<PAGE> 1
PROSPECTUS SUPPLEMENT Filed Pursuant to Rule 424(b)(5)
FEBRUARY 3, 1997 Registration No. 333-17453
(TO PROSPECTUS DATED FEBRUARY 3, 1997)
10,000,000 SHARES
USA WASTE SERVICES, INC.
COMMON STOCK
All of the shares of Common Stock offered hereby are being sold by USA
Waste Services, Inc. See "Underwriting."
Concurrently with this Offering, the Company is offering, pursuant to a
separate Prospectus Supplement, $500,000,000 aggregate principal amount of 4%
Convertible Subordinated Notes due 2002 ($535,275,000 if the underwriters'
over-allotment option is exercised in full). The net proceeds of this Offering,
together with the net proceeds of the Notes Offering, are expected to be used to
repay the outstanding indebtedness under the Company's revolving Credit Facility
and for general corporate purposes. Amounts repaid on the Credit Facility may be
reborrowed from time to time for possible future acquisitions (including the
Pending Acquisitions described under "Prospectus Supplement Summary -- The
Company -- Recent Developments"), capital expenditures and other general
corporate purposes. Consummation of this Offering is not a condition to
consummation of the Notes Offering, and consummation of the Notes Offering is
not a condition to consummation of this Offering. See "Prospectus Supplement
Summary -- The Company -- Recent Developments" and "Use of Proceeds."
The Common Stock is listed on the New York Stock Exchange and traded under
the symbol "UW." On February 3, 1997, the closing sale price of the Common Stock
as reported on the New York Stock Exchange Composite Tape was $35 1/8 per share.
See "Price Range of Common Stock."
SEE "RISK FACTORS" BEGINNING ON PAGE S-6 FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
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.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
PRICE UNDERWRITING PROCEEDS
TO THE DISCOUNTS AND TO THE
PUBLIC COMMISSIONS(1) COMPANY(2)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share.................................. $35.125 $1.40 $33.725
Total (3).................................. $351,250,000 $14,000,000 $337,250,000
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(2) Before deducting expenses payable by the Company estimated at $400,000.
(3) The Company has granted to the Underwriters an option exercisable within 30
days after the date of this Prospectus Supplement to purchase up to an
aggregate of 1,500,000 additional shares of Common Stock, on the same terms
as set forth above, at the Price to the Public, less the Underwriting
Discounts and Commissions, solely for the purpose of covering
over-allotments, if any. If such option is exercised in full, the total
Price to the Public, Underwriting Discounts and Commissions and Proceeds to
the Company will be $403,937,500, $16,100,000 and $387,837,500,
respectively. See "Underwriting."
The shares of Common Stock are offered by the several Underwriters when, as
and if delivered to and accepted by them, subject to certain conditions,
including their rights to withdraw, cancel or reject orders in whole or in part.
It is expected that delivery of the shares of Common Stock will be made in New
York, New York, on or about February 7, 1997.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
DEUTSCHE MORGAN GRENFELL
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
<PAGE> 2
IN CONNECTION WITH THE OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OR THE
COMMON STOCK AT LEVELS ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
S-2
<PAGE> 3
PROSPECTUS SUPPLEMENT SUMMARY
The following summary is qualified in its entirety by the more detailed
information, including the Selected Consolidated Financial Data and the
Company's Consolidated Financial Statements and Notes thereto, included or
incorporated by reference in this Prospectus Supplement and the accompanying
Prospectus. Except as otherwise specified, all information in this Prospectus
Supplement assumes that the Underwriters do not exercise the over-allotment
option described under the caption "Underwriting." The "Company" and "USA Waste"
refer to USA Waste Services, Inc. and its subsidiaries and predecessors, unless
otherwise indicated or the context requires otherwise.
THE COMPANY
USA Waste is the third largest solid waste management company in North
America and serves municipal, commercial, industrial and residential customers
in 36 states, the District of Columbia, Canada, Mexico and Puerto Rico. The
Company's solid waste management services include collection, transfer and
disposal operations and, to a lesser extent, recycling and certain other waste
management services. USA Waste owns or operates 101 landfills, 61 transfer
stations and 123 collection operations and serves more than 2.0 million
customers.
For the nine months ended September 30, 1996, approximately 52.9% of the
Company's revenues was attributable to collection operations, approximately
28.9% was attributable to landfill operations and approximately 10.6% was
attributable to transfer operations. Of the collection revenues, approximately
39.6%, 28.8% and 31.6% were from commercial, residential and industrial
customers, respectively. For the nine months ended September 30, 1996, the
Company's average landfill volume was approximately 72,500 tons per day.
The Company's strategy includes the following key elements: (i) increasing
productivity and operating efficiencies in existing and acquired operations,
(ii) increasing revenues and enhancing profitability in its existing markets
through "tuck-in" acquisitions, and (iii) expanding into new markets through
acquisitions. The Company seeks to become the low-cost operator in each of its
markets by increasing productivity and operating efficiencies through
implementation of uniform administrative systems, consolidation of collection
routes, improvement of equipment utilization, and increases in employee
productivity through incentive compensation and training programs. The Company
regularly pursues opportunities to expand its services through the acquisition
of additional solid waste management businesses and operations that can be
effectively integrated with the Company's existing operations, and pursues
acquisitions in new markets where the Company believes it can strengthen its
overall competitive position as a national provider of integrated solid waste
management services.
USA Waste was incorporated under the laws of the State of Delaware in April
1995 to become the successor to USA Waste Services, Inc., an Oklahoma
corporation organized in 1987. The principal executive offices of USA Waste are
located at 1001 Fannin Street, Suite 4000, Houston, Texas 77002 and its
telephone number is (713) 512-6200.
RECENT DEVELOPMENTS
On December 16, 1996, the Company acquired Empire Sanitary Landfill, Inc.,
a large landfill, and Danella Environmental Technologies, Inc., a collection
operation, both located near Scranton, Pennsylvania. The annualized revenues
from these acquired operations are approximately $52 million.
USA Waste has signed a definitive agreement, effective as of January 15,
1997, to acquire the Canadian operations of Allied Waste Industries, Inc.
("Allied") for approximately US $518 million in cash (the "Canadian
Acquisition"). Allied acquired these operations from Laidlaw Inc. on December
30, 1996. The Canadian Acquisition includes landfill and collection operations
in the provinces of Alberta, British Columbia, Manitoba, Ontario, Quebec and
Saskatchewan. The annualized revenues from the Canadian Acquisition are
approximately US $270 million. Completion of the Canadian Acquisition is subject
to certain Canadian regulatory approvals and other customary conditions.
S-3
<PAGE> 4
USA Waste has signed a definitive agreement to acquire substantially all of
the assets of Mid-American Waste Systems, Inc. ("Mid-American") for
approximately $180 million (the "Mid-American Acquisition," and together with
the Canadian Acquisition, the "Pending Acquisitions"). The purchase price
includes the proposed assumption of $49 million of debt, with the balance of the
price being paid in cash or a combination of cash and up to $90 million of
Common Stock of USA Waste. Since the purchase price is significantly less than
Mid-American's total outstanding indebtedness, Mid-American and its related
subsidiaries have filed a proceeding under Chapter 11 of the Bankruptcy Code
with the United States Bankruptcy Court for the District of Delaware. Under the
terms of the agreement, USA Waste will acquire the assets of Mid-American,
subject only to agreed liabilities, and will be afforded protection from future
creditor claims against the assets acquired. The assets to be acquired consist
of landfill and collection operations in Ohio, Illinois, Indiana, Kentucky,
Pennsylvania, South Carolina and West Virginia. Mid-American had annual revenues
for 1996 of approximately $123 million. Completion of the Mid-American
Acquisition is subject to approval of the Bankruptcy Court, antitrust clearance
and other customary conditions.
There can be no assurance that the Pending Acquisitions will be completed.
Consummation of this Offering is not conditioned on consummation of the Pending
Acquisitions, nor is consummation of the Pending Acquisitions conditioned on
consummation of this Offering.
The Company has received a commitment from a group of commercial banks for
a $400 million bridge credit facility with an 18-month maturity and other
proposed terms that the Company believes to be generally acceptable (the "Bank
Bridge Facility"). In the event that this offering (the "Offering") or the
Company's concurrent offering of 4% Convertible Subordinated Notes due 2002 (the
"Notes Offering") is not consummated or is delayed, the Company intends to use
the proceeds from the Bank Bridge Facility to fund a portion of the Canadian
Acquisition.
On December 31, 1996, the Company was served with subpoenas relating to
documents covering a period from 1990 to the present in connection with an
ongoing investigation being conducted by the United States Attorney's Office for
the Central District of California. The Company has been informed that it is not
a target of the investigation but that one of its subsidiaries, Western Waste
Industries, which the Company acquired in May of 1996, is a target of the
investigation. The Company has pledged its full cooperation in the
investigation.
S-4
<PAGE> 5
THE OFFERING
Common Stock offered by the
Company..................... 10,000,000 shares
Common Stock to be outstanding
after the Offering............ 149,585,765 Shares(1)
Concurrent Offering........... Concurrently with this Offering of Common
Stock, par value $.01 per share, of the Company
(the "Common Stock"), the Company is offering
$500,000,000 aggregate principal amount of 4%
Convertible Subordinated Notes due 2002 (the
"Notes") ($535,275,000 if the underwriters'
over-allotment option is exercised in full)
pursuant to a separate Prospectus Supplement.
The Notes are convertible into Common Stock at
a conversion price of $43.56 per share.
Consummation of this Offering is not a
condition to consummation of the Notes
Offering, and consummation of the Notes
Offering is not a condition to consummation of
this Offering.
Use of Proceeds............... The net proceeds of this Offering, together
with the net proceeds of the Notes Offering,
are expected to be used to repay the
outstanding indebtedness under the Company's
revolving credit facility (the "Credit
Facility") and for general corporate purposes.
Amounts repaid on the Credit Facility may be
reborrowed from time to time for possible
future acquisitions (including the Pending
Acquisitions), capital expenditures and other
general corporate purposes. See "Use of
Proceeds."
New York Stock Exchange
("NYSE") symbol............. UW
- ------------------------------
(1) Based on the number of shares of Common Stock outstanding as of December 31,
1996. Does not include (i) 11,479,738 shares issuable upon conversion of the
4% Convertible Subordinated Notes due 2002 at a conversion price of $43.56
per share, (ii) 4,062,168 shares issuable upon conversion of the Company's
outstanding 5% Convertible Subordinated Debentures due 2006 at a conversion
price of $28.31 per share, or (iii) 18,565,613 shares issuable upon exercise
of outstanding stock options under the Company's stock option plans and
outstanding warrants as of such date.
S-5
<PAGE> 6
RISK FACTORS
In addition to the other information contained in or incorporated by
reference in this Prospectus Supplement or the accompanying Prospectus,
prospective investors should consider carefully the following factors relating
to the business of the Company and the sale of the Common Stock before acquiring
any of the Common Stock offered hereby. Information contained or incorporated by
reference in this Prospectus Supplement or the accompanying Prospectus contains
"forward-looking statements." No assurance can be given that the future results
covered by the forward-looking statements will be achieved. The following
cautionary statements identify certain important factors with respect to such
forward-looking statements, including certain risks and uncertainties, that
could cause actual results to vary materially from the future results covered in
such forward-looking statements. Other factors also could cause actual results
to vary materially from the future results covered in such forward-looking
statements. In addition, prospective investors should consider carefully the
information set forth under the captions "Business -- Regulation" and
"-- Factors Influencing Future Results and Accuracy of Forward-Looking
Statements" in Part I of the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1995, which is incorporated by reference herein.
