Filed pursuant to
Rule 424(b)(3)
File No. 333-67443
PROSPECTUS
[USFILTER LOGO]
UNITED STATES FILTER CORPORATION
COMMON STOCK
5,999,051 SHARES
We may use this Prospectus to issue or reserve shares of our Common
Stock from time to time in connection with the acquisition of various
businesses. You should read this Prospectus for more information.
Any shares issued or reserved for issuance under this Prospectus
will be listed on the New York Stock Exchange. Our Common Stock trades under the
symbol "USF."
AN INVESTMENT IN THESE SHARES INVOLVES CERTAIN RISKS. SEE "RISK
FACTORS" BEGINNING ON PAGE 5.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED
UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is January 13, 1999.
<PAGE>
[USFILTER LOGO]
UNITED STATES FILTER CORPORATION
COMMON STOCK
PROSPECTUS
5,999,051 SHARES
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TABLE OF CONTENTS
About This Prospectus......................................................... 2
Where You Can Find More Information........................................... 2
The Company................................................................... 4
Risk Factors.................................................................. 5
Reselling Shares..............................................................14
Description of Capital Stock..................................................15
Validity of Common Stock......................................................21
Experts.......................................................................21
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ABOUT THIS PROSPECTUS
Under this Prospectus, we may offer and issue up to 5,999,051 shares of
our Common Stock in connection with the acquisition of various businesses. We
may issue the shares in mergers or consolidations or in exchange for shares of
capital stock, partnership interests or other tangible or intangible assets
representing a direct or indirect interest in other companies or enterprises, or
for debt obligations of the acquired businesses. If we issue warrants, options,
convertible debt obligations, convertible equity securities, contingent rights
or other similar rights to acquire shares in connection with acquisitions, we
may reserve shares to cover their offering, issuance and sale upon exercise or
conversion of such rights.
When we issue shares under this Prospectus, we may promise the recipient
that the amount the recipient receives from a later sale of such shares will not
be lower than the valuation (or a specific amount related to such valuation) we
used at the time we originally issued the shares. These guaranties would be
limited in duration and could require us to make up any shortfall (including any
shortfall attributable to brokers' commissions and selling expenses) in cash or
by issuing additional shares under this Prospectus.
For each acquisition, we expect to negotiate the terms with the owners or
controlling persons of the businesses we plan to acquire. We will value the
shares issued or reserved in each acquisition based on or related to market
prices for our Common Stock on the New York Stock Exchange (NYSE). Such
valuation may occur at the time we agree to the terms of an acquisition, the
time of delivery of our shares, during periods ending at or about such times
based on average market prices, or otherwise.
We will not pay underwriting discounts or commissions, although we may pay
brokers' or finders' fees with respect to specific acquisitions - in some cases,
we may issue shares under this Prospectus in full or partial payment of such
fees. Any person who receives such fees may be deemed to be an underwriter
within the meaning of the U.S. Securities Act of 1933, as amended (the
Securities Act).
With our consent, persons who have received or will receive shares under
this Prospectus in connection with acquisitions (Selling Stockholders), may use
this Prospectus to sell such shares at a later date.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the U.S. Securities and Exchange Commission (SEC). Our SEC
filings are available to the public over the Internet at the SEC's web site at
www.sec.gov. You may also read and copy any document we file at the SEC's public
reference rooms in Washington, D.C., New York, New York and Chicago, Illinois.
Please call the SEC at 1-800-SEC-0330 for further information about the public
reference rooms.
For this offering, we have filed registration statements on Form S-4 with
the SEC (the Registration Statements)
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under the Securities Act. This Prospectus does not contain all of the
information set forth in the Registration Statements, certain portions of which
the SEC permits us to omit. If you would like to review those portions,
including exhibits, please visit the SEC's web site or call the SEC at the
number mentioned above.
If we make statements in this Prospectus that refer to the contents of any
omitted documents, such statements may be incomplete. In those cases, we refer
you to the omitted document for a more complete description. Such reference
modifies any statements made in this Prospectus.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this Prospectus, and information that we file later with
the SEC will automatically update and supersede this information.
We incorporate by reference the documents and reports listed below and any
future filings with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the U.S.
Securities Exchange Act of 1934, as amended. Future filings include filings made
after the date of the initial Registration Statements and prior to effectiveness
of the Registration Statements and after the date of this Prospectus and prior
to the termination of this Offering. Documents incorporated by reference include
the following:
o Annual Report on Form 10-K for the fiscal year ended March 31, 1998;
o Quarterly Reports on Form 10-Q for the quarters ended June 30, 1998 and
September 30, 1998;
o Quarterly Report on Form 10-Q/A dated November 9, 1998 (amending the
Quarterly Report on Form 10-Q for the quarter ended June 30, 1998);
o 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 3, 1998;
November 9, 1998;
November 27, 1998; and
December 3, 1998.
o Current Reports on Form 8-K/A filed:
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);
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o Definitive Proxy Statement on Schedule 14A dated July 7, 1998; and
o The descriptions of Common Stock, and the associated rights to purchase our
Series A Junior Participating Preferred Stock (the "Rights"), contained in
our Registration Statements on Form 8-A, as amended.
