USI ATLANTIC CORP
S-4/A, 1999-04-08
ELECTRIC LIGHTING & WIRING EQUIPMENT
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      AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 8, 1999
                                                   REGISTRATION NO.  333-70537

================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                 AMENDMENT NO. 2
                                       TO
                                    FORM S-4
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933


                              U.S. INDUSTRIES, INC.
                           USI AMERICAN HOLDINGS, INC.
      (Exact Name of Co-Registrant Issuers as Specified in their Charters)

                               USI ATLANTIC CORP.
       (Exact Name of Co-Registrant Guarantor as Specified in its Charter)

<TABLE>
<S>                                             <C>                                        <C>
                 DELAWARE                                   3998                              22-3568449
                 DELAWARE                                   3998                              22-3363062
                 DELAWARE                                   3998                              22-3369326
       (State or other Jurisdiction             (Primary Standard Industrial               (I.R.S. Employer
     of Incorporation or Organization)           Classification Code Number)               Identification No.)

</TABLE>
                              101 Wood Avenue South
                            Iselin, New Jersey 08830
                                 (732) 767-0700
    (Address, Including Zip Code, and Telephone Number, Including Area Code,
                of Co-Registrants' Principal Executive Offices)


                             George H. MacLean, Esq.
                         Senior Vice President, General
                               Counsel & Secretary
                              101 Wood Avenue South
                            Iselin, New Jersey 08830
                                 (732) 767-0700
            (Name, Address, Including Zip Code, and Telephone Number,
                   Including Area Code, of Agent for Service)

                                    COPY TO:

                              Ellen J. Odoner, Esq.
                           Weil, Gotshal & Manges LLP
                                767 Fifth Avenue
                            New York, New York 10153
                                 (212) 310-8000


        APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
  As soon as practicable after this registration statement becomes effective.

      If the securities being registered on this form are being offered in
         connection with the formation of a holding company and there is
       compliance with General Instruction G, check the following box. [ ]

THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.


NY2:\375759\03\81XR03!.DOC\78595.0012
<PAGE>
                   SUBJECT TO COMPLETION, DATED APRIL 8, 1999

Exchange Offer for
$250,000,000 7-1/8% Senior Notes due 2003
of
U.S. INDUSTRIES, INC.
USI AMERICAN HOLDINGS, INC.
Issuers

USI ATLANTIC CORP.
Guarantor

                           TERMS OF THE EXCHANGE OFFER

o        We are offering to exchange registered 7-1/8% Senior Notes due 2003 for
         all old unregistered 7-1/8% Senior Notes due 2003.

o        The terms of the registered notes will be identical to the terms of the
         old notes, except for the elimination of transfer restrictions,
         registration rights and liquidated damages provisions.

o        Our offer to exchange expires at 5:00 p.m., New York City time, on
         _______________, 1999, unless extended.

o        Our offer to exchange is not subject to any condition other than that
         it not violate applicable law or any applicable interpretation of the
         staff of the Securities and Exchange Commission.

o        All old notes that are validly tendered and not validly withdrawn will
         be exchanged.

o        Tenders of old notes may be withdrawn at any time prior to the
         expiration of the exchange offer.

o        As of December 31, 1998, we had approximately $___ million of senior
         debt outstanding, including the old notes and other debt which ranks
         equal in right of payment with the old notes and the registered notes.


         PLEASE REFER TO "RISK FACTORS" BEGINNING ON PAGE 8 OF THIS DOCUMENT FOR
         CERTAIN IMPORTANT INFORMATION.

         NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
         COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES, NOR HAVE
         ANY OF THESE ORGANIZATIONS DETERMINED THAT THIS PROSPECTUS IS TRUTHFUL
         OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

         THE INFORMATION IN THIS PROSPECTUS MAY NOT BE COMPLETE AND MAY BE
         CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
         STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS
         EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND
         IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE
         WHERE THE OFFER OR SALE IS NOT PERMITTED.

                 The date of this prospectus is _________, 1999.

<PAGE>
                                TABLE OF CONTENTS

                                                                 PAGE

Prospectus Summary.................................................3

Risk Factors.......................................................8

Where You Can Find More Information................................9

Incorporation Of Certain Documents By Reference....................9

Disclosure Regarding Forward-Looking Statements...................10

Use Of Proceeds...................................................10

Capitalization....................................................12

Ratio Of Earnings To Fixed Charges................................12

The Exchange Offer................................................13

Procedures For Tendering Old Notes................................18

Description Of The Registered Notes...............................24

Material Federal Income Tax Considerations........................46

Notice To Canadian Residents......................................48

Legal Matters.....................................................50

Experts  .........................................................50


                                       2
<PAGE>
                               PROSPECTUS SUMMARY

         This brief summary highlights selected information from the prospectus.
It does not contain all of the information that is important to you. We urge you
to carefully read and review the entire prospectus and the other documents to
which the prospectus refers to fully understand the terms of the registered
notes and the exchange offer.

                   SUMMARY OF THE TERMS OF THE EXCHANGE OFFER


Registration Rights...............  On October 27, 1998, we completed the
                                    private placement offering of $250 million
                                    of our 7-1/8% Senior Notes due 2003. We
                                    entered into a registration rights agreement
                                    in connection with the private offering in
                                    which we agreed to deliver this prospectus
                                    to you and to complete the exchange offer
                                    prior to May 25, 1999. You are entitled to
                                    exchange your old notes in the exchange
                                    offer for registered notes with
                                    substantially identical terms.

The Exchange Offer................  We are offering to exchange up to $250
                                    million of the registered notes for up to
                                    $250 million of the old notes. Old notes may
                                    be exchanged only in $1,000 increments. IF
                                    YOU DO NOT PARTICIPATE IN THE EXCHANGE
                                    OFFER, UPON COMPLETION OF THE EXCHANGE
                                    OFFER, THERE MAY BE NO MARKET FOR THE OLD
                                    NOTES AND YOU MAY HAVE DIFFICULTY SELLING
                                    THEM.

Resales of the Registered Notes...  We believe that registered notes issued in
                                    the exchange offer may be offered for
                                    resale, resold or otherwise transferred by
                                    you, without compliance with the
                                    registration and prospectus delivery
                                    requirement of the Securities Act if:

                                    (1) the registered notes are acquired in the
                                    ordinary course of your business;

                                    (2) you are not engaging in and do not
                                    intend to engage in a distribution of the
                                    registered notes;

                                    (3) you do not have an arrangement or
                                    understanding with any person to participate
                                    in the distribution of the registered notes;
                                    and

                                    (4) you are not related to us in a capacity
                                    such as a director, officer or significant
                                    stockholder.

                                    If you do not meet all of the above
                                    conditions and you transfer any registered
                                    note issued to you in the exchange offer
                                    without delivering a prospectus meeting the
                                    requirements of the Securities Act or


                                       3
<PAGE>
                                    without an exemption from registration of
                                    your notes from those requirements, you may
                                    incur liability under the Securities Act. We
                                    do not assume, or indemnify you against,
                                    this liability. We will ask you to represent
                                    to us by signing the letter of transmittal
                                    that you meet all of the conditions
                                    described in the first sentence of this
                                    section when you elect to participate in the
                                    exchange offer. Each broker-dealer that
                                    receives registered notes for its own
                                    account in exchange for old notes which were
                                    acquired by the broker-dealer as a result of
                                    market-making activities or other trading
                                    activities, must acknowledge that it will
                                    deliver a prospectus meeting the
                                    requirements of the Securities Act in
                                    connection with any resales of the
                                    registered notes. A broker-dealer may use
                                    this prospectus for an offer to resell or
                                    otherwise transfer the registered notes.

Expiration Date...................  Unless we extend the exchange offer, it will
                                    expire at 5:00 p.m., New York City time, on
                                    _________ __, 1999. We will not extend this
                                    time period to a date later than May 25,
                                    1999.

Withdrawal........................  You may withdraw the tender of your old
                                    notes at any time prior to 5:00 p.m., New
                                    York City time, on ____________ __, 1999, or
                                    the later date and time to which we extend
                                    the exchange offer. We will return to you
                                    any old notes not accepted for exchange for
                                    any reason without expense to you as soon as
                                    practicable after the expiration or
                                    termination of the exchange offer.


Interest On The Registered Notes 
And The Old Notes.................  The registered notes and the old notes
                                    (collectively, the "notes") will pay
                                    interest at the rate of 7-1/8% per year,
                                    payable semi-annually on each April 15 and
                                    October 15, commencing April 15, 1999.
                                    Interest on the registered notes will accrue
                                    from the date of the original issuance of
                                    the old notes or from the date of the last
                                    periodic payment of interest on the old
                                    notes, whichever is later. No additional
                                    interest will be paid on old notes tendered
                                    and accepted for exchange.


                                       4
<PAGE>
Conditions To The Exchange Offer..  The exchange offer is subject to the
                                    following conditions, each of which may be
                                    waived by us:

                                    (1) any injunction, order or decree shall
                                    have been issued by any court or any
                                    governmental agency that would prohibit,
                                    prevent or otherwise materially impair our
                                    ability to proceed with the exchange offer;
                                    or

                                    (2) the exchange offer shall violate any
                                    applicable law or any applicable
                                    interpretation of the Staff of the
                                    Securities and Exchange Commission.

                                    If we waive a condition, we may be required,
                                    in certain instances, to extend the
                                    expiration date of the exchange offer.


Procedures For Tendering 
Old Notes.........................  If you wish to tender your old notes in the
                                    exchange offer you must transmit to The
                                    First National Bank of Chicago, as the
                                    exchange agent, by 5:00 p.m., New York City
                                    time, on the expiration date:

                                    o a properly completed and signed letter of
                                    transmittal, including all other required
                                    documents, and one or more outstanding
                                    certificates representing old notes, or

                                    o the documents necessary for compliance
                                    with the guaranteed delivery procedures
                                    described on page ___ of this prospectus.

                                    If you hold your old notes through The
                                    Depositary Trust Company and you wish to
                                    participate in the exchange offer, you may
                                    do so through The Depositary Trust Company's
                                    Automated Tender Offer Program. By
                                    participating in the exchange offer, you
                                    will agree to be bound by the letter of
                                    transmittal as though you had signed the
                                    letter of transmittal.

Exchange Agent....................  The First National Bank of Chicago is
                                    serving as exchange agent for the exchange
                                    offer.

Federal Income Tax 
Considerations....................  The exchange of old notes for registered
                                    notes in the exchange offer will not
                                    constitute a sale or an exchange for federal
                                    income tax purposes. See "Material Federal
                                    Income Tax Considerations."


                                       5
<PAGE>
                  SUMMARY OF THE TERMS OF THE REGISTERED NOTES


Issuers...........................  U.S. Industries, Inc. USI American Holdings,
                                    Inc.

Guarantor.........................  USI Atlantic Corp.

Securities Offered................  $250 million aggregate principal amount of
                                    7-1/8% Senior Notes due 2003 which have been
                                    registered under the Securities Act.

Maturity Date.....................  October 15, 2003.

Interest..........................  The registered notes will bear interest at a
                                    rate of 7-1/8% per year, payable
                                    semi-annually on each April 15 and October
                                    15, commencing April 15, 1999.

Optional Redemption...............  The registered notes are redeemable, in
                                    whole or in part, at our option on 30 days'
                                    prior notice at the redemption prices stated
                                    in "Description of the Registered
                                    Notes--Optional Redemption" plus accrued and
                                    unpaid interest to the date of redemption.

Guarantees........................  The registered notes are fully and
                                    unconditionally guaranteed on a senior
                                    unsecured basis by the guarantor. See
                                    "Description of the Registered
                                    Notes--Guarantee."

Ranking...........................  The registered notes and the guarantee are
                                    general unsecured obligations of the issuers
                                    and the guarantor, respectively. The notes
                                    and the guarantee will rank equal in right
                                    of payment with all other existing and
                                    future unsecured indebtedness of the issuers
                                    and the guarantor, respectively, unless the
                                    holders of that indebtedness agree to give
                                    priority to the notes.

Events of Default.................  The indenture describes those circumstances
                                    which are considered events of default with
                                    respect to any series of notes offered under
                                    the terms of the indenture. See "Description
                                    of the Registered Notes--Events of Default."


                                       6
<PAGE>
Restrictive Covenants.............  The indenture contains certain limitations
                                    on our ability and the ability of our
                                    subsidiaries to, among other things, incur
                                    additional indebtedness, create liens, enter
                                    into certain sale and leaseback transactions
                                    and merge with or sell all or substantially
                                    all of our assets to another person. See
                                    "Description of the Registered
                                    Notes--Certain Covenants" and "Description
                                    of the Registered Notes-- Merger,
                                    Conveyance, Transfer or Lease."

Use of Proceeds...................  We will not receive any cash proceeds from
                                    the exchange offer.


                                   WHO WE ARE

         We manufacture and distribute a broad range of consumer and industrial
products through four operating divisions summarized below. Our businesses have
operations and markets both inside and outside the United States. Please refer
to our Form 10-K and other filings for further information.

o      USI BATH AND PLUMBING PRODUCTS manufactures and distributes a full line
       of bath and plumbing products under the brand names Jacuzzi, Eljer and
       Zurn.

o      LIGHTING CORPORATION OF AMERICA manufactures and distributes indoor and
       outdoor lighting fixtures. Its brand names include Architectural Area
       Lighting, Columbia, Kim, Progress, Siemens (under license from Siemens
       AG) and SiTeco.

o      USI HARDWARE AND TOOLS manufactures and distributes lawn and garden
       tools, hand tools, ladders, windows and metal television picture tube
       components. Its brand names include Ames, Garant, Spear and Jackson and
       Woodings-Verona tools; Keller ladders; and BiltBest windows.

o      USI DIVERSIFIED manufactures a wide range of consumer and industrial
       products. These include Rainbow vacuum cleaners; Ertl die-cast toys and
       replicas; Georgia Boot and Durango footwear; leather, metal and plastic
       automotive components; overhauled aircraft engine bearings; and
       leadframes for the electronics industry.

         Our principal executive offices are located at 101 Wood Avenue South,
Iselin, New Jersey 08830, telephone number (732) 767-0700.




                                       7
<PAGE>
                                  RISK FACTORS

         In evaluating us, you should consider carefully the following factors
in addition to other information and data included in this prospectus, our Form
10-K and other filings referred to under "Incorporation of Certain Documents By
Reference."

THE INDENTURE DOES NOT RESTRICT TRANSACTIONS WHICH COULD LEAD TO A HIGHER RISK 
OF DEFAULT

         Please be aware that the indenture does not prohibit or limit:

         (1)      the incurrence of secured or unsecured indebtedness by the
                  issuers or unrestricted subsidiaries of the issuers,

         (2)      a change in control of the issuers or the guarantor or

         (3)      a highly leveraged transaction involving the issuers or the
                  guarantor.

Any of these transactions could result in significantly more debt and a less
favorable ratio of earnings to fixed charges, which could lead to a downgrade in
rating of U.S. Industries or its senior debt by nationally recognized rating
agencies. A downgrade in rating would be likely to lower the market value of the
notes. In addition, if we have higher fixed debt service charges, this may
restrict our ability to fund or obtain financing for working capital, capital
expenditures and general corporate purposes, making us more vulnerable to
economic downturns, competition and other market factors. These factors could
lead to an increased risk of default on the notes.


YOU MAY NOT BE ABLE TO SELL YOUR NOTES

         There is no existing trading market for the registered notes and no
such market may develop. The absence of such market adversely affects the
liquidity of an investment in the notes. If a market for the registered notes
does develop, future trading prices will depend on many factors, including among
other things, prevailing interest rates and the market for similar securities,
general economic conditions and our financial condition and performance. We do
not intend to apply for listing of the registered notes on any securities
exchange or for quotation through any over-the-counter market.



                                       8
<PAGE>
                       WHERE YOU CAN FIND MORE INFORMATION

         We are subject to the informational and reporting requirements of the
Securities Exchange Act of 1934. As a result, we file annual, quarterly and
special reports, proxy statements and other information with the SEC. You may
read and copy any reports, statements and other information that we file with
the SEC at the SEC's public reference facilities at Room 1024, 450 Fifth Street,
N.W., Washington D.C. 20549. Please call 1-800-SEC-0330 for further information
on the public reference facilities. You may also obtain information about us
from the following regional offices of the SEC: Seven World Trade Center, 13th
Floor, New York, New York 10048 and Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60601-2511. Copies of these materials can be
obtained at prescribed rates. Our filings with the SEC are also available on the
SEC's home page on the Internet at http://www.sec.gov.