NO ASSURANCE OF SUCCESSFUL MANAGEMENT AND MAINTENANCE OF GROWTH
The Company has experienced rapid growth, primarily through acquisitions.
The Company's financial results and prospects depend in large part on its
ability to successfully manage and improve the operating efficiencies and
productivity of these acquired operations. In particular, whether the
anticipated benefits of acquired operations are ultimately achieved will depend
on a number of factors, including the ability of the combined companies to
achieve administrative cost savings, rationalization of collection routes,
insurance and bonding cost reductions, general economies of scale and the
ability of the Company, generally, to capitalize on its combined asset base and
strategic position. Moreover, the ability of the Company to continue to grow
will depend on a number of factors, including competition from other waste
management companies, availability of capital, ability to maintain margins and
the management of costs in a changing regulatory environment. There can be no
assurance that the Company will be able to continue to expand and successfully
manage its growth.
ACQUISITION STRATEGY
The Company regularly pursues opportunities to expand through acquisitions.
The Company plans to continue to seek acquisitions that complement its services,
broaden its customer base and improve its operating efficiencies. The Company's
acquisition strategy involves certain potential risks associated with assessing,
acquiring and integrating the operations of acquired companies. Although the
Company generally has been successful in implementing its acquisition strategy,
there can be no assurance that attractive acquisition opportunities will
continue to be available, that the Company will have access to the capital
required to finance potential acquisitions on satisfactory terms, or that any
businesses acquired will prove profitable. Future acquisitions may result in the
incurrence of additional indebtedness or the issuance of additional equity
securities.
INTERNATIONAL EXPANSION
If the pending Canadian Acquisition is consummated, a significant portion
of the Company's operations will be conducted in Canada. The Company's
operations in foreign countries, including Canada, generally are subject to a
number of risks inherent in any business operating in foreign countries,
including political, social and economic instability, general strikes,
nationalization of assets, currency restrictions and exchange rate fluctuations,
nullification, modification or renegotiation of contracts, and governmental
regulation, all of which are beyond the control of the Company. No prediction
can be made as to how existing or future foreign governmental regulations in any
jurisdiction may affect the Company in particular or the solid waste management
industry in general.
S-6
<PAGE> 7
USE OF PROCEEDS
The proceeds to the Company from the sale of the Common Stock in this
Offering, after deducting underwriting discounts and commissions and estimated
offering expenses, are $336.9 million ($387.4 million if the Underwriters'
over-allotment option is exercised in full). The proceeds to the Company from
the Notes Offering, after deducting underwriting discounts and commissions and
estimated offering expenses, are $487.1 million ($521.5 million if the
underwriters' over-allotment option is exercised in full).
The net proceeds of this Offering, together with the net proceeds of the
Notes Offering, are expected to be used to repay the outstanding indebtedness
under the Credit Facility and for general corporate purposes. At January 30,
1997, the aggregate outstanding balance under the Credit Facility was $767.0
million. Borrowings under the Credit Facility bear interest at a rate equal to
the Eurodollar rate plus an amount not in excess of 0.75% per annum (currently
5.75%) and mature on August 30, 2001. Amounts currently outstanding under the
Credit Facility were incurred to fund acquisitions and refinance existing
indebtedness and for capital expenditures and other general corporate purposes.
Amounts repaid on the Credit Facility may be reborrowed from time to time for
possible future acquisitions (including the Pending Acquisitions), capital
expenditures and other general corporate purposes.
Consummation of this Offering is not a condition to consummation of the
Notes Offering, and consummation of the Notes Offering is not a condition to
consummation of this Offering.
PRICE RANGE OF COMMON STOCK
The Common Stock is traded on the NYSE under the symbol "UW." The following
table sets forth the range of the high and low per share sales prices for the
Common Stock as reported on the NYSE Composite Tape for the period from January
1, 1995 through February 3, 1997.
<TABLE>
<CAPTION>
PRICE RANGE
OF COMMON STOCK
--------------------------
HIGH LOW
<S> <C> <C>
1995
First Quarter........................................ $12 1/2 $10
Second Quarter....................................... 16 5/8 11 1/2
Third Quarter........................................ 22 14 5/8
Fourth Quarter....................................... 22 1/2 17
1996
First Quarter........................................ $25 5/8 $17 1/4
Second Quarter....................................... 32 5/8 24
Third Quarter........................................ 34 1/8 22 3/4
Fourth Quarter....................................... 34 1/4 28 5/8
1997
First Quarter (through February 3, 1997)............. $37 1/2 $28 5/8
</TABLE>
On February 3, 1997, the closing sale price of the Common Stock as reported
on the NYSE Composite Tape was $35 1/8 per share.
DIVIDEND POLICY
The Company has never paid cash dividends on its Common Stock, and the
Company's Board of Directors presently intends to retain any earnings in the
foreseeable future for use in the Company's business. Payment of dividends on
the Common Stock is restricted by terms of the Credit Facility.
S-7
<PAGE> 8
CAPITALIZATION
The following table sets forth the consolidated cash and cash equivalents
and capitalization of the Company at September 30, 1996 (i) on an historical
basis; (ii) "As Adjusted" to reflect additional borrowings under the Credit
Facility through January 30, 1997 primarily related to acquisitions and
repayment of a note payable after September 30, 1996; and (iii) "As Further
Adjusted" to give effect to this Offering and the sale by the Company of
$500,000,000 aggregate principal amount of Notes in the Notes Offering and the
anticipated application of the aggregate net proceeds from such offerings. See
"Use of Proceeds." This table should be read in conjunction with and is
qualified by reference to the Company's Consolidated Financial Statements and
Notes thereto incorporated by reference herein.
<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 1996
----------------------------------------
AS FURTHER
ACTUAL AS ADJUSTED ADJUSTED(1)
(IN THOUSANDS)
<S> <C> <C> <C>
Cash and cash equivalents.............................. $ 14,108 $ 14,108 $ 71,058
========== ========== ==========
Long-term debt (including current maturities):
Credit facility...................................... $ 506,000 $ 767,000 $ --
Senior notes, maturing through 2005.................. 106,947 106,947 106,947
Note payable to bank................................. 60,000 -- --
5% Convertible subordinated debentures due 2006...... 112,069 112,069 112,069
4% Convertible subordinated notes due 2002........... -- -- 500,000
Subordinated debt, maturing through 2008............. 6,931 6,931 6,931
Industrial revenue bonds............................. 163,230 163,230 163,230
Other................................................ 71,254 71,254 71,254
---------- ---------- ----------
Total long-term debt, including current
maturities................................. 1,026,431 1,227,431 960,431
---------- ---------- ----------
Stockholders' equity:
Preferred stock, 10,000,000 shares authorized, none
issued............................................ -- -- --
Common stock, 300,000,000 shares authorized,
138,343,184 shares issued (Actual and As Adjusted)
and 148,343,184 shares issued (As Further
Adjusted)(2)...................................... 1,383 1,383 1,483
Additional paid-in capital........................... 1,232,775 1,232,775 1,569,525
Accumulated deficit.................................. (131,875) (131,875) (131,875)
Foreign currency translation adjustment.............. (14,625) (14,625) (14,625)
Less treasury stock at cost, 23,485 shares........... (484) (484) (484)
---------- ---------- ----------
Total stockholders' equity................... 1,087,174 1,087,174 1,424,024
---------- ---------- ----------
Total capitalization.................... $2,113,605 $2,314,605 $2,384,455
========== ========== ==========
</TABLE>
- ------------------------------
(1) Does not include indebtedness which is expected to be incurred or assumed if
the Pending Acquisitions are consummated.
(2) Based on the number of shares of Common Stock outstanding as of September
30, 1996. Does not include (i) 11,479,738 shares issuable upon conversion of
the Notes at a conversion price of $43.56 per share, (ii) 4,062,168 shares
issuable upon conversion of the Company's outstanding 5% Convertible
Subordinated Debentures due 2006 at a conversion price of $28.31 per share,
or (iii) 18,026,775 shares issuable upon exercise of outstanding stock
options under the Company's stock option plans and outstanding warrants as
of such date.
S-8
<PAGE> 9
SELECTED CONSOLIDATED FINANCIAL DATA
The following selected consolidated financial data of the Company as of
December 31, 1994 and 1995, and for each of the three years in the period ended
December 31, 1995, have been derived from the audited Consolidated Financial
Statements and Notes thereto of the Company. The following selected consolidated
financial data of the Company as of December 31, 1991, 1992 and 1993, for each
of the two years in the period ended December 31, 1992, and as of and for the
nine months ended September 30, 1995 and 1996, have been derived from the
unaudited Consolidated Financial Statements of the Company, which in the opinion
of the Company, reflect all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of the Company's financial
condition and results of operations as of such date and for such periods. This
data should be read in conjunction with the Consolidated Financial Statements
and the Notes thereto incorporated by reference in this Prospectus Supplement
and the accompanying Prospectus. The data set forth below include the accounts
of the Company and the businesses it has acquired in transactions accounted for
as poolings of interests as if such businesses had been combined since their
inception. The accounts of businesses acquired by the Company in transactions
accounted for as purchases are included from their respective dates of
acquisition. Results for the nine months ended September 30, 1996 are not
necessarily indicative of results to be expected for the full year.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------------------------------------ ------------------------
1991 1992 1993 1994 1995 1995 1996
(IN THOUSANDS, EXCEPT PER SHARE AND RATIO DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Operating revenues............... $ 571,588 $ 682,869 $ 778,966 $ 897,644 $ 987,705 $ 726,148 $ 963,021
Costs and expenses:
Operating...................... 414,369 424,497 455,282 520,255 551,305 408,053 522,698
General and administrative..... 72,379 130,956 126,347 138,819 140,051 104,859 118,557
Depreciation and
amortization................. 67,176 77,872 96,861 112,860 119,570 88,934 111,157
Merger costs................... -- -- -- 3,782 25,639 25,639 120,656
Unusual items.................. -- 72,090 2,672 8,863 4,733 4,733 63,800
---------- ---------- ---------- ---------- ---------- ---------- ----------
553,924 705,415 681,162 784,579 841,298 632,218 936,868
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income (loss) from operations.... 17,664 (22,546) 97,804 113,065 146,407 93,930 26,153
---------- ---------- ---------- ---------- ---------- ---------- ----------
Other income (expense):
Shareholder litigation
settlement and other
litigation related costs..... -- (10,853) (5,500) (79,400) -- -- --
Interest expense:
Nonrecurring interest........ -- -- -- (1,254) (10,994) (10,994) --
Other........................ (41,282) (44,612) (46,032) (47,678) (48,558) (37,917) (33,977)
Interest income................ 12,352 6,840 4,835 4,670 5,482 4,077 4,015
Other income, net.............. (8,713) 2,285 1,161 2,570 5,143 3,497 4,853
---------- ---------- ---------- ---------- ---------- ---------- ----------
(37,643) (46,340) (45,536) (121,092) (48,927) (41,337) (25,109)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income (loss) before income
taxes.......................... (19,979) (68,886) 52,268 (8,027) 97,480 52,593 1,044
Provision for (benefit from)
income taxes................... (7,992) (27,554) 24,249 1,015 44,992 27,037 14,324
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income (loss) from continuing
operations..................... $ (11,987) $ (41,332) $ 28,019 $ (9,042) $ 52,488 $ 25,556 $ (13,280)
========== ========== ========== ========== ========== ========== ==========
Income (loss) from continuing
operations per common share.... $ (0.13) $ (0.47) $ 0.29 $ (0.09) $ 0.46 $ 0.24 $ (0.10)
========== ========== ========== ========== ========== ========== ==========
Weighted average number of common
and common equivalent shares
outstanding.................... 89,772 88,371 95,858 103,422 113,279 108,710 138,262
========== ========== ========== ========== ========== ========== ==========
BALANCE SHEET DATA (AT END OF PERIOD):
Working capital.................. $ 177,388 $ 75,143 $ 45,805 $ 9,971 $ 30,109 $ 33,448 $ 15,814
Intangible assets, net........... 91,056 104,471 152,370 185,066 262,205 231,307 487,321
Total assets..................... 1,277,428 1,311,828 1,428,444 1,588,996 1,933,557 1,805,118 2,628,977
Long-term debt, including current
maturities..................... 606,562 614,684 650,331 688,673 731,741 826,473 1,026,431
Stockholders' equity............. 440,445 457,745 534,989 560,616 907,622 716,619 1,087,174
OTHER DATA:
Ratio of earnings to fixed charges(1):
Actual......................... 0.53x (0.20)x 1.68x 0.73x 2.08x 1.69x 0.77x
Supplemental................... 0.53 1.07 1.81 2.15 2.88 2.64 4.31
EBITDA(2):
Actual......................... $ 84,840 $ 55,326 $ 194,665 $ 225,925 $ 265,977 $ 182,864 $ 137,310
Supplemental................... 84,840 127,416 197,337 238,570 296,349 213,236 321,766
</TABLE>
- ------------------------------
(1) For purposes of computing the actual ratio of earnings to fixed charges,
earnings consist of income (loss) from continuing operations, taxes and
fixed charges, excluding capitalized interest. Fixed charges consist of
interest, whether expensed or capitalized, amortization of debt expense and
discount on premium relating to indebtedness, whether expensed or
capitalized, and such portion of rental expenses that can be demonstrated to
be representative of the interest factor in the particular case. For
purposes of computing the supplemental ratio of earnings to fixed charges,
merger costs, unusual items, shareholder litigation settlement and other
litigation related costs and nonrecurring interest expense are excluded.
