<PAGE>
FILED PURSUANT TO RULE 424(b)(2)
SEC FILE NO. 33-58177
PROSPECTUS SUPPLEMENT
(To Prospectus dated June 5, 1995)
TYSON FOODS, INC. [LOGO OF TYSON FOODS APPEARS HERE]
$350,000,000
Medium-Term Notes
Due From Nine Months to Thirty Years From Date of Issue
Tyson Foods, Inc. (the "Company") may offer from time to time its Medium-Term
Notes (the "Notes"), with an aggregate principal amount (or in the case of
Notes issued at a discount from the principal amount, an aggregate initial
offering price) of up to $350,000,000. Such aggregate offering price is subject
to reduction as a result of the sale by the Company of certain other Debt
Securities. See "Plan of Distribution." Unless otherwise indicated in the
applicable Pricing Supplement, the interest rate on each Note will be either a
fixed rate established by the Company at the date of issue of such Note, which
may be zero in the case of certain Original Issue Discount Notes, or a floating
rate as set forth therein and specified in the applicable Pricing Supplement.
Notes may also be issued as Amortizing Notes or as Original Issue Discount
Notes, as described under "Description of Notes."
Unless otherwise specified in the applicable Pricing Supplement, interest on
each Fixed Rate Note will be payable each June 1 and December 1 and at stated
maturity or upon any earlier redemption or repayment. Interest on each Floating
Rate Note will be payable on the dates set forth herein and in the applicable
Pricing Supplement. See "Description of Notes--Interest and Interest Rates."
Original Issue Discount Notes may provide that holders of such Notes will not
receive periodic payments of interest. See "Description of Notes--Original
Issue Discount Notes." Each Fixed Rate Note will mature on a day from nine
months to thirty years from the date of issue, as set forth in the applicable
Pricing Supplement. Each Floating Rate Note will mature on a day from nine
months to thirty years from the date of issue, as set forth in the applicable
Pricing Supplement. Unless otherwise specified in the applicable Pricing
Supplement, the Notes may not be redeemed by the Company or the holder prior to
maturity. Notes will be issued in denominations of $1,000 or any amount in
excess thereof which is an integral multiple of $1,000.
Each Note will be issued only in fully registered form and will be represented
either by a Global Security registered in the name of a nominee of The
Depository Trust Company ("DTC"), as Depositary (a "Book-Entry Note"), or by a
certificate issued in definitive form (a "Certificated Note"), as set forth in
the applicable Pricing Supplement. Beneficial interests in Global Securities
representing Book-Entry Notes will be shown on, and transfer thereof will be
effected through, the records maintained by the Depositary (with respect to
participants' interests) and its participants. Book-Entry Notes will not be
issuable as Certificated Notes except as described under "Description of Debt
Securities--Book-Entry System" in the accompanying Prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT, ANY PRICING SUPPLEMENT OR
THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
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PRICE TO AGENT'S DISCOUNTS PROCEEDS TO
PUBLIC(1) OR COMMISSIONS(2) COMPANY (2)(3)
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Note 100% .125% to .750% 99.875% to 99.250%
- ----------------------------------------------------------------------------------
Total $350,000,000 $437,500 to $2,625,000 $349,562,500 to $347,375,000
- ----------------------------------------------------------------------------------
</TABLE>
(1) Unless otherwise specified in the applicable Pricing Supplement, Notes will
be sold at 100% of their principal amount. If the Company issues any Note
at a discount from or at a premium over its principal amount, the Price to
Public of any Note issued at a discount will be set forth in the applicable
Pricing Supplement.
(2) The commission payable to an Agent for each Note sold through such Agent
shall range from .125% to .750% of the principal amount of such Note. The
Company may also sell Notes to an Agent, as principal, at negotiated
discounts, for resale to one or more investors or other purchasers at fixed
offering prices or at varying prices related to prevailing market prices at
the time of resale or otherwise, as determined by such Agent. Unless
otherwise indicated in the applicable Pricing Supplement, any Note sold to
an Agent as principal shall be purchased by such Agent at a price equal to
100% of the principal amount thereof less a percentage equal to the
commission applicable to any agency sale of a Note of identical maturity.
The Company has agreed to indemnify each Agent against certain liabilities,
including liabilities under the Securities Act of 1933, as amended. See
"Plan of Distribution."
(3) Before deducting expenses payable by the Company estimated at $330,000.
The Notes are being offered on a continuing basis by the Company through J.P.
Morgan Securities Inc., CS First Boston Corporation, Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, BA Securities, Inc., A.G.
Edwards & Sons, Inc., NatWest Capital Markets Limited, and Stephens Inc.
(individually, an "Agent" and collectively, the "Agents"), each of which has
agreed to use its reasonable best efforts, consistent with industry standards,
to solicit purchases of the Notes. The Company has reserved the right (i) to
sell Notes directly to investors in those jurisdictions in which the Company is
so permitted and (ii) to accept (but not solicit) offers to purchase Notes from
time to time through one or more additional agents or dealers, acting as either
principal or agent, on substantially the same terms as those applicable to
sales of Notes to or through the Agents. Unless otherwise specified in the
applicable Pricing Supplement, the Notes will not be listed on any securities
exchange, and there can be no assurance that the Notes offered hereby will be
sold or that there will be a secondary market for the Notes. The Company
reserves the right to withdraw, cancel or modify the offer made hereby without
notice. No termination date for the offering of the Notes has been established.
The Company may reject any offer in its sole discretion, or an Agent may reject
any unreasonable offer, in whole or in part. See "Plan of Distribution."
J.P. MORGAN SECURITIES INC.
CS FIRST BOSTON
MERRILL LYNCH & CO.
BA SECURITIES, INC.
A.G. EDWARDS & SONS, INC.
NATWEST CAPITAL MARKETS LIMITED
STEPHENS INC.
July 19, 1995
<PAGE>
IN CONNECTION WITH THE DISTRIBUTION OF THE NOTES, THE AGENTS MAY OVER-ALLOT
OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
NOTES OFFERED HEREBY OR OTHER DEBT SECURITIES OF THE COMPANY AT LEVELS ABOVE
THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT, ANY PRICING
SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR BY ANY AGENT. THIS PROSPECTUS SUPPLEMENT, ANY
PRICING SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE AN OFFER
TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOTES BY ANYONE IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER
THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT, ANY PRICING SUPPLEMENT OR THE
PROSPECTUS, NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
OR INCORPORATED BY REFERENCE HEREIN OR THEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
----------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
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PAGE
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Recent Developments........................................................ S-3
Description of Notes....................................................... S-3
United States Tax Considerations........................................... S-16
Plan of Distribution....................................................... S-23
</TABLE>
PROSPECTUS
<TABLE>
<S> <C>
Available Information....................................................... 2
Incorporation of Certain Documents by Reference............................. 2
The Company................................................................. 3
Ratio of Earnings to Fixed Charges.......................................... 4
Use of Proceeds............................................................. 4
Description of Debt Securities.............................................. 4
Plan of Distribution........................................................ 16
Legal Matters............................................................... 16
Experts..................................................................... 16
</TABLE>
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RECENT DEVELOPMENTS
On July 14, 1995, the Company signed a letter of intent with Cargill,
Incorporated of Minneapolis, Minnesota ("Cargill"), agreeing in principle to
acquire the U.S. broiler operations of Cargill, which are located in Georgia
and Florida. The purchase price for the transaction will consist of the
transfer to Cargill of the Company's swine processing plant in Marshall,
Missouri and the payment of cash.
The broiler operations being sold to the Company include Cargill's
processing plants in Buena Vista and Vienna, Georgia, that each process
approximately 870,000 chickens per week; a processing plan in Jacksonville,
Florida that processes approximately 850,000 chickens per week and two further
processing plants in Dawson, Georgia. Also included are feed mills and
hatcheries that provide the birds and feed for farmers in those areas who grow
chickens under contracts with Cargill.
The transaction is subject to regulatory approvals and the satisfaction of
certain conditions, but is expected to close on or about September 1, 1995.
DESCRIPTION OF NOTES
GENERAL
The following description of the particular terms of the Notes offered
hereby (referred to in the accompanying Prospectus as the "Debt Securities")
supplements, and to the extent inconsistent therewith replaces, the
description of the general terms and provisions of the Debt Securities set
forth in the Prospectus, to which description reference is hereby made. Unless
otherwise specified in the applicable Pricing Supplement, the Notes will have
the terms described below, except that references to interest payments and
interest-related information do not apply to certain Original Issue Discount
Notes.
The Notes are to be issued under an Indenture dated as of June 1, 1995 (the
"Indenture") between the Company and The Chase Manhattan Bank, N.A. (the
"Trustee"). Whenever a defined term is referred to and not defined herein, the
definition thereof is contained in the accompanying Prospectus or in the
Indenture referred to therein.
The Notes will (i) rank equally with other unsecured and unsubordinated
obligations of the Company (excluding subsidiary debt) for borrowed money, of
which approximately $1,460,519,006 was outstanding at April 1, 1995, (ii) be
effectively subordinated (with respect to underlying collateral) to secured
indebtedness of the Company (excluding subsidiary debt), of which $30,615,528
was outstanding at April 1, 1995 and (iii) be structurally subordinated to all
indebtedness of the Company's subsidiaries, of which $66,359,375 was
outstanding at April 1, 1995.
This Prospectus Supplement and any Pricing Supplement may be used in
connection with the offer and sale from time to time of Notes in an aggregate
initial public offering price of up to $350,000,000 (provided that, with
respect to Original Issue Discount Notes, the initial offering price of such
Notes shall be used in calculating the aggregate principal amount of Notes
offered hereunder). The aggregate principal amount of Notes authorized to be
issued under this Prospectus Supplement is subject to reduction as a result of
the sale by the Company after the date of this Prospectus Supplement of other
issues of Debt Securities from time to time as described in the accompanying
Prospectus. See "Plan of Distribution" herein and in the accompanying
Prospectus.
The Pricing Supplement relating to a Note will describe the following terms:
(i) whether such Note is a Fixed Rate Note or a Floating Rate Note (including
whether such Note is a Regular Floating Rate Note, a Floating Rate/Fixed Rate
Note or an Inverse Floating Rate Note); (ii) the price at which such Note will
be issued (the "Issue Price"); (iii) the date on which such Note will be
issued (the "Original Issue Date"); (iv) the date on which such Note will
mature; (v) if such Note is a Fixed Rate Note, the rate per annum at which
such Note will bear interest, if any; (vi) if such Note is a Floating Rate
Note, the Interest Rate Basis, the Initial Interest
S-3
<PAGE>
Rate, the Interest Payment Dates, the Index Maturity, the Spread and/or Spread
Multiplier, if any (all as defined below) and any other terms relating to the
particular method of calculating the interest rate for such Note; (vii) if
such Note is an Amortizing Note, the amortization schedule and any other terms
relating to the particular Note; (viii) whether such Note is an Original Issue
Discount Note; (ix) whether such Note may be redeemed at the option of the
Company, or repaid at the option of the holder, prior to its stated maturity
as described under "Optional Redemption" and "Repayment at the Noteholders'
Option; Repurchase" below and, if so, the provisions relating to such
redemption or repayment, including, in the case of any Original Issue Discount
Notes, the information necessary to determine the amount due upon redemption
or repayment; (x) any relevant tax consequences associated with the terms of
the Notes which have not been described under "United States Tax
Considerations" below; and (xi) any other terms of such Note not inconsistent
with the provisions of the Indenture.
Each Note will mature on a day from 9 months to 30 years from the date of
issue, as specified in the applicable Pricing Supplement, as selected by the
initial purchaser and agreed to by the Company. In the event that such
maturity date of any Note or any date fixed for redemption or repayment of any
Note (collectively, the "Maturity Date") is not a Business Day (as defined
below), principal and interest payable at maturity or upon such redemption or
repayment will be paid on the next succeeding Business Day with the same
effect as if such Business Day were the Maturity Date. No interest shall
accrue for the period from and after the Maturity Date to such next succeeding
Business Day. Except as may be provided in the applicable Pricing Supplement,
all Notes will mature at par.
The Notes will be offered on a continuing basis, and each Note will be
issued initially either as a Book-Entry Note or a Certificated Note. Notes
will be issued in denominations of $1,000 and any integral multiples of $1,000
in excess thereof, unless otherwise specified in the applicable Pricing
Supplement. Interest rates offered by the Company with respect to the Notes
may differ depending upon, among other things, the aggregate principal amount
of the Notes purchased in any single transaction.
Notes will be issued in the form of (i) one or more fully registered global
or master Notes deposited with or on behalf of DTC, as Depositary, and
registered in the name of DTC's nominee or (ii) by a certificate issued in
definitive form, in each case as specified in the applicable Pricing
Supplement. See "Description of Notes--Global Notes, Delivery and Form" in the
Prospectus. Certificated Notes will not be exchangeable for Book-Entry Notes
and, except under the circumstances described in the Prospectus under the
caption "Description of Notes--Global Notes, Delivery and Form", Book-Entry
Notes will not be exchangeable for Certificated Notes and will not otherwise
be issuable as Certificated Notes.
Principal of, premium, if any, and interest, if any, on the Notes will be
payable in the manner described herein, the transfer of the Notes will be
registrable, and Notes will be exchangeable for Notes bearing identical terms
and provisions at the office of The Chase Manhattan Bank, N.A., the Company's
paying agent (the "Paying Agent", which term includes any successor paying
agent appointed by the Company) and registrar for the Notes, currently located
at 4 Chase MetroTech Center, 3rd Floor, Brooklyn, NY 11245; provided that
payment of interest, other than interest at maturity or upon redemption or
repayment, may be made by check mailed to the address of the person entitled
thereto as it appears on the security register at the close of business on the
Regular Record Date corresponding to the relevant Interest Payment Date;
provided further that Book-Entry Notes will be exchangeable only in the manner
and to the extent set forth under "Description of Notes--Global Notes,
Delivery and Form", in the Prospectus. Notwithstanding the foregoing, (a) a
Depositary, as holder of Book-Entry Notes, shall be entitled to receive
payments of interest by wire transfer of immediately available funds and (b) a
holder of $5,000,000 or more in aggregate principal amount of Certificated
Notes (having identical terms and provisions) shall be entitled to receive
payments of interest, other than interest due at maturity or upon redemption
or repayment, if any, by wire transfer of immediately available funds into an
account maintained by the holder in the United States, if appropriate wire
transfer instructions have been received by the Paying Agent not less than 10
days prior to the applicable Interest Payment Date.
S-4
<PAGE>
The principal and interest payable on a Note at maturity or upon redemption
or repayment will be paid by wire transfer of immediately available funds
against presentation of the Note at the office of The Chase Manhattan Bank,
Institutional Trust Group Window, 1 Chase Manhattan Plaza, Floor 1-B, New
York, New York 10081, unless otherwise provided in the applicable Pricing
Supplement.
OPTIONAL REDEMPTION
The Pricing Supplement will indicate either that the Notes cannot be
redeemed prior to maturity or will indicate the terms on which the Notes will
be redeemable at the option of the Company. Notice of redemption shall be
provided by mailing a notice of such redemption to each holder by first class
mail, postage prepaid, at least 30 and not more than 60 calendar days prior to
the date fixed for redemption to the respective address of each holder as that
address appears upon the books of the Company.
REPAYMENT AT THE NOTEHOLDERS' OPTION; REPURCHASE
If applicable, the Pricing Supplement will indicate that the Notes will be
repayable at the option of the holder on a date or dates specified prior to
its stated maturity date (an "Optional Repayment Date") and, unless otherwise
specified in such Pricing Supplement, at a price equal to 100% of the
principal amount thereof, together with accrued interest to, but excluding,
the date of repayment. If no Optional Repayment Date is included with respect
to a Note, such Note will not be repayable at the option of the holder prior
to its maturity.
In order for such a Note to be repaid, and unless provided otherwise in the
applicable Pricing Supplement, the Paying Agent must receive at least 30 but
not more than 60 calendar days prior to the Optional Repayment Date, (i) the
Note with the form entitled "Option to Elect Repayment" on the reverse of the
Note duly completed or (ii) a telegram, facsimile transmission or a letter
from a member of a national securities exchange or a member of the National
Association of Securities Dealers, Inc. (the "NASD") or a commercial bank or
trust company in the United States which must set forth the name of the holder
of the Note, the principal amount of the Note, the principal amount of the
Note to be repaid, the certificate number or a description of the tenor and
terms of the Note, a statement that the option to elect repayment is being
exercised thereby and a guarantee that the Note to be repaid, together with
the duly completed form entitled "Option to Elect Repayment" on the reverse of
the Note, will be received by the Paying Agent not later than the fifth
Business Day after the date of such telegram, facsimile transmission or
letter; provided, however, that such telegram, facsimile transmission or
letter from a member of a national securities exchange or a member of the
NASD, or a commercial bank or trust company in the United States shall only be
effective in such case if such Note and form duly completed are received by a
Paying Agent by such fifth Business Day. Exercise of the repayment option by
the holder of a Note will be irrevocable. The repayment option may be
exercised by the holder of a Note for less than the entire principal amount of
the Note but, in that event, the principal amount of the Note remaining
outstanding after repayment must be an authorized denomination.
The Company may at any time purchase Notes at any price in the open market
or otherwise. Notes purchased by the Company may, at its discretion, be held,
resold or surrendered to the Registrar for cancellation.