You may request a free copy of these filings, other than exhibits (unless
such exhibits are specifically incorporated by reference into such documents) by
writing or telephoning us at the following address:
General Counsel
United States Filter Corporation
40-004 Cook Street
Palm Desert, California 92211
(760) 340-0098
You should rely only on the information contained in this Prospectus or to
which we have referred you. We have not authorized anyone to provide you with
information that is different. We are not making an offer of these securities in
any state or country where the offer is not permitted.
This Prospectus is not an offer to sell, and it is not soliciting an offer
to buy, any securities other than those offered in this document. This
Prospectus also is not an offer to sell, and it is not soliciting an offer to
buy, any securities offered in this document in any circumstances in which such
offer or solicitation is unlawful.
You should not assume that the information in this Prospectus or any
supplement to this Prospectus is accurate as of any date other than the date on
the first page of those documents.
THE COMPANY
We are 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 we believe is one of the largest worldwide. We
offer a single-source solution to our customers through what we believe is the
industry's broadest range of cost-effective systems, products, services and
proven technologies. In addition, we market a broad line of waterworks
distribution products and services.
We have 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. We capitalize on our large installed
base, extensive distribution network and manufacturing capabilities to provide
customers with ongoing local service and maintenance.
We are a leading provider of outsourced water services, including the
operation of water and wastewater treatment systems at customer sites. In
addition, we are 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. We also own a significant
amount of property with appurtenant water rights in the Western and Southwestern
United States,
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substantially all of which are leased to agricultural tenants.
Our principal executive offices are located at 40-004 Cook Street, Palm
Desert, California 92211 and the telephone number there is (760) 340-0098.
RISK FACTORS
Before you invest in our Common Stock, you should consider risks
associated with the investment. We describe some of the principal risks in this
section.
This Prospectus contains information about us, some of which is
incorporated by reference to other documents. Our information includes
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are statements other
than historical information or statements about our current condition. You can
identify some forward-looking statements by the use of terms such as "believes,"
"contemplates," "expects," "may," "will," "could," "should," "would,"
"anticipates," "intends" or "continues."
We may not achieve the results indicated by the forward-looking
statements. The risk factors in this section are some of the factors that could
cause our actual results to differ materially from those contained in any
forward-looking statement.
EARNINGS VARIATION DUE TO BUSINESS CYCLES AND SEASONAL FACTORS
Our operating results can experience quarterly or annual variations due to
business cycles, seasonality and other factors. The market price for our Common
Stock may decrease if our operating results do not meet the expectations of
stock market analysts.
About 45% of our sales are of capital equipment. Sales of capital
equipment are affected by general fluctuations in the business cycle in the
United States and worldwide, instability of economic conditions (such as the
current conditions in the Asia Pacific region and Latin America) and interest
rates, as well as other factors.
In addition, operating results of some of our business segments are
significantly influenced, along with other factors such as interest rates, by
particular business cycles and seasonality, including:
BUSINESS CYCLES
AND SEASONS
SEGMENT AFFECTING RESULTS
- --------------------------------------------------------------------
Waterworks Distribution o Real estate development
o Housing starts
o Winter months in temperate regions
o Industrial capital spending
Consumer and Commercial o Consumer spending
o Housing starts
Industrial Products and o Microelectronics
Services o Pharmaceutical
o Biotechnology
o Municipal spending
PROFIT UNCERTAINTY IN FIXED-PRICE CONTRACTS
Contracts with fixed prices make up a significant portion of our revenues.
If our original cost estimates are incorrect, there are delays in scheduled
deliveries or we otherwise do not progress under a
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fixed-price contract as we expected, the profits under that contract could
decrease, or we could lose money on that contract. When our cost estimates
change for fixed-price contracts, we record adjustments in our financial
statements, and any future downward adjustments could be material.
COMPETITION
We compete against many companies in fragmented, highly competitive
markets and we have fewer resources than some of those companies. Our businesses
compete within and outside the United States principally on the basis of the
following factors:
BUSINESS FACTORS
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Water and Wastewater o Product quality and specifications
Treatment o Technology
o Reliability
o Price (can predominate among
competitors in the wastewater
treatment business that have
sufficient technical qualifications,
particularly in the municipal
contract bid process)
o Customized design and technical
qualifications
o Reputation
o Prompt local service
Filtration and o Price
Separation o Technical expertise
o Product quality
o Responsiveness to customer needs
o Service
o Technical support
Industrial Products and o Quality
Services o Service
o Price
Waterworks Distribution o Prompt local service capability
o Product knowledge by sales force and
service branch management
o Price
Consumer and Commercial o Price
Products o Product quality
o "Taste"
o Service
o Distribution capabilities
o Geographic presence
o Reputation
The waterworks distribution business competes against independent
wholesalers, distribution chains similar to ours and manufacturers who sell
directly to customers. The consumer products business competes with thousands of
companies, including those with national, regional or local distribution
networks, as well as retail outlets.
