payment of the purchase price
therefor, on such Remarketing Date. The Remarketing Dealer will, not later
than 2:00 p.m., New York City time, on the Business Day immediately preceding
the applicable Remarketing Date, pay to the Trustee the ROARS Purchase Price
for such series of ROARS. On such Remarketing Date, the Remarketing Dealer
will cause the Trustee to make payment to the Participant of each Beneficial
Owner of such series of ROARS, by book-entry through DTC by the close of
business on such Remarketing Date, against delivery through DTC of such
Beneficial Owner's ROARS, of the ROARS Purchase Price for such series of
ROARS. If the Remarketing Dealer does not purchase all of such series of ROARS
on such Remarketing Date, it will be the obligation of the Company to make or
cause to be made such payment for such series of ROARS as described under "--
Mandatory Redemption." In any case, the Company will make or cause the Trustee
to make payment of any interest due on such Remarketing Date to each
Beneficial Owner of a series of ROARS by book-entry through DTC by the close
of business on such Remarketing Date.
The transactions described above will be executed on each Remarketing Date
through DTC in accordance with the procedures of DTC, and the accounts of the
respective Participants will be debited and credited and the ROARS delivered
by book-entry as necessary to effect such transactions.
All payments of principal and interest in respect of the ROARS in book-entry
form will be made in immediately available funds. Each series of ROARS will
trade in DTC's Same-Day Funds Settlement System until the applicable Stated
Maturity Date or Remarketing Date, as the case may be, or until such series of
ROARS is issued in definitive form, and secondary market trading activity in
the ROARS will therefore be required by DTC to settle in immediately available
funds.
The tender and settlement procedures described above, including provisions
for payment to selling Beneficial Owners of tendered ROARS or for payment by
the purchasers of ROARS in the remarketing, may be
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modified to the extent required by DTC or, if the book-entry system is no
longer available for the ROARS at the time of the remarketing, to the extent
required to facilitate the tendering and remarketing of ROARS in certificated
form. In addition, the Remarketing Dealer may modify the settlement procedures
described above in order to facilitate the settlement process.
As long as DTC or its nominee holds a certificate representing any ROARS in
the book-entry system of DTC, no certificates for such ROARS will be delivered
by any selling Beneficial Owner to reflect any transfer of such ROARS effected
in the remarketing. In addition, under the terms of the ROARS and the
Remarketing Agreement, the Company has agreed that (i) it will use its best
efforts to maintain the ROARS in book-entry form with DTC or any successor
thereto and to appoint a successor depository to the extent necessary to
maintain the ROARS in book-entry form, and (ii) it will waive any
discretionary right it otherwise has under the Indenture to cause the ROARS to
be issued in certificated form.
For further information with respect to transfers and settlement through
DTC, see "--Book-Entry System."
REMARKETING DEALER
On May 19, 1998, the Company and the Remarketing Dealer entered into a
remarketing agreement (the "Remarketing Agreement"). The Remarketing Dealer
will not receive any fees or reimbursement of expenses from the Company in
connection with the remarketing, except under certain circumstances. The
aggregate price paid to the Company by the Initial Purchasers for the purchase
of the Private ROARS included an amount paid by the Remarketing Dealer for its
right to remarket the ROARS.
The Company has agreed to indemnify the Remarketing Dealer against certain
liabilities, including liabilities under the Securities Act, arising out of or
in connection with its duties under the Remarketing Agreement.
If the Remarketing Dealer elects to remarket a series of ROARS, the
obligation of the Remarketing Dealer to purchase such series of ROARS will be
subject to several conditions precedent set forth in the Remarketing
Agreement. In addition, upon the occurrence of certain events after the
Remarketing Dealer elects to remarket a series of ROARS, the Remarketing
Dealer will have the right to terminate the Remarketing Agreement or terminate
its obligation to purchase such series of ROARS, or, until 2:00 p.m., New York
City time, on the Business Day immediately preceding the applicable
Remarketing Date, to redetermine the applicable Interest Rate to Maturity.
No Beneficial Owner of any ROARS will have any rights or claims under the
Remarketing Agreement or against the Company or the Remarketing Dealer as a
result of the Remarketing Dealer not purchasing such ROARS.
The Remarketing Agreement provides that the Remarketing Dealer may resign at
any time as Remarketing Dealer, such resignation to be effective ten Business
Days after the delivery to the Company and the Trustee of notice of such
resignation. In such case, the Company has no obligation to appoint a
successor Remarketing Dealer. The Remarketing Dealer, in its individual or any
other capacity, may buy, sell, hold, and deal in any of the ROARS. The
Remarketing Dealer may exercise any vote or join in any action that any
Beneficial Owner of ROARS may be entitled to exercise or take as if it did not
act in any capacity under the Remarketing Agreement. The Remarketing Dealer,
in its individual capacity, either as principal or agent, may engage in or
have an interest in any financial or other transaction with the Company as
freely as if it did not act in any capacity under the Remarketing Agreement.
As long as the Remarketing Agreement is in effect, the Company will not
acquire ROARS prior to the applicable remarketing thereof by the Remarketing
Dealer, other than in connection with the fulfillment of its obligation to
redeem a series of ROARS or the exercise of its right to redeem a series of
ROARS on a Remarketing Date or in the Exchange Offers. After the applicable
Remarketing Date or termination of the
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Remarketing Agreement prior thereto, the Company may at any time purchase any
ROARS of the applicable series at any price in the open market or otherwise.
The ROARS so purchased by the Company may, at its discretion, be held, resold
or surrendered to the Trustee for cancellation.
PAYMENT AND PAYMENT AGENTS
Principal of and interest on the Exchange ROARS will be payable, subject to
any applicable laws and regulations, at the offices of such paying agents as
the Company may designate from time to time pursuant to the Indenture ("Paying
Agents"), except that, at the option of the Company, payment of any interest
may be made by check mailed to the address of the person entitled thereto as
such address appears in the Security Register.
The Company has designated the Corporate Trust Office of the Trustee in New
York, New York as the Paying Agent and as the place where the Exchange ROARS
may be presented for payment. The Company may at any time designate one or
more additional Paying Agents or rescind the designation of any Paying Agent
or approve a change in the office through which any Paying Agent acts, except
that the Company will be required to maintain a Paying Agent in each Place of
Payment.
Notwithstanding the foregoing, payment of principal and interest on Book-
Entry Securities will be made in accordance with the arrangements from time to
time in place between the Paying Agent and DTC or its nominee as holder. See
"--Book-Entry System."
Any payment due on any day that is not a Business Day need not be made on
such day, but may be made on the next succeeding Business Day, with the same
force and effect as if made on the due date, and no interest will be payable
on the date of payment for the period from and after such due date.
BOOK-ENTRY SYSTEM
The Exchange ROARS will be issued only in fully registered form without
coupons and will be a "Registered Security" under the Indenture. The Exchange
ROARS will be issued in fully registered book-entry form, will be a "Book-
Entry Security" under the Indenture and will be represented by one or more
fully registered Global Securities deposited with or on behalf of DTC and
registered in the name of DTC or its nominee. Interests in the Global
Securities will be shown on, and transfers thereof will be effected only
through, records maintained by DTC (with respect to its Participants'
interests) and the Participants (with respect to Beneficial Owners). So long
as DTC or its nominee is the registered owner of a Global Security, such
registered owner will be considered the sole owner or holder of the Exchange
ROARS represented by such Global Security for all purposes under the
Indenture. Except as otherwise provided below, Beneficial Owners will not be
entitled to have any of the individual Exchange ROARS represented by a Global
Security registered in their names, will not receive or be entitled to receive
physical delivery of any such Exchange ROARS in definitive form, and will not
be considered the owners or holders thereof under the Indenture.
