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FILED PURSUANT TO RULE NO. 424(b)(3)
REGISTRATION NO. 333-12125
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED SEPTEMBER 26,1996
$100,000,000
TUPPERWARE FINANCE COMPANY B.V.
MEDIUM-TERM NOTES, SERIES A
DUE 9 MONTHS OR MORE FROM DATE OF ISSUE
PAYMENT OF PRINCIPAL AND INTEREST UNCONDITIONALLY GUARANTEED BY
TUPPERWARE CORPORATION
---------------
Tupperware Finance Company B.V. (the "Company") may offer from time to time
its Medium-Term Notes, Series A (the "Notes"), due from 9 months or more from
the date of issue, as selected by the purchaser and agreed to by the Company,
at an aggregate initial public offering price not to exceed $100,000,000 or
its equivalent in foreign currencies, currency units or composite currencies.
The Notes may be denominated in U.S. dollars or in such foreign currencies,
currency units or composite currencies as the Company may designate at the
time of offering. The Company will set forth the specific currency, currency
unit or composite currency, interest rate (if any), issue price, and maturity
date of any Note in the related Pricing Supplement to this Prospectus
Supplement. Unless otherwise specified in the applicable Pricing Supplement,
Agents will not sell Notes denominated in other than U.S. dollars or ECUs in,
or to residents of, the country issuing the Specified Currency. See
"Description of Notes."
Except as otherwise indicated in the applicable Pricing Supplement, interest
on Fixed Rate Notes will be payable on each June 1 and December 1 and at
maturity. Interest on Floating Rate Notes will be payable on the dates
specified therein and in the applicable Pricing Supplement. Zero Coupon Notes
will not bear interest.
Unless the Company specifies an Initial Redemption Date in the applicable
Pricing Supplement, the Notes will not be redeemable prior to their Stated
Maturity.
The Company will issue the Notes offered hereby in registered global or
definitive certificated form, as specified in the applicable Pricing
Supplement. A registered global Note will be registered in the name of, or a
nominee of, The Depository Trust Company, which will act as Depositary.
Beneficial interests in the registered global Note will be evidenced only by,
and transfers thereof will be effected only through, records maintained by the
Depositary (with respect to participants' interests) and its participants.
Except as described below under "Description of Debt Securities, Warrants and
Guarantees, --Book Entry System" in the accompanying Prospectus, owners of
beneficial interests in a registered global Note will not be considered the
Holders thereof and will not be entitled to receive physical delivery of Notes
in definitive form, and no global Note will be exchangeable except for another
global Note of like denomination and terms to be registered in the name of the
Depositary or its nominee. Unless otherwise specified in the applicable
Pricing Supplement, the Notes offered hereby will be issued only in registered
form in denominations of $100,000 and integral multiples of $1,000 in excess
thereof, or the approximate equivalent in the Specified Currency. See
"Description of Notes."
---------------
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 OR THE PROSPECTUS TO WHICH IT RELATES.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------
<TABLE>
<CAPTION>
PRICE TO PROCEEDS TO
PUBLIC(1) AGENT'S COMMISSION(2) COMPANY(3)
------------ --------------------- -----------------------
<S> <C> <C> <C>
Per Note............ 100% 0.125%-0.750% 99.250%-99.875%
Total (4)........... $100,000,000 $125,000-$750,000 $99,250,000-$99,875,000
</TABLE>
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(1) Notes will be issued at 100% of their principal amount, unless otherwise
specified in the applicable Pricing Supplement.
(2) The Company will pay the Agents a commission ranging from 0.125% to
0.750%, depending on maturity, of the principal amount of any Notes sold
through them as agents (or sold to such Agents as principal in
circumstances in which no other discount is agreed). Tupperware
Corporation ("Tupperware") has agreed to indemnify the Agents against
certain liabilities, including liabilities under the Securities Act of
1933. See "Supplemental Plan of Distribution."
(3) Before deducting estimated expenses of $150,000 payable by Tupperware,
including $55,000 of estimated expenses of the Agents to be reimbursed by
Tupperware.
(4) Or the equivalent thereof in another currency or composite currency.
---------------
Offers to purchase Notes are being solicited, on a reasonable efforts basis,
from time to time by the Agents on behalf of the Company. Notes may be sold to
the Agents on their behalf at negotiated discounts. The Company reserves the
right to sell Notes directly on its own behalf. The Company also reserves the
right to withdraw, cancel, or modify the offering contemplated hereby without
notice. The Company has not established a termination date for the offering of
the Notes. The Company or the Agents may reject any order as a whole or in
part. See "Supplemental Plan of Distribution."
GOLDMAN, SACHS & CO. MORGAN STANLEY & CO.
INCORPORATED
---------------
The date of this Prospectus Supplement is May 22, 1997.
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CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NOTES, INCLUDING
OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN SUCH NOTES, AND
THE IMPOSITION OF A PENALTY BID, IN CONNECTION WITH THE OFFERING. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "SUPPLEMENTAL PLAN OF DISTRIBUTION".
----------------
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes offered
hereby supplements and, to the extent inconsistent therewith replaces, the
description of the general terms and provisions of the Securities (as defined
in the accompanying Prospectus) set forth under the heading "Description of
Debt Securities, Warrants and Guarantees" in the accompanying Prospectus, to
which description reference is hereby made. The provisions of the Notes
summarized herein will apply to each Note unless otherwise specified in the
applicable Pricing Supplement. Capitalized terms used but not defined herein
have the meanings specified in the accompanying Prospectus and/or the
Indenture (as defined in the accompanying Prospectus).
GENERAL
The Notes offered hereby will be issued under the Indenture referred to in
the accompanying Prospectus. The summary contained herein of certain
provisions of the Notes is subject to and is qualified in its entirety by
reference to the provisions of the Indenture and the forms of Notes, each of
which has been filed as an exhibit to the Registration Statement (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Notes, to which exhibits reference is
hereby made.
The Notes constitute a single series for purposes of the Indenture and are
limited in amount as set forth on the cover page of this Prospectus
Supplement. Each Note will be denominated in a currency, currency unit or
composite currency ("Specified Currency") as specified on its face and in the
applicable Pricing Supplement. Purchasers of the Notes are required to pay for
them by delivery of the requisite amount of the Specified Currency to an
Agent, unless other arrangements have been made. Unless otherwise specified in
the applicable Pricing Supplement, payments on the Notes will be made in the
applicable Specified Currency in the country issuing the Specified Currency
(or, for ECUs, Brussels), provided that, at the election of the Holder and in
certain circumstances at the Company's option, payments on Notes denominated
in other than U.S. dollars may be made in U.S. dollars.
The Notes will constitute unsecured and unsubordinated indebtedness of the
Company and will rank on a parity with the Company's other unsecured and
unsubordinated indebtedness.
The Notes are offered on a continuing basis and will mature on a day from 9
months or more from their date of issue, as selected by the initial purchaser
and agreed to by the Company, and may be subject to redemption at the option
of the Company or repayment at the option of the Holder prior to Stated
Maturity. See "Redemption and Repayment" below. Unless otherwise specified in
the applicable Pricing Supplement, the Notes will not be subject to any
sinking fund. 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.
Each Note will be issued initially as either a Global Note or a Certificated
Note. Except as set forth under "Debt Securities, Warrants and Guarantees--
Book-Entry System" in the accompanying Prospectus, Global Notes will not be
issuable in certificated form. Unless otherwise specified in the applicable
Pricing Supplement, Notes will be issued in denominations of $100,000 and
integral
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multiples of $1,000 in excess thereof. The authorized denominations of any
Note denominated in other than U.S. dollars will be the amount of the
Specified Currency for such Note equivalent, at the noon buying rate in The
City of New York for cable transfers for such Specified Currency (the
"Exchange Rate") on the sixth Business Day in The City of New York and in the
country issuing such currency (or, for ECUs, Brussels) next preceding the date
of issue of such Note, to U.S. $1,000 (rounded to the nearest 1,000 units of
such Specified Currency) and any greater amount that is an integral multiple
of 1,000 units of such Specified Currency unless specified in the applicable
Pricing Supplement.
Payments of interest and, in the case of Amortizing Notes, principal with
respect to any Certificated Note (other than interest and, in the case of
Amortizing Notes, principal payable at Stated Maturity) will be made by
mailing a check to the Holder at the address of the Holder appearing in the
Security register (as defined in the Indenture) for the Notes on the
applicable Regular Record Date (as defined below). Notwithstanding the
foregoing, at the option of the Company, all payments of interest and, in the
case of Amortizing Notes, principal on the Notes may be made by wire transfer
of immediately available funds to an account designated by each Holder at a
bank located in the United States. Payment of the principal of (and premium,
if any) and interest due with respect to any Certificated Note at Maturity
will be made in immediately available funds upon surrender of such Note
accompanied by wire transfer instructions at the principal office of the
Trustee (as defined in the accompanying Prospectus) in the Borough of
Manhattan, The City of New York, provided that the Certificated Note is
presented to the Trustee in time for the Trustee to make such payment in such
funds in accordance with its normal procedures.
Notwithstanding anything in this Prospectus Supplement to the contrary,
unless otherwise specified in the applicable Pricing Supplement, if a Note is
an Original Issue Discount Note, the amount payable on such Note in the event
the principal amount thereof is declared to be due and payable immediately or
in the event of redemption or repayment thereof prior to its Stated Maturity,
in lieu of the principal amount due at the Stated Maturity thereof, will be
the Amortized Face Amount of such Note as of the date of declaration,
redemption or repayment, as the case may be. The "Amortized Face Amount" of an
Original Issue Discount Note will be the amount equal to (i) the principal
amount of such Note multiplied by the Issue Price (as defined below) specified
in the applicable Pricing Supplement plus (ii) the portion of the difference
between the dollar amount determined pursuant to the preceding clause (i) and
the principal amount of such Note that has accreted at the yield to maturity
specified in the applicable Pricing Supplement (computed in accordance with
generally accepted United States bond yield computation principles) to such
date of declaration, redemption or repayment, but in no event will the
Amortized Face Amount of an Original Issue Discount Note exceed its principal
amount.
The Pricing Supplement relating to each Note will describe, among other
things, the following items: (i) the Specified Currency with respect to such
Note, and, if such Specified Currency is other than U.S. dollars, certain
other terms relating to such Note; (ii) the price (expressed as a percentage
of the aggregate principal amount thereof) 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 (the
"Stated Maturity") and whether the Stated Maturity may be extended by the
Company, and if so, the Extension Periods and the Final Maturity Date (each as
defined below under "Extension of Maturity"); (v) whether such Note is a Fixed
Rate Note or a Floating Rate Note; (vi) if such Note is a Fixed Rate Note, the
rate per annum at which such Note will bear interest, if any, the Interest
Payment Date or Dates, if different from those set forth below under "Fixed
Rate Notes" and whether such rate may be changed by the Company prior to
Stated Maturity; (vii) if such Note is a Floating Rate Note, the Initial
Interest Rate, the Interest Rate Basis, the Interest Reset Dates, the Interest
Payment Dates, the Index Maturity, the maximum interest rate, if any, the
minimum interest rate, if any, the Spread, if any, the Spread Multiplier, if
any (all as defined herein), and any other terms relating to the particular
method of calculating the interest rate for such Note, and whether any such
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Spread and/or Spread Multiplier may be changed by the Company prior to Stated
Maturity; (viii) whether such Note is an Original Issue Discount Note, and if
so, the yield to maturity and whether it has been issued with original issue
discount for United States Federal income tax purposes; (ix) whether such Note
is an Amortizing Note (as defined below under "Amortizing Notes"), and if so,
the basis or formula for the amortization of principal and/or interest and the
payment dates for such periodic principal payments; (x) the regular record
date or dates for determining the person entitled to receive payments of
interest, principal and premium, if any (a "Regular Record Date"), if other
than as set forth below; (xi) whether such Note may be redeemed at the option
of the Company, or repaid at the option of the Holder, prior to Stated
Maturity and, if so, the provisions relating to such redemption or repayment,
including in the case of Original Issue Discount Notes, the information
necessary to determine the amount due upon redemption or repayment; (xii) any
sinking fund or other mandatory redemption provisions with respect to such
Note; (xiii) whether such Note will be issued initially as a registered global
Note or a Certificated Note; (xiv) any relevant United States federal income
tax consequences associated with the terms of such Notes which have not been
described in "United States Federal Income Tax Consequences" below; and (xv)
any other terms of such Note not inconsistent with the provisions of the
Indenture.
All percentages resulting from any calculation with respect to any Notes
will be rounded, if necessary, to the nearest one hundred-thousandth of a
percentage point, with five one-millionths of a percentage point rounded
upward (e.g., 9.876545% (or .09876545) would be rounded to 9.87655% (or
.0987655)), and all dollar amounts used in or resulting from such calculation
on any Notes will be rounded to the nearest cent with one-half cent being
rounded upward.
As used herein, "Business Day", for any particular location, means, unless
otherwise specified in the applicable Pricing Supplement, each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in such location are authorized or obligated by law, regulation
or executive order to close, "Market Day" means any Business Day in The City
of New York and, with respect to Notes as to which LIBOR (as defined below
under "Floating Rate Notes--LIBOR Notes") is the applicable Interest Rate
Basis is also a London Business Day. As used herein, "London Business Day"
means any day (a) if the Designated LIBOR Currency (as defined below under
"Floating Rate Notes--LIBOR Notes") is other than the ECU, on which dealings
in deposits in such Designated LIBOR Currency are transacted in the London
interbank market or (b) if the Designated LIBOR Currency is the ECU, that is
not designated as an ECU Non-Settlement Day by the ECU Banking Association in
Paris or otherwise generally regarded in the ECU interbank market as a day on
which payments on ECUs will not be made.
The Notes (other than book-entry Notes) may be presented for registration of
transfer or exchange at an office or agency of the Company maintained for such
purpose in the City of Chicago. With respect to transfers of book-entry Notes
and exchanges of registered global Notes representing book-entry Notes, see
"Description of Debt Securities, Warrants and Guarantees--Book Entry System"
in the accompanying Prospectus.
The Notes are referred to in the accompanying Prospectus as "Debt
Securities". For a description of the rights attaching to different series of
Securities under the Indenture, see "Description of Debt Securities, Warrants
and Guaranties" in the Prospectus. Unless otherwise specified in the
applicable Pricing Supplement, the Notes will have the terms described below.
INTEREST AND INTEREST RATES
Unless otherwise specified in the applicable Pricing Supplement, each Note
(other than a Zero-Coupon Note) will bear interest from and including its
Original Issue Date or from and including the most recent Interest Payment
Date to which interest on such Note has been paid or duly provided for at a
fixed rate per annum or at a rate per annum determined pursuant to an Interest
Rate Basis, stated
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therein and in the applicable Pricing Supplement, that may be adjusted by a
Spread and/or Spread Multiplier, until the principal thereof is paid or made
available for payment. Unless otherwise specified in the applicable Pricing
Supplement, interest will be payable on each Interest Payment Date and at
Maturity. "Maturity" means the date on which the principal of a Note or an
installment of principal becomes due and payable in accordance with its terms
and the terms of the Indenture, whether at Stated Maturity, upon acceleration,
redemption, repayment or otherwise. Interest (other than defaulted interest
which may be paid to the Holder on a special record date) will be payable to
the Holder at the close of business on the Regular Record Date next preceding
an Interest Payment Date; provided, however, that interest payable at Maturity
will be payable to the person to whom principal will be payable. The first
payment of interest on any Note originally issued between a Regular Record
Date and the next Interest Payment Date will be made on the Interest Payment
Date following the next succeeding Regular Record Date to the Holder on such
next succeeding Regular Record Date.
Interest rates, interest rate formulae and other variable terms of the Notes
are subject to change by the Company from time to time, but no such change
will affect any Note already issued or as to which an offer to purchase has
been accepted by the Company. Unless otherwise specified in the applicable
Pricing Supplement, the Interest Payment Dates and the Regular Record Dates
for Fixed Rate Notes will be as described below under "Fixed Rate Notes." The
Interest Payment Dates for Floating Rate Notes will be as specified in the
applicable Pricing Supplement, and unless otherwise specified in the
applicable Pricing Supplement, each Regular Record Date for a Floating Rate
Note will be the fifteenth day (whether or not a Business Day) preceding each
Interest Payment Date.
Each Note (other than a Zero-Coupon Note) will bear interest at either (a) a
fixed rate (a "Fixed Rate Note") or (b) a floating rate (a "Floating Rate
Note") determined by reference to an Interest Rate Basis which may be adjusted
by a Spread and/or Spread Multiplier. Any Floating Rate Note may also have
either or both of the following: (i) a maximum interest rate, or ceiling, on
the rate of interest which may accrue during any interest period, and (ii) a
minimum interest rate, or floor, on the rate of interest which may accrue
during any interest period. The applicable Pricing Supplement relating to each
Note will designate either a fixed rate of interest per annum on the
applicable Fixed Rate Note or one or more of the following Interest Rate Bases
as applicable to the relevant Floating Rate Note: (a) the Commercial Paper
Rate, in which case such Note will be a "Commercial Paper Rate Note," (b) the
CD Rate, in which case such Note will be a "CD Rate Note," (c) the CMT Rate,
in which case such Note will be a "CMT Rate Note," (d) the Federal Funds Rate,
in which case such Note will be a "Federal Funds Rate Note," (e) the 11th
District Cost of Funds Rate, in which case such Note will be an "11th District
Cost of Funds Rate Note," (f) the Kenny Rate, in which case such Note will be
a "Kenny Rate Note," (g) LIBOR, in which case such Note will be a "LIBOR
Note," (h) the Prime Rate, in which case such Note will be a "Prime Rate
Note," (i) the Treasury Rate, in which case such Note will be a "Treasury Rate
Note," or (j) such other Interest Rate Basis or formula as may be specified in
such Pricing Supplement.
Notwithstanding the determination of the interest rate as provided below,
the interest rate on the Notes for any interest period shall not be greater
than the maximum interest rate, if any, or less than the minimum interest
rate, if any, specified in the applicable Pricing Supplement. The interest
rate on the Notes will in no event be higher than the maximum rate permitted
by New York or other applicable law, as the same may be modified by United
States law of general application. Under present New York law, the maximum
rate of interest is 25% per annum on a simple interest basis. This limit may
not apply to Notes in which $2,500,000 or more has been invested.
Unless otherwise specified in the applicable Pricing Supplement, payments of
principal of (and premium, if any) and interest on all Notes will be made in
the applicable Specified Currency; provided, however, that payments of
principal (and premium, if any) and interest on Notes denominated in other
than U.S. dollars will nevertheless be made in U.S. dollars: (a) at the option
of the Holders of such Notes under the procedures described in the two
following paragraphs; and (b) at the Company's
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option in the case of imposition of exchange controls or other circumstances
beyond the Company's control as described in the last paragraph under this
heading.
Unless otherwise specified in the applicable Pricing Supplement, and except
as provided in the next paragraph, payments of interest and principal (and
premium, if any) for any Note denominated in other than U.S. dollars will be
made in U.S. dollars if the registered Holder of such Note on the relevant
Regular Record Date, or at Maturity, as the case may be, has transmitted a
written request for such payment in U.S. dollars to the Paying Agent (as
defined in the accompanying Prospectus) at the Paying Agent's office in the
City of Chicago on or before such Regular Record Date, or the date 15 days
before Maturity, as the case may be. Such request may be in writing (mailed or
hand delivered) or by cable, telex, or other form of facsimile transmission.
Any such request made for any Note by a registered Holder will remain in
effect for any further payments of interest and principal (and premium, if
any) on such Note payable to such Holder, unless such request is revoked on or
before the relevant Regular Record Date or the date 15 days before Maturity,
as the case may be. Holders of Notes denominated in other than U.S. dollars
whose Notes are registered in the name of a broker or nominee should contact
such broker or nominee to determine whether and how to elect to receive
payments in U.S. dollars.
The U.S. dollar amount to be received by a Holder of a Note denominated in
other than U.S. dollars who elects to receive payment in U.S. dollars will be
based on the highest bid quotation in The City of New York received by the
Exchange Rate Agent (as defined below) as of 11:00 a.m., New York City time on
the second Business Day next preceding the applicable payment date from three
recognized foreign exchange dealers (one of which may be the Exchange Rate
Agent) for the purchase by the quoting dealer of the Specified Currency for
U.S. dollars for settlement on such payment date in the aggregate amount of
the Specified Currency payable to all Holders of Notes electing to receive
U.S. dollar payments and at which the applicable dealer commits to execute a
contract. If three such bid quotations are not available on the second
Business Day preceding the date of payment of principal (and premium, if any)
or interest for any Note, such payment will be made in the Specified Currency.
All currency exchange costs associated with any payment in U.S. dollars on any
such Note will be borne by the Holder thereof by deductions from such payment.
The Exchange Rate Agent (the "Exchange Rate Agent") with respect to any Notes
denominated in other than U.S dollars will be specified in the applicable
Pricing Supplement.
If the principal of (and premium, if any) or interest on any Note is payable
in other than U.S. dollars and such Specified Currency is not available due to
the imposition of exchange controls or other circumstances beyond the control
of the Company, the Company will be entitled to satisfy its obligations to
Holders of the Notes by making such payment in U.S. dollars on the basis of
the most recently available Exchange Rate. Any payment made under such
circumstances in U.S. dollars where the required payment is in other than U.S.
dollars will not constitute an Event of Default under the Indenture.
