SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED):
August 6, 1998
THE WALT DISNEY COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
(STATE OR JURISDICTION OF INCORPORATION)
333-52659 95-4545390
(COMMISSION FILE NUMBER) (IRS EMPLOYER IDENTIFICATION NO.)
500 SOUTH BUENA VISTA STREET, BURBANK, CALIFORNIA 91521
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(818) 560-1000
(REGISTRANT'S TELEPHONE NUMBER)
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ITEM 5. OTHER EVENTS
On August 6, 1998, the Securities and Exchange Commission
declared effective the Registration Statement on Form S-3 (No. 333-
52659) of The Walt Disney Company (the "Company"), permitting the
Company to issue an aggregate of $5,000,000,000 of debt securities,
preferred stock, common stock and warrants.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit 4.3(a) Officers' Certificate regarding Authorization of
Medium-Term Notes
Exhibit 5.1 Opinion of O'Melveny & Myers LLP regarding the Securities
Exhibit 23.1 Consent of O'Melveny & Myers LLP (included in their
opinion filed as Exhibit 5.1)
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE WALT DISNEY COMPANY
Date: August 6, 1998 By: /s/ Laurence J. Shapiro
-----------------------------
Laurence J. Shapiro
Vice President-Counsel
<PAGE>
<PAGE>
Exhibit 4.3(a)
THE WALT DISNEY COMPANY
OFFICERS' CERTIFICATE
August 6, 1998
Pursuant to Sections 2.1 and 2.3(a) of the Indenture, dated as
of March 7, 1996 (the "Indenture"), between The Walt Disney Company, a
Delaware corporation (the "Company"), and Citibank, N.A., a national
banking association, as trustee (the "Trustee"), the undersigned Thomas
O. Staggs and David K. Thompson, the Executive Vice President-Chief
Financial Officer and Senior Vice President-Assistant General Counsel of
the Company, respectively, hereby certify on behalf of the Company as
follows:
(1) Authorization. Pursuant to an Officers' Certificate
dated March 7, 1996 (the "1996 Certificate"), a series of medium-
term notes of the Company titled "Medium-Term Notes" was
established under the Indenture. This certificate amends and
restates in its entirety the 1996 Certificate. The amendment and
restatement of the terms of the Medium-Term Notes has been approved
and authorized in accordance with the provisions of the Indenture.
The forms of Medium-Term Notes attached hereto as Exhibits A, B, C
and D have been approved and authorized in accordance with the
provisions of the Indenture.
(2) Compliance with Conditions Precedent. All conditions
precedent provided for in the Indenture relating to the
establishment of new forms and terms of the Medium-Term Notes have
been complied with.
(3) Terms. The terms of the series of Securities established
pursuant to this Officers' Certificate shall be as follows:
(a) Title. The title of the series of Securities is the
"Medium-Term Notes" (the "Notes").
(b) Aggregate Initial Offering Price.
Subject to being increased by the Company from
time to time as shall be stated in a subsequent
Officers' Certificate, the aggregate initial
offering price of the Notes which may be
authenticated and delivered pursuant to the
Indenture (except for Notes (i) authenticated
and delivered upon registration or transfer of,
or in exchange for, or in lieu of, other Notes
pursuant to Sections 2.8, 2.9, 2.11, 3.6, 9.5
and 10.3 of the Indenture or (ii) which,
pursuant to Section 2.4 of the Indenture, are
deemed never to have been authenticated and
delivered) is $6,700,000,000 or the equivalent
thereof at the date of issue in one or more
foreign or composite currencies or currency
units (of which amount $1,700,000,000 is
outstanding as of the date hereof and
$5,000,000,000 is authorized but unissued as of
the date hereof).
(c) Registered Securities in Definitive
or Book-Entry Form; Global Security;
Depository. Each Note will be issued in fully
registered book-entry form (a "Book-Entry
Note") or definitive form (a "Definitive
Note"), as set forth in the pricing supplement
to the Prospectus and Prospectus Supplement
relating to such Note (the "Pricing
Supplement"). Upon issuance, all Notes in book-
entry form having the same original issue date,
Stated Maturity and otherwise having identical
terms and provisions will be represented by a
single global security (each a "Global
Security"); provided, however, that if by
reason of the foregoing a single Global
Security would exceed $200,000,000 in aggregate
principal amount, one Global Security will be
issued to represent each $200,000,000 of
aggregate principal amount and an additional
Global Security will be issued to represent any
remaining principal amount. The initial
Depositary with respect to any Global Security
will be The Depository Trust Company, New York,
New York. So long as the Depositary for a
Global Security, or its nominee, is the
registered owner of the Global Security, the
Depositary or its nominee, as the case may be,
will be considered the sole owner or holder of
the Notes in book-entry form represented by
such Global Security for all purposes under the
Indenture. Book-Entry Notes will not be
exchangeable for Definitive Notes except that,
if the Depositary with respect to any Global
Security or Securities is at any time unwilling
or unable to continue as Depositary and a
successor Depositary is not appointed by the
Company within 90 days, the Company will issue
Definitive Notes in exchange for the Book-Entry
Notes represented by any such Global Security
or Securities. In addition, the Company may at
any time and in its sole discretion determine
not to have a Global Security or Securities,
and, in such event, will issue Definitive Notes
in exchange for the Book Entry Notes
represented by such Global Security or
Securities in accordance with the provisions of
Section 2.8 of the Indenture.
(d) Persons to Whom Interest Payable.
Unless otherwise specified in a Note or an
applicable Pricing Supplement, interest will be
payable to the person in whose name a Note is
registered at the close of business (whether or
not a Business Day) on the Regular Record Date
with respect to such payment of interest;
provided, however, that interest payable at
Maturity will be payable to the person to whom
principal is payable.
(e) Business Day. "Business Day" means
any day, other than a Saturday or Sunday, that
is neither a legal holiday nor a day on which
banking institutions are authorized or required
by law, regulation or executive order to close
in The City of New York; provided, however,
that with respect to Notes the payment of which
is to be made in a Denominated Currency (as
defined below) other than U.S. dollars, such
day is also not a day on which banking
institutions are authorized or required by law,
regulation or executive order to close in the
principal financial center of the country of
such Denominated Currency (or, in the case of
European Currency Units ("ECUs"), is not a day
designated as an ECU Non-Settlement Day by the
ECU Banking Association or otherwise generally
regarded in the ECU interbank market as a day
on which payments in ECUs shall not be made);
provided, however, that, with respect to LIBOR
Notes, such day is also a London Business Day
(as defined below). "London Business Day"
means any day (i) if the Index Currency (as
defined below) is other than ECU, on which
dealings in such Index Currency are transacted
in the London interbank market or (ii) if the
Index Currency is ECU, that is not designated
as an ECU Non-Settlement Day by the ECU Banking
Association or otherwise generally regarded in
the ECU interbank market as a day on which
payments in ECUs shall not be made.
(f) Stated Maturity; Extension of
Maturity.
(i) The Notes may be issued on
different dates and the principal amount
of the Notes may be payable on different
dates, as shall be set forth in the Note
or an applicable Pricing Supplement;
provided that the date on which the
principal of any Note is payable will be
on a Business Day no less than nine months
from the date of issue stated on the face
thereof.
(ii) The Pricing Supplement relating
to each Note will indicate whether the
Company has the option to extend the
Stated Maturity of such Note for one or
more whole year periods (each an
"Extension Period") up to but not beyond
the date (the "Final Maturity Date") set
forth in such Pricing Supplement and the
basis or formula, if any, for setting the
interest rate or the Spread or Spread
Multiplier (as defined below), as the case
may be, applicable to any such Extension
Period.