INTEREST AND INTEREST RATES
GENERAL
Unless otherwise specified in the applicable Pricing Supplement, each Note
will bear interest at either (a) a fixed rate (the "Fixed Rate Notes") or (b)
a floating rate determined by reference to an Interest Rate Basis (the
"Floating Rate Notes"), which may be adjusted by a Spread and/or Spread
Multiplier (each as defined below). Any Floating Rate Note may also have
either or both of the following: (i) a maximum interest rate limitation, or
ceiling, on the rate at which interest may accrue during any interest period;
and (ii) a minimum interest rate limitation, or floor, on the rate at which
interest may accrue during any interest period. The applicable Pricing
Supplement will designate (a) a fixed rate per annum, in which case such Notes
will be Fixed Rate Notes; or (b) one or more of the following Interest Rate
Bases as applicable to such Notes, in which case such Notes will be
S-5
<PAGE>
Floating Rate Notes: (i) the CD Rate, in which case such Notes will be "CD
Rate Notes"; (ii) the Commercial Paper Rate, in which case such Notes will be
"Commercial Paper Rate Notes"; (iii) the Federal Funds Rate, in which case
such Notes will be "Federal Funds Rate Notes"; (iv) LIBOR, in which case such
Notes will be "LIBOR Notes"; (v) the Prime Rate, in which case such Notes will
be "Prime Rate Notes"; (vi) the Treasury Rate, in which case such Notes will
be "Treasury Rate Notes"; or (vii) such other interest rate basis or formula
as is set forth in such Pricing Supplement.
Each Note will bear interest from its date of issue or from the most recent
date to which interest on such Note has been paid or duly provided for, at the
annual rate, or at a rate determined pursuant to an interest rate formula,
stated therein, until the principal thereof is paid or made available for
payment. Interest will be payable on each Interest Payment Date (except for
certain Original Issue Discount Notes and except for Notes originally issued
between a Regular Record Date and an Interest Payment Date) and at maturity or
on redemption or repayment, if any. Interest payments in respect of the Notes
will equal the amount of interest accrued from and including the immediately
preceding Interest Payment Date in respect of which interest has been paid or
duly made available for payment (or from and including the date of issue, if
no interest has been paid with respect to the applicable Note) to but
excluding the related Interest Payment Date or the Maturity Date, as the case
may be.
Interest will be payable to the person in whose name a Note is registered at
the close of business on the Regular Record Date next preceding the Interest
Payment date; provided, however, that (i) if the Company fails to pay such
interest on such Interest Payment Date, such defaulted interest will be paid
to the person in whose name such Note is registered at the close of business
on the record date to be established for the payment of defaulted interest and
(ii) interest payable at maturity, redemption or repayment will be payable to
the person to whom principal shall be payable. The first payment of interest
on any Note originally issued between a Regular Record Date and an Interest
Payment Date will be made on the Interest Payment Date following the next
succeeding Regular Record Date to the registered owner on such next Regular
Record Date. Interest rates and interest rate formulae are subject to change
by the Company from time to time but no such change will affect any Note
theretofore issued or which the Company has agreed to issue. Unless otherwise
indicated in the applicable Pricing Supplement, the Interest Payment Dates and
the Regular Record Dates for Fixed Rate Notes shall be as described below
under "Fixed Rate Notes." The Interest Payment Dates for Floating Rate Notes
shall be as indicated in the applicable Pricing Supplement and in such Note,
and, unless otherwise specified in the applicable Pricing Supplement, each
Regular Record Date for a Floating Rate Note will be the fifteenth calendar
day (whether or not a Business Day) next preceding each Interest Payment Date.
FIXED RATE NOTES
Each Fixed Rate Note will bear interest at the annual rate specified therein
and in the applicable Pricing Supplement. Unless otherwise specified in the
applicable Pricing Supplement, the Interest Payment Dates for the Fixed Rate
Notes will be on June 1 and December 1 of each year and the Regular Record
Dates will be at the close of business on the immediately preceding May 15 and
November 15, respectively. Unless otherwise specified in the applicable
Pricing Supplement, interest on Fixed Rate Notes will be computed and paid on
the basis of a 360-day year of twelve 30-day months. In the event that any
Interest Payment Date or Maturity Date for any Fixed Rate Note is not a
Business Day (as defined below under "Floating Rate Notes"), interest on such
Fixed Rate Note will be paid on the next succeeding Business Day and no
interest on such payment shall accrue for the period from and after such
Interest Payment Date to such next succeeding Business Day.
FLOATING RATE NOTES
Unless otherwise specified in an applicable Pricing Supplement, Floating
Rate Notes will be issued as described below. Each applicable Pricing
Supplement will specify certain terms with respect to which such Floating Rate
Note is being delivered, including: whether such Floating Rate Note is a
Regular Floating Rate Note, an Inverse Floating Rate Note or a Floating
Rate/Fixed Rate Note (each as defined below); the Interest Rate Basis or
Bases, Initial Interest Rate, Interest Reset Dates, Interest Reset Period,
Regular Record Dates, Interest Payment Dates, Index Maturity, maximum interest
rate and minimum interest rate, if any, and the Spread and/or Spread
Multiplier, if any.
S-6
<PAGE>
The interest rate borne by the Floating Rate Notes will be determined as
follows:
(a) Unless such Floating Rate Note is designated as a Floating Rate/Fixed
Rate Note, an Inverse Floating Rate Note or as having an Addendum attached,
such Floating Rate Note will be designated a "Regular Floating Rate Note"
and, except as described below or in an applicable Pricing Supplement, will
bear interest at the rate determined by reference to the applicable
Interest Rate Basis (i) plus or minus the applicable Spread, if any, and/or
(ii) multiplied by the applicable Spread Multiplier, if any. Commencing on
the Initial Interest Reset Date, the rate at which interest on such Regular
Floating Rate Note shall be payable shall be reset as of each Interest
Reset Date; provided, however, that the interest rate in effect for the
period from the Original Issue Date to the Initial Interest Reset Date will
be the Initial Interest Rate.
(b) If such Floating Rate Note is designated as a "Floating Rate/Fixed
Rate Note," then, except as described below or in an applicable Pricing
Supplement, such Floating Rate Note will initially bear interest at the
rate determined by reference to the applicable Interest Rate Basis (i) plus
or minus the applicable Spread, if any, and/or (ii) multiplied by the
applicable Spread Multiplier, if any. Commencing on the Initial Interest
Reset Date, the rate at which interest on such Floating Rate/Fixed Rate
Note shall be payable shall be reset as of each Interest Reset Date;
provided, however, that (i) the interest rate in effect for the period from
the Original Issue Date to the Initial Interest Reset Date will be the
Initial Interest Rate; and (ii) the interest rate in effect commencing on,
and including, the Fixed Rate Commencement Date to the Maturity Date shall
be the Fixed Interest Rate, if such rate is specified in the applicable
Pricing Supplement, or if no such Fixed Interest Rate is so specified and
the Floating Rate/Fixed Rate Note is still outstanding on such day, the
interest rate in effect thereon on the day immediately preceding the Fixed
Rate Commencement Date.
(c) If such Floating Rate Note is designated as an "Inverse Floating Rate
Note," then, except as described below or in an applicable Pricing
Supplement, such Floating Rate Note will bear interest equal to the Fixed
Interest Rate specified in the related Pricing Supplement minus the rate
determined by reference to the Interest Rate Basis (i) plus or minus the
applicable Spread, if any, and/or (ii) multiplied by the applicable Spread
Multiplier, if any; provided, however, unless otherwise specified in the
applicable Pricing Supplement, the interest rate thereon will not be less
than zero. Commencing on the Initial Interest Reset Date, the rate at which
interest on such Inverse Floating Rate Note is payable shall be reset as of
each Interest Reset Date; provided, however, that the interest rate in
effect for the period from the Original Issue Date to the Initial Interest
Reset Date will be the Initial Interest Rate.
Notwithstanding the foregoing, if such Floating Rate Note is designated as
having an Addendum attached as specified on the face thereof, such Floating
Rate Note shall bear interest in accordance with the terms described in such
Addendum and the applicable Pricing Supplement. See "Other Provisions,
Addenda" below.
Unless otherwise provided in the applicable Pricing Supplement, each
Interest Rate Basis shall be the rate determined in accordance with the
applicable provisions below. Except as set forth above or in an applicable
Pricing Supplement, the interest rate in effect on each day shall be (a) if
such day is an Interest Reset Date, the interest rate determined on the
Interest Determination Date (as defined below) immediately preceding such
Interest Reset Date or (b) if such day is not an Interest Reset Date, the
interest rate determined on the Interest Determination Date immediately
preceding the next preceding Interest Reset Date.
Interest on Floating Rate Notes will be determined by reference to an
"Interest Rate Basis," which may be one or more of (i) the CD Rate, (ii) the
Commercial Paper Rate, (iii) the Federal Funds Rate, (iv) LIBOR, (v) the Prime
Rate, (vi) the Treasury Rate, or (vii) such other Interest Rate Basis or
interest rate formula as may be set in the applicable Pricing Supplement;
provided, however, that with respect to a Floating Rate/Fixed Rate Note, the
interest rate commencing on the Fixed Rate Commencement Date and continuing,
unless otherwise specified in the applicable Pricing Supplement, until the
Maturity Date shall be the Fixed Interest Rate, if such rate is specified in
the applicable Pricing Supplement, or if no such Fixed Interest Rate is so
specified, the interest rate in effect thereon on the day immediately
preceding the Fixed Rate Commencement Date. In addition, if so specified in
the applicable Pricing Supplement, a Floating Rate Note may bear interest
calculated based upon two or more Interest Rate Bases.
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The "Spread" is the number of basis points to be added to or subtracted from
the related Interest Rate Basis or Bases applicable to such Floating Rate
Note. The "Spread Multiplier" is the percentage of the related Interest Rate
Basis or Bases applicable to such Floating Rate Note by which such Interest
Rate Basis or Bases will 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 Interest
Rate Basis or Bases will be calculated. The Spread, Spread Multiplier, Index
Maturity and other variable terms of the Floating Rate Notes are subject to
change by the Company from time to time, but no such change will affect any
Floating Rate Note previously issued or as to which an offer has been accepted
by the Company.
Each applicable Pricing Supplement will specify whether the rate of interest
on the related Floating Rate Note will be reset daily, weekly, monthly,
quarterly, semiannually, annually or such other specified period (each, an
"Interest Reset Period") and the dates on which such interest rate will be
reset (each, an "Interest Reset Date"). Unless otherwise specified in the
applicable Pricing Supplement, the Interest Reset Date will be, in the case of
Floating Rate Notes which reset: (i) daily, each Business Day; (ii) weekly,
the Wednesday of each week (with the exception of weekly reset Treasury Rate
Notes, which will reset the Tuesday of each week except as specified below;
(iii) monthly, the third Wednesday of each month; (iv) quarterly, the third
Wednesday of March, June, September and December of each year; (v)
semiannually, the third Wednesday of the two months specified in the
applicable Pricing Supplement; and (vi) annually, the third Wednesday of the
month specified in the applicable Pricing Supplement; provided, however, that,
with respect to Floating Rate/Fixed Rate Notes, the fixed rate of interest in
effect for the period from the Fixed Rate Commencement Date until the Maturity
Date shall be the Fixed Interest Rate or the interest rate in effect on the
day immediately preceding the Fixed Rate Commencement Date, as specified in
the applicable 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 Floating Rate Note as to which LIBOR is an
applicable Interest Rate Basis, in which case if such Business Day falls in
the next succeeding calendar month, such Interest Reset Date will be the
immediately preceding Business Day. As used herein, "Business Day" means,
unless otherwise specified in the applicable Pricing Supplement, any day other
than a Saturday or Sunday or any other day on which banking institutions are
generally authorized or obligated by law, regulation or executive order to
close in The City of New York and with respect to LIBOR Notes any day which is
also a London Business Day. "London Business Day" means any day on which
dealings in U.S. dollars are transacted in the London Interbank Market.
A Floating Rate Note may also have either or both of the following: (i) a
maximum numerical limitation, or ceiling, on the rate at which interest may
accrue during any interest period and (ii) a minimum numerical limitation, or
floor, on the rate at which interest may accrue during any interest period. In
addition to any maximum interest rate that may be applicable to any Floating
Rate Note pursuant to the above provisions, 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.
Each Floating Rate Note will bear interest from the date of issue at the
rates specified therein until the principal thereof is paid or otherwise made
available for payment. Except as provided below or in an applicable Pricing
Supplement, interest will be payable in the case of Floating Rate Notes which
reset: (i) 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 Pricing Supplement; (ii) quarterly, on the third
Wednesday of March, June, September and December of each year; (iii)
semiannually on the third Wednesday of the two months of each year specified
in the applicable Pricing Supplement; and (iv) annually, on the third
Wednesday of the month of each year specified in the applicable Pricing
Supplement (each, an "Interest Payment Date") and, in each case, on the
Maturity Date. If any Interest Payment Date for any Floating Rate Note (other
than the Maturity Date) would otherwise be a day that is not a Business Day,
such Interest Payment Date will be the next succeeding day that is a Business
Day except that if such Note is a LIBOR Note and if such Business Day falls in
the next succeeding calendar month, such Interest Payment Date will be the
immediately preceding Business
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Day. If the Maturity Date of a Floating Rate Note falls on a day that is not a
Business Day, the payment of principal, premium, if any, and interest, if any,
will be made on the next succeeding Business Day, and no interest shall accrue
for the period from and after such Maturity Date.
All percentages resulting from any calculation on Floating Rate Notes will
be to the nearest one hundred-thousandth of a percentage point, with five one
millionths of a percentage point rounded upwards (e.g., 9.876545% (or
.09876545) would be rounded to 9.87655% (or .0987655)), and all dollar amounts
used in or resulting from such calculation will be rounded to the nearest cent
(with one-half cent being rounded upward).
Unless otherwise specified in the applicable Pricing Supplement, interest
payments on Floating Rate Notes will equal the amount of interest accrued from
and including the next preceding Interest Payment Date in respect of which
interest has been paid (or from and including the date of issue, if no
interest has been paid with respect to such Floating Rate Notes) to but
excluding the related Interest Payment Date or Maturity Date, as the case may
be.
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 and including the later of (i) the date of issue and (ii) the last
day to which interest has been paid or duly provided for to and including the
last date for which accrued interest is being calculated as described in the
immediately preceding paragraph. Unless otherwise specified in the applicable
Pricing Supplement, the interest factor for each such day will be computed by
dividing the interest rate applicable to such day by 360, in the case of Notes
for which the Interest Rate Basis is the CD Rate, the Commercial Paper Rate,
the Federal Funds Rate, LIBOR or the Prime Rate, or by the actual number of
days in the year in the case of Notes for which the Interest Rate Basis is the
Treasury Rate. The accrued interest factor for Notes for which the interest
rate may be calculated with reference to two or more Interest Rate Bases will
be calculated in each period by selecting one such Interest Rate Basis for
such period in accordance with the provisions of the applicable Pricing
Supplement.
The interest rate applicable to each Interest Reset Period commencing on the
Interest Reset Date with respect to such Interest Reset Period will be the
rate determined as of the "Interest Determination Date." Unless otherwise
specified in the applicable Pricing Supplement, the Interest Determination
Date with respect to the CD Rate, the Commercial Paper Rate, the Federal Funds
Rate and the Prime Rate will be the second Business Day preceding each
Interest Reset Date for the related Note; and the Interest Determination Date
with respect to LIBOR will be the second London Business Day preceding each
Interest Reset Date. With respect to the Treasury Rate, unless otherwise
specified in an applicable Pricing Supplement, the Interest Determination Date
will be the day in the week in which the related Interest Reset Date falls on
which day Treasury Bills (as defined below) are normally auctioned (Treasury
Bills are normally sold at auction on Monday of each week, unless that days is
a legal holiday, in which case the auction is normally held on the following
Tuesday, except that such auction may be held on the preceding Friday);
provided, however, that if an auction is held on the Friday on the week
preceding the related Interest Reset Date, the related Interest Determination
Date will be such preceding Friday; and provided, further, that if an auction
falls on any Interest Reset Date then the related Interest Reset Date will
instead be the first Business Day following such auction. Unless otherwise
specified in the applicable Pricing Supplement, the Interest Determination
Date pertaining to a Floating Rate Note the interest rate of which is
determined with reference to two or more Interest Rate Bases will be the
latest Business Day which is at least two Business Days prior to each Interest
Reset Date for such Floating Rate Note. Each Interest Rate Basis will be
determined and compared on such date, and the applicable interest rate will
take effect on the related Interest Reset Date, as specified in the applicable
Pricing Supplement.
Unless otherwise provided for in the applicable Pricing Supplement, The
Chase Manhattan Bank, N.A. will be the Calculation Agent (the "Calculation
Agent," which term includes any successor calculation agent appointed by the
Company), and for each Interest Reset Date will determine the interest rate
with respect to any Floating Rate Note as described below. The Calculation
Agent will notify the Trustee of each determination of the interest rate
applicable to any such Floating Rate Note promptly after such determination is
made. The
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Trustee will, upon the request of the holder of any Floating Rate Note,
provide the interest rate then in effect and, if determined, the interest rate
which will become effective as a result of a determination made with respect
to the most recent Interest Determination Date relating to such Note. Unless
otherwise specified in the applicable Pricing Supplement, the "Calculation
Date," where applicable, pertaining to any Interest Determination Date will be
the earlier of (i) the tenth calendar day after such Interest Determination
Date or, if such day is not a Business Day, the next succeeding Business Day
or (ii) the Business Day preceding the applicable Interest Payment Date or
Maturity Date, as the case may be.