FIXED RATE NOTES
Unless otherwise specified in the applicable Pricing Supplement, each Fixed
Rate Note (other than a Zero Coupon Note) will accrue interest from and
including its Original Issue Date at the annual rate stated on the face
thereof, as specified in the applicable Pricing Supplement. Unless otherwise
specified in the applicable Pricing Supplement, payments of interest on any
Fixed Rate Note with respect to any Interest Payment Date or Maturity will
include interest accrued from and including the Original Issue Date, or from
and including the most recent Interest Payment Date to which interest has been
paid or duly provided for, to but excluding such Interest Payment Date or
Maturity. Fixed Rate Notes may bear one or more annual rates of interest
during the periods or under the circumstances specified therein and in the
applicable Pricing Supplement. 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.
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Unless otherwise specified in the applicable Pricing Supplement, the
Interest Payment Dates for Fixed Rate Notes, including Fixed Rate Amortizing
Notes, will be semi-annually on each June 1 and December 1 and the Regular
Record Dates will be each May 15 and November 15 (whether or not a Business
Day). In the case of Fixed Rate Amortizing Notes, Interest Payment Dates may
be quarterly on each January 15, April 15, July 15 and October 15 if specified
in the applicable Pricing Supplement, and the Regular Record Dates will be
each January 1, April 1, July 1 and October 1 (whether or not a Business Day)
next preceding each such Interest Payment Date. If the Interest Payment Date
or Maturity for any Fixed Rate Note is not a Business Day, all payments to be
made on such day with respect to such Note will be made on the next day that
is a Business Day with the same force and effect as if made on the due date,
and no additional interest will be payable on the date of payment for the
period from and after the due date as a result of such delayed payment.
Unless otherwise specified in the applicable Pricing Supplement, payments
with respect to Fixed Rate Amortizing Notes will be applied first to interest
due and payable thereon and then to the reduction of the unpaid principal
amount thereof. A table setting forth repayment information in respect of each
Fixed Rate Amortizing Note will be provided to the original purchaser of such
Note and will be available, upon request, to subsequent Holders.
FLOATING RATE NOTES
The interest rate on each Floating Rate Note will be equal to the interest
rate calculated by reference to the specified Interest Rate Basis (i) plus or
minus the Spread, if any, and/or (ii) multiplied by the Spread Multiplier, if
any. The "Spread" is the number of basis points (one basis point equals one-
hundredth of a percentage point) specified in the applicable Pricing
Supplement as being applicable to such Note, and the "Spread Multiplier" is
the percentage specified in the applicable Pricing Supplement as being
applicable to such Note. The applicable Pricing Supplement will specify the
Interest Rate Basis and the Spread and/or Spread Multiplier, if any, and the
maximum or minimum interest rate, if any, applicable to each Floating Rate
Note. In addition, such Pricing Supplement will contain particulars as to the
Calculation Agent (unless otherwise specified in the applicable Pricing
Supplement, The First National Bank of Chicago (in such capacity, the
"Calculation Agent")), Index Maturity, Original Issue Date, the interest rate
in effect for the period from the Original Issue Date to the first Interest
Reset Date specified in the applicable Pricing Supplement (the "Initial
Interest Rate"), Interest Determination Dates, Interest Payment Dates, Regular
Record Dates, and Interest Reset Dates with respect to such Note.
Except as provided below or in the applicable Pricing Supplement, the
Interest Payment Dates for Floating Rate Notes, including Floating Rate
Amortizing Notes, will be (i) in the case of Floating Rate Notes that reset
daily, weekly or monthly, the third Wednesday of each month or the third
Wednesday of March, June, September and December of each year, as specified on
the face thereof and in the applicable Pricing Supplement; (ii) in the case of
Floating Rate Notes that reset quarterly, the third Wednesday of March, June,
September and December of each year as specified on the face thereof and in
the applicable Pricing Supplement; (iii) in the case of Floating Rate Notes
that reset semiannually, the third Wednesday of each of two months of each
year, as specified on the face thereof and in the applicable Pricing
Supplement; and (iv) in the case of Floating Rate Notes that reset annually,
the third Wednesday of one month of each year, as specified on the face
thereof and in the applicable Pricing Supplement and, in each case, at Stated
Maturity. If any Interest Payment Date, other than Maturity, for any Floating
Rate Note is not a Market Day for such Floating Rate Note (and, if the
Specified Currency is other than U.S. dollars, a Business Day in the country
issuing the Specified Currency (or, for ECUs, Brussels)), such Interest
Payment Date will be postponed to the next day that is a Market Day for such
Floating Rate Note, except that in the case of a LIBOR Note, if such Market
Day for such Floating Rate Note is in the next succeeding calendar month, such
Interest Payment Date will be the immediately preceding London Business Day.
If the Maturity for any Floating Rate Note falls
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on a day that is not a Market Day (and, if the Specified Currency is other
than U.S. dollars, a Business Day in the country issuing the Specified
Currency (or, for ECUs, Brussels)), all payments to be made on such day with
respect to such Note will be made on the next day that is a Market Day with
the same force and effect as if made on the due date, and no additional
interest will be payable on the date of payment for the period from and after
the due date as a result of such delayed payment.
The rate of interest on each Floating Rate Note will be reset daily, weekly,
monthly, quarterly, semiannually or annually (such period being the "Reset
Period" for such Note, and the first day of each Reset Period being an
"Interest Reset Date"), as specified in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the Interest
Reset Date will be, in the case of Floating Rate Notes which reset daily, each
Market Day for such Floating Rate Note; in the case of Floating Rate Notes
(other than Treasury Rate Notes) which reset weekly, the Wednesday of each
week; in the case of Treasury Rate Notes which reset weekly, the Tuesday of
each week, except as provided below; in the case of Floating Rate Notes which
reset monthly, the third Wednesday of each month (with the exception of
monthly reset 11th District Cost of Funds Rate Notes, which will reset on the
first calendar day of the month); in the case of Floating Rate Notes which
reset quarterly, the third Wednesday of each March, June, September and
December; in the case of Floating Rate Notes which reset semiannually, the
third Wednesday of each of two months of each year, as specified in the
applicable Pricing Supplement; and in the case of Floating Rate Notes which
reset annually, the third Wednesday of one month of each year, as specified in
the applicable Pricing Supplement; provided, however, that the interest rate
in effect from the Original Issue Date to but excluding the first Interest
Reset Date with respect to a Floating Rate Note will be the Initial Interest
Rate (as specified in the applicable Pricing Supplement). If any Interest
Reset Date for any Floating Rate Note is not a Market Day for such Floating
Rate Note, such Interest Reset Date will be postponed to the next day that is
a Market Day for such Floating Rate Note, except that in the case of a LIBOR
Note, if such Day is in the next succeeding calendar month, such Interest
Reset Date will be the immediately preceding Market Day. Each adjusted rate
will be applicable on and after the Interest Reset Date to which it relates to
but excluding the next succeeding Interest Reset Date or until Maturity.
The interest rate for each Reset Period will be the rate determined by the
Calculation Agent on the Calculation Date (as defined below) pertaining to the
Interest Determination Date pertaining to the Interest Reset Date for such
Reset Period. Unless otherwise specified in the applicable Pricing Supplement,
the "Interest Determination Date" pertaining to an Interest Reset Date for (a)
a Commercial Paper Rate Note (the "Commercial Paper Interest Determination
Date"), (b) a CD Rate Note (the "CD Interest Determination Date"), (c) a CMT
Rate Note (the "CMT Interest Determination Date"), (d) a Federal Funds Rate
Note (the "Federal Funds Interest Determination Date"), (e) a Kenny Rate Note
(the "Kenny Rate Interest Determination Date") or (f) a Prime Rate Note (the
"Prime Interest Determination Date") will be the second Market Day prior to
such Interest Reset Date. Unless otherwise specified in the applicable Pricing
Supplement, the Interest Determination Date pertaining to an Interest Reset
Date for the 11th District Cost of Funds Rate Note (the "11th District
Interest Determination Date") will be the last Market Day of the month
immediately preceding such Interest Reset Date on which the Federal Home Loan
Bank of San Francisco (the "FHLB of San Francisco") publishes the Index (as
defined below under "11th District Cost of Funds Rate Notes"). Unless
otherwise specified in the applicable Pricing Supplement, the Interest
Determination Date pertaining to an Interest Reset Date for a LIBOR Note (the
"LIBOR Interest Determination Date") will be the second London Business Day
immediately preceding each Interest Reset Date. Unless otherwise specified in
the applicable Pricing Supplement, the Interest Determination Date pertaining
to an Interest Reset Date for a Treasury Rate Note (the "Treasury Interest
Determination Date") will be the day of the week in which such Interest Reset
Date falls on which Treasury bills would normally be auctioned. Treasury bills
are usually sold at auction on Monday of each week, unless that day is a legal
holiday, in which case the auction is usually held on the following Tuesday,
except that such auction may be held on the preceding Friday. If an auction is
so held on the preceding Friday, such Friday will be the Treasury
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Interest Determination Date pertaining to the Reset Period commencing in the
next succeeding week. If an auction date falls on any Interest Reset Date for
a Treasury Rate Note, then such Interest Reset Date will instead be the first
Market Day immediately following such auction date. Unless otherwise specified
in the applicable Pricing Supplement, the "Calculation Date" pertaining to any
Interest Determination Date will be the earlier of (i) the tenth calendar day
after the Interest Determination Date or, if such day is not a Market Day, the
next day that is a Market Day, or (ii) the Market Day preceding the applicable
Interest Payment Date or Maturity, as the case may be.
"Index Maturity" means, with respect to a Floating Rate Note, the period to
maturity of the instrument or obligation on which the interest rate formula is
based, as specified in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, payments
with respect to Floating Rate Amortizing Notes will be applied first to
interest due and payable thereon and then to the reduction of the unpaid
principal amount thereof. A table setting forth repayment information in
respect of each Floating Rate Amortizing Note will be provided to the original
purchaser of such Note and will be available, upon request, to subsequent
Holders.
Unless otherwise specified in the applicable Pricing Supplement, each
Floating Rate Note will accrue interest from and including its Original Issue
Date at the rate determined as provided in such Note and as specified in the
applicable Pricing Supplement. Unless otherwise specified in the applicable
Pricing Supplement, payments of interest on any Floating Rate Note with
respect to any Interest Payment Date or Maturity will include interest accrued
from and including the Original Issue Date, or from and including the most
recent Interest Payment Date to which interest has been paid or duly provided
for, to but excluding the Interest Payment Date or Maturity. With respect to
Floating Rate Notes, accrued interest is calculated by multiplying in the face
amount of a Note by an accrued interest factor. This accrued interest factor
is computed by adding the interest factors calculated for each day from and
including the Original Issue Date, or from and including the last date to
which interest has been paid or duly provided for, to but excluding the date
for which accrued interest is being calculated. The interest factor for each
such day (unless otherwise specified) is computed by dividing the interest
rate applicable to such day by 360, in the case of Commercial Paper Rate
Notes, CD Rate Notes, Federal Funds Rate Notes, 11th District Cost of Funds
Rate Notes, LIBOR Notes and Prime Rate Notes or by the actual number of days
in the year, in the case of CMT Rate Notes or Treasury Rate Notes, or by 365
days in the case of Kenny Rate Notes.
The Calculation Agent will calculate the interest rate on the Floating Rate
Notes, as provided below. The Calculation Agent will, upon the request of the
Holder of any Floating Rate Note, provide the interest rate then in effect
and, if then determined, the interest rate which will become effective as a
result of a determination made with respect to the most recent Interest
Determination Date with respect to such Note. For purposes of calculating the
rate of interest payable on Floating Rate Notes, the Company has entered into
or will enter into an agreement with the Calculation Agent. The Calculation
Agent's determination of any interest rate shall be final and binding in the
absence of manifest error.
COMMERCIAL PAPER RATE NOTES
Each Commercial Paper Rate Note 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 Note and in
the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Commercial
Paper Rate" means, with respect to any Commercial Paper Interest Determination
Date, the Money Market Yield (calculated as described below) of the rate on
such date for commercial paper having the Index
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Maturity specified in the applicable Pricing Supplement as published by the
Board of Governors of the Federal Reserve System in "Statistical Release H.
15(519), Selected Interest Rates" or any successor publication of the Board of
Governors ("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 Commercial Paper Interest Determination
Date, then the Commercial Paper Rate with respect to such Commercial Paper
Interest Determination Date will be the Money Market Yield of the rate on such
Commercial Paper Interest Determination Date for commercial paper having the
Index Maturity specified in the applicable Pricing Supplement as published by
the Federal Reserve Bank of New York in its daily statistical release
"Composite 3:30 P.M. Quotations for U.S. Government Securities" or any
successor publication ("Composite Quotations") under the heading "Commercial
Paper." If by 3:00 P.M., New York City time, on such on such Calculation Date
such rate is not published in either H. 15(519) or Composite Quotations, then
the Commercial Paper Rate with respect to such Commercial Paper Interest
Determination Date will be calculated by the Calculation Agent and will be the
Money Market Yield of the arithmetic mean of the offered rates (quoted on a
bank discount basis) as of 11:00 A.M., New York City time, on such Commercial
Paper Interest Determination Date of three leading dealers of commercial paper
in The City of New York (which may include any Agents or their affiliates)
selected by the Calculation Agent for commercial paper having the Index
Maturity specified in the applicable Pricing Supplement placed for an
industrial issuer whose bond rating is "AA," or the equivalent, from a
nationally recognized securities rating agency; provided, however, that if the
dealers selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the Commercial Paper Rate with respect to such
Commercial Paper Interest Determination Date will be the Commercial Paper Rate
in effect immediately prior to such Commercial Paper Interest Determination
Date.
"Money Market Yield" will be a yield (expressed as a percentage rounded, if
necessary, to the nearest one hundred-thousandth of a percent) calculated in
accordance with the following formula:
D X 360
Money Market Yield = ------- X 100
360-(D X M)
where "D" refers to the 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 accrued interest is being calculated.
CD RATE NOTES
Each CD Rate Note 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 Note and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "CD Rate"
means, with respect to any CD Interest Determination Date, the rate on such
date for negotiable certificates of deposit having the Index Maturity
specified in the applicable Pricing Supplement as published in H.15(519) under
the heading "CDs (Secondary Market)." In the event that such rate is not
published prior to 9:00 A.M., New York City time, on the Calculation Date
pertaining to such CD Interest Determination Date, then the CD Rate with
respect to such CD Interest Determination Date will be the rate on such CD
Interest Determination Date for negotiable certificates of deposit having the
Index Maturity specified in the applicable Pricing Supplement as published in
Composite Quotations under the heading "Certificates of Deposit." If by 3:00
P.M., New York City time, on such Calculation Date such rate is not published
in either H. 15(519) or Composite Quotations, then the CD Rate with respect to
such CD Interest Determination Date will be calculated by the Calculation
Agent and will be the arithmetic mean of the secondary market offered rates as
of 10:00 A.M., New York City time, on such CD Interest Determination Date of
three leading nonbank dealers in negotiable U.S. dollar certificates of
deposit in
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The City of New York selected by the Calculation Agent for negotiable
certificates of deposit of major United States money market banks (in the
market for negotiable certificates of deposit) with a remaining maturity
closest to the Index Maturity specified in the applicable Pricing Supplement
in a denomination of $5,000,000; provided, however, that if the dealers
selected as aforesaid by the Calculation Agent are not quoting as mentioned in
this sentence, the CD Rate with respect to such CD Interest Determination Date
will be the CD Rate in effect immediately prior to such CD Interest
Determination Date.
CMT RATE NOTES
Each CMT Rate Note will bear interest at the interest rate (calculated with
reference to the CMT Rate and the Spread and/or Spread Multiplier, if any)
specified in the CMT Rate Note and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "CMT Rate"
means, with respect to any CMT Interest Determination Date, the rate displayed
on the Designated CMT Telerate Page (as defined below) under the caption
". . . Treasury Constant Maturities . . . Federal Reserve Board Release
H.15 . . . Mondays Approximately 3:45 P.M.," under the column for the
Designated CMT Maturity Index (as defined below) for (i) if the Designated CMT
Telerate Page is 7055, such CMT Interest Determination Date and (ii) if the
Designated CMT Telerate Page is 7052, the week, or the month, as specified in
the applicable Pricing Supplement, ended immediately preceding the week in
which the applicable CMT Interest Determination Date occurs. If such rate is
no longer displayed on the relevant page, or if not displayed by 3:00 P.M.,
New York City time, on the Calculation Date pertaining to such CMT Interest
Determination Date, then the CMT Rate with respect to such CMT Interest
Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index as published in the relevant H.15(519). If such
rate is no longer published, or if not published by 3:00 P.M., New York City
time, on the Calculation Date pertaining to such CMT Interest Determination
Date, then the CMT Rate with respect to such CMT Interest Determination Date
will be such treasury constant maturity rate for the Designated CMT Maturity
Index (or other United States Treasury rate for the Designated CMT Maturity
Index) for the CMT Interest Determination Date with respect to such Interest
Reset Date as may then be published by either the Board of Governors of the
Federal Reserve System or the United States Department of the Treasury that
the Calculation Agent determines to be comparable to the rate formerly
displayed on the Designated CMT Telerate Page and published in the relevant
H.15(519). If such information is not provided by 3:00 P.M., New York City
time, on the Calculation Date pertaining to such CMT Interest Determination
Date, then the CMT Rate with respect to such CMT Interest Determination Date
will be calculated by the Calculation Agent and will be a yield to maturity,
based on the arithmetic mean of the secondary market closing offer side prices
as of approximately 3:30 P.M., New York City time, on the CMT Interest
Determination Date reported, according to their written records, by three
leading primary United States government securities dealers (each, a
"Reference Dealer") in The City of New York (which may include any Agents or
their affiliates) selected by the Calculation Agent (from five such Reference
Dealers selected by the Calculation Agent and eliminating the highest
quotation (or, in the event of equality, one of the highest) and the lowest
quotation (or, in the event of equality, one of the lowest)), for the most
recently issued direct noncallable fixed rate obligations of the United States
("Treasury Notes") with an original maturity of approximately the Designated
CMT Maturity Index and a remaining term to maturity of not less than such
Designated CMT Maturity Index minus one year. If the Calculation Agent cannot
obtain three such Treasury Note quotations, the CMT Rate with respect to such
CMT Interest Determination Date will be calculated by the Calculation Agent
and will be a yield to maturity based on the arithmetic mean of the secondary
market offer side prices as of approximately 3:30 P.M., New York City time, on
the CMT Interest Determination Date of three Reference Dealers in The City of
New York (from five such Reference Dealers selected by the Calculation Agent
and eliminating the highest quotation (or, in the event of equality, one of
the highest) and the lowest quotation (or, in the event of equality, one
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of the lowest)), for Treasury Notes with an original maturity of the number of
years that is the next highest to the Designated CMT Maturity Index and a
remaining term to maturity closest to the Designated CMT Maturity Index and in
an amount of at least $100,000,000. If three or four (and not five) of such
Reference Dealers are quoting as described above, then the CMT Rate with
respect to such CMT Interest Determination Date will be based on the
arithmetic mean of the offer prices obtained and neither the highest nor the
lowest of such quotes will be eliminated; provided, however, that if fewer
than three Reference Dealers selected by the Calculation Agent are quoting as
described herein, the CMT Rate will be the CMT Rate in effect immediately
prior to such CMT Interest Determination Date. If two Treasury Notes with an
original maturity as described in the second preceding sentence have remaining
terms to maturity equally close to the Designated CMT Maturity Index, the
quotes for the Treasury Note with the shorter remaining term to maturity will
be used.
"Designated CMT Telerate Page" means the display on the Dow Jones Telerate
Service on the page specified in the applicable Pricing Supplement (or any
other page as may replace such page on that service for the purpose of
displaying Treasury Constant Maturities as published in H.15(519)), for the
purpose of displaying Treasury Constant Maturities as published in H.15(519).
If no such page is specified in the applicable Pricing Supplement, the
Designated CMT Telerate Page will be 7052, for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity of the
U.S. Treasury securities (either one, two, three, five, seven, ten, twenty or
thirty years) specified in the applicable Pricing Supplement with respect to
which the CMT Rate will be calculated. If no such maturity is specified in the
applicable Pricing Supplement, the Designated CMT Maturity Index will be two
years.
FEDERAL FUNDS RATE NOTES
Each Federal Funds Rate Note 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 Note and in the
applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Federal
Funds Rate" means, with respect to any Federal Funds Interest Determination
Date, the rate on such date for Federal Funds as published in H.15(519) under
the heading "Federal Funds (Effective)." In the event that such rate is not
published prior to 9:00 A. M., New York City time, on the Calculation Date
pertaining to such Federal Funds Interest Determination Date, then the Federal
Funds Rate with respect to such Federal Funds Interest Determination Date will
be the rate on such Federal Funds Interest Determination Date as published in
Composite Quotations under the heading "Federal Funds/Effective Rate." If by
3:00 P.M., New York City time, on such Calculation Date such rate is not
published in either H.15(519) or Composite Quotations, then the Federal Funds
Rate with respect to such Federal Funds Interest Determination Date will be
calculated by the Calculation Agent and will be the arithmetic mean (rounded,
if necessary, to the nearest one hundred-thousandth of a percent) of the rates
as of 9:00 A.M., New York City time, on such Federal Funds Interest
Determination Date for the last transaction in overnight Federal Funds
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
mentioned in this sentence, the Federal Funds Rate with respect to such
Federal Funds Interest Determination Date will be the Federal Funds Rate in
effect immediately prior to such Federal Funds Interest Determination Date.