DTC has advised the Company as follows: DTC is a limited-purpose trust
company organized under the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the Uniform
Commercial Code as in effect in the State of New York, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act; DTC
holds securities deposited by Participants with DTC, and facilities the
clearance and settlement of securities transactions among Participants in such
securities through electronic book-entry changes in Participants' accounts,
thereby eliminating the need for physical movement of security certificates;
Participants include securities brokers and dealers (including one or more of
the Initial Purchasers), banks, trust companies, clearing corporations, and
certain other organizations, some of which (and/or their representatives) have
ownership interests in DTC; indirect access to DTC's book-entry system is also
available to others, such as banks, brokers, dealers and trust companies that
clear through or maintain a
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custodial relationship with a Participant, either directly or indirectly; and
the rules applicable to DTC and Participants are on file with the Commission.
The Indenture provides that if at any time the depository for a series of
ROARS is unwilling, unable or ineligible to continue to serve as such, the
Company will appoint a successor depository with respect to such series of
ROARS. If a successor depository is not appointed by the Company by the
effective date of the resignation of such depository, the Company will issue
individual certificated ROARS in exchange for the Global Security or Global
Securities representing such ROARS. In addition, the Indenture provides that
the Company may not at any time determine not to have any such ROARS
represented by one or more Global Securities. Under the terms of the Exchange
ROARS and the Remarketing Agreement, the Company has agreed that it will use
its best efforts to maintain the Exchange ROARS in book-entry form with DTC or
any successor thereto and to appoint a successor depository to the extent
necessary to maintain the Exchange ROARS in book-entry form.
Payments of principal of and interest on a series of ROARS represented by a
Global Security registered in the name of DTC or its nominee will be made to
DTC or its nominee, as the case may be, as the registered owner of the Global
Security representing such series of ROARS. None of the Company, the Trustee,
any Paying Agent or the Security Registrar for such series of ROARS will have
any responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the Global
Security for such series of ROARS or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests. The Exchange
ROARS may be transferred or exchanged only though a Participant in DTC.
MATERIAL COVENANTS
The following is a summary of the material covenants contained in the
Indenture:
Limitation on Liens. The Company will, and will cause each of its
Subsidiaries to, promptly secure (on the basis set forth below) the Company's
obligations under the ROARS in the event that the Company or such Subsidiary
creates, incurs or suffers to exist a Lien of any nature whatsoever, other
than a Permitted Lien, on any property of the Company or any Subsidiary of the
Company (including Capital Stock of any such Subsidiary), whether owned at the
Closing Date or thereafter acquired, which secures Indebtedness that ranks
pari passu with or is subordinated to the ROARS. In the event such Lien
secures Indebtedness that ranks pari passu with the ROARS, the ROARS will be
secured on an equal and ratable basis with the obligation so secured until
such time as such obligation is no longer secured by such Lien. In the event
such Lien secures Indebtedness that ranks subordinate to the ROARS, the ROARS
will be secured on a basis senior to the obligation so secured to the same
extent as the ROARS rank senior in right of payment to such subordinated
Indebtedness, until such time as such obligation is no longer secured by such
Lien.
Limitation on Affiliate Transactions. The Company will not, and will not
permit any Subsidiary of the Company to, enter into or permit to exist any
transaction or series of related transactions (including the purchase, sale,
lease or exchange of any property, employee compensation arrangements or the
rendering of any service) with any Affiliate of the Company (an "Affiliate
Transaction") unless the terms thereof (i) are materially no less favorable to
the Company or such Subsidiary than those that could be obtained at the time
of such transaction in arm's-length dealings with a Person who is not such an
Affiliate, (ii) if such Affiliate Transaction (or series of related Affiliate
Transactions) involve aggregate payments in an amount in excess of $10,000,000
in any one year, (x) comply with the terms described in clause (i) and (y)
have been approved by a majority of the disinterested members of the Board of
Directors and (iii) if such Affiliate Transaction (or series of related
Affiliate Transactions) involve aggregate payments in an amount in excess of
$20,000,000 in any one year, (x) comply with the terms described in clause
(ii) and (y) have been determined by a nationally recognized investment
banking, accounting or qualified appraisal firm to be fair, from a financial
standpoint, to the Company and its Subsidiaries.
The provisions described in the immediately preceding paragraph will not
prohibit (i) any issuance of securities or any payments, awards or grants in
cash, securities or otherwise pursuant to, or the funding of,
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employment arrangements, stock option and stock ownership plans and other
stock-based employee compensation in the ordinary course of business and
approved by the Board of Directors; (ii) the grant of stock options or similar
rights to employees, officers and directors of the Company or any Subsidiary
of the Company in the ordinary course of business and pursuant to plans
approved by the Board of Directors; (iii) loans or advances to employees,
officers or directors in the ordinary course of business of the Company and
its Subsidiaries; (iv) fees, compensation or employee benefit arrangements
paid to and indemnity provided for the benefit of directors, officers or
employees of the Company or any Subsidiary of the Company in the ordinary
course of business; (v) any Affiliate Transaction between the Company and a
Subsidiary or Joint Venture of the Company or between any such Subsidiaries or
Joint Ventures (so long as the other stockholders of any such participating
Subsidiaries or Joint Ventures which are not wholly owned Subsidiaries of the
Company are not themselves Affiliates of the Company); and (vi) any
transactions effected pursuant to agreements in effect on the Closing Date;
provided, that such transactions are effected pursuant to the terms of such
agreements as in effect on the Closing Date.
Merger, Consolidation and Sale of Assets. The Company will not, in a single
transaction or series of related transactions, consolidate or merge with or
into any Person, or sell, assign, transfer, lease, convey or otherwise dispose
of (or cause or permit any Subsidiary of the Company to sell, assign,
transfer, lease, convey or otherwise dispose of) all or substantially all of
the Company's assets (determined on a consolidated basis for the Company and
the Company's Subsidiaries) to any Person, unless: (i) either (a) the Company
is the surviving or continuing corporation or (b) the Person (if other than
the Company) formed by such consolidation or into which the Company is merged
or the Person which acquires by sale, assignment, transfer, lease, conveyance
or other disposition all or substantially all of the Company's assets (the
"Surviving Entity") (x) is a corporation organized and validly existing under
the laws of the United States or any state thereof or the District of Columbia
and (y) expressly assumes, by supplemental indenture (in form and substance
satisfactory to the Trustee) executed and delivered to the Trustee, the due
and punctual payment of the principal of and interest on all of the ROARS and
the performance of every covenant of the ROARS, the Indenture, the Remarketing
Agreement and the Registration Rights Agreement on the part of the Company to
be performed or observed; (ii) immediately after giving effect to such
transaction and the assumption described in clause (i)(b)(y) above, the
Company or such Surviving Entity, as the case may be, has a Consolidated Net
Worth equal to at least 90% of the Consolidated Net Worth of the Company
immediately prior to such transaction; (iii) immediately before and
immediately after giving effect to such transaction and the assumption
described in clause (i)(b)(y) above, no Default or Event of Default has
occurred and is continuing; and (iv) the Company or the Surviving Entity has
delivered to the Trustee an officers' certificate and an opinion of counsel,
each stating that such consolidation, merger, sale, assignment, transfer,
lease, conveyance or other disposition and, if a supplemental indenture is
required in connection with such transaction, such supplemental indenture
comply with the applicable provisions of the Indenture and that all conditions
precedent in the Indenture relating to such transaction have been satisfied.
For purposes of the foregoing description, the transfer (by lease,
assignment, sale or otherwise in a single transaction or series of
transactions) of all or substantially all of the assets of one or more
Subsidiaries of the Company, the Capital Stock of which constitutes all or
substantially all of the assets of the Company, will be deemed to be the
transfer of all or substantially all of the assets of the Company.
The Indenture provides that, upon any consolidation, combination or merger
or any transfer of all or substantially all of the assets of the Company in
accordance with the covenant described above, in which the Company is not the
continuing corporation, the Surviving Entity formed by such consolidation or
into which the Company is merged or to which such sale, assignment, transfer,
lease, conveyance or other disposition is made will succeed to, and be
substituted for, and may exercise every right and power of, the Company under
the Indenture and the ROARS with the same effect as if such Surviving Entity
had been named as such.