Competitive pressures, including those described above, and other factors
could cause us to lose market share or could result in decreases in prices,
either of which could have a material adverse effect on our financial position
and results of operations.
RISKS RELATED TO ACQUISITIONS
We have made a large number of acquisitions since 1991 and we plan to
continue to pursue acquisitions. Candidates for acquisition include businesses
that allow us to:
o expand the segments of the water and wastewater treatment and water-
related industries in which we participate;
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o complement our technologies, products or services;
o broaden our customer base and geographic areas served;
o expand our global distribution network; or
o use our "one-stop-shop" approach in terms of technology, distribution
or service.
If we are not correct when we assess the value, strengths, weaknesses,
liabilities and potential profitability of acquisition candidates or we are not
successful in integrating the operations of acquired businesses, our results of
operation or financial position could be adversely affected and we could lose
money. In addition, if we acquire other businesses by making so-called "hostile"
tender offers, as we did with Memtec Limited, we may encounter added risks. When
we negotiate to acquire a business, that business generally makes legally
binding statements (known as "representations") to us and provides us with
access to internal documents and other data that we rely upon in deciding
whether to acquire the business and, if we decide to acquire the business, on
what terms. We would not get such representations or internal information in a
"hostile" tender offer. We will continue to look for acquisition opportunities,
although we may not continue to easily find desirable acquisition candidates or
complete acquisitions.
RISKS OF DOING BUSINESS IN OTHER COUNTRIES
We have acquired businesses, and we otherwise conduct business, in markets
outside the United States, and we expect to continue to do so. In addition to
the risk of currency fluctuations, the risks associated with conducting business
in some countries outside the United States can include:
o slower payment of invoices;
o underdeveloped legal systems;
o nationalization; and
o social, political and economic instability.
Current economic conditions in the Asia Pacific region and Latin America
have adversely affected our operations and sales there. We cannot predict the
full impact of this economic instability, but it could have a material adverse
effect on our revenues and profits.
IMPORTANCE OF CERTAIN EMPLOYEES
Our senior officers, particularly Richard J. Heckmann, who is our Chief
Executive Officer, are very important to the success of our operations. We have
various compensation and benefit arrangements with our senior officers,
including Mr. Heckmann, that are designed to encourage them to continue their
employment with us. However, if any of our senior officers do not continue in
their present roles, our prospects may be adversely affected.
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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 (such
as 12/31/99), rather than eight (such as 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).
Our 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 our solutions.
We have completed identification, assessment and remediation of most of
our information technology (IT) systems. We have commenced identification and
assessment of our non-IT systems, which include, among other things, components
found in water and wastewater treatment plants and process water treatment
systems owned and/or operated under contract by us and in our hazardous waste
treatment facilities, as well as components of equipment in our manufacturing
facilities. Identification and assessment with respect to non-IT systems is
projected to continue until September 1999 for currently owned businesses.
However, as we acquire 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 our Year 2000 compliance program may be occurring
simultaneously as they relate to different systems. Each phase may have a
varying timetable to completion, depending upon the system and the date when a
particular business was acquired by us.
With the possible exception of the remediation and testing phases for
certain of our non-IT systems, all phases of our Year 2000 compliance program
are expected to be completed by September 1999, although we cannot assure you
that all phases for all businesses will be completed by that date. In
particular, we cannot assure you that recently or newly acquired businesses will
be Year 2000 compliant, although we currently have a policy that requires an
acquisition candidate to represent that its business is Year 2000 compliant. To
the extent feasible, we also review the Year 2000 status of acquisition
candidates before we complete an acquisition.
In addition to our internal systems, we have begun to assess the level of
Year 2000 problems associated with our various suppliers, customers and
creditors. To test the Year 2000 compliance status of our suppliers, we plan to
submit hypothetical orders to our suppliers dated after December 31, 1999
requesting confirmation that the orders have been correctly processed.
Our costs to date for our Year 2000 compliance program, excluding employee
salaries, have not been material. Although we have not completed our assessment,
we do not currently believe that the future
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costs associated with our Year 2000 compliance program will be material.
We are currently unable to determine our most reasonably likely worst-case
Year 2000 scenario, as we have not identified and assessed all our systems,
particularly our non-IT systems. As we complete our identification and
assessment of internal and third-party systems, we expect to develop contingency
plans for various worst-case scenarios. We expect 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 our business, financial condition or
results of operations.
POTENTIAL ENVIRONMENTAL RISKS
Environmental laws and regulations require us to meet certain standards
and impose liability if we do not meet them. Environmental laws and regulations
and their interpretations change. We must comply with any new standards and
requirements, even when they require us to clean up environmental conditions
that were not illegal when the conditions were created. We can be held
responsible for failures to meet environmental standards by businesses we have
acquired that happened before we acquired them. All of these requirements can
cost us money.