11TH DISTRICT COST OF FUNDS RATE NOTES
Each 11th District Cost of Funds Rate Note will bear interest at the
interest rate (calculated with reference to the 11th District Cost of Funds
Rate and the Spread and/or Spread Multiplier, if any) specified in the 11th
District Cost of Funds Rate Note and in the applicable Pricing Supplement.
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Unless otherwise specified in the applicable Pricing Supplement, "11th
District Cost of Funds Rate" means, with respect to any 11th District Interest
Determination Date, the rate equal to the monthly weighted average cost of
funds for the calendar month preceding such 11th District Interest
Determination Date as set forth under the caption "11th District" on Telerate
Page 7058 as of 11:00 A.M., San Francisco time, on such 11th District Interest
Determination Date. If such rate does not appear on Telerate Page 7058 on any
related 11th District Interest Determination Date, the 11th District Cost of
Funds Rate for such 11th District Interest Determination Date will be the
monthly weighted average cost of funds paid by member institutions of the
Eleventh Federal Home Loan Bank District that was most recently announced (the
"Index") by the FHLB of San Francisco as such cost of funds for the calendar
month preceding the date of such announcement. If the FHLB of San Francisco
fails to announce such rate for the calendar month next preceding such 11th
District Interest Determination Date, then the 11th District Cost of Funds
Rate with respect to such 11th District Interest Determination Date will be
the 11th District Cost of Funds Rate then in effect on such 11th District
Interest Determination Date.
KENNY RATE NOTES
Each Kenny Rate Note will bear interest at the interest rate (calculated
with reference to the Kenny Rate and the Spread and/or Spread Multiplier, if
any) specified in the Kenny Rate Note and in the applicable Pricing
Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Kenny
Rate" means, with respect to any Kenny Rate Interest Determination Date, the
high grade weekly index (the "Weekly Index") on such date made available by
J.J. Kenny Information Systems ("Kenny") to the Calculation Agent. The Weekly
Index is, and will be, based upon 30-day yield evaluations at par of bonds,
the interest on which is exempt from Federal income taxation under the
Internal Revenue Code of 1986, as amended (the "Code"), of not less than five
high grade component issuers selected by Kenny which will include, without
limitation, issuers of general obligation bonds. The specified issuers
included among the component issuers may be changed from time to time by Kenny
in its discretion. The bonds on which the Weekly Index is based will not
include any bonds on which the interest is subject to a minimum tax or similar
tax under the Code unless all tax-exempt bonds are subject to such tax. In the
event Kenny ceases to make available such Weekly Index, a successor indexing
agent will be selected by the Calculation Agent, such index to reflect the
prevailing rate for bonds rated in the highest short-term rating category by
Moody's Investors Service, Inc. and Standard & Poor's Corporation in respect
of issuers most closely resembling the high grade component issuers selected
by Kenny for its Weekly Index, the interest on which is (A) variable on a
weekly basis, (B) exempt from Federal income taxation under the Code and (C)
not subject to a minimum tax or similar tax under the Code unless all tax-
exempt bonds are subject to such tax. If such successor indexing agent is not
available, the Kenny Rate with respect to any Kenny Rate Interest
Determination Date will be 67% of the rate determined as if the Treasury Rate
option had been originally selected.
LIBOR NOTES
Each LIBOR Note 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 Note and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "LIBOR"
means, with respect to any LIBOR Interest Determination Date, the rate
determined by the Calculation Agent in accordance with the following
provisions:
(a) either (i) the arithmetic mean of the offered rates for deposits in
the Index Currency for the period of the applicable Index Maturity which
appear on the Reuters Screen LIBO Page at
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approximately 11:00 a.m., London time, on such LIBOR Interest Determination
Date if at least two such offered rates appear on the Reuters Screen LIBO
Page ("LIBOR Reuters"), or (ii) the rate for deposits in the Index Currency
for the period of the applicable Index Maturity that appears on the
Telerate Page 3750 as of 11:00 a.m., London time, on such LIBOR Interest
Determination Date ("LIBOR Telerate"). "Reuters Screen LIBO Page" means the
display designated as Page "LIBO" on the Reuters Monitor Money Rate Service
(or such other page as may replace the LIBO page on the service for the
purpose of displaying London interbank offered rates of major banks).
"Telerate Page 3750" means the display designated as page "3750" on the
Telerate Service (or such other page as may replace the 3750 page on that
service or such other service or services as may be nominated by the
British Bankers' Association for the purpose of displaying London interbank
offered rates for U.S. dollar deposits). If neither LIBOR Reuters nor LIBOR
Telerate is specified in the applicable Pricing Supplement, LIBOR will be
determined as if LIBOR Telerate has been specified. If fewer than two
offered rates appear on the Reuters Screen LIBO Page, or if no rate appears
on the Telerate Page 3750, as applicable, LIBOR in respect of that LIBOR
Interest Determination Date will be determined as if the parties had
specified the rate described in (b) below.
(b) If fewer than two offered rates appear on the Reuters Screen LIBO
Page or no rate appears on Telerate Page 3750, as applicable, the
Calculation Agent will request the principal London offices of four major
banks in the London interbank market, as selected by the Calculation Agent,
to provide the Calculation Agent with its offered quotations for deposits
in the Index Currency for the period of the applicable Index Maturity to
prime banks in the London interbank market at approximately 11:00 a.m.,
London time, commencing on the second London Business Day immediately
following such LIBOR Interest Determination Date and in a principal amount
equal to an amount of not less than U.S. $1 million or the approximate
equivalent thereof in the applicable Index Currency that is representative
of a single transaction in such market at such time. If at least two
quotations are provided, LIBOR in respect of that LIBOR Interest
Determination Date will be the arithmetic mean of such rates. If fewer than
two quotations are provided, LIBOR in respect of that LIBOR Interest
Determination Date will be the arithmetic mean of the rates quoted by three
major banks in the applicable Principal Financial Center (as defined below)
selected by the Calculation Agent at approximately 11:00 a.m. in such
Principal Financial Center, commencing on the second London Business Day
immediately following such LIBOR Interest Determination Date for loans in
the Index Currency to leading European banks, for the period of the
applicable Index Maturity and in a principal amount equal to an amount of
not less than U.S. $1 million or the approximate equivalent thereof in the
applicable Index Currency that is representative of a single transaction in
such market at such time; provided, however, that if fewer than three banks
selected as aforesaid by the Calculation Agent are quoting rates as
mentioned in this sentence, the rate of interest in effect for the
applicable period will be the LIBOR in effect on such LIBOR Interest
Determination Date.
"Index Currency" means the currency (including composite currencies)
specified in the applicable Pricing Supplement as the currency for which LIBOR
shall be calculated. If no such currency is specified in the applicable
Pricing Supplement, the Index Currency shall be United States dollars.
"Principal Financial Center" will generally be the capital city of the
country of the specified Index Currency, except that with respect to United
States dollars, Deutsche marks, Italian lira, Swiss francs, Dutch Gilders and
ECUs, the Principal Financial Center shall be The City of New York, Frankfurt,
Milan, Zurich, Amsterdam and Luxembourg, respectively.]
PRIME RATE NOTES
Each Prime Rate Note will bear interest at the interest rate (calculated
with reference to the Prime Rate and the Spread and/or Spread Multiplier, if
any) specified in the Prime Rate Note and in the applicable Pricing
Supplement.
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Unless otherwise specified in the applicable Pricing Supplement, "Prime
Rate" means, with respect to any Prime Interest Determination Date, the rate
on such date as published in H.15(519) under the heading "Bank Prime Loan." In
the event that such rate is not published prior to 9:00 A.M., New York City
time, on the Calculation Date pertaining to such Prime Interest Determination
Date, then the Prime Rate with respect to such Prime Interest Determination
Date will be calculated by the Calculation Agent and will be the arithmetic
mean of the rates of interest publicly announced by each bank that appears on
the Reuters Screen USPRIME1 (as defined below) as such bank's prime rate or
base lending rate as in effect with respect to such Prime Interest
Determination Date. If fewer than four such rates appear on the Reuters Screen
USPRIME1 with respect to such Prime Interest Determination Date, the Prime
Rate with respect to such Prime Interest Determination Date will be calculated
by the Calculation Agent and will be the arithmetic mean of the prime rates
quoted on the basis of the actual number of days in the year divided by 360 as
of the close of business on such Prime Interest Determination Date by three
major banks in The City of New York selected by the Calculation Agent;
provided, however, that if fewer than three banks selected as provided above
by the Calculation Agent are quoting as mentioned in this sentence, the Prime
Rate with respect to such Prime Interest Determination Date will be the Prime
Rate in effect immediately prior to such Prime Interest Determination Date.
"Reuters Screen USPRIME1" means the display designated as page "USPRIME1" on
the Reuters Monitor Money Rate Service (or such other page which may replace
the USPRIME1 page on the service for the purpose of displaying the prime rate
or base lending rate of major banks).
TREASURY RATE NOTES
Each Treasury Rate Note 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 Note and in the applicable Pricing
Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Treasury
Rate" means, with respect to any Treasury Interest Determination Date, the
rate for the most recent auction of direct obligations of the United States
("Treasury bills") having the Index Maturity specified in the applicable
Pricing Supplement as published in H.15(519) under the heading, "U.S.
Government Securities/Treasury Bills Auction Average (investment)" or, if not
so published by 9:00 A.M., New York City time, on the Calculation Date
pertaining to such Treasury Interest Determination Date, the average auction
rate on such Treasury 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 such rate is not available by
3:00 P.M., New York City time, on the Calculation Date pertaining to such
Treasury Interest Determination Date, or if no such auction is held in a
particular week, then the Treasury Rate with respect to such Treasury Interest
Determination Date will be the rate set forth in H.15(519) for the relevant
Treasury Interest Determination Date for the specified Index Maturity under
the heading "U.S. Government Securities/Treasury Bills/Secondary Market." If
such rate is not so published by 3:00 p.m., New York City time, on the
relevant Calculation Date, the Treasury Rate for such Interest Determination
Date will be calculated by the Calculation Agent and will be a yield to
maturity (expressed as a bond equivalent, on the basis of a year of 365 or 366
days, as applicable, and applied on a daily basis) of the arithmetic mean of
the secondary market bid rates, as of approximately 3:30 P.M., New York City
time, on such Treasury Interest Determination Date, of three leading primary
U.S. government securities dealers in The City of New York selected by the
Calculation Agent for the issue of Treasury bills with a remaining maturity
closest to the Index Maturity specified in the applicable Pricing Supplement;
provided, however, that if the dealers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the Treasury
Rate with respect to such Treasury Interest Determination Date will be the
Treasury Rate in effect immediately prior to such Treasury Interest
Determination Date.
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ORIGINAL ISSUE DISCOUNT NOTES
The Company may from time to time offer Original Issue Discount Notes. The
Pricing Supplement applicable to certain Original Issue Discount Notes may
provide that Holders of such Notes will not receive periodic payments of
interest. For purposes of determining whether Holders of the requisite
principal amount of Notes outstanding under the Indenture have made a demand
or given a notice or waiver or taken any other action, the outstanding
principal amount of Original Issue Discount Notes shall be deemed to be the
amount of the principal that would be due and payable upon declaration of
acceleration of the Stated Maturity thereof as of the date of such
determination. See "General."
"Original Issue Discount Note" means (i) a Note that has a "stated
redemption price at maturity" that exceeds its "issue price" (each as defined
for United States federal income tax purposes) by at least 0.25% of its stated
redemption price at maturity multiplied by the number of complete years from
the Original Issue Date to the Stated Maturity for such Note (or, in the case
of a Note that provides for payment of any amount other than the "qualified
stated interest" prior to maturity, the weighted average maturity of the Note)
and (ii) any other Note designated by the Company as issued with original
issue discount for United States federal income tax purposes.
AMORTIZING NOTES
The Company may from time to time offer Notes for which payments of
principal and interest are made in installments over the life of the Note
("Amortizing Notes"). Interest on each Amortizing Note will be computed as
specified in the applicable Pricing Supplement. Unless otherwise specified in
the applicable Pricing Supplement, payments with respect to an Amortizing Note
will be applied first to interest due and payable thereon and then to the
reduction of the unpaid principal amount thereof. A table setting forth
repayment information with respect to each Amortizing Note will be provided to
the original purchaser of such Note and will be available, upon request, to
subsequent Holders.
RESET NOTES
The Pricing Supplement relating to each Note will indicate whether the
Company has the option with respect to such Note to reset the interest rate,
in the case of a Fixed Rate Note, or to reset the Spread and/or Spread
Multiplier, in the case of a Floating Rate Note (in each case, a "Reset
Note"), and, if so, (i) the date or dates on which such interest rate or such
Spread and/or Spread Multiplier, as the case may be, may be reset (each an
"Optional Interest Reset Date") and (ii) the basis or formula, if any, for
such resetting.
The Company may exercise such option with respect to a Reset Note by
notifying the Trustee of such exercise at least 45 but not more than 60
calendar days prior to an Optional Interest Reset Date for such Reset Note. If
the Company so notifies the Trustee of such exercise, the Trustee will send
not later than 40 calendar days prior to such Optional Interest Reset Date, by
telegram, telex, facsimile transmission, hand delivery or letter (first class,
postage prepaid) to the Holder of such Reset Note a notice (the "Reset
Notice") indicating (i) that the Company has elected to reset the interest
rate, in the case of a Fixed Rate Note, or the Spread and/or Spread
Multiplier, in the case of a Floating Rate Note, (ii) such new interest rate
or such new Spread and/or Spread Multiplier, as the case may be, and (iii) the
provisions, if any, for redemption during the period from such Optional
Interest Reset Date to the next Optional Interest Reset Date or, if there is
no such next Optional Interest Reset Date, to the Stated Maturity of such
Reset Note (each such period a "Subsequent Interest Period"), including the
date or dates on which or the period or periods during which and the price or
prices at which such redemption may occur during such Subsequent Interest
Period.
Notwithstanding the foregoing, not later than 20 calendar days prior to an
Optional Interest Reset Date for a Reset Note, the Company may, at its option,
revoke the interest rate, in the case of a Fixed
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Rate Note, or the Spread and/or Spread Multiplier, in the case of a Floating
Rate Note, in either case provided for in the Reset Notice and establish a
higher interest rate, in the case of a Fixed Rate Note, or a Spread and/or
Spread Multiplier resulting in a higher interest rate, in the case of a
Floating Rate Note, for the Subsequent Interest Period commencing on such
Optional Interest Reset Date by causing the Trustee to send by telegram,
telex, facsimile transmission, hand delivery or letter (first class, postage
prepaid) notice of such higher interest rate or Spread and/or Spread
Multiplier resulting in a higher interest rate, as the case may be, to the
Holder of such Reset Note. Such notice will be irrevocable. All Reset Notes
with respect to which the interest rate or Spread and/or Spread Multiplier is
reset on an Optional Interest Reset Date to a higher interest rate or Spread
and/or Spread Multiplier resulting in a higher interest rate will bear such
higher interest rate, in the case of a Fixed Rate Note, or Spread and/or
Spread Multiplier resulting in a higher interest rate, in the case of a
Floating Rate Note, whether or not tendered for repayment as provided in the
next paragraph.
If the Company elects prior to an Optional Interest Reset Date to reset the
interest rate or the Spread and/or Spread Multiplier of a Reset Note, the
Holder of such Reset Note will have the option to elect repayment of such
Reset Note, in whole but not in part, by the Company on such Optional Interest
Reset Date at a price equal to the principal amount thereof plus accrued and
unpaid interest to but excluding such Optional Interest Reset Date. In order
for a Reset Note to be so repaid on an Optional Interest Reset Date, the
Holder thereof must follow the procedures set forth below under "Redemption
and Repayment" for optional repayment, except that the period for delivery of
such Reset Note or notification to the Trustee will be at least 25 but not
more than 35 calendar days prior to such Optional Interest Reset Date. A
Holder who has tendered a Reset Note for repayment following receipt of a
Reset Notice may revoke such tender for repayment by written notice to the
Trustee received prior to 5:00 P.M., New York City time, on the tenth calendar
day prior to such Optional Interest Reset Date.
EXTENSION OF MATURITY
The Pricing Supplement relating to each Note will indicate whether the
Company has the option to extend the Stated Maturity of such Note (an
"Extendible Note") for one or more periods of from one to five whole years
(each an "Extension Period") up to but not beyond the date (the "Final
Maturity Date") specified in such Pricing Supplement.
The Company may exercise such option with respect to an Extendible Note by
notifying the Trustee of such exercise at least 45 but not more than 60
calendar days prior to the Stated Maturity of such Extendible Note in effect
prior to the exercise of such option (the "Original Stated Maturity Date"). If
the Company so notifies the Trustee of such exercise, the Trustee will send,
not later than 40 calendar days prior to the Original Stated Maturity Date, by
telegram, telex, facsimile transmission, hand delivery or letter (first class,
postage prepaid) to the Holder of such Extendible Note a notice (the
"Extension Notice") relating to such Extension Period, indicating (i) that the
Company has elected to extend the Stated Maturity of such Extendible Note,
(ii) the new Stated Maturity, (iii) in the case of a Fixed Rate Note, the
interest rate applicable to such Extension Period or, in the case of a
Floating Rate Note, the Spread and/or Spread Multiplier applicable to such
Extension Period, and (iv) the provisions, if any, for redemption during such
Extension Period, including the date or dates on which or the period or
periods during which and the price or prices at which such redemption may
occur during such Extension Period. Upon the sending by the Trustee of an
Extension Notice to the Holder of an Extendible Note, the Stated Maturity of
such Extendible Note will be extended automatically, and, except as modified
by the Extension Notice and as described in the next two paragraphs, such Note
will have the same terms as prior to the sending of such Extension Notice.
Notwithstanding the foregoing, not later than 20 calendar days prior to the
Original Stated Maturity Date for an Extendible Note, the Company may, at its
option, revoke the interest rate, in the case of a Fixed Rate Note, or the
Spread and/or Spread Multiplier, in the case of a Floating Rate Note, provided
for in the Extension Notice and establish a higher interest rate, in the case
of a Fixed Rate Note, or a
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Spread and/or Spread Multiplier resulting in a higher interest rate, in the
case of a Floating Rate Note, for the Extension Period by causing the Trustee
to send by telegram, telex, facsimile transmission, hand delivery or letter
(first class, postage prepaid) notice of such higher interest rate or Spread
and/or Spread Multiplier resulting in a higher interest rate, as the case may
be, to the Holder of such Extendible Note. Such notice will be irrevocable.
All Extendible Notes with respect to which the Stated Maturity is extended
will bear such higher interest rate, in the case of a Fixed Rate Note, or
Spread and/or Spread Multiplier resulting in a higher interest rate, in the
case of a Floating Rate Note, for the Extension Period, whether or not
tendered for repayment as provided in the next paragraph.
If the Company extends the Stated Maturity of an Extendible Note (or an
Extension Period, as applicable), the Holder of such Extendible Note will have
the option to elect repayment of such Extendible Note, in whole but not in
part, by the Company on the Original Stated Maturity Date (or last day of such
Extension Period) at a price equal to the principal amount thereof plus
accrued and unpaid interest to but excluding such date. In order for an
Extendible Note to be so repaid on the Original Stated Maturity Date (or last
day of such Extension Period), the Holder thereof must follow the procedures
set forth below under "Redemption and Repayment" for optional repayment,
except that the period for delivery of such Extendible Note or notification to
the Trustee will be at least 25 but not more than 35 calendar days prior to
the Original Stated Maturity Date (or last day of such Extension Period). A
Holder who has tendered an Extendible Note for repayment following receipt of
an Extension Notice may revoke such tender for repayment by written notice to
the Trustee received prior to 5:00 P.M., New York City time, on the tenth
calendar day prior to the Original Stated Maturity Date (or last day of such
Extension Period).
RENEWABLE NOTES
The applicable Pricing Supplement will indicate whether a Note (other than
an Amortizing Note) will mature at its Original Stated Maturity Date unless
the term of all or any portion of any such Note (a "Renewable Note") is
renewed by the Holder in accordance with the procedures described in such
Pricing Supplement.
COMBINATION OF PROVISIONS
If so specified in the applicable Pricing Supplement, any Note may be
subject to all of the provisions, or any combination of the provisions,
described above under "Reset Notes," "Extension of Maturity" and "Renewable
Notes."
