As filed with the Securities and Exchange Commission
on May 14, 1998
Registration No. 333-45981
-----------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
AMENDMENT NO. 4 TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------------------
UNITED STATES FILTER CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 3589
(State or other jurisdiction (Primary Standard Industrial
of incorporation or organization) Classification Code Number)
33-0266015
(I.R.S. Employer
Identification No.)
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)
-------------------
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)
-------------------
Copy to:
JANICE C. HARTMAN
KIRKPATRICK & LOCKHART LLP
1500 OLIVER BUILDING
PITTSBURGH, PENNSYLVANIA 15222
(412) 355-6500
<PAGE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to time
after this registration statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------------
<PAGE>
===============================================================================
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 MAY 14, 1998
PROSPECTUS
, 1998
5,815,450 SHARES
UNITED STATES FILTER CORPORATION
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
-------------------
This prospectus provides for the offering by the Selling Stockholders
named herein (the "Selling Stockholders") of up to an aggregate of 5,815,450
shares (the "Shares") of the Common Stock, par value $.01 per share ("Common
Stock"), of United States Filter Corporation (the "Company"). The Shares were
acquired by the Selling Stockholders named herein on January 16, 1998 pursuant
to the terms of a Merger Agreement, dated as of December 31, 1997, among the
Company, The Kinetics Group, Inc. ("Kinetics"), U.S. Filter/KG Acquisition
Corp., The Bianco Family 1991 Trust (the "Bianco Trust"), Dated February 1,
1991, David J. Shimmon and BT Capital Partners, Inc. (the "Merger Agreement").
The Shares were issued in consideration of the acquisition by the Company of
Kinetics, effective as of December 31, 1997 (the "Merger").
See "Selling Stockholders."
The acquisition of Kinetics was accounted for as a pooling of interests
and accordingly the holders of an aggregate of
<PAGE>
5,551,369 shares (the "Affiliate Shares") may not sell, transfer or otherwise
dispose of any Shares prior to the date that the Company publishes financial
results covering at least thirty days of combined operations of the Company and
Kinetics. In addition, of the 5,815,450 shares, an aggregate of 290,194 Shares
(the "Escrow Shares"), 277,569 of which are included in the Affiliate Shares,
are held in escrow by PNC Bank, escrow agent, under an Escrow Agreement entered
into pursuant to the Merger Agreement. The Escrow Shares are subject to claims
of the Company for indemnification under the Merger Agreement and, to the extent
not returned to the Company in satisfaction of such claims for indemnification
or pending the resolution of any disputed claims, can be expected to be
delivered to the Selling Stockholders based upon their respective percentage
interests by December 31, 1998.
Subject to the limitations set forth above, the Shares may be offered or
sold by or for the account of the Selling Stockholders from time to time or at
one time, on one or more exchanges or otherwise, at prices and on terms to be
determined at the time of sale, to purchasers directly or by or through brokers
or dealers, who may receive compensation in the form of discounts, commissions
or concessions. The Selling Stockholders and any such brokers or dealers may be
deemed to be "underwriters" within the meaning of the United States Securities
Act of 1933, as amended (the "Securities Act"), and any discounts, concessions
and commissions received by any such brokers and dealers may be deemed to be
underwriting commissions or discounts under the Securities Act. The Company will
not receive any of the proceeds from any sale of the Shares offered hereby. See
"Use of Proceeds," "Selling Stockholders" and "Plan of Distribution."
The Common Stock is listed on the New York Stock Exchange (the "NYSE") and
traded under the symbol "USF." The last reported sale price of the Common Stock
on the NYSE on May 13, 1998 was $33.50 per share.
---------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR CERTAIN CONSIDERATIONS RELEVANT
TO AN INVESTMENT IN THE COMMON STOCK.
---------------------
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.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the United
States Securities Exchange Act of 1934 (the "Exchange Act") and in accordance
therewith files periodic reports, proxy solicitation materials and other
information with the United States Securities and Exchange Commission (the
"Commission"). Such reports, proxy solicitation materials and other information
can be inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549
and at the Commission's Regional Offices located at Seven World Trade Center,
Suite 1300, New York, New York 10048 and Citicorp Center 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such materials can
be obtained from the Public Reference Section of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission
maintains a Web site that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission. Such reports, proxy and information statements and other information
may be found on the Commission's site address, http://www.sec.gov. The Common
Stock is listed on the NYSE. Such reports, proxy solicitation materials and
other information can also be inspected and copied at the NYSE at 20 Broad
Street, New York, New York 10005.
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,
1997; the Company's Quarterly Reports for the quarterly periods ended June 30,
1997 (as amended on Form 10-Q/A dated August 22, 1997), September 30, 1997 and
December 31, 1997 (as amended on Forms 10-Q/A dated May 12, 1998 and May 14,
1998); the Company's Current Reports on Form 8-K dated October 28, 1996 (as
amended on a Forms 8-K/A dated December 19, 1996), December 2, 1996, January 6,
1997, August 4, 1997, September 17, 1997, September 19, 1997, December 9, 1997
(as amended on Forms 8-K/A dated February 6, 1998 and March 4, 1998), December
31, 1997, January 16, 1998 (as amended on Forms 8-K/A dated February 6, 1998,
March 4, 1998, May 12, 1998 and May 14, 1998), February 9, 1998, May 12, 1998
(as amended on Form 8-K dated May 14, 1998); and the description of the Common
Stock contained in the Company's Registration Statement on Form 8-A, as the same
may be amended.