This covenant would not apply to any recapitalization transaction, a change
of control of the Company or a highly leveraged transaction unless such
transaction or change of control were structured to include a merger or
consolidation or sale, assignment, transfer, lease, conveyance or other
disposition of the Company's assets substantially as an entirety. There are no
covenants or other provisions in the Indenture providing for a "put" or
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increased interest or that would otherwise afford holders of ROARS protection
in the event of a recapitalization transaction, a change of control of the
Company or a highly leveraged transaction.
EVENTS OF DEFAULT
The following are Events of Default under the Indenture with respect to the
ROARS of either series: (i) failure to pay interest payable on any ROARS of
such series when due, continued for 30 days; (ii) failure to pay principal on
any ROARS of such series when due; (iii) failure to perform any other covenant
of the Company in the Indenture, continued for 60 days, after written notice
as provided in the Indenture; (iv) (x) the Company or any Subsidiary of the
Company fails to pay any of its Indebtedness under one or more agreements or
instruments evidencing an aggregate principal amount of Indebtedness equal to
at least $25,000,000 (or its equivalent in any other currency or currencies)
as and when that Indebtedness becomes due and payable, after the expiration of
any applicable grace period, or (y) any other event occurs which, under one or
more agreements or instruments evidencing Indebtedness of the Company or any
Subsidiary of the Company, obligates the Company or such Subsidiary to pay an
aggregate principal amount of Indebtedness equal to at least $25,000,000 (or
its equivalent in any other currency or currencies) prior to the date on which
it otherwise would have become due and payable; and (v) certain events of
voluntary or involuntary bankruptcy, insolvency or reorganization with respect
to the Company. If an Event of Default (other than an Event of Default
described in clause (v) above) occurs and is continuing, either the Trustee or
the holders of at least 25% in principal amount of the outstanding ROARS of
such series by notice as provided in the Indenture may declare the principal
amount of all of the ROARS of such series to be due and payable immediately.
However, at any time after a declaration of acceleration with respect to the
ROARS of either series has been made, but before a judgment or decree based on
such acceleration has been obtained, the holders of a majority in principal
amount of the outstanding ROARS of such series may, under certain
circumstances, rescind and annul such acceleration. If an Event of Default
described in clause (v) above occurs, all unpaid principal of and accrued
interest on the outstanding ROARS will ipso facto become and be immediately
due and payable without any declaration or other act on the part of the
Trustee or any holder. For information as to waiver of defaults, see "--
Modification and Waiver."
The Indenture provides that, subject to the duty of the Trustee during an
Event of Default to act with the required standard of care, the Trustee will
be under no obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the holders, unless such
holders shall have offered to the Trustee reasonable security or indemnity.
Subject to certain provisions, including those requiring security or
indemnification of the Trustee, the holders of a majority in principal amount
of the outstanding ROARS of either series will have the right 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,
with respect to the ROARS of such series.
The Company will be required to furnish to the Trustee annually a statement
as to the performance by the Company of its obligations under the Indenture
and as to any default in such performance.
DEFEASANCE AND COVENANT DEFEASANCE
The Indenture provides that the Company, at its option after the Remarketing
Date for a series of ROARS, (a) will be deemed to have been discharged from
any and all obligations in respect of the ROARS of such series (except for
certain obligations to register the transfer of or exchange ROARS, to replace
stolen, lost, destroyed or mutilated ROARS upon satisfaction of certain
requirements (including, without limitation, providing such security or
indemnity as the Trustee or the Company may require), to maintain paying
agencies and to hold certain moneys in trust for payment); or (b) need not
comply with certain restrictive covenants of the Indenture (including those
described under "--Material Covenants"), in each case, if the Company
deposits, in trust with the Trustee, money in U.S. dollars or U.S. Government
Obligations that, through the scheduled payment of principal and interest in
respect thereof in accordance with their terms, will provide money in an
amount or a combination thereof, in each case sufficient to pay all the
principal of and interest on the ROARS of such series on the dates such
payments are due in accordance with the terms of the Indenture and the ROARS
of such series.
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In the case of a discharge as described in clause (a) above, the Company is
required to deliver to the Trustee an opinion of counsel to the effect that
(i) the holders of the ROARS of the applicable series will not recognize
income, gain or loss for U.S. federal income tax purposes as a result of the
exercise of the option set forth in clause (a) above and will be subject to
U.S. federal income tax on the same amounts and in the same manner and at the
same times as would have been the case if such option had not been exercised;
and (ii) either (A) the Company has received from, or there has been published
by, the U.S. Internal Revenue Service ("IRS") a ruling to that effect, or (B)
since the date of the Indenture, there has been a change in the applicable
U.S. federal income tax law. In the case of an election as described in clause
(b) above, the Company is required to deliver to the Trustee an opinion of
counsel to the effect that the holders of the ROARS of the applicable series
will not recognize income, gain or loss for U.S. federal income tax purposes
as a result of the exercise of the option set forth in clause (b) above.
SATISFACTION AND DISCHARGE
The Indenture will be discharged and will cease to be of further effect
(except as to surviving rights of registration of transfer or exchange of
ROARS as expressly provided for in the Indenture) as to all outstanding ROARS
of either series when (i) either (a) all the ROARS of such series theretofore
authenticated and delivered (except lost, stolen or destroyed ROARS which have
been replaced or paid and ROARS for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company and
thereafter been repaid to the Company or discharged from such trust) have been
delivered to the Trustee for cancellation, or (b) all ROARS of such series not
theretofore delivered to the Trustee for cancellation have become due and
payable or will become due and payable at their stated maturity within one
year and the Company has irrevocably deposited or caused to be deposited with
the Trustee funds in trust in an amount sufficient to pay and discharge the
entire Indebtedness on such ROARS not theretofore delivered to the Trustee for
cancellation, including the principal of and interest on such ROARS to the
date of deposit or to the maturity thereof; (ii) the Company has paid all
other sums payable under the Indenture by the Company in respect of the
outstanding ROARS of such series; and (iii) the Company has delivered to the
Trustee an officers' certificate and an opinion of counsel satisfactory to the
Trustee, each stating that all conditions precedent under the Indenture
relating to the satisfaction and discharge of the Indenture in respect of the
ROARS of such series have been complied with.
MODIFICATION AND WAIVER
From time to time the Company and the Trustee may, without the consent of
the holders, amend, waive or supplement the Indenture or the ROARS for certain
specified purposes, including, among other things, curing ambiguities, defects
or inconsistencies, or making any other provisions with respect to matters or
questions arising under the Indenture, or making any change that does not
adversely affect the interests of any holder in any material respect. Other
modifications and amendments of the Indenture may be made by the Company and
the Trustee with the consent of the holders of not less than a majority in
principal amount of the outstanding ROARS of each series affected thereby;
provided, that no such modification or amendment may, without the consent of
the holder of each outstanding ROARS affected thereby: (a) change the stated
maturity of the principal of, or any installment of principal of, or interest
on, any ROARS in a manner other than as contemplated by the Remarketing
Agreement; (b) reduce the principal amount of or the rate of interest on any
ROARS except as contemplated by the Remarketing Agreement or the Indenture;
(c) change the place or currency of payment of principal of or interest on any
ROARS; (d) impair the right to institute suit for the enforcement of any
payment on or with respect to any ROARS; (e) reduce the percentage in
principal amount of outstanding ROARS, the consent of the holders of which is
required for modification or amendment of the Indenture or for waiver of
compliance with certain provisions of the Indenture or for waiver of certain
defaults; or (f) change any obligation of the Company to maintain an office or
agency in the places and for the purposes specified in the Indenture.