REDEMPTION AND REPAYMENT
Unless otherwise specified in the applicable Pricing Supplement, the Notes
will not be redeemable prior to their Stated Maturity. If so specified, the
Notes will be subject to redemption at the option of the Company on any date
on and after the initial redemption date specified in the applicable Pricing
Supplement in whole or from time to time in part in increments of $100,000 or
the minimum denomination, if any, specified in the applicable Pricing
Supplement (provided that any remaining principal amount hereof shall be at
least $1,000 or such minimum denomination), at the redemption price specified
in the applicable Pricing Supplement, plus accrued and unpaid interest to but
excluding the date of redemption, but payments due with respect to the Notes
prior to the date of redemption will be payable to the Holders of the Notes of
record at the close of business on the relevant Regular Record Date specified
in the applicable Pricing Supplement, all as provided in the Indenture. The
Company may exercise such option by causing the Trustee to mail a notice of
such redemption, at least 30 but not more than 60 calendar days prior to the
date of redemption, in accordance with the provisions of the Indenture. In the
event of redemption of the Notes in part only, the Notes will be canceled and
a new Note or Notes representing the unredeemed portion thereof will be issued
in the name of the Holders thereof.
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Unless otherwise specified in the applicable Pricing Supplement, the Notes
will not be subject to any sinking fund.
Unless otherwise specified in the applicable Pricing Supplement, a Note will
not be repayable prior to Stated Maturity at the option of the Holder. If so
specified, a Note will be repayable at the option of the Holder, in whole or
in part, on a date or dates specified prior to Stated Maturity at a price or
prices specified in the applicable Pricing Supplement, plus accrued and unpaid
interest to but excluding the date of repayment. Unless otherwise specified in
the applicable Pricing Supplement, if a Note is repayable in part pursuant to
the preceding sentence, the principal amount of the Note or Notes to be issued
to the Holder for the portion of such Note not being repaid must be $100,000
or an integral multiple of $1,000 in excess thereof.
In order for a Note that is repayable at the option of the Holder to be
repaid prior to Stated Maturity, the Paying Agent (initially, the Company has
appointed the Trustee as Paying Agent) must receive at least 30 but not more
than 45 calendar days prior to the 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, telex, facsimile transmission, hand delivery or letter
(first class, postage prepaid) from a member of a national securities exchange
or the National Association of Securities Dealers, Inc. or a commercial bank
or trust company in the United States setting 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 with the form entitled
"Option to Elect Repayment" on the reverse of the Note duly completed will be
received by the Paying Agent not later than five Business Days after the date
of such telegram, telex, facsimile transmission, hand delivery or letter and
such Note and form duly completed are received by the Paying Agent by such
fifth Business Day. Exercise of the repayment option by the Holder of a Note
will be irrevocable, except that a Holder who has tendered a Note for
repayment may revoke such tender for repayment by written notice to the Paying
Agent received prior to 5:00 P.M., New York City time, on the tenth calendar
day prior to the repayment date. The repayment option may be exercised by the
Holder of a Note for less than the entire principal amount of the Note
provided that the principal amount of the Note remaining outstanding after
such repayment is an authorized denomination. Upon such partial repayment such
Note will be cancelled and a new Note or Notes for the remaining principal
amount thereof will be issued in the name of the Holder thereof.
While Notes are represented by Global Securities (as defined in the
accompanying Prospectus) held by or on behalf of the Depositary, and
registered in the name of the Depositary or its nominee, the option for
repayment may be exercised by the applicable participant that has an account
with the Depositary (a "Participant"), on behalf of the beneficial owners of
the Global Security or Securities, by delivering a written notice
substantially similar to the above-mentioned form duly completed to the
Trustee at its Corporate Trust Office (or such other address of which the
Company will from time to time notify the Holders), at least 30 but not more
than 60 calendar days prior to the date of repayment. Notices of election from
Participants on behalf of beneficial owners of the Global Security or
Securities to exercise their option to have such Notes repaid must be received
by the Trustee by 5:00 P.M., New York City time, on the last day for giving
such notice. In order to ensure that a notice is received by the Trustee on a
particular day, the beneficial owner of the Global Security or Securities must
so direct the applicable Participant before such Participant's deadline for
accepting instructions for that day. Different firms may have different
deadlines for accepting instructions from their customers. Accordingly,
beneficial owners of the Global Security or Securities should consult the
Participants through which they own their interest therein for the respective
deadlines for such Participants. All notices shall be executed by a duly
authorized officer of such Participant (with signatures guaranteed) and will
be irrevocable. In addition, beneficial owners of the Global Security or
Securities shall effect delivery at the time such notices of election are
given to the Depositary by causing the applicable
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Participant to transfer such Beneficial owner's interest in the Global
Security or Securities, on the Depositary's records, to the Trustee. See
"Description of Debt Securities, Warrants and Guarantees-- Book-Entry System"
in the accompanying Prospectus.
If applicable, the Company will comply with the requirements of Rule 14e-1
under the Securities Exchange Act of 1934, as amended ("Exchange Act"), and
any other securities laws or regulations in connection with any such
repayment.
REPURCHASE
The Company may at any time purchase Notes at any price or prices in the
open market or otherwise. Notes so purchased by the Company may be held or
resold or, at the discretion of the Company, may be surrendered to the Trustee
for cancellation.
OTHER PROVISIONS
Any provisions with respect to the determination of an Interest Rate Basis,
the specifications of an Interest Rate Basis, calculation of the interest rate
applicable to, or the principal payable at Maturity on, any Note, its Interest
Payment Dates or any other matter relating thereto may be modified by the
terms as specified under "Other Provisions" on the face of such Note, or in an
annex relating thereto if so specified on the face thereof, and/or in the
applicable Pricing Supplement.
DEFEASANCE
Unless otherwise specified in the applicable Pricing Supplement, the Notes
will be subject to defeasance and discharge as described under "Description of
Debt Securities, Warrants and Guarantees---Defeasance and Discharge, Covenant
Defeasance" in the accompanying Prospectus.
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following summary describes the principal United States federal income
tax consequences of the purchase, ownership and disposition of Notes to
beneficial owners ("holders") of Notes purchasing Notes at their original
issuance. This summary is based on the Internal Revenue Code of 1986, as
amended (the "Code"), legislative history, administrative pronouncements,
judicial decisions and final, temporary and proposed Treasury Regulations,
changes to any of which subsequent to the date of this Prospectus Supplement
may affect the tax consequences described herein. Any such change may apply
retroactively.
This summary discusses only the principal United States federal income tax
consequences to holders holding Notes as capital assets within the meaning of
Section 1221 of the Code. It does not address all of the tax consequences that
may be relevant to a holder in light of the holder's particular circumstances
or to holders subject to special rules (including pension plans and other tax-
exempt investors, banks, thrifts, insurance companies, real estate investment
trusts, regulated investment companies, dealers in securities, currencies and
persons so treated for federal income tax purposes, persons whose functional
currency (as defined in Section 985 of the Code) is other than the United
States dollar, and persons who hold Notes as part of a straddle, hedging or
conversion transaction). This summary is subject to the requirement that a
taxpayer obtain the consent of the Internal Revenue Service before changing a
method of accounting.
Persons considering the purchase of Notes should consult their tax advisors
with regard to the application of United States federal income tax laws to
their particular situations as well as any tax consequences to them arising
under the laws of any state, local or foreign taxing jurisdiction. State,
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local and foreign income tax laws may differ substantially from the
corresponding federal income tax laws, and this discussion does not purport to
describe any aspect of the tax laws of any state, local and foreign
jurisdiction. Therefore, potential investors should consult their own tax
advisors with respect to the various state, local and foreign tax consequences
of an investment in Notes.
As used herein, the term "United States Holder" means a holder of a Note who
or which is, for United States federal income tax purposes, (i) a citizen or
resident of the United States, (ii) a corporation, partnership or other entity
created or organized in or under the laws of the United States or of any
political subdivision thereof, (iii) an estate (or, for tax years beginning on
or before December 31, 1996, a trust) the income of which is subject to United
States federal income taxation regardless of its source or (iv) for tax years
beginning after December 31, 1996 (unless earlier elected), any trust if a
court within the United States is able to exercise primary jurisdiction over
the administration of the trust and one or more United States fiduciaries have
the authority to control all substantial decisions of the trust or who or
which otherwise will be subject to United States federal taxation on a net
income basis in respect of the Notes. The term also includes certain holders
who are former citizens of the United States whose income and gain from the
Notes will be subject to United States taxation. The term "non-United States
Holder" means a holder that is not a United States Holder.
TAXATION OF INTEREST
The taxation of interest on a Note depends on whether the interest is
"qualified stated interest" (as defined below). Interest that is qualified
stated interest is includible in a United States Holder's income as ordinary
income when actually or constructively received (if such Holder uses the cash
method of accounting for federal income tax purposes) or when accrued (if such
Holder uses an accrual method of accounting for federal income tax purposes).
Interest that is not qualified stated interest is includible in a United
States Holder's income under the rules governing "original issue discount,"
described below, regardless of such Holder's method of accounting.
DEFINITION OF QUALIFIED STATED INTEREST
Interest on a Note is "qualified stated interest" if the interest is
unconditionally payable or will be constructively received under Section 451
of the Code, in cash or in property (other than debt instruments of the
Company) at least annually at a single fixed rate (in the case of a Fixed Rate
Note) or at a single "qualified floating rate" or "objective rate" (in the
case of a Floating Rate Note that qualifies as a variable rate debt
instrument). If a Floating Rate Note that qualifies as a variable rate debt
instrument provides for interest other than at a single qualified floating
rate or single objective rate, special rules apply to determine the portion of
such interest that is qualified stated interest. See "Original Issue
Discount--Floating Rate Notes that are VRDIs," below.
DEFINITION OF VARIABLE RATE DEBT INSTRUMENT (VRDI), QUALIFIED FLOATING RATE
AND OBJECTIVE RATE
A Floating Rate Note is a variable rate debt instrument ("VRDI") if all four
of the following conditions are met. First, the "issue price" (as defined
under "Original Issue Discount") of the Note must not exceed the total
noncontingent principal payments by more than an amount equal to the lesser of
(i) .015 multiplied by the product of the total noncontingent principal
payments and the number of complete years to maturity from the issue date (or,
in certain cases, its weighted average maturity) and (ii) 15% of the total
noncontingent principal payments.
Second, except as provided in the preceding paragraph, the Floating Rate
Note must not provide for any principal payments that are contingent.
Third, the Note must provide for stated interest (compounded or paid at
least annually) at (a) one or more qualified floating rates, (b) a single
fixed rate and one or more qualified floating rates, (c) a
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single objective rate or (d) a single fixed rate and a single objective rate
that is a "qualified inverse floating rate" (as defined below).
Fourth, the Note must provide that a qualified floating rate or objective
rate in effect at any time during the term of the Note is set at the value of
the rate on any day that is no earlier than three months prior to the first
day on which that value is in effect and no later than one year following that
first day. For example, a Note could not provide for an interest rate based on
the LIBOR rate in effect two years prior to each Interest Payment Date.
Subject to certain exceptions, a variable rate of interest on a Note is a
"qualified floating rate" if variations in the value of the rate can
reasonably be expected to measure contemporaneous fluctuations in the cost of
newly borrowed funds in the currency in which the Note is denominated. This
includes a variable rate equal to (i) the product of an otherwise qualified
floating rate and a Spread Multiplier that is greater than 0.65 but not more
than 1.35 or (ii) the product described in clause (i) plus or minus a Spread.
If the variable rate equals the product of an otherwise qualified floating
rate and a single Spread Multiplier greater than 1.35 or less than or equal to
0.65, however, such rate generally is an objective rate. A variable rate is
not considered a qualified floating rate if the variable rate is subject to a
cap, floor, governor or similar restriction that is not fixed throughout the
term of the Note and is reasonably expected as of the issue date to cause the
yield on the Note to be significantly more or less than the expected yield
determined without the restriction.
Subject to certain exceptions, an "objective rate" is a rate (other than a
qualified floating rate) that is determined using a single fixed formula and
that is based on objective financial or economic information that is neither
within the control of the issuer (or a related party) nor unique to the
circumstances of the issuer (or a related party). For example, an objective
rate generally includes a rate that is based on one or more qualified floating
rates or on the yield or price of actively traded personal property (within
the meaning of Section 1092(d)(1) of the Code). For purposes of the preceding
sentence, a foreign currency for which there is an active interbank market is
presumed to be actively traded for these purposes. A rate is not an objective
rate if it is reasonably expected that the average value of the rate during
the first half of the Note's term will be either significantly less than or
significantly greater than the average value of the rate during the final half
of the Note's term. The Internal Revenue Service may designate rates other
than those specified above that will be treated as objective rates. As of the
date of this Prospectus, no such other rates have been designated. An
objective rate is a "qualified inverse floating rate" if (a) the rate is equal
to a fixed rate minus a qualified floating rate and (b) the variations in the
rate can reasonably be expected to reflect inversely contemporaneous
variations in the cost of newly borrowed funds (disregarding any caps, floors,
governors or similar restrictions that would not, as described above, cause a
rate to fail to be a qualified floating rate).
If interest on a Note is stated at a fixed rate for an initial period of one
year or less, 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 are treated as a single qualified
floating rate or objective rate.
ORIGINAL ISSUE DISCOUNT
Original issue discount is the excess, if any, of a Note's "stated
redemption price at maturity" over its "issue price." A Note's "stated
redemption price at maturity" is the sum of all payments provided by the Note
(whether designated as interest or as principal) other than payments of
qualified stated interest. The "issue price" of a Note is the first price at
which a substantial amount of the Notes in the issuance that includes the Note
is sold (excluding sales to bond houses, brokers or similar persons or
organizations acting in the capacity of underwriters, placement agents or
wholesalers).
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United States Holders of Notes with original issue discount (other than
Short-Term Notes, as defined below) generally will be required to include such
original issue discount in income as it accrues in accordance with the
constant yield method described below, before the receipt of the related cash
payments.
The amount of original issue discount with respect to a Note will be treated
as zero if the original issue discount is less than an amount equal to .0025
multiplied by the product of the stated redemption price at maturity and the
number of complete years to maturity (or weighted average maturity, as
applicable). If the amount of original issue discount with respect to a Note
is less than that amount, the original issue discount that is not included in
payments of stated interest is included in income as capital gain as principal
payments are made. The amount includible equals the product of the total
amount of original issue discount and a fraction, the numerator of which is
the amount of the principal payment and the denominator of which is the stated
principal amount of the Note.
FIXED RATE NOTES
In the case of a Fixed Rate Note with original issue discount, the amount of
original issue discount includible in the income of a United States Holder for
any taxable year is determined under the constant yield method, as follows.
First, the "yield to maturity" of the Note is computed. The yield to maturity
is the discount rate that, when used in computing the present value of all
interest and principal payments to be made under the Note (including payments
of qualified stated interest) produces an amount equal to the issue price of
the Note. The yield to maturity is constant over the term of the Note and,
when expressed as a percentage, must be calculated to at least two decimal
places.
Second, the term of the Note is divided into "accrual periods." Accrual
periods may be of any length and may vary in length over the term of the Note,
provided that each accrual period is no longer than one year and 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.
Third, the total amount of original issue discount on the Note is allocated
among accrual periods. In general, the original issue discount allocable to an
accrual period equals the product of the "adjusted issue price" of the Note at
the beginning of the accrual period and the yield to maturity of the Note,
less the amount of any qualified stated interest allocable to the accrual
period. The adjusted issue price of a Note at the beginning of the first
accrual period is its issue price. Thereafter, the adjusted issue price of the
Note is its issue price, increased by the amount of original issue discount
previously includible in the gross income of any holder and decreased by the
amount of any payment previously made on the Note other than a payment of
qualified stated interest. For purposes of computing the adjusted issue price
of a Note, the amount of original issue discount previously includible in the
gross income of any holder is determined without regard to "premium" and
"acquisition premium", as those terms are defined below under "Premium and
Acquisition Premium."
Fourth, the "daily portions" of original issue discount are determined by
allocating to each day in an accrual period its ratable portion of the
original issue discount allocable to the accrual period.
A United States Holder includes in income in any taxable year the daily
portions of original issue discount for each day during the taxable year that
such Holder held Notes. Under the constant yield method described above,
United States Holders generally are required to include in income increasingly
greater amounts of original issue discount in successive accrual periods.
FLOATING RATE NOTES THAT ARE VRDIS
The taxation of original issue discount (including interest that is not
qualified stated interest) on a Floating Rate Note depends on whether the Note
is a "VRDI," as defined above.
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In the case of a VRDI that provides for interest at a single variable rate
and the interest is unconditionally payable or will be constructively received
under Section 451 of the Code, in cash or in property (other than debt
instruments of the Company) at least annually, all stated interest is
qualified stated interest and the amount of qualified stated interest and
original issue discount, if any, includible in income during a taxable year
are determined under the rules applicable to Fixed Rate Notes by assuming that
the variable rate is a fixed rate equal to (i) in the case of a qualified
floating rate or a qualified inverse floating rate, the value, as of the issue
date, of the qualified floating rate or qualified inverse floating rate, and
(ii) in the case of an objective rate (other than a qualified inverse floating
rate), the rate that reflects the yield that is reasonably expected for the
Note. Qualified stated interest allocable to an accrual period is increased
(or decreased) if the interest actually paid during an accrual period exceeds
(or is less than) the interest assumed to be paid during the accrual period.
If a Note that is a VRDI does not provide for interest at a single variable
rate as described above, the amount of interest and original issue discount
accruals are determined by constructing an equivalent fixed rate debt
instrument, as follows.
First, in the case of an instrument that provides for interest at one or
more qualified floating rates or at a qualified inverse floating rate and, in
addition, at a fixed rate, replace the fixed rate with a qualified floating
rate (or qualified inverse floating rate) such that the fair market value of
the instrument, so modified, as of the issue date would be approximately the
same as the fair market value of the unmodified instrument.
Second, a fixed rate substitute for each variable rate provided by the Note
is determined. The fixed rate substitute for each qualified floating rate
provided by the Note is the value of that qualified floating rate on the issue
date. If the Note provides for two or more qualified floating rates with
different intervals between interest adjustment dates (e.g., the 30-day
Commercial Paper Rate and quarterly LIBOR), the fixed rate substitutes are
based on intervals that are equal in length (e.g., the 90-day Commercial Paper
Rate and quarterly LIBOR, or the 30-day Commercial Paper Rate and monthly
LIBOR). The fixed rate substitute for an objective rate that is a qualified
inverse floating rate is the value of the qualified inverse floating rate on
the issue date. The fixed rate substitute for an objective rate (other than a
qualified inverse floating rate) is a fixed rate that reflects the yield that
is reasonably expected for the Note.
Third, a hypothetical equivalent fixed rate debt instrument is constructed
that has terms identical to those provided under the Note, except that the
equivalent fixed rate debt instrument provides for the fixed rate substitutes
determined in the second step, in lieu of the qualified floating rates or
objective rate provided by the Note.
Fourth, the amount of qualified stated interest and original issue discount
for the equivalent fixed rate debt instrument are determined under the rules
described above for Fixed Rate Notes. These amounts are taken into account as
if the United States Holder held the equivalent fixed rate debt instrument.
See "Taxation of Interest" and "Original Issue Discount--Fixed Rate Notes,"
above.
Fifth, appropriate adjustments are made for the actual values of the
variable rates. In this step, qualified stated interest or original issue
discount allocable to an accrual period is increased (or decreased) if the
interest actually accrued or paid during the accrual period exceeds (or is
less than) the interest assumed to be accrued or paid during the accrual
period under the equivalent fixed rate debt instrument.
CONTINGENT NOTES
A Floating Rate Note that is not a VRDI (a "Contingent Note"), will be
taxable under the rules applicable to contingent payment debt instruments (the
"Contingent Debt Regulations"), as follows.
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First, the Company is required to determine as of the issue date, the
comparable yield for the Contingent Note. The comparable yield is generally
the yield at which the Company would issue a fixed rate debt instrument with
terms and conditions similar to those of the Contingent Note (including the
level of subordination, term, timing of payments and general market
conditions) but not taking into consideration the riskiness of the
contingencies or the liquidity of the Contingent Note. Further, the comparable
yield may not be less than the applicable Federal Rate announced monthly by
the Internal Revenue Service (the "AFR"). In certain cases where Contingent
Notes are marketed or sold in substantial part to tax-exempt investors or
other investors for whom the prescribed inclusion of interest is not expected
to have a substantial effect on their U.S. tax liability, the comparable yield
for the Contingent Note is, without proper evidence to the contrary, presumed
to be the AFR.
Second, solely for tax purposes, the Company constructs a projected schedule
of payments determined under the Contingent Debt Regulations for the
Contingent Note (the "Schedule"). The Schedule is determined as of the issue
date and generally remains in place throughout the term of the Contingent
Note. If a right to a contingent payment is based on market information, the
amount of the projected payment is the forward price of the contingent
payment. If a contingent payment is not based on market information, the
amount of the projected payment is the expected value of the continent payment
as of the issue date. The Schedule must produce the comparable yield
determined as set forth above. Otherwise, the Schedule must be adjusted under
the rules set forth in the Contingent Debt Regulations.
Third, under the usual rules applicable to Notes issued with original issue
discount notes and based on the Schedule, the interest income on the
Contingent Note for each accrual period is determined by multiplying the
comparable yield of the Contingent Note (adjusted for the length of the
accrual period) by the Contingent Note's adjusted issue price at the beginning
of the accrual period (determined under rules set forth in the Contingent Debt
Regulations). The amount so determined is then allocated on a ratable basis to
each day in the accrual period that the United States Holder held the
Contingent Note.