(2) EBITDA means earnings from operations before interest, taxes, depreciation
and amortization. EBITDA is frequently used by securities analysts and other
financial statement users and is presented herein to provide additional
information about the Company's operations. EBITDA is not a measurement
presented in accordance with generally accepted accounting principles
("GAAP") and is not intended to be used in lieu of GAAP presentations of net
income and cash provided by operating activities. For purposes of computing
the supplemental EBITDA, merger costs and unusual items are excluded.
S-9
<PAGE> 10
UNDERWRITING
Subject to the terms and conditions contained in the Underwriting Agreement
(the "Underwriting Agreement"), the Underwriters named below for whom Donaldson,
Lufkin & Jenrette Securities Corporation ("DLJ"), Deutsche Morgan Grenfell Inc.,
Goldman, Sachs & Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated are
acting as representatives (the "Representatives"), have severally agreed to
purchase from the Company an aggregate of 10,000,000 shares of Common Stock. The
number of shares of Common Stock that each Underwriter has agreed to purchase is
set forth opposite its name below:
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
<S> <C>
Donaldson, Lufkin & Jenrette Securities Corporation......... 2,005,000
Deutsche Morgan Grenfell Inc................................ 2,005,000
Goldman, Sachs & Co......................................... 2,005,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.................................... 2,005,000
ABN Amro Chicago Corporation................................ 90,000
Bear, Stearns & Co. Inc. ................................... 90,000
Alex. Brown & Sons Incorporated............................. 90,000
BT Securities Corporation................................... 90,000
Credit Suisse First Boston Corporation...................... 90,000
Dillon, Read & Co. Inc. .................................... 90,000
Morgan Stanley & Co. Incorporated........................... 90,000
NatWest Securities Limited.................................. 90,000
Oppenheimer & Co., Inc. .................................... 90,000
Robertson, Stephens & Company LLC........................... 90,000
Salomon Brothers Inc ....................................... 90,000
Smith Barney Inc. .......................................... 90,000
Robert W. Baird & Co. Incorporated.......................... 45,000
CIBC Wood Gundy Securities Corp. ........................... 45,000
Cleary Gull Reiland & McDevitt Inc. ........................ 45,000
Fahnestock & Co. Inc. ...................................... 45,000
First Analysis Securities Corporation....................... 45,000
Interstate/Johnson Lane Corporation......................... 45,000
McDonald & Company Securities, Inc. ........................ 45,000
Morgan Keegan & Company, Inc. .............................. 45,000
Ohio Company................................................ 45,000
Parker/Hunter Incorporated.................................. 45,000
Pennsylvania Merchant Group Ltd ............................ 45,000
Principal Financial Securities, Inc. ....................... 45,000
Raymond James & Associates, Inc. ........................... 45,000
Sanders Morris Mundy........................................ 45,000
Sands Brothers & Co., Ltd. ................................. 45,000
Southwest Securities, Inc. ................................. 45,000
Sutro & Co. Incorporated.................................... 45,000
Toronto Dominion Securities (USA) Inc. ..................... 45,000
Tucker Anthony Incorporated................................. 45,000
Van Kasper & Company........................................ 45,000
----------
Total............................................. 10,000,000
==========
</TABLE>
S-10
<PAGE> 11
The Underwriting Agreement provides that the obligations of the several
Underwriters to purchase and accept delivery of the shares of Common Stock
offered hereby are subject to approval of certain legal matters by counsel and
to certain other conditions. If any of the shares of Common Stock are purchased
by the Underwriters pursuant to the Underwriting Agreement, all such shares
(other than those covered by the over-allotment option described below) must be
purchased.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended,
or to contribute to payments that the Underwriters may be required to make in
respect thereof.
The Representatives have advised the Company that the Underwriters propose
to offer the shares of Common Stock to the public initially at the price set
forth on the cover page of this Prospectus Supplement and to certain dealers
(who may include the Underwriters) at such price, less a concession not in
excess of $0.84 per share. The Underwriters may allow, and such dealers may
re-allow, discounts not in excess of $0.10 per share to any other Underwriter
and certain other dealers. After the initial offering, the offering price and
other selling terms may be changed by the Underwriters.
The Company has granted to the Underwriters an option to purchase up to an
aggregate of 1,500,000 additional shares of Common Stock, at the initial public
offering price less underwriting discounts and commissions, solely to cover
over-allotments. Such option may be exercised at any time until 30 days after
the date of this Prospectus Supplement. To the extent that the Underwriters
exercise such option, each of the Underwriters will be committed, subject to
certain conditions, to purchase a number of shares proportionate to such
Underwriter's initial commitment as indicated in the preceding table.
The Company and its executive officers and directors, who collectively are
the beneficial owners of 25,028,928 shares of Common Stock, have agreed with the
Underwriters not to, directly or indirectly, offer, sell, contract to sell,
grant any option to purchase or otherwise dispose of, without the prior written
consent of DLJ, any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for, or warrants, options or rights to purchase or
acquire, Common Stock or in any other manner transfer all or a portion of the
economic consequences associated with the ownership of any Common Stock, or
enter into any agreement to do any of the foregoing for a period of 90 days
after the date of this Prospectus Supplement. The restriction on the Company is
subject to exceptions for issuances of Common Stock pursuant to acquisitions,
existing director and employee benefit plans, existing contractual obligations,
conversion of outstanding convertible securities and exercise of outstanding
warrants. The Underwriters have agreed that 250,000 of the shares of Common
Stock owned by Donald F. Moorehead, Jr., a director and executive officer of the
Company, and a total of 500,000 shares of the Common Stock owned by John G.
Rangos, Sr. and Alexander W. Rangos, both directors of the Company, will not be
subject to the foregoing restriction.
Each of DLJ and Deutsche Morgan Grenfell Inc. has in the past provided, and
may in the future provide, investment banking services for the Company.
Additionally, the Representatives are participating as underwriters in the Notes
Offering. Consummation of this Offering is not a condition to consummation of
the Notes Offering, and consummation of the Notes Offering is not a condition to
consummation of this Offering.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for the
Company by Vinson & Elkins L.L.P., Houston, Texas and certain legal matters will
be passed upon for the Underwriters by McDermott, Will & Emery, Chicago,
Illinois.
S-11
<PAGE> 12
PROSPECTUS
USA WASTE SERVICES, INC.
DEBT SECURITIES
COMMON STOCK
---------------------
USA Waste Services, Inc. ("USA Waste" or the "Company") may offer and sell
from time to time, in one or more series, its unsecured debt securities
consisting of notes, debentures or other evidences of indebtedness (the "Debt
Securities"). The Company may also offer and sell from time to time shares of
its common stock, par value $.01 per share (the "Common Stock"). The aggregate
initial offering prices of the Debt Securities and the Common Stock offered by
the Company hereby (the "Securities") will not exceed $939,212,500 or, if
applicable, the equivalent thereof in any other currency or currency unit. The
Securities will be offered in amounts, at prices and on terms to be determined
in light of market conditions at the time of sale and set forth in a supplement
to this Prospectus (a "Prospectus Supplement").
If the offering and sale of Securities in respect of which this Prospectus
is being delivered includes a series of Debt Securities, then the terms of such
series of Debt Securities, including, where applicable, the specific
designation, aggregate principal amount, authorized denominations, ranking as
senior or subordinated Debt Securities, maturity, interest rate or rates (or
method of determining the same) and time or times of payment of any interest,
any terms for optional or mandatory redemption, which may include redemption at
the option of holders upon the occurrence of certain events, conversion into
Common Stock, or payment of additional amounts or any sinking fund provisions,
any initial public offering price, the proceeds to the Company and any other
specific terms in connection with the offering and sale of such series of Debt
Securities will be set forth in a Prospectus Supplement. As used herein, Debt
Securities shall include securities denominated in United States dollars or, at
the option of the Company if so specified in an applicable Prospectus
Supplement, in any other currency or currency unit, or in amounts determined by
reference to an index.
The Securities may be sold directly by the Company to investors, through
agents designated from time to time or to or through underwriters or dealers.
See "Plan of Distribution." If any agents of the Company or any underwriters are
involved in the sale of any Securities in respect of which this Prospectus is
being delivered, the names of such agents or underwriters and any applicable
commissions or discounts will be set forth in a Prospectus Supplement. The net
proceeds to the Company from such sale also will be set forth in a Prospectus
Supplement. See "Use of Proceeds."
Debt Securities may be issued in registered form or bearer form with or
without interest coupons attached, or both. In addition, all or a portion of the
Debt Securities of a series may be issuable in temporary or permanent global
form. Debt Securities in bearer form are offered only to non-United States
persons and to offices located outside the United States of certain United
States financial institutions.
---------------------
The Common Stock is traded on the New York Stock Exchange under the symbol
"UW." Any Common Stock sold pursuant to a Prospectus Supplement will be listed
on such exchange, subject to official notice of issuance.
---------------------
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.
---------------------
This Prospectus may not be used to consummate sales of the Securities
unless accompanied by a Prospectus Supplement.
THE DATE OF THIS PROSPECTUS IS FEBRUARY 3, 1997.