         Our common stock is listed on the New York Stock Exchange, Inc. and
related materials may be inspected at the offices of the NYSE at 20 Broad
Street, New York, New York 10005.

         We have filed a registration statement on Form S-4 to register the
notes to be issued in the exchange offer with the SEC. This prospectus is part
of that registration statement. As allowed by the SEC's rules, this prospectus
does not contain all of the information you can find in the registration
statement or the exhibits to the registration statement.

                 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

         The SEC allows us to "incorporate by reference" the information we file
with the SEC. This permits us to disclose important information to you by
referencing these filed documents. Any information referenced this way is
considered part of this prospectus, and any information filed with the SEC
subsequent to this prospectus will automatically update and supersede this
information. Any updated or superseded information shall not be considered a
part of this prospectus except as updated or superseded. We incorporate by
reference the following documents which have been filed with the SEC:

         1. Our Current Report on Form 8-K filed on October 16, 1998;

         2. Our Annual Report on Form 10-K for the year ended October 3, 1998
filed December 14, 1998;

         3. Our Amendment to Annual Report on Form 10-K/A for the year ended
October 3, 1998 filed February 3, 1999;

         4. Our Proxy Statement, dated January 4, 1999; and

         5. Our Quarterly Report on Form 10-Q for the fiscal quarter ended
January 2, 1999.

         We incorporate by reference all documents filed in accordance with
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
prospectus and prior to the termination of the exchange offer.

         We will promptly provide without charge to each person to whom this
prospectus is delivered, upon written or oral request, a copy of any or all of
the documents incorporated by reference in this prospectus. We will not provide
copies of the exhibits to those documents unless the exhibits are specifically
incorporated by reference in those documents. Requests for copies and
information should be directed to George H. MacLean, Esq., Senior Vice
President, General Counsel and Secretary, U.S. Industries, Inc., 101 Wood Avenue
South, P.O. Box 169, Iselin, New Jersey 08830-0169, telephone (732) 767-0700.


                                       9
<PAGE>
                 DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

         This prospectus, including the documents incorporated by reference in
this prospectus, contains forward-looking statements about our financial
condition, results of operations and business. All statements other than
statements of historical fact are, or may be considered to be, forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Exchange Act. Various economic and competitive factors could
cause actual results to differ materially from the expectations reflected in
those forward-looking statements, including factors which are outside our
control, such as:

         o        interest rates,

         o        foreign currency exchange rates,

         o        instability in domestic and foreign financial markets,

         o        consumer spending patterns,

         o        availability of consumer and commercial credit,

         o        levels of residential and commercial construction,

         o        levels of automotive production,

         o        changes in raw material costs and Year 2000 issues,

         o        along with the other factors noted in this prospectus, and in
                  the other documents incorporated by reference in this
                  prospectus.

           In addition, our future results are subject to uncertainties relating
to our ability to consummate our business strategy, including realizing
efficiencies and cost savings by eliminating redundant marketing operations from
the integration of our acquired businesses. All subsequent written and oral
forward-looking statements attributable to us are expressly qualified in their
entirety by these factors.

                                 USE OF PROCEEDS

         The exchange offer is intended to satisfy our obligations under the
registration rights agreement. We will not receive any cash proceeds from the
issuance of the registered notes. The old notes surrendered in exchange for the
registered notes will be retired and cancelled and cannot be reissued. As a
result, the issuance of the registered notes will not result in any increase or
decrease in the indebtedness of the issuers.

         The net proceeds of the private offering of the old notes, after
deducting the estimated underwriting discounts and expenses, were $247 million.
We applied $200 million of the net proceeds to repay all amounts outstanding
under a short-term note. The remainder was used to repay borrowings under
uncommitted bank credit lines, and for general corporate purposes.



                                       10
<PAGE>
                             SELECTED FINANCIAL DATA

         The following tables sets forth our consolidated (combined) historical
selected financial data.

<TABLE>
<CAPTION>
                                             For the Three                                                               
                                             Months Ended                                                                
                                              December 31                For the Fiscal Years Ended September 30
                                             -------------    -----------------------------------------------------------

                                             1998     1997     1998 (1)      1997        1996     1995 (5)         1994
                                             ----     ----     --------      ----        ----     --------         ----
                                                                  (in millions, except per share)

<S>                                         <C>      <C>       <C>          <C>          <C>        <C>         <C>
      Income Statement Data:

      Net Sales........................       $ 796    $ 744      $3,310      $2,716      $2,364     $2,181       $2,080

      Operating Income.................          55       70         149         287         239        105          196

      Income (loss) from continuing                                                                                      
        operations.....................          23       32           7         136         104       (42)           53

      Net income (loss)................          23       31        (44)         252         138       (72)           87

      Income from continuing
        operations per share (2)

          Basic........................        0.24     0.34         .07        1.48        1.09         --           --

          Diluted......................        0.23     0.33         .07        1.43        1.07         --           --

      Net Income (loss) per                                                                                              
        share(2)                                                                                                         

          Basic........................        0.24     0.33       (.46)        2.73        1.45         --           --

          Diluted......................        0.23     0.32       (.45)        2.64        1.42         --           --

      Cash dividend declared per                                                                                         
        share (4)......................        0.05     0.05         .20         .05          --         --           --

      BALANCE SHEET DATA (AT PERIOD END):

      Cash and cash equivalents........        $ 51     $ 61        $ 44        $ 67        $ 57       $ 67         $ 34

      Working capital..................         828      727         807         651         697        721        1,159

      Total assets.....................       2,737    2,744       2,812       2,538       2,502      2,232        2,608

      Total debt (3)...................         955      838         966         746         930      1,000          997

      Stockholders' equity/Invested                                                                                      
        capital........................         977    1,054         960         950         758        643        1,022

</TABLE>

- ------------------

(1)    The fiscal year ended September 30, 1998 included non-recurring and
       unusual after-tax charges of $140 million of merger, restructuring and
       other costs, $7 million to write-off interest rate protection agreements,
       $34 million to discontinue a business, and $5 million associated with the
       refinancing of Zurn's outstanding indebtedness, totaling $186 million.

(2)    All earnings per share data has been prepared in accordance with SFAS
       128, which was adopted on December 31, 1997. The adoption of SFAS 128 did
       not have a material impact on the information previously presented. Prior
       to fiscal 1996, earnings per share information is not presented as that
       information is not indicative of our continuing capital structure.

(3)    Amount in fiscal 1994 primarily represents intercompany notes payable to
       Hanson plc.

(4)    Cash dividends exclude dividends declared and paid by Zurn prior to the
       merger.

(5)    We changed our accounting policy for evaluating goodwill impairment in
       fiscal 1995, resulting in a charge of $98 million, which affects
       comparability between fiscal 1995 and fiscal 1994. Fiscal 1995 operating
       income includes charges of $2 million to close certain underutilized
       facilities of our lighting products operations.



                                       11
<PAGE>
                                 CAPITALIZATION

         The following table, which is unaudited, presents the consolidated
capitalization of our company and its subsidiaries at December 31, 1998,
including U.S. Industries, Inc. and each of its subsidiaries. It reflects the
private offering of the old notes and the use of proceeds from that offering,
reduced by transaction costs, fees and costs paid in October 1998 to settle
outstanding interest rate protection agreements net of tax benefits. See "Use of
Proceeds." This table should be read in conjunction with the financial
information included in the Form 10-K and the Form 10-Q, each as amended. See
"Incorporation of Certain Documents by Reference."

                                                           ($ in millions)

                  Cash and cash equivalents                 $        51
                                                            ===========
                  Short-term debt                           $        17
                  Long-term debt:
                  Credit Facility:                                  503
                  7 1/4% Notes Due 2006                             123
                  7 1/8% Notes Due 2003                             247
                  Other                                              65
                                                            -----------
                  Total debt                                        955
                                                            -----------
                  Stockholders' equity                              977
                                                            -----------
                  Total capitalization                      $     1,932
                                                            ===========


                       RATIO OF EARNINGS TO FIXED CHARGES

         The following table sets forth the ratio of earnings to fixed charges
for our company for fiscal 1998, 1997, 1996, 1995 and 1994 and the three months
ended December 31, 1998 and 1997:

<TABLE>
<CAPTION>
                                                                                            THREE MONTHS ENDED
                          FISCAL YEAR ENDED SEPTEMBER 30,                                       DECEMBER 31
- ------------------------------------------------------------------------------------- --------------------------------
      1998              1997             1996             1995            1994             1998             1997
      ----              ----             ----             ----            ----             ----             ----
<S>                    <C>              <C>             <C>              <C>             <C>              <C>
       2.1              4.5x             3.6x             1.1x            1.9x             2.8x             4.0x

</TABLE>


         For purposes of computing the ratio of earnings to fixed charges,
"fixed charges" are defined as interest expense plus a portion of rental expense
representing the interest factor, and "earnings" are defined as income from
continuing operations before income taxes and fixed charges. The ratio of
earnings to fixed charges for fiscal 1998 was affected by non-recurring and
unusual pre-tax charges of $154 million. Before taking into account those
charges, the ratio of earnings to fixed charges for fiscal 1998 would have been
4.0x. The ratio of earnings to fixed charges for fiscal 1995 was affected by
goodwill impairment and other non-recurring and unusual pre-tax charges of $100
million. Before taking into account those charges, the ratio of earnings to
fixed charges for fiscal 1995 would have been 2.0x.



                                       12
<PAGE>
                               THE EXCHANGE OFFER

PURPOSE AND EFFECT OF THE EXCHANGE OFFER

         We issued the old notes on October 27, 1998. The initial purchasers
have advised us that they subsequently resold the old notes to "qualified
institutional buyers" in reliance on Rule 144A under the Securities Act. As a
condition to the private offering, we entered into the registration rights
agreement, which requires that we file a registration statement under the
Securities Act with respect to the registered notes to be issued in the exchange
offer and, upon the effectiveness of the registration statement, offer to you
the opportunity to exchange your notes for a like principal amount of registered
notes. These registered notes will be issued without a restrictive legend and,
except as described in the next paragraph, may be reoffered and resold by you
without registration under the Securities Act. After we complete the exchange
offer, our obligations with respect to the registration of the old notes and the
registered notes will terminate, except as provided in the last paragraph of
this section. As a result of the filing and the effectiveness of the
registration statement, assuming we complete the exchange offer by May 25, 1999,
certain prospective increases in the interest rate on the old notes provided for
in the registration rights agreement will not occur.

         Based on no-action letters issued by the staff of the SEC with respect
to similar transactions, we believe that the registered notes to be issued in
the exchange offer are not subject to transfer restrictions when the notes are
held by a person who is not related to the issuers, such as directors, officers,
or significant stockholders, provided that the holder represents to us that:

       (1)    the registered notes are acquired in the ordinary course of the
              holder's business; and

       (2)    the holder is not engaged in, has no understanding with any person
              to participate in, and does not intend to engage in, any
              distribution of the registered notes.

         However, we have not sought a no-action letter with respect to the
exchange offer and we can not assure you that the staff of the SEC would make a
similar determination with respect to the exchange offer. Any holder who tenders
his old notes in the exchange offer with any intention of participating in a
distribution of registered notes

       (1)    cannot rely on this interpretation by the staff of the SEC,

       (2)    will not be able to validly tender old notes in the exchange
              offer, and

       (3)    must comply with the registration and prospectus delivery
              requirements of the Securities Act in connection with any
              secondary resale transactions.

         In addition, each broker-dealer that receives registered notes for its
own account in the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of the registered notes. The letter of
transmittal accompanying this prospectus states that by acknowledging that it
will deliver a prospectus and by delivering the prospectus, a broker-dealer will
not be considered to admit that it is acting in the capacity of an "underwriter"
within the meaning of Section 2(a)(11) of the Securities Act. This prospectus,
as it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of registered notes received in
exchange for old notes where the old notes were acquired by the broker-dealer as
a result of market-making activities or other trading activities. Under the
registration rights agreement, we agreed to make this prospectus available to
any broker-dealer for use in connection with these resales.


                                       13
<PAGE>
         If you will not receive freely tradeable registered notes in the
exchange offer or are not eligible to participate in the exchange offer, you can
elect, by indicating on the letter of transmittal and providing certain
additional necessary information, to have your old notes registered in a shelf
registration statement on an appropriate form in accordance with Rule 415 under
the Securities Act. If we are obligated to file a shelf registration statement,
we will be required to keep the shelf registration statement effective for a
period of two years or shorter period that will terminate when all of the old
notes covered by the shelf registration statement have been sold under the
registration statement. Other than as described in this paragraph, you will not
have the right to require us to register your old notes under the Securities
Act.

TERMS OF THE EXCHANGE OFFER

         Upon satisfaction or waiver of all of the conditions of the exchange
offer, we will accept, any and all old notes properly tendered and not withdrawn
prior to the expiration date and will issue the registered notes promptly after
acceptance of the old notes. See "--Conditions to the Exchange Offer" and
"Procedures for Tendering Old Notes." We will issue $1,000 principal amount of
registered notes in exchange for each $1,000 principal amount of outstanding old
notes accepted in the exchange offer. As of the date of this prospectus,
$250,000,000 aggregate principal amount of the old notes are outstanding.
Holders may tender some or all of their old notes in the exchange offer.
However, old notes may be tendered only in integral multiples of $1,000.

         The registered notes are identical to the old notes except for the
elimination of transfer restrictions, registration rights and liquidated damages
provisions. The registered notes will evidence the same debt as the old notes.
The registered notes will be issued under and entitled to the benefits of the
indenture and, together with the old notes, will be considered one issue of
notes.

         This prospectus, together with the letter of transmittal, is being sent
to all registered holders and to others believed to have beneficial interests in
the old notes. Holders of old notes do not have any appraisal or dissenters'
rights under the General Corporation Law of the State of Delaware or the
indenture in connection with the exchange offer. We intend to conduct the
exchange offer in accordance with the applicable requirements of the Securities
Act, the Exchange Act and the rules and regulations under those acts.

         For purposes of the exchange offer, we will be considered to have
accepted validly tendered old notes when we have given oral or written notice of
acceptance to the exchange agent. The exchange agent will act as agent for the
tendering holders for the purpose of receiving the registered notes from us and
delivering registered notes to those holders.

         If we do not accept any tendered old notes because of an invalid tender
or the occurrence of any of the conditions specified under "--Conditions to the
Exchange Offer," we will return any unaccepted old notes, without expense, to
the tendering holder as promptly as practicable after the expiration date.

         Holders who tender old notes in the exchange offer will not be required
to pay brokerage commissions or fees or, except as described below under
"--Transfer Taxes," transfer taxes with respect to the exchange of old notes in
the exchange offer. We will pay all charges and expenses, other than certain
applicable taxes, in connection with the exchange offer. See "--Fees and
Expenses."

EXPIRATION DATE; EXTENSIONS; AMENDMENTS

         The term "expiration date" shall mean 5:00 p.m., New York City time, on
_______, 1999, unless we, in our sole discretion, extend the exchange offer, in
which case the term "expiration date" shall mean the latest date and time to
which the exchange offer is extended. In order to extend the exchange offer, we


                                       14
<PAGE>
will notify the exchange agent by oral or written notice and each registered
holder by means of press release or other public announcement of any extension,
in each case, prior to 9:00 a.m., New York City time, on the next business day
after the previously scheduled expiration date.

         We reserve the right, in our sole discretion,

        (1)    to delay accepting any old notes,

        (2)    to extend the exchange offer,

        (3)    to terminate the exchange offer if the conditions described below
               under "--Conditions to the Exchange Offer" shall not have been
               satisfied, or

        (4)    to amend the terms of the exchange offer in any manner.

         We will notify the exchange agent of any delay, extension, termination
or amendment by oral or written notice. We will additionally notify each
registered holder of any amendment. We will give to the exchange agent written
confirmation of any oral notice.

         We acknowledge and undertake to comply with the provisions of Rule
14e-1(c) under the Exchange Act which requires us to pay the consideration
offered, or return the old notes surrendered for exchange, promptly after the
termination or withdrawal of the exchange offer. We will notify each registered
holder as promptly as practicable of any extension, termination or amendment.

EXCHANGE DATE

         As soon as practicable after the close of the exchange offer, we will
accept for exchange all old notes properly tendered and not validly withdrawn
prior to 5:00 p.m., New York City time, on the expiration date in the exchange
offer in accordance with the terms of the registration statement and the letter
of transmittal.