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All documents and reports filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d)of the Exchange Act after the date of the initial registration
statement and prior to effectiveness of this registration statement and after
the date of this Prospectus and prior to the termination of the offering made by
this Prospectus shall be deemed to be incorporated by reference herein. Any
statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document which is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide to each person to whom a copy of this Prospectus
is delivered, upon the written or oral request of such person, without charge, a
copy of any or all of the documents that are incorporated herein by reference,
other than exhibits to such information (unless such exhibits are specifically
incorporated by reference into such documents). Requests should be directed to
General Counsel, United States Filter Corporation, 40-004 Cook Street, Palm
Desert, California 92211 (telephone (760) 340-0098).
THE COMPANY
The Company is a leading global provider of industrial and municipal water
and wastewater treatment systems, products and services, with an installed base
of systems that the Company believes is one of the largest worldwide. The
Company 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. The Company markets a broad line of
waterworks distribution products and services. In addition, the Company also
sells, installs and services in the United States a wide range of products which
address household water issues. The Company has one of the industry's largest
networks of sales and service and distribution facilities through more than 600
locations including 88 manufacturing plants in 33 countries. 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
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privatization initiatives for municipal water treatment facilities throughout
the world and, specifically, in the United States, Mexico and Canada. The
Company also owns a significant amount of properties with appurtenant water
rights in the Western and Southwestern United States, a substantial portion 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. References herein to the Company refer to United States Filter
Corporation and its subsidiaries, unless the context requires otherwise.
RISK FACTORS
Prospective investors should consider carefully the following factors
relating to the business of the Company, together with the other information and
financial data included or incorporated by reference in this Prospectus, before
acquiring the securities offered hereby. Information contained or incorporated
by reference in this Prospectus includes "forward-looking statements" which can
be identified by the use of forward-looking terminology such as "believes,"
"contemplates," "expects," "may," "will," "could," "should," "would,"
"anticipates" or "continue" or the negative thereof or other variations thereon
or comparable terminology. No assurance can be given that the future results
covered by the forward-looking statements will be achieved. The following
matters constitute cautionary statements identifying important factors with
respect to such forward-looking statements, including certain risks and
uncertainties, that could cause actual results to vary materially from the
future results covered in such forward-looking statements.
RISK OF NON-CONSUMMATION OF THE CULLIGAN MERGER
On February 9, 1998, the Company agreed to acquire Culligan Water
Technologies, Inc. ("Culligan") pursuant to a Merger Agreement between the
Company, a wholly owned subsidiary of the Company and Culligan (the "Culligan
Merger Agreement"). The merger ("Culligan Merger") is subject to approval by the
stockholders of both the Company and Culligan. The Company and Culligan
currently anticipate holding special stockholders meetings in June 1998. Holders
of an aggregate of 28.5% of the outstanding shares of Culligan common stock have
agreed to vote in favor of the Culligan Merger. However, there can be no
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assurance that the Culligan Merger will be consummated, or, if consummated, that
the Culligan businesses will be integrated successfully into the Company's
businesses or provide profitable. In the event of termination of the Culligan
Merger Agreement because the Company's stockholders do not approve the Culligan
Merger, because the Company's Board of Directors modifies or changes in any
manner adverse to Culligan its recommendation to its stockholders in favor of
the Culligan Merger or because the Company or its affiliates fail to perform the
Company's obligations to use its reasonable best efforts to obtain governmental
and third party approvals and otherwise to take certain actions necessary to
consummate the Culligan Merger, the Company may be required to pay to Culligan
up to $47 million under the terms of the Culligan Merger Agreement.
In addition, filings with, notifications to and authorizations and
approvals of, various governmental agencies, both U.S. and non-U.S., with
respect to the transactions contemplated by the Culligan Merger Agreement,
relating primarily to antitrust, foreign investment and securities law issues,
must be made and received prior to consummation of the Culligan Merger. The
Company has received notice of early termination of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. The combined
enterprise may be required to divest one or more of its product lines or
operations, or agree to various operating restrictions, before or after receipt
of stockholder approval, in order to obtain the necessary authorizations and
approvals of the Culligan Merger or to assure that governmental authorities do
not seek to enjoin the Culligan Merger. There can be no assurance that the
consummation of any such divestitures could be effected at a fair market price
or that the reinvestment of the proceeds therefrom would produce for the
combined enterprise operating profit at the same level as the divested product
lines or a commensurate rate of return on the amount of its investment. There
also can be no assurance that any operating restrictions imposed would not
adversely affect the value of the combined enterprise. In addition, obtaining
any necessary authorizations and approvals may result in delays in the
stockholder meetings beyond June 1998. The Culligan Merger Agreement is subject
to termination if the Culligan Merger is not consummated by November 15, 1998.
Culligan will have the right to terminate the Culligan Merger Agreement if
a governmental authority enjoins the Culligan Merger; if the Culligan Merger is
not consummated by November 15, 1998 and Culligan has not failed to perform its
obligations under the Culligan Merger Agreement; if the Board of Directors of
the
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Company changes its recommendation to its stockholders in a manner adverse to
Culligan in respect of the Culligan Merger; if the stockholders of Culligan or
the Company fail to approve the Culligan Merger; if the average of the closing
prices of the Common Stock for any period of 10 consecutive trading days ending
on or after the sixth trading day prior to the date of Culligan's stockholders
meeting is less than $26.25; or if the Company materially breaches (and fails to
cure such breach) its obligations under the Culligan Merger Agreement. However,
if Culligan terminates the Culligan Merger Agreement in respect of a competing
transaction, Culligan may be obligated to pay to the Company up to $47 million.
ACQUISITION STRATEGY
In pursuit of its strategic objective of becoming the leading global
single-source provider of water and wastewater treatment systems and services,
the Company has, since 1991, acquired more than 125 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 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 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.
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INTERNATIONAL TRANSACTIONS
The Company has made and expects it will continue to make acquisitions and
expects to obtain contracts in markets outside the United States. In addition, a
substantial portion of the business of Culligan includes non-U.S. sales. 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 which have been and may in the future be adversely affected by current
economic conditions in that region. 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.