Fourth, appropriate adjustments are made to the interest income determined
under the foregoing rules to account for any differences between the Schedule
and actual contingent payments. Under the rules set forth in the Contingent
Debt Regulations, differences between the actual amounts of any contingent
payments made in a calendar year and the projected amounts of such payments
are generally aggregated and taken into account, in the case of a positive
difference, as additional interest income, or, in the case of a negative
difference, first as a reduction in interest income for such year and
thereafter, subject to certain limitations, as ordinary income or loss.
The Contingent Debt Regulations require the Company to provide each holder
of a Contingent Note with the Schedule. If the Company does not create the
Schedule or the Schedule is unreasonable, a United States Holder must set its
own projected payment schedule and explicitly disclose the fact that the
United States Holder's schedule is being used and the reason therefor. Unless
otherwise prescribed by the Internal Revenue Service, the United States Holder
must make such disclosure or a statement attached to the United States
Holder's timely filed federal income tax return for the taxable year in which
the Contingent note was acquired.
In general, any gain realized by a United States Holder on the sale,
exchange, redemption, or retirement of a Contingent Note is interest income.
In general, any loss on a Contingent Note accounted for under the method
described above is ordinary loss to the extent it does not exceed such
Holder's prior interest inclusions on the Contingent Note (net of negative
adjustments). Special rules apply in determining the tax basis of a Contingent
Note and the amount realized on the retirement of a Contingent Note.
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OTHER RULES
Certain Notes having original issue discount may be redeemed prior to
maturity. Such Notes may be subject to rules that differ from the general
rules discussed above relating to the tax treatment of original issue
discount. Purchasers of such Notes with a redemption feature should carefully
examine the applicable Pricing Supplement and should consult their tax
advisors with respect to such feature since the tax consequences with respect
to interest and original issue discount will depend, in part, on the
particular terms and the particular features of the Note.
MARKET DISCOUNT
If a United States Holder acquires a Note having a maturity date of more
than one year from the date of its issuance and has a tax basis in the Note
that is, in the case of a Note that does not have original issue discount,
less than its stated redemption price at maturity, or, in the case of a Note
that has original issue discount, less than an amount which generally equals
its adjusted issue price (as defined above), the amount of such difference is
treated as "market discount" for federal income tax purposes, unless such
difference is less than 1/4 of one percent of the stated redemption price at
maturity multiplied by the number of complete years to maturity (from the date
of acquisition).
Under the market discount rules of the Code, a United States Holder is
required to treat any principal payment (or, in the case of a Note that has
original issue discount, any payment that is not qualified stated interest)
on, or any gain on the sale, exchange, retirement, redemption or other
disposition of, a Note as ordinary income to the extent of the accrued market
discount that has not previously been included in income. Thus, partial
principal payments are treated as ordinary income to the extent of accrued
market discount that has not previously been included in income. If the Note
is disposed of by the United States Holder in certain otherwise nontaxable
transactions, accrued market discount is includible as ordinary income by the
United States Holder as if such Holder had sold the Note at its then fair
market value.
In general, the amount of market discount that has accrued is determined on
a ratable basis. A United States Holder may, however, elect to determine the
amount of accrued market discount on a constant yield to maturity basis. This
election is made on a Note-by-Note basis and is irrevocable.
A United States Holder may not be allowed to deduct immediately a portion of
the interest expense on any indebtedness incurred or continued to purchase or
to carry Notes with market discount. A United States Holder may elect to
include market discount in income currently as it accrues, in which case the
interest deferral rule set forth in the preceding sentence will not apply.
Such an election will apply to all debt instruments acquired by the United
States Holder on or after the first day of the first taxable year to which
such election applies and is irrevocable without the consent of the Internal
Revenue Service. A United States Holder's tax basis in a Note will be
increased by the amount of market discount included in such Holder's income
under such an election.
The application of the foregoing rules may be different in the case of
Contingent Notes. Accordingly, prospective purchasers of Contingent Notes
should consult with their tax advisors with respect to the application of the
market discount rules to such Notes.
PREMIUM AND ACQUISITION PREMIUM
A United States Holder will be treated as having purchased a Note at a
"premium" (or "amortizable bond premium") if the Note's adjusted basis,
immediately after its purchase by such Holder, exceeds the sum of all amounts
payable on the Note after the purchase date other than payments of qualified
stated interest. United States Holders may elect to amortize the premium over
the remaining term of the Note (where such Note is not callable prior to its
maturity date), as a
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reduction in the amount of the interest payments otherwise includible in
income, and the United States Holders will not be required to include in
income original issue discount (if any) with respect to any Note purchased at
a premium. If such Note may be called by the Company prior to maturity after
the United States Holder has acquired it, the amount of amortizable bond
premium is determined with reference to either the amount payable at maturity,
or, if it results in a smaller premium attributable to the period through the
earlier call date, with reference to the amount payable on the earlier call
date. If a United States Holder makes this election, the premium will be
allocated among all the interest payments on the Note, on the basis of the
United States Holders's yield to maturity, with compounding at the close of
each accrual period. A United States Holder who elects to amortize premium
must reduce the tax basis of the Note by the amount of the premium amortized
in any year. If this election is made with respect to any Note, it will also
apply to all debt instruments held by the United States Holder at the
beginning of the first taxable year to which the election applies and to all
debt instruments acquired by the United States Holder, and will be binding for
all subsequent taxable years unless the election is revoked with the consent
of the Internal Revenue Service.
On June 27, 1996, the Internal Revenue Service published in the Federal
Register proposed regulations on the amortization of amortizable bond premium.
The regulations describe the constant yield method under which such premium is
amortized and provide that the resulting offset to interest income can be
taken into account only as a United States Holder takes the corresponding
interest income into account under such Holder's regular accounting method. In
the case of instruments that may be redeemed or repaid prior to maturity, the
proposed regulations provide that the premium is calculated by assuming that
the issuer or Holder will exercise or not exercise its redemption or repayment
rights in the manner that maximizes the United States Holder's yield. The
regulations are proposed to be effective for debt instruments acquired on or
after the date 60 days after the date final regulations are published in the
Federal Register. However, if a United States Holder elects to amortize bond
premium for the taxable year containing such effective date, the regulations
would apply to all the United States Holder's debt instruments held on or
after the first day of that taxable year. It cannot be predicted at this time
whether these regulations will become effective or what, if any, modifications
may be made to them prior to their becoming effective.
If a United States Holder purchases a Note issued with original issue
discount at an "acquisition premium," the amount of original issue discount
that the United States Holder includes in gross income is reduced to reflect
the acquisition premium. A Note is purchased at an acquisition premium if its
adjusted basis, immediately after its purchase, is (a) less than or equal to
the sum of all amounts payable on the Note after the purchase date other than
payments of qualified stated interest and (b) greater than the Note's
"adjusted issue price" (as described above under "Original Issue Discount--
Fixed Rate Notes").
If a Note is purchased at an acquisition premium, the United States Holder
reduces the amount of original issue discount otherwise includible in income
during an accrual period by a fraction. The numerator of this fraction is the
excess of the adjusted basis of the Note immediately after its acquisition by
the purchaser over the adjusted issue price of the Note. The denominator of
the fraction is the excess of the sum of all amounts payable on the Note after
the purchase date, other than payments of qualified stated interest, over the
Note's adjusted issue price.
As an alternative to reducing the amount of original issue discount
otherwise includible in income by this fraction, the United States Holder may
elect to compute original issue discount accruals by treating the purchase as
a purchase at original issuance and applying the constant yield method
described above.
The application of the foregoing rules may be different in the case of
Contingent Notes. Accordingly, prospective purchasers of Contingent Notes
should consult with their own tax advisors with respect to the application of
the acquisition premium and amortizable bond premium rules to such Notes.
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ELECTION TO TREAT ALL INTEREST AS ORIGINAL ISSUE DISCOUNT
United States Holders may elect to include in gross income all interest that
accrues on a Note, including any stated interest, acquisition discount,
original issue discount, market discount, de minimis original issue discount,
de minimis market discount and unstated interest (as adjusted by amortizable
bond premium and acquisition premium), by using the constant yield method
described above under "Original Issue Discount." Such an election for a Note
with amortizable bond premium results in a deemed election to amortize bond
premium for all debt instruments owned and later acquired by the United States
Holder with amortizable bond premium and may be revoked only with the
permission of the Internal Revenue Service. Similarly, such an election for a
Note with market discount results in a deemed election to accrue market
discount in income currently for such Note and for all other bonds acquired by
the United States Holder with market discount on or after the first day of the
taxable year to which such election first applies, and may be revoked only
with the permission of the Internal Revenue Service. A United States Holder's
tax basis in a Note is increased by each accrual of the amounts treated as
original issue discount under the constant yield election described in this
paragraph.
The application of the foregoing rules may be different in the case of
Contingent Notes. Accordingly, prospective purchasers should consult with
their tax advisors with respect to the application of the market discount,
acquisition premium and amortizable bond premium rules to such Notes.
SALE, EXCHANGE, REDEMPTION OR RETIREMENT OF NOTES
A United States Holder generally recognizes gain or loss upon the sale,
exchange, redemption or retirement of a Note equal to the difference between
the amount realized upon such sale, exchange, redemption or retirement and the
United States Holder's adjusted basis in the Note. Such adjusted basis in the
Note generally equals the cost of the Note, increased by original issue
discount, acquisition discount or market discount previously included in
respect thereof, and reduced (but not below zero) by any payments on the Note
other than payments of qualified stated interest and by any premium that the
United States Holder has taken into account. To the extent attributable to
accrued but unpaid interest, the amount realized by the United States Holder
is treated as a payment of interest. Subject to the discussion under "Foreign
Currency Notes" below, any gain or loss is capital gain or loss, except as
provided under "Market Discount" above and "Short-Term Notes," below. 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.
The application of the foregoing rules may be different in the case of
Contingent Notes. Accordingly, prospective purchasers of Contingent Notes
should consult with their tax advisors with respect to rules governing the
sale, exchange or retirement of such Notes.
SHORT-TERM NOTES
In the case of a Note with a maturity of one year or less from its issue
date (a "Short-Term Note"), no interest is treated as qualified stated
interest, and therefore all interest is included in original issue discount.
United States Holders that report income for federal income tax purposes on an
accrual method and certain other United States Holders, including banks and
dealers in securities, are required to include original issue discount in
income on such Short-Term Notes on a straight-line basis, unless an election
is made to accrue the original issue discount according to a constant yield
method based on daily compounding.
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Any other United States Holder of a Short-Term Note is not required to
accrue original issue discount for federal income tax purposes (unless it
elects to do so) with the consequence that the reporting of such income is
deferred until it is received. In the case of a United States Holder that is
not required, and does not elect, to include original issue discount in income
currently, any gain realized on the sale, exchange or retirement of a Short-
Term Note is 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 sale, exchange or
retirement. In addition, United States Holders that are not required, and do
not elect, to include original issue discount in income currently are required
to defer deductions for any interest paid on indebtedness incurred or
continued to purchase or carry a Short-Term Note in an amount not exceeding
the deferred interest income with respect to such Short-Term Note (which
includes both the accrued original issue discount and accrued interest that
are payable but that have not been included in gross income), until such
deferred interest income is realized. A United States Holder of a Short-Term
Note may elect to apply the foregoing rules (except for the rule
characterizing gain on sale, exchange or retirement as ordinary) with respect
to "acquisition discount" rather than original issue discount. Acquisition
discount is the excess of the stated redemption price at maturity of the
Short-Term Note over the United States Holder's basis in the Short-Term Note.
This election applies to all obligations acquired by the taxpayer on or after
the first day of the first taxable year to which such election applies, unless
revoked with the consent of the Internal Revenue Service. A United States
Holder's tax basis in a Short-Term Note is increased by the amount included in
such Holder's income on such a Note.
EXTENDIBLE NOTES, RENEWABLE NOTES AND RESET NOTES
If so specified in an applicable Pricing Supplement relating to a Note, the
Company or a Holder may have the option to extend the Stated Maturity of such
Note. See "Description of Notes--Extension of Maturity" and "Description of
Notes--Renewable Notes." In addition, the Company may have the option to reset
the interest rate, the Spread and/or the Spread Multiplier with respect to a
Note. See "Description of Notes--Reset Notes." The treatment of a United
States Holder of Notes to which such options apply is unclear and will depend,
in part, on the terms established for such Notes by the Company pursuant to
the exercise of such option. Upon the exercise of any such option, such United
States Holder may be treated for federal income tax purposes as having
exchanged the Notes (the "Old Notes") for new Notes with revised terms (the
"New Notes"). If such holder is treated as having exchanged Old Notes for New
Notes, such exchange may be treated as either a taxable exchange or a tax-free
recapitalization.
If the exercise of the option is not treated as an exchange of Old Notes for
New Notes, no gain or loss will be recognized by a United States Holder as a
result thereof.
If the exercise of the option is treated as a taxable exchange of Old Notes
for New Notes, a United States Holder would recognize gain or loss generally
equal to the difference between the fair market value of the New Notes and
such Holder's tax basis in the Old Notes. However, if the exercise of the
option is treated as a tax-free recapitalization, no loss would be recognized
by a United States Holder as a result thereof and gain, if any, would be
recognized to the extent of the fair market value of the excess, if any, of
the principal amount of securities received over the principal amount of
securities surrendered. In this regard, the meaning of the term "principal
amount" is not clear. Such term could be interpreted to mean "issue price"
with respect to securities that are received and "adjusted issue price" with
respect to securities that are surrendered. Legislation to that effect has
been introduced in the past. It is not possible to determine whether such
legislation will be reintroduced or enacted, and, if enacted, whether it would
apply to a recapitalization occurring prior to the date of enactment. To the
extent New Notes are received in consideration for accrued but unpaid interest
on the Old Notes, such accrued interest will be treated as ordinary income
regardless of whether the deemed exchange is taxable or a tax-free
recapitalization.
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The presence of such options may also affect the calculation of original
issue discount, among other things. For purposes of determining the yield and
maturity of a Note, an issuer of a debt instrument having an unconditional
option or combination of options to require payments to be made on the debt
instrument under an alternative payment schedule or schedules (e.g., an option
to extend or an option to call a debt instrument at a fixed premium) will be
deemed to exercise or not exercise an option or combination of options in a
manner that minimizes the yield on the debt instrument. Conversely, a holder
having such option or combination of such options will be deemed to exercise
or not exercise such option or combination of options in a manner that
maximizes the yield on such debt instrument. If both the issuer and holder
have options, the foregoing rules are applied to the options in the order that
they may be exercised. Thus, the deemed exercise of one option may eliminate
other options that are later in time. If the exercise of such option or
options actually occurs or does not occur, contrary to what is deemed to occur
pursuant to the foregoing rules, then, solely for purposes of the accrual of
original issue discount, the yield and maturity of the debt instrument are
redetermined by treating the debt instrument as reissued on the date of the
occurrence or non-occurrence of the exercise for an amount equal to its
adjusted issue price on that date.
The foregoing discussion of Extendible Notes, Renewable Notes and Reset
Notes is provided for general information only. Additional tax considerations
may arise from the ownership of such Notes in light of the particular features
or combination of features of such Notes and, accordingly, persons considering
the purchase of such Notes are advised and expected to consult with their own
legal and tax advisers regarding the tax consequences of the ownership of such
Notes.
FOREIGN CURRENCY NOTES
The following summary describes special rules that apply, in addition to the
rules described above, to Notes that are denominated in, or provide for
payments determined by reference to, a currency or currency unit other than
the United States dollar ("Foreign Currency Notes"). The treatment of a debt
instrument, such as a Foreign Currency Note, that provides for interest
payments that are not fixed in amount at the time that the debt instrument is
issued (like the treatment of a Floating Rate Note) depends on whether the
debt instrument qualifies as a VRDI. A Foreign Currency Note qualifying as a
VRDI is subject to the rules discussed above in "Taxation of Interest" and
"Original Issue Discount" in addition to the rules discussed below. Foreign
Currency Notes not qualifying as VRDIs may be subject to the rules discussed
above in "Original Issue Discount--Floating Rate Notes that are Not VRDIs" in
addition to the rules discussed below.
INTEREST INCLUDIBLE IN INCOME UPON RECEIPT
An interest payment on a Foreign Currency Note that is not required to be
included in income by the United States Holder prior to the receipt of such
payment (e.g., qualified stated interest received by a cash method United
States Holder) is includible in income by the United States Holder based on
the United States dollar value of the foreign currency determined on the date
such payment is received, regardless of whether the payment is in fact
converted to United States dollars at that time. Such United States dollar
value is the United States Holder's tax basis in the foreign currency
received.
INTEREST INCLUDIBLE IN INCOME PRIOR TO RECEIPT
In the case of interest income on a Foreign Currency Note that is required
to be included in income by the United States Holder prior to the receipt of
payment (e.g., stated interest on a Foreign Currency Note held by an accrual
basis United States Holder or accrued original issue discount or accrued
market discount that is includible in income as it accrues), a United States
Holder is required to include in income the United States dollar value of the
amount of interest income that has accrued and is otherwise required to be
taken into account with respect to a Foreign Currency Note during an accrual
period. Original issue discount, market discount, acquisition premium, and
amortizable bond
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premium of a Foreign Currency Note are to be determined in the relevant
foreign currency. Unless the United States Holder makes the election discussed
in the next paragraph, the United States dollar value of such accrued income
is determined by translating such income at the average rate of exchange for
the accrual period or, with respect to an accrual period that spans two
taxable years, at the average rate for the portion of the accrual period
within the taxable year. The average rate of exchange for the accrual period
(or partial period) is the simple average of the spot exchange rates for each
business day of such period (or other method if such method is reasonably
derived and consistently applied). Such United States Holder recognizes, as
ordinary gain or loss, foreign currency exchange gain or loss with respect to
accrued interest income on the date such income is actually received,
reflecting fluctuations in currency exchange rates between the last day of the
relevant accrual period and the date of payment. The amount of gain or loss
recognized equals the difference between the United States dollar value of the
foreign currency payment received in respect of such accrual period determined
based on the exchange rate on the date such payment is received and the United
States dollar value of interest income that has accrued during such accrual
period (as determined above).
Under the so-called "spot rate convention election", a United States Holder
may, in lieu of applying the rules described in the preceding paragraph, elect
to translate accrued interest income into United States dollars at the
exchange rate in effect on the last day of the relevant accrual period for
original issue discount, market discount or accrued interest, or in the case
of an accrual period that spans two taxable years, at the exchange rate in
effect on the last day of the taxable year. Such United States Holder will
recognize income or loss with respect to accrued interest income on the date
such income is actually received, equal to the difference (if any) between the
United States dollar value of the foreign currency payment received
(determined on the date such payment is received) and the United States dollar
value of interest income translated at the relevant spot rate described in the
preceding sentence. If a payment of such income is actually received within
five business days of the last day of the accrual period or taxable year, an
electing United States Holder may instead translate such income into United
States dollars at the exchange rate in effect on the day of actual receipt.
Any such election applies to all debt instruments held by the United States
Holder at the beginning of the first taxable year to which the election
applies or thereafter acquired by the United States Holder and is irrevocable
without the consent of the Internal Revenue Service.
PURCHASE, SALE, EXCHANGE, REDEMPTION OR RETIREMENT
A United States Holder that converts United States dollars to a foreign
currency and immediately uses that currency to purchase a Foreign Currency
Note denominated in the same foreign currency normally does not recognize gain
or loss in connection with such conversion and purchase. However, a United
States Holder that purchases a Foreign Currency Note with previously owned
foreign currency does recognize ordinary income or loss in an amount equal to
the difference, if any, between such Holder's tax basis in the foreign
currency and the United States dollar market value of the Foreign Currency
Note on the date of the purchase. A United States Holder's tax basis in a
Foreign Currency Note (and the amount of any subsequent adjustment to such
Holder's tax basis) is the United States dollar value of the foreign currency
amount paid for such Foreign Currency Note (or of the foreign currency amount
of the adjustment) determined on the date of such purchase or adjustment. In
the case of an adjustment resulting from accrual of original issue discount or
market discount, such adjustment is made at the rate at which such original
issue discount or market discount is translated into United States dollars
under the rules described above.
Gain or loss realized upon the sale, exchange, redemption or retirement of,
or the receipt of principal on, a Foreign Currency Note, to the extent
attributable to fluctuations in currency exchange rates, is generally ordinary
income or loss. Gain or loss attributable to fluctuations in exchange rates
equals the difference between (i) the United States dollar value of the
foreign currency purchase price
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for such Note, determined on the date such Note is disposed of, and (ii) the
United States dollar value of the foreign currency purchase price for such
Note, determined on the date such United States Holder acquired such Note. Any
portion of the proceeds of such sale, exchange, redemption or retirement
attributable to accrued interest income may result in exchange gain or loss
under the rules set forth above. Such foreign currency gain or loss is
recognized only to the extent of the overall gain or loss realized by a United
States Holder on the sale, exchange, redemption or retirement of the Foreign
Currency Note. In general, the source of such foreign currency gain or loss is
determined by reference to the residence of the United States Holder or the
"qualified business unit" of such Holder on whose books the Note is properly
reflected. Any gain or loss realized by a United States Holder in excess of
such foreign currency gain or loss is capital gain or loss (except to the
extent of any accrued market discount not previously included in such Holder's
income or, in the case of a Short-Term Note having original issue discount, to
the extent of any original issue discount not previously included in such
Holder's income).