CONDITIONS TO THE EXCHANGE OFFER

         Notwithstanding any other provisions of the exchange offer, and subject
to our obligations under the registration rights agreement, we shall not be
required to accept any old notes for exchange, issue registered notes in
exchange for any old notes and may terminate or amend the exchange offer, if:

       (1)    any injunction, order or decree has been issued by any court or
              any governmental agency that would prohibit, prevent or otherwise
              materially impair our ability to proceed with the exchange offer,
              or

       (2)    the exchange offer violates any applicable law or any applicable
              interpretation of the staff of the SEC.

         These conditions are for our sole benefit and may be asserted by us
regardless of the circumstances giving rise to any of these conditions, subject
to applicable law. We also may waive in whole or in part at any time and from
time to time any of these conditions in our sole discretion. If we waive a
condition, we may be required in certain instances, to extend the expiration
date of the exchange offer. Our failure at any time to exercise any of these
rights shall not be considered to be a waiver of any of these rights and shall
be considered an ongoing right which may be asserted at any time and from time
to time.


                                       15
<PAGE>
         In addition, we will not accept for exchange any old notes tendered,
and no registered notes will be issued in exchange for any old notes, if at the
time the old notes are tendered any stop order shall be threatened by the SEC or
be in effect with respect to the registration statement or the qualification of
the indenture under the Trust Indenture Act of 1939.

         The exchange offer is not conditioned on any minimum aggregate
principal amount of old notes being tendered for exchange.

CONSEQUENCES OF FAILURE TO EXCHANGE

         Any old notes not tendered in the exchange offer will remain
outstanding and continue to accrue interest. The old notes will be subject to
transfer restrictions because they are not registered under the Securities Act.
Accordingly, prior to the date that is two years after the later of October 27,
1998 and the last date on which we or any of our affiliates was the owner of the
untendered old notes, the untendered old notes may be resold only

       (1)    to us,

       (2)    to a person whom the seller reasonably believes is a "qualified
              institutional buyer" purchasing for its own account or for the
              account of another "qualified institutional buyer" in compliance
              with the resale limitations of Rule 144A,

       (3)    to an Institutional Accredited Investor that, prior to the resale,
              furnishes to the trustee a written certification containing
              certain representations and agreements relating to the
              restrictions on transfer of the notes (the form of which letter
              can be obtained from the trustee),

       (4)    in accordance with to the limitations on resale provided by Rule
              144 under the Securities Act (if available),

       (5)    in accordance with the resale provisions of Rule 904 of Regulation
              S under the Securities Act,

       (6)    in accordance with an effective registration statement under the
              Securities Act, or

       (7)    in accordance with any other available exemption from the
              registration requirements of the Securities Act.

Each resale must be made in compliance with applicable state securities laws. As
a result of these restrictions on resale, the liquidity of the market for
non-tendered old notes will be adversely affected upon completion of the
exchange offer.

FEES AND EXPENSES

         We will not make any payments to brokers, dealers or others soliciting
acceptances of the exchange offer. The principal solicitation is being made by
mail; however, additional solicitations may be made in person or by telephone by
our officers and employees.

         Expenses incurred in connection with the exchange offer will be paid by
us and are estimated in the aggregate to be approximately $100,000 which
includes the fees and expenses of the trustee and the exchange agent, accounting
and legal fees and other miscellaneous fees and expenses.


                                       16
<PAGE>
ACCOUNTING TREATMENT

         We will not recognize any gain or loss for accounting purposes upon the
completion of the exchange offer. We will amortize the expenses of the exchange
offer over the term of the registered notes.














                                       17
<PAGE>
                       PROCEDURES FOR TENDERING OLD NOTES

TENDERING OLD NOTES

         The tender of old notes in accordance with any of the procedures
described in this prospectus and in the letter of transmittal will constitute a
binding agreement between the tendering holder and us in accordance with the
terms and subject to the conditions described in this prospectus and in the
letter of transmittal. The tender of old notes will constitute an agreement to
deliver good and marketable title to all tendered old notes prior to the
expiration date free and clear of all liens, charges, claims, encumbrances,
interests and restrictions of any kind.

         EXCEPT AS DESCRIBED IN "--GUARANTEED DELIVERY PROCEDURES," UNLESS THE
OLD NOTES BEING TENDERED ARe DEPOSITED BY YOU WITH THE EXCHANGE AGENT PRIOR TO
THE EXPIRATION DATE ACCOMPANIED BY A PROPERLY COMPLETED AND SIGNED LETTER OF
TRANSMITTAL, WE MAY, AT OUR OPTION, REJECT YOUR TENDER. ISSUANCE OF REGISTERED
NOTES WILL BE MADE ONLY AGAINST DEPOSIT OF TENDERED OLD NOTES AND DELIVERY OF
ALL OTHER REQUIRED DOCUMENTS. PARTICIPANTS IN THE DEPOSITORY TRUST COMPANY
TENDERING THROUGH ITS AUTOMATED TENDER OFFER PROGRAM WILL BE CONSIDERED TO HAVE
MADE VALID DELIVERY WHERE THE EXCHANGE AGENT RECEIVES AN AGENT'S MESSAGE PRIOR
TO THE EXPIRATION DATE.

         Accordingly, to properly tender old notes, the following procedures
must be followed:

         NOTES HELD THROUGH A CUSTODIAN. Each beneficial owner holding old notes
through a participant in DTC must instruct that participant to cause its old
notes to be tendered in accordance with the procedures described in this
prospectus.

         NOTES HELD THROUGH DTC. The exchange agent will establish accounts at
DTC for purposes of the exchange offer with respect to old notes held through
DTC. Any financial institution that is a participant in DTC may make tender
interests in old notes into the exchange agent's account through DTC's Automated
Tender Offer Program.

         Any financial institution that is a participant in DTC's book-entry
system may tender old notes by:

       (1)    electronically transmitting its acceptance through DTC's Automated
              Tender Offer Program, or

       (2)    complying with the guaranteed delivery procedures described below
              and in the notice of guaranteed delivery. See "--Guaranteed
              Delivery Procedures--Notes held through DTC."

         Although you may tender interests in the old notes into the exchange
agent's account through DTC's Automated Tender Offer Program, an agent's message
in connection with your tender, and any other required documents, must be, in
any case, transmitted to and received by the exchange agent at its address
listed under "--Exchange Agent." Delivery of documents to DTC does not
constitute delivery to the exchange agent. The confirmation of a tender into the
exchange agent's account at DTC as described above is referred to in this
prospectus as a "book-entry confirmation."

         The term "agent's message" means a message transmitted by DTC to, and
received by, the exchange agent and forming a part of the book-entry
confirmation, which states that DTC has received an express acknowledgement from
each participant tendering through DTC's Automated Tender Offer Program that the
participants have received a letter of transmittal and agree to be bound by the
terms of the letter of transmittal and that either of the issuers may enforce
that agreement against the participants.


                                       18
<PAGE>
NOTES HELD BY HOLDERS.  Each holder must

         (1)      complete and sign the letter of transmittal, and mail or
                  deliver the letter of transmittal, and any other documents
                  required by the letter of transmittal, together with
                  certificate(s) representing all tendered old notes, to the
                  exchange agent at its address listed under "--Exchange Agent,"
                  or

         (2)      comply with the guaranteed delivery procedures described below
                  and in the notice of guaranteed delivery. See "--Guaranteed
                  Delivery Procedures--Notes held by Holders."

         All signatures on the letter of transmittal must be guaranteed by a
recognized participant in the Securities Transfer Agents Medallion Program, the
New York Stock Exchange Medallion Signature Program or the Stock Exchange
Medallion Program; provided, however, that signatures on the letter of
transmittal need not be guaranteed if old notes are tendered for the account of
an "eligible institution."

         If the letter of transmittal or any old note is signed by a corporation
or person acting in a fiduciary or representative capacity, that person must
indicate that capacity when signing, and proper evidence satisfactory to us of
the authority of that person must be submitted.

         Holders should indicate in the applicable box in the letter of
transmittal the name and address to which substitute certificates evidencing old
notes for amounts not tendered are to be issued or sent, if different from the
name and address of the person signing the letter of transmittal. If the notes
are to be issued in a different name, the employer identification or social
security number of the person named must also be indicated. If no instructions
are given, the untendered old notes will be returned to the person signing the
letter of transmittal.

         By tendering, each holder and each participant in DTC will represent to
us that, among other things,

       (1)    it is not an affiliate of either issuer,

       (2)    it is not a broker-dealer tendering old notes acquired directly
              from either issuer for its own account,

       (3)    the registered notes acquired in the exchange offer are being
              obtained in the ordinary course of business of the holder and

       (4)    the holder has no understanding with any person to participate in
              the exchange offer for the purpose of distributing the registered
              notes.

         We will not accept any alternative, conditional, irregular or
contingent tenders (unless waived by us). By executing a letter of transmittal
or transmitting an acceptance through DTC's Automated Tender Offer Program, each
tendering holder waives any right to receive any notice of the acceptance for
purchase of its old notes.

         We will resolve all questions as to the validity, form, eligibility and
acceptance of tendered old notes, and our determination will be final and
binding. We reserve the absolute right to reject any or all tenders that are not
in proper form or the acceptance of which may, in the opinion of our counsel, be
unlawful. We also reserve the absolute right to waive any condition to the
exchange offer and any irregularities or conditions of tender as to particular
old notes. Our interpretation of the terms and conditions of the exchange offer,
including the instructions in the letter of transmittal, will be final and
binding. Unless waived, any irregularities in connection with tenders must be
cured within the time period we determine. We, along with the exchange agent,


                                       19
<PAGE>
shall be under no duty to give notification of defects in a tender and shall not
incur liabilities for failure to give notification. Tenders of old notes will
not be considered complete until any irregularities have been cured or waived.
Any old notes received by the exchange agent that are not properly tendered and
as to which the irregularities have not been cured or waived will be returned by
the exchange agent to the tendering holder, unless otherwise provided in the
letter of transmittal, as soon as practicable following the expiration date.

         LETTERS OF TRANSMITTAL AND OLD NOTES MUST BE SENT ONLY TO THE EXCHANGE
AGENT. DO NOT SEND LETTERS OF TRANSMITTAL OR OLD NOTES TO EITHER OF THE ISSUERS,
THE GUARANTOR OR DTC.

         The method of delivery of old notes, letters of transmittal, any
required signature guaranties and all other required documents, including
delivery through DTC and any acceptance through DTC's Automated Tender Offer
Program, is at the election and risk of the persons tendering and delivering
acceptances or letters of transmittal and, except as otherwise provided in the
letter of transmittal, delivery will be considered made only when actually
received by the exchange agent. If delivery is by mail, we suggest that you use
properly insured, registered mail with return receipt requested, and that the
mailing be made sufficiently in advance of the expiration date to permit
delivery to the exchange agent prior to the expiration date.

                  GUARANTEED DELIVERY PROCEDURES

         NOTES HELD THROUGH DTC. Participants in DTC holding old notes through
DTC who wish to cause their old notes to be tendered, but who cannot transmit
their acceptances through DTC's Automated Tender Offer Program prior to the
expiration date, may tender their old notes if:

       (1)    guaranteed delivery is made by or through:

              o      a bank;

              o      a broker, dealer, municipal securities dealer, municipal
                     securities broker, government securities dealer or
                     government securities broker;

              o      a credit union;

              o      a national securities exchange, registered securities
                     association or clearing agency; or

              o      a savings institution that is a participant in a Securities
                     Transfer Association recognized program (each an eligible
                     institution);

       (2)    prior to the expiration date, the exchange agent receives by mail,
              hand delivery, facsimile transmission or overnight courier from an
              eligible institution a properly completed and signed notice of
              guaranteed delivery substantially in the form provided with this
              prospectus; and

       (3)    book-entry confirmation and an agent's message are received by the
              exchange agent within three NYSE trading days after the date of
              the execution of the notice of guaranteed delivery.


                                       20
<PAGE>
NOTES HELD BY HOLDERS.  Holders who wish to tender their old notes but

       (1)    whose old notes are not immediately available and will not be
              available for tendering prior to the expiration date, or

       (2)    who cannot deliver their old notes, the letter of transmittal, or
              any other required documents to the exchange agent prior to the
              expiration date,

may effect a tender if:

              o      the tender is made by or through an eligible institution;

              o      prior to the expiration date, the exchange agent receives
                     by mail, hand delivery, facsimile transmission or overnight
                     courier from the eligible institution a properly completed
                     and signed notice of guaranteed delivery substantially in
                     the form provided with this prospectus; and

              o      a properly completed and executed letter of transmittal, as
                     well as the certificate(s) representing all tendered old
                     notes in proper form for transfer, and all other documents
                     required by the letter of transmittal, are received by the
                     exchange agent within three NYSE trading days after the
                     date of the execution of the notice of guaranteed delivery.


WITHDRAWAL RIGHTS

         You may withdraw tenders of old notes at any time prior to 5:00 p.m.,
New York City time, on the expiration date. Withdrawals may be made of any
portion of tendered old notes in integral multiples of $1,000. Any old notes
properly withdrawn will be considered to be invalidly tendered for purposes of
the exchange offer.

         NOTES HELD THROUGH DTC. Participants in DTC holding old notes who have
transmitted their acceptances through DTC's Automated Tender Offer Program may,
prior to 5:00 p.m., New York City time, on the expiration date, withdraw its
tender of old notes by delivering to the exchange agent, at its address listed
under "--Exchange Agent," a written or facsimile notice of withdrawal of that
instruction. The notice of withdrawal must contain:

              o      the name and number of the participant,

              o      the principal amount of old notes to which the withdrawal
                     related, and

              o      the signature of the participant.

Receipt of this written notice of withdrawal by the exchange agent effectuates a
withdrawal.

         NOTES HELD BY HOLDERS. Holders may withdraw their tender of old notes,
prior to 5:00 p.m., New York City time, on the expiration date, by delivering to
the exchange agent, at its address listed under "--Exchange Agent," a written or
facsimile notice of withdrawal. The notice of withdrawal must:

       (1)    specify the name of the person who tendered the old notes to be
              withdrawn,


                                       21
<PAGE>
       (2)    contain a description of the old notes to be withdrawn and
              identify the certificate number or numbers shown on the particular
              certificates evidencing the tendered old notes and the aggregate
              principal amount represented by the tendered old notes and

       (3)    be signed by the holder of the tendered old notes in the same
              manner, including any required signature guaranties, as the
              original signature on the letter of transmittal by which the old
              notes were tendered, or be accompanied by

              (x)    documents of transfer in a form acceptable to us, in our
                     sole discretion and

              (y)    a properly completed irrevocable proxy that authorized the
                     person to effect the revocation on behalf of the holder.

If the old notes to be withdrawn have been delivered or otherwise identified to
the exchange agent, a signed notice of withdrawal is effective immediately upon
written or facsimile notice of withdrawal even if physical release is not yet
effected.

         All signatures on a notice of withdrawal must be guaranteed by a
recognized participant in the Securities Transfer Agents Medallion Program, the
New York Stock Exchange Medallion Signature Program or the Stock Exchange
Medallion Program; provided, however, that signatures on the notice of
withdrawal need not be guaranteed if the old notes being withdrawn are held for
the account of an eligible institution.

         A withdrawal of an instruction or a withdrawal of a tender must be
executed by a participant in DTC or a holder of old notes in the same manner as
the person's name appears on its transmission through DTC's Automated Tender
Offer Program or the letter of transmittal to which the withdrawal relates. If a
notice of withdrawal is signed by a trustee, partner, executor, administrator,
guardian, attorney-in-fact, agent, officer of a corporation or other person
acting in a fiduciary or representative capacity, the person must indicate this
capacity when signing and must submit appropriate evidence of authority to
execute the notice of withdrawal. A participant in DTC or a holder may withdraw
an instruction or a tender only if the withdrawal complies with the provisions
of this prospectus.

         A tender of old notes by a participant in DTC or a holder which has
been withdrawn may be reinstated only by transmitting a new acceptance through
DTC's Automated Tender Offer Program or by signing and delivering a new letter
of transmittal in accordance with the procedures described in this prospectus.