The Company may exercise such option
with respect to a Note by notifying the
Trustee of such exercise at least 45 but
not more than 60 days prior to the Stated
Maturity of such Note in effect prior to
the exercise of such option (the "Original
Stated Maturity Date"). No later than 40
days prior to the Original Stated Maturity
Date, the Trustee will mail to the holder
of such Note a notice (the "Extension
Notice") relating to such Extension
Period, first class, postage prepaid,
setting forth (i) the election of the
Company to extend the Stated Maturity of
such Note, (ii) the new Stated Maturity,
(iii) in the case of a Fixed Rate Note,
the interest rate applicable to the
Extension Period or, in the case of a
Floating Rate Note, the Spread or Spread
Multiplier applicable to the Extension
Period, and (iv) the provisions, if any,
for redemption during the Extension
Period, including the date or dates on
which or the period or periods during
which and the price or prices at which
such redemption may occur during the
Extension Period. Upon the mailing by the
Trustee of an Extension Notice to the
holder of a Note, the Stated Maturity of
such Note shall be extended automatically
as set forth in the Extension Notice, and,
except as modified by the Extension Notice
and as described in the next paragraph,
such Note will have the same terms as
prior to the mailing of such Extension
Notice.
Notwithstanding the foregoing, not
later than 20 days prior to the Original
Stated Maturity Date for a Note, the
Company may, at its option, revoke the
interest rate, in the case of a Fixed Rate
Note, or the Spread or Spread Multiplier,
in the case of a Floating Rate Note,
provided for in the Extension Notice and
establish a higher interest rate, in the
case of a Fixed Rate Note, or a higher
Spread or Spread Multiplier, in the case
of a Floating Rate Note, for the Extension
Period by mailing or causing the Trustee
to mail notice of such higher interest
rate or higher Spread or Spread
Multiplier, as the case may be, first
class, postage prepaid, to the holder of
such Note. Such notice shall be
irrevocable. All Notes with respect to
which the Original Stated Maturity Date is
extended will bear such higher interest
rate, in the case of a Fixed Rate Note, or
higher Spread or Spread Multiplier, in the
case of a Floating Rate Note, for the
Extension Period.
If the Company elects to extend the
Stated Maturity of a Note, the holder of
such Note may, if provided for in the
applicable Pricing Supplement, have the
option to elect repurchase of such Note by
the Company on the Original Stated
Maturity Date at a price equal to the
principal amount thereof plus accrued
interest, if any, to such date.
(g) Rates of Interest; Interest Payment
Dates; Regular Record Dates; Accrual of
Interest.
(i) Rates of Interest. Interest-
bearing Notes will bear interest at either
a fixed rate (the "Fixed Rate Notes") or a
rate determined by reference to one or
more Base Rates (as defined below) which
may be adjusted by a Spread or Spread
Multiplier (the "Floating Rate Notes")
specified in the applicable Floating Rate
Note or the applicable Pricing Supplement.
In no event will the rate of interest
payable on any Fixed Rate Note or Floating
Rate Note be in excess of the maximum rate
of interest permitted by applicable law.
Discount Notes may be issued at
significant discounts from their principal
amount payable at Stated Maturity and some
Discount Notes may be zero coupon Notes
which will bear no interest, except in the
case of default in payment of principal
upon acceleration or redemption (if
applicable), or may bear no interest for a
specified period following the date of
issue. Interest on each Fixed Rate Note
will be computed on the basis of a 360-day
year of twelve 30-day months.
(ii) Interest Payment Dates. Unless
otherwise specified in a Note and the
applicable Pricing Supplement, interest on
Fixed Rate Notes will be payable
semiannually in arrears on February l and
August 1 of each year, commencing with the
first Interest Payment Date next
succeeding the date of original issue, and
at Maturity. Interest on Floating Rate
Notes will be payable in arrears on the
Interest Payment Dates applicable to such
Note and at Maturity. Notwithstanding the
foregoing, if the date of original issue
of a Note is between a Regular Record Date
and the related Interest Payment Date, the
first payment of interest on such Note
will be made on the Interest Payment Date
immediately following the next succeeding
Regular Record Date to the registered
holder on such next succeeding Regular
Record Date.
Except as provided below or in
the applicable Pricing Supplement,
interest will be payable, in the case of a
Floating Rate Note which resets (l) daily,
weekly or monthly, on the third Wednesday
of each month or on the third Wednesday of
March, June, September and December of
each year, as specified in the applicable
Floating Rate Note and in the applicable
Pricing Supplement; (2) quarterly, on the
third Wednesday of March, June, September
and December of each year; (3)
semiannually, on the third Wednesday of
each of the two months specified in the
Floating Rate Note and in the applicable
Pricing Supplement; and (4) annually, on
the third Wednesday of the month specified
in the Floating Rate Note and in the
applicable Pricing Supplement; and, in
each case, at Maturity.
If any Interest Payment Date
(other than an Interest Payment Date
occurring on the Maturity Date) for a
Floating Rate Note falls on a day that is
not a Business Day with respect to such
Note, such Interest Payment Date will be
postponed to the following day that is a
Business Day with respect to such Note,
except that, in the case of a LIBOR Note
(or a Note for which LIBOR (as defined
below) is the applicable Base Rate), if
such Business Day is in the next
succeeding calendar month, such Interest
Payment Date shall be the immediately
preceding day that is a Business Day with
respect to such Floating Rate Note. If
the Maturity of a Floating Rate Note falls
on a day that is not a Business Day with
respect to such Note, the payment of
principal and interest may be made on the
next succeeding Business Day with respect
to such Note, and no interest on such
payment shall accrue for the period from
and after the Maturity.
If any Interest Payment Date or
Maturity of a Fixed Rate Note falls on a
day that is not a Business Day with
respect to such Fixed Rate Note, the
payment due on such Interest Payment Date
or at Maturity will be made on the
following day that is a Business Day with
respect to such Fixed Rate Note as if it
were made on the date such payment was due
and no interest shall accrue on the amount
so payable for the period from and after
such Interest Payment Date or Maturity, as
the case may be.
(iii) Regular Record Dates. Unless
otherwise specified in an applicable
Pricing Supplement, with respect to Fixed
Rate Notes, the Regular Record Dates for
interest payable on each February l and
August 1 will be the immediately preceding
January 15 and July 15 (whether or not a
Business Day), respectively. Unless
otherwise specified in a Floating Rate
Note, the Regular Record Date or Dates for
interest payable on such Floating Rate
Note will be the fifteenth day (whether or
not a Business Day) immediately preceding
the related Interest Payment Date or
Dates.
(iv) Accrual of Interest. Unless
otherwise specified in an applicable
Pricing Supplement, each Note will bear
interest from the date of original issue
at the rate per annum, or, in the case of
a Floating Rate Note, pursuant to the
interest rate formula stated therein,
until the principal thereof is paid or
made available for payment. Each interest
payment shall be the amount of interest
accrued from and including the most recent
Interest Payment Date in respect of which
interest has been paid or duly provided
for (or from and including the date of
original issue if no interest has been
paid or duly provided for with respect to
such Note) to but excluding the next
succeeding Interest Payment Date (an
"Interest Accrual Period").
(h) Place of Payment; Registration of
Transfer and Exchange; Notices to Company.
(i) Place of Payment. Payment of
the principal of and interest on
Definitive Notes will be made at the Corpo
rate Trust Office of the Trustee in the
Borough of Manhattan, The City of New
York, or at any other office or agency
designated by the Company for such
purpose; provided, however, that at the
option of the Company, payment of interest
due (other than at Maturity) may be made
by check mailed to the address of the
person entitled thereto as such address
shall appear in the register of
Securities. Payments of principal and any
interest on Notes in book-entry form
represented by a Global Security or
Securities will be made by the Company
through the Trustee to the Depository or
its nominee, as the case may be, as the
holder of the Global Security or
Securities representing such Notes in book-
entry form. At the option of the Company,
payments of principal of and interest on
the Notes may be made by check mailed to
the address of the Person entitled thereto
as such address shall appear in the
register of Securities or by wire transfer
of immediately available funds to the
account of the holder of a Note if
appropriate wire transfer instructions
have been received in writing by the
Trustee not less than 15 days prior to the
applicable payment date.
(ii) Registration of Exchange and
Transfer. Definitive Notes may be
presented for exchange and registration of
transfer at the Corporate Trust Office of
the Trustee in the Borough of Manhattan,
The City of New York, or at the office of
any transfer agent hereafter designated by
the Company for such purpose. Ownership
of beneficial interests in Notes in book-
entry form represented by a Global
Security or Securities will be shown on,
and the transfer of that ownership will be
effected only through, records maintained
by the Depository and its participants.
Owners of beneficial interests in Notes in
book-entry form represented by a Global
Security or Securities will not be
considered the owners or holders of such
Notes under the Indenture.