Environmental costs can result from cleanup obligations, civil or criminal
enforcement actions or private actions. Costs of environmental compliance and
fines or penalties for environmental violations could have a material adverse
effect on us in the future. Environmental risks that we have in our businesses
and some of the specific environmental liabilities that we know about and that
could result in significant future costs to us are discussed below.
Cleanup Liabilities. The United States Environmental Protection Agency has
notified us that we are a potentially responsible party under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) at
certain sites to which we (or companies we have acquired) have allegedly sent
waste in the past. We may receive additional notices under CERCLA or state law.
You should be aware that in 1995, Culligan Water Technologies, Inc.
(Culligan), one of our subsidiaries, bought part of Anvil Holdings, Inc. and
assumed certain environmental liabilities associated with soil and groundwater
contamination at Anvil Knitwear's Asheville Dyeing and Finishing Plant in
Swannanoa, North Carolina. Since 1990, Culligan has 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 this plant
and at two adjoining properties showed levels of a cleaning solvent that
Culligan believed to be from the plant that exceed applicable state standards.
Culligan has begun cleanup of the contamination and estimates that the
costs of future site cleanup will range from $1.0 million to $1.8 million. We
have a reserve for financial accounting purposes for cleanup of this site. We
anticipate that the potential costs of further monitoring and corrective
measures to address the groundwater problem will not have a
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material adverse effect on our financial position or results of operations.
However, because the full extent of the required cleanup has not been
determined, we cannot assure you of this result.
Also, we do not believe that our liability relating to all of the sites we
know to require cleanup, including the Anvil site, will be material to us.
However, we cannot assure you that such sites and/or other sites that we do not
know about will not have a material adverse effect on our financial position or
results of operations.
Hazardous Waste Treatment and Recovery Facilities. We own and operate
several hazardous waste treatment and recovery facilities, which are subject to
very strict environmental laws and regulations and compliance reviews. If we do
not comply with these regulations, we could be fined significant amounts of
money and/or the facilities' hazardous waste permits could be suspended or
revoked.
Liability for Wastewater Treatment Facilities and Wastewater Discharges.
By contract, we operate various wastewater collection and treatment facilities
that were developed and are owned by governmental or industrial entities. Under
certain of these contracts and applicable environmental laws we may be held
responsible as an operator of such facilities. We also operate facilities owned
by us, including service deionization centers and manufacturing facilities, that
discharge wastewater in connection with routine operations. Potential
responsibilities relating to these facilities include paying the fines or
penalties if the facilities malfunction or discharge wastewater which falls
below certain regulatory thresholds. In some cases, such possible malfunctions
or discharges depend upon design or operational conditions over which we have
limited, if any, control.
Underground Storage Tanks and Potential for Soil and Groundwater
Contamination. Some of our 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, we are investigating, and
have 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, we believe,
although there can be no assurance, that this matter will not have a material
adverse effect on our financial position or results of operations.
Impact of Environmental Laws on Our Product Sales and Potential
Liabilities. The liabilities and risks imposed on our customers by environmental
laws may adversely impact demand for some of our products or services or impose
greater liabilities and risks on us, which could also have an adverse effect on
our competitive and financial position.
RISKS RELATED TO MUNICIPAL WATER AND WASTEWATER BUSINESS
Sales to municipal customers make up a significant percentage of our
revenues. We encounter some additional risks with municipalities that we do not
have with industrial customers. Competition for selection of a municipal
contractor usually
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requires a formal bidding process. By requiring formal bids, municipal projects
entail longer lead times than industrial projects and force us to commit more
resources. In addition, the municipal business depends upon the availability of
funding at the local level, which may be subject to increasing pressure as local
governments are expected to bear a greater share of the cost of public services.
TECHNOLOGICAL AND REGULATORY RISKS
Changes in technology, competitively imposed process standards and
regulatory requirements influence the demand for many of our products and
services. To grow and remain competitive, we need to anticipate changes in
technological and regulatory standards. We need to introduce new and enhanced
products on a timely basis. We may not achieve these goals and some of our
products may become obsolete.
New products often face lack of market acceptance, development delays or
operational failure. Stricter governmental regulations also may affect
acceptance of new products. The market growth potential of in-process research
and development that we have acquired with some businesses we bought is subject
to significant risks, including high development, production and sales costs,
introduction of competing technologies and the possible lack of market
acceptance of the developed products and technologies.
Our trademarks or patents may not provide substantial protection from
competition or be of commercial benefit to us. We may not be able to enforce our
rights under trademarks or patents against third parties. Some international
jurisdictions may not protect these kinds of rights to the same extent that they
are protected under U.S. law. If a third party successfully challenges our
trademarks or patents, it may affect our competitive and financial position.
RISKS RELATED TO WATER RIGHTS AND TRANSFERS OF WATER
We own more than 47,000 acres of agricultural land in the southwestern
United States, most of which is located within the Imperial Irrigation District
(IID) in Imperial County, California. We lease substantially all of the 47,000
acres to agricultural tenants.