                                       22
<PAGE>
EXCHANGE AGENT

         The First National Bank of Chicago has been appointed as exchange agent
for the exchange offer. Questions, requests for assistance and requests for
additional copies of this prospectus or of the letter of transmittal should be
directed to the exchange agent addressed as follows:

                     By Registered or Certified Mail By Hand
                            or By Overnight Courier:
                       The First National Bank of Chicago,
                                as Exchange Agent
                              153 West 51st Street
                               New York, NY 10019


                          Facsimile:           By Telephone:
                       (212) 373-1383         (212) 373-1339

         The exchange agent also acts as trustee under the indenture.

TRANSFER TAXES

         Holders of old notes who tender their old notes for exchange will not
be obligated to pay any transfer taxes in connection with their tender, except
that holders who instruct us to register registered notes in the name of, or
request that old notes not tendered or not accepted in the exchange offer be
returned to, a person other than the registered tendering holder will be
responsible for the payment of any applicable transfer tax on the transfer.









                                       23
<PAGE>
                       DESCRIPTION OF THE REGISTERED NOTES

         The registered notes will be issued, and the old notes were issued,
under an indenture among the issuers, the guarantor and The First National Bank
of Chicago, as trustee. We have filed a copy of the indenture as an exhibit to
the registration statement which includes this prospectus.

         The following is a summary of the material provisions of the indenture
and the notes. We urge you to read the indenture and the notes because they, and
not this description, define your rights as holders of these notes. For the
meaning of capitalized terms used without definition, see "--Definitions."

         As used in this section of the prospectus, the terms "we," "us" and
"our" mean U.S. Industries, Inc. and USI American Holdings, Inc. and are used
interchangeably with the term the "issuers."

GENERAL

         The notes, which mature on October 15, 2003, are limited to $250
million in aggregate principal amount. The notes pay interest at the rate of
7-1/8% per year, payable on each April 15 and October 15, commencing April 15,
1999. Interest on the notes will accrue from the most recent date on which
interest has been paid or, if no interest has been paid, from the original date
of issuance. Interest will be computed on the basis of a 360-day year comprising
twelve 30-day months. Any old notes that remain outstanding after the completion
of the exchange offer will be treated as a single class of securities under the
indenture with the registered notes issued in connection with the exchange
offer. See "The Exchange Offer."

         Principal, premium and interest on the notes will be payable and all of
the notes will be exchangeable and transferable, at our office or agency in the
City of New York or, at our option, interest may be paid by check mailed to the
address of the person entitled to the payment as its address appears in the
security register. Our office or agency in the City of New York will initially
will be the office of the trustee located at 153 West 51st Street, New York, NY
10019.

         The notes will be issued only in registered form without coupons and
only in denominations of $1,000 and integral multiples of $1,000. There is no
minimum principal amount requirement to participate in the exchange offer. No
service charge will be made for any registration, transfer, exchange or
redemption of notes, but we may require payment in certain circumstances of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with that registration, transfer, exchange or redemption.

         We are not obligated to set aside funds or to establish a separate
account for your benefit to make the required interest and principal payments on
the registered notes.

         We do not presently intend to apply for listing of the notes on any
national securities exchange or for inclusion of the notes in any automated
quotation system.

FURTHER ISSUES

         We may issue additional series of notes under the indenture. Any notes
subsequently offered under the indenture will rank equally or lesser in right of
payment to the notes. We may from time to time, without the consent of holders,
create and issue additional notes having substantially the same terms and
conditions as any series of notes. Any of these additional notes may be combined
with existing notes to form a single series of notes under the indenture.


                                       24
<PAGE>
GUARANTEE

         Our obligations under the notes are fully and unconditionally
guaranteed by USI Atlantic. The guarantee is on a senior unsecured basis. The
obligations of USI Atlantic under the guarantee will be limited as necessary to
prevent the guarantee from constituting a fraudulent conveyance or fraudulent
transfer under applicable federal bankruptcy law and comparable provisions of
state fraudulent transfer laws. If the guarantee were void by a court, claims in
respect of the guarantee could be ranked behind all other indebtedness of USI
Atlantic, including guarantees and other contingent liabilities. Any payment by
USI Atlantic under its guarantee could be void and required to be returned to
USI Atlantic, or to a fund for the benefit of its creditors.

A NEW SUBSIDIARY MAY BECOME A CO-ISSUER

         We anticipate that during the third quarter of fiscal 1999, USI
American Holdings will transfer substantially all of its assets to a new
subsidiary of U.S. Industries, USI Global Corp. USI American Holdings would
receive shares of preferred stock of USI Global Corp. in exchange for its
assets. USI Global Corp. does not currently conduct operations or hold assets.
In connection with the asset transfer, USI Global Corp. would become obligated
under the indenture and the notes equally with U.S. Industries and USI American.
Neither of the issuers, nor the guarantor, would be released from its
obligations under the indenture, the notes or the guarantee in connection with
the transfer of assets to USI Global Corp.

RELEASE OF USI ATLANTIC AS GUARANTOR AND USI AMERICAN HOLDINGS AS CO-ISSUER

         USI Atlantic and USI American Holdings can be released from their
respective obligations under the indenture under certain circumstances.
Following that release, only U.S. Industries will remain obligated under the
notes. This provision is intended to permit U.S. Industries to simplify its
borrowing structure in the future, and we do not believe that it will adversely
affect the holders of the notes. The purpose of USI Atlantic and USI American
Holdings serving as obligors under the indenture is to give the holders of the
notes an equivalent ranking with holders of indebtedness of those corporations
which existed prior to the issuance of the notes. If that pre-existing
indebtedness is repaid or USI Atlantic and USI American Holdings are released
from all obligations under that indebtedness, there is no longer a reason for
USI Atlantic and USI American Holdings, each of which is a holding company, to
remain obligated under the indenture.

         USI Atlantic will be released from its obligations under the guarantee
or USI American Holdings will be released from its obligations as co-issuer of
the notes, as the case may be, if:

       (1)    the obligations of the issuers under the indenture are assumed by
              a person or entity other than one of our subsidiaries,

       (2)    USI Atlantic or USI American Holdings, as the case may be, is
              disposed of in a transaction that results in USI Atlantic or USI
              American Holdings, as the case may be, no longer being a
              subsidiary of U.S. Industries, or all or substantially all the
              assets of USI Atlantic or USI American Holdings, as the case may
              be, are disposed of other than to U.S. Industries or one of its
              subsidiaries,

       (3)    all amounts outstanding under the 7 1/4% Senior Notes due 2006,
              the Credit Facility and any indebtedness incurred to extend,
              renew, refinance or refund the 7 1/4% Senior Notes due 2006 or the
              Credit Facility are repaid, or


                                       25
<PAGE>
       (4)    USI Atlantic is released from all obligations under the 7 1/4%
              Senior Notes due 2006, the Credit Facility and any indebtedness
              incurred to extend, renew, refinance or refund the 7 1/4% Senior
              Notes due 2006 or the Credit Facility.

         Immediately following any release, we must be in compliance with the
limitation on indebtedness of Restricted Subsidiaries and the other covenants
contained in the indenture. Furthermore, as a condition to any release under
clause (3) or (4), we must certify to the trustee that immediately following the
release:

       (1)    in the case of USI Atlantic, USI Atlantic will not be a guarantor
              of any Restricted Subsidiary Funded Debt in excess of the amount
              of the Debt Basket or

       (2)    in the case of USI American Holdings, USI American Holdings will
              not be an obligor under any Restricted Subsidiary Funded Debt in
              excess of the amount of the Debt Basket.

RANKING

         The notes are senior unsecured obligations of the issuers and rank
equally to all other existing and future unsecured and unsubordinated
indebtedness of the issuers unless the holders of that indebtedness agree to
give priority to the notes.

         The guarantee is a senior unsecured obligation of the guarantor and
ranks equally to all other existing and future unsecured and unsubordinated
indebtedness of the guarantor and is entitled to be paid before all subordinated
indebtedness of the guarantor.

         The notes and the guarantee are effectively subordinated to all
existing and future

       (1)    secured indebtedness of the issuers and the guarantor, to the
              extent of the value of the assets securing the indebtedness and

       (2)    indebtedness of any subsidiaries of the issuers and of the
              guarantor other than USI American Holdings.

         Each of the issuers and the guarantor is a holding company that
operates through subsidiaries. Accordingly, the ability of each of the issuers
and the guarantor to pay their debts, including the notes, is dependent upon the
cash flow and ability to pay dividends of their respective subsidiaries. The
issuers' and the guarantor's rights and the rights of their respective
creditors, including holders of the notes offered by this prospectus, to receive
proceeds from the assets of any subsidiary upon the subsidiary's liquidation or
recapitalization will be subject to the prior claims of that subsidiary's
creditors. At [September 30, 1998], the total indebtedness of the subsidiaries
of U.S. Industries other than USI American Holdings and USI Atlantic was
approximately [$67 million.]

OPTIONAL REDEMPTION

         We may redeem the notes, in whole or in part, at any time or from time
to time, on at least 30 days' prior notice by mail, at a redemption price equal
to the greater of

       (1)    100% of the principal amount of the notes to be redeemed, or

       (2)    the sum of the present values of the remaining scheduled payments
              of principal and interest on the notes discounted to the date of
              redemption on a semiannual basis at the Treasury Rate plus 50
              basis points,


                                       26
<PAGE>
plus, in each case, accrued but unpaid interest to the redemption date. On and
after the redemption date, interest will cease to accrue on the notes or
portions of the notes called for redemption on that date.

         In the case of any partial redemption, the trustee will select the
notes for redemption on a pro rata basis, by lot or other method as the trustee
in its sole discretion shall deem to be fair and appropriate. No note of $1,000
or less in original principal amount shall be redeemed in part. If any note is
to be redeemed in part only, the notice of redemption relating to that note
shall state the portion of the principal amount of that note to be redeemed. The
holder of the redeemed note will receive a new note in principal amount equal to
the unredeemed portion of that note upon cancellation of the original note.

         For this purpose, the following terms shall have the following
meanings:

         "COMPARABLE TREASURY ISSUE" means the United States Treasury security
selected by an Independent Investment Bank which would be utilized, at the time
of selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of the notes. "Independent Investment Bank" means one of the Reference Treasury
Dealers appointed by the trustee after consultation with the issuers.

         "COMPARABLE TREASURY PRICE" means, with respect to any redemption date,

       (i)    the average of the bid and asked prices for the Comparable
              Treasury Issue, expressed in each case as a percentage of its
              principal amount, on the third business day preceding that
              redemption date, as stated in the daily statistical release
              published by the Federal Reserve Bank of New York and designated
              "Composite 3:30 p.m. Quotations for U.S. Government Securities,"
              or

       (ii)   if that release or a successor is not published or does not
              contain those prices on that business day

              (A)    the average of the Reference Treasury Dealer Quotations for
                     that redemption date, after excluding the highest and
                     lowest Reference Treasury Dealer Quotations, or

              (B)    if the trustee obtains fewer than three Reference Treasury
                     Dealer Quotations, the average of all quotations.

         "REFERENCE TREASURY DEALER" means Credit Suisse First Boston
Corporation and its successors and/or any other primary U.S. Government
securities dealers in New York City (a "Primary Treasury Dealer") as shall be
designated by the issuers from time to time, in each case, so long as the entity
continues to be a Primary Treasury Dealer.

         "REFERENCE TREASURY DEALER QUOTATIONS" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the trustee, of the bid and asked prices for the Comparable Treasury Issue,
expressed in each case as a percentage of its principal amount, quoted in
writing to the trustee by the Reference Treasury Dealer at 5:00 p.m. EST on the
third business day preceding the redemption date.

         "TREASURY RATE" means, with respect to any redemption date, the yearly
rate equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue expressed as
a percentage of its principal amount equal to the Comparable Treasury Price for
the redemption date.


                                       27
<PAGE>
         The notice of redemption will describe the method of calculation of the
redemption price as described in the first paragraph of this section entitled
"Optional Redemption." We will deliver to the trustee, no later than two
business days prior to the redemption date, an officers' certificate stating the
redemption price, calculated as stated in the notice of redemption.

REDEMPTION IN CIRCUMSTANCES INVOLVING TAXATION

         We may redeem any series of notes, in whole at any time, at a
redemption price equal to 100% of the principal amount of the notes plus accrued
and unpaid interest to the redemption date, if, as the result of:

       (1)    any change in or any amendment to the laws, including any
              applicable double taxation treaty or convention, of the United
              Kingdom or any Other Jurisdiction, as defined under "--Payment of
              Additional Amounts", or of any political subdivision or taxing
              authority of the United Kingdom, affecting taxation, or

       (2)    any change in the application or interpretation of those laws,
              double taxation treaty or convention,

which change or amendment becomes effective on or after the original issuance
date of the notes or, in certain circumstances, the later date on which any
assignee of the issuers, the guarantor or a successor corporation of either of
them as permitted under the indenture, it is determined, by us, the guarantor or
the assignee which terms, for purposes of the remainder of this paragraph,
include any successor to us, the guarantor or the assignee that

              (a)    the issuers, the guarantor or their respective assignees
                     would be required to make additional payments in respect of
                     principal, any premium, or interest, or

              (b)    based upon an opinion of independent counsel to the
                     issuers, the guarantor or their respective assignees, as a
                     result of any action taken by any taxing authority of, or
                     any action brought in a court of competent jurisdiction in,
                     the United Kingdom or the Other Jurisdiction, or any
                     political subdivision or taxing authority of the United
                     Kingdom whether or not the action was taken or brought with
                     respect to the issuers, the guarantor or their respective
                     assignees, which action is taken or brought on or after the
                     original issuance date of the notes or, in certain
                     circumstances, the later date on which a corporation
                     becomes a successor or an assignee, the circumstances
                     described in clause (1) would exist.

MATERIAL COVENANTS

         The indenture contains, among others, the following covenants:

         LIMITATION ON LIENS. We will not, and will not permit any Restricted
Subsidiary to create, incur, assume or allow to exist any lien upon any of our
respective properties, assets or revenues, to secure any debt without making
effective provision for securing the notes and, if we shall so determine, any
other debt of either or both of the issuers which is not lesser in right of
payment to the notes. We shall secure any of those notes:

       (1)    equally and ratably with or prior in right of payment to the debt
              secured by our property or assets for so long as the debt shall be
              secured, or

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<PAGE>
       (2)    if payment on the debt is made only after payments on the notes,
              prior in right of payment to the debt secured by our property or
              assets for so long as that debt shall be secured.

These restrictions will not apply to Permitted Liens (as defined in the
indenture), which shall include:

       (1)    liens securing only the notes or the guarantee;

       (2)    liens in favor of only the issuers, the guarantor or a Restricted
              Subsidiary;

       (3)    liens existing on the date of the indenture;

       (4)    liens on property of a Person existing at the time that Person is
              merged into or combined with either issuer or a Restricted
              Subsidiary, or becomes a Restricted Subsidiary of either issuer,
              and not in anticipation of or in connection with the merger or
              combination, provided that the debt secured by the lien is
              otherwise permitted to be incurred under the indenture;

       (5)    liens on property existing immediately prior to the time of the
              acquisition of that property from a non-affiliate and not incurred
              in anticipation of or in connection with the financing of the
              acquisition of the property, provided that the debt secured by the
              lien is otherwise permitted to be incurred under the indenture;

       (6)    liens to secure debt incurred to finance all or any part of the
              purchase price or the cost of construction or improvement of the
              property subject to the liens and, in the case of a Restricted
              Subsidiary all or substantially all of whose assets consist of the
              property, any lien on ownership interests or investments in the
              Restricted Subsidiary incurred in connection with the acquisition
              or construction of the property, and the incurrence of the debt is
              otherwise permitted under the indenture and the debt is incurred
              prior to, at the time of, or within 180 days after, the
              acquisition of the property, the completion of the construction or
              the making of the improvements;

       (7)    liens on property of the issuers or any of their Restricted
              Subsidiaries in favor of the United States of America or any state
              of the United States, or any instrumentality of either, to secure
              certain payments in accordance with any contract or statute;

       (8)    liens for taxes or assessments or other governmental charges or
              levies which are being contested in good faith by appropriate
              proceedings promptly instituted and diligently conducted or for
              which a reserve or other appropriate provision, if any, as shall
              be required in accordance with GAAP shall have been made;

       (9)    liens to secure obligations under workmen's compensation,
              temporary disability, social security, retiree health or similar
              laws or under unemployment insurance;

       (10)   liens incurred to secure the performance of statutory obligations,
              bids, tenders, leases, contracts, other than contracts for the
              repayment of debt, surety or appeal bonds, performance or
              return-of-money bonds or other similar obligations incurred in the
              ordinary course of business;

       (11)   judgement and attachment liens not giving rise to a Default or
              Event of Default;


                                       29
<PAGE>
       (12)   any lien arising out of conditional sale, title retention,
              consignment or similar arrangements for the sale of goods in the
              ordinary course of business in accordance with industry practice;

       (13)   liens securing documentary letters of credit; provided the liens
              attach only to the property or goods to which the letter of credit
              relates;

       (14)   liens arising from filing financing statements under the Uniform
              Commercial Code for precautionary purposes in connection with true
              leases of personal property that are otherwise permitted under the
              indenture and under which the issuers or any Restricted Subsidiary
              is a lessee; or

       (15)   liens to secure debt incurred to extend, renew, refinance or
              refund, in whole or in part, debt secured by any lien referred to
              in clauses (1) through (14) inclusive, so long as

              (a)    the lien does not extend to any additional property other
                     than property attributable to improvements, alterations and
                     repairs and

              (b)    the principal amount of the debt secured under this clause
                     (15) shall not exceed the principal amount of debt
                     extended, renewed, refinanced or refunded assuming all
                     available amounts were borrowed plus the aggregate amount
                     of premiums, other payments, costs and expenses required to
                     be paid or incurred in connection with the extension,
                     renewal, refinancing or refunding at the time of the
                     extension, renewal, refinancing or refunding.