(iii) Notices to Company. Notices
and demands to or upon the Company in
respect to the Notes and the Indenture may
be served at The Walt Disney Company, 500
S. Buena Vista Street, Burbank, California
91521, Attention: Legal Department.
(i) Optional Redemption. If so provided
in the Note or an applicable Pricing
Supplement, such Note may, prior to its Stated
Maturity, be subject to redemption, in whole or
in part, at the option of the Company on the
terms set forth in the Note or the applicable
Pricing Supplement, as the case may be.
(j) Sinking Fund. Unless otherwise
specified in an applicable Pricing Supplement,
the Notes will not be subject to any sinking
fund or analogous provision.
(k) Denominations. The Notes are
issuable in denominations of U.S. $1,000 and
any amount in excess thereof which is an
integral multiple of U.S. $1,000.
(l) Principal and Interest Payable in
Dollars. Unless otherwise specified in a Note
or an applicable Pricing Supplement providing
for payments of principal and interest to be
made in one or more foreign or composite
currencies, the payment of the principal of and
any interest on the Notes will be payable in
U.S. dollars.
(m) Determination of Interest on Floating
Rate Notes.
(i) Base Rates. Unless otherwise
specified in an applicable Pricing
Supplement, interest on a Floating Rate
Note will be determined by reference to a
"Base Rate," which may be one or more of
the following: (l) the Commercial Paper
Rate (as defined below), in which case
such Note will be a "Commercial Paper Rate
Note"; (2) LIBOR, in which case such Note
will be a "LIBOR Note"; (3) the CD Rate
(as defined below), in which case such
Note will be a "CD Rate Note"; (4) the
Federal Funds Rate (as defined below), in
which case such Note will be a "Federal
Funds Rate Note"; (5) the Treasury Rate
(as defined below), in which case such
Note will be a "Treasury Rate Note"; (6)
the Prime Rate (as defined below), in
which case such Note will be a "Prime Rate
Note"; (7) the CMT Rate (as defined
below), in which case such Note will be a
"CMT Rate Note"; or (8) such other Base
Rate or interest rate formula as may be
set forth in the applicable Pricing
Supplement. In addition, a Floating Rate
Note may bear interest calculated by
reference to the lowest of two or more
Base Rates determined in the same manner
as the Base Rates are determined for the
types of Notes described above. Each
Floating Rate Note will specify the Base
Rate or Rates applicable thereto.
(ii) Calculation of Rate by
Reference to Base Rate and, as Applicable,
Spread, Spread Multiplier and Index
Maturity. The interest rate on each
Floating Rate Note will be calculated by
reference to the specified Base Rate or
the lowest of two or more specified Base
Rates, in either case plus or minus the
Spread, if any, or multiplied by the
Spread Multiplier, if any. The "Spread" is
the number of basis points to be added to
or subtracted from the related Base Rate
or Rates applicable to such Floating Rate
Note. The "Spread Multiplier" is the
percentage of the related Base Rate or
Rates to be multiplied to determine the
applicable interest rate on such Floating
Rate Note. The "Index Maturity" is the
period to maturity of the instrument or
obligation with respect to which the
related Base Rate or Rates are calculated.
Each Floating Rate Note and the applicable
Pricing Supplement will specify the Index
Maturity and the Spread or Spread
Multiplier, if any, applicable thereto.
(iii) Interest Reset Periods;
Interest Reset Date. Each Floating Rate
Note and the applicable Pricing Supplement
will specify whether the rate of interest
on such Floating Rate Note will be reset
daily, weekly, monthly, quarterly,
semiannually or annually (each, an
"Interest Reset Period") and the date on
which such interest rate will be reset
(each, an "Interest Reset Date"). Unless
otherwise specified in a Floating Rate
Note and the applicable Pricing
Supplement, the Interest Reset Date will
be, in the case of a Floating Rate Note
which resets (l) daily, each Business Day;
(2) weekly, the Wednesday of each week
(with the exception of weekly reset
Treasury Rate Notes, which reset the
Tuesday of each week, except as specified
in paragraph (iv) below); (3) monthly, the
third Wednesday of each month; (4)
quarterly, the third Wednesday of March,
June, September and December of each year;
(5) semiannually, the third Wednesday of
each of the two months specified in such
Pricing Supplement; and (6) annually, the
third Wednesday of the month specified in
such Pricing Supplement. If any Interest
Reset Date for any Floating Rate Note
would otherwise be a day that is not a
Business Day, such Interest Reset Date
will be postponed to the next succeeding
day that is a Business Day, except that in
the case of a LIBOR Note (or a Note for
which LIBOR is the applicable Base Rate),
if such Business Day is in the next
succeeding calendar month, such Interest
Reset Date shall be the last Business Day
in the preceding month.
(iv) Interest Determination Date.
The interest rate applicable to each
Interest Reset Period commencing on the
Interest Reset Date or Dates with respect
to such Interest Reset Period will be the
rate determined on the applicable
"Interest Determination Date." Unless
otherwise specified in an applicable
Pricing Supplement, the Interest
Determination Date with respect to a
Commercial Paper Rate Note (the
"Commercial Paper Interest Determination
Date"), a CD Rate Note (the "CD Interest
Determination Date"), a Federal Funds Rate
Note (the "Federal Funds Interest
Determination Date"), a Prime Rate Note
(the "Prime Rate Interest Determination
Date") and a CMT Rate Note (the "CMT
Interest Determination Date") will be the
second Business Day preceding each
Interest Reset Date and the Interest
Determination Date with respect to a LIBOR
Note (the "LIBOR Interest Determination
Date") will be the second London Business
Day preceding each Interest Reset Date.
Unless otherwise specified in an
applicable Pricing Supplement, the
Interest Determination Date with respect
to a Treasury Rate Note (the "Treasury
Rate Interest Determination Date"), will
be the day in the week in which the
Interest Reset Date falls on which day
Treasury Bills (as defined below) normally
would be auctioned or, if no such auction
is held for a particular week, the first
Business Day of that week; provided, how
ever, that if, as a result of a legal
holiday, an auction is held on the Friday
of the week preceding the Interest Reset
Date, the related Interest Determination
Date shall be such preceding Friday; and
provided, further, that if an auction
shall fall on any Interest Reset Date,
then the Interest Reset Date shall instead
be the first Business Day immediately
following such auction. Unless otherwise
specified in the applicable Pricing
Supplement, the Interest Determination
Date pertaining to a Note the interest
rate of which is determined with reference
to two or more Base Rates will be the
first Business Day which is at least two
Business Days prior to such Interest Reset
Date for such Note on which each Base Rate
shall be determinable. Each Base Rate
shall be determined and compared on such
date, and the applicable interest rate
shall take effect on the related Interest
Reset Date.
(v) Maximum and Minimum Limits on
Interest Rates. Any Floating Rate Note
and the applicable Pricing Supplement may
specify either or both a maximum limit and
a minimum limit on the rate at which
interest may accrue during any Interest
Accrual Period. In addition to any maximum
interest rate which may be applicable to
any Floating Rate Note, the interest rate
on Floating Rate Notes will in no event be
higher than the maximum rate permitted by
New York law, as the same may be modified
by United States law of general
application. This limit may not apply to
Floating Rate Notes in which $2,500,000 or
more has been invested.
(vi) Initial Interest Rate; Interest
Rate Thereafter in Effect. The interest
rate in effect with respect to a Floating
Rate Note on each day that is not an
Interest Reset Date will be the interest
rate determined as of the Interest Deter
mination Date pertaining to the
immediately preceding Interest Reset Date
and the interest rate in effect on any day
that is an Interest Reset Date will be the
interest rate determined as of the
Interest Determination Date pertaining to
such Interest Reset Date, subject in
either case to applicable provisions of
law and any maximum or minimum interest
rate limitations referred to above;
provided, however, that the interest rate
in effect with respect to a Floating Rate
Note for the period from the date of
original issue to the first Interest Reset
Date will be the rate specified as such
therein and in the applicable Pricing
Supplement (the "Initial Interest Rate").