The holders of not less than a majority in principal amount of the
outstanding ROARS of either series may on behalf of the holders of all ROARS
of such series waive compliance by the Company with certain covenants of the
Indenture. The holders of not less than a majority in principal amount of the
outstanding ROARS of either
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series may on behalf of the holders of all ROARS of such series waive any past
default under the Indenture, except a default in the payment of the principal
of or interest on any ROARS or in respect of a provision which under the
Indenture cannot be modified or amended without the consent of the holder of
each outstanding ROARS affected.
GOVERNING LAW AND SERVICE OF PROCESS
The Indenture and the ROARS will be governed by the laws of the State of New
York. The Company will appoint The Bank of New York as its authorized agent
upon which process may be served in any action or proceeding arising out of or
based upon the Indenture or the ROARS which may be instituted in any Federal
or state court having subject matter jurisdiction in the Borough of Manhattan,
The City of New York, New York and has irrevocably submitted to the
jurisdiction of such courts in any such action or proceeding.
CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the Indenture. Reference
is made to the Indenture for the definitions of other capitalized terms used
herein but not defined herein.
"Affiliate" of any specified Person means any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Attributable Debt" in respect of a Sale/Leaseback Transaction means, at the
time of determination, the present value (discounted at the interest rate
implicit in such transaction in accordance with GAAP) of the total obligations
of the lessee for rental payments during the remaining term of the lease
included in such Sale/Leaseback Transaction (including any period for which
such lease has been extended).
"Board of Directors" means the Board of Directors of the Company or any
committee thereof duly authorized to act on behalf of such Board with respect
to the Indenture and the Securities.
"Capital Lease Obligation" means an obligation that is required to be
classified and accounted for as a capital lease for financial reporting
purposes in accordance with GAAP, and the amount of Indebtedness represented
by such obligation shall be the capitalized amount of such obligation
determined in accordance with GAAP.
"Capital Stock" of any Person means any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any
Preferred Stock, but excluding any debt securities convertible into such
equity.
"Consolidated Net Worth" of any Person means the stockholders' equity of
such Person, determined on a consolidated basis in accordance with GAAP, less
(without duplication) amounts attributable to Disqualified Capital Stock of
such Person.
"Consolidated Tangible Assets" means Total Assets less the sum of (a) the
total book value of all assets of the Company and its Subsidiaries properly
classified as intangible assets under GAAP, including such items as goodwill,
the purchase price of acquired assets in excess of the fair market value
thereof, trademarks, trade names, service marks, customer lists, brand names,
copyrights, patents and licenses, and rights with respect to the foregoing,
and (b) all amounts representing any write-up in the book value of any assets
of the Company or its Subsidiaries resulting from a revaluation thereof
subsequent to the date of the Company's then most recent audited financial
statements.
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"Convertible Notes" means the 6% Convertible Subordinated Notes due 2005 of
the Company and the 4 1/2% Convertible Subordinated Notes due 2001 of the
Company.
"Currency Agreement" means, with respect to any Person, any foreign exchange
contract, currency swap agreement or other similar agreement to which such
Person is a party or of which such Person is a beneficiary.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Disqualified Capital Stock" means, with respect to any Person, Capital
Stock of such Person that, by its terms or by the terms of any security into
which it is convertible or exchangeable or for which it is exercisable, is, or
upon the happening of an event or the passage of time or both would be,
required to be redeemed or repurchased (including at the option of the holder
thereof) by such Person or any of its Subsidiaries, in whole or in part, on or
prior to the Stated Maturity Date of the applicable series of ROARS.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, as are in effect from time to time.
"Hedging Obligations" of any Person means the obligations of such Person
pursuant to any Interest Rate Agreement or Currency Agreement.
"Incur" means issue, assume, guarantee, incur or otherwise become liable
for; provided, however, that any Indebtedness or Capital Stock of a Person
existing at the time such Person becomes a Subsidiary of another Person
(whether by merger, consolidation, acquisition or otherwise) will be deemed to
be Incurred by such Person at the time it becomes such a Subsidiary; provided,
further, however, that in the case of a discount security, neither the accrual
of interest nor the accretion of original issue discount will be considered an
Incurrence of Indebtedness, but the entire face amount of such security will
be deemed Incurred upon the issuance of such security. The term "Incurrence"
when used as a noun will have a correlative meaning.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication), (i) the principal of and premium (if any)
in respect of (A) indebtedness of such Person for money borrowed, and (B)
indebtedness evidenced by notes, debentures, bonds or other similar
instruments for the payment of which such Person is responsible or liable;
(ii) all Capital Lease Obligations of such Person and all Attributable Debt in
respect of Sale/Leaseback Transactions entered into by such Person; (iii) the
amount of all obligations of such Person with respect to the redemption,
repayment or other repurchase of any Disqualified Capital Stock or, with
respect to any Subsidiary of such Person, any Preferred Stock (but excluding,
in each case, any accrued dividends); and (iv) all obligations of the types
referred to in clauses (i) and (iii) of other Persons and all dividends of
other Persons for the payment of which, in either case, such Person is
responsible or liable, directly or indirectly, as obligor, guarantor or
otherwise. The amount of Indebtedness of any Person at any date will be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations as described above at
such date; provided, however, that the amount outstanding at any time of any
Indebtedness issued with original issue discount will be deemed to be the face
amount of such Indebtedness less the remaining unamortized portion of the
original issue discount of such Indebtedness at such time as determined in
conformity with GAAP.
"Interest Rate Agreement" means any interest rate swap agreement, interest
rate cap agreement or other financial agreement or arrangement designed to
protect the Company or any Subsidiary of the Company against fluctuations in
interest rates.
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"Joint Venture" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; provided,
however, that, as to any such arrangement in corporate form, such corporation
will not, as to any Person of which such corporation is a Subsidiary, be
considered to be a Joint Venture to which such Person is a party.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including any conditional sale or other title retention
agreement or lease in the nature thereof).
"Permitted Liens" means any (i) Liens arising by reason of (x) operation of
law in favor of carriers, warehousemen, landlords, mechanics, materialmen,
laborers, employees or suppliers in existence for less than 120 days or for
more than 120 days which are not yet delinquent or are being contested in good
faith by negotiations or by appropriate proceedings which suspend the
collection thereof or (y) any interest or title of a lessor under any lease;
(ii) Liens in favor of the Company; (iii) Liens on property of a Person
existing at the time such Person is acquired by, merged into or consolidated
with the Company or any Subsidiary of the Company; provided, that such Liens
were not incurred in contemplation of such acquisition, merger or
consolidation and do not extend to any assets other than those of the Person
acquired by, merged into or consolidated with the Company or any such
Subsidiary; (iv) Liens on property existing at the time of acquisition thereof
by the Company or any Subsidiary of the Company; provided, that such Liens
were not incurred in contemplation of such acquisition; (v) Liens existing on
the date of the Indenture; (vi) Liens to secure taxes, assessments and other
government charges or claims for labor, material or supplies (x) in respect of
obligations which are not overdue or (y) which are currently being contested
in good faith by appropriate proceedings if the Company has set aside on its
books adequate reserves with respect thereto, if required, and if no
proceedings have been commenced to foreclose any such Lien; (vii) deposits or
pledges made in connection with, or to secure payment of, workers'
compensation, unemployment insurance, old age pensions or other social
security obligations; (viii) Liens in respect of judgments or awards which
have been in force for less than the applicable period for taking an appeal,
so long as execution is not levied thereunder, or in respect of which the
Company or one of its Subsidiaries, as the case may be, at the time in good
faith is prosecuting an appeal or proceedings for review and in respect of
which the Company and its Subsidiaries have maintained reserves in an amount
satisfactory to the Company; (ix) encumbrances consisting of easements, rights
of way, zoning restrictions, restrictions on the use of real property, defects
and irregularities in the title thereto, landlord's or lessor's Liens under
leases to which the Company or any Subsidiary of the Company is a party, and
other minor liens or encumbrances none of which in the opinion of the Company
or such Subsidiary interferes materially with the use of the property affected
in the ordinary conduct of the business of the Company or such Subsidiary and
which encumbrances do not individually or in the aggregate have a material
adverse effect on the business of the Company and its Subsidiaries on a
consolidated basis; (x) Liens securing Indebtedness in respect of performance
bonds, bankers' acceptances, and surety or appeal bonds entered into by the
Company or its Subsidiaries in the ordinary course of their business; (xi)
Liens securing Hedging Obligations consisting of Interest Rate Agreements and
Currency Agreements entered into in the ordinary course of business and not
for the purpose of speculation; (xii) Liens securing Indebtedness arising from
the honoring by a bank or other financial institution of a check, draft or
similar instrument inadvertently (except in the case of daylight overdrafts)
drawn against insufficient funds in the ordinary course of business; provided,
that such Indebtedness is extinguished within five business days of
Incurrence; (xiii) Liens securing Indebtedness of the Company and its
Subsidiaries arising from agreements providing for indemnification, adjustment
of purchase price or similar obligations, in any case Incurred in connection
with the disposition of any assets of the Company or any such Subsidiary
(other than guarantees of Indebtedness Incurred by any Person acquiring all or
any portion of such assets for the purpose of financing such acquisition), in
a principal amount not to exceed the gross proceeds actually received by the
Company or any such Subsidiary in connection with such disposition; and (xiv)
Liens securing Indebtedness in an aggregate principal amount together with all
Liens securing other Indebtedness of the Company and its Subsidiaries
outstanding on the date of such Incurrence (other than Liens described in
clauses (i) through (xiii) above) not exceeding 15% of Consolidated Tangible
Assets.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity.