RELIANCE ON 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 is considering an
employment agreement for Mr. Heckmann, who does not currently have one. The
Company is also considering employment agreements for other members of senior
management, most of whom do not currently have such agreements, although the
names of such members have yet to be determined. There can be no assurance that
the Company will enter into employment agreements with Mr. Heckmann or members
of senior management. Should any of the Company's senior managers be unable or
choose not to continue in their present roles, the Company's prospects could be
adversely affected.
PROFITABILITY OF FIXED PRICE CONTRACTS
A significant portion of the Company's revenues are generated under fixed
price contracts. To the extent that original cost estimates are inaccurate,
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.
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CYCLICALITY, SEASONALITY AND POSSIBLE EARNINGS FLUCTUATIONS
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 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.
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
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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, in which event the market price of the Common
Stock could be adversely affected.
POTENTIAL ENVIRONMENTAL RISKS
The Company's business and products may be significantly influenced by the
constantly changing body of environmental laws and regulations, which require
that certain environmental standards be met and impose liability for the failure
to comply with such standards. The Company is also subject to inherent risks
associated with environmental conditions at facilities owned, and the state of
compliance with environmental laws, by businesses acquired by the Company. While
the Company endeavors at each of its facilities to assure compliance with
environmental laws and regulations, there can be no assurance that the Company's
operations or activities, or historical operations by others at the Company's
locations, will not result in cleanup obligations, civil or criminal enforcement
actions or private actions that could have a material adverse effect on the
Company.
In that regard, at a Connecticut ion exchange resin regeneration facility
(the "South Windsor Facility") operated by a wholly owned subsidiary of the
Company (the "South Windsor Subsidiary"), acquired by the Company in October
1995 from Anjou International Company ("Anjou"), U.S. federal and state
environmental regulatory authorities have issued certain notices of violation
alleging multiple violations of applicable wastewater pretreatment standards. A
grand jury investigation concerning these conditions also is pending. The South
Windsor Subsidiary has reached a tentative agreement with the U.S. Attorney's
Office and the U.S. Environmental Protection Agency ("USEPA") to settle all
agency claims and investigations relating to this matter by pleading guilty to a
single violation of the Federal Water Pollution Control Act. The proposed
settlement includes a payment of $1.36 million, including a criminal penalty of
approximately $1.0 million, and annual environmental compliance audits at the
South Windsor Facility for five years. The Company believes that this settlement
will conclude this matter in its entirety; however, there can be no
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assurance that the proposed settlement will become final, and it is not expected
that it would include a formal release of all liabilities in this regard. In
connection with this proposed settlement, representatives of the Company and the
USEPA's Office of Grants and Debarment have discussed the South Windsor
Facility's debarment from participation in government contracts. Based on its
discussions with the USEPA, the Company believes that the USEPA will lift any
such debarment immediately after the Company and the USEPA agree to the proposed
settlement. The loss of revenue from a debarment, regardless of its duration, is
not expected to be material to the Company. Based upon the anticipated
settlement, the Company does not believe that this matter will have a material
adverse effect on the Company. In addition, the Company has certain rights of
indemnification from Anjou which may be available with respect to these matters
pursuant to the laws of the state of New York or the Stock Purchase Agreement
dated as of August 30, 1995 among the Company, Anjou and Polymetrics, Inc.
With respect to a former California ion exchange resin regeneration
facility (the "El Cajon Facility") operated by a wholly owned subsidiary of the
Company (the "El Cajon Subsidiary"), the San Diego county district attorney is
investigating a hydrochloric acid spill that occurred in early 1997. In
connection with this incident, the Company and the office of the district
attorney have reached a proposed settlement (subject to final approval of the
court) whereby the Company has agreed to a civil violation of the California
Health and Safety Code and has paid a $140,000 fine, which includes a civil
penalty of $25,000. Pursuant to the terms of the settlement, the office of the
district attorney has agreed that it will not subject the Company (or its
subsidiaries and affiliates) to further civil or criminal prosecution for this
matter.
In addition to the foregoing, 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 and Culligan also operate
other facilities, including service deionization centers and manufacturing
facilities, that discharge wastewater in connection
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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. In other matters, 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. Based on sites which are currently known to the
Company that may require remediation, 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. In addition, to some
extent, the liabilities and risks imposed by environmental laws on the Company's
customers may adversely impact demand for certain of the Company's products or
services or impose greater liabilities and risks on the Company, which could
also have an adverse effect on the Company's competitive and financial position.
In 1995, Culligan purchased an equity interest in Anvil Holdings, Inc. 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 has 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 above action levels under state guidelines. Culligan has begun
remediation of the contamination. Culligan currently estimates that the costs of
future site remediation will range from up to $1.0 million to $1.8 million and
that it has sufficient reserves for the site cleanup. Culligan 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 Culligan,
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 Culligan's financial position or the results of operations of
Culligan.
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Certain of the Company's and Culligan's facilities contain or in the past
contained underground storage tanks which may have cause soil or groundwater
contamination. At one formerly owned site, Culligan 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 combined companies' financial position or results
of operations.
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,
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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, which upon consummation of the Culligan Merger will include
Culligan's current residential operations, 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.