Interest rates with respect to Floating Rate Notes will be determined by the
Calculation Agent as follows:
CD Rate Notes. CD Rate Notes will bear interest at the interest rate
(calculated with reference to the CD Rate and the Spread and/or Spread
Multiplier, if any) specified in the CD Rate Notes and in the applicable
Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "CD Rate"
means, with respect to any Interest Determination Date relating to a CD Rate
Note, the rate on such date for negotiable certificates of deposit having the
Index Maturity designated 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
("H.15(519)") under the heading "CDs (Secondary Market)," or, if not so
published by 3:00 p.m., New York City time, on the Calculation Date pertaining
to such Interest Determination Date, the CD Rate will be the rate on such
Interest Determination Date for negotiable certificates of deposit of the
Index Maturity designated 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 (the "Composite Quotations") under the heading
"Certificates of Deposit." If such rate is not yet published in either
H.15(519) or the Composite Quotations by 3:00 p.m., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, the CD Rate
on such 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 Interest Determination Date, for
negotiable certificates of deposit of major United States money market banks
with a remaining maturity closest to the Index Maturity designated in the
applicable Pricing Supplement in an amount that is representative for a single
transaction in that market at that time as quoted by three leading nonbank
dealers in negotiable U.S. dollar certificates of deposit in The City of New
York selected by the Calculation Agent; provided, however, that if the dealers
selected as aforesaid by the Calculation Agent are not quoting as set forth
above, the CD Rate with respect to such Interest Determination Date shall be
the CD Rate as in effect on such Interest Determination Date.
Commercial Paper Rate Notes. Commercial Paper Rate Notes will bear interest
at the interest rate (calculated with reference to the Commercial Paper Rate
and the Spread and/or Spread Multiplier, if any) specified in the Commercial
Paper Rate Notes and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Commercial
Paper Rate" means, with respect to any Interest Determination Date relating to
a Commercial Paper Note, the Money Market Yield (as defined below) of the rate
on that date for commercial paper having the Index Maturity designated in the
applicable Pricing Supplement, as such rate shall be published in H.15(519),
under the heading "Commercial Paper." In the event that such rate is not
published prior to 3:00 p.m., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, then the Commercial Paper Rate
shall be the Money Market Yield of the rate on such Interest Determination
Date for commercial paper of the specified Index Maturity as published in
Composite Quotations under the heading "Commercial Paper" (with an Index
Maturity of one month or three months being deemed to be equivalent to an
Index Maturity of 30 days or 90 days, respectively). If by 3:00 p.m., New York
City time, on such Calculation Date such rate is not yet available in either
H.15(519) or Composite Quotations, then the Commercial Paper Rate on such
Interest Determination Date shall be calculated by the Calculation Agent and
shall be the Money Market Yield corresponding to the arithmetic mean of the
offered rates as of approximately 11:00 a.m., New York City time, on such
Interest Determination Date for commercial paper of the specified Index
Maturity placed for an industrial issuer whose bond rating is "AA,"
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or the equivalent, from a nationally recognized rating agency as quoted by
three leading dealers of commercial paper in The City of New York selected by
the Calculation Agent; provided, however, that if the dealers selected as
aforesaid by the Calculation Agent are not quoting offered rates as set forth
above, the Commercial Paper Rate with respect to such Interest Determination
Date shall be the Commercial Paper Rate in effect on such Interest
Determination Date.
"Money Market Yield" shall be a yield (expressed as a percentage) calculated
in accordance with the following formula:
D X 360
Money Market Yield = ------------- 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 period for which interest is being calculated.
Federal Funds Rate Notes. Federal Funds Rate Notes will bear interest at the
interest rate (calculated with reference to the Federal Funds Rate and the
Spread and/or Spread Multiplier, if any) specified in the Federal Funds Rate
Notes and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
"Federal Funds Rate" means, with respect to any Interest Determination Date
relating to a Federal Funds Rate Note, the rate on such date for Federal funds
as published in H.15(519) under the heading "Federal Funds (Effective)" or, if
not so published by 3:00 p.m., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, the Federal Funds Rate will be
the rate on such Interest Determination Date as published in Composite
Quotations under the heading "Federal Funds/Effective Rate." If such rate is
not published in either H.15(519) or the Composite Quotations by 3:00 p.m.,
New York City time, on the Calculation Date pertaining to such Interest
Determination Date, the Federal Funds Rate for such 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 United States dollar
Federal funds as of 9:00 a.m., New York City time, on such Interest
Determination Date arranged by three leading brokers of Federal funds
transactions in The City of New York selected by the Calculation Agent;
provided, however, that if the brokers selected as aforesaid by the
Calculation Agent are not quoting as set forth above, the Federal Funds Rate
with respect to such Interest Determination Date shall be the Federal Funds
Rate in effect on such Interest Determination Date.
LIBOR Notes. LIBOR Notes will bear interest at the interest rate (calculated
with reference to LIBOR and the Spread and/or Spread Multiplier, if any)
specified in the LIBOR Notes and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "LIBOR" for
each Interest Reset Date will be determined by the Calculation Agent as
follows:
(i) With respect to an Interest Determination Date relating to a LIBOR
Note, LIBOR will be either: (A) if "LIBOR Telerate" is specified in the
applicable Pricing Supplement or if such Pricing Supplement does not
specify a source for LIBOR, the rate for deposits in the London interbank
market in the Index Currency (as defined below) having the Index Maturity
designated in the applicable Pricing Supplement commencing on the second
London Business Day immediately following such Interest Determination Date
that appears on the Designated LIBOR Page (as defined below) as of 11:00
a.m., London time, on such Interest Determination Date, or (B) if "LIBOR
Reuters" is specified in the applicable Pricing Supplement, the arithmetic
mean of the offered rates (unless the specified Designated LIBOR Page by
its terms provides only for a single rate, in which case such single rate
shall be used) for deposits in the London interbank market in the Index
Currency having the Index Maturity designated in the applicable Pricing
Supplement and commencing on the second London Business day immediately
following such Interest Determination Date that appear on the Designated
LIBOR Page as of 11:00 a.m., London time, on such Interest Determination
Date, if at least two such offered rates appear (unless, as aforesaid, only
a single rate is
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required) on such Designated LIBOR Page. If no rate appears on the
Designated LIBOR Page (or, in the case of clause (i)(B) above, if the
Designated LIBOR Page by its terms provides for more than a single rate but
fewer than two offered rates appear on such Page), LIBOR in respect of such
Interest Determination Date will be determined as if the parties had
specified the rate described in clause (ii) below.
(ii) With respect to an Interest Determination Date relating to a LIBOR
Note to which the last sentence of clause (i) above applies, the
Calculation Agent will request the principal London offices of each of four
major reference banks in the London interbank market, as selected by the
Calculation Agent, to provide the Calculation Agent with its offered
quotation for deposits in the Index Currency for the period of the Index
Maturity designated in the applicable Pricing Supplement commencing on the
second London Business Day immediately following such Interest
Determination Date to prime banks in the London interbank market at
approximately 11:00 a.m., London time on such Interest Determination Date
and in a principal amount that is representative for a single transaction
in such Index Currency in such market at such time. If at least two such
quotations are provided, LIBOR determined on such Interest Determination
Date will be the arithmetic mean of such quotations. If fewer than two
quotations are provided, LIBOR determined on such Interest Determination
Date will be the arithmetic mean of the rates quoted at approximately 11:00
a.m. (or such other time specified in the applicable Pricing Supplement),
in the applicable Principal Financial Center (as defined below), on such
Interest Determination Date for loans made in the Index Currency to leading
European banks having the Index Maturity designated in the applicable
Pricing Supplement commencing on the second London Business Day immediately
following such Interest Determination Date and in a principal amount that
is representative for a single transaction in such Index Currency in such
market at such time by three major banks in such Principal Financial Center
selected by the Calculation Agent; provided, however, that if the banks so
selected by the Calculation Agent are not quoting as mentioned in this
sentence, LIBOR with respect to such Interest Determination Date will be
LIBOR in effect on such Interest Determination Date.
"Index Currency" shall be U.S. dollars.
"Designated LIBOR Page" means the display on Page 3750 (or such other page
as is specified in the applicable Pricing Supplement) of the Dow Jones
Telerate Service for the purpose of displaying the London interbank offered
rates of major banks for the applicable Index Currency (or such other page as
may replace that page on that service for the purpose of displaying such
rates), unless "LIBOR Reuters" is designated in the applicable Pricing
Supplement, in which case the Designated LIBOR Page shall be the display on
the Reuters Monitor Money Rates Service for the purpose of displaying the
London interbank offered rates of major banks for the applicable Index
Currency.
Unless provided otherwise in the applicable Pricing Supplement, "Principal
Financial Center" will be The City of New York.
Prime Rate Notes. Prime Rate Notes will bear interest at the interest rate
(calculated with reference to the Prime Rate and the Spread and/or Spread
Multiplier, if any, and subject to the Minimum Interest Rate and the Maximum
Interest Rate, if any) specified in the Prime Rate Notes and in the applicable
Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Prime
Rate" means, with respect to any Interest Determination Date, the rate set
forth in H.15(519) for such date opposite the caption "Bank Prime Loan." If
such rate is not yet published by 9:00 A.M., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, the Prime
Rate for such Interest Determination Date will be the arithmetic mean of the
rates of interest publicly announced by each bank named on the Reuters Screen
NYMF Page (as defined below) as such bank's prime rate or base lending rate as
in effect for such Interest Determination Date as quoted on the Reuters Screen
NYMF Page on such Interest Determination Date, or, if fewer than four such
rates appear on the Reuters Screen NYMF Page for such 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 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 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
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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 $500 million and being
subject to supervision or examination by federal or state authority, selected
by the Calculation Agent to quote such rate or rates. "Reuters Screen NYMF
Page" means the display designated as Page "NYMF" on the Reuters Monitor Money
Rates Service (or such other page as may replace the NYMF Page on that service
for the purpose of displaying prime rates or base lending rates of major
United States banks).
Treasury Rate Notes. Treasury Rate Notes will bear interest at the interest
rate (calculated with reference to the Treasury Rate and the Spread and/or
Spread Multiplier, if any) specified in the Treasury Rate Notes and in the
applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
"Treasury Rate" means, with respect to any Interest Determination Date
relating to a Treasury Rate Note, the rate applicable to the most recent
auction of direct obligations of the United States ("Treasury Bills") having
the Index Maturity designated in the applicable Pricing Supplement, as
published in H.15(519) under the heading "Treasury Bills--auction average
(investment)" or, if not so published by 3:00 p.m., New York City time, on the
Calculation Date pertaining to such Interest Determination Date (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 Index Maturity designated in the applicable Pricing
Supplement are not published or reported as provided above 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) calculated using the arithmetic mean of the secondary market bid rates,
as of approximately 3:30 p.m., New York City time, on such 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 for the issue of Treasury Bills with a remaining
maturity closest to the Index Maturity designated in the applicable Pricing
Supplement; provided, however, that if the dealers selected as aforesaid by
the Calculation Agent are not quoting bid rates as mentioned in this sentence,
the Treasury Rate with respect to such Interest Determination Date will be the
Treasury Rate in effect on such Interest Determination Date.
RENEWABLE NOTES
The Company may also issue from time to time variable rate renewable Notes
("Renewable Notes") that will bear interest at the interest rate (calculated
with reference to a Interest Rate Basis and the Spread and/or Spread
Multiplier, if any, and subject to a minimum interest rate and maximum
interest rate, if any) specified in the Renewable Notes and in the applicable
Pricing Supplement. Renewable Notes will be issued only in book-entry form.
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
in each year 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 (or to such other date as is specified in the
applicable Pricing Supplement), 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 to such effect to the Paying Agent
not less than nor more than a number of days to be specified in the applicable
Pricing Supplement prior to such Election Date. Such option may be exercised
with respect to less than the entire principal amount of the Renewable Notes;
provided, however, 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
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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 Paying Agent on any day following the effective date of the
election to terminate the automatic extension of maturity and prior to the
fifteenth calendar day 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, however, 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 Regular 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.
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 of 100% of the principal
amount of the Renewable Notes to be redeemed, together with accrued and unpaid
interest to the date of redemption. Notwithstanding anything to the contrary
in this 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 30 and not more than 60 calendar days prior to the
date fixed for redemption.
Renewable Notes may also be issued, from time to time, with the Spread
and/or Spread Multiplier to be reset by a remarketing agent in remarketing
procedures (the "Remarketing Procedures") to be specified in such Renewable
Notes and in the applicable Pricing Supplement. A description of the
Remarketing Procedures, the terms of the remarketing agreement between the
Company and the remarketing agent and the terms of any additional agreements
with other parties that may be involved in the Remarketing Procedures will be
set forth in the applicable Pricing Supplement.
EXTENSION OF MATURITY
The Pricing Supplement relating to each Fixed Rate Note (other than an
Amortizing Note) will indicate whether the Company has the option to extend
the maturity of such Fixed Rate Note for one or more periods of one or more
whole years (each an "Extension Period") up to but not beyond the date (the
"Final Maturity Date") set forth in such Pricing Supplement. If the Company
has such option with respect to any such Fixed Rate Note (an "Extendible
Note"), the following procedures will apply, unless modified as set forth in
the applicable Pricing Supplement.
The Company may exercise such option with respect to an Extendible Note by
notifying the Paying Agent of such exercise at least 45 but not more than 60
calendar days prior to the stated maturity date originally in effect with
respect to such Note (the "Original Maturity Date") or, if the stated maturity
date of such Note has already been extended, prior to the stated maturity date
then in effect (an "Extended Maturity Date"). No later than 38 calendar days
prior to the Original Maturity Date or an Extended Maturity Date, as the case
may be (each, a "Maturity Date"), the Paying Agent will mail to the holder of
such Extendible Note a notice (the "Extension Notice") relating to such
Extension Period, first class mail, postage prepaid, setting forth (a) the
election of the Company to extend the maturity of such Extendible Note; (b)
the new Extended Maturity Date;
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(c) the interest rate applicable to the Extension Period; and (d) the
provisions, if any, for redemption during the Extension Period, including the
date or dates on which, 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 Paying Agent of an Extension Notice to the holder of an
Extendible Note, the maturity of such Note shall be extended automatically,
and, except as modified by the Extension Notice and as described in the next
paragraph, such Note will have the same terms it had prior to the mailing of
such Extension Notice.
Notwithstanding the foregoing, not later than 10:00 a.m., New York City
time, on the twentieth calendar day prior to the Maturity Date then in effect
for an Extendible Note (or, if such day is not a Business Day, not later than
10:00 a.m., New York City time, on the immediately succeeding Business Day),
the Company may, at its option, revoke the interest rate provided for in the
Extension Notice and establish a higher interest rate for the Extension Period
by causing the Paying Agent to send notice of such higher interest rate to the
holder of such Note by first class mail, postage prepaid, or by such other
means as shall be agreed between the Company and the Paying Agent. Such notice
shall be irrevocable. All Extendible Notes with respect to which the Maturity
Date is extended in accordance with an Extension Notice will bear such higher
interest rate for the Extension Period, whether or not tendered for repayment.
If the Company elects to extend the maturity of an Extendible Note, the
holder of such Note will have the option to require the Company to repay such
Note on the Maturity Date then in effect at a price equal to the principal
amount thereof plus an accrued and unpaid interest to such date. In order for
an Extendible Note to be so repaid on such Maturity Date, the holder thereof
must follow the procedures set forth above under "Repayment at the
Noteholders' Option; Repurchase" for optional repayment, except that the
period for delivery of such Note or notification to the Paying Agent shall be
at least 25 but not more than 35 calendar days prior to the Maturity Date then
in effect and except that a holder who has tendered an Extendible Note for
repayment pursuant to an Extension Notice may, by written notice to the Paying
Agent, revoke any such tender for repayment until 3:00 p.m., New York City
time, on the twentieth calendar day prior to the Maturity Date then in effect
(or, if such day is not a Business Day, until 3:00 p.m., New York city time,
on the immediately succeeding Business Day).
AMORTIZING NOTES
Amortizing Notes are Fixed Rate Notes for which payments combining principal
and interest are made in installments over the life of the Note ("Amortizing
Notes"). Unless otherwise specified in the applicable Pricing Supplement,
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. Further information concerning
additional terms and conditions of any issue of Amortizing Notes will be
provided in the applicable Pricing Supplement. A table setting forth repayment
information in respect of each Amortizing Note will be included in the
applicable Pricing Supplement and set forth on such Notes.
ORIGINAL ISSUE DISCOUNT NOTES
Original Issue Discount Notes are Notes issued at a discount from the
principal amount payable at maturity and which are considered to be issued
with original issue discount which must be included in income for United
States federal income tax purposes at a constant rate ("Original Issue
Discount Notes"). See "United States Tax Considerations." Certain additional
considerations relating to Original Issue Discount Notes may be described in
the Pricing Supplement relating thereto.