<PAGE> 13
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements, and other information filed by the Company with the Commission can
be inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549 and at the following Regional Offices of the Commission: Chicago
Regional Office, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661 and New York Regional Office, Seven World Trade Center, New York,
New York 10048. Copies of such material can be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Commission maintains a World Wide Web site on
the Internet at http://www.sec.gov that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the Commission. In addition, reports, proxy statements and other
information concerning the Company can be inspected at the New York Stock
Exchange, 20 Broad Street, New York, New York 10005, on which exchange the
Common Stock is listed.
This Prospectus constitutes a part of a Registration Statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") filed by the Company with the Commission under the Securities Act of
1933, as amended (the "Securities Act"). This Prospectus omits certain of the
information contained in the Registration Statement in accordance with the rules
and regulations of the Commission. Reference is hereby made to the Registration
Statement and exhibits thereto for further information with respect to the
Company and the securities offered hereby. Any statements contained herein
concerning the provisions of any document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission are not
necessarily complete, and in each instance reference is made to the copy of such
document so filed. Each such statement is qualified in its entirety by such
reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission under the
Exchange Act (File No. 1-12154) are incorporated by reference in this
Prospectus:
(a) the Company's Annual Report on Form 10-K for the year ended December
31, 1995;
(b) the Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1996, June 30, 1996 and September 30, 1996;
(c) the Company's Current Report on Form 8-K dated January 9, 1996, Current
Report on Form 8-K dated May 7, 1996, as amended by Form 8-K/A
(Amendment No. 1) filed on May 29, 1996, Form 8-K/A (Amendment No. 2)
filed June 28, 1996, and Form 8-K/A (Amendment No. 3) filed July 1,
1996, and Current Report on Form 8-K dated June 22, 1996, Current
Report on Form 8-K dated September 3, 1996, Current Report on Form 8-K
dated September 12, 1996, as amended by Form 8-K/A (Amendment No. 1)
filed November 14, 1996 and Form 8-K/A (Amendment No. 2) filed November
15, 1996, Current Report on Form 8-K dated November 12, 1996, Current
Report on Form 8-K dated January 13, 1997, and Current Report on Form
8-K dated January 24, 1997; and
(d) the description of the Common Stock contained in the Registration
Statement on Form 8-A dated July 1, 1993, as amended by Form 8-B dated
July 13, 1995.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Securities pursuant hereto shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of filing of such document. 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 other subsequently filed document which
also is or is deemed to be
2
<PAGE> 14
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 without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any or all of the documents that are incorporated by reference in this
Prospectus (other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference into such documents). Requests should be
directed to the Corporate Secretary, USA Waste Services, Inc., 1001 Fannin
Street, Suite 4000, Houston, Texas 77002, telephone number (713) 512-6200.
THE COMPANY
USA Waste is the third largest solid waste management company in North
America and serves municipal, commercial, industrial and residential customers
in 36 states, the District of Columbia, Canada, Mexico and Puerto Rico. The
Company's solid waste management services include collection, transfer and
disposal operations and, to a lesser extent, recycling and certain other waste
management services. USA Waste owns or operates 101 landfills, 61 transfer
stations and 123 collection operations and serves more than 2 million customers.
USA Waste was incorporated under the laws of the State of Delaware in April 1995
to become the successor to USA Waste Services, Inc., an Oklahoma corporation
organized in 1987. The principal executive offices of USA Waste are located at
1001 Fannin Street, Suite 4000, Houston, Texas 77002 and its telephone number is
(713) 512-6200. The "Company" and "USA Waste" refer to USA Waste Services, Inc.
and its subsidiaries and predecessors, unless otherwise indicated or the context
requires otherwise.
USE OF PROCEEDS
Except as may otherwise be described in the Prospectus Supplement relating
to an offering of Securities, the net proceeds from the sale of the Securities
offered pursuant to this Prospectus and such Prospectus Supplement will be used
for general corporate purposes. Any specific allocation of the net proceeds of
an offering of Securities by the Company to a specific purpose will be
determined at the time of such offering and will be described in the related
Prospectus Supplement.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's consolidated ratios of
earnings to fixed charges for the periods as shown.
<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED DECEMBER 31, ENDED
---------------------------------------------------------------- SEPTEMBER 30,
1991 1992 1993 1994 1995 1996
-------- -------- -------- -------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Actual........................ 0.53 (0.20) 1.68 0.73 2.08 0.77
</TABLE>
The Company's consolidated ratios of earnings to fixed charges were
computed by dividing earnings by fixed charges. For this purpose, earnings are
the sum of income (loss) from continuing operations, taxes, and fixed charges,
excluding capitalized interest. Fixed charges are interest, whether expensed or
capitalized, amortization of debt expense and discount on premium relating to
indebtedness, whether expensed or capitalized, and such portion of rental
expense that can be demonstrated to be representative of the interest factor in
the particular case. For the nine months ended September 30, 1996 and the years
ended December 31, 1991, 1992, and 1994, earnings are insufficient to cover
fixed charges as evidenced by a less than one-to-one coverage ratio as shown
above. Additional earnings of $12,022,000, $27,827,000, $78,473,000, and
$17,855,000 were necessary for the nine months ended September 30, 1996 and the
years ended December 31, 1991, 1992, and 1994, respectively, to provide a
one-to-one coverage ratio. Except for the year ended December 31, 1991,
nonrecurring costs, as discussed below, caused the less than one-to-one coverage
in each of these periods.
3
<PAGE> 15
The following table sets forth the Company's consolidated ratios of
earnings to fixed charges for the periods shown, on a supplemental basis
excluding nonrecurring items.
<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED DECEMBER 31, ENDED
---------------------------------------------------------------- SEPTEMBER 30,
1991 1992 1993 1994 1995 1996
-------- -------- -------- -------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Supplemental................... 0.53 1.07 1.81 2.15 2.88 4.31
</TABLE>
Nonrecurring items for the nine months ended September 30, 1996, represent
merger costs, primarily related to mergers with Sanifill, Inc. in August 1996
and Western Waste Industries ("Western") in May 1996, and unusual items,
primarily related to operating losses and estimated losses associated with the
disposition of certain non-core business assets. Nonrecurring items in 1995
primarily represent merger costs related to the merger with Chambers Development
Company, Inc. ("Chambers") in June 1995 and nonrecurring interest related to
extension fees and other charges associated with the refinancing of Chambers
pre-merger debt. Nonrecurring items in 1994 primarily represent shareholder
litigation costs incurred in connection with a settled class action of
consolidated suits on similar claims alleging federal securities violations
against Chambers, certain of its officers and directors, its former auditors,
and the underwriters of its securities. Nonrecurring items in 1992 primarily
represent various restructuring charges and charges to asset reserves by Western
and Chambers. Nonrecurring items in 1991 and 1993 were not material.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will constitute either senior debt of the Company
("Senior Debt Securities"), or subordinated debt of the Company ("Subordinated
Debt Securities"). Debt Securities may be issued from time to time under one or
more indentures, each dated as of a date on or prior to the issuance of the Debt
Securities to which it relates. Senior Debt Securities and Subordinated Debt
Securities may be issued pursuant to separate indentures (respectively, a
"Senior Debt Indenture" and a "Subordinated Debt Indenture"), in each case
between the Company and a trustee (a "Trustee"), which may be the same Trustee,
and in the form that has been filed as an exhibit to the Registration Statement
of which this Prospectus is a part, subject to such amendments or supplements as
may be adopted form time to time. The Senior Debt Indenture and the Subordinated
Debt Indenture, as amended or supplemented from time to time, are sometimes
hereinafter referred to individually as an "Indenture" and collectively as the
"Indentures." The following summaries of anticipated provisions of the
Indentures and the Debt Securities do not purport to be complete and such
summaries are subject to the detailed provisions of the applicable Indenture to
which reference is hereby made for a full description of such provisions,
including the definition of certain terms used herein. Section references in
parentheses below are to sections in both Indentures unless otherwise indicated.
Wherever particular sections or defined terms of the applicable Indenture are
referred to, such sections or defined terms are incorporated herein by reference
as part of the statement made, and the statement is qualified in its entirety by
such reference. The Indentures are substantially identical, except for certain
covenants of the Company and provisions relating to subordination and
conversion.
The Debt Securities may be issued from time to time in one or more series.
The following description of the Debt Securities sets forth certain general
terms and provisions of the Debt Securities of all series. The particular terms
of each series of Debt Securities offered by any Prospectus Supplement (the
"Offered Debt Securities") will be described therein.
PROVISIONS APPLICABLE TO BOTH SENIOR AND SUBORDINATED DEBT SECURITIES
General. The Debt Securities will be unsecured senior or subordinated
obligations of the Company and may be issued from time to time in one or more
series. The Indentures do not limit the amount of Debt Securities, debentures,
notes or other types of indebtedness that may be issued by the Company or any of
its subsidiaries nor do they restrict transactions between the Company and its
affiliates or the payment of dividends or other distributions by the Company to
its stockholders. The rights of the Company's creditors, including holders of
Debt Securities, will be limited to the assets of the Company and will not be an
obligation
4
<PAGE> 16
of any of its Subsidiaries. In addition, other than as may be set forth in any
Prospectus Supplement, the Indentures do not and the Debt Securities will not
contain any covenants or other provisions that are intended to afford holders of
the Debt Securities special protection in the event of either a change of
control of the Company or a highly leveraged transaction by the Company.
Reference is made to the Prospectus Supplement for the following terms of
and information relating to the Offered Debt Securities (to the extent such
terms are applicable to such Offered Debt Securities): (i) the title of the
Offered Debt Securities; (ii) classification as either Senior Debt Securities or
Subordinated Debt Securities; (iii) whether the Offered Debt Securities that
constitute Subordinated Debt Securities are convertible into Common Stock and,
if so, the terms and conditions upon which such conversion will be effected
including the initial conversion price or conversion rate and any adjustments
thereto in addition to or different from those described herein, the conversion
period and other conversion provisions in addition to or in lieu of those
described herein; (iv) any limit on the aggregate principal amount of the
Offered Debt Securities; (v) whether the Offered Debt Securities are to be
issuable as Registered Securities or Bearer Securities or both, whether any of
the Offered Debt Securities are to be issuable initially in temporary global
form and whether any of the Offered Debt Securities are to be in permanent
global form; (vi) the price or prices (expressed as a percentage of the
aggregate principal amount thereof) at which the Offered Debt Securities will be
issued; (vii) the date or dates on which the Offered Debt Securities will
mature; (viii) the rate or rates per annum (or the method by which such will be
determined) at which the Offered Debt Securities will bear interest, if any, and
the date from which any such interest will accrue; (ix) the Interest Payment
Dates on which any such interest on the Offered Debt Securities will be payable,
the date on which payment of such interest, if any, will commence and the
Regular Record Dates for any interest payable on any Offered Debt Securities
which are Registered Securities on any Interest Payment Date and the extent to
which, or the manner in which, any interest payable on a temporary global
Offered Debt Security on an Interest Payment Date will be paid; (x) any
mandatory or optional sinking fund or analogous provisions; (xi) each office or
agency where, subject to the terms of the Indentures as described below under
"Payment and Paying Agents," the principal of and any premium and interest on
the Offered Debt Securities will be payable and each office or agency where,
subject to the terms of the Indentures as described below under "Form, Exchange,
Registration and Transfer," the Offered Debt Securities may be presented for
registration of transfer or exchange; (xii) the right, if any, or obligation, if
any, of the Company to redeem the Offered Debt Securities at its option and the
period or periods, if any, within which and the price or prices at which the
Offered Debt Securities may, pursuant to any optional or mandatory redemption
provisions, be redeemed, in whole or in part, and the other detailed terms and
provisions of any such optional or mandatory redemption; (xiii) the
denominations in which any Offered Debt Securities which are Registered
Securities will be issuable, if other than denominations of $1,000 and any
integral multiple thereof, and the denomination or denominations in which any
Offered Debt Securities which are Bearer Securities will be issuable, if other
than the denomination of $5,000; (xiv) the currency or currencies (including
composite currencies) in which payment of principal of and any premium and
interest on the Offered Debt Securities is payable if other than United States
dollars; (xv) any index used to determine the amount of payments of principal of
and any premium and interest on the Offered Debt Securities; (xvi) information
with respect to book-entry procedures, if any; (xvii) any deletions from,
modification of or additions to the Events of Default or covenants of the
Company with respect to such Offered Debt Securities; and (xviii) any other
terms of the Offered Debt Securities not inconsistent with the provisions of the
Indentures. (Section 301) Any such Prospectus Supplement will also describe any
special provisions for the payment of additional amounts with respect to the
Offered Debt Securities.