The tax basis of a United States Holder in any foreign currency received on
the sale, exchange, redemption or retirement of a Foreign Currency Note is
equal to the United States dollar value of such foreign currency, determined
at the time of such sale, exchange, redemption or retirement. Treasury
Regulations provide a special rule for purchases and sales of publicly traded
securities by a cash method taxpayer under which units of foreign currency
paid or received are translated into United States dollars at the spot rate on
the settlement date of the purchase or sale. Accordingly, no exchange gain or
loss results from currency fluctuations between the trade date and the
settlement of such a purchase or sale. An accrual method taxpayer may elect
the same treatment with respect to the purchase and sale of publicly traded
securities provided the election is applied consistently. Such election cannot
be changed without consent of the Internal Revenue Service. United States
Holders should consult their tax advisors concerning the applicability to
Foreign Currency Notes of the special rules summarized in this paragraph.
Market discount, acquisition premium and amortizable bond premium of a
Foreign Currency Note are determined in the relevant foreign currency. The
amount of such market discount or acquisition premium that is included in (or
reduces) income currently is to be determined for any accrual period in the
relevant foreign currency and then translated into United States dollars on
the basis of the average exchange rate in effect during such accrual period or
with reference to the spot rate convention election as described above.
Exchange gain or loss realized with respect to such accrued market discount or
acquisition premium is determined and recognized in accordance with the rules
relating to accrued interest described above. The amount of accrued market
discount (other than market discount that is included in income currently)
taken into account upon the receipt of any partial principal payment or upon
the sale, exchange, redemption, retirement or other disposition of a Foreign
Currency Note is the United States dollar value of such accrued market
discount, determined on the date of receipt of such partial principal payment
or upon the sale, exchange, redemption, retirement or other disposition, and
no portion thereof is treated as exchange gain or loss.
Any gain or loss realized on the sale, exchange, retirement, or redemption
of a Foreign Currency Note with amortizable bond premium by a United States
Holder who has not elected to amortize such premium (under the rules described
above) will be ordinary income or loss to the extent attributable to
fluctuation in currency exchange rates determined as described above. If such
election is made, amortizable bond premium taken into account on a current
basis will reduce interest income in units of the relevant foreign currency.
Exchange gain or loss will be realized on such amortized bond premium with
respect to any period by treating the bond premium amortized in such period as
a return of principal. Similar rules apply in the case of acquisition premium.
NON-UNITED STATES HOLDERS
Under current United States federal income tax law now in effect, and
subject to the discussion of backup withholding in the following section,
payments of principal and interest (including original issue discount) with
respect to a Note by the Company or by any paying agent to any non-United
States
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<PAGE>
Holder are not subject to United States federal withholding tax, provided, in
the case of interest, that (i) such Holder does not actually or constructively
own 10% or more of the total combined voting power of all classes of stock of
the Company entitled to vote, (ii) such Holder is not for federal income tax
purposes a controlled foreign corporation related, directly or indirectly, to
the Company through stock ownership, (iii) such Holder is not a bank receiving
interest described in Section 881(c) (3) (A) of the Code and (iv) either (A)
the beneficial owner of the Note certifies, under penalties of perjury, to the
Company or paying agent, as the case may be, that such owner is a non-United
States Holder and provides such owner's name and address, or (B) 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 holds the Note, certifies, under penalties of
perjury, to the Company or paying agent, as the case may be, that such
certificate has been received from the beneficial owner by it or by a
financial institution between it and the beneficial owner and furnishes the
payor with a copy thereof. A certificate described in this paragraph is
effective only with respect to payments of interest (including original issue
discount) made to the certifying non-United States Holder after the issuance
of the certificate in the calendar year of its issuance and the two
immediately succeeding calendar years. Under temporary Treasury Regulations,
the foregoing certification may be provided by the beneficial owner of a Note
on Internal Revenue Service Form W-8.
Notwithstanding the foregoing, interest described in Section 871(h) (4) of
the Code is subject to United States withholding tax at a 30% rate (or such
lower rate as may be provided by an applicable treaty). In general, interest
described in Section 871(h) (4) of the Code includes (subject to certain
exceptions) any interest the amount of which is determined by reference to
receipts, sales or other cash flow of the issuer or a related person, any
income or profits of the issuer or a related person, any change in the value
of any property of the issuer or a related person or any dividends,
partnership distribution or similar payments made by the issuer or a related
person. Interest described in Section 871(h) (4) of the Code may include other
types of contingent interest identified by the Internal Revenue Service in
future Treasury Regulations.
If a non-United States Holder is engaged in a trade or business in the
United States and interest (including original issue discount) on the Note is
effectively connected with the conduct of such trade or business, the non-
United States Holder, although exempt from the withholding tax discussed in
the preceding paragraphs, is subject to United States federal income tax on
such interest (including original issue discount) in the same manner as if it
were a United States Holder. In lieu of the certificate described above, such
Holder must provide a properly executed Internal Revenue Service Form 4224 in
order to claim an exemption from withholding tax. In addition, if such Holder
is a foreign corporation, it may be subject to a branch profits tax equal to
30% (or such lower rate as may be specified by an applicable treaty) of its
effectively connected earnings and profits for the taxable year, subject to
adjustments. For this purpose, interest (including original issue discount) on
a Note is included in the earnings and profits of such Holder if such interest
(including original issue discount) is effectively connected with the conduct
by such Holder of a trade or business in the United States.
Generally, any gain or income (other than that attributable to accrued
interest or original issue discount, which is taxable in the manner described
above) realized upon the sale, exchange, retirement or other disposition of a
Note is not subject to federal income tax unless (i) such gain or income is
effectively connected with a trade or business in the United States of the
non-United States Holder or (ii) in the case of a non-United States Holder who
is an individual, the non-United States Holder is present in the United States
for 183 days or more in the taxable year of such sale, exchange, retirement or
other disposition and either (a) such individual has a "tax home" (as defined
in Section 911(d) (3) of the Code) in the United States or (b) the gain is
attributable to an office or other fixed place of business maintained by such
individual in the United States.
S-33
<PAGE>
On April 22, 1996, the Internal Revenue Service published in the Federal
Register proposed regulations (the "1996 Proposed Regulations") which, if
adopted in final form, could affect the United States taxation of non-United
States Holders. The 1996 Proposed Regulations are generally proposed to be
effective for payments after December 31, 1997, regardless of the issue date
of the Note with respect to which such payments are made, subject to certain
transition rules. It cannot be predicted at this time whether the 1996
Proposed Regulations will become effective as proposed or what, if any,
modifications may be made to them. The discussion under this heading and under
"Backup Withholding and Information Reporting," below, is not intended to be a
complete discussion of the provisions of the 1996 Proposed Regulations, and
prospective investors are urged to consult their tax advisors with respect to
the effect the 1996 Proposed Regulations may have if adopted.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Under current United States federal income tax law, information reporting
requirements generally will apply to interest (including original issue
discount) and principal payments made to, and to the proceeds of sales before
maturity by, certain non-corporate United States Holders. In addition, a 31%
backup withholding tax applies if the non-corporate United States Holder (i)
fails to furnish such Holder's Taxpayer Identification Number ("TIN") (which,
for an individual, would be his or her Social Security Number) to the payor in
the manner required, (ii) furnishes an incorrect TIN and the payor is so
notified by the Internal Revenue Service, (iii) is notified by the Internal
Revenue Service that such Holder has failed properly to report payments of
interest and dividends or (iv) in certain circumstances, fails to certify,
under penalties of perjury, that it has not been notified by the Internal
Revenue Service that it is subject to backup withholding for failure properly
to report interest and dividend payments. Backup withholding does not apply
with respect to payments made to certain exempt recipients, such as
corporations (within the meaning of Section 7701(a) of the Code) and tax-
exempt organizations, provided they may need to provide certification of such
status to establish entitlement to an exemption.
In the case of a non-United States Holder, under Treasury Regulations,
backup withholding and information reporting do not apply to payments of
principal and interest made by the Company or any paying agent thereof on a
Note with respect to which such Holder has provided the required certification
under penalties of perjury that such Holder is a non-United States Holder or
has otherwise established an exemption, provided that (i) the Company or
paying agent, as the case may be, does not have actual knowledge that the
payee is a United States person and (ii) certain other conditions are
satisfied.
In general, (i) payments of principal or interest on a Note collected
outside the United States by a foreign office of a custodian, nominee or other
agent acting on behalf of a beneficial owner of a Note and (ii) payments on
the sale, exchange or retirement of a Note to or through a foreign office of a
broker are not subject to backup withholding or information reporting.
However, if such custodian, nominee, agent or broker is a United States
person, a controlled foreign corporation for United States tax purposes, or a
foreign person 50% or more of whose gross income is effectively connected with
the conduct of a United States trade or business for a specified three-year
period, such custodian, nominee, agent or broker may be subject to certain
information reporting (but not backup withholding) requirements with respect
to such payments unless such custodian, nominee, agent or broker has in its
records documentary evidence that the beneficial owner is a non-United States
Holder and certain conditions are met or the beneficial owner otherwise
establishes an exemption.
Backup withholding tax is not an additional tax. Rather, any amounts
withheld from a payment to a Holder under the backup withholding rules are
allowed as a refund or a credit against such Holder's United States federal
income tax, provided that the required information is furnished to the
Internal Revenue Service.
S-34
<PAGE>
The foregoing is not intended to be a complete discussion of the rules
governing information reporting and back-up withholding. Holders should
consult their tax advisors regarding the application of information reporting
and backup withholding to their particular situations, the availability of an
exemption therefrom, and the procedure for obtaining such an exemption, if
available.
SUPPLEMENTAL PLAN OF DISTRIBUTION
Subject to the terms and conditions set forth in the Distribution Agreement
(the "Distribution Agreement"), the Notes are being offered on a continuing
basis by the Company, Goldman, Sachs & Co. and Morgan Stanley & Co.
Incorporated (the "Agents"). Goldman, Sachs & Co. and Morgan Stanley & Co.
Incorporated have agreed to use reasonable efforts to solicit purchases of the
Notes. The Company will have the sole right to accept offers to purchase Notes
and may reject any proposed purchase of Notes as a whole or in part. The
Agents shall have the right, in their discretion reasonably exercised, to
reject any offer to purchase Notes, as a whole or in part. The Company will
pay the Agents a commission of from 0.125% to 0.750% of the principal amount
of Notes, depending upon maturity, for sales made through them as Agents, with
commissions with respect to Notes in excess of 30 years to be negotiated
between the Company and the Agents at the time of sale.
The Company may also sell Notes to the Agents as principals for their own
accounts at a discount to be agreed upon at the time of sale, or the
purchasing Agents may receive from the Company a commission or discount
equivalent to that set forth on the cover page of this Prospectus Supplement
in the case of any such principal transaction in which no other discount is
agreed. Such Notes may be resold at prevailing market prices, or at prices
related thereto, at the time of such resale, as determined by the Agents. The
Company reserves the right to sell Notes directly on its own behalf. No
commission will be payable on any Notes sold directly by the Company.
In addition, the Agents may offer the Notes they have purchased 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 may include all or part of the discount to be received
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. After the initial public offering of Notes to be resold to
investors and other purchasers on a fixed public offering price basis, the
public offering price, concession and discount may be changed.
The Agents, as agents or principals, may be deemed to be "underwriters"
within the meaning of the Securities Act. Tupperware has agreed to indemnify
the Agents against certain liabilities, including liabilities under the
Securities Act. Tupperware has agreed to reimburse the Agents for certain
expenses.
The Agents may sell to or through dealers who may resell to investors, and
the Agents may pay all or part of their discount or commission to such
dealers. Such dealers may be deemed to be "underwriters" within the meaning of
the Act.
The Notes are a new issue of securities with no established trading market
and will not be listed on any securities exchange. No assurance can be given
as to the existence or liquidity of the secondary market for the Notes.
Unless otherwise indicated in the applicable Pricing Supplement, payment of
the purchase price of Notes will be required to be made in immediately
available funds in The City of New York.
S-35
<PAGE>
The Agents have provided and will in the future continue to provide
investment banking and other financial services for Tupperware and the Company
and certain of their affiliates in the ordinary course of business for which
they have received and will receive customary compensation. In addition,
certain of the underwriters or agents and their associates may be customers of,
engage in transactions with, and perform services for the Company in the
ordinary course of business.
In connection with the offering, the Agents, acting as principals, may
purchase and sell the Notes in the open market. These transactions may include
over-allotment and stabilizing transactions and purchases to cover short
positions created by the Agents in connection with the offering. Stabilizing
transactions consist of certain bids or purchases for the purpose of preventing
or retarding a decline in the market price of the Notes; and short positions
created by the Agents involve the sale by the Agents of a greater number of
Notes than they are required to purchase from the Company in the offering. The
Agents may also impose a penalty bid, whereby selling concessions allowed to
broker-dealers in respect of the Notes sold in the offering may be reclaimed by
the Agents if such Notes are repurchased by the Agents in stabilizing or
covering transactions. These activities may stabilize, maintain or otherwise
affect the market price of the Notes, which may be higher than the price that
might otherwise prevail in the open market; and these activities, if commenced,
may be discontinued at any time. These transactions may be effected in the
over-the-counter market or otherwise.
FOREIGN CURRENCY RISKS
GENERAL
EXCHANGE RATES AND EXCHANGE CONTROLS
An investment in Notes denominated in other than U.S. dollars entails
significant risks that are not associated with a similar investment in a
security denominated in U.S. dollars. Such risks include, without limitation,
the possibility of significant changes in rates of exchange between the U.S.
dollar and the various foreign currencies or composite currencies, and the
possibility of the imposition or modification of foreign exchange controls by
either the U.S. or foreign governments. Such risks generally depend on economic
and political events over which the Company has no control. In recent years,
rates of exchange between the U.S. dollar and certain foreign currencies have
been highly volatile, and such volatility may be expected to continue in the
future. Fluctuations in any particular exchange rate that have occurred in the
past are not necessarily indicative, however, of fluctuations in the rate that
may occur during the term of any Note. Depreciation of the Specified Currency
other than U.S. dollars against the U.S. dollar would result in a decrease in
the effective yield of such Note below its coupon rate, and in certain
circumstances could result in a loss to the investor on a U.S. dollar basis.
Governments have imposed from time to time and may in the future impose
exchange controls that could affect exchange rates as well as the availability
of a specified foreign currency at a Note's maturity. Even if there are no
actual exchange controls, it is possible that the Specified Currency for any
particular Note would not be available at such Note's maturity. In that event,
the Company will repay such Note at maturity in U.S. dollars on the basis of
the most recently available Exchange Rate.
This Prospectus Supplement does not describe all the risks of an investment
in Notes denominated in other than U.S. dollars. Prospective investors should
consult their own financial and legal advisors as to the risks entailed by an
investment in Notes denominated in other than U.S. dollars. Notes denominated
in other than U.S. dollars are not an appropriate investment for investors who
are unsophisticated about foreign currency transactions.
Currently, there are limited facilities in the United States for conversion
of U.S. dollars into certain foreign currencies, and vice versa.
S-36
<PAGE>
Notes denominated in other than U.S. dollars or European currency units will
not be sold in, or to residents of, the country issuing the Specified Currency
in which particular Notes are denominated. The information set forth in this
Prospectus Supplement is directed to prospective purchasers who are United
States residents, and the Company disclaims any responsibility to advise
prospective purchasers who are residents of countries other than the United
States as to any matters that may affect the purchase, holding, or receipt of
payments of principal of and interest on the Notes. Such persons should consult
their own financial and legal advisors with regard to such matters.
GOVERNING LAW AND JUDGEMENTS
The Notes will be governed by and construed in accordance with the laws of
the State of New York. Under the Judiciary Law of the State of New York, a
judgment in an action based upon an obligation denominated in a currency other
than U.S. dollars will be rendered in the foreign currency of the underlying
obligation and converted into U.S. dollars at the rate of exchange prevailing
on the date of the entry of the judgment or decree.
EXCHANGE RATE AND CONTROLS FOR SPECIFIED CURRENCIES
For any Note denominated in other than U.S. dollars, the Pricing Supplement
relating to such Notes will contain information concerning exchange rates. The
information concerning exchange rates will be furnished as a matter of
information only and should not be regarded as indicative of the rate of or
trends in future fluctuations in currency exchange rates.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference to the Annual Report on Form 10-K of Tupperware Corporation for the
year ended December 28, 1996, have been so incorporated in reliance on the
report of Price Waterhouse LLP, independent accountants, given upon the
authority of said firm as experts in auditing and accounting.
S-37
<PAGE>
PROSPECTUS
TUPPERWARE FINANCE COMPANY B.V.
DEBT SECURITIES
AND
WARRANTS TO PURCHASE DEBT SECURITIES
TUPPERWARE CORPORATION
GUARANTOR
Tupperware Finance Company B.V., (the "Company") from time to time may offer
one or more series of unsecured notes, debentures or other debt securities
("Debt Securities") and warrants ("Warrants") to purchase Debt Securities (the
Debt Securities and Warrants being hereinafter collectively called the
"Securities") having an aggregate initial offering price of up to U.S.
$200,000,000, or the equivalent thereof if any of the Securities are
denominated in a foreign currency or a foreign currency unit. All Debt
Securities will be unconditionally guaranteed as to payment of principal,
premium, if any, and interest by Tupperware Corporation ("Tupperware"). The
guarantees of the Debt Securities (the "Guarantees") will constitute unsecured
obligations of Tupperware and will rank pari passu with other unsecured
indebtedness of Tupperware.
The Debt Securities will be offered as separate series in amounts, at prices
and on terms to be determined at the time of sale and to be set forth in one
or more supplements to this Prospectus (a "Prospectus Supplement"). The Debt
Securities and Warrants may be sold for U.S. Dollars, foreign currencies or
foreign currency units, and the principal of and any interest on the Debt
Securities may be payable in U.S. Dollars, foreign currencies or foreign
currency units. The specific designation, aggregate principal amount, the
currency or currency unit for which the Securities may be purchased, the
currency or currency unit in which the principal and any interest is payable,
the rate (or method of calculation) and time of payment of any interest,
authorized denominations, maturity, offering price, any redemption terms or
other specific terms of the Securities in respect of which this Prospectus is
being delivered will be set forth in the Prospectus Supplement. With regard to
the Warrants, if any, in respect of which this Prospectus is being delivered,
the Prospectus Supplement sets forth a description of the Debt Securities for
which each Warrant is exercisable and the offering price, if any, exercise
price, duration, detachability and other terms of the Warrants.
The Company may sell Securities through underwriting syndicates led by one
or more managing underwriters or through one or more underwriting firms acting
alone, to or through dealers, acting as principals for their own account or as
agents, and also may sell Securities directly to other purchasers. See "Plan
of Distribution". The names of any underwriters, dealers or agents involved in
the sale of the Securities in respect to which this Prospectus is being
delivered and their compensation will be set forth in the Prospectus
Supplement.
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
----------------
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 OR THE PROSPECTUS TO WHICH IT RELATES.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
----------------
The date of this Prospectus is September 26, 1996.
<PAGE>
AVAILABLE INFORMATION
Tupperware is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the Commission's Regional Offices at the Northwestern
Atrium Center, 500 West Madison Street, Chicago, Illinois 60661 and Seven
World Trade Center, New York, New York 10048. Copies of such material can also
be obtained at prescribed rates by writing to the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington D.C. 20549. In addition,
such material can be inspected at the offices of the New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005. The Commission maintains a
Web site (http://www.sec.gov) that contains reports, proxy and information
statements and other information regarding registrants who file electronically
with the Commission. The Company will not file reports under the Exchange Act.
The Company and Tupperware have filed with the Commission a combined
registration statement on Form S-3 (the "Registration Statement," which term
encompasses any amendments thereof) under the Securities Act of 1933, as
amended, with respect to the Securities and the Guarantees offered hereby. As
permitted by the rules and regulations of the Commission, this Prospectus does
not contain all of the information set forth in the Registration Statement and
the exhibits and schedules thereto to which reference is hereby made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by Tupperware (File No. 1-11657)
with the Commission pursuant to the Exchange Act and are incorporated herein
by reference and made a part of this Prospectus:
(a) Amendment No. 4 on Form 10/A4 to Tupperware's Registration Statement on
Form 10 (No. 1-11657) filed with the Commission on May 21, 1996,
including the exhibits thereto; and
(b) Tupperware's Quarterly Reports on Form 10-Q for the periods ended March
30, 1996 and June 29, 1996.
All documents filed by Tupperware with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Securities
shall be deemed to be incorporated herein by reference and made a part of this
Prospectus from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein or in any other subsequently filed document which also is or is deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
Tupperware and the Company will provide without charge to each person to
whom this Prospectus is delivered, upon the written or oral request of such
person, a copy of any or all documents incorporated herein by reference
(without exhibits other than exhibits specifically incorporated by reference).
Requests should be directed to Tupperware Corporation, P.O. Box 2353, Orlando,
Florida 32802, Attention: Corporate Secretary's Office (telephone number:
(407) 826-5050).