We acquired the land with water rights, and we are seeking to acquire
additional properties with water rights, primarily in the southwestern and
western United States. In the future, we may want to transfer water attributable
to such water rights, particularly from the land located in the IID.
Our ability to transfer water and the profitability of any such transfers
are subject to various uncertainties, including:
o Hydrologic risks of variable water supplies;
o Unavailable or inadequate transportation facilities;
o Allocations of water under existing and prospective priorities;
o Risks of adverse changes to or interpretations of U.S. federal,
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state and local laws, regulations and policies relating to water
rights; and
o Compliance with all U.S. federal and state environmental laws and
regulations.
Transfers of IID water are subject to additional uncertainties, including:
o Control by the IID of the timing and terms of any transfers of our IID
water (the IID holds title to all of the water rights within the IID
in trust for the landowners);
o Limitations of Colorado River water allocations (the source of all
water deliveries to IID properties) under
o international treaties;
o interstate compacts;
o U.S. federal and state laws and regulations; and
o contractual arrangements;
o Curtailment of water deliveries by the U.S. government in times of
drought;
o Required approval by the U.S. Secretary of the Interior;
o If a transfer of IID water were approved, possible assertion by other
California water districts and users of claims adverse to our 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 our IID water rights and
the ability to transfer our IID water); and
o Uncertainty of California laws relating to the cost of transportation
and volume of water which could be required to be transported via the
Colorado River Aqueduct owned by the Metropolitan Water District, a
quasi-governmental agency (any IID water transferred to metropolitan
areas of Southern California such as San Diego would be transported
through this aqueduct).
The uncertainties associated with water rights could have a material
adverse effect on our future profitability.
EURO CONVERSION
On January 1, 1999, eleven of fifteen member countries of the European
Union established fixed conversion rates between their existing currencies
(legacy currencies) and one common currency - the euro. The euro is now trading
on currency exchanges and may be used as a non-cash transactional currency. The
conversion to the euro eliminates currency exchange rate risk between the
participating member countries. Beginning in January 2002, new euro-denominated
bills and coins will be issued, and legacy currencies will be withdrawn from
circulation.
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We are assessing the issues raised by the euro currency conversion. These
issues include, among others, the need to adapt computer and financial systems
to accommodate euro-denominated transactions, the competitive impact of
increased price transparency in the participating countries and the impact on
our existing contracts. Since financial systems and processes currently
accommodate multiple currencies, we contemplate system conversion by mid-2001 if
not already addressed in conjunction with Year 2000 remediation. We do not
expect system conversion costs to be material. Due to numerous uncertainties, we
cannot reasonably estimate at this time the effects a common currency will have
on pricing within the European Union and the resulting impact, if any, on our
financial condition or results of operations.
SHARES ELIGIBLE FOR FUTURE SALE
The market price of our Common Stock could be adversely affected by the
availability for public sale of up to 42,569,560 shares held or issuable on
January 4, 1999, including:
NUMBER OF SHARES
OF COMMON STOCK HOLDER AND/OR MANNER OF HOLDING
----------------------------------------------------------------------
o Up to 2,806,263 Shares may be delivered:
o in lieu of cash by Laidlaw Inc. or its
affiliates at maturity of Laidlaw's 5 3/4%
Exchangeable Notes due 2000; or
o upon sale in accordance with Rule 144(k)
under the Securities Act.
o 10,481,013 Shares issuable upon conversion of our 4 1/2%
Convertible Subordinated Notes due 2001 at
a conversion price of $39.50 per share of
Common Stock.
o 1,200,000 Shares issuable upon exercise of two sets of
warrants, in each case expiring on September
17, 2007 and exercisable at any time after
the first sale of water rights from certain
of our properties:
o 600,000 at an exercise price of $50.00
per share; and
o 600,000 at an exercise price of $60.00
per share.
o 31,050 Shares issuable upon exercise of currently
exercisable warrants at an exercise price of
$36.53 per share, expiring February 11, 2002.
o 22,235,786 Outstanding shares subject to agreements pursuant
to which the holders have rights to request us to
register the sale of their Common Stock under the
Securities Act and/or, to include certain
percentages of such shares in other
registration statements filed by us.
Such rights as to 8,000,000 shares are not
exercisable until February 17, 2000.
o 5,815,450 Outstanding shares currently registered for sale
under the Securities Act pursuant to a shelf
registration statement.
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RESELLING SHARES
With our consent, this Prospectus may be used by Selling Stockholders who
may wish to sell shares. We may consent to the use of this Prospectus by Selling
Stockholders for a limited period of time and subject to limitations and
conditions which may be varied by agreement between us and one or more Selling
Stockholders.
Selling Stockholders may agree that:
o an offering of shares under this Prospectus be effected in an orderly
manner through securities dealers, acting as broker or dealer,
selected by us;
o they will enter into custody agreements with one or more banks with
respect to such shares; and
o that they make sales only by one or more of the methods described in
this Prospectus, as appropriately supplemented or amended when
required.