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"Preferred Stock," as applied to the Capital Stock of any corporation or the
equity securities of any trust, means Capital Stock of any class or classes
(however designated) which is preferred as to the payment of dividends or
distributions or as to the distribution of assets upon any voluntary or
involuntary liquidation or dissolution of such corporation or trust over
shares of Capital Stock of any other class of such corporation or trust.
"Principal" of any Indebtedness (including a ROARS) means the principal of
such Indebtedness plus the premium, if any, payable on such Indebtedness which
is due or overdue or is to become due at the relevant time.
"Sale/Leaseback Transaction" means an arrangement relating to property now
owned or hereafter acquired whereby the Company or one of its Subsidiaries
transfers such property to a Person and the Company or such Subsidiary leases
it from such Person.
"Stated Maturity" means, with respect to any instrument, the date specified
in such instrument as the fixed date on which the final payment of principal
of such instrument is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for the
repurchase, redemption or repayment of such instrument at the option of the
holder thereof upon the happening of any contingency unless such contingency
has occurred).
"Subsidiary" means, in respect of any Person, any corporation, association,
partnership or other business entity of which more than 50% of the total
voting power of shares of Capital Stock or other interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by (i)
such Person, (ii) such Person and one or more Subsidiaries of such Person or
(iii) one or more Subsidiaries of such Person.
"Total Assets" means the total consolidated assets of the Company and its
Subsidiaries, as shown on the most recent balance sheet (excluding the
footnotes thereto) of the Company.
REGISTRATION RIGHTS
Pursuant to the Registration Rights Agreement, the Company has agreed, for
the benefit of the Holders of the Private ROARS, at the Company's cost, to (i)
use its reasonable best efforts to cause the Registration Statement to be
declared effective under the Securities Act within 180 days after the Closing
Date (the "Effective Date"); and (ii) commence the Exchange Offers and use its
reasonable best efforts to issue the Exchange ROARS on or prior to the date
(the "Consummation Date") that is 35 days immediately following the date that
the Registration Statement shall have been declared effective. Upon the
Registration Statement being declared effective, the Company will offer the
Exchange ROARS in exchange for surrender of then-outstanding Private ROARS.
The Company will keep the Exchange Offers open for not less than 20 business
days (or longer if required by applicable law) after the date on which notice
of the Exchange Offers is mailed to the Holders. For each Private ROARS
accepted pursuant to an Exchange Offer, the Holder of such Private ROARS will
receive an Exchange ROARS having a principal amount equal to that of the
surrendered Private ROARS. Interest on each Exchange ROARS will accrue from
the last interest payment date to which interest was paid on the Private ROARS
surrendered in exchange therefor or, if no interest has been paid on such
Private ROARS, from May 19, 1998.
Under existing interpretations of the Staff, the Exchange ROARS would in
general be freely tradable after the consummation of the Exchange Offers
without further registration under the Securities Act. However, any Holder of
Private ROARS who is an Affiliate of the Company or who intends to participate
in an Exchange Offer for the purpose of distributing Exchange ROARS (i) will
not be able to rely on those interpretations of the Staff; (ii) will not be
entitled to tender its Private ROARS in the Exchange Offers; and (iii) must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any sale or transfer of those Private ROARS
unless such sale or transfer is made pursuant to an exemption from such
requirements.
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<PAGE>
Each Holder which wishes to exchange its Private ROARS for Exchange ROARS
pursuant to the Exchange Offers will be required to represent that (i) it is
not an Affiliate of the Company, (ii) it is not a broker-dealer tendering
Private ROARS acquired directly from the Company, (iii) the Exchange ROARS to
be received by it will be acquired in the ordinary course of its business, and
(iv) it has no arrangement with any person to participate in a distribution of
Exchange ROARS. In addition, in connection with any resales of Exchange ROARS,
any broker-dealer (a "Participating Broker-Dealer") who acquired Private ROARS
for its own account as a result of market-making or other trading activities
must deliver a prospectus meeting the requirements of the Securities Act. The
Commission has taken the position that Participating Broker-Dealers may
fulfill their prospectus delivery requirements with respect to Exchange ROARS
(other than resale of an unsold allotment from the original sale of the
Private ROARS) with this Prospectus. Under the Registration Rights Agreement,
the Company is required to allow Participating Broker-Dealers and other
persons, if any, subject to similar prospectus delivery requirements, to use
this Prospectus in connection with the resale of Exchange ROARS for a period
of 60 days after the Expiration Date.
In the event that (x) the Company reasonably determines that changes in law
or the applicable interpretations of the Staff do not permit it to effect the
Exchange Offers; or (y) the Exchange Offers are not consummated within 215
calendar days after the Closing Date; or (z) upon the request of any Initial
Purchaser with respect to any Private ROARS held by it, if such Initial
Purchaser is not permitted pursuant to applicable law or applicable
interpretations of the Staff to participate in the Exchange Offers and thereby
receive Exchange ROARS, the Company will promptly notify the relevant Holders
of the Private ROARS and will, at its cost, (a) cause to be filed with the
Commission a registration statement (a "Shelf Registration Statement")
relating to those Private ROARS covering resales of those Private ROARS; (b)
use its reasonable best efforts to cause the Shelf Registration Statement to
be declared effective under the Securities Act as soon as practicable; and (c)
use its reasonable best efforts to keep the Shelf Registration Statement
effective until two years after the Closing Date or until all Private ROARS
eligible to be sold thereunder have been so sold or cease to be outstanding.
The Company will provide to each relevant Holder copies of the prospectus
which is a part of the Shelf Registration Statement, notify each such Holder
when the Shelf Registration Statement has become effective and take certain
other actions as required to permit unrestricted resales of the relevant
Private ROARS. A Holder that sells Private ROARS pursuant to the Shelf
Registration Statement generally will be required to be named as a selling
securityholder in the related prospectus and to deliver a prospectus to
purchasers, will be subject to certain of the civil liability provisions under
the Securities Act in connection with such sales, and will be bound by the
provisions of the Registration Rights Agreement which are applicable to such a
Holder (including certain indemnification obligations). In addition, such a
Holder of Private ROARS will be required to deliver information to be used in
connection with the Shelf Registration Statement in order to have such
Holder's Private ROARS included in the Shelf Registration Statement and to
benefit from the provisions described in the following paragraph.