POTENTIAL RISKS RELATED TO WATER RIGHTS AND WATER TRANSFERS
The Company recently acquired more than 47,000 acres of agricultural land
(the "Properties"), situated in the Southwestern United States, the substantial
majority of which are in Imperial County, California (the "IID Properties")
located within the Imperial Irrigation District (the "IID"). Substantially all
of the Properties are currently leased to third party agricultural tenants,
including prior owners of the Properties. The Company acquired the Properties
with appurtenant water rights, and is actively seeking to acquire additional
properties with water rights, primarily in the Southwestern and Western United
States. The Company may seek in the future to transfer water attributable to
water rights appurtenant to the Properties, particularly the IID Properties (the
"IID Water"). However, since the IID holds title to all of the water rights
within the IID in trust for the landowners, the IID would control the timing and
terms of any transfers of IID Water by the Company. The circumstances under
which transfers of water can be made and the profitability of any transfers are
subject to significant uncertainties, including hydrologic risks of variable
water supplies, risks presented by allocations of water under existing and
prospective priorities, and risks of adverse changes to or interpretations of
U.S. federal, state and local laws, regulations and policies. Transfers of IID
Water attributable to water rights appurtenant to the IID Properties (the "IID
Water Rights") are subject to additional uncertainties. Allocations of Colorado
River water, which is the source of all water deliveries to the IID Properties,
are subject to limitations under complex international treaties, interstate
compacts, 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
13
<PAGE>
the approval of the U.S. Secretary of the Interior. 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. Water transferred by
the IID to metropolitan areas of Southern California, such as San Diego,
currently would be transported through aqueducts owned or controlled by the
Metropolitan Water District, a quasi-governmental agency (the "MWD"). The
transportation cost for any transfer of IID Water and the volume of water which
the MWD can be required to transport at any time are subject to California laws
of uncertain application, some aspects of which are currently in litigation. The
uncertainties associated with water rights could have a material adverse effect
on the Company's future profitability.
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 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-
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<PAGE>
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.
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.
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 two digits,
rather than four, to define the applicable year of business transactions. Most
of the Company's operating systems with Year 2000 issues have been modified to
address those issues; accordingly, management does not anticipate any
significant costs, problems or uncertainties associated with becoming Year 2000
compliant. The Company is currently developing a plan intended to assure that
its other internal operating systems with Year 2000 issues are modified on a
timely basis. Suppliers, customers and creditors of the Company also face
similar Year 2000 issues. A failure to successfully address the Year 2000 issue
could have a material adverse effect on the Company's business or results of
operations.
SHARES ELIGIBLE FOR FUTURE SALE
The market price of the Common Stock could be adversely affected by the
availability for public sale of shares held on March 31, 1998 by security
holders of the Company, including: (i) up to 3,646,783 shares which may be
delivered by Laidlaw Inc.
15
<PAGE>
or its affiliates ("Laidlaw"), at Laidlaw's option in lieu of cash, at maturity
pursuant to the terms of 5-3/4% Exchangeable Notes due 2000 of Laidlaw (the
amount of shares or cash delivered or paid to be dependent within certain limits
upon the value of the Common Stock at maturity), or sold from time to time in
accordance with Rule 144(k) under the Securities Act; (ii) 7,636,364 shares
issuable upon conversion of the Company's 6% Convertible Subordinated Notes due
2005 at a conversion price of $18.33 per share of Common Stock; (iii) 10,481,013
shares issuable upon conversion of the Company's 4-1/2% Convertible Subordinated
Notes due 2001 at a conversion price of $39.50 per share of Common Stock; (iv)
1,200,000 shares issuable upon exercise of warrants, 600,000 at an exercise
price of $50.00 per share and 600,000 at an exercise price of $60.00 per share,
in each case expiring on September 17, 2007 and exercisable at any time after
the first sale of water from water rights appurtenant to the Properties (the
"Warrants"); and (v) 8,482,926 outstanding shares which are subject to
agreements pursuant to which the holders have certain rights to request the
Company to register the sale of such holders' Common Stock under the Securities
Act and/or, subject to certain conditions, to include certain percentages of
such shares in other registration statements filed by the Company, of which such
rights as to 8,000,000 shares are not exercisable until February 17, 2000. In
addition, the Company has registered for sale under the Securities Act 2,903,207
shares which may be issuable by the Company from time to time in connection with
acquisitions of businesses or assets from third parties. Upon consummation of
the Culligan Merger, approximately 46,343,475 shares to be issued pursuant
thereto (assuming the Average Share price is $33.50) will be subject to
agreements pursuant to which certain stockholders will have certain rights to
request the Company to register the sale of such shares under the Securities Act
and/or, subject to certain conditions, to include certain percentages of such
shares in other registration statements filed by the Company. See "Risk Factors
Acquisition Strategy."
16
<PAGE>
RECENT DEVELOPMENTS
The Company has entered into an agreement to issue $900 million of
unsecured redeemable or remarketable securities to qualified institutional
buyers (as defined in Rule 144A of the Securities Act) to refinance existing
indebtedness under the Company's Senior Credit Facility and for general
corporate purposes. The proposed issuance of such securities is not expected to
have a material impact on the Company's financial position or its future results
of operations. The securities offered will not be, and have not been, registered
under the Securities Act and may not be offered or sold in the United States
absent registration or applicable exemption from the registration requirements.
USE OF PROCEEDS
The Selling Stockholders will receive all of the net proceeds from any
sale of the Shares offered hereby, and none of such proceeds will be available
for use by the Company or otherwise for the Company's benefit.
SELLING STOCKHOLDERS
The following table sets forth the names of the Selling Stockholders, the
total number of Shares owned, including separately the number of shares subject
to the Escrow Agreement and the number of shares as adjusted to reflect the sale
of the Shares by the Selling Stockholders. Each of the Selling Stockholders
acquired the Shares on January 16, 1998, and the respective number of shares
indicated as to each Selling Stockholder constitutes less than one percent of
the shares of Common Stock outstanding as of such date, except as to The Bianco
Trust, David J. Shimmon and BT Capital Partners Inc., which owned beneficially
2.2%, 1.9% and 1.1% as of such date.
<TABLE>
<CAPTION>
Shares
Name of Shares Shares Maximum Beneficially
Selling Beneficially Subject to Shares to be Owned As
Stockholder Owned Escrow Sold Adjusted
<S> <C> <C> <C> <C>
The Bianco 2,314,995 115,750 2,314,995 --
Family 1991
Trust, dated
February 1, 1991
David J. Shimmon 2,052,920 102,646 2,052,920 --
BT Capital 1,183,454 59,173 1,183,454 --
Partners Inc.