Other than in circumstances where we may receive certain benefits in
connection with price guaranty arrangements, we will not receive any of the
proceeds from any sale of shares offered by a Selling Stockholder.
Selling Stockholders may sell shares:
o on one or more exchanges or otherwise;
o directly to purchasers in negotiated transactions;
o by or through brokers or dealers, in ordinary brokerage transactions
or transactions in which the broker or dealer solicits purchasers;
o in block trades in which the broker or dealer will attempt to sell
shares as agent but may position and resell a portion of the block as
principal;
o in transactions in which a broker or dealer purchases as principal for
resale for its own account;
o through underwriters or agents; or
o in any combination of these methods.
Shares may be sold at a fixed offering price, which may be changed, at the
prevailing market price at the time of sale, at prices related to such
prevailing market price or at negotiated prices. Any brokers, dealers,
underwriters or agents may arrange for others to participate in any such
transaction and may receive compensation in the form of discounts, commissions
or concessions from Selling Stockholders and/or the purchasers of shares. The
proceeds to a Selling Stockholder from any sale of shares will be reduced by any
such compensation and by any expenses to be borne by the Selling Stockholder.
If required at the time that a particular offer of shares is made, a
supplement to this Prospectus will be delivered that describes any material
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arrangements for the distribution of shares and the terms of the offering,
including the names of any underwriters, brokers, dealers or agents and any
discounts, commissions or concessions and other items constituting compensation
from the Selling Stockholder.
Selling Stockholders and any brokers, dealers, underwriters or agents that
participate with a Selling Stockholder in the distribution of shares may be
deemed to be "underwriters" within the meaning of the Securities Act, in which
event any discounts, commissions or concessions received by any such brokers,
dealers, underwriters or agents and any profit on the resale of the shares
purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act.
We may agree to indemnify Selling Stockholders and/or any such brokers,
dealers, underwriters or agents against certain civil liabilities, including
liabilities under the Securities Act, and to reimburse them for certain expenses
in connection with the offering and sale of shares.
Selling Stockholders may also offer and sell shares of Common Stock
covered by this Prospectus under exemptions from the registration requirements
of the Securities Act, including sales which meet the requirements of Rule
145(d) under the Securities Act.
DESCRIPTION OF CAPITAL STOCK
GENERAL
As of January 4, 1999, we were authorized to issue 300,000,000 shares of
Common Stock, of which 177,532,199 shares were issued and outstanding. Of the
unissued shares of Common Stock:
o 10,481,013 shares were reserved for issuance upon conversion of our
4-1/2% Convertible Subordinated Notes due 2001;
o 1,200,000 shares were reserved for issuance upon exercise of warrants
expiring September 17, 2007;
o 31,050 shares were reserved for issuance upon exercise of currently
exercisable warrants at an exercise price of $36.53 per share,
expiring February 11, 2002; and
o an aggregate of 15,923,555 shares were reserved for issuance upon
exercise of options either outstanding or available for grant to our
officers, directors and employees.
COMMON STOCK
The holders of our Common Stock receive one vote for each share held of
record by them on all matters to be voted on by stockholders. Stockholders
cannot use cumulative voting in electing directors - as a result, the holders of
shares having more than 50% of our 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 our Common Stock may receive dividends if declared by the
Board of Directors out of legally available funds, subject to any prior rights
of preferred stockholders. If we liquidate, dissolve or wind up our affairs, the
holders
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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 our Common Stock. Except as described below under "Stock
Purchase Rights" and "Rights Plan," holders of shares of Common Stock have no
conversion, preemptive or other subscription rights, and there are no redemption
or sinking fund provisions applicable to our Common Stock.
We currently intend to retain earnings to provide funds for the operation
and expansion of our business. Accordingly, we do 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 our financial
condition, earnings, capital requirements and such other factors as our Board of
Directors deems relevant. Our Amended and Restated Multicurrency Credit
Agreement, dated as of October 20, 1997, imposes, and any future debt or equity
instruments or securities may impose, restrictions on our ability to pay
dividends.
PREFERRED STOCK
Shares of preferred stock may be issued without stockholder approval. Our
Board of Directors is authorized to issue such shares in one or more series and
to fix the rights, preferences, privileges, qualifications, limitations and
restrictions thereof, including dividend rights and rates, conversion rights,
voting rights, terms of redemption, redemption prices, liquidation preferences
and the number of shares constituting any series or the designation of such
series, without any vote or action by the stockholders. We have 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. Our 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 us.
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STOCK PURCHASE RIGHTS
Laidlaw, which, as of January 4, 1999, held 2,806,263 shares of Common
Stock, or 1.6% of the outstanding Common Stock, has certain rights to purchase
our voting securities in order to maintain its percentage voting interest. If we
sell or issue shares of voting securities, Laidlaw has the right to purchase, on
the same terms as the sale or issuance, that number of shares or rights as will
maintain its percentage interest in our voting securities, assuming the
conversion of all convertible securities and the exercise of all options and
warrants then outstanding. Laidlaw's right does not apply in the case of
mergers, acquisitions or employee stock option or stock bonus plans.