         In addition, we and our Restricted Subsidiaries may incur a lien to
secure any debt, without securing the notes, if, after giving effect to the
lien, the sum, without duplication, of

       (1)    the aggregate principal amount of all outstanding debt secured by
              liens incurred by us and our Restricted Subsidiaries with the
              exception of secured debt which is excluded under clauses (1)
              through (15) inclusive, described above and

       (2)    the aggregate amount of all Attributable Debt of all sale and
              leaseback transactions involving Principal Properties with the
              exception of Attributable Debt excluded under clauses (1), (2) and
              (3) described below under "--Limitation on Sale and Leaseback
              Transactions" does not exceed 15% of Consolidated Net Tangible
              Assets. That amount is referred to in this prospectus as the "Lien
              Basket." The Lien Basket, however, shall be reduced, without
              duplication, by the amount of outstanding Funded Debt incurred
              from time to time under the Debt Basket (as defined below).

         LIMITATION ON SALE AND LEASEBACK TRANSACTIONS. We will not, and will
not permit any Restricted Subsidiary to, enter into any sale and leaseback
transaction unless either of the following conditions are met:

              (1)(A) the Attributable Debt of the issuers and their Restricted
                     Subsidiaries in respect of the particular sale and
                     leaseback transaction and all other sale and leaseback
                     transactions entered into after October 27, 1998 other than
                     sale and leaseback transactions permitted by paragraph (2)
                     or (3) below,

                     PLUS

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<PAGE>
              (B)    the aggregate principal amount of Funded Debt secured by
                     liens on Principal Properties and Restricted Securities
                     then outstanding excluding any Funded Debt secured by
                     Permitted Liens without equally and ratably securing the
                     notes,

would not exceed 15% of Consolidated Net Tangible Assets. This amount is
referred to in this prospectus as the "Leaseback Basket;" or

       (2)    the issuers, within 180 days after the sale or transfer, apply or
              cause a Restricted Subsidiary to apply an amount equal to the
              greater of

              (A)    the net proceeds of the sale or transfer or

              (B)    the fair market value of the Principal Property that was
                     sold and leased back at the time of entering into the sale
                     and leaseback transaction,

in either case, as determined by any two of the following: the Chairman, the
President, any Vice President, the Treasurer or the Controller of each of the
issuers, to the retirement of our debt which has the following characteristics:

              (a)    senior or equal in right of payment to the notes or debt of
                     a Restricted Subsidiary and

              (b)    having a stated maturity more than 12 months from the date
                     of the application or which is extendible at the option of
                     the obligor on the debt to a date more than 12 months from
                     the date of the application.

         Unless otherwise expressly provided with respect to any one or more
series of notes, any redemption of notes under this provision shall not be
regarded as a refunding operation or anticipated refunding operation for the
purposes of any provision limiting our right to redeem notes of any one or more
series when the redemption involves a refunding operation or anticipated
refunding operation. The amount to be applied shall be reduced by:

              (a)    the principal amount of notes delivered within 120 days
                     after the sale or transfer to the trustee for retirement
                     and cancellation, and

              (b)    the principal amount of any of the debt of the issuers or a
                     Restricted Subsidiary, other than notes, voluntarily
                     retired by us or a Restricted Subsidiary within 120 days
                     after the sale or transfer.

         Notwithstanding the preceding discussion, no retirement referred to in
this paragraph (2) may be effected by payment at maturity or any mandatory
prepayment provision; or

       (3)    the issuers, within 180 days prior or subsequent to the sale or
              transfer, apply or cause a Restricted Subsidiary to apply an
              amount equal to the net proceeds of the sale or transfer to an
              investment in another Principal Property; provided, however, that
              this exception shall apply only if the proceeds invested in the
              other Principal Property shall not exceed the total acquisition,
              alteration, repair and construction cost of the issuers or any
              Restricted Subsidiary in the other Principal Property less amounts
              secured by any purchase money or construction mortgage on the
              other Principal Property.

For purposes of this covenant, a "sale and leaseback transaction" shall mean any
arrangement with any bank, insurance company or other third-party lender or
investor providing for the leasing of any Principal Property, which was or is


                                       31
<PAGE>
owned or leased by either of us or a Restricted Subsidiary and which has been or
is to be sold or transferred, more than 180 days after the completion of
construction and commencement of full operation of that Principal Property by us
to that third-party or to any Person to whom funds have been or are to be
advanced by that third-party on the security of that Principal Property.

         This provision will not prohibit a lease for a temporary period not to
exceed three years, if by the end of the three-year period it is intended that
the use of the Principal Property by the lessee will be discontinued.

         LIMITATION ON RESTRICTED SUBSIDIARY FUNDED DEBT. We will not permit any
Restricted Subsidiary of ours or of the guarantor to incur any Funded Debt. Any
Restricted Subsidiary may, however, incur the following Funded Debt:

       (1)    Funded Debt of any Restricted Subsidiary constituting Existing
              Funded Debt;

       (2)    Funded Debt incurred by a Special Purpose Funding Subsidiary,
              provided that the Restricted Subsidiary remains at all times a
              Special Purpose Funding Subsidiary;

       (3)    Funded Debt owed by a Restricted Subsidiary to the guarantor,
              either issuer or a Wholly-Owned Subsidiary of either of the
              guarantor or either issuer; provided that the Funded Debt is at
              all times held by the guarantor, either issuer or a Person which
              is a Wholly-Owned Subsidiary of either of us; provided, further,
              that upon either

              (A)    the transfer or other disposition by the guarantor, either
                     issuer or Wholly-Owned Subsidiary of any of this Funded
                     Debt to a Person other than the guarantor, either issuer or
                     another Wholly-Owned Subsidiary of any of us, or

              (B)    the issuance, sale, lease, transfer or other disposition of
                     shares, other than directors' qualifying shares, of Capital
                     Stock, including by merger or other business combination of
                     the Wholly-Owned Subsidiary, to a Person other than the
                     guarantor, either issuer or another Wholly-Owned
                     Subsidiary, the provisions of this clause (3) shall no
                     longer be applicable to that Funded Debt and that Funded
                     Debt shall be considered incurred at the time of the
                     transfer or other disposition;

       (4)    Funded Debt incurred by a Person before that Person became a
              Restricted Subsidiary in an acquisition from a non-affiliate
              whether through a stock acquisition, merger, business combination
              or otherwise, after October 27, 1998; provided that the Funded
              Debt was not incurred in anticipation of or in connection with and
              was outstanding prior to the acquisition;

       (5)    Funded Debt incurred in connection with the acquisition, purchase,
              improvement or development of property or assets used or held by
              any subsidiary of either issuer prior to, or within 180 days
              after, the time of that acquisition, purchase, improvement or
              development;

       (6)    Funded Debt incurred to extend, renew, refinance or refund, in
              whole or in part, any Funded Debt referred to in clauses (1), (4)
              and (5), provided that the principal amount of the Funded Debt
              incurred under this clause (6) shall not exceed the principal
              amount of Funded Debt extended, renewed, refinanced or refunded,
              plus the aggregate amount of premiums, other payments, costs and
              expenses required to be paid or incurred in connection with the


                                       32
<PAGE>
              extension, renewal, refinancing or refunding at the time of the
              extension, renewal, refinancing or refunding; and

       (7)    Funded Debt not otherwise permitted under the exceptions described
              above in an aggregate principal amount which, when aggregated with
              all other Funded Debt not otherwise permitted under the exceptions
              described above of all of our Restricted Subsidiaries then
              outstanding does not exceed 15% of Consolidated Net Tangible
              Assets. This amount is referred to in this prospectus as the "Debt
              Basket." The Debt Basket shall be reduced, without duplication, by
              the amount of debt secured by the Lien Basket and by the amount of
              Attributable Debt incurred under the Leaseback Basket, in each
              case to the extent that secured debt and that Attributable Debt
              may from time to time be outstanding.

EVENTS OF DEFAULT

         The following are Events of Default with respect to any series of notes
offered under the indenture:

       (1)    default in the payment of any interest on the notes of that
              series, or any related coupon, when the interest or coupon becomes
              due and payable, which default continues for a period of 30 days;

       (2)    default in the payment of the principal of or premium, if any, on
              the notes of that series at their maturity which default continues
              for a period of five business days;

       (3)    default in the performance, or breach, of any covenant or
              agreement of the issuers or the guarantor in the indenture which
              affects or is applicable to the notes of that series other than a
              default in the performance, or breach of a covenant or agreement
              which is specifically dealt with elsewhere, which default or
              breach continues for a period of 60 days after there has been
              given, by registered or certified mail, to the issuers or the
              guarantor, by the trustee or to the issuers or the guarantor and
              the trustee for that series of notes by the holders of at least
              25% in principal amount of all Outstanding notes of that series a
              written notice specifying the default or breach and requiring it
              to be remedied and stating that the notice is a "Notice of
              Default" under the indenture;

       (4)    an event of default shall have occurred under any mortgage, bond,
              indenture, loan agreement or other document evidencing any Debt of
              either issuer or any Restricted Subsidiary of either issuer, which
              Debt is outstanding in a principal amount in excess of $25,000,000
              in the aggregate, and the default results in the Debt becoming,
              whether by declaration or otherwise, due and payable prior to the
              date on which it would otherwise become due and payable or a
              default in any payment when due at final maturity of that Debt;

       (5)    any Person entitled to take the actions described in this section,
              after the occurrence of any event of default under any agreement
              or instrument evidencing any Debt in excess of $25,000,000 in the
              aggregate of either issuer or any Restricted Subsidiary of either
              issuer, shall commence judicial proceedings to foreclose upon our
              assets or assets of any of our subsidiaries having an aggregate
              value in excess of $25,000,000, or shall have exercised any right
              under applicable law or applicable security documents to take
              ownership of those assets in lieu of foreclosure;


                                       33
<PAGE>
       (6)    final judgments or orders rendered against either of us or any
              Restricted Subsidiary which require the payment in money, either
              individually or in an aggregate amount, that is more than
              $25,000,000 and either

              (a)    an enforcement proceeding shall have been commenced by any
                     creditor upon that judgment or order or

              (b)    there shall have been a period of 60 days during which a
                     stay of enforcement of the judgment or order, by reason of
                     pending appeal or otherwise, was not in effect;

       (7)    the entry of a decree or order by a court with jurisdiction

              (a)    adjudging either of the issuers or the guarantor as
                     bankrupt or insolvent,

              (b)    adjustment or composition of or in respect of either of the
                     issuers or the guarantor approving as properly filed a
                     petition seeking reorganization, arrangement under the
                     Federal Bankruptcy Code or any other applicable federal or
                     state law,

              (c)    appointing a receiver, liquidator, assignee, trustee,
                     sequestrator or other similar official of either of the
                     issuers or the guarantor or of any substantial part of our
                     respective properties, or

              (d)    ordering the winding up or liquidation of our affairs,

              which decree or order remains unstayed and in effect for a period
              of 90 consecutive days;

       (8)    either of the issuers or the guarantor

              (a)    institute proceedings to be adjudicated a bankrupt or
                     insolvent,

              (b)    consent to the institution of bankruptcy or insolvency
                     proceedings against either of them,

              (c)    file a petition or answer or consent seeking reorganization
                     or relief under the Federal Bankruptcy Code or any other
                     applicable federal or state law,

              (d)    consent to the filing of the petition described in clause
                     (c) or to the appointment of a receiver, liquidator,
                     assignee, trustee, sequestrator or other similar official
                     of any of them or of any substantial part of their
                     respective properties,

              (e)    make an assignment for the benefit of creditors, or

              (f)    admit in writing our inability to pay our debts generally
                     as they become due; and

       (9)    the guarantee ceases to be in full force and effect or is declared
              null and void or the guarantor denies that it has any further
              liability under the guarantee, or gives notice to that effect


                                       34
<PAGE>
              other than by reason of the termination of the indenture or the
              release of the guarantee in accordance with the indenture.

         If an Event of Default other than an Event of Default of the type
described in clauses (7) and (8) above shall occur and be continuing, either the
trustee or the holders of at least 25% in principal amount of the Outstanding
notes of that series may declare the principal of all notes of that series to be
due and payable immediately.

         If an Event of Default specified in clause (7) or (8) above shall occur
and be continuing, then the principal of all of the notes shall be due and
payable immediately without any declaration or other act on the part of the
trustee or any holder.

         In certain cases, the holders of a majority in principal amount of the
Outstanding notes of any series may on behalf of the holders of all notes of
that series withdraw a declaration of acceleration.

         The trustee will not be liable for any action taken or omitted by it in
good faith and believed by it to be authorized or within the discretion or
rights or powers conferred upon it by the indenture. No holder of notes of any
series may institute any proceedings, judicial or otherwise, to enforce the
indenture except in the case of failure of the trustee, for 60 days, to act
after it has received a request to enforce the indenture. In the case of an
Event of Default other than the type described in clauses (7) and (8), holders
of at least 25% in aggregate principal amount of the then outstanding notes of
that series must request the trustee to act. In the case of an Event of Default
of the type described in clauses (7) and (8) above, holders of at least 25% in
aggregate principal amount of all of the notes then outstanding must request the
trustee to act and offer the trustee reasonable indemnity.

         This provision will not prevent any holder of notes from enforcing
payment of the principal on the notes and any premium and interest on the notes
at the respective due dates. The holders of a majority in aggregate principal
amount of the notes of any series then outstanding may 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 it with respect to the notes of
that series.

         The trustee may, however, refuse to take any action that it determines
may not lawfully be taken or would be illegal or conflict with the terms of the
indenture or involve it in personal liability or which would be unjustly
prejudicial to holders not joining in the action.

         The trustee will, within 90 days after the occurrence of a default with
respect to the notes of any series, give to the holders of notes of that series
notice of default, if the default has not been cured or waived. Except in the
case of a default in the payment of principal of or any premium or interest on
any note, or in the payment of any installment in respect of any fund required
to be set aside for the payment of any note, the trustee shall be protected in
withholding that notice if it determines in good faith that the withholding of
the notice is in the interest of the holders of the notes.

         We will be required to file with the trustee annually an officers'
certificate as to compliance with all conditions and covenants under the terms
of the indenture.

MODIFICATION AND WAIVER

         Subject to certain exceptions, we, along with the guarantor and the
trustee, may modify or amend the indenture, including the guarantee, only with
the consent of the holders of a majority in principal amount of the outstanding
notes of each series affected by the modification or amendment. However, no
modification or amendment may, without the consent of the holder of each
outstanding note affected thereby:


                                       35
<PAGE>
       (1)    change the stated maturity of the principal of or any premium or
              any installment of interest on any note, or reduce the principal
              amount of any note or any premium or the rate of any interest on
              any note, or change any obligation of the issuers to pay
              additional amounts contemplated by the indenture, with limited
              exceptions, or reduce the amount of the principal of an Original
              Issue Discount Security that would be due and payable upon a
              declaration of acceleration of the maturity of the note or the
              amount of the note provable in bankruptcy; or

       (2)    adversely affect any right of repayment at the option of any
              holder of notes, or change any place of payment where or the
              currency in which the notes or any premium or interest on the
              notes is payable;

       (3)    impair the right to institute suit for the enforcement of any
              payment on or after the stated maturity of the notes or, in the
              case of redemption or repayment at the option of the holder, on or
              after the redemption date or repayment date;

       (4)    adversely affect any right to exchange any note provided in the
              indenture;

       (5)    reduce the percentage in principal amount of the outstanding notes
              of any series, the consent of whose holders is required for any
              supplemental indenture, for any waiver of compliance with certain
              provisions of the indenture which affect the notes or certain
              defaults applicable to the notes and their consequences provided
              for in the indenture;

       (6)    reduce the requirements under the indenture for quorum or voting
              with respect to any series of notes;

       (7)    modify any of the provisions of Sections 902, 513 or 1011 of the
              indenture, except to increase that percentage or to provide that
              certain other provisions of the indenture which affect the notes
              cannot be modified or waived without the consent of the holder of
              each outstanding note affected thereby;

       (8)    modify the ranking or priority of any series of notes or the
              guarantee; or

       (9)    release the guarantor from any of its obligations under the
              guarantee or the indenture other than in accordance with the terms
              of the indenture.