Churchill ESOP 92,600 4,630 92,600 --
Capital Partners
D&S Partners 50,958(1) 1,966 50,958(1) --
17
<PAGE>
Shares
Name of Shares Shares Maximum Beneficially
Selling Beneficially Subject to Shares to be Owned As
Stockholder Owned Escrow Sold Adjusted
Silicon Valley 38,476 1,924 38,476 --
Bancshares
L.H. Friend, 36,921 1,847 36,921 --
Weinress,
Frankson &
Presson, Inc.
Gregory Presson 26,665 1,334 26,665 --
Christopher 18,461 924 18,461 --
Halloran
Total 5,815,450(1) 290,194 5,815,450(1) --
- ----------------
(1) Includes 11,647 shares of Common Stock which the holder has the right to
acquire pursuant to options at an exercise price of $12.02 per share, giving
effect to the conversion in accordance with the Merger Agreement of options
to purchase shares of the Common Stock of Kinetics.
</TABLE>
Pursuant to the Merger Agreement, the Company acquired from the Selling
Stockholders all of the issued and outstanding shares of capital stock of
Kinetics. Other than their equity holdings in Kinetics, the Selling Stockholders
do not have, and within the past three years did not have, any position, office
or other material relationship with the Company or any of its predecessors or
affiliates, except that: (i) William A. Bianco, Jr., a Trustee of the Bianco
Trust, was the founder of Kinetics in 1973 and served as Chairman of the Board
from 1980 until the consummation of the Merger and as Chief Executive Officer of
Kinetics from 1973 through March 1997; (ii) Marie R. Bianco, a Trustee of the
Bianco Trust, served as Executive Vice President and a Director of Kinetics from
1989 until the consummation of the Merger; (iii) David J. Shimmon has served as
President/Chief Operating Officer of the Company's Industrial Products and
Services Group since March 1998, as Chief Executive Officer of Kinetics since
March 1997, as President and Director of Kinetics since October 1990, as Chief
Financial Officer of Kinetics from 1991 until the consummation of the Merger and
as Executive Vice President of Kinetics from October 1990 through March 1996;
(iv)
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<PAGE>
BT Capital Partners ("BT") purchased 2,250,000 shares of Series A Preferred
Stock from Kinetics in June 1995 and loaned Kinetics $10,000,000 in a
subordinated debt offering in June 1997 which was repaid by the Company upon the
consummation of the Merger; (v) Martin M. Jelenko, a consultant or employee of
affiliates of BT since 1992, served as a Director of Kinetics from June 1995
until the consummation of the Merger; and (vi) Jeffrey L. Ott, who has served in
several capacities at affiliates of BT since 1988, served as a Director of
Kinetics from December 1996 until the consummation of the Merger.
PLAN OF DISTRIBUTION
The Shares offered hereby may be sold from time to time by or for the
account of the Selling Stockholders on one or more exchanges or otherwise;
directly to purchasers in negotiated transactions; by or through brokers or
dealers in ordinary brokerage transactions or transactions in which a broker or
dealer solicits purchasers; in block trades in which brokers or dealers will
attempt to sell Shares as agent but may position and resell a portion of the
block as principal; in transactions in which a broker or dealer purchases as
principal for resale for its own account; or in any combination of the foregoing
methods. Shares may be sold at a fixed offering price, which may be changed, at
the prevailing market price at the time of sale, at prices related to such
prevailing market price or at negotiated prices. Brokers or dealers may arrange
for others to participate in any such transaction and may receive compensation
in the form of discounts, commissions or concessions payable by the Company
and/or the purchasers of Shares. If required at the time that a particular offer
of Shares is made, a supplement to this Prospectus will be delivered that
describes any material arrangements for the distribution of Shares and the terms
of the offering, including, without limitation, any discounts, commissions or
concessions and other items constituting compensation from the Selling
Stockholders or otherwise. The Company may agree to indemnify participating
brokers or dealers against certain civil liabilities, including liabilities
under the Securities Act. The Company and the Selling Stockholders are obligated
to indemnify each other against certain civil liabilities arising under the
Securities Act.
The Selling Stockholders may not sell the Shares in the public market
unless they do so by or through Donaldson, Lufkin & Jenrette Securities
Corporation, Salomon Smith Barney Inc., Deutsche Morgan Grenfell or BT Alex
Brown or another nationally
19
<PAGE>
recognized investment banking firm satisfactory to the Company in its reasonable
discretion, and, further, the Selling Stockholders are obligated to sell the
Shares in the public market in an orderly fashion as will not be materially
disruptive to the market for the Common Stock.
The Selling Stockholders and any such brokers or dealers may be deemed to
be "underwriters" within the meaning of the Securities Act, in which event any
discounts, commissions or concessions received by such brokers or dealers and
any profit on the resale of the Shares purchased by such brokers or dealers may
be deemed to be underwriting commissions or discounts under the Securities Act.
The Company has informed the Selling Stockholders that the provisions of
Regulation M under the Exchange Act may apply to their sales of Shares and has
furnished the Selling Stockholders with a copy of that regulation. The Company
also has advised the Selling Stockholders of the requirement for delivery of a
prospectus in connection with any sale of the Shares.
Any Shares covered by this Prospectus which qualify for sale pursuant to
Rule 144 under the Securities Act may be sold under Rule 144 rather than
pursuant to this Prospectus. There is no assurance that the Selling Stockholders
will sell any or all of the Shares. The Selling Stockholders may transfer,
devise or gift such Shares by other means not described herein.