Laidlaw has additional purchase rights if we sell or issue securities at
prices below 85% of the current market price at the time of sale or issuance or
the prevailing customary price for such securities or their equivalent.
CERTAIN VOTING ARRANGEMENTS
As part of our acquisition of Smogless S.p.A. in September 1994, Laidlaw
agreed to vote its shares for our Board's nominees for election. On all other
matters, Laidlaw agreed to vote 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 us or any amendment to our
Certificate of Incorporation (Charter) or By-laws.
In September 1997, we acquired 47,000 acres of agricultural land in the
southwestern United States for 8,000,000 shares of Common Stock and 1,200,000
warrants. In connection with that acquisition, we agreed, so long as the parties
from whom we acquired the land own at least 5% of our outstanding Common Stock,
to nominate a person designated by the parties for election to our Board.
The parties designated Ardon E. Moore and our Board appointed him to serve
as a Class I director until our Annual Meeting in 2000. If the parties own at
least 7 1/2% of our outstanding Common Stock and a vacancy occurs due to the
termination of service of one of our non-employee directors, the parties must
also approve the person filling such vacancy. If the non-employee director
creating the vacancy is the existing designee of the parties, the vacancy would
be filled with a successor designee.
In addition, the parties agreed to vote all of their shares as recommended
by a majority of the members of our Board, except with respect to transactions
involving the sale of all or substantially all of our assets, merger or
acquisition transactions in which we are not the survivor or the parent of the
survivor (unless the holders of our stock prior to such a transaction continue
to own 80% or more of the outstanding voting stock of the survivor),
transactions involving the issuance by us of Common Stock representing 20% or
more of the outstanding Common Stock (or equivalents), or amendment of our
Charter or By-laws.
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CERTAIN CHARTER AND BY-LAW PROVISIONS
Our Charter places certain restrictions on the voting rights of a "Related
Person," defined as any person who directly or indirectly beneficially owns 5%
or more of our outstanding voting stock. Our founders and original directors are
excluded from the definition of "Related Persons," as are seven named
individuals including Richard J. Heckmann, our Chairman of the Board and Chief
Executive Officer.
These voting restrictions apply in two situations. First, if the Board
votes to call a meeting of stockholders to consider a proposal by a director who
is also a Related Person, the vote of a director who is also a Related Person
will not count. Second, any changes to our Charter that relate to specified
Articles therein (those dealing with corporate governance, limitation of
director liability or amendments to the Charter), must be approved by a majority
of our Board then in office, a majority of our outstanding voting stock and
either:
o a majority of the authorized number of directors (and, if one or more
Related Persons exist, by a majority of the directors who are not
Related Persons); or
o the holders of at least 80% of our outstanding voting stock.
In addition, the Charter provides that any changes to our By-laws be approved by
one of the methods specified above. If any change in the Charter or By-laws was
proposed by or on behalf of a Related Person, then approval by the holders of a
majority of the outstanding voting stock not held by Related Persons is also
required.
Our Charter and By-laws also provide that our Board 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 our Board, or 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 us from 30
to 60 days in advance of the meeting, or, in certain circumstances, within 10
days after notice or public disclosure of the meeting is first given to
stockholders.
RIGHTS PLAN
On December 11, 1998, we made a dividend distribution of one Right for
each outstanding share of our Common Stock. Each Right entitles its holder to
purchase from us one one-thousandth of a share of our Series A Junior
Participating Preferred Stock, at a purchase price of $80 subject to adjustment.
In addition, so long as the Rights are attached to our Common Stock, one
additional Right (as such number may be adjusted pursuant to the Rights
Agreement) shall be deemed to be delivered for each share of our Common Stock
issued or transferred by us in the future. 300,000 shares of Series A Preferred
Stock were initially reserved for issuance upon exercise of the Rights.
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The description and terms of the Rights are set forth in a Rights
Agreement between us and The Bank of New York, as our Rights Agent. The
following summary of the Rights is not complete and is qualified in its entirety
by reference to the complete text of the Rights Plan and the exhibits attached
to the Rights Plan.
The Rights are not exercisable until the Distribution Date, which will
occur upon the earlier of:
o 10 days following a Stock Acquisition Date - the date on which it is
publicly announced that an Acquiring Person has acquired, or obtained
the right to acquire, beneficial ownership of 15% or more of our
Common Stock; or
o 10 business days (or any later date our Board determines) following
the commencement of a tender offer or exchange offer that would result
in a person or group becoming an Acquiring Person.
An Acquiring Person is any person or entity beneficially owning 15% or
more of our Common Stock, subject to certain exceptions described in the Rights
Agreement.
Until a Right is exercised, the holder has no rights as a stockholder of
our company, including the right to vote or to receive dividends. The Rights
will expire at the close of business on November 27, 2008, unless redeemed or
exchanged by us at an earlier time.