         We, along with the guarantor and trustee, may amend the indenture
without the consent of any holder of notes, to:

       (1)    cure any ambiguity, omission, defect or inconsistency;

       (2)    provide for the assumption by a successor corporation of the
              obligations of the issuers or the guarantor under the indenture;

       (3)    add guarantees or collateral security with respect to the notes;

       (4)    add to the covenants of the issuers for the benefit of the holders
              or to surrender any right or power conferred upon the issuers or
              the guarantor;

       (5)    make any change that does not adversely affect the rights of any
              holder; or


                                       36
<PAGE>
       (6)    comply with any requirement of the SEC in connection with the
              qualification of the indenture under the Trust Indenture Act of
              1939.

         We may choose in some instances not to comply with a term, provision or
condition contained in notes of one series, if the holders of at least a
majority in principal amount of the notes of each series affected by our
noncompliance, waive our compliance that term, provision or condition. The
waiver shall only extend to or affect that term, provision or condition to the
extent it is expressly waived. Until the waiver becomes effective, our
obligations and the duties of the trustee to those holders with respect to that
term, provision or condition shall remain in full force and effect. The holders
of:

       o      a majority in principal amount of the outstanding notes of any
              series in the case of an Event of Default specified in (1), (2),
              (3) or (6) in "--Events of Default," above

       o      or of all then outstanding notes in the case of an Event of
              Default specified in (4) or (5) in "--Events of Default," above

may, on behalf of those holders, waive any past default under the indenture with
respect to those notes except a default in the payment of the principal of or
any premium or any interest on the notes and except a default in respect of a
covenant or provision the modification or amendment of which would require the
consent of the holder of each outstanding note of each series affected by that
modification or amendment..

MERGER, CONVEYANCE, TRANSFER OR LEASE

         We may not enter into any merger or other business combination, or
liquidate, wind up or dissolve, or convey, sell, lease, assign, transfer or
otherwise dispose of, all or substantially all of our respective property,
business or assets, except:

       (1)    any subsidiary of either of the issuers may be merged or combined
              with or into

              (a)    either of the issuers, if the issuer involved in the
                     transaction is the continuing or surviving corporation, or

              (b)    any one or more wholly-owned subsidiaries of either issuer,
                     if the wholly-owned subsidiary or subsidiaries involved in
                     the transaction is the continuing or surviving corporation;

       (2)    the issuers or any wholly-owned subsidiary of the issuers may
              sell, lease, transfer or otherwise dispose of any or all of their
              assets upon voluntary liquidation, or otherwise, to either of the
              issuers or any other wholly-owned subsidiary of the issuers or may
              sell, lease, transfer or otherwise dispose of any or all of their
              assets upon voluntary liquidation, or otherwise, to any
              non-wholly-owned subsidiary of the issuers for fair market value;

       (3)    any non-wholly-owned subsidiary of the issuers may sell, lease,
              transfer or otherwise dispose of any or all of its assets upon
              voluntary liquidation, or otherwise, to the issuers or any
              wholly-owned subsidiary of the issuers for fair market value or
              may sell, lease, transfer or otherwise dispose of any or all of
              its assets upon voluntary liquidation, or otherwise, to any other
              non-wholly-owned subsidiary of the issuers; and

       (4)    the issuers or any subsidiary of either of the issuers may be
              merged or combined with or into another entity.


                                       37
<PAGE>
Any of the transactions discussed above may occur only if no Default or Event of
Default shall have occurred and be continuing or would occur as a result of the
transaction. If the issuer involved in the transaction is not the continuing or
surviving corporation, the continuing or surviving corporation shall succeed to
the indenture.

         The guarantor may not merge with or into any other entity or convey,
sell, assign, transfer, lease or otherwise dispose of its properties and assets
substantially as an entirety to any other entity other than any of the issuers
unless:

       (1)    the entity formed by or surviving the merger, if other than the
              guarantor, or to which the properties and assets are transferred
              assumes all of the obligations of the guarantor under the
              indenture and the guarantee, in a supplemental indenture in form
              and substance satisfactory to the trustee;

       (2)    immediately after giving effect to the transaction, no Default or
              Event of Default has occurred and is continuing; and

       (3)    the guarantor delivers, or causes to be delivered, to the trustee,
              in form and substance reasonably satisfactory to the trustee, an
              officers' certificate and an opinion of counsel, each stating that
              the transaction complies with the requirements of the indenture.

PAYMENT OF ADDITIONAL AMOUNTS

         Any amounts paid by the issuers, or their assignee or successor, will
be paid without deduction for taxes collected for the account of the United
Kingdom or the foreign jurisdiction of incorporation or residence of any
assignee of the issuers or any successor to either issuer or the guarantor. We
refer to these foreign jurisdictions of incorporation or residents in this
prospectus as an "Other Jurisdiction." If, at any time, the United Kingdom or an
Other Jurisdiction requires those deductions, the issuers, their assignee or any
relevant successor will pay additional amounts in respect of principal, premium
or interest as may be necessary so that the net amounts paid to the holders of
the notes or the trustee under the indenture, after the deduction, shall equal
the respective amounts of principal, premium or interest to which those holders
or the trustee are entitled. We refer to these additional amounts in this
prospectus as "Additional Amounts." The preceding discussion shall not apply to

       (1)    any taxes which would not have been so imposed but for the fact
              that the holder or beneficial owner of the relevant note is or has
              been a domiciliary, national or resident of, has been engaged in
              business, has maintained a permanent establishment, or is or has
              been physically present in, the United Kingdom or the Other
              Jurisdiction, or otherwise has or has had some connection with the
              United Kingdom or the Other Jurisdiction other than the holding or
              ownership of a note, or the collection of principal of, premium
              and interest on, or the enforcement of, a note or the guarantee,

       (2)    any taxes which would not have been so imposed but for the fact
              that the relevant note was presented more than thirty days after
              the date the payment became due or was provided for, whichever is
              later,

       (3)    any taxes or charges which are payable otherwise than by deduction
              or withholding on or in respect of the relevant note or guarantee,

       (4)    any taxes which would not have been so imposed but for the holders
              failure to comply with any reporting requirements concerning the
              nationality, residence, identity or connection with the United


                                       38
<PAGE>
              Kingdom or the Other Jurisdiction or any other relevant
              jurisdiction of the holder or beneficial owner of the relevant
              note,

       (5)    any taxes

              (A)    which would not have been imposed if the beneficial owner
                     of the relevant note had been the holder of that note, or

              (B)    which, if the beneficial owner of that note had held the
                     note as the holder of that note, would have been excluded
                     under clauses (1) through (4) above, or

       (6)    any estate, inheritance, gift, sale, transfer, personal property
              or similar tax.

         We are not required to pay Additional Amounts with respect to the notes
or the guarantee due to any deduction requirement imposed by any governmental
unit other than the United Kingdom or an Other Jurisdiction.

DEFEASANCE

         With respect to any series of notes, we, at our option, may be
discharged from any and all obligations in respect of that series of notes
except for our obligations to replace stolen, lost or mutilated notes, maintain
paying agencies, and hold money for payment in the defeasance trust. This is
referred to as "legal defeasance." We may also terminate our obligations with
respect to certain covenants in the indenture and any other specified covenants
with respect to that series of notes. This is referred to as "covenant
defeasance."

         In order to exercise either of these defeasance options, we must
deposit with the trustee, in trust, money or government obligations, an adequate
amount for the payment of principal, including any mandatory installment
payments in respect of any fund to be set aside for the payment of principal,
and interest on, the outstanding notes of the relevant series on the dates those
payments are due.

         We must also deliver to the trustee the following:

       (1)    an opinion of counsel to the effect that the deposit and related
              defeasance would not cause the holders of the notes of that series
              to recognize income, gain or loss for federal income tax purposes;

       (2)    in the case of a legal defeasance only, the opinion of counsel
              must be based on either a ruling received from or published by the
              United States Internal Revenue Service or other change in
              applicable federal income tax law to that effect; and

       (3)    an officer's certificate stating that no Event of Default with
              respect to that series of notes has occurred and is continuing.

BOOK-ENTRY; DELIVERY AND FORM

         GENERAL. Except as described below, the notes will not be represented
by physical certificates. Instead, the notes will be in the form of one or more
fully registered global notes. Each global note will be deposited with the
trustee, as custodian for, and registered in the name of DTC or a nominee of
DTC. The old notes, to the extent validly tendered and accepted and directed by
their holders in their letters of transmittal, will be exchanged through
electronic transfer through DTC's Automated Tender Offer Program.


                                       39
<PAGE>
         Notes that are issued as described below under "--Physical Notes" will
be issued as physical certificates. Upon the transfer of a note of any series
issued as physical certificates, that note will be exchanged for an interest in
the global note representing the principal amount of notes being transferred,
unless the global notes for that series have previously been exchanged for
physical certificates.

         THE GLOBAL NOTES.  We expect that in accordance with DTC's procedures:

       (1)    upon deposit of the global notes, DTC or its custodian will
              credit, on its internal system, the principal amount of the
              individual beneficial interests represented by the global notes to
              the respective accounts of persons who have accounts with DTC and

       (2)    ownership of beneficial interests in the global notes will be
              shown on, and the transfer of that ownership will be effected only
              through:

              o      records maintained by DTC or its nominee with respect to
                     interests of persons who have accounts with DTC
                     ("participants") and

              o      the records of participants with respect to interests of
                     persons other than participants.

         So long as DTC, or its nominee, is the registered owner or holder of
the global notes, DTC or the nominee will be considered the sole record owner or
holder of the notes represented by the global notes for all purposes under the
indenture. No beneficial owner of an interest in the global notes will be able
to transfer that interest except in accordance with DTC's procedures and the
requirements of the indenture.

         We will make payments of the principal of, or premium and interest on,
the global notes to DTC or its nominee, as the registered owner of the global
notes. None of the issuers, the trustee or any paying agent under the indenture
will have any responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests in the global
notes or for maintaining, supervising or reviewing any records relating to those
beneficial ownership interests.

         We expect that DTC or its nominee, upon receipt of any payment of the
principal of, or premium and interest on, the global notes, will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of the global notes as
shown on the records of DTC or its nominee. We also expect that payments by
participants to owners of beneficial interests in the global notes held through
those participants will be governed by standing instructions and customary
practice as is now the case with securities held for the accounts of customers
registered in the names of nominees for those customers.
Those payments will be the responsibility of those participants.

         Transfers between participants in DTC will be effected in accordance
with DTC's procedures and will be settled in immediately available funds. If a
holder requires physical delivery of the notes for any reason, including to sell
notes to persons in states which require physical delivery of the notes, or to
pledge the notes, the holder must transfer its interest in the global notes in
accordance with DTC's normal procedures and the procedures described in the
indenture.

         DTC has advised the issuers and the guarantor that it will take any
action permitted to be taken by a holder of notes only at the direction of one
or more participants to whose account interests in the global notes are credited
and only in respect of the aggregate principal amount of notes as to which that
participant has given direction. However, if there is an Event of Default under
the indenture, DTC will exchange the global notes for physical notes, which it
will distribute to its participants.

                                       40
<PAGE>
         DTC has advised the issuers and the guarantor as follows:

       (1)    DTC is a limited purpose trust company organized under the laws of
              the State of New York,

       (2)    a member of the Federal Reserve System,

       (3)    a "clearing corporation" within the meaning of the Uniform
              Commercial Code and

       (4)    a "clearing agency" registered pursuant to the provisions of
              Section 17A of the Exchange Act.

DTC was created to hold securities for its participants and facilitate the
clearance and settlement of securities transactions between participants through
electronic entries in its participants' accounts. This system eliminated the
need for physical movement of certificates. Participants include securities
brokers and dealers, banks, trust companies and clearing corporations and
certain other organizations. Indirect access to the DTC system is available to
others such as banks, brokers, dealers and trust companies and clear through or
maintain a custodial relationship with a participant ("indirect participants").

         Although DTC and its participants are expected to follow these
procedures in order to facilitate transfers of interests in the global notes
among participants, they are under no obligation to perform these procedures,
and the procedures may be discontinued at any time. Neither the issuers nor the
trustee will have any responsibility for the performance by DTC or its
participants or indirect participants of their respective obligations under the
rules and procedures governing their operations.

         PHYSICAL NOTES. Notes issued as physical certificates are referred to
in this prospectus as "physical notes." These physical notes will be
exchangeable or transferable for global notes if:

       (1)    DTC notifies us that it is unwilling or unable to continue as
              depositary for the global notes, or DTC ceases to be a "clearing
              agency" registered under the Exchange Act, and a successor
              depositary is not appointed by us within 90 days, or

       (2)    we, in our discretion, at any time determine not to have all of
              the notes represented by a global note or

       (3)    an Event of Default has occurred and holders of more than 25% in
              aggregate principal amount of the notes at the time outstanding
              represented by global notes advise the trustee through DTC or a
              successor depositary in writing that the continuation of an
              electronic system through DTC or the successor depositary with
              respect to the global notes is no longer required.

Upon the occurrence of any of the above events, we will cause the appropriate
physical notes to be delivered.

THE TRUSTEE

         Unless an Event of Default has occurred and is continuing, the trustee
will only perform those duties specifically described in the indenture. If an
Event of Default has occurred and is continuing, the trustee will exercise the
rights and powers given to it under the indenture and use the same degree of
care and skill in its exercise as a prudent person would exercise under the
circumstances in the conduct of that person's own affairs.


                                       41
<PAGE>
         If the trustee becomes a creditor of any issuer or the guarantor, the
indenture and provisions of the Trust Indenture Act of 1939 incorporated by
reference in the indenture limit the trustee's rights to obtain payment of
claims in certain cases or, to realize on certain property received by it in
respect of those claims, as security or otherwise. The trustee is permitted to
engage in other transactions; however, if it acquires any conflicting interest
it must eliminate the conflict or resign.

PAYMENT

         All payments of principal, any premium, and interest on the notes will
be made by the issuers in immediately available funds.

NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS

         No director, officer, employee, incorporator or stockholder of the
issuers or the guarantor shall have any liability for any obligations of the
issuers or the guarantor under the guarantee, any series of notes or the
indenture or for any claim based on, in respect of, or by reason of, the
obligations or their creation. Each holder of notes by accepting a note waives
and releases those persons from that liability. The waiver and release are part
of the consideration for issuance of the notes and the guarantee. This waiver
may not be effective to waive liabilities under the federal securities laws and
it is the view of the SEC that this waiver is against public policy.

TRANSFER

         The notes will be issued in registered form and will be transferable
only upon the surrender of the notes being transferred for registration of
transfer. The issuer may require payment of a sum sufficient to cover any tax,
assessment or other governmental charge payable in connection with certain
transfers and exchanges.

GOVERNING LAW

         The indenture provides that it and the notes will be governed by, and
construed in accordance with, the laws of the State of New York to the extent
that the application of the law of another jurisdiction would not otherwise be
required.

CERTAIN DEFINITIONS

         The following are certain defined terms used in the indenture.
Reference is made to the indenture for a full disclosure of all defined terms,
as well as any other terms used in this prospectus for which no definition is
provided.