The Company will pay all of the expenses incurred in connection with
registration of the Shares, including, without limitation, all registration,
printing, qualification and filing fees and fees and disbursements of counsel
for the Company ("Registration Expenses"). All costs and expenses, other than
Registration Expenses, including without limitation, underwriting discounts,
selling commissions and stock transfer taxes, applicable to registration of the
Shares will be paid by the Selling Stockholders.
DESCRIPTION OF CAPITAL STOCK
GENERAL
As of March 31, 1998, the Company was authorized to issue 300,000,000
shares of Common Stock, par value $.01 per share, of which 108,462,296 shares
were issued and outstanding, and 3,000,000 shares of preferred stock, par value
$.10 per share, of
20
<PAGE>
which none were issued and outstanding. Of the unissued shares of Common Stock,
7,636,364 shares were reserved for issuance upon conversion of the Company's 6%
Convertible Subordinated Notes due 2005, 10,481,013 shares were reserved for
issuance upon conversion of the Company's 4-1/2% Convertible Subordinated Notes
due 2001, 1,200,000 shares were reserved for issuance upon exercise of the
Warrants expiring September 17, 2007 and an aggregate of 7,647,059 shares were
reserved for issuance upon exercise of options either outstanding or available
for grant.
COMMON STOCK
The holders of Common Stock are entitled to one vote for each share held
of record by them on all matters to be voted on by stockholders. There is no
cumulative voting with respect to the election of directors; thus, the holders
of shares having more than 50% of the Company's voting power (including both
common and voting preferred shares, if any) voting for the election of directors
can elect all of the directors. The holders of Common Stock are entitled to
receive dividends when, as and if declared by the Board of Directors out of
funds legally available therefor, subject to the prior rights of preferred
stockholders. In the event of liquidation, dissolution or winding up of the
Company's affairs, the holders of Common Stock are entitled to share ratably in
all assets remaining available for distribution to them after payment of
liabilities and after provision has been made for each class of stock, including
any preferred stock, that has preference over the Common Stock. Except as
described below under "Stock Purchase Rights," holders of shares of Common
Stock, as such, have no conversion, preemptive or other subscription rights, and
there are no redemption or sinking fund provisions applicable to the Common
Stock.
The Company currently intends to retain earnings to provide funds for the
operation and expansion of its business and accordingly does not anticipate
paying cash dividends on the Common Stock in the foreseeable future. Any payment
of cash dividends on the Common Stock in the future will depend upon the
Company's financial condition, earnings, capital requirements and such other
factors as the Board of Directors deems relevant.
PREFERRED STOCK
Shares of preferred stock may be issued without stockholder approval. The
Board of Directors is authorized to issue such shares in one or more series and
to fix the rights, preferences,
21
<PAGE>
privileges, qualifications, limitations and restrictions thereof, including
dividend rights and rates, conversion rights, voting rights, terms of
redemption, redemption prices, liquidation preferences and the number of shares
constituting any series or the designation of such series, without any vote or
action by the stockholders. The Company has no current plans for the issuance of
any shares of preferred stock. Any preferred stock to be issued could rank prior
to the Common Stock with respect to dividend rights and rights of liquidation.
The Board of Directors, without stockholder approval, may issue preferred stock
with voting and conversion rights that could adversely affect the voting power
of holders of Common Stock or create impediments to persons seeking to gain
control of the Company.
STOCK PURCHASE RIGHTS
Laidlaw, which, as of March 31, 1998, held 3,646,783 shares of Common
Stock, or 3.4% of the outstanding Common Stock, has certain rights to purchase
voting securities of the Company in order to maintain its percentage voting
interest. Except in connection with mergers or other acquisitions or in the
ordinary course under an employee stock option or stock bonus plan, in the event
the Company proposes to sell or issue shares of voting securities, Laidlaw has
the right to purchase, on the same terms as the proposed sale or issuance, that
number of shares or rights as will maintain its percentage interest in the
voting securities of the Company, assuming the conversion of all convertible
securities and the exercise of all options and warrants then outstanding. In
addition, Laidlaw has other purchase rights with respect to sales or issuances
of securities by the Company at prices below 85% of current market price at the
time of sale or issuance or the prevailing customary price for such securities
or their equivalent.
CERTAIN VOTING ARRANGEMENTS
Pursuant to the agreements whereby the Company acquired Smogless S.p.A. in
September 1994, Laidlaw has agreed to vote all shares owned by it for the
nominees of the Company's Board for election to the Board, and on all other
matters in the same proportion as the votes cast by other holders of voting
securities, other than those that relate to any business combination or similar
transaction involving the Company or any amendment to the Company's Certificate
of Incorporation (the "Company Certificate") or By-laws.
22
<PAGE>
Pursuant to the agreement whereby the Company acquired the Properties in
exchange for 8,000,000 shares of Common Stock and the Warrants in September
1997, the Company has agreed, so long as the parties from whom the Properties
were acquired (the "Parties") own at least 5% of the outstanding Common Stock,
to nominate a person designated by the Parties for election to the Company Board
(the "Designee"). The Designee, Ardon E. Moore, has been appointed by the
Company's Board of Directors to serve as a Class I director until the Company's
Annual Meeting in 2000. If a vacancy occurs in the Company's Board of Directors
while the Parties own at least 7 1/2% of the outstanding Common Stock and such
vacancy is the result of the cessation to serve of a non-employee director of
the Company (other than the cessation of service of a Designee, which vacancy
shall be filled with a successor Designee), the Parties must also approve the
person filling such vacancy. In addition, the Parties have agreed to vote all
shares owned by them as recommended by a majority of the members of the
Company's Board of Directors, except with respect to certain fundamental
transactions, transactions involving the issuance by the Company of Common Stock
representing 20% or more of the outstanding Common Stock (or equivalents) or
amendment of the Company Certificate or By-laws.