(vii) Accrued Interest; Accrued
Interest Factor. With respect to each
Floating Rate Note, accrued interest is
calculated by multiplying its face amount
by an accrued interest factor. Such
accrued interest factor is computed by
adding the interest factor calculated for
each day from the date of issue, or from
the last date to which interest has been
paid or duly provided for, to the date for
which accrued interest is being
calculated. The interest factor for each
such day is computed by dividing the
interest rate applicable to such day by
360, in the case of Commercial Paper Rate
Notes, LIBOR Notes, CD Rate Notes, Federal
Funds Rate Notes and Prime Rate Notes and
by the actual number of days in the year,
in the case of Treasury Rate Notes and CMT
Rate Notes. Unless otherwise specified in
an applicable Pricing Supplement, the
interest factor for Notes for which the
interest rate is calculated with reference
to two or more Base Rates will be
calculated in each period in the same
manner as if only the lowest of the
applicable Base Rates applied.
(viii) Rounding of Percentages. All
percentages resulting from any calculation
on Floating Rate Notes will be rounded, if
necessary, to the nearest one hundred-
thousandth of a percentage point, with
five one-millionths of a percentage point
rounded upward (e.g., 9.876545% (or
.09876545) will be rounded upward to
9.87655% (or .0987655)), and all dollar
amounts used in or resulting from such
calculation on Floating Rate Notes will be
rounded to the nearest cent (with one-half
cent being rounded upward).
(ix) Calculation Agents; Calculation
Date. Unless otherwise specified in an
applicable Pricing Supplement, the Trustee
will be the "Calculation Agent" with
respect to all Floating Rate Notes. Upon
the request of the holder of any Floating
Rate Note, the Trustee will provide the
interest rate then in effect and, if
determined, the interest rate that will
become effective as a result of a
determination made for the next Interest
Reset Date with respect to such Floating
Rate Note. If at any time the Trustee is
not the Calculation Agent, the Company
will notify the Trustee of each determi
nation of the interest rate applicable to
any such Floating Rate Note promptly after
such determination is made by any
successor Calculation Agent. The
"Calculation Date," where applicable,
pertaining to any Interest Determination
Date is the date by which the applicable
interest rate must be calculated and will
be the earlier of (a) the tenth calendar
day after such Interest Determination
Date, or, if any such day is not a
Business Day, the next succeeding Business
Day and (b) the Business Day preceding the
applicable Interest Payment Date or
Maturity Date, as the case may be.
(x) Calculation of Floating Rates.
The interest rate in effect with respect
to a Floating Rate Note from the date of
issue to the first Interest Reset Date
will be the Initial Interest Rate. The
interest rate for each subsequent Interest
Reset Date will be determined by the
Calculation Agent as follows:
(A) Commercial Paper Rate
Notes. Commercial Paper Rate Notes
will bear interest at the interest
rates (calculated with reference to
the Commercial Paper Rate and the
Spread or Spread Multiplier, if any)
specified in such Commercial Paper
Rate Notes and in an applicable
Pricing Supplement.
(l) Unless otherwise
specified in an applicable
Pricing Supplement, "Commercial
Paper Rate" means, with respect
to any Commercial Paper Interest
Determination Date, the Money
Market Yield (as defined below)
on such date of the rate for
commercial paper having the
Index Maturity specified in the
applicable Pricing Supplement as
published by the Board of
Governors of the Federal Reserve
System in "Statistical Release
H.15(519), Selected Interest
Rates" or any successor
publication ("Release
H.15(519)") under the heading
"Commercial Paper-Nonfinancial."
In the event that such rate is
not published by 3:00 P.M., New
York City time, on the
Calculation Date pertaining to
such Commercial Paper Interest
Determination Date, then the
Commercial Paper Rate will be
the Money Market Yield on such
Commercial Paper Interest
Determination Date of the rate
for commercial paper of the
Index Maturity specified in the
applicable Pricing Supplement as
published by the Federal Reserve
Bank of New York in its daily
statistical release "Composite
3:30 P.M. Quotations for U.S.
Government Securities" or any
successor publication
("Composite Quotations") under
the heading "Commercial Paper-
Nonfinancial." If such rate is
not published in either Release
H.15(519) or the Composite
Quotations by 3:00 P.M., New
York City time, on such
Calculation Date, then the
Commercial Paper Rate will be
calculated by the Calculation
Agent and will be the Money
Market Yield of the arithmetic
mean of the offered rates, as of
approximately 11:00 A.M., New
York City time, on such
Commercial Paper Interest De
termination Date, of three
leading dealers of commercial
paper in New York, New York
(which may include one or more
of the Agents) selected by the
Calculation Agent (after
consultation with the Company)
for commercial paper of the
specified Index Maturity placed
for an industrial issuer whose
bond rating is "AA," or the
equivalent, from a nationally
recognized statistical rating
agency; provided, however, that
if the dealers selected as
aforesaid by the Calculation
Agent are not quoting as
mentioned in this sentence, the
rate of interest in effect for
the applicable period will be
the same as the interest rate in
effect on such Commercial Paper
Interest Determination Date.
(2) "Money Market Yield"
shall be a yield (expressed as a
percentage rounded, if
necessary, to the nearest one
hundred-thousandth of a percent)
calculated in accordance with
the following formula:
Money Market Yield = (D x 360) x 100
-------------
360 - (D x M)
where "D" refers to the
applicable per annum rate for
commercial paper quoted on a
bank discount basis and
expressed as a decimal and "M"
refers to the actual number of
days in the interest period for
which interest is being
calculated.
(B) LIBOR Notes. LIBOR Notes will
bear interest at the interest rates
(calculated with reference to LIBOR and
the Spread or Spread Multiplier, if any)
specified in such LIBOR Notes and in an
applicable Pricing Supplement. Unless
otherwise specified in an applicable
Pricing Supplement, "LIBOR" means the rate
determined by the Calculation Agent in
accordance with the following provisions:
(1) With respect to a LIBOR Interest
Determination Date, LIBOR will be, as
specified in the applicable Pricing
Supplement, either: (a) the arithmetic
mean of the offered rates for deposits in
the Index Currency having the Index
Maturity designated in the applicable
Pricing Supplement, commencing on the
second London Business Day immediately
following that LIBOR Interest
Determination Date, that appear on the
Designated Reuters LIBOR Page (as defined
below) as of 11:00 A.M., London time, on
that LIBOR Interest Determination Date, if
at least two such offered rates appear on
the Designated Reuters LIBOR Page ("LIBOR
Reuters"), or (b) the rate for deposits in
the Index Currency having the Index
Maturity designated in the applicable
Pricing Supplement, commencing on the
second London Business Day immediately
following that LIBOR Interest
Determination Date, that appears on the
Designated Telerate LIBOR Page (as defined
below) as of 11:00 A.M., London time, on
that LIBOR Interest Determination Date
("LIBOR Telerate"). "Designated Reuters
LIBOR Page" means the display on the
Reuters Monitor Money Rates Service for
the purpose of displaying the London
interbank rates of major banks for the
applicable Index Currency. "Designated
Telerate LIBOR Page" means the display on
the Dow Jones Telerate Service for the
purpose of displaying London interbank
rates of major banks for the applicable
Index Currency. If neither LIBOR Reuters
nor LIBOR Telerate is specified in the
applicable Pricing Supplement, LIBOR for
the applicable Index Currency will be
determined as if LIBOR Telerate (and, if
the U.S. dollar is the Index Currency,
Page 3750) had been specified. If fewer
than two offered rates appear on the
Designated Reuters LIBOR Page, or if no
rate appears on the Designated Telerate
LIBOR Page, as applicable, LIBOR in
respect of that LIBOR Interest
Determination Date will be determined as
if the parties had specified the rate
described in (2) below.