In the event that, with respect to either series of Private ROARS, either
(i) the Registration Statement is not declared effective by the Commission by
the Effective Date or the Exchange Offer for such series is not consummated on
or prior to the Consummation Date (unless changes in law or the applicable
interpretations of the Staff do not permit the Company to effect the Exchange
Offers, in which case the provisions described in clause (ii) shall apply); or
(ii) the Shelf Registration Statement with respect to the Private ROARS of
such series that is required to be filed as described in clause (x), (y) or
(z) of the preceding paragraph is not declared effective (or shall thereafter
cease to be effective, subject to certain exceptions, prior to the earlier of
the second anniversary of the Closing Date and the date on which all relevant
Private ROARS have been sold thereunder) on or prior to the later of the 215th
calendar day after the Closing Date and the 60th calendar day after the
publication of the change in law or interpretation, the interest rate accruing
on the Private ROARS of the series affected thereby will be increased by 0.50%
per annum for the first 90 days following the Effective Date or the
Consummation Date, as applicable, in the case of the provisions described in
clause (i) above, or following such 215th or 60th calendar day, as applicable,
in the case of the provisions described in clause (ii) above, and will be
increased by an additional 0.50% per annum after the end of such period,
except under the circumstances described in the succeeding sentence
("Liquidated Damages"). Upon (x) the declaration of the effectiveness of
38
<PAGE>
the Registration Statement after the Effective Date or the consummation of the
applicable Exchange Offer after the Consummation Date, as applicable; or (y)
the effectiveness of the Shelf Registration Statement after the 215th or 60th
calendar day, as applicable (or if the Shelf Registration Statement ceased to
be effective as described above, after the Shelf Registration Statement again
becomes effective subject to certain specified exceptions), any such increase
in the interest rate will cease to be effective. In the case of either series
of Private ROARS, the aggregate amount of Liquidated Damages pursuant to the
provisions described above will in no event exceed 1.00% per annum.
If the Remarketing Dealer purchases Exchange ROARS on the applicable
Remarketing Date and subsequently offers such Exchange ROARS for resale, the
resale of such Exchange ROARS may have to be registered with the Commission
under the Securities Act. If the resale of such Exchange ROARS has to be
registered, the Company has agreed to pay the expenses incident to such a
registration.
This summary of certain provisions of the Registration Rights Agreement does
not purport to be complete and such summary is subject to the detailed
provisions of the Registration Rights Agreement to which reference is hereby
made for a full description of such provisions. A copy of the Registration
Rights Agreement is filed as an exhibit to the Registration Statement of which
this Prospectus constitutes a part. See "Available Information."
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a general discussion of the material potential United
States Federal income tax consequences associated with the exchange of Private
ROARS for Exchange ROARS and the acquisition and disposition of Exchange ROARS
by a holder who holds Exchange ROARS as "capital assets" (generally, property
held for investment). This discussion is based upon the United States Federal
income tax laws, regulations, rulings and decisions now in effect, which are
subject to change, possibly retroactively. This discussion does not cover all
aspects of Federal income taxation that may be relevant to holders, in light
of their specific circumstances, particularly holders subject to special tax
treatment (such as insurance companies, financial institutions, tax exempt
organizations or foreign persons, except to the extent described below).
Prospective holders of Exchange ROARS are urged to consult their tax advisors
regarding the United States Federal income tax consequences of acquiring,
holding and disposing of Exchange ROARS, as well as any tax consequences that
may arise under the laws of any foreign, state, local or other taxing
jurisdiction.
For purposes of this discussion, a "U.S. holder" means a holder of Exchange
ROARS that is a citizen or resident of the United States, a corporation,
partnership or other entity created or organized in the United States or under
the laws of the United States or of any political subdivision thereof, an
estate whose income is includible in gross income for United States Federal
income tax purposes regardless of its source, or a trust whose administration
is subject to the primary supervision of a United States court and which has
one or more United States fiduciaries who have the authority to control all
substantial decisions of the trust. A "Non-U.S. holder" means a beneficial
owner of Exchange ROARS who is not a U.S. holder.
U.S. HOLDERS
Exchange of ROARS. There will be no Federal income tax consequences to a
holder exchanging Private ROARS for Exchange ROARS pursuant to the Exchange
Offers, and such a holder will have the same adjusted tax basis and holding
period in the Exchange ROARS as it had in the Private ROARS immediately before
the exchange.
Disposition of Exchange ROARS. In general, the holder of an Exchange ROARS
will recognize gain or loss upon the sale, redemption, retirement or other
disposition of that Exchange ROARS measured by the difference between the
amount of cash and the fair market value of property received (except to the
extent attributable to the payment of accrued interest) and the holder's
adjusted tax basis in that Exchange ROARS.
39
<PAGE>
Subject to the market discount rules discussed below, the gain or loss on the
sale or other disposition of an Exchange ROARS should be long-term capital
gain or loss; provided, that the holder has a holding period for that Exchange
ROARS (which would include the holding period of the exchanged Private ROARS)
of more than one year. In the case of a U.S. holder who is an individual, any
capital gain recognized on the sale or other disposition of an Exchange ROARS
generally will be subject to a maximum U.S. Federal income tax rate of (i) 28
percent if such U.S. holder's holding period is more than one year and not
more than 18 months and (ii) 20 percent if such U.S. holder's holding period
exceeds 18 months.
Market Discount on Resale. Holders, other than purchasers of Private ROARS
in the original offering, should be aware that the resale of Exchange ROARS
may be affected by the market discount provisions of the Internal Revenue Code
of 1986, as amended. These rules generally provide that if a subsequent holder
of an Exchange ROARS purchases it at a market discount in excess of a
statutorily defined de minimis amount, and thereafter recognizes gain upon a
disposition (including a partial redemption) of that Exchange ROARS, the
lesser of such gain or the portion of the market discount that accrued while
the Exchange ROARS was held by such holder will be treated as ordinary
interest income at the time of the disposition. The rules also provide that a
holder who acquires an Exchange ROARS at a market discount may be required to
defer a portion of any interest expense that may otherwise be deductible on
any indebtedness incurred or maintained to purchase or carry such Exchange
ROARS until the holder disposes of such Exchange ROARS in a taxable
transaction. If a holder of an Exchange ROARS elects to include market
discount in income currently, both of the foregoing rules would not apply.
NON-U.S. HOLDERS
Under present United States Federal income and estate tax law, assuming
certain certification requirements are satisfied (which include identification
of the beneficial owner of the instrument), and subject to the discussion of
backup withholding below:
(a) payments of interest on Exchange ROARS to any Non-U.S. holder will not
be subject to United States Federal income or withholding tax;
provided, that (1) such holder does not actually or constructively own
10% or more of the total combined voting power of all classes of stock
of the Company entitled to vote, (2) such holder is not (i) a bank
receiving interest pursuant to a loan agreement entered into in the
ordinary course of its trade or business or (ii) a controlled foreign
corporation that is related to the Company through stock ownership, and
(3) such interest payments are not effectively connected with the
conduct of a United States trade or business of such holder;
(b) a holder of an Exchange ROARS who is a Non-U.S. holder will not be
subject to the United States Federal income tax on gain realized on the
sale, exchange or other disposition of that Exchange ROARS, unless (1)
such holder is an individual who is present in the United States for
183 days or more during the taxable year and certain other requirements
are met, or (2) the gain is effectively connected with the conduct of a
United States trade or business of such holder; and
(c) if interest on an Exchange ROARS is exempt from withholding of United
States Federal income tax under the rules described below, that
Exchange ROARS will not be included in the estate of a deceased Non-
U.S. holder for United States Federal estate tax purposes.
The certification referred to above may be made on an I.R.S. Form W-8 or
substantially similar substitute form.