CERTAIN CHARTER AND BY-LAW PROVISIONS
The Company Certificate places certain restrictions on the voting rights
of a "Related Person," defined therein as any person who directly or indirectly
owns 5% or more of the outstanding voting stock of the Company. The founders and
the original directors of the Company are excluded from the definition of
"Related Persons," as are seven named individuals including Richard J. Heckmann,
the Chairman of the Board, President and Chief Executive Officer of the Company.
These voting restrictions apply in two situations. First, the vote of a director
who is also a Related Person is not counted in the vote of the Board of
Directors to call a meeting of stockholders where that meeting will consider a
proposal made by the Related Person director. Second, any amendments to the
Company Certificate that relate to specified Articles therein (those dealing
with corporate governance, limitation of director liability or amendments to the
Company Certificate), in addition to being approved by the Board of Directors
and a majority of the Company's outstanding voting stock, must also be approved
by either (i) a majority of directors who are not Related Persons, or (ii) the
holders of at least 80% of the Company's outstanding voting stock, provided that
if the change was proposed by or on behalf of a Related Person, then approval by
the holders of a
23
<PAGE>
majority of the outstanding voting stock not held by Related Persons is also
required. In addition, any amendment to the Company's By-laws must be approved
by one of the methods specified in clauses (i) and (ii) in the preceding
sentence.
The Company Certificate and the Company's By-laws provide that the Board
of Directors shall fix the number of directors and that the Board shall be
divided into three classes, each consisting of one-third of the total number of
directors (or as nearly as may be possible). Stockholders may not take action by
written consent. Meetings of stockholders may be called only by the Board of
Directors (or by a majority of its members). Stockholder proposals, including
director nominations, may be considered at a meeting only if written notice of
that proposal is delivered to the Company from 30 to 60 days in advance of the
meeting, or within ten days after notice of the meeting is first given to
stockholders.
DELAWARE ANTI-TAKEOVER LAW
Section 203 of the Delaware General Corporation Law ("Section 203")
provides, in general, that a stockholder acquiring more than 15% of the
outstanding voting shares of a corporation subject to the statute (an
"Interested Stockholder"), but less than 85% of such shares, may not engage in
certain "Business Combinations" with the corporation for a period of three years
subsequent to the date on which the stockholder became an Interested Stockholder
unless (i) prior to such date the corporation's board of directors has approved
either the Business Combination or the transaction in which the stockholder
became an Interested Stockholder or (ii) the Business Combination is approved by
the corporation's board of directors and authorized by a vote of at least
two-thirds of the outstanding voting stock of the corporation not owned by the
Interested Stockholder.
Section 203 defines the term "Business Combination" to encompass a wide
variety of transactions with or caused by an Interested Stockholder in which the
Interested Stockholder receives or could receive a benefit on other than a pro
rata basis with other stockholders, including mergers, certain asset sales,
certain issuances of additional shares to the Interested Stockholder,
transactions with the corporation that increase the proportionate interest of
the Interested Stockholder or transactions in which the Interested Stockholder
receives certain other benefits.
24
<PAGE>
These provisions could have the effect of delaying, deferring or
preventing a change of control of the Company. The Company's stockholders, by
adopting an amendment to the Company Certificate or the By-laws of the Company,
may elect not to be governed by Section 203, effective twelve months after
adoption. Neither the Company Certificate nor the By-laws of the Company
currently excludes the Company from the restrictions imposed by Section 203.
VALIDITY OF COMMON STOCK
The validity of the Shares will be passed upon for the Company by
Kirkpatrick & Lockhart LLP, counsel to the Company.
EXPERTS
The consolidated financial statements of United States Filter Corporation
and its subsidiaries as of March 31, 1996 and 1997 and for each of the three
years in the period ended March 31, 1997 have been incorporated by reference
herein and in the registration statement in reliance upon the reports of KPMG
Peat Marwick LLP and Ernst & Young LLP, independent certified public accountants
as stated in their reports, incorporated by reference herein, and upon the
authority of said firms as experts in accounting and auditing.
The combined financial statements of the Systems and Manufacturing Group
of Wheelabrator Technologies Inc. as of December 31, 1994 and 1995 and for each
of the three years in the period ended December 31, 1995 have been incorporated
by reference herein in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing.
The consolidated financial statements of Culligan Water Technologies, Inc.
as of January 31, 1997 and 1998 and the related consolidated statements of
operations, changes in stockholders' equity and cash flows for each of the three
years in the period ended January 31, 1998 have been incorporated by reference
herein in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, which report is incorporated by reference herein,
and upon the authority of said firm as experts in accounting and auditing.
25
<PAGE>
The aggregated financial statements of the Process Equipment Division of
United Utilities Plc as of March 31, 1996 and 1995 and for each of the years in
the two year period ended March 31, 1996 have been incorporated by reference
herein in reliance upon the report of KPMG Audit Plc, independent chartered
accountants, which report is incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
The aggregated financial statements of Protean Plc as of March 31, 1997
and for the year ended March 31, 1997 have been incorporated by reference herein
in reliance upon the report of KPMG Audit Plc, independent chartered
accountants, which report is incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
The consolidated financial statements of The Kinetics Group, Inc. at
September 30, 1997 and 1996, 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 incorporated by reference herein in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
The combined financial statements of The Water Filtration Business (a
wholly owned business of AMETEK, Inc.) at December 31, 1996 and 1995, and for
each of the three years in the period ended December 31, 1996, 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
incorporated by reference herein 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 of Price Waterhouse, independent accountants, given on
the authority of said firm as experts in auditing and accounting.
The audited financial statements of WaterPro Supplies Corporation as of
December 31, 1995 and for the period from April 7, 1995 to December 31, 1995
incorporated by reference herein have been audited by Arthur Andersen LLP,
independent public accountants as indicated in their report with respect
thereto,
26
<PAGE>
and are incorporated by reference herein in reliance upon the authority of said
firm as experts in giving said report.