(2) If fewer than two offered rates
appear on the Designated Reuters LIBOR
Page, or if no rate appears on the
Designated Telerate LIBOR Page, as
applicable, LIBOR will be determined as of
approximately 11:00 A.M., London time, on
such LIBOR Interest Determination Date on
the basis of the rate at which deposits in
the applicable Index Currency having the
Index Maturity specified in the applicable
Pricing Supplement are offered to prime
banks in the London interbank market by
four major banks in the London interbank
market selected by the Calculation Agent
(after consultation with the Company) com
mencing on the second London Business Day
immediately following such LIBOR Interest
Determination Date and in a principal
amount equal to an amount that is
representative for a single transaction in
such market at such time. The Calculation
Agent will request the principal London
office of each of such banks to provide a
quotation of its rate. If at least two
such quotations are provided, LIBOR for
such LIBOR Interest Determination Date
will be the arithmetic mean of such
quotations. If fewer than two quotations
are provided, LIBOR for such LIBOR
Interest Determination Date will be the
arithmetic mean of the rates quoted as of
approximately 11:00 A.M. in the applicable
Principal Financial Center (as defined
below) on such LIBOR Interest Determina
tion Date by three major banks in such
Principal Financial Center selected by the
Calculation Agent (after consultation with
the Company) for loans in the applicable
Index Currency to leading European banks
having the specified Index Maturity, and
in a principal amount equal to an amount
of not less than $1,000,000 (or the
equivalent in the Index Currency, if the
Index Currency is not the U.S. dollar) and
that is representative for a single
transaction in such market at such time;
provided, however, that if the banks
selected as aforesaid by the Calculation
Agent are not quoting as mentioned in this
sentence, the rate of interest in effect
for the applicable period will be the same
as the interest rate in effect on such
LIBOR Interest Determination Date.
"Index Currency" means the index
currency (including composite
currencies) specified in the
applicable Pricing Supplement as the
currency for which LIBOR shall be
calculated. If no such index
currency is specified in the
applicable Pricing Supplement, the
Index Currency shall be U.S. dollars.
"Principal Financial Center" will
generally be the capital city of the
country of the specified Index Cur
rency, except that with respect to
U.S. dollars, Deutsche Marks, Dutch
Guilders, Italian Lire, Swiss Francs
and ECUs, the Principal Financial
Center shall be The City of New York,
Frankfurt, Amsterdam, Milan, Zurich
and Luxembourg, respectively.
(C) CD Rate Notes. CD Rate Notes
will bear interest at the interest rates
(calculated with reference to the CD Rate
and the Spread or Spread Multiplier, if
any) specified in such CD Rate Notes and
in an applicable Pricing Supplement.
Unless otherwise indicated in the
applicable Pricing Supplement, "CD Rate"
means, with respect to any CD Interest
Determination Date, the rate on such date
for negotiable certificates of deposit
having the Index Maturity designated in
the applicable Pricing Supplement as
published in Release H.15(519) under the
caption "CDs (Secondary Market)" or, if
not so published by 9:00 A.M., New York
City time, on the Calculation Date
pertaining to such CD Interest
Determination Date, the CD Rate will be
the rate on such CD Interest Determination
Date for negotiable certificates of
deposit of the Index Maturity designated
in the applicable Pricing Supplement set
forth in the Composite Quotations under
the caption "Certificates of Deposit." If
by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such CD
Interest Determination Date such rate is
not yet published in either Release
H.15(519) or the Composite Quotations,
then the CD Rate on such CD Interest
Determination Date will be calculated by
the Calculation Agent and will be the
arithmetic mean of the secondary market
offered rates as of 10:00 A.M., New York
City time, on such CD Interest
Determination Date, of three leading non-
bank dealers in negotiable U.S. dollar
certificates of deposit in The City of New
York (which may include one or more of the
Agents) selected by the Calculation Agent
(after consultation with the Company) for
negotiable certificates of deposit of
major United States money market banks (in
the market for negotiable certificates of
deposit) with a remaining maturity closest
to the Index Maturity designated in the
applicable Pricing Supplement in a
denomination of $5,000,000; provided,
however, that if the dealers selected as
aforesaid by the Calculation Agent are not
quoting as set forth above, the rate of
interest in effect for the applicable
period will be the same as the interest
rate in effect on such CD Interest Deter
mination Date.
(D) Federal Funds Rate Notes.
Federal Funds Rate Notes will bear
interest at the interest rates (calculated
with reference to the Federal Funds Rate
and the Spread or Spread Multiplier, if
any) specified in such Federal Funds Rate
Notes and in an applicable Pricing
Supplement.
Unless otherwise indicated in the
applicable Pricing Supplement, "Federal
Funds Rate" means, with respect to any
Federal Funds Interest Determination Date,
the rate on such date for Federal Funds as
published in Release H.15(519) under the
heading "Federal Funds (Effective)" or, if
not so published by 9:00 A.M., New York
City time, on the Calculation Date
pertaining to such Federal Funds Interest
Determination Date, the Federal Funds Rate
will be the rate on such Federal Funds
Interest Determination Date as published
in the Composite Quotations under the
column "Effective Rate" under the heading
"Federal Funds." If, by 3:00 P.M., New
York City time, on the Calculation Date
pertaining to such Federal Funds Interest
Determination Date such rate is not yet
published in either Release H.15(519) or
the Composite Quotations, the Federal
Funds Rate for such Federal Funds Interest
Determination Date will be calculated by
the Calculation Agent and will be the
arithmetic mean of the rates for the last
transaction in overnight Federal Funds
arranged by three leading dealers of
Federal Funds transactions in The City of
New York, which dealers have been selected
by the Calculation Agent (after
consultation with the Company) as of 9:00
A.M., New York City time, on such Federal
Funds Interest Determination Date;
provided, however, that, if the dealers
selected as aforesaid by the Calculation
Agent are not quoting as set forth above,
the rate of interest in effect for the
applicable period will be the same as the
interest rate in effect on such Federal
Funds Interest Determination Date.
(E) Treasury Rate Notes. Treasury
Rate Notes will bear interest at the
interest rates (calculated with reference
to the Treasury Rate and the Spread or
Spread Multiplier, if any) specified in
such Treasury Rate Notes and in an applica
ble Pricing Supplement.
Unless otherwise specified in an
applicable Pricing Supplement, "Treasury
Rate" means, with respect to any Treasury
Rate Interest Determination Date, the rate
applicable to the most recent auction of
direct obligations of the United States
("Treasury Bills") having the Index
Maturity specified in the applicable
Pricing Supplement, as such rate is
published in Release H.15(519) under the
heading "Treasury Bills -- auction average
(investment)" or, if not published by 3:00
P.M., New York City time, on the Calcula
tion Date pertaining to such Treasury Rate
Interest Determination Date, the auction
average rate (expressed as a bond
equivalent on the basis of a year of 365
or 366 days, as applicable, and applied on
a daily basis) as otherwise announced by
the United States Department of the
Treasury. In the event that the results
of the auction of Treasury Bills having
the specified Index Maturity are not
reported as provided by 3:00 P.M., New
York City time, on such Calculation Date,
or if no such auction is held in a
particular week, then the Treasury Rate
shall be calculated by the Calculation
Agent and shall be a yield to maturity
(expressed as a bond equivalent on the
basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis)
of the arithmetic mean of the secondary
market bid rates, as of approximately 3:30
P.M., New York City time, on such Treasury
Rate Interest Determination Date, of three
leading primary United States government
securities dealers (which may include one
or more of the Agents) selected by the
Calculation Agent (after consultation with
the Company), for the issue of Treasury
Bills with a remaining maturity closest to
the specified Index Maturity; provided,
however, that if the dealers selected as
aforesaid by the Calculation Agent are not
quoting as set forth in this sentence, the
rate of interest in effect for the
applicable period will be the same as the
interest rate in effect on such Treasury
Rate Interest Determination Date.
(F) Prime Rate Notes. Prime Rate
Notes will bear interest at the interest
rate (calculated with reference to the
Prime Rate and the Spread or Spread
Multiplier, if any) specified in such
Prime Rate Notes and in an applicable
Pricing Supplement, except that the
initial interest rate for each Prime Rate
Note will be the rate specified in the
applicable Pricing Supplement.
Unless otherwise specified in an
applicable Pricing Supplement, "Prime
Rate" means, with respect to any Prime
Rate Interest Determination Date, the rate
set forth in Release H.15(519) for such
date opposite the caption "Bank Prime
Loan." If such rate is not so published by
9:00 A.M., New York City time, on the
Calculation Date, the Prime Rate for such
Prime Rate Interest Determination Date
will be the arithmetic mean of the rates
of interest publicly announced by each
bank named on the Reuters Screen USPRIME1
(as defined below) as such bank's prime
rate or base lending rate as in effect for
such Prime Rate Interest Determination
Date as quoted on the Reuters Screen
USPRIME1 on such Prime Rate Interest
Determination Date, or if fewer than four
such rates appear on the Reuters Screen
USPRIME1 for such Prime Rate Interest
Determination Date, the rate shall be the
arithmetic mean of the prime rates quoted
on the basis of the actual number of days
in the year divided by 360 as of the close
of business on such Prime Rate Interest
Determination Date by at least two of the
three major money center banks in The City
of New York selected by the Calculation
Agent (after consultation with the Com
pany) from which quotations are requested.