OTHER PROVISIONS, ADDENDA
Any provisions with respect to Notes, including the determination of an
Interest Rate Basis, the specification of Interest Rates Basis, calculation of
the interest rate applicable to a Floating Rate Note, its Interest Payment
Dates or any other matter relating thereto may be modified by the terms
specified under "Other Provisions" on
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the face thereof or in an Addendum relating thereto, if so specified on the
face thereof and in the applicable Pricing Supplement.
GOVERNING LAW AND JUDGMENTS
The Indenture and Notes will be governed by and construed in accordance with
the laws of the State of New York.
UNITED STATES TAX CONSIDERATIONS
The following is a summary of the principal United States federal income tax
consequences of the purchase, ownership and disposition of the Notes. This
summary is based on the Internal Revenue Code of 1986, as amended to the date
hereof (the "Code") and final, temporary and proposed Treasury Regulations,
Revenue Rulings, administration pronouncements and judicial decisions in
existence on the date of this Prospectus Supplement. It deals only with Notes
held as capital assets and does not deal with special classes of holders, such
as (i) dealers in securities, (ii) life insurance companies, (iii) persons who
enter into certain hedging transactions in connection with the Notes, (iv)
persons holding Notes as part of a straddle (as defined in Section 1092 of the
Code) or as part of a conversion transaction (as defined in Section 1258 of
the Code), (v) United States holders whose functional currency (as defined in
Section 985 of the Code) is other than the United States dollar or (vi) except
as described under "United States Tax Considerations--U.S. Consequences to
Alien Holders," holders other than United States Holders (as defined below).
Moreover, this summary does not discuss Original Issue Discount Notes (as
defined below which qualify as "applicable high-yield discount obligations"
under Section 163(i) of the Code. Holders of Original Issue Discount Notes
which are "applicable high-yield discount obligations" may be subject to
special rules. The tax consequences of holding a particular Note will depend,
in part, on the particular terms of such Note as set forth in the related
Pricing Supplement. Potential purchasers of Notes should also understand that
future legislative, administrative and judicial changes' could modify the tax
consequences described in this summary. As used in this section "holder"
refers to the person who is considered the owner of a Note for federal income
tax purposes, whether or not such person is the registered holder of a Note.
UNITED STATES HOLDERS
"United States Holder" means an owner of a Note who is a citizen or resident
of the United States for United States federal income tax purposes, an estate
or trust subject to United States federal income taxation without regard to
the source of its income or a corporation, partnership or other entity created
or organized in or under the laws of the United States, or any State or the
District of Columbia.
PAYMENTS OF INTEREST ON NOTES
Except as set forth below, interest on a Note (whether or not denominated in
United States dollars) will be taxable to a United States Holder as ordinary
interest income at the time it is accrued or received, in accordance with the
United States Holder's method of accounting for tax purposes.
ORIGINAL ISSUE DISCOUNT NOTES
The following is a general discussion of the United States federal income
tax consequences to holders of Original Issue Discount Notes.
Original issue discount is the excess of the stated redemption price at
maturity of a Note over its issue price if such excess is more than a de
minimis amount (generally 1/4 of l% of the Note's stated redemption price at
maturity multiplied by the number of complete years to maturity). United
States Holders of Notes with a de minimis amount of original issue discount
will generally include such original issue discount in income as capital gain
on a pro rata basis as principal payments are made on the Notes. The issue
price of an issue of
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Notes will be equal to the first price at which a substantial amount of such
Notes are sold to the public. The stated redemption price at maturity of a
Note is the total of all payments required to be made under the Note other
than "qualified stated interest" payments.
The term "qualified stated interest" means stated interest that is
unconditionally payable as a series of payments in cash or property (other
than debt instruments of the issuer) at least annually during the entire term
of the Note either at a single fixed rate or at a floating rate established by
a "Variable Rate Note" as defined below. Interest is payable at a single fixed
rate only if the rate takes into account the length of the interval between
payments. A "Variable Rate Note" means a Note which (a) has an issue price
that does not exceed the sum of the noncontingent principal payments to be
made on the Note by more than a specified amount, (b) provides for stated
interest (compounded or paid at least annually) at (i) one or more qualified
floating rates, (ii) a single fixed rate and one or more qualified floating
rates, (iii) a single objective rate or (iv) a single fixed rate and a single
objective rate that is a qualified inverse floating rate, and (c) provides
that each "qualified floating rate" or "objective rate" in effect during an
accrual period is set at the current value of that rate (which is the rate on
any day during the period beginning three months prior to the first day on
which the value is in effect under the Note and ending one year following that
day). A "qualified floating rate" is any floating rate where variations in
such rate can reasonably be expected to measure contemporaneous variations in
the cost of newly borrowed funds in the same currency as the Note (e.g., the
Prime Rate or LIBOR). A fixed multiple of not more than 1.35 times a qualified
floating rate, whether or not this rate is increased or decreased by a fixed
rate, is a qualified floating rate. Restrictions on the maximum or minimum
stated interest rate ("cap" or "floor"), restrictions on the amount of
increase or decrease in the stated interest rate ("governor") or other similar
restrictions generally will cause the rate not to be treated as a qualified
floating rate. However, the following restrictions will not cause a variable
rate to fail to be a qualified floating rate: (i) a cap, floor or governor
that is fixed throughout the term of the Note, (ii) a cap or similar
restriction that is not reasonably expected as of the issue date to cause the
yield on the Note to be significantly less than the expected yield determined
without the cap, (iii) a floor or similar restriction that is not reasonably
expected as of the date of issue to cause the yield on the Note to be
significantly more than the expected yield determined without the floor, or
(iv) a governor or similar restriction that is not reasonably expected as of
the issue date to cause the yield on the Note to be significantly more or
significantly less than the expected yield determined without the governor. An
"objective rate" includes a rate other than a qualified floating rate based on
the change in price of actively traded personal property or on changes in the
value of an index of the prices of such property. An objective rate must be
determined using a single formula that is fixed throughout the term of the
Note. A multiple of a qualified floating rate is also an objective rate. If a
Floating Rate Note provides for two or more qualified floating rates that can
reasonably be expected to have approximately the same values throughout the
term of the Note, the qualified floating rates together constitute a single
qualified floating rate. If interest on a debt instrument is stated at a fixed
rate for an initial period of less than 1 year followed by a variable rate
that is either a qualified floating rate or an objective rate for a subsequent
period, and the value of the variable rate on the issue date is intended to
approximate the fixed rate, the fixed rate and the variable rate together
constitute a single qualified floating rate or objective rate. Two or more
rates will be conclusively presumed to meet the requirements of the preceding
sentences if the values of the applicable rates on the issue date are within
1/4 of 1 percent of each other. Special tax considerations (including possible
original issue discount) may arise with respect to Floating Rate Notes
providing for (i) one Interest Rate Basis followed by one or more Interest
Rate Bases, (ii) a single fixed rate followed by a qualified floating rate or
(iii) a Spread Multiplier. Purchasers of Floating Rate Notes with any of such
features should carefully examine the applicable Pricing Supplement and should
consult their tax advisors with respect to such a feature since the tax
consequences will depend, in part, on the particular terms of the purchased
Note. Under these rules, Commercial Paper Rate Notes, Prime Rate Notes, LIBOR
Notes, Treasury Rate Notes, CD Rate Notes, and Federal Funds Rate Notes, other
than certain Notes subject to caps or floors, should generally be treated as
Variable Rate Notes. Special rules apply to Notes which are not Variable Rate
Notes as defined above, e.g. (i) bear interest at a floating rate subject to a
maximum numerical interest rate limitation or a minimum numerical interest
rate limitation, (ii) bear interest for one or more accrual periods at a rate
below the rate applicable for the remaining term of such Note (e.g., Notes
with interest holidays), (iii) bear interest at one or more variable rates
that are not qualified floating rates or objective rates or (iv) bear interest
at
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the lesser of two or more variable rates. Such Notes may be treated as issued
with original issue discount, their stated interest may be treated as original
issue discount, or such Notes may be treated as contingent payment
obligations. The applicable pricing supplement will contain a discussion of
any special provisions of the income tax regulations which may be relevant to
such Notes.
Long-Term Original Issue Discount Notes. A United States Holder of Original
Issue Discount Notes having maturities in excess of one year ("Long-Term
Original Issue Discount Notes") is required to include original issue discount
in income as it accrues, in accordance with a constant yield method based on a
compounding of interest, before the receipt of cash attributable to such
income. The amount of original issue discount includible in income by the
holder of a Long-Term Original Issue Discount Note during the taxable year is
the sum of the daily portions of original issue discount with respect to such
Note for each day during the taxable year on which such holder held such Note
("accrued original issue discount"). The daily portion of original issue
discount on any Long-Term Original Issue Discount Note is determined by
allocating to each day in any "accrual period" a ratable portion of the
original issue discount allocable to that period. As discussed below, the
daily portion is reduced in the case of a holder who pays an acquisition
premium for a Long-Term Original Issue Discount Note. The amount of original
issue discount on a Long-Term Original Issue Discount Note allocable to each
accrual period is determined by (i) multiplying the "adjusted issue price" of
the Long-Term Original Issue Discount Note at the beginning of such accrual
period by its "yield to maturity" (adjusted for the length of the accrual
period) and (ii) subtracting from that product the amount of qualified stated
interest, if any, allocable to such accrual period. If the interval between
payments of qualified stated interest contains more than one accrual period,
the amount of qualified stated interest payable at the end of the interval is
allocated pro rata (on the basis of their relative lengths) to each accrual
period in the interval. The term "accrual period" means, in the case of a
Long-Term Original Issue Discount Note, a period of any length up to one year
which the holder elects to use to compute original issue discount, provided
that each scheduled payment of principal or interest occurs either on the
final day of an accrual period or on the first day of an accrual period. The
holder may vary the length of the accrual period over the term of the Long-
Term Original Issue Discount Note so long as the holder also adjusts the
Note's yield to maturity to reflect the length of the period. The term "yield
to maturity" means the discount rate which, when used to compute the present
value of all principal and interest payments to be made under the Note, will
produce an amount equal to the issue price of the Note. The "adjusted issue
price" of a Long-Term Original Issue Discount Note at the beginning of any
accrual period is the sum of the issue price of the Long-Term Original Issue
Discount Note plus the accrued original issue discount for each prior accrual
period (without regard to any reduction for amortized acquisition premium)
plus any qualified stated interest applicable to the prior accrual periods not
yet payable less any prior payments on the Long-Term Original Issue Discount
Note that were not qualified stated interest payments. In computing the amount
of original issue discount allocable to each accrual period for a Variable
Rate Note which is a Long-Term Original Issue Discount Note, the Variable Rate
Note is "converted" to an equivalent fixed rate debt instrument by
substituting an appropriate fixed rate (as specified by the income tax
regulations) for the variable rate. The rules applicable to fixed rate
instruments, described above, are then applied to determine original issue
discount accruals. Variable Rate Notes may be subject to certain special rules
and any special tax considerations with respect to Variable Rate Notes will be
set forth in the related Pricing Supplement. With respect to an initial
accrual period which is shorter than other accrual periods, the original issue
discount allocable to such period may be computed using any reasonable method.
With respect to the final accrual period, the original issue discount
allocable to such period is the difference between the amount payable at
maturity other than qualified stated interest and the adjusted issue price at
the beginning of the final accrual period.
Under the foregoing rules, Unites States Holders may have to include in
income increasingly greater amounts of original issue discount in successive
accrual periods.
Short-Term Original Issue Discount Notes. In the case of Notes having
maturities of one year or less ("Short-Term Original Issue Discount Notes"), a
special rule provides that payments of stated interest will not be considered
to be qualified stated interest. A cash basis United States Holder of a Short-
Term Original Issue Discount Note will not be required to accrue original
issue discount on a current basis, but may elect to do so. Such an election
will apply to all obligations acquired by the holder on or after the first day
of the first taxable
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year for which the election is made and will be irrevocable without the
consent of the Internal Revenue Service. A cash basis holder of a Short-Term
Original Issue Discount Note will, nevertheless, be required to take stated
interest into income as it is received. Accrual basis holders and certain
other holders, including banks and dealers in securities, are required to
accrue the original issue discount on Short-Term Original Issue Discount Notes
currently. Such holders will accrue original issue discount on a straight-line
basis, but may make an irrevocable election to accrue it under the constant
yield method based on daily compounding. In the case of a holder who is not
required and who does not elect to include the original issue discount in
income currently, (a) any gain realized on the disposition of a Short-Term
Original Issue Discount Note will be ordinary income to the extent of the
original issue discount accrued on a straight-line basis (or, if elected,
according to a constant yield method based on daily compounding) through the
date of disposition and (b) such holder will be required to defer net
deductions for interest on borrowing allocable to these Short-Term Original
Issue Discount Notes in an amount not exceeding the deferred income until the
deferred income is recognized.
Any holder (whether cash or accrual basis) who otherwise is required or has
elected to accrue original issue discount on a Short-Term Original Issue
Discount Note can elect to accrue the "acquisition discount," if any, with
respect to the Short-Term Original Issue Discount Note on a current basis in
lieu of original issue discount. Acquisition discount is the excess of the sum
of all remaining payments to be made under the Short-Term Note, including
stated interest, over the holder's tax basis in the Note at the time of
acquisition. Acquisition discount will be treated as accruing on a straight-
line basis, unless the holder makes an irrevocable election to use the
constant yield method.
Other Features and Reporting of Original Issue Discount. Certain of the
Original Issue Discount Notes may be redeemed prior to maturity either at the
option of the holder or the Company. Original Issue Discount Notes containing
such feature may be subject to rules that differ from the general rules
discussed above. Persons intending to purchase Original Issue Discount Notes
with any such feature should carefully examine the related Pricing Supplement
and should consult with their own tax advisors with respect to such features
since the tax consequences with respect to original issue discount will
depend, in part, on the particular terms and the particular features of the
purchased Note.
The Company is required to report to the Internal Revenue Service the amount
of original issue discount accrued on Original Issue Discount Notes held of
record by United States persons other than corporations and other exempt
holders. The amount required to be reported by the Company may not be equal to
the amount of original issue discount required to be reported as taxable
income by a holder of such Original Issue Discount Notes where the holder and
the Company use different accrual periods to determine the amount of original
issue discount or where the holder is not an original purchaser.
TAX BASIS AND DISPOSITION OF NOTES
A United States Holder's tax basis in a Note, other than an Original Issue
Discount Note, will generally be the dollar cost of the Note to such holder
increased by any amounts of market discount previously included in income by
the holder with respect to such Note and reduced by any amortized bond premium
and by principal payments received by the holder. A United States Holder's tax
basis in an Original Issue Discount Note will generally be the cost of the
Note to such holder increased by any original issue discount and market
discount previously included in income and decreased by the amount of any
payment on the Original Issue Discount Note, other than a payment of qualified
stated interest and by any amortized acquisition premium.
Except as discussed above with respect to Short-Term Original Issue Discount
Notes, upon the disposition of a Note, a United States Holder will recognize
gain or loss equal to the difference between the amount realized on the
disposition and the holder's tax basis in the Note. For these purposes, the
amount realized does not include any amount attributable to accrued interest
on the Note. Amounts attributable to accrued interest are treated as interest
as described under "Payments of Interest on Notes" above.
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Gain or loss realized on the sale, exchange or retirement of a Note will be
capital gain or loss (except in the case of a short-term Original Issue
Discount Note, to the extent of any original issue discount not previously
included in the United States Holder's taxable income and except as otherwise
described in the discussion under "Foreign Currency Notes" below), and will be
long-term capital gain or loss if at the time of sale, exchange or retirement
the Note has been held for more than one year. See "Original Issue Discount
Notes" above. The excess of net long-term capital gains over net short-term
capital losses is taxed at a lower rate than ordinary income for certain non-
corporate taxpayers. The distinction between capital gain or loss and ordinary
income or loss is also relevant for purposes of, among other things,
limitations on the deductibility of capital losses.
PREMIUM AND MARKET DISCOUNT
If a United States Holder purchases a Note with a maturity date more than
one year from the date of issue for an amount that is less than its stated
redemption price at maturity, or less than its revised issue price if the Note
is an Original Issue Discount Note, the amount of the difference will be
treated as "market discount" for federal income tax purposes, unless such
difference is less than a specified de minimis amount (generally 1/4 of 1% of
the Note's stated redemption price at maturity, or its revised issue price, if
the Note is an Original Issue Discount Note, multiplied by the number of
complete years to maturity from the date of acquisition by the holder). The
revised issue price of an Original Issue Discount Note is the sum of the issue
price of the Note and the aggregate amount of the original issue discount
includible, without regard to the rules for acquisition premium discussed
below, in the gross income of all previous holders of the Note. Any payments
to prior holders of amounts other than qualified stated interest should be
subtracted in determining the revised issue price. Under the market discount
rules, a holder will be required to treat any principal payment (or in the
case of an Original Issue Discount Note, any payment that does not constitute
qualified stated interest) on, or any gain on the disposition of, a Note as
ordinary income to the extent of the market discount which has not previously
been included in income and which is treated as having accrued on such Note at
the time of such payment or disposition. If such Note is disposed of in
certain nontaxable transactions (including a gift), accrued market discount
will be includible as ordinary income to the holder as if such holder had sold
the Note at its then fair market value. In addition. the holder may be
required to defer until the maturity of the Note, or its earlier disposition
in a taxable transaction, the deduction of all or a portion of the interest
expense on any indebtedness incurred or continued to purchase or carry such
Note.