INFORMATION REPORTING AND BACKUP WITHHOLDING
A U.S. holder may be subject to backup withholding at a rate of 31% with
respect to interest paid on or proceeds derived from the sale or other
disposition of an Exchange ROARS, unless that U.S. holder (i) is a corporation
or comes within certain other exempt categories or (ii) provides a taxpayer
identification number,
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<PAGE>
certifies as to no loss of exemption from backup withholding and otherwise
complies with applicable requirements of the backup withholding rules.
Under temporary United States Treasury regulations, United States
information reporting requirements and backup withholding tax will generally
not apply to interest paid on Exchange ROARS to a Non-U.S. holder at an
address outside the United States. Payment by a United States office of a
broker of the proceeds of a sale of an Exchange ROARS are subject to both
backup withholding at a rate of 31% and information reporting unless the
holder thereof certifies its Non-U.S. holder status under penalties of perjury
or otherwise establishes an exemption. Information reporting requirements (but
not backup withholding) will also apply to payment of the proceeds of a sale
of an Exchange ROARS by a foreign office of a United States broker or a
foreign broker with certain types of relationships to the United States,
unless that broker has documentary evidence in its records that the holder is
a Non-U.S. holder and certain other conditions are met or the holder otherwise
establishes an exemption.
Backup withholding is not an additional tax. Any amount withheld under the
backup withholding rules will be refunded or credited against the holder's
United States Federal income tax liability; provided, that the required
information is furnished to the I.R.S.
On October 6, 1997, the United States Treasury Department issued final
regulations governing information reporting and the certification procedures
regarding withholding and backup withholding on certain amounts paid to Non-
U.S. holders after December 31, 1999. The new Treasury regulations would alter
the procedures for claiming the benefits of an income tax treaty and may
change the certification procedures relating to the receipt by intermediaries
of payments on behalf of beneficial owners of ROARS. Holders of ROARS should
consult their tax advisors concerning the effect, if any, of such new Treasury
regulations on an investment in ROARS.
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange ROARS for its own account pursuant
to the Exchange Offers must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange ROARS. This Prospectus, as it may
be amended or supplemented from time to time, may be used by a broker-dealer
in connection with resales of Exchange ROARS received in exchange for Private
ROARS where such Private ROARS were acquired by such broker-dealer as a result
of market-making activities or other trading activities. The Company has
agreed that, starting on the applicable Expiration Date and ending at the
close of business on the 60th day following such Expiration Date, it will make
this Prospectus, as amended or supplemented, available to any broker-dealer
for use in connection with any such resale.
The Company will not receive any proceeds from any sale of Exchange ROARS by
broker-dealers. Exchange ROARS received by broker-dealers for their own
account pursuant to the Exchange Offers may be sold from time to time in one
or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on those Exchange ROARS or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or at negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer that resells Exchange ROARS that were
received by it for its own account pursuant to the Exchange Offers and any
broker or dealer that participates in a distribution of such Exchange ROARS
may be deemed to be an "underwriter" within the meaning of the Securities Act
and any profit from any such resale of Exchange ROARS and any commissions or
concessions received by any such persons may be deemed to be underwriting
compensation under the Securities Act. Each Letter of Transmittal states that,
by acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act.
If the Remarketing Dealer purchases Exchange ROARS on the applicable
Remarketing Date and subsequently offers such Exchange ROARS for resale, the
resale of such Exchange ROARS may have to be
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registered with the Commission under the Securities Act. If the resale of such
Exchange ROARS has to be registered, the Company has agreed to pay the
expenses incident to such a registration.
For a period of 60 days after the applicable Expiration Date, the Company
will promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such
documents in the applicable Letter of Transmittal. The Company has agreed to
pay all expenses incident to the Exchange Offers, other than any of the
expenses of any Holder, including the fees and expenses of such Holder's
counsel, and will indemnify the Holders of the Private ROARS (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
LEGAL MATTERS
Certain legal matters relating to the Exchange ROARS will be passed upon for
the Company by Kirkpatrick & Lockhart LLP, Pittsburgh, Pennsylvania.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The consolidated financial statements of United States Filter Corporation
and its subsidiaries as of March 31, 1997 and 1998 and for each of the three
years in the period ended March 31, 1998, have been incorporated by reference
herein and the Registration Statement in reliance upon the reports of KPMG
Peat Marwick LLP and Ernst and Young LLP, independent certified public
accountants, incorporated by reference, and upon the authority of said firms
as experts in accounting and auditing.
The consolidated financial statements of The Kinetics Group, Inc. at
September 30, 1997 and for each of the two years in the period ended September
30, 1997 incorporated by reference herein have been audited by Ernst & Young
LLP, independent auditors, as set forth in their report thereon incorporated
by reference herein, and are included in reliance upon such report given upon
the authority of such firm as experts in accounting and auditing.
The consolidated financial statements of Memtec Limited as of June 30, 1997
and 1996 and for each of the three years in the period ended June 30, 1997
incorporated by reference herein have been so incorporated by reference in
reliance on the report, issued in the name Price Waterhouse, of
PricewaterhouseCoopers, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
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NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION OTHER THAN THAT CONTAINED IN THIS PROSPECTUS OR TO MAKE ANY REPRE-
SENTATIONS IN CONNECTION WITH THE OFFERINGS COVERED BY OR PURSUANT TO THIS
PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY OF THE
SECURITIES DESCRIBED HEREIN IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PRO-
SPECTUS NOR ANY TRANSACTION HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN
IMPLICATION THAT THERE HAS NOT BEEN A CHANGE IN THE FACTS SET FORTH IN THIS
PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
--------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
Risk Factors............................................................... 3
The Company................................................................ 10
Use of Proceeds............................................................ 11
Selected Consolidated Financial Data....................................... 12
First Call Consensus Earnings Estimates.................................... 15
The Exchange Offers........................................................ 16
Description of the ROARS................................................... 23
Certain United States Federal Income Tax Consequences...................... 39
Plan of Distribution....................................................... 41
Legal Matters.............................................................. 42
Independent Certified Public Accountants................................... 42
</TABLE>
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UNITED STATES
FILTER CORPORATION
OFFERS TO EXCHANGE
$500,000,000
6.375% EXCHANGE REMARKETABLE OR
REDEEMABLE SECURITIES
DUE 2011
(REMARKETING DATE MAY 15, 2001)
$400,000,000
6.50% EXCHANGE REMARKETABLE OR
REDEEMABLE SECURITIES
DUE 2013
(REMARKETING DATE MAY 15, 2003)
---------------
PROSPECTUS
---------------
, 1998
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Certificate of Incorporation and the By-laws of the Company provide for
the indemnification of directors and officers to the fullest extent permitted
by the General Corporation Law of the State of Delaware, the state of
incorporation of the Company.
Section 145 of the General Corporation Law of the State of Delaware
authorizes indemnification when a person is made a party or is threatened to
be made a party to any proceeding by reason of the fact that such person is or
was a director, officer, employee or agent of the corporation or is or was
serving as a director, officer, employee or agent of another enterprise, at
the request of the corporation, and if such person acted in good faith and in
a manner reasonably believed by him or her to be in, or not opposed to, the
best interests of the corporation. With respect to any criminal proceeding,
such person must have had no reasonable cause to believe that his or her
conduct was unlawful. If it is determined that the conduct of such person
meets these standards, he or she may be indemnified for expenses incurred
(including attorney's fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him or her in connection with such
proceeding.
If such a proceeding is brought by or in the right of the corporation (i.e.,
a derivative suit), such person may be indemnified against expenses actually
and reasonably incurred if he or she acted in good faith and in a manner
reasonably believed by him or her to be in, or not opposed to, the best
interests of the corporation. There can be no indemnification with respect to
any matter as to which such person is adjudged to be liable to the
corporation; however, a court may, even in such case, allow such
indemnification to such person for such expenses as the court deems proper.
Where such person is successful in any such proceeding, he or she is
entitled to be indemnified against expenses actually and reasonably incurred
by him or her. In all other cases, indemnification is made by the corporation
upon determination by it that indemnification of such person is proper because
such person has met the applicable standard of conduct.