If fewer than two quotations are provided,
the Prime Rate shall be calculated by the
Calculation Agent and shall be determined
as the arithmetic mean on the basis of the
prime rates in The City of New York by the
appropriate number of substitute banks or
trust companies organized and doing
business under the laws of the United
States, or any State thereof, in each case
having total equity capital of at least
U.S. $500 million and being subject to
supervision or examination by Federal or
State authority selected by the
Calculation Agent (after consultation with
the Company) to quote such rate or rates.
Unless otherwise specified in the
applicable Pricing Supplement, "Reuters
Screen USPRIME1" means the display desig
nated as "USPRIME1" on the Reuters Monitor
Money Rates Service (or such other page as
may replace the USPRIME1 page on that
service for the purpose of displaying
prime rates or base lending rates of major
United States banks).
If in any month the Prime Rate is not
published in Release H.15(519) and the
banks or trust companies selected as
aforesaid are not quoting as mentioned in
the preceding paragraph, the "Prime Rate"
for such Interest Reset Period will be the
same as the Prime Rate for the immediately
preceding Interest Reset Period (or, if
there was no such Interest Reset Period,
the rate of interest payable on the Prime
Rate Notes for which the Prime Rate is
being determined shall be the Initial
Interest Rate).
(G) CMT Rate Notes. CMT Rate Notes
will bear interest at the interest rate
(calculated with reference to the CMT Rate
and the Spread or Spread Multiplier, if
any) specified in the CMT Rate Notes and
in the applicable Pricing Supplement.
Unless otherwise specified in the
applicable Pricing Supplement, "CMT Rate"
means, with respect to any CMT Interest
Determination Date relating to a CMT Rate
Note or any Floating Rate Note for which
the interest rate is determined with
reference to the CMT Rate, the rate
displayed on the Designated CMT Telerate
Page (as defined below) under the caption
"...Treasury Constant Maturities...Federal
Reserve Board Release H.15... Mondays
Approximately 3:45 P.M.," under the column
for the Designated CMT Maturity Index (as
defined below) for (i) if the Designated
CMT Telerate Page is 7055, the rate on
such CMT Interest Determination Date and
(ii) if the Designated CMT Telerate Page
is 7052, the week, or the month, as
applicable, ended immediately preceding
the week, or the month, as applicable, in
which the related CMT Interest
Determination Date occurs. If such rate
is no longer displayed on the relevant
page, or if not displayed by 3:00 P.M.,
New York City time, on the related
Calculation Date, then the CMT Rate for
such CMT Interest Determination Date will
be such treasury constant maturity rate
for the Designated CMT Maturity Index as
published in the relevant H.15(519). If
such rate is no longer published, or if
not published by 3:00 P.M., New York City
time, on the related Calculation Date,
then the CMT Rate for such CMT Interest
Determination Date will be such treasury
constant maturity rate for the Designated
CMT Maturity Index (or other United States
Treasury rate for the Designated CMT
Maturity Index) for the CMT Interest
Determination Date with respect to such
Interest Reset Date as may then be
published by either the Board of Governors
of the Federal Reserve System or the
United States Department of the Treasury
that the Calculation Agent determines to
be comparable to the rate formerly
displayed on the Designated CMT Telerate
Page and published in the relevant
H.15(519). If such information is not
provided by 3:00 P.M., New York City time,
on the related Calculation Date, then the
CMT Rate for the CMT Interest
Determination Date will be calculated by
the Calculation Agent and will be a yield
to maturity, based on the arithmetic mean
of the secondary market closing offer side
prices as of approximately 3:30 P.M., New
York City time, on the CMT Interest Deter
mination Date reported, according to their
written records, by three leading primary
United States government securities
dealers (each, a "Reference Dealer") in
The City of New York (which may include
any Agent or its affiliates) selected by
the Calculation Agent (from five such
Reference Dealers selected by the
Calculation Agent (after consultation with
the Company) and eliminating the highest
quotation (or, in the event of equality,
one of the highest) and the lowest quota
tion (or, in the event of equality, one of
the lowest)), for the most recently issued
direct noncallable fixed rate obligations
of the United States ("Treasury Notes")
with an original maturity of approximately
the Designated CMT Maturity Index and a
remaining term to maturity of not less
than such Designated CMT Maturity Index
minus one year. If the Calculation Agent
cannot obtain three such Treasury Note
quotations, the CMT Rate for such CMT
Interest Determination Date will be
calculated by the Calculation Agent and
will be a yield to maturity based on the
arithmetic mean of the secondary market
offer side prices as of approximately 3:30
P.M., New York City time, on the CMT
Interest Determination Date of three
Reference Dealers in The City of New York
(from five such Reference Dealers selected
by the Calculation Agent (after
consultation with the Company) and
eliminating the highest quotation (or, in
the event of equality, one of the highest)
and the lowest quotation (or, in the event
of equality, one of the lowest)), for
Treasury Notes with an original maturity
of the number of years that is the next
highest to the Designated CMT Maturity
Index and a remaining term to maturity
closest to the Designated CMT Maturity
Index and in an amount of at least $100
million. If three or four (and not five)
of such Reference Dealers are quoting as
described above, then the CMT Rate will be
based on the arithmetic mean of the offer
prices obtained and neither the highest
nor the lowest of such quotes will be
eliminated; provided however, that if
fewer than three Reference Dealers
selected by the Calculation Agent (after
consultation with the Company) are quoting
as described herein, the CMT Rate will be
the CMT Rate in effect on such CMT
Interest Determination Date. If two
Treasury Notes with an original maturity
as described in the second preceding sen
tence have remaining terms to maturity
equally close to the Designated CMT
Maturity Index, the quotes for the
Treasury Note with the shorter remaining
term to maturity will be used.
"Designated CMT Telerate Page" means the
display on the Dow Jones Telerate Service
on the page designated in the applicable
Pricing Supplement (or any other page as
may replace such page on that service for
the purpose of displaying Treasury
Constant Maturities as reported in
H.15(519)), for the purpose of displaying
Treasury Constant Maturities as reported
in H.15(519). If no such page is
specified in the applicable Pricing
Supplement, the Designated CMT Telerate
Page shall be 7052, for the most recent
week.
"Designated CMT Maturity Index" means the
original period to maturity of the U.S.
Treasury securities (either 1, 2, 3, 5, 7,
10, 20 or 30 years) specified in the
applicable Pricing Supplement with respect
to which the CMT Rate will be calculated.
If no such maturity is specified in the
applicable Pricing Supplement, the
Designated CMT Maturity Index shall be 2
years.
(n) Renewable Notes. Notes may be issued
from time to time as variable rate renewable
notes (the "Renewable Notes") that will bear
interest at the interest rate (calculated with
reference to a Base Rate and the Spread or
Spread Multiplier, if any) specified in the
Renewable Notes and in the applicable Pricing
Supplement.
The Renewable Notes will mature on an
Interest Payment Date as specified in the
applicable Pricing Supplement (the "Initial
Maturity Date"), unless the maturity of all or
any portion of the principal amount thereof is
extended in accordance with the procedures
described below. On the Interest Payment Dates
specified in the applicable Pricing Supplement
(each such Interest Payment Date, an "Election
Date"), the maturity of the Renewable Notes
will be extended to the Interest Payment Date
occurring twelve months after such Election
Date, unless the holder thereof elects to
terminate the automatic extension of the
maturity of the Renewable Notes or of any
portion thereof having a principal amount of
$1,000 or any multiple of $1,000 in excess
thereof by delivering a notice of such effect
to the Trustee not less than nor more than the
number of days to be specified in the
applicable Pricing Supplement prior to such
Election Date. If no such notice period is
specified in the applicable Pricing Supplement,
such notice shall be given no less than 30 days
nor more than 60 days prior to such Election
Date. Such option may be exercised with
respect to less than the entire principal
amount of the Renewable Notes; provided that
the principal amount for which such option is
not exercised is at least $1,000 or any larger
amount that is an integral multiple of $1,000.