Any market discount will be considered to accrue on a straight-line basis
during the period from the date of acquisition to the maturity date of the
Note, unless the United States Holder makes an irrevocable election to compute
the accrual on a constant yield basis. A holder of a Note may elect to include
market discount in income currently as it accrues (on either a straight-line
or a constant yield basis), in which case the rule described above regarding
deferral of interest deductions will not apply. This election to include
market discount in income currently, once made, applies to all market discount
obligations of a holder acquired on or after the first day of the first
taxable year to which the election applies, and may not be revoked without the
consent of the Internal Revenue Service.
A United States Holder who purchases an Original Issue Discount Note for an
amount that is greater than its adjusted issue price will be considered to
have purchased such Note at an "acquisition premium", unless the holder will
be considered to have purchased the Note at a premium as described below.
Under the acquisition premium rules, the daily portion of original issue
discount which such holder must include in its gross income with respect to
such Note for any accrual period will be reduced by the daily portion of such
acquisition premium properly allocable to such period.
If a United States Holder acquires a Note for an amount that is greater than
the sum of all amounts payable under the Note after the purchase date other
than payments of qualified stated interest, such holder will be considered to
have purchased such Note at a premium ("bond premium") equal in amount to such
excess and the Note will not be an Original Issue Discount Note in the case of
such holder. Such holder may make an irrevocable election to amortize such
premium generally over the remaining term of the Note. If such Note may be
optionally redeemed prior to maturity after the holder has acquired it, the
amount of amortizable bond
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premium is determined with reference to the amount payable on maturity or, if
its results in a smaller premium attributable to the period of earlier
redemption date, with reference to the amount payable on the earlier
redemption date. The election applies to all bonds held by the holder at the
beginning of the first taxable year to which the election applies or acquired
thereafter and may be revoked only with the consent of the Internal Revenue
Service. Premium will be amortized using a constant yield method. The amount
amortized in any year will be treated as a reduction of the holder's interest
income from the Note. Bond premium on a Note held by a holder that does not
make such an election will decrease the gain or increase the loss otherwise
recognized on disposition of the Note.
ELECTION BY HOLDER
A holder of a Note may elect to include in gross income all interest that
accrues on a Note using the constant yield method. For purposes of the
election, interest includes stated interest, acquisition discount, original
issue discount, de minimis original issue discount, market discount, de
minimis market discount and unstated interest, as adjusted by any amortizable
bond premium or acquisition premium. If the holder makes the election with
respect to any obligation with amortizable bond premium or market discount,
the election will be deemed made for all of the holder's other obligations
with amortizable bond premium or market discount. In applying the constant
yield method, the Note is treated as if (i) it is issued for the holder's
adjusted basis immediately after its acquisition by the holder, (ii) it is
issued on the holder's acquisition date and (iii) no payments provided for in
the Note are qualified stated interest payments. The election may not be
revoked without the approval of the Internal Revenue Service.
EXTENSION OF MATURITY AND RESET OF INTEREST RATE
As described under "Description of Notes--Extension of Maturity" above, the
issuer will have the option to extend the maturity of a Note in certain
circumstances and, if the issuer exercises such option, the Holder will have
the option to require the issuer to repay the Note on the Maturity Date.
Although the law is currently unclear, proposed Treasury Regulations suggest
that any such extension of the maturity of a Note that exceeds the lesser of 5
years or 50% of the original term will likely be treated as a taxable
exchange. Any discussion herein that otherwise makes reference to sales,
exchanges or other disposition should be read to include any deemed
disposition that would result from an extension of maturity.
BACKUP WITHHOLDING
A 31% "backup" withholding tax may apply to payments of principal, premium
and interest (including original issue discount, if any) made to, and the
proceeds of disposition of a Note by, certain noncorporate holders. Backup
withholding will apply if a United States Holder (i) fails to furnish a
Taxpayer Identification Number ("TIN") (social security number or employer
identification number) or (ii) under certain circumstances, fails to certify
that the TIN furnished by the holder is correct and that the holder has not
been notified by the Internal Revenue Service that the holder is subject to
backup withholding for failure to report interest and dividend payments.
Backup withholding will also apply if the payor is notified by the Internal
Revenue Service that the payee has failed to report properly a correct TIN or
interest and dividends earned by such payee.
Any amounts withheld from a payment to a holder under the backup withholding
rules will be allowed as a credit against such holder's United States federal
income tax liability and may entitle such holder to a refund, provided the
required information is furnished to the Internal Revenue Service.
TAX CONSEQUENCES TO UNITED STATES ALIEN HOLDERS
As used herein, the term "United States Alien Holder" means an owner of a
Note that is, for United States federal income tax purposes, (i) a non
resident alien individual, (ii) a foreign corporation, (iii) a non-resident
alien fiduciary of a foreign estate or trust or (iv) a foreign partnership,
one or more of the members of which is, for United States federal income tax
purposes, a non-resident alien individual, a foreign corporation or a non-
resident alien fiduciary of a foreign estate or trust.
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Under present United States federal law, and subject to the discussion below
concerning backup withholding:
(a) payments of principal, interest (including original issue discount,
if any) and premium on the Notes by the Company or any paying agent to any
United States Alien Holder will not be subject to United States federal
withholding tax, provided that, in the case of interest, (i) such holder
does not own, actually or constructively, 10 percent or more of the total
combined voting power of all classes of stock of the Company entitled to
vote, is not a controlled foreign corporation related, directly or
indirectly, to the Company through stock ownership, and is not a bank
receiving interest described in Section 881(c)(3)(A) of the Code and (ii)
if the Note is a Registered Note, the statement requirement set forth in
Section 871(h) or Section 881(c) of the Code has been fulfilled with
respect to the beneficial owner, as discussed below;
(b) a United States Alien Holder of a Note will not be subject to United
States federal income tax on gain realized on the sale, exchange or other
disposition of such Note, unless (i) such holder is an individual who is
present in the United States for 183 days or more in the taxable year of
disposition, and either (a) such individual has a "tax home" (as defined in
Code Section 911(d)(3)) in the United States (unless such gain is
attributable to a fixed place of business in a foreign country maintained
by such individual and has been subject to foreign tax of at least 10%) or
(b) the gain is attributable to an office or other fixed place of business
maintained by such individual in the United States or (ii) such gain is
effectively connected with the conduct by such Holder of a trade or
business in the United States.
Sections 871(h) and 881(c) of the Code require that, in order to obtain the
portfolio interest exemption from withholding tax described in paragraph (a)
above in the case of a Registered Note, either the beneficial owner of the
Note, or a securities clearing organization, bank or other financial
institution that holds customers' securities in the ordinary course of its
trade or business (a "Financial Institution") and that is holding the Note on
behalf of such beneficial owner, file a statement with the withholding agent
to the effect that the beneficial owner of the Note is not a United States
Holder. Under temporary United States Treasury Regulations, such requirement
will be fulfilled if the beneficial owner of a Note certifies on Internal
Revenue Service Form W-8, under penalties of perjury, that it is not a United
States Holder and provides its name and address, and any Financial Institution
holding the Note on behalf of the beneficial owner files a statement with the
withholding agent to the effect that it has received such a statement from the
Holder (and furnishes the withholding agent with a copy thereof).
If a United States Alien Holder of a Note is engaged in a trade or business
in the United States, and if interest (including original issue discount) on
the Note is effectively connected with the conduct of such trade or business,
the United States Alien Holder, although exempt from the withholding tax
discussed in the preceding paragraph, will generally be subject to regular
United States income tax on interest (including any original issue discount)
and on any gain realized on the sale, exchange or other disposition of a Note
in the same manner as if it were a United States Holder. See above discussion.
In lieu of the certificate described in the preceding paragraph, such a holder
will be required to provide to the Company a properly executed Internal
Revenue Service Form 4224 in order to claim an exemption from withholding tax.
In addition, if such United States Alien Holder is a foreign corporation, it
may be subject to a branch profits tax equal to 30% (or such lower rate
provided by an applicable treaty) of its effectively connected earnings and
profits for the taxable year, subject to certain adjustments. For purposes of
the branch profits tax, interest (including original discount on and any gain
recognized on the sale, exchange or other disposition of a Note will be
included in the effectively connected earnings and profits of such United
States Alien Holder if such interest or gain, as the case may be, is
effectively connected with the conduct by the United States Alien Holder of a
trade or business in the United States.
Under Section 2105(b) of the United States federal estate tax law, a Note or
coupon held by an individual who is not a citizen or resident of the United
States at the time of his death will not be subject to United States federal
estate tax as a result of such individual's death, provided that the
individual does not own, actually or constructively, 10 percent or more of the
total combined voting power of all classes of stock of the Company entitled to
vote and, at the time of such individual's death, payments with respect to
such Note would not have been effectively connected to the conduct by such
individual of a trade or business in the United States.
S-22
<PAGE>
Backup Withholding and Information Reporting. As discussed above, under
current United States federal income tax law, a 31% backup withholding tax and
information reporting requirements apply to certain payments of principal,
premium and interest (including original issue discount) made to, and to the
proceeds of sale before maturity by, certain noncorporate United States
persons. Under current Treasury Regulations, backup withholding will not apply
nor will it apply to payments made on a Registered Note if the certifications
required by Sections 871(h) and 881(c) are received, provided in each case
that the Company or such paying agent, as the case may be, does not have
actual knowledge that the payee is a United States person.
Under current Treasury Regulations, payments on the sale, exchange or other
disposition of a Note made to or through a foreign office of a broker
generally will not be subject to backup withholding. However, if such broker
is a United States person, a controlled foreign corporation for United States
tax purposes or a foreign person 50 percent or more of whose gross income is
effectively connected with a United States trade or business for a specified
three-year period, information reporting will be required unless the broker
has in its records documentary evidence that the beneficial owner is not a
United States person and certain other conditions are met or the beneficial
owner otherwise establishes an exemption. Under proposed Treasury Regulations,
backup withholding may apply to any payment which such broker is required to
report if such broker has actual knowledge that the payee is a United States
person. Payments to or through the United States office of a broker will be
subject to backup withholding and information reporting unless the holder
certifies, under penalties of perjury, that it is not a United States person
or otherwise establishes an exemption.
United States Alien Holders of Notes should consult their tax advisers
regarding the application of information reporting and backup withholding in
their particular situations, the availability of an exemption therefrom, and
the procedure for obtaining such an exemption, if available. Any amounts
withheld from a payment to a United States Alien Holder under the backup
withholding rules will be allowed as a credit against such Holder's United
States federal income tax liability and may entitle such Holder to a refund,
provided that the required information is furnished to the United States
Internal Revenue Service.
THE FEDERAL INCOME TAX SUMMARY SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT
TO THE TAX CONSEQUENCES TO THEM OF THE ACQUISITION, OWNERSHIP AND DISPOSITION
OF THE NOTES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND
OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX
LAWS.
PLAN OF DISTRIBUTION
GENERAL
Under the terms of the Distribution Agreement dated as of July 19, 1995 (the
"Distribution Agreement"), the Notes are being offered on a continuing basis
by the Company through the Agents, each of which has agreed to use its
reasonable best efforts, consistent with industry standards, to solicit
purchases of the Notes. Except as otherwise agreed by the Company and an Agent
with respect to a particular Note, the Company will pay each Agent a
commission ranging from .125% to .750% of the principal amount of each Note,
depending on its maturity sold through such Agent. The Company will have the
sole right to accept offers to purchase Notes and may reject any such offer,
in whole or in part. Each Agent shall have the right, in its discretion
reasonably exercised, without notice to the Company, to reject any offer to
purchase Notes received by it, in whole or in part.
The Company also may sell Notes to any Agent, acting as principal, at a
discount or concession to be agreed upon at the time of sale, for resale to
one or more investors or other purchasers at a fixed offering price or at
varying prices related to prevailing market prices at the time of such resale
or otherwise, as determined by such Agent and specified in the applicable
Pricing Supplement. The Agents may offer the Notes they have purchased
S-23
<PAGE>
as principal to other dealers. The Agents may sell Notes to any dealer at a
discount and, unless otherwise specified in the applicable Pricing Supplement,
such discount allowed to any dealer will not be in excess of the discount to
be received by such Agent from the Company. Unless otherwise indicated in the
applicable Pricing Supplement, any Note sold to an Agent as principal will be
purchased by such Agent at a price equal to 100% of the principal amount
thereof less a percentage equal to the commission applicable to any agency
sale of a Note of identical maturity, and may be resold by the Agent to
investors and other purchasers from time to time in one or more transactions,
including negotiated transactions as described above. After the initial public
offering of Notes to be resold to investors and other purchasers, the public
offering price, concession and discount may be changed.
The Notes may also be sold by the Company directly to investors (other than
broker-dealers) in those jurisdictions in which the Company is permitted to do
so. No commission will be paid on Notes sold directly by the Company.
The Company may also accept (but not solicit) offers to purchase Notes from
time to time through one or more additional agents or dealers, acting either
as agent or principal, on substantially the same terms as those applicable to
sales of Notes to or through the Agents pursuant to the Distribution
Agreement. Any such additional agent shall, with respect to such Notes, be
deemed to be included in all references to an "Agent" or the "Agents"
hereunder.
The Company reserves the right to withdraw, cancel or modify the offer made
hereby without notice.
Each purchaser of a Note will arrange for payment as instructed by the
applicable Agent. The Agents are required to deliver the proceeds of the Notes
to the Company in immediately available funds, to a bank designated by the
Company in accordance with the terms of the Distribution Agreement, on the
date of settlement.
An Agent may be deemed to be an "underwriter" within the meaning of the
Securities Act of 1933, as amended (the "Act"). The Company has agreed to
indemnify the Agents against and contribute toward certain liabilities,
including liabilities under the Act. The Company has also agreed to reimburse
the Agents for certain expenses.
The Company does not intend to apply for the listing of the Notes on a
national securities exchange, but has been advised by the Agents that the
Agents intend to make a market in the Notes, as permitted by applicable laws
and regulation. The Agents are not obligated to do so, however, and the Agents
may discontinue making a market at any time without notice. No assurance can
be given as to the liquidity of any trading market for the Notes.
Concurrently with the offering of the Notes through the Agents as described
herein, the Company may issue other Debt Securities as described in the
accompanying Prospectus. See "Description of Notes" on page S-3.
Certain of the Agents and their affiliates engage in transactions with and
perform services for the Company in the ordinary course of business and have
engaged, and may in the future engage, in commercial banking and investment
banking transactions with the Company.
NatWest Capital Markets Limited ("NatWest"), a United Kingdom broker-dealer
and a member of the Securities Futures Authority Limited, has agreed that, as
part of the distribution of the Notes and subject to certain exceptions, it
will not offer or sell any Notes within the United States, its territories or
possessions or to persons who are citizens thereof or residents therein,
provided that NatWest Securities Corporation, an affiliate of NatWest and a
United States broker-dealer, may be a selling broker with respect to the
Notes, acting as agent for purchasers within the United States. The
Distribution Agreement does not limit the sale of the Notes offered hereby
outside the United States.
NatWest has further represented and agreed that:
1. it has not offered or sold and will not offer or sell prior to the
date six months after their date of issue any Notes, having an original
maturity of one year or greater, to persons in the United Kingdom,
S-24
<PAGE>
except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent) for
the purposes of their businesses or otherwise in circumstances which have
not resulted and will not result in an offer to the public in the United
Kingdom within the meaning of the Public Offers of Securities Regulations
1995;
2. it has complied with and will comply with all applicable provisions of
the Financial Services Act 1986 with respect to anything done by it in
relation to the Notes in, from or otherwise involving the United Kingdom;
and
3. it has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the issue of
the Notes to a person who is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order
1995 or is a person to whom such document may otherwise lawfully be issued
or passed on.
S-25
<PAGE>
PROSPECTUS
$500,000,000
TYSON FOODS, INC.
DEBT SECURITIES
----------------
Tyson Foods, Inc. (the "Company") intends to issue from time to time debt
securities (the "Debt Securities"), which will be direct, unsecured
obligations of the Company and offered to the public on terms determined by
market conditions at the time of sale. The Company may sell Debt Securities
for proceeds of up to $500,000,000, or the equivalent thereof in one or more
foreign currencies or composite currencies, (i) directly to purchasers, (ii)
through agents designated from time to time, (iii) to dealers, or (iv) through
underwriters or a group of underwriters.
The Debt Securities may be issued in one or more series with the same or
various maturities at or above par or with an original issue discount. The
specific designation, aggregate principal amount, authorized denominations,
purchase price, maturity, rate (or method of calculation) and time of payment
of any interest, any terms for redemption or repurchase or conversion, the
currency or composite currency in which the Debt Securities shall be
denominated or payable, any listing on a securities exchange, whether the Debt
Securities will be issued in the form of a Global Security or securities, or
other specific terms of the Debt Securities in respect of which this
Prospectus is being delivered ("Offered Securities") are set forth in the
accompanying supplement to the Prospectus (the "Prospectus Supplement"),
together with the terms of offering of the Offered Securities. Unless
otherwise indicated in the Prospectus Supplement, the Company does not intend
to list any of the Debt Securities on a national securities exchange. See
"Plan of Distribution."