         "ATTRIBUTABLE DEBT" means, as to any particular lease under which
either of the issuers or any Restricted Subsidiary is at the time liable for a
term of more than 12 months, at any date as of which the amount of the debt
under the lease is to be determined, the total net amount of rent required to be
paid by either the issuers or any Restricted Subsidiary under that lease during
the remaining term of the lease (excluding any subsequent renewal or other
extension options held by the lessee), discounted from the respective due dates
of that rent to that date at the yearly rate equivalent to the interest rate
inherent in the lease. The net amount of rent required to be paid under any
lease for any period shall be:

       o      the aggregate amount of the rent payable by the lessee with
              respect to that period EXCLUDING


                                       42
<PAGE>
       o      amounts required to be paid on account of maintenance and repairs,
              services, insurance, taxes, assessments, water rates and similar
              charges and contingent rents.

In the case of any lease which is terminable by the lessee upon the payment of a
penalty, the net amount of rent shall include the lesser of

       (1)    the total discounted net amount of rent required to be paid from
              the later of the first date upon which the lease may be so
              terminated or the date of the determination of the net amount of
              rent, as the case may be, and

       (2)    the amount of the penalty in which event no rent shall be
              considered as required to be paid under the lease subsequent to
              the first date upon which it may be so terminated.

         "CONSOLIDATED NET TANGIBLE ASSETS" means the total amount of assets
appearing on our most recent Consolidated balance sheet of, prepared in
accordance with GAAP after deducting from those assets

       (1)    all current liabilities excluding any current liabilities which
              are by their terms extendible or renewable at the option of the
              obligor on those liabilities to a time more than 12 months after
              the time as of which the amount of those liabilities is being
              computed and

       (2)    all goodwill, trade names, trademarks, patents, unamortized debt
              discount less unamortized premium and expense and other like
              intangibles.

         "CONSOLIDATION" means, with respect to any Person, the consolidation of
the accounts of that Person and each of its subsidiaries if and to the extent
the accounts of that Person and each of its subsidiaries would normally be
consolidated with those of that Person, all in accordance with GAAP. The term
"Consolidated" shall have a similar meaning.

         "CREDIT FACILITY" means the Credit Agreement, dated as of December 12,
1996, among USI American Holdings, Inc., USI Funding, Inc., as borrowers, U.S.
Industries, as guarantor, Bank of America Illinois, as Issuing Bank and
Swingline Bank, the additional financial institutions named in that agreement,
as lenders, Bank of America National Trust and Savings Association, as Agent,
and BA Securities, Inc., as Arranger, as that agreement may be amended from time
to time or any one or more renewals, extension, refinancings, or refundings of
that facility.

         "DEBT" means (without duplication) indebtedness for borrowed money
evidenced by notes, bonds, debentures or other similar instruments, and any
contingent or other obligations arising under any guarantee or similar
instrument with respect to the debt.

         "DEPOSITORY TRUST COMPANY" or "DTC" means The Depository Trust Company,
its nominees, and their respective successors.

         "EXISTING FUNDED DEBT" means all Funded Debt other than Funded Debt
outstanding under the Credit Facility existing on the date of the indenture.

         "FUNDED DEBT" means Debt that by its terms

       (1)    matures more than one year from the date of original issuance or
              creation or

       (2)    matures within one year from that date but is renewable or
              extendible at the option of any obligor to a date more than one
              year from that date.


                                       43
<PAGE>
         "GAAP" means generally accepted accounting principles described in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in other statements by any other
entity as approved by a significant segment of the accounting profession in the
United States, from time to time.

         "GOVERNMENT OBLIGATIONS" means securities which are:

       (1)    direct obligations of the government which issued the Currency in
              which the notes are payable; or

       (2)    obligations of a Person controlled or supervised by and acting as
              an agency or instrumentality of the government which issued the
              Currency in which the notes are payable, the payment of which is
              unconditionally guaranteed by such government,

which, in either case, are full faith and credit obligations of such government
payable in such Currency and are not callable or redeemable at the option of the
issuer of such obligations and shall also include a depository receipt issued by
a bank or trust company as custodian with respect to any such Government
Obligation or a specific payment of interest on or principal of any such
Government Obligation held by such custodian for the account of the holder of a
depository receipt; provided that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of
the Government Obligation or the specific payment of interest or principal of
the Government Obligation evidenced by such depository receipt.

         "GUARANTEE" means the unconditional guarantee by the guarantor, in
accordance with Article 12 of the indenture, which is subject to release under
certain circumstances as described in this prospectus.

         "LIEN" means any pledge, mortgage, lien, charge, encumbrance or
security interest.

         "MATURITY", when used with respect to any note, means the date on which
the principal of that note or an installment of principal becomes due and
payable as provided in that note or the indenture, whether at the stated
maturity or by declaration of acceleration, notice of redemption, notice of
option to elect repayment or otherwise.

         "ORIGINAL ISSUE DATE" means October 27, 1998, the date on which the
notes were originally issued.

         "ORIGINAL ISSUE DISCOUNT SECURITY" means any note that provides for an
amount less than the principal amount of the note to be due and payable upon a
declaration of acceleration of the Maturity of the note under Section 502 of the
indenture.

         "PAYING AGENT" means any Person authorized by the issuers to pay the
principal of or any premium or any interest, on any notes on behalf of the
issuers.

         "PLACE OF PAYMENT" means New York City, New York.

         "PRINCIPAL PROPERTY" means any manufacturing plant or warehouse,
together with the land upon which it is erected and fixtures comprising a part
of that plant or warehouse, owned by either of the issuers or any Restricted
Subsidiary and located in the United States, the gross book value without
deduction of any reserve for depreciation of which on the date as of which the
determination is being made is an amount which exceeds 1% of Consolidated Net
Tangible Assets, other than that manufacturing plant or warehouse or any portion


                                       44
<PAGE>
of that plant or warehouse together with the land upon which it is erected and
fixtures comprising a part of that plant or warehouse which, in the opinion of
the Board of Directors, is not of material importance to the total business
conducted by the issuers and their subsidiaries, taken as a whole.

         "RESTRICTED SUBSIDIARY" means each subsidiary other than Unrestricted
Subsidiaries.

         "SPECIAL PURPOSE FUNDING SUBSIDIARY" means a direct Wholly-Owned
Subsidiary of either of the issuers:

       (1)    that serves as a cash management company for either of the issuers
              and its respective subsidiaries and has no other material
              operations or business,

       (2)    that for every transfer of funds to it, records a corresponding
              liability on its books and records to the transferor of those
              funds, and

       (3)    whose assets do not materially exceed its liabilities.

         "STATED MATURITY", when used with respect to any note or any
installment of principal of such note or interest on such note, means the date
specified in such note as the fixed date on which the principal of such note or
such installment of principal or interest is due and payable, as such date my be
extended under the provisions of Section 308 of the indenture.

         "TRUSTEE" means The First National Bank of Chicago until a successor
trustee shall have become trustee in accordance with the applicable provisions
of the indenture, and thereafter "trustee" shall mean or include each Person who
is then a trustee under the indenture.

         "UNRESTRICTED SUBSIDIARY" means any subsidiary of either of the issuers
that:

       (1)    is organized under the laws of a jurisdiction other than a
              jurisdiction in the United States of America,

       (2)    does not constitute a "significant subsidiary" of U.S. Industries
              within the meaning of Rule 1-02(w) of Regulation S-X promulgated
              under the Exchange Act or any successor provision or

       (3)    in the case of USI Atlantic and USI American Holdings, is or is
              acting as a co-issuer or guarantor of any indebtedness of U.S.
              Industries that is pari passu in right of payment with the
              indebtedness under the notes.






                                       45
<PAGE>
                   MATERIAL FEDERAL INCOME TAX CONSIDERATIONS

         The following is a general discussion of taxation intended as a summary
of the material income tax consequences generally applicable to the exchange
offer. The statements of United States tax law discussed below are based on the
laws, regulations and administrative and judicial decisions applicable as of the
date of this prospectus, and are subject to any changes in relevant United
States authorities occurring after that date. Any of those changes could be
retroactive and could affect the continuing validity of this discussion.

         Persons considering the exchange of old notes for registered notes in
the exchange offer should consult their own tax advisors concerning the
application of United States federal income tax laws, as well as the laws of any
state, local, or other taxing jurisdiction applicable to their particular
situations.

UNITED STATES FEDERAL INCOME TAXATION

         The exchange of the old notes for registered notes in the exchange
offer will not be a taxable exchange for U.S. federal income tax purposes. As a
result, there will be no federal income tax consequences to a holder exchanging
an old note for a registered note in the exchange offer. A holder should have
the same adjusted basis and holding period in the registered notes as it had in
the old note immediately before the exchange.

         The preceding paragraph summarizes the material U.S. federal income tax
consequences associated with the exchange of the old notes for registered notes
in the exchange offer. This summary applies only to those persons who are the
initial holders of old notes, who acquired old notes for cash and who hold old
notes as capital assets, and assumes that the old notes were not issued with
"original issue discount," as defined in the Internal Revenue Code of 1986. This
summary also does not address the U.S. federal income tax consequences of the
exchange of notes not held as capital assets within the meaning of Section 1221
of the Code, or the U.S. federal income tax consequences to investors subject to
special treatment under the U.S. federal income tax laws, such as dealers in
securities or foreign currency, tax-exempt entities, banks, thrifts, insurance
companies, persons that hold the notes as part of a "straddle", a "hedge"
against currency risk or a "conversion transaction", persons that have a
"functional currency" other than the U.S. dollar and investors in pass-through
entities. It also does not address any consequences arising under U.S. federal
gift and estate taxes or under the tax laws of any state, local or foreign
jurisdiction.

UNITED KINGDOM INCOME TAXATION

         Payments of principal and interest on a registered notes by USI
Atlantic under the guarantee received by a beneficial owner not otherwise
taxable in the United Kingdom will generally be exempt from United Kingdom tax.
However, USI Atlantic's understanding of current Inland Revenue practice is that
where a United Kingdom company, including a company considered to be a United
Kingdom "dual resident" for tax purposes such as USI Atlantic, is obliged to
make a payment of interest under a guarantee which in default would be enforced
in the United Kingdom, that payment will have a United Kingdom source.
Accordingly, the payment will be subject to United Kingdom withholding tax in
the absence of an available exemption under an applicable double taxation treaty
or convention. This exemption should be available under the double taxation
treaty between the United States and the United Kingdom to beneficial owners of
registered notes who timely satisfy the conditions for that exemption and who
comply with the relevant administrative arrangements. If, however, an exemption
is not available and a United Kingdom withholding tax is imposed on a payment in
respect of interest or any additional interest under the guarantee, subject to
the exceptions discussed above under "Description of the Registered
Notes--Payment of Additional Amounts," the issuers or the guarantor or their
successors or assigns, will be obligated to pay or cause to be paid the
Additional Amounts in respect of the relevant interest as may be necessary in


                                       46
<PAGE>
order that the net amount of interest paid to a holder of a registered note
shall equal the amount of interest to which the holder is entitled. If the
issuers or the guarantor are required to pay Additional Amounts by reason of
current Inland Revenue practice, the issuers may redeem the notes in accordance
with the provisions described under "Description of the Registered
Notes--Redemption in Circumstances Involving Taxation."

         Beneficial owners of registered notes should consult their own tax
advisors as to the conditions for exemption and the relevant administrative
arrangements.








                                       47
<PAGE>
                          NOTICE TO CANADIAN RESIDENTS

RESALE RESTRICTIONS

         The distribution of the notes in Canada is being made only on a private
placement basis exempt from the requirement that the issuers prepare and file a
prospectus with the securities regulatory authorities in each province where
trades of notes are effected. Accordingly, any resale of the notes in Canada
must be made in accordance with applicable securities laws which will vary
depending on the relevant jurisdiction, and which may require resales to be made
in accordance with available statutory exemptions or in accordance with a
discretionary exemption granted by the applicable Canadian securities regulatory
authority. Purchasers are advised to seek legal advice prior to any resale of
the notes.

REPRESENTATIONS OF PURCHASERS

         Each purchaser of notes in Canada who receives a purchase confirmation
will be considered to represent to the issuers and the dealer from whom the
purchase confirmation is received that:

       (1)    the purchaser is entitled under applicable provincial securities
              laws to purchase the notes without the benefit of a prospectus
              qualified under those securities laws,

       (2)    where required by law, the purchaser is purchasing as principal
              and not as agent and

       (3)    the purchaser has reviewed the text above under "--Resale
              Restrictions."

RIGHTS OF ACTION (ONTARIO PURCHASERS)

         The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
section 32 of the Regulation under the Securities Act (Ontario). As a result,
Ontario purchasers must rely on other remedies that may be available, including
common law rights of action for damages or rescission or rights of action under
the civil liability provisions of the U.S. federal securities laws. Following a
decision of the U.S. Supreme Court, it is possible that Ontario purchasers will
not be able to rely upon the remedies set out in Section 12(2) of the United
States Securities Act of 1933 where securities are being offered under a U.S.
private placement memorandum such as this document.

ENFORCEMENT OF LEGAL RIGHTS

         All of the issuers' directors and officers as well as the experts named
in this prospectus may be located outside of Canada and, as a result, it may not
be possible for Canadian purchasers to effect service of process within Canada
upon the issuer or those persons. All or a substantial portion of the assets of
the issuer and those persons may be located outside of Canada and, as a result,
it may not be possible to satisfy a judgment against the issuer or those persons
in Canada or to enforce a judgment obtained in Canadian courts against the
issuer or persons outside of Canada.

NOTICE TO BRITISH COLUMBIA RESIDENTS

         A purchaser of notes to whom the Securities Act (British Columbia)
applies is advised that the purchaser is required to file with the British
Columbia Securities Commission a report within ten days of the sale of any notes
acquired by the purchaser in the exchange offer. This report must be in the form
attached to British Columbia Securities Commission Blanket Order BOR #95/17, a
copy of which may be obtained from the issuers. Only one report must be filed in
respect of notes acquired on the same date and under the same prospectus
exemption.

                                       48
<PAGE>
TAXATION AND ELIGIBILITY FOR INVESTMENT

         Canadian purchasers of notes should consult their own legal and tax
advisors with respect to the tax consequences of an investment in the notes in
their particular circumstances and with respect to the eligibility of the notes
for investment by the purchaser under relevant Canadian legislation.









                                       49
<PAGE>
                                 LEGAL MATTERS

         The validity of the registered notes and the registered guarantees have
been passed upon for U.S. Industries, USI Atlantic and USI American Holdings by
Weil, Gotshal & Manges LLP, New York, New York.


                                     EXPERTS

         The consolidated financial statements and schedule of U.S. Industries.
appearing in its Annual Report on Form 10-K for the year ended October 3, 1998,
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon included therein and incorporated in this prospectus by
reference. Their report as to the years ended September 30, 1997 and 1996, is
based in part on the report of PricewaterhouseCoopers LLP. Such consolidated
financial statements and schedule are incorporated in this prospectus by
reference in reliance upon such report given upon the authority of such firms as
experts in accounting and auditing.











                                       50
<PAGE>
                              U.S. INDUSTRIES, INC.

                           USI AMERICAN HOLDINGS, INC.

                               USI ATLANTIC CORP.
                                  $250,000,000
                          7-1/8% Senior Notes due 2003





                                   PROSPECTUS



WE HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED
IN THIS PROSPECTUS. THIS PROSPECTUS DOES NOT OFFER TO SELL OR BUY ANY SECURITIES
IN ANY JURISDICTION WHERE IT IS UNLAWFUL.





<PAGE>
                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

         The issuers and the guarantor are Delaware corporations. Section 145 of
the Delaware General Corporation Law (the "DGCL") provides that a Delaware
corporation has the power to indemnify its officers and directors in certain
circumstances.

         Subsection (a) of Section 145 of the DGCL empowers a corporation to
indemnify any director or officer, or former director or officer, who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of his service as director, officer, employee or agent of the
corporation, or his service, at the corporation's request, as a director,
officer, employee or agent of another corporation or enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred in connection with that action, suit
or proceeding provided that the director or officer acted in good faith and in a
manner reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, provided
that the director or officer had no reasonable cause to believe his conduct was
unlawful.

         Subsection (b) of Section 145 empowers a corporation to indemnify any
director or officer, or former director or officer, who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that the person acted in any of the capacities described
above, against expenses (including attorneys' fees) actually and reasonably
incurred in connection with the defense or settlement of the action or suit
provided that the director or officer acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification may be made in respect of any claim,
issue or matter as to which the director or officer shall have been adjudged to
be liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which the action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, the director or officer is fairly and reasonably
entitled to indemnity for those expenses which the court shall deem proper.