Debt Securities may be issued as Original Issue Discount Securities. An
Original Issue Discount Security is a Debt Security, including any zero-coupon
security, which is issued at a price lower than the amount payable upon the
Stated Maturity thereof and which provides that upon redemption or acceleration
of the maturity thereof an amount less than the amount payable upon the Stated
Maturity thereof and determined in accordance with the terms of such Debt
Security shall become due and payable. Special United States federal income tax
considerations applicable to Debt Securities issued at an original issue
discount, including Original Issue Discount Securities, and special United
States tax considerations and other terms and restrictions applicable to any
Debt Securities which are issued in bearer form, offered exclusively to United
States Aliens
5
<PAGE> 17
or denominated in other than United States dollars, will be set forth in a
Prospectus Supplement relating thereto.
Form, Exchange, Registration and Transfer. Debt Securities of a series may
be issuable in definitive form solely as Registered Securities, solely as Bearer
Securities or as both Registered Securities and Bearer Securities. Unless
otherwise indicated in an applicable Prospectus Supplement, Bearer Securities
will have interest coupons attached. (Section 201) The Indentures also provide
that Debt Securities of a series may be issuable in temporary or permanent
global form. (Section 201)
Registered Securities of any series will be exchangeable for other
Registered Securities of the same series of any authorized denominations and of
a like aggregate principal amount and tenor. In addition, if Debt Securities of
any series are issuable as both Registered Securities and Bearer Securities, at
the option of the Holder, and subject to the terms of the applicable Indenture,
Bearer Securities (with all unmatured coupons, except as provided below, and all
matured coupons in default) of such series will be exchangeable for Registered
Securities of the same series of any authorized denominations and of a like
aggregate principal amount and tenor. Bearer Securities surrendered in exchange
for Registered Securities between a Regular Record Date or a Special Record Date
and the relevant date for payment of interest shall be surrendered without the
coupon relating to such date for payment of interest, and interest accrued as of
such date will not be payable in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the terms of the applicable Indenture.
Bearer Securities will not be issued in exchange for Registered Securities.
(Section 305)
Debt Securities may be presented for exchange as provided above, and
Registered Securities may be presented for registration of transfer (with the
form of transfer endorsed thereon duly executed), at the office of the Security
Registrar or at the office of any transfer agent designated by the Company for
such purpose with respect to any series of Debt Securities and referred to in an
applicable Prospectus Supplement, without service charge and upon payment of any
taxes and other governmental charges as described in the Indentures. Such
transfer or exchange will be effected upon the Security Registrar or such
transfer agent, as the case may be, being satisfied with the documents of title
and identity of the person making the request. The Company will serve initially
as Security Registrar. (Section 305) If a Prospectus Supplement refers to any
transfer agents (in addition to the Security Registrar) initially designated by
the Company with respect to any series of Debt Securities, the Company may at
any time rescind the designation of any such transfer agent or approve a change
in the location through which any such transfer agent acts, except that, if Debt
Securities of a series are issuable solely as Registered Securities, the Company
will be required to maintain a transfer agent in each Place of Payment for such
series and, if Debt Securities of a series are also issuable as Bearer
Securities, the Company will be required to maintain (in addition to the
Security Registrar) a transfer agent in a Place of Payment for such series
located outside the United States. The Company may at any time designate
additional transfer agents with respect to any series of Debt Securities.
(Section 1002)
In the event of any redemption in part, the Company shall not be required
to (i) issue, register the transfer of or exchange Debt Securities of any series
during a period beginning at the opening of business 15 days prior to the
selection of Debt Securities of that series for redemption and ending on the
close of business on (A) if Debt Securities of the series are issuable only as
Registered Securities, the day of mailing of the relevant notice of redemption
and (B) if Debt Securities of the series are issuable as Bearer Securities, the
date of the first publication of the relevant notice of redemption or, if
Securities of the series are also issuable as Registered Securities and there is
no publication, the mailing of the relevant notice of redemption; (ii) register
the transfer of or exchange any Registered Security, or portion thereof, called
for redemption, except the unredeemed portion of any Registered Security being
redeemed in part, or (iii) exchange any Bearer Security called for redemption,
except to exchange such Bearer Security for a Registered Security of that series
and like tenor which is immediately surrendered for redemption. (Section 305)
Payment and Paying Agents. Unless otherwise indicated in an applicable
Prospectus Supplement, payment of principal of and any premium and interest on
Bearer Securities will be payable, subject to any applicable laws and
regulations, at the offices of such Paying Agents outside the United States as
the Company may designate from time to time, in the manner indicated in such
Prospectus Supplement.
6
<PAGE> 18
(Section 1002) Unless otherwise indicated in an applicable Prospectus
Supplement, payment of interest on Bearer Securities on any Interest Payment
Date will be made only against surrender to the Paying Agent of the coupon
relating to such Interest Payment Date. (Section 1001) No payment with respect
to any Bearer Security will be made at any office or agency of the Company in
the United States or by check mailed to any address in the United States or by
transfer to any account maintained with a bank located in the United States.
Notwithstanding the foregoing, payments of principal of and any premium and
interest on Bearer Securities denominated and payable in U.S. dollars will be
made at the office of the Company's Paying Agent in the Borough of Manhattan,
The City of New York, if (but only if) payment of the full amount thereof in
U.S. dollars at all offices or agencies outside the United States is illegal or
effectively precluded by exchange controls or other similar restrictions.
(Section 1002)
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and any premium and interest on Registered Securities will be
made at the office of such Paying Agent or Paying Agents as the Company may
designate from time to time, except that at the option of the Company payment of
any interest may be made by check mailed on or before the due date to the
address of the Person entitled thereto as such address shall appear in the
Security Register. (Sections 307, 1002) Unless otherwise indicated in an
applicable Prospectus Supplement, payment of any installment of interest on
Registered Securities will be made to the Person in whose name such Registered
Security is registered at the close of business on the Regular Record Date for
such interest. (Section 307)
Unless otherwise indicated in an applicable Prospectus Supplement, the
Company, at its principal executive offices in Houston, Texas will act as its
own Paying Agent for payments with respect to Debt Securities which are issuable
solely as Registered Securities and the Company will maintain a Paying Agent
outside the United States for payments with respect to Debt Securities (subject
to limitations described above in the case of Bearer Securities) which are
issuable solely as Bearer Securities or as both Registered Securities and Bearer
Securities. Any Paying Agents outside the United States and any other Paying
Agents in the United States initially designated by Company for the Debt
Securities will be named in an applicable Prospectus Supplement. The Company may
at any time designate additional Paying Agents or rescind the designation of any
Paying Agent or approve a change in the office through which any Paying Agent
acts, except that, if Debt Securities of a series are issuable solely as
Registered Securities, the Company will be required to maintain a Paying Agent
in each Place of Payment for such series and, if Debt Securities of a series are
issuable as Bearer Securities, the Company will be required to maintain (i) a
Paying Agent in the Borough of Manhattan, The City of New York for principal
payments with respect to any Registered Securities of the series (and for
payments with respect to Bearer Securities of the series in the circumstances
described above, but not otherwise), and (ii) a Paying Agent in a Place of
Payment located outside the United States where Debt Securities of such series
and any coupons appertaining thereto may be presented and surrendered for
payment. (Section 1002)
All moneys paid by the Company to a Paying Agent for the payment of
principal of and any premium or interest on any Debt Security which remain
unclaimed at the end of two years after such principal, premium or interest
shall have become due and payable will (subject to applicable escheat laws) be
repaid to the Company, and the Holder of such Debt Security or any coupon will
thereafter look only to the Company for payment thereof. (Section 1003)
Global Debt Securities. Debt Securities of a series may be issued in whole
or in part in the form of one or more global Debt Securities that will be
deposited with, or on behalf of, a depository identified in the Prospectus
Supplement relating to such series. Global Debt Securities may be issued in
either registered or bearer form and in either temporary or permanent form.
(Section 203) Unless and until it is exchanged in whole or in part for the
individual Debt Securities represented thereby, a global Debt Security may not
be transferred except as a whole by the depository for such global Debt Security
to a nominee of such depository or by a nominee of such depository to such
depository or another nominee of such depository or by the depository or any
nominee to a successor depository or any nominee of such successor.
7
<PAGE> 19
The specific terms of the depository arrangement with respect to a series
of Debt Securities and certain limitations and restrictions relating to a series
of Bearer Securities in the form of one or more global Debt Securities will be
described in the Prospectus Supplement relating to such series.
Events of Default. Any one of the following events constitutes an Event of
Default under each Indenture with respect to Debt Securities of any series: (a)
failure to pay any interest on any Debt Security of that series when due,
continued for 30 days; (b) failure to pay principal of or any premium on any
Debt Security of that series when due; (c) failure to deposit any sinking fund
payment, when due, in respect of any Debt Security of that series; (d) failure
to perform any other covenant of the Company in such Indenture (other than a
covenant included in such Indenture solely for the benefit of any series of Debt
Securities other than that series), continued for 90 days after written notice
as provided in such Indenture; (e) certain events in bankruptcy, insolvency or
reorganization involving the Company; and (f) any other Event of Default
provided with respect to Debt Securities of that series. (Section 501)
If an Event of Default with respect to Debt Securities of any series at the
time Outstanding occurs and is continuing, either the Trustee or the Holders of
at least 25% in aggregate principal amount of the Outstanding Securities of that
series by notice as provided in the applicable Indenture may declare the
principal amount (or, if the Debt Securities of that series are Original Issue
Discount Securities, such portion of the principal amount as may be specified in
the terms of that series) of all the Debt Securities of that series to be due
and payable immediately. At any time after a declaration of acceleration with
respect to Debt Securities of any series has been made, but before a judgment or
decree for payment of money has been obtained by the Trustee, the Holders of a
majority in aggregate principal amount of the Outstanding Securities of that
series may, under certain circumstances, rescind and annul such acceleration.