2
<PAGE>
TUPPERWARE CORPORATION
Tupperware is a worldwide direct selling consumer products company engaged
in the manufacture and sale of Tupperware products. The core of Tupperware's
product line consists of food storage containers which preserve freshness
through the well-known Tupperware seals. Tupperware's products are distributed
worldwide through the "direct selling" method of distribution, in which
products are sold to consumers outside traditional retail store channels.
Tupperware has operations in more than 60 countries and its products are sold
in more than 100 foreign countries and in the United States. For the past five
fiscal years sales in foreign countries represented, on average, 81% of total
Tupperware revenues.
Tupperware became an independent public company on May 31, 1996 when its
common stock was distributed to the shareholders of Premark International,
Inc. ("Premark"). Tupperware is a Delaware corporation and its common stock is
traded on the New York Stock Exchange. The address and telephone number of its
corporate headquarters are 14901 South Orange Blossom Trail, Orlando, Florida
32837, (407) 826-5050.
TUPPERWARE FINANCE COMPANY B.V.
The Company was organized under the Dutch Civil Code on September 12, 1996.
The Company is a wholly-owned subsidiary of Tupperware Finance Holding Company
B.V., which is a wholly-owned subsidiary of Tupperware. The Company was
organized to provide financing to Tupperware and other subsidiaries or
affiliates of Tupperware.
The registered office of the Company is at Rijksstraatweg 113-117, NL-3632
AB Loenen a/d Vecht, Netherlands. The Company's telephone number is (407) 826-
5050.
ENFORCEABILITY OF CIVIL LIABILITIES
AND RELATED MATTERS
The Company was organized under the Dutch Civil Code. Certain of its
directors and officers are residents of non-United States jurisdictions and
substantially all of the assets of the Company, and all or a substantial
portion of the assets of such other persons, are located in non-United States
jurisdictions. As a result, it may be difficult for investors to effect
service within the United States upon such persons or to enforce against them,
in the United States, such judgments of courts of the United States predicated
upon civil liabilities under the United States federal securities laws.
Additionally, there is doubt as to the enforceability in The Netherlands, in
original actions or in actions for enforcement of judgements of United States
courts, of liabilities predicated upon the United States federal securities
laws.
USE OF PROCEEDS
Unless otherwise indicated in a Prospectus Supplement relating to a series
of Securities, the net proceeds received by the Company from the sale of
Securities will be advanced to, or otherwise invested in, other subsidiaries
or affiliates of Tupperware to be used for general corporate purposes, which
may include the repayment of indebtedness.
RATIO OF EARNINGS TO FIXED CHARGES OF TUPPERWARE CORPORATION
The following table sets forth the ratio of earnings to fixed charges of
Tupperware for the periods indicated:
<TABLE>
<CAPTION>
26 WEEKS ENDED YEAR ENDED
---------------- -----------------------------------------------
JUNE 29, JULY 1, DEC. 30, DEC. 31, DEC. 25, DEC. 26, DEC. 28,
1996 1995 1995 1994 1993 1992 1991
-------- ------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Historical.............. 14.2x 14.9x 14.9x 10.9x 5.8x --(1) 3.3x
Pro forma for
Distribution........... 7.8x 7.3x
</TABLE>
3
<PAGE>
(1) For the fiscal year ended December 26, 1992, fixed charges exceeded
earnings by $42.6 million. Pre-tax income was reduced by a $136.7
million charge primarily related to consolidation of manufacturing
capacity and restructuring the U.S. distribution system. Excluding
this charge, the ratio would have been 4.0.
For the purpose of calculating the ratios, earnings consist of income (loss)
before income taxes and cumulative effect of accounting changes to which has
been added fixed charges less capitalized interest. Historical fixed charges
consist of interest expense, interest capitalized, and one third of rental
expense, the approximate portion representing interest. In calculating the
ratios that are pro forma for the Distribution, fixed charges have been
increased for the assumed incremental interest on borrowings incurred in
conjunction with the Distribution (see Note 2(a) to the Tupperware Corporation
Pro Forma Consolidated Statement of Income).
4
<PAGE>
DESCRIPTION OF DEBT SECURITIES, WARRANTS AND GUARANTEES
The following description of the terms of the Debt Securities, Warrants and
Guarantees sets forth certain general terms and provisions of the Debt
Securities, Warrants and Guarantees to which a Prospectus Supplement may
relate. The particular terms and provisions of the Debt Securities offered by
a Prospectus Supplement (the "Offered Debt Securities") or Warrants offered by
a Prospectus Supplement and the extent, if any, to which such general terms
and provisions may not apply to the Debt Securities and Warrants so offered
will be described in the Prospectus Supplement relating to such Offered Debt
Securities and Warrants.
The Debt Securities will be issued under an Indenture (the "Indenture"),
among the Company, Tupperware and The First National Bank of Chicago, as
Trustee (the "Trustee"), a copy of which is filed as an exhibit to the
Registration Statement of which this Prospectus is a part. The following
summaries of certain provisions of the Debt Securities, the Warrants, the
Guarantees and the Indenture do not purport to be complete and are subject to,
and are qualified in their entirety by reference to, all the provisions of the
Debt Securities, the Warrant Agreements, the Guarantees and the Indenture,
including the definition therein of certain terms. Wherever particular
sections, articles or defined terms of the Indenture are referred to herein,
such sections, articles or defined terms shall be as specified in the
Indenture. Certain defined terms in the Indenture are capitalized herein.
Section numbers below refer to provisions of the Indenture.
GENERAL
The Indenture does not limit the amount of Debt Securities which can be
issued thereunder and provides that Debt Securities of any series may be
issued thereunder up to the aggregate principal amount which may be authorized
from time to time by the Company. The Indenture does not limit the amount of
other indebtedness or securities which may be issued by the Company.
All Debt Securities will be unsecured and will rank pari passu with all
other unsecured and unsubordinated indebtedness of the Company and will have
the benefit of the Guarantees described below.
Reference is made to the Prospectus Supplement relating to the particular
Offered Debt Securities offered thereby for the following terms of the Offered
Debt Securities: (i) the title of the Offered Debt Securities or the
particular series thereof; (ii) any limit on the aggregate principal amount of
the Offered Debt Securities or the particular series thereof; (iii) whether
the Offered Debt Securities are to be issuable as Registered Securities or
Unregistered Securities or both, whether any of the Offered Debt Securities
are to be issuable initially in temporary global form and whether any of the
Offered Debt Securities are to be issuable in permanent global form; (iv) the
price or prices (generally expressed as a percentage of the aggregate
principal amount thereof) at which the Offered Debt Securities will be issued;
(v) the date or dates on which the Offered Debt Securities will mature; (vi)
the rate or rates per annum (or the formula by which such rate or rates shall
be determined) at which the Offered Debt Securities will bear interest, if
any, and the dates from which any such interest will accrue; (vii) the
interest payment dates on which any such interest on the Offered Debt
Securities will be payable, the regular record date for any interest payable
on any Offered Debt Securities that are Registered Securities on any interest
payment date, and the extent to which, or the manner in which, any interest
payable on a Global Security on an interest payment date will be paid if other
than in the manner described below under "Book-Entry System"; (viii) any
mandatory or optional sinking fund or analogous provisions; (ix) each office
or agency where, subject to the terms of the Indenture as described below
under "Payments and Paying Agents," the principal of and any premium and
interest on the Offered Debt Securities will be payable and each office or
agency where, subject to the terms of the Indenture as described below under
"Denominations, Registration and Transfer," the Offered Debt Securities may be
presented for registration of transfer or exchange; (x) the price or prices at
which and, the period or periods within which the Offered Debt Securities may,
pursuant to any optional or mandatory redemption provisions, be redeemed, in
whole or in part, and the other detailed terms and
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provisions of any such optional or mandatory redemption provisions; (xi) the
denominations in which any Offered Debt Securities will be issuable, if other
than denominations of U.S. $100,000 or any amount in excess thereof which is
an integral multiple of $1,000; (xii) the currency or currencies of payment of
principal of and any premium and interest on the Offered Debt Securities;
(xiii) any index used to determine the amount of payments of principal of and
any premium and interest on the Offered Debt Securities; (xiv) any additional
covenants applicable to the Offered Debt Securities; (xv) whether the Offered
Debt Securities will not be defeasible by the Company or Tupperware pursuant
to the provisions described below under "Defeasance and Discharge, Covenant
Defeasance"; and (xvi) any other terms and provisions of the Offered Debt
Securities or the Guarantees not inconsistent with the terms and provisions of
the Indenture. Any such Prospectus Supplement will also describe any special
provisions for the payment of additional amounts with respect to the Offered
Debt Securities. (Section 2.3).
If the purchase price of any of the Debt Securities is denominated in a
foreign currency or currencies or foreign currency unit or units or if the
principal of and any premium and interest on any series of Offered Debt
Securities is payable in a foreign currency or currencies or foreign currency
unit or units, the restrictions, elections, general tax considerations,
specific terms and other information with respect to such issue of Offered
Debt Securities and such foreign currency or currencies or foreign currency
unit or units will be set forth in the applicable Prospectus Supplement.
Some of the Debt Securities may be 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. Federal income tax considerations and other
special considerations applicable to any original issue discount securities
will be set forth in the applicable Prospectus Supplement.
There are no covenants or provisions contained in the Indenture which may
afford debt holders protection in the event of a highly leveraged transaction.
WARRANTS
The Company may issue Warrants for the purchase of Debt Securities. Warrants
may be issued independently or together with Debt Securities offered by any
Prospectus Supplement and may be attached to or separate from such Debt
Securities. Each series of Warrants will be issued under a separate warrant
agreement (a "Warrant Agreement") to be entered into between the Company and a
warrant agent to be designated by the Company (the "Warrant Agent"), all as
set forth in the Prospectus Supplement relating to the particular issue of
offered Warrants. The Warrant Agent will act solely as an agent of the Company
in connection with the Warrants and will not assume any obligation or
relationship of agency or trust for or with any holders of Warrants or
beneficial owners of Warrants. Holders of Warrants (without the consent of the
Warrant Agent, any Trustee, the holders of any Debt Securities or the holders
of any other Warrants) may, on their own behalf and for their own benefit,
enforce, and may institute and maintain any suit, action or proceeding against
the Company suitable to enforce or otherwise in respect of, their rights to
exercise Warrants evidenced by Warrant Certificates. Copies of the forms of
Warrant Agreements, including the forms of Warrant Certificates representing
the Warrants, are filed as exhibits to the Registration Statement of which
this Prospectus is a part. The following summary of certain provisions of the
Warrants does not purport to be complete and is subject to, and is qualified
in its entirety by reference to, all the provisions of the Warrant Agreements.
Reference is made to the Prospectus Supplement relating to any particular
issue of Warrants for the terms of such Warrants, including, where applicable:
(i) the initial public offering price of such Warrants; (ii) the title and
terms of any Debt Securities with which such Warrants are issued, the number
of such Warrants issued with each Debt Security offered and the date, if any,
on or after such Warrants and the related Debt Securities will be separately
transferable; (iii) the designation, aggregate principal amount, currencies,
denominations and terms of the series of Debt Securities purchasable upon
exercise of Warrants to purchase Debt Securities and the price at which such
Debt Securities may be purchased upon such exercise; (iv) the date on which
the right to exercise such Warrants shall commence and the date (the
"Expiration Date") on which such right shall expire; (v) U.S.
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federal income tax consequences applicable to such Warrants; and (vi) any
other terms of such Warrants. The exercise price for Warrants may be subject
to adjustment in accordance with the applicable Prospectus Supplement.
Unless otherwise provided in the related Prospectus Supplement, each Warrant
will entitle the holder thereof to purchase such principal amount of Debt
Securities at such exercise price as shall in each case be set forth in, or
calculable from, the Prospectus Supplement relating to the offered Warrants,
which exercise price may be subject to adjustment upon the occurrence of
certain events as set forth in such Prospectus Supplement. After the close of
business on the Expiration Date (or such later date to which such Expiration
Date may be extended by the Company), unexercised Warrants will become void.
The place or places where, and the manner in which, Warrants may be exercised
will be specified in the Prospectus Supplement relating to such Warrants.
Prior to the exercise of any Warrants to purchase Debt Securities, holders
of such Warrants will not have any of the rights of holders of the Debt
Securities purchasable upon such exercise, including the right to receive
payments of principal of, premium, if any, or interest on the Debt Securities
purchasable upon such exercise or to enforce covenants in the applicable
Indenture.
Unless otherwise provided in the related Prospectus Supplement, each Warrant
Agreement may be amended by the Company and the Warrant Agent (i) without the
consent of the holders of Warrants for the purpose of curing any ambiguity,
curing, correcting or supplementing any defective provision contained therein
or making such provisions with respect to matters or questions arising
thereunder as the Company and the Warrant Agent may deem necessary or
desirable, provided that such action will not have a material adverse effect
on the interests of the holders of Warrants and (ii) with the consent of the
holders of not less than a majority of the Warrants then outstanding and
unexercised for any other reason.
GUARANTEES
Tupperware will unconditionally guarantee the due and punctual payment of
the principal, premium, if any, and interest (including additional amounts) on
the Debt Securities when and as the same shall become due and payable, whether
at maturity, upon redemption, or otherwise. (Section 2.13). Tupperware may,
without the consent of the holders of the Debt Securities, assume all rights
and obligations of the Company with respect to a series of the Debt
Securities, as described in the Indenture, and upon such assumption, the
Company will be released from its liabilities under the Indenture and under
such series of Debt Securities. (Section 2.15). The Guarantees will rank
equally with all other unsecured and unsubordinated obligations of Tupperware.
DENOMINATIONS, REGISTRATION AND TRANSFER
The Debt Securities will be issuable as Registered Securities, Unregistered
Securities or both. Debt Securities may be issuable in the form of one or more
Global Securities, as described below under "Book-Entry System." Unless
otherwise provided in the applicable Prospectus Supplement, Debt Securities
denominated in U.S. dollars will be issued only in denominations of $100,000
or any amount in excess thereof which is an integral multiple of $1,000. A
Global Security will be issued in a denomination equal to the principal amount
of outstanding Debt Securities represented by such Global Security. The
Prospectus Supplement relating to Offered Debt Securities denominated in a
foreign or composite currency will specify the denominations thereof.
(Sections 2.3 and 2.7). The Debt Securities of each series will be
consecutively numbered, beginning with the number one.
In connection with the original issuance, no Unregistered Security shall be
mailed or otherwise delivered to any location in the United States (as defined
below under "Limitations on Issuance of Unregistered Securities") and an
Unregistered Security may be delivered in connection with its original
issuance only if the person entitled to receive such Unregistered Security
furnishes written certification, in the form required by the Indenture, to the
effect that such Unregistered Security is not being acquired by or on behalf
of a United States person (as defined below under "Limitations on Issuance of
Unregistered Securities"), or, if a beneficial interest in such
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Unregistered Security is being acquired by or on behalf of a United States
person, that such United States person is a financial institution which agrees
to comply with the requirements of Section 165(j) (3) (A), (B) or (C) of the
United States Internal Revenue Code of 1986, as amended ( the "Code"), and the
regulations thereunder. (Sections 2.4 and 2.11). See "Limitations on Issuance
of Unregistered Securities" below.
Registered Securities of any series will be exchangeable for other
Registered Securities of the same series and of a like aggregate principal
amount and tenor of different authorized denominations, subject to the
limitations regarding Global Securities discussed in "Book-Entry System"
below. In addition, if Debt Securities of any series are issuable as both
Registered Securities and as Unregistered Securities, at the option of the
holder upon request confirmed in writing, and subject to the terms of the
Indenture, Unregistered Securities (with all unmatured coupons, except as
provided below, and all matured coupons in default attached) of such series
will be exchangeable for Registered Securities of the same series of any
authorized denominations and of a like aggregate principal amount and tenor.
Unless otherwise indicated in an applicable Prospectus Supplement, any
Unregistered Security surrendered in exchange for a Registered Security
between a record date and the relevant date for payment of interest shall be
surrendered without the coupon relating to such date for payment of interest
attached and interest will not be payable in respect of the Registered
Security issued in exchange for such Unregistered Security, but will be
payable only to the holder of such coupon when due in accordance with the
terms of the Indenture. Except as provided in an applicable Prospectus
Supplement, Unregistered Securities will not be issued in exchange for
Registered Securities. (Section 2.8).
Debt Securities may be presented for exchange as provided above, and
Registered Securities (other than a Global Security) may be presented for
registration of transfer (with the form of transfer duly executed), at the
office of the security registrar designated by the Company or at the office of
any transfer agent designated by the Company for such purpose with respect to
any series of Debt Securities and referred to in an applicable Prospectus
Supplement, without service charge and upon payment of any taxes and other
governmental charges as described in the Indenture. Such transfer or exchange
will be effected upon the security registrar or such transfer agent, as the
case may be, being satisfied with the documents of title and identity of the
person making the request. The Company has initially appointed the Trustee as
the security registrar under the Indenture. (Section 2.8). If a Prospectus
Supplement refers to any transfer agent (in addition to the security
registrar) initially designated by the Company with respect to any series of
Debt Securities, the Company may at any time rescind the designation of any
such transfer agent or approve a change in location through which any such
transfer agent acts, except that, if Debt Securities of a series are issuable
only as Registered Securities, the Company will be required to maintain a
transfer agent in each Place of Payment for such series and, if Debt
Securities of a series are issuable as Unregistered Securities, the Company
will be required to maintain (in addition to the Security Registrar) a
transfer agent in a Place of Payment for such series located outside the
United States. The Company may at any time designate additional transfer
agents with respect to any series of Debt Securities. (Section 3.2).
In the event of any redemption in part, the Company shall not be required to
(i) issue, register the transfer of or exchange Debt Securities of any series
during a period beginning at the opening of business 15 days before the
mailing of a notice of redemption of Debt Securities of that series selected
to be redeemed and ending at the close business on (a) if Debt Securities of
the series are issuable only as Registered Securities, the day of mailing of
the relevant notice of redemption and (b) if Debt Securities of the series are
issuable as Unregistered Securities, the day of the first publication of the
relevant notice of redemption or, if Debt Securities of that series are also
issuable as Registered Securities and there is no publication, the mailing of
the relevant notice of redemption; (ii) register the transfer of or exchange
any Registered Security or portion thereof called for redemption, except the
unredeemed portion of any Registered Security being redeemed in part; or (iii)
exchange any Unregistered Security called for redemption, except to exchange
such Unregistered Security for a Registered Security of that series and like
tenor which is immediately surrendered for redemption. (Section 2.8).
PAYMENTS AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and any premium and interest on Registered Securities (other
than a Global Security) will be made at the office of such Paying Agent or
Paying Agents as the Company may designate from time to time, except that, at
the option of
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the Company, payment of any interest may be made by check mailed to the
address of the payee entitled thereto as such address shall appear in the
Security Register. (Sections 2.7 and 3.2). Unless otherwise indicated in an
applicable Prospectus Supplement, payment of any installment of interest on
Registered Securities will be made to the person in whose name such Registered
Security is registered at the close of business on the record date for such
interest payment. (Section 2.7).
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and any premium and interest on Unregistered Securities will
be payable (subject to applicable laws and regulations) at the offices of such
Paying Agent or Paying Agents outside the United States as the Company may
designate from time to time, except that, at the option of the Company,
payment of any interest may be made by check or by wire transfer to an account
maintained by the payee outside the United States. (Sections 2.7 and 3.2).
Unless otherwise indicated in an applicable Prospectus Supplement, payment of
interest on Unregistered Securities on any Interest Payment Date will be made
only against surrender of the coupon relating to such Interest Payment Date.
(Section 2.7). No payment with respect to any Unregistered Security will be
made at any office or agency of the Company in the United States or by check
mailed to any address in the United States or by transfer to an account
maintained in the United States. Payments will not be made in respect of
Unregistered Securities or coupons appertaining thereto pursuant to
presentation to the Company or its Paying Agents within the United States or
any other demand for payment to the Company or its Paying Agents within the
United States. Notwithstanding the foregoing, payment of principal of and any
premium and interest on Unregistered Securities denominated and payable in
U.S. dollars will be made at the office of the Company's Paying Agent in the
United States if, and only if, payment of the full amount thereof in U.S.
dollars at all offices or agencies outside the United States is illegal or
effectively precluded by exchange controls or other similar restrictions and
the Company has delivered to the Trustee an opinion of counsel to that effect.
(Section 3.2).
Unless otherwise indicated in an applicable Prospectus Supplement, the
principal office of the Trustee in The City of New York will be designated as
the Company's sole Paying Agent for payments with respect to Debt Securities
which are issuable solely as Registered Securities. Any Paying Agent outside
the United States and any other Paying Agent in the United States initially
designated by the Company for the Debt Securities will be named in the
applicable Prospectus Supplement. The Company may at any time designate
additional Paying Agents or rescind the designation of any Paying Agent or
approve a change in the office through which any Paying Agent acts, except
that, if Debt Securities of a series are issuable only as Registered
Securities, the Company will be required to maintain a Paying Agent in each
Place of Payment for such series and, if Debt Securities of a series are
issuable as Unregistered Securities, the Company will be required to maintain
(i) a Paying Agent in each Place of Payment for such series in the United
States for payments with respect to any Registered Securities of such series
(and for payments with respect to Unregistered Securities of such series in
the circumstances described above, but not otherwise), (ii) a Paying Agent in
each Place of Payment located outside the United States where Debt Securities
of such series and any coupon appertaining thereto may be presented and
surrendered for payment; provided that if the Debt Securities of such series
are listed on The International Stock Exchange, London or the Luxembourg Stock
Exchange or any other stock exchange located outside the United States and
such stock exchange shall so require, the Company will maintain a Paying Agent
in London or Luxembourg City or any other required city located outside the
United States, as the case may be, for Debt Securities of such series and
(iii) a Paying Agent in each Place of Payment located outside the United
States where (subject to applicable laws and regulations) Registered
Securities of such series may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company may be served.