Notwithstanding the foregoing, the maturity of
the Renewable Notes may not be extended beyond
the Final Maturity Date, as specified in the
applicable Pricing Supplement (the "Final
Maturity Date"). If the holder elects to
terminate the automatic extension of the
maturity of any portion of the principal amount
of the Renewable Notes and such election is not
revoked as described below, such portion will
become due and payable on the Interest Payment
Date falling six months (unless another period
is specified in the applicable Pricing
Supplement) after the Election Date prior to
which the holder made such election.
An election to terminate the automatic
extension of maturity may be revoked as to any
portion of the Renewable Notes having a
principal amount of $1,000 or any multiple of
$1,000 in excess thereof by delivering a notice
to such effect to the Trustee on any day
following the effective date of the election to
terminate the automatic extension of maturity
and prior to the date 15 days before the date
on which such portion would otherwise mature.
Such a revocation may be made for less than the
entire principal amount of the Renewable Notes
for which the automatic extension of maturity
has been terminated; provided that the
principal amount of the Renewable Notes for
which the automatic extension of maturity has
been terminated and for which such a revocation
has not been made is at least $1,000 or any
larger amount that is an integral multiple of
$1,000. Notwithstanding the foregoing, a
revocation may not be made during the period
from and including a Record Date to but
excluding the immediately succeeding Interest
Payment Date.
An election to terminate the automatic
extension of the maturity of the Renewable
Notes, if not revoked as described above by the
holder making the election or any subsequent
holder, will be binding upon such subsequent
holder.
The Renewable Notes may be redeemed in
whole or in part at the option of the Company
on the Interest Payment Dates in each year
specified in the applicable Pricing Supplement,
commencing with the Interest Payment Date
specified in the applicable Pricing Supplement,
at a redemption price as stated in the
applicable Pricing Supplement, together with
accrued and unpaid interest, if any, to the
date of redemption. Notwithstanding anything
to the contrary in the Prospectus Supplement,
notice of redemption will be provided by
mailing a notice of such redemption to each
holder by first class mail, postage prepaid, at
least 180 days (unless otherwise specified in
the applicable Pricing Supplement) prior to the
date fixed for redemption.
(o) Amount Payable Upon Declaration of
Maturity of Discount Note. With respect to any
Note which is a Discount Note, the portion of
the principal amount of any Discount Note which
is payable upon redemption prior to the Stated
Maturity thereof or upon declaration of
acceleration of the Stated Maturity thereof
pursuant to Section 6.2 of the Indenture will
be as provided in the applicable Note.
(p) Register of Securities; Paying Agent.
The register of the Securities for the Notes
will be initially maintained at the Corporate
Trust Office of the Trustee. The Company
hereby appoints the Trustee as the initial
Paying Agent.
(q) Currency Indexed Notes. Notes may be
issued, from time to time, with the principal
amount payable on any principal payment date,
or the amount of interest payable on any
Interest Payment Date, to be determined by
reference to the value of one or more
currencies (or composite currencies or currency
units). In such event, the currency or
currencies (or composite currencies or currency
units) to which the principal amount payable on
any principal payment date or the amount of
interest payable on any Interest Payment Date
is indexed, the currency in which the face
amount of the Note is denominated (the
"Denominated Currency"), and the currency in
which principal and interest on the Note will
be paid (the "Payment Currency") will be set
forth in the applicable Pricing Supplement.
The Denominated Currency and the Payment
Currency may be the same currency or different
currencies. Unless otherwise specified in the
applicable Pricing Supplement, interest on
currency indexed Notes shall be paid in the
Denominated Currency based on the face amount
of the Note at the rate per annum and on the
dates set forth in the applicable Pricing
Supplement. Currency indexed Notes may
include, but are not limited to, Notes of the
types described below.
(i) Currency Linked Securities ("CLS").
CLS are Notes pursuant to which the
principal amount payable at Stated Maturity
equals the Payment Currency equivalent at
Stated Maturity of a fixed amount of a
designated currency (or composite currency
or currency units) (the "Indexed Currency").
The Denominated Currency, the Indexed
Currency and the Payment Currency will be
identified in the applicable Pricing
Supplement. In addition, the fixed amount of
the Indexed Currency to which the principal
of the CLS is linked will be set forth in
the applicable Pricing Supplement for a
specific representative face amount of the
CLS as well as for the aggregate face amount
of all CLS forming part of the same issue.
If the Payment Currency and the Indexed
Currency are not the same, the Payment
Currency equivalent of the Indexed Currency
amount on any date shall be determined in
the manner specified in the applicable
Pricing Supplement.
(ii) Reverse Currency Linked Securities
("Reverse CLS"). Reverse CLS are Notes
pursuant to which the principal amount
payable at Stated Maturity equals the
Payment Currency equivalent at Stated
Maturity of a fixed amount of a designated
currency (or composite currencies or
currency units) (the "First Indexed
Currency") minus the amount of the Payment
Currency equivalent at Stated Maturity of a
fixed amount of another designated currency
(or composite currency or currency units)
(the "Second Indexed Currency"); provided,
however, that the minimum principal amount
payable at Stated Maturity shall be zero.
The Denominated Currency, the First and
Second Indexed Currencies and the Payment
Currency will be identified in the
applicable Pricing Supplement. In addition,
the fixed amounts of the First and Second
Indexed Currencies to which the principal of
the Reverse CLS is linked shall be set forth
in the applicable Pricing Supplement for a
specific representative face amount of the
Reverse CLS as well as for the aggregate
face amount of all Reverse CLS forming part
of the same issue.
If the Payment Currency and the First
Indexed Currency or the Second Indexed
Currency are not the same, the Payment
Currency equivalent of the First Indexed
Currency amount or the Second Indexed
Currency amount, as the case may be, on any
date shall be determined in the manner
specified in the applicable Pricing
Supplement.
(iii) Multicurrency Currency Linked
Securities ("Multicurrency CLS").
Multicurrency CLS are Notes pursuant to
which the principal amount payable at Stated
Maturity equals the Payment Currency
equivalent at Stated Maturity of a fixed
amount of a designated currency (or
composite currency or currency units) (the
"First Indexed Currency") plus or minus the
Payment Currency equivalent at Stated
Maturity of a fixed amount of a second
designated currency (or composite currency
or currency units) (the "Second Indexed
Currency") plus or minus the Payment
Currency equivalent at Stated Maturity of a
fixed amount of a third designated currency
(or composite currency or currency units)
(the "Third Indexed Currency"); provided,
however, that the minimum principal amount
payable at Stated Maturity shall be zero.
The Denominated Currency, each Indexed
Currency, the Payment Currency and whether
the fixed amounts of the Second and Third
Indexed Currencies are to be added or
subtracted to determine the principal amount
payable at Stated Maturity of the
Multicurrency CLS shall be set forth in the
applicable Pricing Supplement. In addition,
the fixed amounts of the First, Second and
Third Indexed Currencies to which the
principal of the Multicurrency CLS is linked
shall be set forth in the applicable Pricing
Supplement for a specific representative
face amount of the Multicurrency CLS as well
as for the aggregate face amount of all
Multicurrency CLS forming part of the same
issue. As used herein, "Added Indexed
Currency" means the First Indexed Currency
and any other Indexed Currency that is added
to determine the principal amount payable at
Maturity of the Multicurrency CLS and a
"Subtracted Indexed Currency" means an
Indexed Currency that is subtracted to
determine the principal amount payable at
Stated Maturity of the Multicurrency CLS.
If any Added Index Currency or Subtracted
Index Currency is not the same as the
Payment Currency, the Payment Currency
equivalent of such Added Indexed Currency
amount or Subtracted Index Currency amount,
as the case may be, on any date shall be
determined in the manner specified in the
applicable Pricing Supplement.
(iv) Conversion of ECU into EURO. Upon
substitution of the ECU by the EURO, all
payments in respect of the Notes payable in
ECUs will be payable in EUROs at the rate of
one EURO for one ECU, and all references
herein and in any Note or Pricing Supplement
to ECUs, including reference to ECUs as the
Denominated Currency, an Indexed Currency or
the Payment Currency, shall be deemed to
refer to EUROs.