         Section 145 further provides that to the extent a director or officer
of a corporation has been successful in the defense of any action, suit or
proceeding referred to in subsections (a) or (b) or in the defense of any claim,
issue or matter in that action, suit or proceeding, he shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with that defense; provided that indemnification provided for
by Section 145 or granted under that section shall not be exclusive of any other
rights to which the indemnified party may be entitled; and empowers the
corporation to purchase and maintain insurance on behalf of a director of
officer of the corporation against any liability asserted against him or
incurred by him in that capacity or arising out of his status director or
officer whether or not the corporation would have the power to indemnify him
against those liabilities under Section 145.

         In addition, Section 102(b)(7) of the DGCL permits Delaware
corporations to include a provision in their certificates of incorporation
eliminating or limiting the personal liability of a director to the corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, provided that those provisions shall not eliminate or limit the
liability of a director (i) for any breach of the director's duty of loyalty to


                                      II-1
<PAGE>
the corporation or its stockholders, (ii) for acts or omissions not in good
faith or that involved intentional misconduct or a knowing violation of law,
(iii) for unlawful payment of dividends or other unlawful distributions, or (iv)
for any transactions from which the director derived an improper personal
benefit.

         Each of the issuers' and the guarantor's Certificates of Incorporation
currently provide that each Director shall not be personally liable to each
respective corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director and require each respective corporation to
indemnify its directors and officers to the fullest extent permitted by the
DGCL.

         The By-Laws of each of the issuers provide that the issuers shall, and
the By-Laws of the guarantor provide that the guarantor may, provide to any
director or officer advances for expenses incurred in defending an action, suit
or proceeding brought against that person because of his or her status as an
officer or director upon receipt of an undertaking to repay those advances
unless it is ultimately determined that he or she is entitled to indemnification
by the respective corporation.

         The directors and officers of each of the issuers and the guarantor are
insured against certain civil liabilities, including liabilities under federal
securities laws, which might be incurred by them in their capacity as directors
and officers.

ITEM 21. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES.

(a)      EXHIBITS

Exhibit No.       Description of Document
- -----------       -----------------------

3.1(a)            Amended and Restated Certificate of Incorporation of USI
                  (filed as Exhibit 3.1 to the Form 10-K).*

3.1(b)            Certificate of Incorporation of USI American Holdings (filed
                  as Exhibit 3.1(a) to the Registration Statement on Form S-4 of
                  USI American Holdings (Registration No. 333-20183 (the "USIAH
                  Form S-4")).*

3.1(c)            Amended and Restated Certificate of Incorporation of USI
                  Atlantic.**

3.2(a)            Amended and Restated Bylaws of USI (filed as Exhibit 3.2 to
                  the Form 10-K).*

3.2(b)            Bylaws of USI American Holdings (filed as Exhibit 3.2(a) to
                  the USIAH Form S-4).*

3.2(c)            Amended and Restated Bylaws of USI Atlantic (filed as Exhibit
                  3.2 to Form 10-K of USI Atlantic for the fiscal year ended
                  September 28, 1996).*

4.1               Indenture, dated as of October 27, 1998, among the Issuers,
                  the Guarantor and The First National Bank of Chicago, as
                  Trustee (filed as Exhibit 4.4 to the Form 10-K).*

4.2               Specimen Registered Notes (included in Exhibit 4.1).*

4.3               Registration Rights Agreement, dated October 22, 1998, among
                  the Issuers, the Guarantor and Credit Suisse First Boston
                  Corporation on behalf of the Initial Purchasers.**

5.1               Opinion of Weil, Gotshal & Manges LLP.**


                                      II-2
<PAGE>
Exhibit No.       Description of Document
- -----------       -----------------------

10.1              Credit Agreement, dated December 12, 1996, among the Issuers,
                  the Guarantor, Various Banks named therein, Bank of America
                  National Trust and Savings Association, as Issuing Bank,
                  Swingline Bank and Agent, and BA Securities, Inc., as Arranger
                  (filed as Exhibit 10.13 to the Form 10-K).*

12.1              Computation of Ratio of Earnings to Fixed Charges.****

23.1              Consent of Ernst & Young LLP.**

23.2              Consent of PricewaterhouseCoopers LLP.**

23.4              Consent of Weil, Gotshal & Manges LLP (included in Exhibit
                  5.1).**

24.1              Powers of Attorney.**

25.1              Form T-1 Statements of Eligibility under the Trust Indenture
                  Act of 1939, as amended, of the Trustee under the Indenture.**

99.1              Form of Letter of Transmittal.****

99.2              Form of Notice of Guaranteed Delivery.**

99.3              Form of Letter to Brokers.**

99.4              Form of Letter to Clients.**


- ------------------

*        Incorporated herein by reference.
**       Previously filed.
***      Filed herewith.
****     To be filed by amendment.

        (b)     Financial Statement Schedules.

        II.     Valuation and Qualifying Accounts (included in Item 8 of the
                Company's 1998 Annual Report), which is incorporated herein by
                reference.

        (c)     Not applicable.

ITEM 22. UNDERTAKINGS

        (a)     The undersigned Registrants hereby undertake that, for purposes
                of determining any liability under the Securities Act of 1933,
                each filing of the Registrant's annual report pursuant to
                Section 13(a) or 15(d) of the Securities Exchange Act of 1934
                (and, where applicable, each filing of an employee benefit
                plan's annual report pursuant to Section 15(d) of the Securities
                Exchange Act of 1934) that is incorporated by reference in the
                Registration Statement shall be deemed to be a new registration
                statement relating to the securities offered therein, and the
                offering of such securities at that time shall be deemed to be
                the initial bona fide offering thereof.

        (b)     The undersigned Registrants hereby undertake to deliver or cause
                to be delivered with the prospectus, to each person to whom the
                prospectus is sent or given, the latest annual report, to
                security holders that is incorporated by reference in the
                prospectus and furnished pursuant to and meeting the


                                      II-3
<PAGE>
                requirements of Rule 14a-3 or Rule 14c-3 under the Securities
                Exchange Act of 1934; and, where interim financial information
                required to be presented by Article 3 of Regulation S-X is not
                set forth in the prospectus, to deliver, or cause to be
                delivered to each person to whom the prospectus is sent or
                given, the latest quarterly report that is specifically
                incorporated by reference in the prospectus to provide such
                interim financial information.

        (c)     Insofar as indemnification for liabilities arising under the
                Securities Act of 1933 may be permitted to directors, officers
                and controlling persons of the registrant pursuant to the
                foregoing provisions, or otherwise, the registrant has been
                advised that in the opinion of the Securities and Exchange
                Commission such indemnification is against public policy as
                expressed in the Act and is, therefore, unenforceable. In the
                event that a claim for indemnification against such liabilities
                (other than the payment by the registrant of expenses incurred
                or paid by a director, officer or controlling person of the
                registrant in the successful defense of any action, suit or
                proceeding) is asserted by such director, officer or controlling
                person in connection with the securities being registered, the
                registrant will, unless in the opinion of its counsel the matter
                has been settled by controlling precedent, submit to a court of
                appropriate jurisdiction the question whether such
                indemnification by it is against public policy as expressed in
                the Act and will be governed by the final adjudication of such
                issue.

        (d)     The undersigned Registrants hereby undertake to respond to
                requests for information that is incorporated by reference into
                the prospectus pursuant to Item 4, 10(b), 11, or 13 of this
                form, within one business day of receipt of such request, and to
                send the incorporated documents by first class mail or other
                equally prompt means. This includes information contained in
                documents filed subsequent to the effective date of the
                Registration Statement through the date of responding to the
                request.

        (e)     The undersigned Registrants hereby undertake to supply by means
                of a post-effective amendment all information concerning a
                transaction, and the company being acquired involved therein,
                that was not the subject of and included in the Registration
                Statement when it became effective.

        (f)     The undersigned hereby undertake:

                (1)     To file, during any period in which offers or sales are
                        being made, a post-effective amendment to this
                        registration statement:

                (i)     To include any prospectus required by Section 10(a)(3)
                        of the Securities Act of 1933;

                (ii)    To reflect in the prospectus any facts or events arising
                        after the effective date of the registration statement
                        (or the most recent post-effective amendment thereof)
                        which, individually or in the aggregate, represent a
                        fundamental change in the information set forth in the
                        registration statement. Notwithstanding the foregoing,
                        any increase or decrease in volume of securities offered
                        (if the total value of securities offered would not
                        exceed that which was registered) and any deviation from
                        the low or high end of the estimated maximum offering
                        range may be reflected in the form of prospectus filed
                        with the Commission pursuant to Rule 424(b) if, in the
                        aggregate, the changes in volume and price represent no


                                      II-4
<PAGE>
                        more than a 20 percent change in the maximum offering
                        price set forth in the "Calculation of Registration Fee"
                        table in the effective registration statement;

                (iii)   To include any material information with respect to the
                        plan of distribution not previously disclosed in the
                        registration statement or any material change to such
                        information in the registration statement;

provided, however, that paragraphs (f)(1)(i) and (f)(1)(ii) doe not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or 15(d) of the Securities Act of 1934 that
are incorporated by reference in the registration statement.

                (2)     That for the purpose of determining any liability under
                        the Securities Act of 1933, each such post-effective
                        amendment shall be deemed to be a new registration
                        statement relating to the securities offered therein,
                        and the offering of such securities at that time shall
                        be deemed to be the initial bona fide offering thereof.

                (3)     To remove from registration by means of a post-effective
                        amendment any of the securities being registered which
                        remain unsold at the termination of the offering.









                                      II-5
<PAGE>
                                   SIGNATURES

         Pursuant to the requirements of the Securities Act, the Registrants
named below have duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Iselin,
State of New Jersey, on April 8, 1999.


                                     USI AMERICAN HOLDINGS, INC.
                                     USI ATLANTIC CORP.
                                     U.S. INDUSTRIES, INC.

                                     By: /s/ George H. MacLean
                                         --------------------------------------
                                         Name: George H. MacLean
                                         Title: Senior Vice President, General
                                                Counsel and Secretary







                                      II-6
<PAGE>
USI AMERICAN HOLDINGS, INC.

<TABLE>
<CAPTION>
               SIGNATURE                                     TITLE                                     DATE
               ---------                                     -----                                     ----
<S>                                            <C>                                               <C>

                 *                              Chairman of the Board and Chief                    April 8, 1999
- ----------------------------------              Executive Officer (Principal Executive
          David H. Clarke                       Officer)


                 *                              Director, President and Chief                      April 8, 1999 
- ----------------------------------              Operating Officer
           John G. Raos                         


 /s/ George H. MacLean                          Director, Senior Vice President,                   April 8, 1999
- ----------------------------------              General Counsel and Secretary
         George H. MacLean                      


                 *                              Senior Vice President and Chief                    April 8, 1999
- ----------------------------------              Financial Officer (Principal Financial
           James O'Leary                        Officer)


                 *                              Corporate Controller                               April 8, 1999
- ----------------------------------              (Principal Accounting Officer)
         Robert P. Noonan                       



By:  /s/ George H. MacLean
    ------------------------------
     George H. MacLean
     Attorney-in-fact




                                      II-7
<PAGE>
USI ATLANTIC CORP.


                SIGNATURE                                        TITLE                                 DATE
                ---------                                        -----                                 ----


                   *                        Chairman of the Board and Chief Executive             April 8, 1999
            David H. Clarke                 Officer (Principal Executive Officer)
- ------------------------------------


                   *                        Director                                              April 8, 1999
- ------------------------------------
            Brian C. Beazer


                   *                        Director                                              April 8, 1999
- ------------------------------------
           Sir Harry Solomon


                   *                        Director                                              April 8, 1999
- ------------------------------------
           Royall Victor III



 /s/ George H. MacLean                      Director, Senior Vice President, General              April 8, 1999
- ------------------------------------        Counsel and Secretary
           George H. MacLean                



                   *                        Senior Vice President and Chief Financial             April 8, 1999
- ------------------------------------        Officer (Principal Financial Officer)
             James O'Leary                  



                   *                        Corporate Controller (Principal Accounting            April 8, 1999
- ------------------------------------        Officer)
           Robert P. Noonan                 



By:  /s/ George H. MacLean
    --------------------------------
     George H. MacLean
     Attorney-in-fact



                                      II-8
<PAGE>
U.S. INDUSTRIES, INC.


                SIGNATURE                                        TITLE                                 DATE
                ---------                                        -----                                 ----


                   *                        Chairman of the Board and Chief Executive             April 8, 1999
- ------------------------------------        Officer (Principal Executive Officer)
            David H. Clarke                 


                   *                        Director, President and Chief Operating Officer       April 8, 1999
- ------------------------------------
             John G. Raos


                   *                        Director                                              April 8, 1999
- ------------------------------------
            Brian C. Beazer


                   *                        Director                                              April 8, 1999
- ------------------------------------
           William E. Butler


                   *                        Director                                              April 8, 1999
- ------------------------------------
          John J. McAtee, Jr.


                   *                        Director                                              April 8, 1999
- ------------------------------------
     The Hon. Charles H. Price II


                   *                        Director                                              April 8, 1999
- ------------------------------------
           Sir Harry Solomon


                   *                        Director                                              April 8, 1999
- ------------------------------------
           Royall Victor III


                   *                        Director                                              April 8, 1999
- ------------------------------------
          Mark Vorder Bruegge


                   *                        Director                                              April 8, 1999
- ------------------------------------
           Robert R. Womack


                   *                        Senior Vice President and Chief Financial             April 8, 1999
- ------------------------------------        Officer (Principal Financial Officer)
             James O'Leary                  



                   *                        Corporate Controller                                  April 8, 1999
- ------------------------------------        (Principal Accounting Officer)
           Robert P. Noonan                 


By:  /s/ George H. MacLean                                                                                          
    --------------------------------
     George H. MacLean                                                                                              
     Attorney-in-fact                                                                                               

</TABLE>
                                      II-9
<PAGE>
                                  EXHIBIT INDEX


Exhibit No.       Description of Document
- -----------       -----------------------

3.1(a)            Amended and Restated Certificate of Incorporation of USI
                  (filed as Exhibit 3.1 to the Form 10-K).*

3.1(b)            Certificate of Incorporation of USI American Holdings (filed
                  as Exhibit 3.1(a) to the Registration Statement on Form S-4 of
                  USI American Holdings (Registration No. 333-20183 (the "USIAH
                  Form S-4")).*

3.1(c)            Amended and Restated Certificate of Incorporation of USI
                  Atlantic.**

3.2(a)            Amended and Restated Bylaws of USI (filed as Exhibit 3.2 to
                  the Form 10-K).*

3.2(b)            Bylaws of USI American Holdings (filed as Exhibit 3.2(a) to
                  the USIAH Form S-4).*

3.2(c)            Amended and Restated Bylaws of USI Atlantic (filed as Exhibit
                  3.2 to Form 10-K of USI Atlantic for the fiscal year ended
                  September 28, 1996).*

4.1               Indenture, dated as of October 27, 1998, among the Issuers,
                  the Guarantor and The First National Bank of Chicago, as
                  Trustee (filed as Exhibit 4.4 to the Form 10-K).*

4.2               Specimen Registered Notes (included in Exhibit 4.1).*

4.3               Registration Rights Agreement, dated October 22, 1998, among
                  the Issuers, the Guarantor and Credit Suisse First Boston
                  Corporation on behalf of the Initial Purchasers.**

5.1               Opinion of Weil, Gotshal & Manges LLP.**

10.1              Credit Agreement, dated December 12, 1996, among the Issuers,
                  the Guarantor, Various Banks named therein, Bank of America
                  National Trust and Savings Association, as Issuing Bank,
                  Swingline Bank and Agent, and BA Securities, Inc., as Arranger
                  (filed as Exhibit 10.13 to the Form 10-K).*

12.1              Computation of Ratio of Earnings to Fixed Charges.****

23.1              Consent of Ernst & Young LLP.**

23.2              Consent of PricewaterhouseCoopers LLP.**

23.4              Consent of Weil, Gotshal & Manges LLP (included in Exhibit
                  5.1).**

24.1              Powers of Attorney.**

25.1              Form T-1 Statements of Eligibility under the Trust Indenture
                  Act of 1939, as amended, of the Trustee under the Indenture.**

99.1              Form of Letter of Transmittal.****

99.2              Form of Notice of Guaranteed Delivery.**

99.3              Form of Letter to Brokers.**

99.4              Form of Letter to Clients.**


- ------------------

*        Incorporated herein by reference.
**       Previously filed.
***      Filed herewith.
****     To be filed by amendment.


                                     II-10


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