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMIS-SION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS OR ANY SUPPLEMENT HERETO. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
The date of this Prospectus is June 5, 1995.
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS
OR THE ACCOMPANYING PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ANY AGENT, DEALER OR UNDERWRITER. NEITHER THE
DELIVERY OF THIS PROSPECTUS OR THE ACCOMPANYING PROSPECTUS SUPPLEMENT NOR ANY
SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THE INFORMATION CONTAINED HEREIN OR IN THE ACCOMPANYING
PROSPECTUS SUPPLEMENT IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF
OR THEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY
SINCE THE DATE HEREOF OR THEREOF. NEITHER THIS PROSPECTUS NOR THE ACCOMPANYING
PROSPECTUS SUPPLEMENT CONSTITUTES AN OFFER TO SELL OR SOLICITATION OF AN OFFER
TO BUY DEBT SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS
NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549 and at the following regional offices of the Commission: Seven
World Trade Center, Suite 1300, New York, New York 10048, and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material can be obtained by mail at prescribed rates from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549.
This Prospectus constitutes a part of a Registration Statement on Form S-3,
as amended (the "Registration Statement") filed by the Company with the
Commission under the Securities Act of 1933, as amended (the "Securities
Act"). This Prospectus and the accompanying Prospectus Supplement omit certain
of the information contained in the Registration Statement in accordance with
the rules and regulations of the Commission. Reference is hereby made to the
Registration Statement and related exhibits for further information with
respect to the Company and the Debt Securities. Statements contained herein
concerning the provisions of any document are not necessarily complete and, in
each instance, reference is made to the copy of such document filed as an
exhibit to the Registration Statement or otherwise filed with the Commission.
Each such statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by the Company with the Commission
are incorporated by reference in this Prospectus:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
October 1, 1994; and
2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
December 31, 1994 and April 1, 1995.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14, or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering hereunder shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of the filing of such documents.
Any statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of the Registration Statement and this Prospectus to the extent
that a statement contained herein or in any subsequently filed document which
also is or
2
<PAGE>
is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of the Registration
Statement or this Prospectus.
The Company will provide, without charge, to each person to whom this
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all of the documents which have been incorporated herein by
reference, other than exhibits to such documents (unless such exhibits are
specifically incorporated by reference into such documents). Requests should
be directed to Corporate Secretary, Tyson Foods, Inc., 2210 West Oaklawn
Drive, Springdale, Arkansas 72762-6999, telephone: (501) 290-4000.
THE COMPANY
Tyson Foods, Inc. and its various subsidiaries produce, market and
distribute a variety of food products consisting of value-enhanced poultry;
fresh and frozen poultry; value-enhanced beef and pork products; fresh and
frozen pork products; value-enhanced seafood products; fresh and frozen
seafood products; and flour and corn tortillas, chips and other Mexican food-
based products. The Company also has live swine, animal feed and pet food
operations. The Company's integrated operations consist of breeding and
rearing chickens and hogs, harvesting seafood, as well as the processing,
further processing and marketing of these food products. Additionally, the
Company processes and markets beef products.
The Company's products are marketed and sold to national and regional
grocery chains, regional grocery wholesalers, clubs and warehouse stores,
military commissaries, industrial food processing companies, national and
regional chain restaurants or their distributors, international export
companies and domestic distributors who service restaurants, food service
operations such as plant and school cafeterias, convenience stores, hospitals
and other vendors. Sales are made by the Company's sales staffs located in
Springdale, Arkansas, in regions throughout the United States and in several
foreign countries. Additionally, sales to the United States military and a
portion of sales to international markets are made through independent brokers
and trading companies.
As of May 5, 1995, Don Tyson, Senior Chairman of the Board of Directors of
the Company, directly and through the Tyson Limited Partnership, of which he
is the managing general partner, beneficially owned 1.3% and 99.9% of the
Company's Class A Common Stock, $.10 par value per share, and Class B Common
Stock, $.10 par value per share, respectively, which represented approximately
90% of the combined voting power of the shares of such Class A Common Stock
and Class B Common Stock on such date.
The Company commenced business in 1935, was incorporated in Arkansas in
1947, and was reincorporated in Delaware in 1986. The Company's executive
offices are located at 2210 West Oaklawn Drive, Springdale, Arkansas 72762-
6999 and its telephone number is (501) 290-4000.
3
<PAGE>
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the Company for each of the last five fiscal years ended October 1, 1994 and
for the six months ended April 1, 1995. For the purposes of calculating the
ratio of earnings to fixed charges, "earnings" consist of income from
continuing operations before income taxes and fixed charges (excluding
capitalized interest). "Fixed charges" consist of (i) interest on
indebtedness, whether expensed or capitalized, but excluding interest to
fifty-percent-owned subsidiaries (ii) the Company's proportionate share of
interest of fifty-percent-owned subsidiaries, (iii) that portion of rental
expense the Company believes to be representative of interest (one-third of
rental expense) and (iv) amortization of debt discount and expense.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
SIX MONTHS ENDED ---------------------------------------------------------------------
APRIL 1, 1995 1994 1993 1992 1991 1990
---------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
3.58 2.13 4.47 3.76 3.14 2.40
</TABLE>
USE OF PROCEEDS
The Company intends to use the net proceeds from the sale of the Debt
Securities to refinance existing indebtedness, to finance acquisitions, as
opportunities may arise, and for other general corporate purposes. Further
details relating to the uses of the net proceeds of any such offering will be
set forth in the applicable Prospectus Supplement. The Company expects to
engage in additional financing as needs arise.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued under an Indenture dated as of June 1,
1995 (hereinafter referred to as the "Indenture"), between the Company and The
Chase Manhattan Bank, N.A., as Trustee (hereinafter referred to as the
"Trustee"). The following statements are subject to the detailed provisions of
the Indenture, a copy of which is filed as an exhibit to the Registration
Statement and which is also available for inspection at the office of the
Trustee. Section references are to the Indenture. The following summarizes the
material terms of the Indenture; however, the following summaries of certain
provisions of the Indenture do not purport to be complete, and wherever
particular provisions of the Indenture are referred to, such provisions,
including definitions of certain terms, are incorporated by reference as part
of such summaries or terms, which are qualified in their entirety by such
reference to the provisions of the Indenture.
GENERAL
The Indenture does not limit the aggregate principal amount of Debt
Securities which may be issued thereunder and provides that the Debt
Securities may be issued from time to time in one or more series. The Debt
Securities will be direct, unsecured and unsubordinated obligations of the
Company. Except as described under "Certain Covenants," the Indenture does not
limit other indebtedness or securities which may be incurred or issued by the
Company or any of its subsidiaries or contain financial or similar
restrictions on the Company or any of its subsidiaries. The Company's rights
and the rights of its creditors, including holders of Debt Securities, to
participate in any distribution of assets of any subsidiary upon the latter's
liquidation or reorganization or otherwise are effectively subordinated to the
claims of the subsidiary's creditors, except to the extent that the Company or
any of its creditors may itself be a creditor of that subsidiary.
The Prospectus Supplement which accompanies this Prospectus sets forth where
applicable the following terms of and information relating to the Offered
Securities offered thereby: (i) the designation of the Offered Securities;
(ii) the aggregate principal amount of the Offered Securities; (iii) the date
or dates on which principal
4
<PAGE>
of, and premium, if any, on the Offered Securities is payable; (iv) the rate
or rates at which the Offered Securities shall bear interest, if any, or the
method by which such rate shall be determined, and the basis on which interest
shall be calculated if other than a 360-day year consisting of twelve 30-day
months, the date or dates from which such interest will accrue and on which
such interest will be payable and the related record dates; (v) if other than
the offices of the Trustee, the place where the principal of and any premium
or interest on the Offered Securities will be payable; (vi) any redemption,
repayment or sinking fund provisions; (vii) if other than denominations of
$1,000 or multiples thereof, the denominations in which the Offered Securities
will be issuable; (viii) if other than the principal amount thereof, the
portion of the principal amount due upon acceleration; (ix) if other than U.S.
dollars, the currency or currencies (including composite currencies) in which
the Offered Securities are denominated or payable; (x) whether the Offered
Securities shall be issued in the form of a Global Security or securities;
(xi) any other specific terms of the Offered Securities; and (xii) the
identity of any trustees, depositories, authenticating or paying agents,
transfer agents or registrars with respect to the Offered Securities. (Section
2.3)
The Debt Securities will be issued either in certificated, fully registered
form, without coupons, or as global securities under a book-entry system, as
specified in the accompanying Prospectus Supplement. See "--Book-Entry
System."
Unless otherwise specified in the accompanying Prospectus Supplement,
principal and premium, if any, will be payable, and the Debt Securities will
be transferable and exchangeable without any service charge, at the office of
the Trustee. However, the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection with any such
transfer or exchange. (Sections 2.7, 4.1 and 4.2)
Unless otherwise specified in the accompanying Prospectus Supplement,
interest on any series of Debt Securities will be payable on the interest
payment dates set forth in the accompanying Prospectus Supplement to the
persons in whose names the Debt Securities are registered at the close of
business on the related record date and will be paid, at the option of the
Company, by wire transfer or by checks mailed to such persons. (Sections 2.7,
4.1 and 4.2)
If the Debt Securities are issued as Original Issue Discount Securities
(bearing no interest or interest at a rate which at the time of issuance is
below market rates) to be sold at a substantial discount below their stated
principal amount, the federal income tax consequences and other special
considerations applicable to such Original Issue Discount Securities will be
generally described in the Prospectus Supplement.
Unless otherwise described in the accompanying Prospectus Supplement, there
are no covenants or provisions contained in the Indenture which afford the
holders of the Debt Securities protection in the event of a highly leveraged
transaction involving the Company.
BOOK-ENTRY SYSTEM
If so specified in the accompanying Prospectus Supplement, Debt Securities
of any series may be issued under a book-entry system in the form of one or
more global securities (each a "Global Security"). Each Global Security will
be deposited with, or on behalf of, a depositary, which, unless otherwise
specified in the accompanying Prospectus Supplement, will be The Depository
Trust Company, New York, New York (the "Depositary"). The Global Securities
will be registered in the name of the Depositary or its nominee.
The Depositary has advised the Company that the Depositary is a limited
purpose trust company organized under the laws of the State of New York, a
"banking organization" within the meaning of the New York banking law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of section 17A of the Exchange Act. The
Depositary was created to hold securities of its participants and to
facilitate the clearance and settlement of securities transactions among its
participants through electronic book-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of securities
certificates. The
5
<PAGE>
Depositary's participants include securities brokers and dealers, banks, trust
companies, clearing corporations, and certain other organizations, some of
whom (and/or their representatives) own the Depositary. Access to the
Depositary's book-entry system is also available to others, such as banks,
brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a participant, either directly or indirectly.
Upon the issuance of a Global Security in registered form, the Depositary
will credit, on its book-entry registration and transfer system, the
respective principal amounts of the Debt Securities represented by such Global
Security to the accounts of participants. The accounts to be credited will be
designated by the underwriters, dealers or agents, if any, or by the Company,
if such Debt Securities are offered and sold directly by the Company.
Ownership of beneficial interests in the Global Security will be limited to
participants or persons that may hold interests through participants.
Ownership of beneficial interests by participants in the Global Security will
be shown on, and the transfer of that ownership interest will be effected only
through, records maintained by such participants. The laws of some
jurisdictions may require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such laws may impair the
ability to transfer beneficial interest in a Global Security.
So long as the Depositary or its nominee is the registered owner of a Global
Security, it will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture. Except as set forth below, owners of beneficial interests in such
Global Security will not be entitled to have the Debt Securities represented
thereby registered in their names, will not receive or be entitled to receive
physical delivery of certificates representing the Debt Securities and will
not be considered the owners or holders thereof under the Indenture.
Accordingly, each person owning a beneficial interest in such Global Security
must rely on the procedures of the Depositary and, if such person is not a
participant, on the procedures of the participant through which such person
owns its interest, to exercise any rights of a holder under the Indenture. The
Company understands that under existing practice, in the event that the
Company requests any action of the holders or a beneficial owner desires to
take any action a holder is entitled to take, the Depositary would act upon
the instructions of, or authorize, the participant to take such action.
Payment of principal of, premium, if any, and interest on Debt Securities
represented by a Global Security will be made to the Depositary or its
nominee, as the case may be, as the registered owner and holder of the Global
Security representing such Debt Securities. None of the Company, the Trustee,
any paying agent or registrar for such Debt Securities 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
Security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
The Company has been advised by the Depositary that the Depositary will
credit participants' accounts with payments of principal, premium, if any, or
interest on the payment date thereof in amounts proportionate to their
respective beneficial interests in the principal amount of the Global Security
as shown on the records of the Depositary. The Company expects that payments
by participants to owners of beneficial interests in the Global Security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts
of customers registered in "street name," and will be the responsibility of
such participants.
A Global Security may not be transferred except as a whole by the Depositary
to a nominee or successor of the Depositary or by a nominee of the Depositary
to another nominee of the Depositary. A Global Security representing all but
not part of the Debt Securities being offered hereby is exchangeable for Debt
Securities in definitive form of like tenor and terms if (i) the Depositary
notifies the Company that it is unwilling or unable to continue as depositary
for such Global Security or if at any time the Depositary is no longer
eligible to be or in good standing as a clearing agency registered under the
Exchange Act, and in either case, a successor depositary is not appointed by
the Company within 90 days of receipt by the Company of such notice or of the
Company becoming aware of such ineligibility, or (ii) the Company in its sole
discretion at any time determines not to have all of the Debt Securities
represented by a Global Security and notifies the Trustee thereof. A Global
Security exchangeable pursuant to the preceding sentence shall be exchangeable
for Debt Securities registered in
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such names and in such authorized denominations as the Depositary for such
Global Security shall direct. (Section 2.7)
CERTAIN COVENANTS
Restrictions on Liens. The Indenture provides that the Company will not, and
will not permit any Restricted Subsidiary (as hereinafter defined) to, create,
incur or suffer to exist any mortgage or pledge, as security for any
indebtedness, on or of any shares of stock, indebtedness or other obligations
of a Subsidiary (as hereinafter defined) or any Principal Property (as
hereinafter defined) of the Company or a Restricted Subsidiary, whether such
shares of stock, indebtedness or other obligations of a Subsidiary or
Principal Property is owned at the date of the Indenture or thereafter
acquired, unless the Company secures or causes such Restricted Subsidiary to
secure the outstanding Debt Securities equally and ratably with all
indebtedness secured by such mortgage or pledge, so long as such indebtedness
shall be so secured. This covenant will not apply in the case of: (i) the
creation of any mortgage, pledge or other lien on any shares of stock,
indebtedness or other obligations of a Subsidiary or any Principal Property
acquired after the date of the Indenture (including acquisitions by way of
merger or consolidation) by the Company or a Restricted Subsidiary
contemporaneously with such acquisition, or within 180 days thereafter, to
secure or provide for the payment or financing of any part of the purchase
price thereof, or the assumption of any mortgage, pledge or other lien upon
any shares of stock, indebtedness or other obligations of a Subsidiary or any
Principal Property acquired after the date of the Indenture existing at the
time of such acquisition, or the acquisition of any shares of stock,
indebtedness or other obligations of a Subsidiary or any Principal Property
subject to any mortgage, pledge or other lien without the assumption thereof,
provided that every such mortgage, pledge or lien referred to in this clause
(i) will attach only to the shares of stock, indebtedness or other obligations
of a Subsidiary or any Principal Property so acquired and fixed improvements
thereon; (ii) any mortgage, pledge or other lien on any shares of stock,
indebtedness or other obligations of a Subsidiary or any Principal Property
existing at the date of this Indenture; (iii) any mortgage, pledge or other
lien on any shares of stock, indebtedness or other obligations of a Subsidiary
or any Principal Property in favor of the Company or any Restricted
Subsidiary; (iv) any mortgage, pledge or other lien on Principal Property
being constructed or improved securing loans to finance such construction or
improvements; (v) any mortgage, pledge or other lien on shares of stock,
indebtedness or other obligations of a Subsidiary or any Principal Property
incurred in connection with the issuance of tax-exempt governmental
obligations; and (vi) any renewal of or substitution for any mortgage, pledge
or other lien permitted by any of the preceding clauses (i) through (v),
provided, in the case of a mortgage, pledge or other lien permitted under
clause (i), (ii) or (iv), the indebtedness secured is not increased nor the
lien extended to any additional shares of stock, indebtedness or other
obligations of a Subsidiary or any additional Principal Property.