(Section 502)
Each Indenture provides that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee is under no
obligation to exercise any of its rights or powers under such Indenture at the
request or direction of any of the Holders, unless such Holders shall have
offered to the Trustee reasonable indemnity. (Sections 601, 603) Subject to such
provisions for the indemnification of the Trustee, the Holders of a majority in
aggregate principal amount of the Outstanding Securities of any series have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred on
the Trustee, with respect to the Debt Securities of that series; provided,
however, that the Trustee is not obligated to take any action unduly prejudicial
to Holders not joining in such direction or involving the Trustee in personal
liability. (Section 512)
The Company is required to furnish to the Trustee annually a statement as
to the performance by the Company of its obligations under each Indenture and as
to any default in such performance. (Section 1007)
Defeasance. If so specified with respect to any particular series of Debt
Securities issued under an Indenture, the Company may discharge its indebtedness
and its obligations or certain of its obligations under such Indenture with
respect to such series by depositing funds or obligations issued or guaranteed
by the United States of America with the Trustee. (Sections 1301-1303)
Defeasance and Discharge. Each Indenture provides that, if so specified
with respect to the Debt Securities of any series issued under such Indenture
(other than convertible Subordinated Debt Securities), the Company will be
discharged from any and all obligations in respect of the Debt Securities of
such series (except for certain obligations relating to temporary Debt
Securities and exchange of Debt Securities, registration of transfer or exchange
of Debt Securities of such series, replacement of stolen, lost or mutilated Debt
Securities of such series, maintenance of paying agencies to hold moneys for
payment in trust and payment of additional amounts, if any, required in
consequence of United States withholding taxes imposed on payments to non-United
States persons) upon the deposit with the Trustee, in trust, of money and/or
U.S. Government Obligations which through the payment of interest and principal
in respect thereof in accordance with their terms will provide money in an
amount sufficient to pay the principal of (and premium, if any), and each
installment of interest on, the Debt Securities of such series on the Stated
Maturity of such payments in accordance with the terms of such Indenture and the
Debt Securities of such series. (Sections 1302, 1304) Such a trust may only be
established if, among other things, the Company has delivered to the Trustee an
Opinion of Counsel to the effect that (i) the Company has received from, or
there has been published by, the
8
<PAGE> 20
Internal Revenue Service a ruling, or (ii) since the date of such Indenture
there has been a change in applicable federal income tax law, in either case to
the effect that, and based thereon such Opinion of Counsel shall confirm that,
the Holders of such series will not recognize income, gain or loss for federal
income tax purposes as a result of such deposit, defeasance and discharge, and
will be subject to federal income tax on the same amounts and in the same manner
and at the same times as would have been the case if such deposit, defeasance
and discharge had not occurred. (Section 1304) In the event of any such
defeasance and discharge of Debt Securities of such series, Holders of such
series would be entitled to look only to such trust fund for payment of
principal of and any premium and any interest on their Debt Securities until
Maturity.
Covenant Defeasance. Each Indenture also provides that, if so specified
with respect to the Debt Securities of any series issued thereunder, the Company
may omit to comply with certain restrictive covenants, including (in the case of
the Senior Debt Indenture) the covenant described under "Limitation on Liens"
below, but excluding (in the case of the Subordinated Debt Indenture) any
applicable obligation of the Company respecting the conversion of Debt
Securities of such series into Common Stock, and any such omission shall not be
an Event of Default with respect to the Debt Securities of such series, upon the
deposit with the Trustee, in trust, of money and/or U.S. Government Obligations
which through the payment of interest and principal in respect thereof in
accordance with their terms will provide money in an amount sufficient to pay
the principal of (and premium, if any), and each installment of interest on, the
Debt Securities of such series on the Stated Maturity of such payments in
accordance with the terms of such Indenture and the Debt Securities of such
series. The obligations of the Company under such Indenture and the Debt
Securities of such series other than with respect to such covenants shall remain
in full force and effect. (Section 1303) Such a trust may be established only
if, among other things, the Company has delivered to the Trustee an Opinion of
Counsel to the effect that the Holders of such series will not recognize income,
gain or loss for federal income tax purposes as a result of such deposit and
defeasance of certain obligations and will be subject to federal income tax on
the same amounts and in the same manner and at the same time as would have been
the case if such deposit and defeasance had not occurred. (Section 1304)
Although the amount of money and U.S. Government Obligations on deposit
with the Trustee would be intended to be sufficient to pay amounts due on the
Debt Securities of such series at the time of their Stated Maturity, in the
event the Company exercises its option to omit compliance with the covenants
defeased with respect to the Debt Securities of any series as described above,
and the Debt Securities of such series are declared due and payable because of
the occurrence of any Event of Default, such amount may not be sufficient to pay
amounts due on the Debt Securities of such series at the time of the
acceleration resulting from such Event of Default. The Company shall in any
event remain liable for such payments as provided in the applicable Indenture.
Federal Income Tax Consequences. Under current United States federal income
tax law, defeasance and discharge would likely be treated as a taxable exchange
of Debt Securities to be defeased for an interest in the defeasance trust. As a
consequence, a holder would recognize gain or loss equal to the difference
between the holder's cost or other tax basis for such Debt Securities and the
value of the holder's interest in the defeasance
trust, and thereafter would be required to include in income the holder's share
of the income, gain or loss of the defeasance trust. Under current United States
federal income tax law, covenant defeasance would ordinarily not be treated as a
taxable exchange of such Debt Securities.
Meetings, Modification and Waiver. Modifications and amendments of either
Indenture may be made by the Company and the Trustee with the consent of the
Holders of a majority in aggregate principal amount of the Outstanding
Securities of each series affected by such modification or amendment; provided,
however, that no such modification or amendment may, without consent of the
Holder of each Outstanding Security affected thereby, (a) change the Stated
Maturity of the principal of, or any installment of principal of or interest on,
any Debt Security, (b) change the Redemption Date with respect to any Debt
Security, (c) reduce the principal amount of, or premium or interest on, any
Debt Security, (d) change any obligation of the Company to pay additional
amounts, (e) reduce the amount of principal of an Original Issue Discount
Security payable upon acceleration of the Maturity thereof, (f) change the coin
or currency in which any Debt Security or any premium or interest thereon is
payable, (g) change the redemption right of any Holder, (h) impair the right to
institute suit for the enforcement of any payment on or with respect to any Debt
9
<PAGE> 21
Security or any conversion right with respect thereto, (i) reduce the percentage
in principal amount of Outstanding Securities of any series, the consent of
whose Holders is required for modification or amendment of such Indenture or for
waiver of compliance with certain provisions of such Indenture or for waiver of
certain defaults, (j) reduce the requirements contained in such Indenture for
quorum or voting, (k) change any obligation of the Company to maintain an office
or agency in the places and for the purposes required by such Indenture, (l)
adversely affect the right to convert Subordinated Debt Securities, if
applicable, or (m) modify any of the above provisions. (Section 902)
The Subordinated Debt Indenture may not be amended to alter the
subordination of any outstanding Subordinated Debt Securities without the
consent of each holder of Senior Indebtedness (as defined below under
"-- Provisions Applicable Solely to Subordinated Debt Securities") then
outstanding that would be adversely affected thereby. (Section 907 of the
Subordinated Debt Indenture)
The Holders of a majority in aggregate principal amount of the Outstanding
Securities of each series may, on behalf of all Holders of that series, waive,
insofar as that series is concerned, compliance by the Company with certain
restrictive provisions of the Indenture under which such series has been issued.
(Section 1008) The Holders of a majority in aggregate principal amount of the
Outstanding Securities of each series may, on behalf of all Holders of that
series, waive any past default under the applicable Indenture with respect to
any Debt Securities of that series, except a default (a) in the payment of
principal of, or premium, if any, or any interest on any Debt Security of such
series or (b) in respect of a covenant or provision of such Indenture which
cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected. (Section 513)
Each Indenture provides that in determining whether the Holders of the
requisite principal amount of the Outstanding Securities have given any request,
demand, authorization, direction, notice, consent or waiver thereunder or are
present at a meeting of the Holders for quorum purposes, (i) the principal
amount of an Original Issue Discount Security that is deemed to be Outstanding
will be the amount of the principal that would be due and payable as of the date
of such determination upon acceleration of the Maturity thereof, and (ii) the
principal amount of a Debt Security denominated in a foreign currency or
currency units will be the U.S. dollar equivalent, determined on the date of
original issuance of such Debt Security, of the principal amount of such Debt
Security or, in the case of an Original issue Discount Security, the U.S. dollar
equivalent, determined on the date of original issuance of such Security, of the
amount determined as provided in (i) above. (Section 101)
Each Indenture contains provisions for convening meetings of the Holders of
a series if Debt Securities of that series are issuable as Bearer Securities.
(Section 1401) A meeting may be called at any time by the Trustee, and also,
upon request, by the Company or the Holders of at least 10% in aggregate
principal amount of the Outstanding Securities of such series, in any such case
upon notice given in accordance with "Notices" below. (Section 1402) Except for
any consent which must be given by the Holder of each Outstanding Security
affected thereby, as described above, any resolution presented at a meeting (or
adjourned meeting at which a quorum is present) may be adopted by the
affirmative vote of the Holders of a majority in aggregate principal amount of
the Outstanding Securities of that series; provided, however, that any
resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action which may be made, given or taken by the
Holders of a specified percentage, which is less than a majority, in aggregate
principal amount of the Outstanding Securities of a series may be adopted at a
meeting (or adjourned meeting duly reconvened at which a quorum is present) by
the affirmative vote of the Holders of such specified percentage in aggregate
principal amount of the Outstanding Securities of that series. Any resolution
passed or decision taken at any meeting of Holders of any series duly held in
accordance with the applicable Indenture will be binding on all Holders of that
series and related coupons. The quorum at any meeting, and at any reconvened
meeting, will be Persons holding or representing a majority in aggregate
principal amount of the Outstanding Securities of a series. (Section 1404)
Consolidation, Merger and Sale of Assets. The Company, without the consent
of the Holders of any of the outstanding Securities under either Indenture, may
consolidate with or merge into, or convey, transfer or lease its assets
substantially as an entirety to, any Person which is a corporation, partnership
or trust organized
10
<PAGE> 22
and validly existing under the laws of any domestic jurisdiction, provided that
any successor Person assumes the Company's obligations on the Securities and
under such Indenture, and provided further that after giving effect to the
transaction no Event of Default, and no event which, after notice or lapse of
time, would become an Event of Default, shall have occurred and be continuing,
and that certain other conditions are met. (Section 801)
Notices. Except as otherwise provided in the Indentures, notices to Holders
of Bearer Securities will be given by publication at least twice in a daily
newspaper in The City of New York and in such other city or cities as may be
specified in such Bearer Securities. Notices to Holders of Registered Securities
will be given by mail to the addresses of such Holders as they appear in the
Security Register. (Section 106)
Title. Title to any Bearer Securities (including Bearer Securities in
permanent global form) and any coupons appertaining thereto will pass by
delivery. The Company, the Trustee and any agent of the Company or the Trustee
may treat the bearer of any Bearer Security and the bearer of any coupon and the
registered owner of any Registered Security as the owner thereof (whether or not
such Debt Security or coupon shall be overdue and notwithstanding any notice to
the contrary) for the purpose of making payment and for all other purposes.
(Section 308)
Replacement of Securities and Coupons. Any mutilated Debt Security or a
Debt Security with a mutilated coupon appertaining thereto will be replaced by
the Company at the expense of the Holder upon surrender of such Debt Security to
the Trustee. Debt Securities or coupons that became destroyed, stolen or lost
will be replaced by the Company at the expense of the Holder upon delivery to
the Trustee of the Debt Security and coupons or evidence of destruction, loss or
theft thereof satisfactory to the Company and the Trustee; in the case of any
coupon which becomes destroyed, stolen or lost, such coupon will be replaced by
issuance of a new Debt Security in exchange for the Debt Security to which such
coupon appertains. In the case of a destroyed, lost or stolen Debt Security or
coupon, an indemnity satisfactory to the Trustee and the Company may be required
at the expense of the Holder of such Debt Security or coupon before a
replacement Debt Security will be issued. (Section 306)
Governing Law. The Indentures, the Debt Securities and coupons will be
governed by, and construed in accordance with, the laws of the State of New
York. (Section 113)
Regarding the Trustee. The Trustee for each series of Debt Securities will
be identified in the applicable Prospectus Supplement.