The Company maintains an errors and omissions liability policy for the
benefit of its officers and directors, which may cover certain liabilities of
such individuals to the Company.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits. The following exhibits are filed as part of this registration
statement:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
4.01 Debt Securities Indenture dated as of May 19, 1998 between United
States Filter Corporation and The Bank of New York, as Trustee
(incorporated by reference to Exhibit 4.2 to the Company's Annual
Report on Form 10-K for the year ended March 31, 1998 (File No. 1-
10728)).
4.02 First Supplemental Indenture dated as of May 19, 1998, between United
States Filter Corporation and The Bank of New York, supplementing the
Indenture dated as of May 19, 1998 (incorporated by reference to
Exhibit 4.3 to the Company's Annual Report on Form 10-K for the year
ended March 31, 1998 (File No. 1-10728)).
4.03 Registration Rights Agreement dated as of May 19, 1998 among United
States Filter Corporation, NationsBanc Montgomery Securities LLC,
Donaldson, Lufkin & Jenrette Securities Corporation and Salomon
Brothers Inc (previously filed).
5.01 Opinion of Kirkpatrick & Lockhart LLP as to the legality of the
securities being registered (previously filed).
12.01 Computation of Ratio of Earnings to Fixed Charges (previously filed).
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
23.01 Consent of Kirkpatrick & Lockhart LLP (included in Exhibit 5.01).
23.02 Consent of KPMG Peat Marwick LLP (previously filed).
23.03 Consent of Ernst & Young LLP (previously filed).
23.04 Consent of Price Waterhouse (previously filed).
24.01 Power of Attorney (previously filed).
25.01 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of The Bank of New York, as Trustee under the
Indenture for the 6.375% Exchange Remarketable or Redeemable
Securities due 2011 (previously filed).
25.02 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of The Bank of New York, as Trustee under the
Indenture for the 6.50% Exchange Remarketable or Redeemable Securities
due 2013 (previously filed).
99.01 Form of Letter of Transmittal for the 6.375% Exchange Remarketable or
Redeemable Securities due 2011 (previously filed).
99.02 Form of Letter of Transmittal for the 6.50% Exchange Remarketable or
Redeemable Securities due 2013 (previously filed).
99.03 Form of Notice of Guaranteed Delivery for the 6.375% Exchange
Remarketable or Redeemable Securities due 2011 (previously filed).
99.04 Form of Notice of Guaranteed Delivery for the 6.50% Exchange
Remarketable or Redeemable Securities due 2013 (previously filed).
99.05 Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 (previously filed).
99.06 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees for the 6.375% Exchange Remarketable or Redeemable
Securities due 2011 (previously filed).
99.07 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees for the 6.50% Exchange Remarketable or Redeemable
Securities due 2013 (previously filed).
99.08 Form of Letter to Clients for the 6.375% Exchange Remarketable or
Redeemable Securities due 2011 (previously filed).
99.09 Form of Letter to Clients for the 6.50% Exchange Remarketable or
Redeemable Securities due 2013 (previously filed).
99.10 Form of Exchange Agent Agreement (previously filed).
</TABLE>
ITEM 22. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1)To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial bona
fide offering thereof.
II-2
<PAGE>
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed to be
a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(5) To respond to requests for information that is incorporated by reference
into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form, within
one business day of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective date of
the registration statement through the date of responding to the request.
(6) To supply by means of a post-effective amendment all required
information concerning a transaction, and the company being acquired involved
therein, that was not the subject of and included in the registration
statement when it became effective.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
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 12, 1998.
UNITED STATES FILTER CORPORATION
/s/ Richard J. Heckmann
By: ________________________________
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.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
<S> <C> <C>
/s/ Richard J. Heckmann Chairman of the Board, President November 12,
- ------------------------- and 1998
Richard J. Heckmann Chief Executive Officer
(Principal Executive
Officer) and a Director
/s/ Kevin L. Spence Executive Vice President/Chief November 12,
- ------------------------- Financial 1998
Kevin L. Spence Officer (Principal Financial and
Accounting Officer)
* President/Chief Operating November
- ------------------------- Officer-- 12, 1998
Andrew D. Seidel North American Wastewater Group
and a Director
* President/Chief Operating November
- ------------------------- Officer-- 12, 1998
Nicholas C. Memmo North American Process Water
Group and a Director
Director
- -------------------------
James E. Clark
* Director November
- ------------------------- 12, 1998
John L. Diederich
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
SIGNATURE CAPACITY
DATE
* Director November 12, 1998
- -------------------------
Robert S. Hillas
Director
- -------------------------
Arthur B. Laffer
* Director November 12, 1998
- -------------------------
Ardon E. Moore
* Director November 12, 1998
- -------------------------
Alfred E. Osborne, Jr.
* Director November 12, 1998
- -------------------------
J. Danforth Quayle
* Director November 12, 1998
- -------------------------
C. Howard Wilkins, Jr.
* /s/ Damian C. Georgino November 12, 1998
- -------------------------
By: Damian C. Georgino
Attorney-in-Fact
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
4.01 Debt Securities Indenture dated as of May 19, 1998 between United
States Filter Corporation and The Bank of New York, as Trustee
(incorporated by reference to Exhibit 4.2 to the Company's Annual
Report on Form 10-K for the year ended March 31, 1998 (File No. 1-
10728)).
4.02 First Supplemental Indenture dated as of May 19, 1998, between United
States Filter Corporation and The Bank of New York, supplementing the
Indenture dated as of May 19, 1998 (incorporated by reference to
Exhibit 4.3 to the Company's Annual Report on Form 10-K for the year
ended March 31, 1998 (File No. 1-10728)).
4.03 Registration Rights Agreement dated as of May 19, 1998 among United
States Filter Corporation, NationsBanc Montgomery Securities LLC,
Donaldson, Lufkin & Jenrette Securities Corporation and Salomon
Brothers Inc (previously filed).
5.01 Opinion of Kirkpatrick & Lockhart LLP as to the legality of the
securities being registered (previously filed).
12.01 Computation of Ratio of Earnings to Fixed Charges (previously filed).
23.01 Consent of Kirkpatrick & Lockhart LLP (included in Exhibit 5.01).
23.02 Consent of KPMG Peat Marwick LLP (previously filed).
23.03 Consent of Ernst & Young LLP (previously filed).
23.04 Consent of Price Waterhouse (previously filed).
24.01 Power of Attorney (previously filed).
25.01 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of The Bank of New York, as Trustee under the
Indenture for the 6.375% Exchange Remarketable or Redeemable
Securities due 2011 (previously filed).
25.02 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of The Bank of New York, as Trustee under the
Indenture for the 6.50% Exchange Remarketable or Redeemable Securities
due 2013 (previously filed).
99.01 Form of Letter of Transmittal for the 6.375% Exchange Remarketable or
Redeemable Securities due 2011 (previously filed).
99.02 Form of Letter of Transmittal for the 6.50% Exchange Remarketable or
Redeemable Securities due 2013 (previously filed).
99.03 Form of Notice of Guaranteed Delivery for the 6.375% Exchange
Remarketable or Redeemable Securities due 2011 (previously filed).
99.04 Form of Notice of Guaranteed Delivery for the 6.50% Exchange
Remarketable or Redeemable Securities due 2013 (previously filed).
99.05 Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 (previously filed).
99.06 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees for the 6.375% Exchange Remarketable or Redeemable
Securities due 2011 (previously filed).
99.07 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees for the 6.50% Exchange Remarketable or Redeemable
Securities due 2013 (previously filed).
99.08 Form of Letter to Clients for the 6.375% Exchange Remarketable or
Redeemable Securities due 2011 (previously filed).
99.09 Form of Letter to Clients for the 6.50% Exchange Remarketable or
Redeemable Securities due 2013 (previously filed).
99.10 Form of Exchange Agent Agreement (previously filed).
</TABLE>
1