Notwithstanding the foregoing, the Company or any Restricted Subsidiary may
create or assume liens in addition to those permitted by this paragraph, and
renew, extend or replace such liens, provided that at the time of such
creation, assumption, renewal, extension or replacement, and after giving
effect thereto, Exempted Debt (as hereinafter defined) does not exceed 10% of
Consolidated Net Tangible Assets (as hereinafter defined). (Section 4.3)
Restrictions on Sale and Lease-Back Transactions. The Indenture provides
that the Company will not, and will not permit any Restricted Subsidiary to,
sell or transfer, directly or indirectly, except to the Company or a
Restricted Subsidiary, any Principal Property as an entirety, or any
substantial portion thereof, with the intention of taking back a lease of such
property, except a lease for a period of three years or less at the end of
which it is intended that the use of such property by the lessee will be
discontinued; provided that, notwithstanding the foregoing, the Company or any
Restricted Subsidiary may sell any such Principal Property and lease it back
for a longer period (i) if the Company or such Restricted Subsidiary would be
entitled, pursuant to the provisions described above under "--Restrictions on
Liens," to create a mortgage on the property to be leased securing Funded Debt
(as hereinafter defined) in an amount equal to the Attributable Debt (as
hereinafter defined) with respect to such sale and lease-back transaction
without equally and ratably securing the outstanding Debt Securities or (ii)
if (A) the Company promptly informs the Trustee of such transaction, (B) the
net proceeds of such transaction are at least equal to the fair value (as
determined by board resolution of the Company) of such property and (C) the
Company causes an amount equal to the net proceeds of the sale to be applied
to the retirement, within 180 days after receipt of such proceeds, of Funded
Debt incurred or assumed by the Company
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or a Restricted Subsidiary (including the Debt Securities); provided further
that, in lieu of applying all of or any part of such net proceeds to such
retirement, the Company may, within 75 days after such sale, deliver or cause
to be delivered to the applicable trustee for cancellation either debentures
or notes evidencing Funded Debt of the Company (which may include the
outstanding Debt Securities) or of a Restricted Subsidiary previously
authenticated and delivered by the applicable trustee, and not theretofore
tendered for sinking fund purposes or called for a sinking fund or otherwise
applied as a credit against an obligation to redeem or retire such notes or
debentures, and an officers' certificate (which will be delivered to the
Trustee and each paying agent and which need not contain the statements
prescribed by the second paragraph of Section 10.4 of the Indenture) stating
that the Company elects to deliver or cause to be delivered such debentures or
notes in lieu of retiring Funded Debt as hereinabove provided. If the Company
shall so deliver debentures or notes to the applicable trustee and the Company
shall duly deliver such officers' certificate, the amount of cash which the
Company will be required to apply to the retirement of Funded Debt under this
provision of the Indenture shall be reduced by an amount equal to the
aggregate of the then applicable optional redemption prices (not including any
optional sinking fund redemption prices) of such debentures or notes or, if
there are no such redemption prices, the principal amount of such debentures
or notes; provided, that in the case of debentures or notes which provide for
an amount less than the principal amount thereof to be due and payable upon a
declaration of the maturity thereof, such amount of cash shall be reduced by
the amount of principal of such debentures or notes that would be due and
payable as of the date of such application upon a declaration of acceleration
of the maturity thereof pursuant to the terms of the indenture pursuant to
which such debentures or notes were issued. Notwithstanding the foregoing, the
Company or any Restricted Subsidiary may enter into sale and lease-back
transactions in addition to those permitted by this paragraph and without any
obligation to retire any outstanding Debt Securities or other Funded Debt,
provided that at the time of entering into such sale and lease-back
transactions and after giving effect thereto, Exempted Debt does not exceed
10% of Consolidated Net Tangible Assets. (Section 4.4)
CERTAIN DEFINITIONS
The term "Attributable Debt" as defined in the Indenture means, as to any
particular lease under which any Person is at the time liable, other than a
capital lease, and at any date as of which the amount thereof is to be
determined, the total net amount of rent required to be paid by such Person
under such lease during the initial term thereof as determined in accordance
with generally accepted accounting principles, discounted from the last date
of such initial term to the date of determination at a rate per annum equal to
the discount rate which would be applicable to a capital lease with like term
in accordance with generally accepted accounting principles. The net amount of
rent required to be paid under any such lease for any such period shall be the
aggregate amount of rent payable by the lessee with respect to such period
after excluding amounts required to be paid on account of insurance, taxes,
assessments, utility, operating and labor costs and similar charges. In the
case of any lease which is terminable by the lessee upon the payment of a
penalty, such net amount shall also include the amount of such penalty, but no
rent shall be considered as required to be paid under such lease subsequent to
the first date upon which it may be so terminated. "Attributable Debt" means,
as to a capital lease under which any Person is at the time liable and at any
date as of which the amount thereof is to be determined, the capitalized
amount thereof that would appear on the face of a balance sheet of such Person
in accordance with generally accepted accounting principles.
The term "Consolidated Net Tangible Assets" as defined in the Indenture
means the excess over the current liabilities of the Company of all of its
assets as determined by the Company and as would be set forth in a
consolidated balance sheet of the Company and its Subsidiaries, on a
consolidated basis, in accordance with generally accepted accounting
principles as of a date within 90 days of the date of such determination,
after deducting goodwill, trademarks, patents, other like intangibles and
minority interests of others.
The term "Exempted Debt" as defined in the Indenture means the sum, without
duplication, of the following items outstanding as of the date Exempted Debt
is being determined: (i) indebtedness of the Company and its Restricted
Subsidiaries incurred after the date of the Indenture and secured by liens
created, assumed or otherwise incurred or permitted to exist pursuant to the
provision described in the last sentence under "--Certain Covenants--
Restrictions on Liens" and (ii) Attributable Debt of the Company and its
Restricted Subsidiaries in
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respect of all sale and lease-back transactions with regard to any Principal
Property entered into pursuant to the provision described in the last sentence
under "--Certain Covenants--Restrictions on Sale and Lease-Back Transactions."
The term "Funded Debt" as defined in the Indenture means all indebtedness
for money borrowed, including purchase money indebtedness, having a maturity
of more than one year from the date of its creation or having a maturity of
less than one year but by its terms being renewable or extendible, at the
option of the obligor in respect thereof, beyond one year from its creation.
The term "Principal Property" as defined in the Indenture means (i) land,
land improvements, buildings and associated factory and laboratory equipment
owned or leased pursuant to a capital lease and used by the Company or a
Restricted Subsidiary primarily for processing, producing, packaging or
storing its products, raw materials, inventories or other materials and
supplies and located within the United States of America and having an
acquisition cost plus capitalized improvements in excess of 1% of Consolidated
Net Tangible Assets as of the date of such determination, (ii) certain
property referred to in the Indenture and (iii) any asset held by Tyson
Holding Company, Inc., but shall not include any such property or assets
described in clauses (i), (ii) or (iii) that is financed through the issuance
of tax exempt governmental obligations, or any such property or assets that
has been determined by board resolution of the Company not to be of material
importance to the respective businesses conducted by the Company or such
Restricted Subsidiary, effective as of the date such resolution is adopted.
The term "Restricted Subsidiary" as defined in the Indenture means any
Subsidiary organized and existing under the laws of the United States of
America and the principal business of which is carried on within the United
States of America which owns or is a lessee pursuant to a capital lease of any
Principal Property or owns shares of capital stock or indebtedness of another
Restricted Subsidiary other than: (i) each Subsidiary the major part of whose
business consists of finance, banking, credit, leasing, insurance, financial
services or other similar operations, or any combination thereof; and (ii)
each Subsidiary formed or acquired after the date of the Indenture for the
purpose of acquiring the business or assets of another person and which does
not acquire all or any substantial part of the business or assets of the
Company or any Restricted Subsidiary; provided, however, the Board of
Directors of the Company may declare any such Subsidiary to be a Restricted
Subsidiary effective as of the date such resolution is adopted.
The term "Subsidiary" as defined in the Indenture means, with respect to any
Person, any corporation, association or other business entity of which more
than 50% of the outstanding Voting Stock (as defined in the Indenture) is
owned directly or indirectly, by such Person and one or more other
Subsidiaries of such Person.
RESTRICTIONS ON CONSOLIDATIONS, MERGERS AND SALES OF ASSETS
The Indenture provides that the Company will not consolidate with, merge
with or into, or sell, convey, transfer, lease or otherwise dispose of all or
substantially all of its property and assets (as an entirety or substantially
an entirety in one transaction or a series of related transactions) to, any
Person (other than a consolidation with or merger with or into a Subsidiary)
or permit any Person to merge with or into the Company unless: (a) either (i)
the Company will be the continuing Person or (ii) the Person (if other than
the Company) formed by such consolidation or into which the Company is merged
or that acquired or leased such property and assets of the Company shall be a
corporation organized and validly existing under the laws of the United States
of America or any jurisdiction thereof and shall expressly assume, by a
supplemental indenture, executed and delivered to the Trustee, all of the
obligations of the Company on all of the Debt Securities and the Company shall
have delivered to the Trustee an opinion of counsel stating that such
consolidation, merger or transfer and such supplemental indenture complies
with this provision and that all conditions precedent provided for herein
relating to such transaction have been complied with; and (b) immediately
after giving effect to such transaction, no Default (as defined in the
Indenture) shall have occurred and be continuing. (Section 5.1)
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EVENTS OF DEFAULT
An Event of Default, as defined in the Indenture and applicable to Debt
Securities, will occur with respect to the Debt Securities of any series if:
(a) the Company defaults in the payment of the principal of any Debt Security
of such series when the same becomes due and payable at maturity, upon
acceleration, redemption, mandatory repurchase or otherwise; (b) the Company
defaults in the payment of interest on any Debt Security of such series when
the same becomes due and payable, and such default continues for a period of
30 days; (c) the Company defaults in the performance of or breaches any other
covenant or agreement of the Company in the Indenture with respect to the Debt
Securities of such series and such default or breach continues for a period of
30 consecutive days after written notice to the Company by the Trustee or to
the Company and the Trustee by the Holders (as defined in the Indenture) of
25% or more in aggregate principal amount of the Debt Securities of such
series; (d) an involuntary case or other proceeding shall be commenced against
the Company with respect to it or its debts under any bankruptcy, insolvency
or other similar law now or hereafter in effect seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or
any substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of 60 days; or
an order for relief shall be entered against the Company under the federal
bankruptcy laws as now or hereafter in effect; (e) the Company (i) commences a
voluntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or consents to the entry of an order for
relief in an involuntary case under any such law, (ii) consents to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company or for all
or substantially all of the property and assets of the Company or (iii)
effects any general assignment for the benefit of creditors; or (f) any other
Events of Default set forth in the applicable Prospectus Supplement occurs.
(Section 6.1)
The Indenture provides that if an Event of Default described in clauses (a),
(b), (c) or (f) above (if such Event of Default under clause (c) or (f) is
with respect to one or more but not all series of Debt Securities then
outstanding) occurs and is continuing, then, and in each and every such case,
except for any series of Debt Securities the principal of which shall have
already become due and payable, either the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Debt Securities of each such
series then outstanding under the Indenture (each such series voting as a
separate class) by notice in writing to the Company (and to the Trustee if
given by Holders), may declare the entire principal (or, if the Debt
Securities of any such series are Original Issue Discount Securities (as
defined in the Indenture), such portion of the principal amount as may be
specified in the terms of such series and set forth in the applicable
Prospectus Supplement) of all Debt Securities of all such series, and the
interest accrued thereon, if any, to be due and payable immediately, and upon
any such declaration the same shall become immediately due and payable. If an
Event of Default described in clause (c) or (f) occurs and is continuing with
respect to all series of Debt Securities then outstanding, then and in each
and every such case, unless the principal of all the Debt Securities shall
have already become due and payable, either the Trustee or the Holders of not
less than 25% in aggregate principal amount of all the Debt Securities then
outstanding under the Indenture (treated as one class), by notice in writing
to the Company (and to the Trustee if given by Holders), may declare the
entire principal (or, if any Debt Securities are Original Issue Discount
Securities, such portion of the principal as may be specified in the terms
thereof and set forth in the applicable Prospectus Supplement) of all the Debt
Securities then outstanding and interest accrued thereon, if any, to be due
and payable immediately, and upon any such declaration the same shall become
immediately due and payable. If an Event of Default described in clause (d) or
(e) occurs and is continuing, then the principal amount (or, if any Debt
Securities are original Issue Discount Securities, such portion of the
principal as may be specified in the terms thereof and set forth in the
applicable Prospectus Supplement) of all the Debt Securities then outstanding
and interest accrued thereon, if any shall be and become immediately due and
payable, without any notice or other action by any Holder or the Trustee, to
the full extent permitted by applicable law.
The provisions described in the paragraph above, however, are subject to the
condition that if, at any time after the principal (or, if the Debt Securities
are Original Issue Discount Securities, such portion of the principal as may
be specified in the terms thereof and set forth in the applicable Prospectus
Supplement) of the Debt Securities of any series (or of all the Debt
Securities, as the case may be) shall have been so declared due and payable,
and before any judgment or decree for the payment of the moneys due shall have
been obtained or
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entered as hereinafter provided, the Company will pay or will deposit with the
Trustee a sum sufficient to pay all
matured installments of interest upon all the Debt Securities of each such
series (or of all the Debt Securities, as the case may be) and the principal
of any and all Debt Securities of each such series (or of all the Debt
Securities, as the case may be) which shall have become due otherwise than by
acceleration (with interest upon such principal and, to the extent that
payment of such interest is enforceable under applicable law, on overdue
installments of interest, at the same rate as the rate of interest or yield to
maturity (in the case of Original Issue Discount Securities) specified in the
Debt Securities of each such series and set forth in the applicable Prospectus
Supplement to the date of such payment or deposit) and such amount as shall be
sufficient to cover reasonable compensation to the Trustee and each
predecessor Trustee, their respective agents, attorneys and counsel, and all
other expenses and liabilities incurred, and all advances made, by the Trustee
and each predecessor Trustee except as a result of negligence or bad faith,
and if any and all Events of Default under the Indenture, other than the non-
payment of the principal of Debt Securities which shall have become due by
acceleration, shall have been cured, waived or otherwise remedied as provided
in the Indenture, then and in every such case the Holders of a majority in
aggregate principal amount of all the Debt Securities of each such series, or
of all the Debt Securities, in each case voting as a single class, then
outstanding, by written notice to the Company and to the Trustee, may waive
all defaults with respect to each such series (or with respect to all the Debt
Securities, as the case may be) and rescind and annul such declaration and its
consequences, but no such waiver or rescission and annulment will extend to or
shall affect any subsequent default or shall impair any right consequent
thereon. For all purposes under the Indenture, if a portion of the principal
of any Original Issue Discount Securities shall have been accelerated and
declared due and payable pursuant to the provisions described above, then,
from and after such declaration, unless such declaration has been rescinded
and annulled, the principal amount of such Original Issue Discount Securities
will be deemed, for all purposes under the Indenture, to be such portion of
the principal thereof as shall be due and payable as a result of such
acceleration, and payment of such portion of the principal thereof as shall be
due and payable as a result of such acceleration, together with interest, if
any, thereon and all other amounts owing thereunder, shall constitute payment
in full of such Original Issue Discount Securities. (Section 6.2)
The Indenture contains a provision under which, subject to the duty of the
trustee during a default to act with the standard of care required by law, (i)
the Trustee may rely and will be protected in acting or refraining from acting
upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be
genuine and to have been signed or presented by the proper person, and the
Trustee need not investigate any fact or matter stated in the document, but
the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit; (ii) before the Trustee acts or
refrains from acting, it may require an officers' certificate or an opinion of
counsel, and the Trustee shall not be liable for any action it takes or omits
to take in good faith in reliance on such certificate or opinion; (iii) the
Trustee may act through its attorneys and agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care; (iv)
the Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by the Indenture at the request or direction of any of the
Holders, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might
be incurred by it in compliance with such request or direction; (v) the
Trustee shall not be liable for any action it takes or omits to take in good
faith that it believes to be authorized or within its rights or powers or for
any action it takes or omits to take in accordance with the direction of the
Holders of a majority in principal amount of the outstanding Debt Securities
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under the Indenture; and (vi) the Trustee may consult with
counsel and the written advice of such counsel or any opinion of counsel shall
be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon. (Section 7.2)
Subject to such provisions in the Indenture for the indemnification of the
Trustee and certain other limitations, the Holders of at least a majority in
aggregate principal amount of the outstanding Debt Securities of
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each series affected (each such series voting as a separate class) 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 the
Trustee; provided, that the Trustee may refuse to follow any direction that
conflicts with law or the Indenture, that may involve the Trustee in personal
liability, or that the Trustee determines in good faith may be unduly
prejudicial to the rights of Holders not joining in the giving of such
direction; and provided further, that the Trustee may take any other action it
deems proper that is not inconsistent with any directions received from
Holders of Debt Securities pursuant to this paragraph. (Section 6.5)
The Indenture provides that no Holder of any Debt Security of any series may
institute any proceeding, judicial or otherwise, with respect to the Indenture
or the Debt Securities of such series, or for the appointment of a receiver or
trustee, or for any other remedy under the Indenture, unless: (i) such Holder
has previously given to the Trustee written notice of a continuing Event of
Default with respect to the Debt Securities of such series; (ii) the Holders
of at least 25% in aggregate principal amount of outstanding Securities of
such series shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee
under the Indenture; (iii) such Holder or Holders have offered to the Trustee
indemnity reasonably satisfactory to the Trustee against any costs,
liabilities or expenses to be incurred in compliance with such request; (iv)
the Trustee for 60 days after its receipt of such notice, request and offer of
indemnity has failed to institute any such proceeding; and (v) during such 60-
day period, the Holders of a majority in aggregate principal
amount of the outstanding Debt Securities of such series have not given the
Trustee a direction that is inconsistent with such written request. A Holder
may not use the Indenture to prejudice the rights of another Holder or to
obtain a preference or priority over such other Holder. (Section 6.6)
The Indenture contains a covenant that the Company will file annually, not
more than 90 days after the end of its fiscal year, with the Trustee a
certification from the principal executive officer, principal financial
officer or principal accounting officer that a review has been conducted of
the activities of the Company and its Subsidiaries and the Company's and its
Subsidiaries' performance under the Indenture and that the Company has
complied with all conditions and covenants under the Indenture. (Section 4.6)
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The Indenture provides that, except as provided below, the Company may
terminate its obligations under the Debt Securities of any series and the
Indenture with respect to Debt Securities of such series if: (i) all Debt
Securities of such series previously authenticated and delivered (other than
destroyed, lost or stolen Debt Securities of such series that have been
replaced or Debt Securities of such series that are fully repaid or Debt
Securities of such series for whose payment money or securities have
theretofore been held in trust and thereafter repaid to the Company, as
provided in the Indenture) have been delivered to the Trustee for cancellation
and the Company has paid all sums payable by it hereunder; or (ii) (A) the
Debt Securities of such series mature within one year or all of them are to be
called for redemption within one year under arrangements satisfactory to the
Trustee for giving the notice of redemption, (B) the Company irrevocably
deposits in trust with the Trustee, as trust funds solely for the benefit of
the Holders of such Securities for that purpose, money or U.S. Government
Obligations or a combination thereof sufficient (in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee), without consideration
of any reinvestment, to pay principal of and interest on the Debt Securities
of such series to maturity or redemption, as the case may be, and to pay all
other sums payable by it under the Indenture, (C) no Default with respect to
the Debt Securities of such series has occurred and is continuing on the date
of such deposit, (D) such deposit does not result in a breach or violation of,
or constitute a default under, the Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound and (E) the
Company delivers to the Trustee an officers' certificate and an opinion of
counsel, in each case stating that all conditions precedent provided for in
the Indenture relating to the satisfaction and discharge of the Indenture have
been complied with. With respect to the foregoing clause (i), only the
Company's obligations under Section 7.7 of the Indenture in respect of the
Debt Securities of such series shall survive. With respect to the foregoing
clause (ii), only the Company's obligations in Sections 2.2, 2.3, 2.4, 2.5,
2.6, 2.7, 2.11, 4.2, 7.7, 7.8, 8.5 and 8.6 of the Indenture in respect of the
Debt Securities of such series shall survive until the Debt Securities are no
longer outstanding. Thereafter, only the Company's obligations in Sections
7.7, 8.5 and 8.6 of the Indenture in respect of the Debt Securities of
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such series shall survive. After any such irrevocable deposit, the Trustee
upon request shall acknowledge in writing the discharge of the Company's
obligations under the Debt Securities of such series and this Indenture with
respect to the Debt Securities of such series except for those surviving
obligations specified above. (Section 8.1)
The Indenture provides that, except as provided below, the Company will be
deemed to have paid and will be discharged from any and all obligations in
respect of the Debt Securities of any series after the period specified in
clause (D)(2)(z) of this paragraph, and the provisions of the Indenture will
no longer be in effect with respect to the Debt Securities of such series, and
the Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same; provided that the following conditions shall have been
satisfied: (A) the Company has irrevocably deposited in trust with the Trustee
as trust funds solely for the benefit of the Holders for payment of the
principal of and interest on the Debt Securities of such series, money or U.S.