Each Indenture contains certain limitations on the right of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases, or to realize for its own account on certain property received in
respect of any such claim as security or otherwise. (Section 613) The Trustee is
permitted to engage in certain other transactions; however, if it acquires any
conflicting interest (as described in the Indentures), it must eliminate such
conflict or resign. (Section 608)
The holders of a majority in principal amount of all outstanding Debt
Securities of a Series (or if more than one Series is affected thereby, all of
Series so affected, voting as a single class) will have the right to direct the
time, method and place of conducting any proceeding for exercising any remedy or
power available to the Trustee for such Series or all such Series so affected.
In case an Event of Default shall occur (and shall not be cured) under any
Indenture relating to a Series of Debt Securities and is known to the Trustee
for such Series, such Trustee shall exercise such of the rights and powers
vested in it by such Indenture and use the same degree of care and skill in its
exercise as a prudent person would exercise or use under the circumstances in
the conduct of his own affairs. Subject to such provisions, no Trustee will be
under any obligation to exercise any of its rights or powers under the
applicable Indenture at the request of any of the holders of Debt Securities
unless they shall have offered to such Trustee security and indemnity
satisfactory to it.
11
<PAGE> 23
PROVISIONS APPLICABLE SOLELY TO SENIOR DEBT SECURITIES
General. Senior Debt Securities will be issued under the Senior Debt
Indenture, and each series will rank pari passu as to the right of payment of
principal and any premium and interest with each other series issued thereunder
and will rank senior to all series of Subordinated Debt Securities that may be
issued.
Certain Definitions. For purposes of the following discussion, the
following definitions are applicable (Section 101 of the Senior Debt Indenture).
"Net Tangible Assets" means the total amount of assets appearing on a
consolidated balance sheet of the Company and its Subsidiaries less, without
duplication: (a) total current liabilities (excluding current maturities of
long-term debt and preferred stock); (b) all reserves for depreciation and other
asset valuation reserves but excluding reserves for deferred federal and state
income taxes; (c) all intangible assets such as goodwill, trademarks, trade
names, patents and unamortized debt discount and expense carried as an asset;
and (d) all appropriate adjustments on account of minority interests of other
Persons holding common stock in any Subsidiary.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Subsidiary" means a corporation more than 50% of the outstanding stock of
which is owned, directly or indirectly, by the Company or by one or more
Subsidiaries, or by the Company and one or more other Subsidiaries. For the
purposes of this definition, "voting stock" means stock which ordinarily has
voting power for the election of directors, whether at all times or only so long
as no senior class of stock has such voting power by reason of any contingency.
PROVISIONS APPLICABLE SOLELY TO SUBORDINATED DEBT SECURITIES
Subordination. The Subordinated Debt Securities will be subordinate and
junior in right of payment, to the extent set forth in the Subordinated Debt
Indenture, to all Senior Indebtedness (as defined below) of the Company. If the
Company should default in the payment of any principal of or premium or interest
on any Senior Indebtedness when the same become due and payable, whether at
maturity or a date fixed for prepayment or by declaration of acceleration or
otherwise, then, upon written notice of such default to the Company by the
holders of such Senior Indebtedness or any trustee therefor and subject to
certain rights of the Company to dispute such default and subject to proper
notification of the Trustee, unless and until such default has been cured or
waived or ceases to exist, no direct or indirect payment (in cash, property,
securities, by set-off or otherwise) will be made or agreed to be made for
principal or premium, if any, or interest, if any, on the Subordinated Debt
Securities, or in respect of any redemption, retirement, purchase or other
acquisition of the Subordinated Debt Securities other than those made in capital
stock of the Company (or cash in lieu of fractional shares thereof) pursuant to
any conversion right of the Subordinated Debt Securities or otherwise made in
capital stock of the Company. (Sections 1601, 1604 and 1605 of the Subordinated
Debt Indenture)
"Senior Indebtedness" is defined in Section 101 of the Subordinated Debt
Indenture as Indebtedness (as defined below) of the Company outstanding at any
time except (a) any Indebtedness as to which, by the terms of the instrument
creating or evidencing the same, it is provided that such Indebtedness is not
senior in right of payment to the Subordinated Debt Securities, (b) the
Subordinated Debt Securities, (c) any Indebtedness of the Company to a
wholly-owned Subsidiary of the Company, (d) interest accruing after the filing
of a petition initiating certain bankruptcy or insolvency proceedings unless
such interest is an allowed claim enforceable against the Company in a
proceeding under federal or state bankruptcy laws, (e) obligations under
performance guarantees, support agreements and other agreements in the nature
thereof relating to the obligations of any Subsidiary of the Company, and (f)
trade accounts payable. "Indebtedness" is defined in Section 101 of the
Subordinated Debt Indenture as, with respect to any Person, (a) (i) the
principal of and premium and interest, if any, on indebtedness for money
borrowed of such Person evidenced by bonds, notes, debentures or similar
obligations, including any guaranty by such Person of any indebtedness for money
borrowed of any other Person, whether any such indebtedness or guaranty is
outstanding on the date of the
12
<PAGE> 24
Subordinated Debt Indenture or is thereafter created, assumed or incurred, (ii)
the principal of and premium and interest, if any, on indebtedness for money
borrowed, incurred, assumed or guaranteed by such Person in connection with the
acquisition by it or any of its subsidiaries of any other business, properties
or other assets and (iii) lease obligations which such Person capitalizes in
accordance with Statement of Financial Accounting Standards No. 13 promulgated
by the Financial Accounting Standards Board or such other generally accepted
accounting principles as may be from time to time in effect, (b) any other
indebtedness of such Person, including any indebtedness representing the balance
deferred and unpaid of the purchase price of any property or interest therein,
including any such balance that constitutes a trade account payable, and any
guaranty, endorsement or other contingent obligation of such Person in respect
of any indebtedness of another, which is outstanding on the date of the
Subordinated Debt Indenture or is thereafter created, assumed or incurred by
such Person and (c) any amendments, modifications, refundings, renewals or
extensions of any indebtedness or obligation described as Indebtedness in clause
(a) or (b) above.
If (i) without the consent of the Company a court shall enter (A) an order
for relief with respect to the Company under the United States federal
bankruptcy laws, (B) a judgment, order or decree adjudging the Company a
bankrupt or insolvent, or (C) an order for relief for reorganization,
arrangement, adjustment or composition of or in respect of the Company under
the United States federal bankruptcy laws or state insolvency laws or (ii) the
Company shall institute proceedings for the entry of an order for relief with
respect to the Company under the United States federal bankruptcy laws or for
an adjudication of insolvency, or shall consent to the institution of
bankruptcy or insolvency proceedings against it, or shall file a petition
seeking, or seek or consent to reorganization, arrangement, composition or
similar relief under any applicable law, or shall consent to the filing of such
petition or to the appointment of a receiver, custodian, liquidator, assignee,
trustee, sequestrator or similar official in respect of the Company or of
substantially all of its property, or the Company shall make a general
assignment for the benefit of creditors, then all Senior Indebtedness
(including any interest thereon accruing after the commencement of any such
proceedings) will first be paid in full before any payment or distribution,
whether in cash, securities or other property, is made on account of the
principal of, premium, if any, or interest, if any, on the Subordinated Debt
Securities. In such event, any payment or distribution on account of the
principal of, premium, if any, or interest, if any, on the Subordinated Debt
Securities, whether in cash, securities or other property (other than
securities of the Company or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least to
the extent provided in the subordination provisions with respect to the
Subordinated Debt Securities, to the payment of all Senior Indebtedness then
outstanding and to any securities issued in respect thereof under any such plan
of reorganization or readjustment), which would otherwise (but for the
subordination provisions) be payable or deliverable in respect of the
Subordinated Debt Securities will be paid or delivered directly to the holders
of Senior Indebtedness in accordance with the priorities then existing among
such holders until all Senior Indebtedness (including any interest thereon
accruing after the commencement of any such proceedings) has been paid in full.
If any payment or distribution on account of the principal of, premium, if any,
or interest, if any, on the Subordinated Debt Securities of any character,
whether in cash, securities or other property (other than securities of the
Company or any other corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinate, at least to the extent
provided in the subordination provisions with respect to the Subordinated Debt
Securities, to the payment of all Senior Indebtedness then outstanding and to
any securities issued in respect thereof under any such plan of reorganization
or readjustment), shall be received by the Trustee or any holder of any
Subordinated Debt Securities in contravention of any of the terms of the
Subordinated Debt Indenture, such payment or distribution will be received in
trust for the benefit of, and will be paid over or delivered and transferred
to, the holders of the Senior Indebtedness then outstanding in accordance with
the priorities then existing among such holders for application to the payment
of all Senior Indebtedness remaining unpaid, to the extent necessary to pay all
such Senior Indebtedness in full. In the event of any such proceeding, after
payment in full of all sums owing with respect to Senior Indebtedness, the
holders of Subordinated Debt Securities, together with the holders of any
obligations of the Company ranking on a parity with the Subordinated Debt
Securities, will be entitled to be repaid from the remaining assets of the
Company the amounts at that time due and owing on account of unpaid principal
of or any premium or interest on the Subordinated Debt Securities and such
other obligations before any payment or other distribution, whether in cash,
property or otherwise, shall
13
<PAGE> 25
be made on account of any capital stock or obligations of the Company ranking
junior to the Subordinated Debt Securities and such other obligations. (Section
1601 of the Subordinated Debt Indenture)
The Prospectus Supplement respecting any series of Subordinated Debt
Securities will set forth any subordination provisions applicable to such series
in addition to or different from those described above.
By reason of such subordination, in the event of liquidation, bankruptcy,
reorganization, insolvency, receivership or similar proceeding involving the
Company or an assignment for the benefit of creditors of the Company or any of
its Subsidiaries or a marshalling of assets or liabilities of the Company and
its Subsidiaries, holders of Senior Indebtedness and holders of other
obligations of the Company that are not subordinated to Senior Indebtedness may
receive more, ratably, than holders of the Subordinated Debt Securities. Such
subordination will not prevent the occurrence of any Default or Event of Default
or limit the rights of the Trustee or any Holder, subject to the other
provisions of the Indenture, to pursue any other rights or remedies with respect
to the Subordinated Debt Securities.
Conversion. The Subordinated Debt Indenture may provide for a right of
conversion of Subordinated Debt Securities into Common Stock (or cash in lieu
thereof). (Sections 301 and 1501 of the Subordinated Debt Indenture) The
following provisions will apply to Debt Securities that are convertible
Subordinated Debt Securities unless otherwise provided in the Prospectus
Supplement for such Debt Securities.