(r) Amount Payable Upon Declaration of
Maturity -- CLS, Reverse CLS or Multicurrency
CLS. If the principal amount payable at the
Stated Maturity of any CLS, Reverse CLS or
Multicurrency CLS shall be declared due and
payable prior to such Stated Maturity, the
amount payable with respect to such Note will
be paid in the Denominated Currency and will
equal the face amount of such Note plus accrued
interest to but excluding the date of payment.
(s) Commodity Linked Notes. Notes may be
issued, from time to time, with the principal
amount payable on any principal payment date,
or the amount of interest payable on any
Interest Payment Date, to be determined by
reference to one or more commodity prices,
equity indices or other factors and on such
other terms as may be set forth in the
applicable Pricing Supplement.
(t) Amortizing Notes. Notes may be issued
from time to time as Amortizing Notes (as
defined below). "Amortizing Notes" are Notes
for which payments of principal and interest
are made in equal installments over the life of
the Note. Interest on each Amortizing Note
will be computed on the basis of a 360-day year
of twelve 30-day months. Payments with respect
to Amortizing Notes will be applied first to
interest due and payable thereon and then to
the reduction of the unpaid principal amount
thereof. A table setting forth repayment
information in respect of each Amortizing Note
will be provided to the original purchaser and
will be available upon request, to subsequent
holders.
(u) Persons to Establish Specific Terms.
The principal amount, any interest rate (or
manner in which interest is to be determined),
any Interest Payment Dates, any Regular Record
Dates, the Stated Maturity, any Redemption Date
or Dates (and if on any such Redemption Date a
premium is to be paid by the Company, the
amount of such premium) and any other relevant
terms of any Note will be determined by any one
of the persons whose name is set forth below.
NAME OFFICE SPECIMEN SIGNATURE
Thomas O. Staggs Executive Vice /s/ Thomas O. Staggs
President and Chief __________________________
Financial Officer
Paul Saleh Senior Vice President /s/ Paul Saleh
and Treasurer __________________________
Kenneth J. Frier Vice President - /s/ Kenneth J. Frier
Corporate Treasury __________________________
Mitchell K. Polon Director - Corporate /s/ Mitchell K. Polon
Treasury __________________________
John Simonelli Vice President - /s/ John Simonelli
Corporate Finance __________________________
Ingrid McConnell Director - Corporate /s/ Ingrid McConnell
Finance __________________________
Thomas L. Robershaw Senior Analyst - /s/ Thomas L. Robershaw
Corporate Finance __________________________
David K. Thompson Senior Vice President /s/ David K. Thompson
- Assistant General __________________________
Counsel
(v) Forms. Unless and until another form is
established pursuant to a subsequent Officers'
Certificate pursuant to Section 2.1 of the Indenture,
the Discount Notes, the Fixed Rate Notes, the Floating
Rate Notes and the Zero Coupon Notes will be in
substantially the forms set forth in Exhibits A, B, C
and D hereto, respectively, and may have such other
terms as are provided herein.
All capitalized terms used in this Officers'
Certificate and not defined herein shall have the meanings
set forth in the Indenture.
Each of the undersigned, for himself, states that
he has read and is familiar with the provisions of Article
Two of the Indenture relating to the establishment of a
series of Securities thereunder and the establishment of
forms of Securities representing a series of Securities
thereunder and, in each case, the definitions therein
relating thereto; that he is generally familiar with the
other provisions of the Indenture and with the affairs of
the Company and its acts and proceedings and that the state
ments and opinions made by him in this Certificate are based
upon such familiarity; and that he has made such examination
or investigation as is necessary to enable him to determine
whether or not the covenants and conditions referred to
above have been complied with; and in his opinion, such
covenants and conditions have been complied with.
<PAGE>
IN WITNESS WHEREOF, the undersigned have hereunto
signed this Certificate on behalf of the Company as of the
day and year first above written.
THE WALT DISNEY COMPANY
By: /s/ Thomas O. Staggs
-------------------------------
Name: Thomas O. Staggs
Title: Executive Vice President and
Chief Financial Officer
By: /s/ David K. Thompson
-------------------------------
Name: David K. Thompson
Title: Senior Vice President - Assistant
General Counsel
<PAGE>
<PAGE>
Exhibit 5.1
August 6, 1998
The Walt Disney Company
500 S. Buena Vista Street
Burbank, California 91521
Ladies and Gentlemen:
We have acted as special counsel to The Walt Disney Company, a
Delaware corporation ("Disney"), in connection with the issuance and
sale by Disney of up to $5,000,000,000 aggregate initial offering price
of its Medium-Term Notes (the "Securities"), pursuant to the Indenture,
dated as of March 7, 1996 (the "Indenture"), between Disney and
Citibank, N.A., a national banking association, as Trustee (the
"Trustee").
We have examined (a) an executed copy of the Indenture, (b) an
executed copy of the Officer's Certificate, dated August 6, 1998 (the
"Officers' Certificate"), amending and restating, pursuant to Section
2.3(a) of the Indenture, the terms of the Securities as a series of
Disney's Senior Debt Securities (the "Debt Securities") under the
Indenture, (c) the Registration Statement on Form S-3, as amended
(Registration No. 333-52659), relating to the registration by Disney
under the Securities Act of $5,000,000,000 aggregate initial offering
price of Debt Securities and other securities, filed with the Securities
and Exchange Commission (the "Registration Statement"), (d) an executed
copy of the Distribution Agreement, dated August 6, 1998 (the
"Distribution Agreement") between Disney and Bear, Stearns & Co. Inc.,
Credit Suisse First Boston Corporation, Goldman, Sachs & Co., Lehman
Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated , J.P.
Morgan Securities Inc. and Morgan Stanley & Co. Incorporated. In
addition we have examined originals or copies, certified or otherwise
identified to our satisfaction, of such records of Disney, certificates
of public officials, certificates of officers or other representatives
of Disney, and such other documents, certificates and records as we have
deemed appropriate.
In our examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of
all documents submitted to us as originals, the conformity to original
documents of all documents submitted to us as certified, conformed or
<PAGE>
The Walt Disney Company, August 6, 1998 - Page 2
photostatic copies and the authenticity of the originals of such copies.
As to any facts material to the opinions expressed herein which we did
not independently establish or verify, we have relied upon statements
and representations of officers and other representatives of Disney and
others.
On the basis of such examination, our reliance upon the
assumptions in this opinion and our consideration of those questions of
law we considered relevant, and subject to the limitations and
qualifications in this opinion, we are of the opinion that the
Securities, when (i) executed by Disney, (ii) the final terms are
established and the Securities are completed, authenticated and
delivered in accordance with the terms of the Indenture and (iii) issued
and paid for by the purchasers thereof in accordance with the terms of
the Distribution Agreement, will constitute valid and binding
obligations of Disney, enforceable against Disney in accordance with
their respective terms, except (x) as may be limited by (A) bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or
affecting creditors' rights generally (including, without limitation,
fraudulent conveyance laws), (B) general principles of equity including,
without limitation, concepts of materiality, reasonableness, good faith
and fair dealing and the possible unavailability of specific performance
or injunctive relief regardless of whether considered in a proceeding in
equity or at law, (C) requirements that a claim with respect to any
Securities denominated other than in United States dollars (or a
judgment denominated other than in United States dollars in respect of
such claim) be converted into United States dollars at a rate of
exchange prevailing at a date determined pursuant to applicable law and
(D) governmental authority to limit, delay or prohibit the making of
payments outside the United States or in foreign currency and (y) we
express no opinion with respect to the enforceability or effect of the
waiver contained in Section 6.12 of the Indenture and advise you that
the provisions regarding jurisdiction contained in Section 12.9 of the
Indenture may not be honored by the courts included or excluded. In
addition, we express no opinion with respect to any Securities that are
indexed or linked to any foreign currency or composite currency,
commodity, equity index or similar index.
We consent to the inclusion of this opinion as an exhibit in
Disney's Current Report on Form 8-K, dated August 6, 1998, and the
incorporation by reference of this opinion in the Registration
Statement.
Respectfully submitted,
/s/ O'Melveny & Myers LLP
O'MELVENY & MYERS LLP