If a person becomes an Acquiring Person (except pursuant to certain
offers), each holder of a Right (other than the Acquiring Person and certain
related parties) will be entitled after the Rights are no longer redeemable to
receive, upon exercise, at the option of our Board:
o Common Stock;
o One one-thousandth of a share of our Series A Preferred Stock; and/or
o Cash, property or any other of our securities.
Each of these three options would have a value equal to two times the exercise
price of the Right.
For example, at an exercise price of $80 per Right, each Right not
beneficially owned by an Acquiring Person (or by certain related parties)
following an event set forth in the preceding paragraph would entitle its holder
after the Rights are no longer redeemable to purchase $160 worth of our Common
Stock (or other consideration, as noted above) for $80. Assuming that our Common
Stock had a per share value of $20 at that time, the holder of each valid Right
would be entitled to purchase 8 shares of our Common Stock for $80.
If at any time following a Stock Acquisition Date:
o we are acquired in a merger or other business combination transaction
in which we are not the surviving corporation; or
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o 50% or more of our assets, cash flow or earning power is sold
or transferred; then
each holder of a Right (except Rights beneficially owned by an Acquiring Person
or certain related parties) would have the right to receive, upon exercise,
common stock of the acquiring company having a value equal to two times the
exercise price of the Right.
At any time after a person becomes an Acquiring Person and prior to the
acquisition by such person or group of 50% or more of our outstanding Common
Stock, our Board may exchange the Rights (other than Rights owned by such person
or group which have become void), in whole or in part, at an exchange ratio of
one share of our Common Stock, or one one-thousandth of a share of Series A
Preferred Stock, per Right (subject to adjustment).
At any time until 10 days following the Stock Acquisition Date, we may
redeem the Rights in whole, but not in part, at a price of $.01 per Right
(payable in cash, our Common Stock or other consideration deemed appropriate by
our Board). Redemption of the Rights may also occur after November 27, 2000
through a stockholder referendum if we receive a qualifying offer from a person
owning less than 5% of our Common Stock.
Immediately upon the action of our Board ordering redemption of the Rights
or the effectiveness of the redemption of Rights pursuant to the stockholder
referendum, the Rights will terminate and the only right of the holders of
Rights will be to receive the $.01 redemption price.
Any of the provisions of the Rights Agreement may be amended by our Board
prior to the Distribution Date. After the Distribution Date, the provisions of
the Rights Agreement may be amended by our Board in order to cure any ambiguity,
to make changes which do not adversely affect the interests of holders of
Rights, or to shorten or lengthen any time period under the Rights Agreement;
provided, however, that no amendment may be made at such time as the Rights are
not redeemable.
The Rights may have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire us in a
manner which causes the Rights to become exercisable unless the offer is
conditioned on a substantial number of Rights being acquired. The Rights,
however, should not affect any prospective offeror willing to make an offer at a
fair price and otherwise in the best interests of us and our stockholders as
determined by a majority of our directors who are not affiliated with the person
making the offer, or who is willing to negotiate with our Board.
The Rights should not interfere with any merger or other business
combination approved by our Board since our Board may, at its option, amend the
Rights Agreement prior to the Distribution Date, or redeem all (but not less
than all) of the then-outstanding Rights at any time until 10 days after the
Stock Acquisition Date.
DELAWARE ANTI-TAKEOVER LAW
In general, Section 203 of the Delaware General Corporation Law
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provides 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 after the date the stockholder
became an Interested Stockholder unless:
o prior to such date, the corporation's Board of Directors approved
either the Business Combination or the transaction in which the
stockholder became an Interested Stockholder; or
o the corporation's Board of Directors approves the Business Combination
and at least two-thirds of the corporation's voting stock (not owned
by the Interested Stockholder) authorizes it.
Section 203 defines "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 greater benefit than other stockholders,
including:
o mergers;
o certain asset sales;
o certain issuances of additional shares to the Interested Stockholder;
o transactions with the corporation that increase the proportionate
interest of the Interested Stockholder; or
o transactions in which the Interested Stockholder receives certain
other benefits.
These provisions could delay, defer or prevent a change of control. Our
stockholders, by adopting an amendment to the Charter or the By-laws, may elect
not to be governed by Section 203, which would be effective twelve months after
adoption. Neither the Charter nor the By-laws currently excludes us from the
restrictions imposed by Section 203.
VALIDITY OF COMMON STOCK
Our counsel, Kirkpatrick & Lockhart LLP, has given an opinion that the
shares of Common Stock covered by this Prospectus, when authorized by our Board
(or a duly appointed committee thereof) and issued as contemplated in the
Registration Statements, will be validly issued, fully paid and non-assessable.
EXPERTS
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 in the Registration Statement in reliance upon the reports of KPMG
LLP, independent certified public accountants, which as to years ended March 31,
1997 and 1996 are based in part on the reports of Ernst and Young LLP,
independent auditors, incorporated herein and in the Registration Statement by
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reference, given 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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