The holder of any convertible Subordinated Debt Securities will have the
right exercisable at any time prior to maturity, unless previously redeemed or
otherwise purchased by the Company, to convert such Subordinated Debt Securities
into shares of Common Stock at the conversion price or conversion rate set forth
in the Prospectus Supplement, subject to adjustment. (Section 1502 of the
Subordinated Debt Indenture) The holder of convertible Subordinated Debt
Securities may convert any portion thereof which is $1,000 in principal amount
or any integral multiple thereof. (Section 1502 of the Subordinated Debt
Indenture)
In certain events, the conversion price or conversion rate will be subject
to adjustment as set forth in the Subordinated Debt Indenture. Such events
include the issuance of shares of Common Stock of the Company as a dividend or
distribution on the Common Stock; subdivisions, combinations and
reclassifications of the Common Stock; the issuance to all holders of Common
Stock of rights or warrants entitling the holders thereof (for a period not
exceeding 45 days) to subscribe for or purchase shares of Common Stock at a
price per share less than the then current market price per share of Common
Stock (as determined pursuant to the Subordinated Debt Indenture); and the
distribution to substantially all holders of Common Stock of evidences of
indebtedness, equity securities (including equity interests in the Company's
Subsidiaries) other than Common Stock, or other assets (excluding cash dividends
paid from surplus) or rights or warrants to subscribe for securities (other than
those referred to above). No adjustment of the conversion price or conversion
rate will be required unless an adjustment would require a cumulative increase
or decrease of at least 1% in such price or rate. (Section 1504 of the
Subordinated Debt Indenture) The Company has been advised by its counsel, Vinson
& Elkins L.L.P., that certain adjustments in the conversion price or conversion
rate in accordance with the foregoing provisions may result in constructive
distributions to either holders of the Subordinated Debt Securities or holders
of Common Stock which would be taxable pursuant to Treasury Regulations issued
under Section 305 of the Internal Revenue Code of 1986, as amended. The amount
of any such taxable constructive distribution would be the fair market value of
the Common Stock which is treated as having been constructively received, such
value being determined as of the time the adjustment resulting in the
constructive distribution is made.
Fractional shares of Common Stock will not be issued upon conversion, but,
in lieu thereof, the Company will pay a cash adjustment based on the then
current market price for the Common Stock. (Section 1503 of the Subordinated
Debt Indenture) Upon conversion, no adjustments will be made for accrued
interest or dividends, and therefore convertible Subordinated Debt Securities
surrendered for conversion between the record date for an interest payment and
the interest payment date (except convertible Subordinated Debt Securities
called for redemption on a redemption date during such period) must be
accompanied by payment of an amount equal to the interest thereon which the
registered holder is to receive. (Sections 1504 and 1502 of the Subordinated
Debt Indenture)
14
<PAGE> 26
In the case of any consolidation or merger of the Company (with certain
exceptions) or any conveyance, transfer or lease of the properties and assets of
the Company substantially as an entirety to any Person, each holder of
convertible Subordinated Debt Securities, after the consolidation, merger,
conveyance, transfer or lease, will have the right to convert such convertible
Subordinated Debt Securities only into the kind and amount of securities, cash
and other property which the holder would have been entitled to receive upon or
in connection with such consolidation, merger, conveyance, transfer or lease, if
the holder had held the Common Stock issuable upon conversion of such
convertible Subordinated Debt Securities immediately prior to such
consolidation, merger, conveyance, transfer or lease. (Section 1505 of the
Subordinated Debt Indenture)
DESCRIPTION OF CAPITAL STOCK
GENERAL
The Company is currently authorized to issue 300,000,000 shares of its
Common Stock, par value $.01 per share, of which 139,585,765 shares were
outstanding on December 31, 1996 and 10,000,000 shares of Preferred Stock, par
value $.01 per share, none of which were outstanding on such date.
COMMON STOCK
Each holder of Common Stock is entitled to one vote per share held of
record on each matter submitted to stockholders. Cumulative voting for the
election of directors is not permitted, and the holders of a majority of shares
voting for the election of directors can elect all members of the Board of
Directors.
Subject to the rights of any holders of Preferred Stock, holders of record
of shares of Common Stock are entitled to receive ratably dividends when and if
declared by the Board of Directors out of funds legally available therefor. In
the event of a voluntary or involuntary winding up or dissolution, liquidation
or partial liquidation of the Company, holders of Common Stock are entitled to
participate ratably in any distribution of the assets of the Company, subject to
any prior rights of holders of any outstanding Preferred Stock.
Holders of Common Stock have no conversion, redemption or preemptive
rights. All outstanding shares of Common Stock are, and the Common Stock to be
issued hereunder will be, validly issued, fully paid and nonassessable.
PREFERRED STOCK
The Board of Directors is authorized, without further approval of the
stockholders, to issue the Preferred Stock in series and with respect to each
series, to fix its designations, relative rights (including voting, dividend,
conversion, sinking fund and redemption rights), preferences (including with
respect to dividends and upon liquidation), privileges and limitations. The
Board of Directors, without stockholder approval, may issue Preferred Stock with
voting and conversion rights, both of which could adversely affect the voting
power of the holders of Common Stock, and dividend or liquidation preferences
that would restrict Common Stock dividends or adversely affect the assets
available for distribution to holders of shares of Common Stock upon the
Company's dissolution.
AUTHORIZED BUT UNISSUED SHARES
Authorized but unissued shares of Common Stock or Preferred Stock can be
reserved for issuance by the Board of Directors from time to time without
further stockholder action for proper corporate purposes, including stock
dividends or stock splits, raising equity capital and structuring future
corporate transactions, including acquisitions.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Common Stock is Boston EquiServe,
Boston, Massachusetts.
15
<PAGE> 27
DELAWARE ANTI-TAKEOVER LAW
Section 203 of the DGCL ("Section 203") generally provides that a person
who, together with affiliates and associates owns, or within three years did
own, at least 15% but less than 85% of the outstanding voting stock of a
corporation subject to the statute (an "Interested Stockholder") may not engage
in certain business combinations with the corporation for a period of three
years after the date on which the person became an Interested Stockholder unless
(i) 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 (ii) subsequent to such date, the business combination
is approved by the corporation's board of directors and authorized at a
stockholders' meeting by a vote of at least two-thirds of the corporation's
outstanding voting stock 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, including mergers,
asset sales, and other transactions in which the Interested Stockholder receives
or could receive a benefit on other than a pro rata basis with other
stockholders.
The provisions of Section 203, combined with the Board's authority to issue
Preferred Stock without further stockholder action, could delay or frustrate a
change in control of the Company. The provisions also could discourage, impede
or prevent a merger, tender offer or proxy contest, even if such event would be
favorable to the interests of stockholders. The Company's stockholders, by
adopting an amendment to the Restated Certificate of Incorporation, may elect
not to be governed by Section 203 which election would be effective 12 months
after such adoption. Neither the Company's Restated Certificate of Incorporation
nor its Bylaws exclude the Company from the restrictions imposed by Section 203.
PLAN OF DISTRIBUTION
GENERAL
The Company may sell Securities to or through underwriters or dealers, and
also may sell Securities directly to other purchasers or through agents.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Securities, underwriters may receive
compensation from the Company, or purchasers of Securities for whom they may act
as agents in the form of discounts, concessions or commissions. Underwriters,
dealers and agents that participate in the distribution of Securities may be
deemed to be underwriters, and any discounts or commissions received by them
from the Company or the purchasers of Securities, as the case may be, and any
profit on the resale of Securities by them may be deemed to be underwriting
discounts and commissions under the Securities Act. Any such person who may be
deemed to be an underwriter will be identified, and any such compensation
received from the Company will be described, in the Prospectus Supplement.
Debt Securities, when first issued, will have no established trading
market. Any underwriters or agents to or through whom Debt Securities are sold
by the Company for public offering and sale may make a market in such Debt
Securities, but such underwriters or agents will not be obligated to do so and
may discontinue any market making at any time without notice. No assurance can
be given as to the liquidity of the trading market for any Debt Securities.
Under agreements which may be entered into by the Company, underwriters,
dealers and agents who participate in the distribution of Securities may be
entitled to indemnification by the Company against or contribution toward
certain liabilities, including liabilities under the Securities Act.
16
<PAGE> 28
DELAYED DELIVERY ARRANGEMENT
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters or other persons acting as the Company's agents to solicit offers
by certain institutions to purchase Debt Securities from the Company pursuant to
contracts providing for payment and delivery on a future date. Institutions with
which such contracts may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others, but in all cases will be subject to the approval of the
Company. The obligations of any purchaser under any such contract will be
subject to the condition that the purchase of the Debt Securities shall not at
the time of delivery be prohibited under the laws of any jurisdiction to which
such purchaser is subject. The underwriters and such agents will not have any
responsibility in respect of the validity or performance of such contracts.
VALIDITY OF SECURITIES
The validity of the Offered Securities, as well as certain tax matters in
connection therewith, will be passed upon for the Company by Vinson & Elkins
L.L.P., Houston, Texas and will be passed upon for any agents, dealers or
underwriters by counsel named in the applicable Prospectus Supplement.
EXPERTS
The consolidated financial statements of the Company and subsidiaries as of
December 31, 1994 and 1995, and for each of the three years in the period ended
December 31, 1995, which are included in the Company's Annual Report on Form
10-K for the year ended December 31, 1995, and the supplemental consolidated
balance sheets of the Company as of December 31, 1994 and 1995, and the
supplemental consolidated statements of operations, stockholders' equity, and
cash flows for each of the years in the three-year period ended December 31,
1995, appearing in the Company's Current Report on Form 8-K/A filed July 1,
1996, and Current Report on Form 8-K filed November 12, 1996, incorporated by
reference in this Prospectus, have been incorporated herein in reliance on the
report of Coopers & Lybrand L.L.P., independent accountants, given on the
authority of that firm as experts in accounting and auditing.
The consolidated financial statements of Sanifill, Inc. appearing in the
Company's Current Report on Form 8-K dated September 18, 1996 and the financial
statements of various companies acquired by Sanifill appearing in the Company's
Current Report on Form 8-K dated September 12, 1996, and amended by its Form
8-K/A (Amendment No. 1) filed November 14, 1996 and as amended by its Form 8-K/A
(Amendment No. 2) filed November 15, 1996, incorporated by reference in this
Prospectus have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
incorporated herein by reference in reliance upon the authority of such firm as
experts in accounting and auditing in giving said reports.
The consolidated financial statements of Western Waste Industries at June
30, 1995 and 1994, and for each of the three years in the period ended June 30,
1995, included in the Company's Current Report on Form 8-K dated January 9,
1996, have been audited by Ernst & Young LLP, independent auditors, as set forth
in their report thereon and included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
17
<PAGE> 29
- ------------------------------------------------------
- ------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OF THE UNDERWRITERS. THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY THE SECURITIES OFFERED HEREBY BY ANYONE IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION NEITHER THE
DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE
HEREUNDER AND THEREUNDER SHALL CREATE ANY IMPLICATION THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PROSPECTUS SUPPLEMENT PAGE
<S> <C>
Prospectus Supplement Summary.......... S-3
Risk Factors........................... S-6
Use of Proceeds........................ S-7
Price Range of Common Stock............ S-7
Dividend Policy........................ S-7
Capitalization......................... S-8
Selected Consolidated Financial Data... S-9
Underwriting........................... S-10
Legal Matters.......................... S-11
PROSPECTUS
Available Information.................. 2
Incorporation of Certain Documents by
Reference............................ 2
The Company............................ 3
Use of Proceeds........................ 3
Ratios of Earnings to Fixed Charges.... 3
Description of Debt Securities......... 4
Description of Capital Stock........... 15
Plan of Distribution................... 16
Validity of Securities................. 17
Experts................................ 17
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
10,000,000 SHARES
USA WASTE
SERVICES, INC.
COMMON STOCK
------------------------------------------
PROSPECTUS SUPPLEMENT
------------------------------------------
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
DEUTSCHE MORGAN GRENFELL
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
FEBRUARY 3, 1997
- ------------------------------------------------------
- ------------------------------------------------------