The independent valuation report of The Mentor Group, Inc. is
incorporated by reference herein in reliance upon the authority of said firm
in giving said report.
27
<PAGE>
===================================== ========================================
NO PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS, AND,
IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY
ANY SECURITIES OTHER THAN THE 5,815,450 SHARES
SECURITIES TO WHICH IT RELATES OR
AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY UNITED STATES FILTER CORPORATION
SUCH SECURITIES IN ANY
CIRCUMSTANCES IN WHICH SUCH OFFER
OR SOLICITATION IS UNLAWFUL. COMMON STOCK
NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF OR
THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE.
----------------
-------------
TABLE OF CONTENTS PROSPECTUS
PAGE -----------------
Available Information............. 2
Incorporation of Certain
Documents by Reference............ 2
The Company....................... 3
Risk Factors...................... 4
Recent Developments ..............17
Use of Proceeds...................17
Selling Stockholders..............17
Plan of Distribution..............19
Description of Capital
Stock............................20
Validity of Common Stock..........25
Experts...........................25
___________, 1998
===================================== ========================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits. The following exhibits are filed as part of this
registration statement:
EXHIBIT
NUMBER DESCRIPTION
------- -----------
5.01 Opinion of Kirkpatrick & Lockhart LLP as to the
legality of the securities being registered*
23.01 Consent of Kirkpatrick & Lockhart LLP (included in
Exhibit 5.01)*
23.02 Consents of KPMG Peat Marwick LLP and KPMG Audit plc**
23.03 Consents of Ernst & Young LLP***
23.04 Consent of Price Waterhouse*
23.05 Consent of Arthur Andersen LLP*
23.06 Consent of The Mentor Group, Inc.*
* Previously filed.
** Two consents filed herewith three consents previously filed.
*** One consent filed herewith; one consent previously filed.
<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
May 14, 1998.
UNITED STATES FILTER CORPORATION
By: /s/ Richard J. Heckmann
--------------------------------
Richard J. Heckmann
Chairman of the Board, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this amendment
has been signed by the following persons in the capacities and on the dates
indicated.
Signature Capacity Date
--------- -------- -----
/s/ Richard J. Heckmann Chairman of the Board, May 14, 1998
- ----------------------------- President and Chief
Richard J. Heckmann Executive Officer
(Principal Executive
Officer) and a Director
/s/ Kevin L. Spence Executive Vice May 14, 1998
- ----------------------------- President/Chief
Kevin L. Spence Financial Officer
(Principal Financial
and Accounting Officer)
* Executive Vice May 14, 1998
- ----------------------------- President/Chief
Michael J. Reardon Administrative Officer
and a Director
* President/Chief May 14, 1998
- ----------------------------- Operating Officer -
Nicholas C. Memmo Process Water Group and
a Director
<PAGE>
Signature Capacity Date
--------- -------- -----
* Director May 14, 1998
- -----------------------------
James E. Clark
* Director May 14, 1998
- -----------------------------
John L. Diederich
Director
- -----------------------------
Robert S. Hillas
* Director May 14, 1998
- -----------------------------
Arthur B. Laffer
Director
- -----------------------------
Ardon E. Moore
* Director May 14, 1998
- -----------------------------
Alfred E. Osborne, Jr.
Director
- -----------------------------
J. Danforth Quayle
* Director May 14, 1998
- -----------------------------
C. Howard Wilkins, Jr.
*By:
/s/ Damian C. Georgino May 14, 1998
- ----------------------
Damian C. Georgino
Attorney-in-Fact
<PAGE>
EXHIBIT INDEX
23.02 Consent of KPMG Peat Marwick LLP and KPMG Audit Plc
23.03 Consent of Ernst & Young LLP
Exhibit 23.02
Page 1 of 2
CONSENT OF KPMG PEAT MARWICK LLP
The Board of Directors
Culligan Water Technologies, Inc.
We consent to the incorporation by reference in the Registration Statement on
Form S-3 (No. 333-45981) of United States Filter Corporation of our report dated
April 7, 1998, with respect to the consolidated balance sheets of Culligan Water
Technologies, Inc. as of January 31, 1998 and 1997 and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of the
years in the three-year period ended January 31, 1998, and to the reference to
our firm under the heading "Experts" in the prospectus.
/s/ KPMG Peat Marwick LLP
Chicago, Illinois
May 14, 1998
<PAGE>
Exhibit 23.02
Page 2 of 2
CONSENT OF KPMG AUDIT PLC
The Board of Directors
Protean plc:
We consent to the incorporation by reference in the Registration Statement on
Form S-3 (No. 333-45891) of the United States Filter Corporation of our report
dated June 12, 1997, relating to the consolidated balance sheet of Protean plc
as of March 31, 1997, and the related consolidated profit and loss account, cash
flow statement, reconciliation of net cash flow to movement in net debt,
statement of total recognized gains and losses, reconciliation of movements in
shareholders' funds, and note of consolidated historical cost profits and losses
for the year ended March 31, 1997 and to the reference to our firm under the
heading "Experts" in the prospectus.
/s/ KPMG Audit Plc
KPMG Audit Plc
Chartered Accountants and Registered Auditor
London
May 14, 1998
Exhibit 23.03
CONSENT OF ERNST & YOUNG LLP
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3, No. 333-45981) of United States Filter
Corporation for the registration of shares of its common stock and to the
incorporation by reference therein of our report dated March 14, 1997, with
respect to the combined financial statements of The Water Filtration Business (a
wholly owned business of AMETEK, Inc.) included in the Current Report on Form
8-K of United States Filter Corporation dated May 12, 1998, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
Ernst & Young LLP
Philadelphia, Pennsylvania
May 14, 1998