Government Obligations or a combination thereof sufficient (in the opinion of
a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee) without consideration
of any reinvestment and after payment of all federal, state and local taxes or
other charges and assessments in respect thereof payable by the Trustee, to
pay and discharge the principal of and accrued interest on the outstanding
Debt Securities of such series to maturity or earlier redemption (irrevocably
provided for under arrangements satisfactory to the Trustee), as the case may
be; (B) such deposit will not result in a breach or violation of, or
constitute a default under, the Indenture or any other agreement or instrument
to which the Company is a party or by which it is bound; (C) no Default with
respect to the Debt Securities of such series shall have occurred and be
continuing on the date of such deposit or at any time during the period
specified in clause (D)(2)(z) below; (D) the Company shall have delivered to
the Trustee (1) either (x) a ruling directed to the Trustee received from the
Internal Revenue Service to the effect that the Holders of the Securities of
such series will not recognize income, gain or loss for federal income tax
purposes as a result of the Company's exercise of its option under this
provision of the Indenture and will be subject to federal income tax on the
same amount and in the same manner and at the same times as would have been
the case if such option had not been exercised or (y) an opinion of counsel to
the same effect as the ruling described in clause (x) above and based on a
change in law and (2) an opinion of counsel to the effect that (x) the
creation of the defeasance trust does not violate the Investment Company Act
of 1940, as amended, (y) the Holders of the Securities of such series have a
valid first priority security interest in the trust funds, and (z) after the
passage of 123 days following the deposit (except after one year following the
deposit, with respect to any trust funds for the account of any Holder of the
Securities of such series who may be deemed to be an "insider" as to an
obligor on the Securities of such series for purposes of the United States
Bankruptcy Code), the trust funds will not be subject to the effect of Section
547 of the United States Bankruptcy Code or Section 15 of the New York Debtor
and Creditor Law in a case commenced by or against the Company under either
such statute, and either (I) the trust funds will no longer remain the
property of the Company (and therefore will not be subject to the effect of
any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally) or (II) if a court were to rule under
any such law in any case or proceeding that the trust funds remained in the
possession of the Company, to the extent not paid to such Holders, the Trustee
will hold, for the benefit of such Holders, a valid and perfected first
priority security interest in such trust funds that is not avoidable in
bankruptcy or otherwise (except for the effect of Section 552(b) of the United
States Bankruptcy Code on interest on the trust funds accruing after the
commencement of a case under such statute and the Holders of the Securities of
such series will be entitled to receive adequate protection of their interests
in such trust funds if such trust funds are used in such case or proceeding;
(E) if the Debt Securities of such series are then listed on a national
securities exchange, the Company shall have delivered to the Trustee an
opinion of counsel to the effect that the defeasance contemplated by this
provision of the Indenture of the Debt Securities of such series will not
cause the Debt Securities of such series to be delisted; and (F) the Company
has delivered to the Trustee an officers' certificate and an opinion of
counsel, in each case stating that all conditions precedent provided for in
the Indenture relating to the defeasance contemplated by this provision of the
Indenture of the Debt Securities of such series have been complied with.
Notwithstanding the foregoing, prior to the end of the 123-day (or one year)
period referred to in clause (D)(2)(z) of this paragraph, none of the
Company's obligations under the Indenture with respect to such series shall be
discharged. Subsequent to the end of such 123-day (or one year) period, the
Company's obligations in Sections
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2.2, 2.3, 2.4, 2.5, 2.6, 2.7, 2.11, 4.1, 4.2, 7.7, 7.8, 8.5 and 8.6 of the
Indenture with respect to the Debt Securities of such series shall survive
until such Debt Securities are no longer outstanding. Thereafter, only the
Company's obligations in Sections 7.7, 8.5 and 8.6 of the Indenture with
respect to the Debt Securities of such series shall survive. If and when a
ruling from the Internal Revenue Service or an opinion of counsel referred to
in clause (D)(1) of this paragraph is able to be provided specifically without
regard to, and not in reliance upon, the continuance of the Company's
obligations under Section 4.1 of the Indenture, then the Company's obligations
under such Section 4.1 of the Indenture shall cease upon delivery to the
Trustee of such ruling or opinion of counsel and compliance with the other
conditions precedent provided for in this provision of the Indenture relating
to the defeasance contemplated by this provision of the Indenture. (Section
8.2)
The Indenture provides that the Company may omit to comply with any term,
provision or condition described under "--Certain Covenants," and such
omission shall be deemed not to be an Event of Default, with respect to the
outstanding Debt Securities of any series if: (i) the Company has irrevocably
deposited in trust with the Trustee as trust funds solely for the benefit of
the Holders of the Securities of such series for payment of the principal of
and interest, if any, on the Debt Securities of such series money or U.S.
Government Obligations or a combination thereof in an amount sufficient (in
the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee) without
consideration of any reinvestment and after payment of all federal, state and
local taxes or other charges and assessments in respect thereof payable by the
Trustee, to pay and discharge the principal of and interest on the outstanding
Debt Securities of such series to maturity or earlier redemption (irrevocably
provided for under arrangements satisfactory to the Trustee), as the case may
be; (ii) such deposit will not result in a breach or violation of, or
constitute a default under, the Indenture or any other agreement or instrument
to which the Company is a party or by which it is bound; (iii) no Default with
respect to the Debt Securities of such series shall have occurred and be
continuing on the date of such deposit; (iv) the Company has delivered to the
Trustee an opinion of counsel to the effect that (A) the creation of the
defeasance trust does not violate the Investment Company Act of 1940, as
amended (B) the Holders of the Debt Securities of such series have a valid
first-priority security interest in the trust funds, (C) such Holders will not
recognize income, gain or loss for federal income tax purposes as a result of
such deposit and covenant defeasance and will be subject to federal income tax
on the same amount and in the same manner and at the same times as would have
been the case if such deposit and defeasance had not occurred and (D) after
the passage of 123 days following the deposit (except, with respect to any
trust funds for the account of any Holder of the Debt Securities of such
series who may be deemed to be an "insider" as to an obligor on the Debt
Securities of such series for purposes of the United States Bankruptcy Code,
the trust funds will not be subject to the effect of Section 547 of the United
States Bankruptcy Code or Section 15 of the New York Debtor and Creditor Law
in a case commenced by or against the Company under either such statute, and
either (1) the trust funds will no longer remain the property of the Company
(and therefore will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally) or (2) if a court were to rule under any such law in any case or
proceeding that the trust funds remained property of the Company, to the
extent not paid to such Holders, the Trustee will hold, for the benefit of
such Holders, a valid and perfected first priority security interest in such
trust funds that is not avoidable in bankruptcy or otherwise (except for the
effect of Section 552(b) of the United States Bankruptcy Code on interest on
the trust funds accruing after the commencement of a case under such statute),
and the Holders of the Debt Securities of such series will be entitled to
receive adequate protection of their interests in such trust funds if such
trust funds are used in such case or proceeding; (v) if the Debt Securities of
such series are then listed on a national securities exchange, the Company
shall have delivered to the Trustee an opinion of counsel to the effect that
the covenant defeasance contemplated by this provision of the Indenture of the
Debt Securities of such series will not cause the Debt Securities of such
series to be delisted; and (vi) the Company has delivered to the Trustee an
officers' certificate and an opinion of counsel, in each case stating that all
conditions precedent provided for in the Indenture relating to the covenant
defeasance contemplated by this provision of the Indenture of the Debt
Securities of such series have been complied with. (Section 8.3)
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MODIFICATION OF THE INDENTURE
The Indenture provides that the Company and the Trustee may amend or
supplement the Indenture or the Debt Securities of any series without notice
to or the consent of any Holder: (1) to cure any ambiguity, defect or
inconsistency in the Indenture; provided that such amendments or supplements
shall not adversely affect the interests of the Holders in any material
respect; (2) to comply with Article 5 of the Indenture; (3) to comply with any
requirements of the Commission in connection with the qualification of the
Indenture under the Trust Indenture Act of 1939, as amended; (4) to evidence
and provide for the acceptance of appointment hereunder by a successor
Trustee; (5) to establish the form or forms or terms of Debt Securities of any
series or of the coupons appertaining to such Debt Securities as permitted by
the Indenture; (6) to provide for uncertificated Debt Securities and to make
all appropriate changes for such purpose; and (7) to make any change that does
not materially and adversely affect the rights of any Holder. (Section 9.1)
The Indenture also provides that, without prior notice to any Holders, the
Company and the Trustee may amend the Indenture and the Debt Securities of any
series outstanding thereunder with the written consent of the Holders of a
majority in principal amount of the outstanding Debt Securities of all series
affected by such supplemental indenture (all such series voting as one class),
and the Holders of a majority in principal amount of the outstanding Debt
Securities of all series affected thereby (all such series voting as one
class) by written notice to the Trustee may waive future compliance by the
Company with any provision of the Indenture or the Debt Securities of such
series. Notwithstanding the foregoing provision, without the consent of each
Holder of the Debt Securities of each series affected thereby, an amendment or
waiver, including a waiver pursuant to Section 6.4 of the Indenture, may not:
(i) extend the stated maturity of the principal of, or any installment of
interest on, such Holder's Debt Security, or reduce the principal amount
thereof or the rate of interest thereon (including any amount in respect of
original issue discount), or any premium payable with respect thereto, or
adversely affect the rights of such Holder under any mandatory repurchase
provision or any right of repurchase at the option of such Holder, or reduce
the amount of the principal of an Original Issue Discount Security that would
be due and payable upon an acceleration of the maturity thereof pursuant to
the Indenture or the amount thereof provable in bankruptcy, or change any
place of payment where, or the currency in which, any Debt Security of such
series or any premium or the interest thereon is payable, or impair the right
to institute suit for the enforcement of any such payment on or after the
stated maturity thereof (or, in the case of redemption, on or after the
redemption date or, in the case of mandatory repurchase, the date therefor);
(ii) reduce the percentage in principal amount of outstanding Debt Security of
such series the consent of whose Holders is required for any such supplemental
indenture, for any waiver of compliance with certain provisions of the
Indenture or certain Defaults and their consequences provided for in the
Indenture; (iii) waive a Default in the payment of principal of or interest
on, any Debt Security of such series; (iv) cause any Debt Security of such
series to be subordinated in right of payment to any obligation of the
Company; (v) modify any of the provisions of this section of the Indenture,
except to increase any such percentage or to provide that certain other
provisions of the Indenture cannot be modified or waived without the consent
of the Holder of each outstanding Debt Security of any series affected
thereby. A supplemental indenture which changes or eliminates any covenant or
other provision of the Indenture which has expressly been included solely for
the benefit of one or more particular series of Debt Securities, or which
modifies the rights of Holders of Debt Security of such series with respect to
such covenant or provision, shall be deemed not to affect the rights under the
Indenture of the Holders of Debt Securities of any other series or of the
coupons appertaining to such Debt Securities. It shall not be necessary for
the consent of the Holders under this section of the Indenture to approve the
particular form of any proposed amendment, supplement or waiver, but it shall
be sufficient if such consent approves the substance thereof. After an
amendment, supplement or waiver under this section of the Indenture becomes
effective, the Company shall give to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. The Company will mail
supplemental indentures to Holders upon request. Any failure of the Company to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such supplemental indenture or waiver. (Section
9.2)
GOVERNING LAW
The Indenture and the Debt Securities will be governed by the laws of the
State of New York.
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CONCERNING THE TRUSTEE
The Company and its subsidiaries maintain ordinary banking relationships
with The Chase Manhattan Bank, N.A. and its affiliates and a number of other
banks. The Chase Manhattan Bank, N.A., and its affiliates along with a number
of other banks have extended credit facilities to the Company and its
subsidiaries.
PLAN OF DISTRIBUTION
The Company may sell Debt Securities to or through one or more underwriters
and also may sell Debt Securities directly to other purchasers or through
agents or dealers, or the Company may sell Debt Securities through a
combination of any such methods.
The distribution of the Debt Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. Underwriters may sell Debt
Securities to or through dealers.
In connection with the sales of Debt Securities, underwriters may receive
compensation from the Company in the form of discounts, concessions or
commissions. Underwriters, dealers and agents that participate in the
distribution of Debt Securities may be deemed to be underwriters, and any
discounts or commissions received by them and any profit on the resale of Debt
Securities by them may be deemed to be underwriting discounts and commissions
under the Securities Act. Any such underwriter or agent will be identified,
and any such compensation will be described, in the Prospectus Supplement.
Pursuant to agreements into which the Company may enter, underwriters,
dealers and agents who participate in the distribution of Debt Securities may
be entitled to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act.
Unless otherwise indicated in the Prospectus Supplement, the Company does
not intend to list any of the Debt Securities on a national securities
exchange. In the event the Debt Securities are not listed on a national
securities exchange, certain broker-dealers may make a market in the Debt
Securities, but will not be obligated to do so and may discontinue any market
making at any time without notice. No assurance can be given that any broker-
dealer will make a market in the Debt Securities or as to the liquidity of the
trading market for the Debt Securities, whether or not the Debt Securities are
listed on a national securities exchange. The Prospectus Supplement with
respect to the Debt Securities will state, if known, whether or not any
broker-dealer intends to make a market in the Debt Securities. If no such
determination has been made, the Prospectus Supplement will so state.
The place and time of delivery for the Offered Securities in respect of
which this Prospectus is delivered will be set forth in the Prospectus
Supplement.
LEGAL MATTERS
The validity of the issuance of the Debt Securities offered hereby will be
passed upon for the Company by Rose Law Firm, Little Rock, Arkansas, and for
any underwriters or agents by Davis Polk & Wardwell, New York, New York.
Certain members of the Rose Law Firm beneficially own shares of the Company's
Class A Common Stock, par value $.10 per share, having a market value on March
15, 1995 of approximately $200,000.
EXPERTS
The consolidated financial statements of Tyson Foods, Inc. incorporated by
reference in the Company's Annual Report (Form 10-K) for the year ended
October 1, 1994, have been audited by Ernst & Young LLP, independent auditors,
as set forth in their reports thereon included therein and incorporated herein
by reference. Such consolidated financial statements are incorporated herein
by reference in reliance upon such reports given upon the authority of such
firm as experts in accounting and auditing.
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