(Section 3.2).
All moneys paid by the Company to a Paying Agent for the payment of
principal of and any premium and interest on any Debt Security that remains
unclaimed at the end of two years after such principal, premium or interest
shall have become due and payable will be repaid to the Company and thereafter
the holder of such Debt Security or any coupon appertaining thereto will look
only to the Company for payment thereof. (Section 10.7).
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BOOK-ENTRY SYSTEM
Unless otherwise specified in an applicable Prospectus Supplement, Debt
Securities of any series shall be issued under a book-entry system in the form
of one or more registered global securities (each a "Global Security"). Unless
otherwise specified in an applicable Prospectus Supplement, each Global
Security will be deposited with, or on behalf of, a depositary, which, unless
otherwise specified in an applicable Prospectus Supplement or Prospectus
Supplements, will be The Depository Trust Company, New York, New York (the
"Depositary"). Unless otherwise specified in an applicable Prospectus
Supplement, Global Securities will be registered in the name of the Depositary
or its nominee and will bear a legend regarding the restrictions on exchanges
and registration of transfers thereof referred to below and any other matters
as may be provided for pursuant to the Indenture.
The Depositary has advised the Company that the Depositary is a limited-
purpose trust company organized under the New York Banking Law, a "banking
organization" within the means 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
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. Unless otherwise specified in an applicable Prospectus Supplement,
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 the holders to take, or a beneficial owner desires to take, any
action, the Depositary would act upon the instructions of, or authorize, the
participant to take such action.
Payment of principal of, and any premium 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.
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The Company has been advised by the Depositary that the Depositary will
credit participants' accounts with payments of principal and any premium 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.
Unless otherwise specified in an applicable Prospectus Supplement, a Global
Security may not be exchanged or 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 or transferable 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 such names and in such authorized denominations as the
Depositary for such Global Security shall direct (Section 2.8).
LIMITATIONS ON ISSUANCE OF UNREGISTERED SECURITIES
In compliance with United States federal tax laws and regulations,
Securities may not be offered, sold, resold or delivered in connection with
their original issuance in the United States or to United States persons (each
as defined below) other than to a Qualifying Branch of a United States
Financial Institution (as defined below), and any underwriters, agents and
dealers participating in the offering of Debt Securities must agree that they
will not offer any Unregistered Securities for sale or resale in the United
States or to United States persons (other than a Qualifying Branch of a United
States Financial Institution) nor deliver Unregistered Securities within the
United States. In addition, any such underwriters, agents and dealers must
agree to send confirmations to each purchaser of an Unregistered Security
confirming that such purchaser represents that it is not a United States
person or is a Qualifying Branch of a United States Financial Institution and,
if such person is a dealer, that it will send similar confirmations to
purchasers from it. The term "Qualifying Foreign Branch of a United States
Financial Institution" means a branch located outside the United States of a
United States securities clearing organization, bank or other financial
institution that holds customers' securities in the ordinary course of its
trade or business and that agrees to comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the Code and the regulations thereunder.
Unregistered Securities and any coupons appertaining thereto will bear a
legend substantially to the following effect: "Any United States person who
holds this obligation will be subject to limitations under the United States
income tax laws, including the limitations provided in Sections 165(j) and
1287(a) of the Internal Revenue Code". Under Sections 165(j) and 1287(a) of
the Code, holders that are United States persons, with certain exceptions,
will not be entitled to deduct any loss on Unregistered Securities and must
treat as ordinary income any gain realized on the sale or other disposition
(including the receipt of principal) of Unregistered Securities.
The term "United States person" means a citizen or resident of the United
States, a corporation, partnership or other entity created or organized in or
under the laws of the United States or of any political subdivision thereof,
and an estate or trust the income of which is subject to United States federal
income taxation regardless of its source, and the term "United States" means
the United States of America (including the states and the District of
Columbia), its territories, its possessions and other areas subject to its
jurisdiction (including the Commonwealth of Puerto Rico).
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PAYMENT OF ADDITIONAL AMOUNTS
Unless otherwise provided in the Prospectus Supplement relating to a
particular series of Offered Debt Securities, if any deduction or withholding
for any present or future taxes, assessments or other governmental charges of
The Netherlands or any political subdivision or taxing authority thereof or
therein shall at any time be required in respect of any amounts to be paid by
the Company under the Debt Securities of such series, the Company will pay as
additional interest such additional amounts as may be necessary in order that
the net amounts paid to the holder of any such Debt Security pursuant to the
terms of such Debt Security, after such deduction or withholding, will be not
less than the amounts specified in such Debt Security to be then due and
payable; provided, however, that the Company shall not be required to make any
payment of additional amounts for or on account of:
(a) any tax, assessment or other governmental charge which would not have
been imposed but for (i) the existence of any present or former connection
between such holder (or between a fiduciary, settlor, beneficiary, member
or shareholder of, or possessor of a power over, such holder, if such
holder is an estate, trust, partnership or corporation) and The Netherlands
or any political subdivision or territory or possession of The Netherlands
or area subject to its jurisdiction, including, without limitation, such
holder (or such fiduciary, settlor, beneficiary, member, shareholder or
possessor) being or having been a citizen or resident or treated as a
resident thereof, being or having been present or engaged in trade or
business therein or having or having had a permanent establishment therein
or (ii) the presentation of such Debt Security (where presentation is
required) for payment on a date more than 20 days after the date on which
such payment became due and payable or the date on which payment thereof
was duly provided for, whichever occurs later;
(b) any estate, inheritance, gift, sale, transfer, personal property or
similar tax, assessment or other governmental charge;
(c) any tax, assessment or other governmental charge which is payable
otherwise than by withholding from payments of (or in respect of) principal
of or interest on such Debt Security;
(d) any tax, assessment or other governmental charge that is imposed or
withheld by reason of the failure to comply by the holder or the beneficial
owner with a request of the Company addressed to the holder to provide
information concerning the nationality, residence or identity of the holder
or beneficial owner of such Debt Security, and to make such declaration or
other similar claim or reporting requirement, which is required by a
statute, treaty or regulation of The Netherlands as a precondition to
exemption from all or part of such tax, assessment or other governmental
charge; or
(e) any condition of items (a), (b), (c) and (d) above;
nor will additional amounts be paid with respect to any payment of the
principal of or interest on any such Debt Security to any such holder who is a
fiduciary or partnership or other than the sole beneficial owner of such
payment to the extent such payment would be required by the laws of The
Netherlands (or any political subdivision or taxing authority of or in The
Netherlands) to be included in the income for tax purpose of a beneficiary or
settlor with respect to such fiduciary or a member of such partnership or a
beneficial owner who would not have been entitled to such additional amounts
had it been the holder of such Debt Security. (Section 13.2).
The Guarantees include Tupperware's unconditional guarantee of the due and
punctual payment of any additional amounts described herein (Section 2.13).
OPTIONAL TAX REDEMPTION
If the provisions described under "Payment of Additional Amounts" apply to a
series of Debt Securities, the Debt Securities of such series may be redeemed,
at the option of the Company or Tupperware, in whole but not in part, upon not
less than 30 nor more than 60 days' notice given as provided in the Indenture,
at any time (except Debt Securities that have a variable rate of interest
which may be redeemed only on an interest payment
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date) at a redemption price equal to the principal amount thereof (except for
Debt Securities issued at a price representing a discount from the principal
amount payable at maturity which may be redeemed at the redemption price set
forth in such Debt Securities) plus accrued interest to the date fixed for
redemption if, as a result of any change in or amendment to the laws (or any
regulations or rulings promulgated thereunder) of The Netherlands or any
political subdivision or taxing authority thereof or therein, or any change in
the official application or interpretation of such laws, regulations or
rulings, or any change in the official application or interpretation of, or
any execution of or amendment to, any treaty or treaties affecting taxation to
which The Netherlands is a party, which change, execution or amendment becomes
effective on or after the original issue date of such Debt Securities, the
Company or Tupperware has been or will be required to pay additional amounts
with respect to such Debt Securities. (Section 13.3).
The Company will also pay, or make available for payment, to holders on the
redemption date any additional amounts (as described under "Payment of
Additional Amounts" above) resulting from the payment of such redemption
price.
CERTAIN DEFINITIONS
"Consolidated Net Tangible Assets" means the total assets of Tupperware and
its consolidated subsidiaries as shown on or reflected in its balance sheet
less (a) all current liabilities (excluding Funded Debt), (b) advances to
entities accounted for on the equity method of accounting and (c) intangible
assets. "Intangible assets" means the aggregate value (net of any applicable
reserves), as shown on or reflected in such balance sheet, of: (i) all trade
names, trademarks, licenses, patents, copyrights and goodwill; (ii)
organizational and development costs; (iii) deferred charges (other than
prepaid items such as insurance, taxes, interest, commissions, rents and
similar items and tangible assets being amortized); and (iv) unamortized debt
discount and expense, less unamortized premium. (Section 1.1).
"Exempted Indebtedness" means the sum of (i) the aggregate outstanding
indebtedness of Tupperware and its Restricted Subsidiaries incurred after the
date of the Indenture and secured by liens relating to Principal Property
(other than liens excluded from Exempted Indebtedness as described under
"Certain Covenants--Restrictions on Secured Debt") and (ii) the aggregate
discounted value of the obligations of Tupperware or any Restricted Subsidiary
for rental payments in respect to sale and leaseback transactions relating to
Principal Property (other than sale and leaseback transactions excluded from
Exempted Indebtedness as described under "Certain Covenants--Limitation on
Sales and Leaseback Transactions"). (Section 1.1).
"Funded Debt" means (i) all indebtedness for money borrowed having a
maturity of more than 12 months from the date as of which the determination is
made or having a maturity of 12 months or less but by its terms being
renewable or extendible beyond 12 months from such date at the option of the
borrower and (ii) rental obligations payable more than 12 months from such
date under leases which are capitalized in accordance with generally accepted
accounting principles (such rental obligations to be included as Funded Debt
at the amount so capitalized at the date of such computation and to be
included for the purposes of the definition of Consolidated Net Tangible
Assets both as an asset and as Funded Debt at the respective amounts so
capitalized). (Section 1.1).
"Principal Property" means any manufacturing facility having a gross book
value (without deduction of any depreciation reserves) in excess of 1% of
Consolidated Net Tangible Assets at the time of determination thereof and
owned by Tupperware or any Restricted Subsidiary and located within United
States of America other than any such facility or portion thereof which the
Board of Directors of Tupperware reasonably determines is not material to the
business conducted by Tupperware and its Subsidiaries as a whole. (Section
1.1).
"Restricted Subsidiary" means any Subsidiary (i) substantially all of the
property of which is located, and substantially all of the business of which
is carried on, within the United States of America and (ii) which owns or
operates one or more Principal Properties; provided, however, Restricted
Subsidiary does not include a
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Subsidiary which is primarily engaged in business as a finance or insurance
company and branches thereof or a Subsidiary which acts exclusively as a
holding company for a Subsidiary which is primarily engaged in business as a
finance or insurance company. (Section 1.1).
"Subsidiary" means each corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by Tupperware or one or more
Subsidiaries, or by the Company and one or more other Subsidiaries. (Section
1.1).
CERTAIN COVENANTS
Restrictions on Secured Debt. Tupperware will not itself, and will not
permit any Restricted Subsidiary to, incur, issue, assume or guarantee any
evidence of indebtedness for money borrowed ("Debt") secured after the date of
Indenture by a mortgage, pledge or lien ("Mortgage") on any Principal Property
of Tupperware or any Restricted Subsidiary, or on any shares of stock of or
Debt of any Restricted Subsidiary, without effectively providing that the Debt
Securities are secured equally and ratably with (or, at Tupperware's option,
prior to) such secured Debt, unless, after giving effect thereto, Exempted
Indebtedness would not exceed 10% of Consolidated Net Tangible Assets.
The above restriction does not apply to, and there will be excluded from
Exempted Indebtedness in any computation under such restriction, (i) Debt
secured by Mortgages on property of, or on any shares of stock of or Debt of,
any corporation existing at the time such corporation becomes a Restricted
Subsidiary, (ii) Debt secured by Mortgages in favor of Tupperware or a
Restricted Subsidiary, (iii) Debt secured by Mortgages in favor of
governmental bodies to secure progress or advance payments or payments
pursuant to contracts or statute, (iv) Debt secured by Mortgages on property,
shares of stock or Debt existing at the time of acquisition thereof (including
acquisition through merger or consolidation) and Debt secured by Mortgages to
finance the acquisition of property, shares of stock or Debt or to finance
construction on property which is incurred within 180 days of such acquisition
or completion of construction, (v) Debt secured by Mortgages securing
industrial revenue or pollution control bonds, or (vi) any extension, renewal
or replacement of any Mortgage referred to in the foregoing clauses (i)
through (v) inclusive; provided, however, that such extension, renewal or
replacement Mortgage shall be limited to all or part of the same property,
shares of stock or Debt that secured the Mortgage extended, renewed or
replaced (plus improvements on such property) and such extension, renewal or
replacement shall not be for an amount which is greater than the Mortgage
extended, renewed or replaced. (Section 3.5).
Limitation on Sales and Leaseback Transactions. Neither Tupperware nor any
Restricted Subsidiary may enter into any sale and leaseback transaction
involving any Principal Property, unless, after giving effect thereto,
Exempted Indebtedness would not exceed 10% of Consolidated Net Tangible
Assets.
This restriction does not apply to, and there shall be excluded from
Exempted Indebtedness in any computation under such restriction, any sale and
leaseback transaction if (i) the lease is for a period of not in excess of
three years, including renewal rights, (ii) the sale or transfer of the
Principal Property is made within 180 days after the later of its acquisition
or completion of construction, (iii) the lease secures or relates to
industrial revenue or pollution control bonds, (iv) the transaction is between
Tupperware and a Restricted Subsidiary or between Restricted Subsidiaries, or
(v) Tupperware or such Restricted Subsidiary, within 180 days after the sale
or transfer is completed, applies (A) to the retirement of the Debt
Securities, other Funded Debt of the Company or Tupperware ranking on a parity
with or senior to the Debt Securities, or Funded Debt of a Restricted
Subsidiary, or (B) to the purchase of other property which will constitute a
Principal Property having a fair market value, in the good faith opinion of
the Board of Directors of Tupperware, at least equal to the fair market value
of the Principal Property leased, an amount equal to the greater of (i) the
net proceeds of the sale of the Principal Property leased, or (ii) the fair
market value (in the good faith opinion of the Board of Directors of
Tupperware) of the Principal Property leased. In lieu of applying proceeds to
the retirement of Funded Debt, Tupperware may surrender debentures or notes
(including the Debt Securities) to the trustee for retirement and
cancellation, or the Company or a Restricted Subsidiary may receive credit for
the principal amount of Funded Debt voluntarily retired within 180 days after
such sale. (Section 3.6).
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CONSOLIDATION, MERGER AND SALE OF ASSETS
Tupperware covenants that it will not merge or consolidate or sell or convey
all or substantially all of its assets unless the successor corporation is
Tupperware or is a corporation organized under the laws of the United States
or any State thereof which assumes Tupperware's obligations on the Guarantees
and under the Indenture, and after giving effect to such transaction,
Tupperware or the successor corporation would not be in default under the
Indenture. (Section 9.1).
EVENTS OF DEFAULT
An Event of Default with respect of any series of Debt Securities is defined
in the Indenture as being (a) default by the Company for 30 days in the
payment of any installment of interest on the Debt Securities of such series;
(b) default by the Company in the payment of any principal on the Debt
Securities of such series; (c) default by the Company in the payment of any
sinking fund installment with respect to Debt Securities of such series; (d)
default by the Company or Tupperware in the performance of any of the
covenants or warranties in the Indenture contained therein in respect of the
Debt Securities of such series which shall not have been remedied within a
period of 90 days after receipt of written notice by the Company and
Tupperware from the Trustee or by the Company and the Trustee from the holders
of not less than 25% in principal amount of the outstanding Debt Securities of
such series; (e) certain events of bankruptcy, insolvency or reorganization of
the Company or Tupperware; affected thereby or (f) any other Event of Default
established in accordance with the Indenture with respect to such series of
Debt Securities. (Section 5.1).
If an Event of Default with respect to Debt Securities of any series at the
time outstanding occurs and is continuing, either the Trustee or the Holders
of at least 25% in principal amount of the outstanding Debt Securities of the
series may declare the principal of the Debt Securities of such series (or if
the Debt Securities of that series are Original Issue Discount Securities,
such portion of the principal as may be specified by the terms of that series)
to be due and payable immediately. Upon certain conditions specified in the
Indenture, such declaration (including a declaration caused by a default in
the payment of principal or interest, the payment for which has subsequently
been provided) may be annulled by the holders of a majority in principal
amount of the Debt Securities of such series then outstanding (each such
series treated as a separate class). In addition, past defaults may be waived
by the holders of a majority in principal amount of the Debt Securities of the
series then outstanding affected thereby (each such series treated as a
separate class), except a default in respect of a covenant or provision of the
Indenture which cannot be modified or amended without the consent of the
holder of each Debt Security so affected. (Sections 5.1 and 5.10).
The Indenture contains a provision entitling the Trustee, subject to the
duty of the Trustee during default to act with the required standard of care,
to be indemnified by the holders of Debt Securities before proceeding to
exercise any right or power under the Indenture at the request of the holders
of such Debt Securities. (Section 6.2). The Indenture also provides that the
holders of a majority in principal amount of the outstanding Debt Securities
of each series affected (each series treated 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, with respect to the Debt Securities of such series. (Section 5.9).
The Indenture contains a covenant that the Company and Tupperware will each
file annually with the Trustee a certificate as to the absence of any default
or specifying any default that exists. (Section 4.3).
DEFEASANCE AND DISCHARGE, COVENANT DEFEASANCE
The Company and Tupperware may elect, at their option at any time, to effect
a defeasance and discharge (a "Defeasance") or a covenant defeasance (a
"Covenant Defeasance") in respect of the Debt Securities and, unless otherwise
specified in a Prospectus Supplement relating to particular Offered Debt
Securities, any series of Debt Securities.
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Upon the Company's or Tupperware's exercise of its respective option to
effect a Defeasance in respect of the Debt Securities or any series thereof,
the Company and Tupperware will be deemed to have been discharged from their
respective obligations with respect to such Debt Securities on and after the
date the conditions to Defeasance described below are satisfied. For purposes
of the Indenture, Defeasance means the Company will be deemed to have paid and
discharged the entire indebtedness represented by such Debt Securities and
that the Company and Tupperware will be deemed to have satisfied all of their
other respective obligations under or with respect to such Debt Securities and
under the Indenture, except for the following: (i) the rights of Holders of
such Debt Securities to receive, solely from the trust fund described in the
Indenture, payments in respect of principal of, and any premium and interest
on, such Debt Securities when due; (ii) certain obligations of the Company and
Tupperware under the Indenture with respect to temporary securities;
registration, registration of transfer and exchange; mutilated, destroyed,
lost or stolen securities; maintenance of an office or agency; and money held
in trust for the benefit of Holders of such Debt Securities; (iii) the rights,
powers, trusts, duties and immunities of the Trustee; and (iv) the foregoing
provisions. (Section 10.2).
Upon the exercise by the Company or Tupperware of its option to effect a
Covenant Defeasance with respect to any Debt Securities or any series thereof,
(i) the Company and Tupperware will be released from their respective
obligations with respect to restrictions on secured debt, limitations on sales
and leaseback transactions and maintenance of properties, as well as any
additional covenants specified in the terms of such series of Debt Securities
or any supplemental indenture related thereto, and (ii) the occurrence of
certain events of default related to the foregoing covenants will be deemed
not to be or result in an Event of Default, in each case with respect to such
Debt Securities after the date that the conditions to Covenant Defeasance
described below are satisfied. (Section 10.3).
The conditions that the Company and Tupperware must satisfy in order to
effect a Defeasance or a Covenant Defeasance in respect of the Debt Securities
or any series thereof are as follows: (i) the Company or Tupperware will
irrevocably deposit or cause to be deposited with the trustee as trust funds,
for the purpose of making payments when due under the Indenture, money or U.S.
Government Obligations or a combination thereof, in an amount sufficient to
pay and discharge the principal of and any premium and interest on such Debt
Securities on the respective Stated Maturities in accordance with the terms of
such Debt Securities and the Indenture; (ii) delivery by the Company or
Tupperware of an Opinion of Counsel regarding the tax effects of such action
on the Holders of Debt Securities; (iii) delivery by the Company of an
Officer's Certificate to the effect that no listed Debt Securities, if then
listed or any securities exchange, will be delisted; (iv) no Event of Default
shall have occurred and be continuing at the time of the deposit or, regarding
bankruptcy-related events, at any time on or prior to the 90th day after such
deposit; (v) such Defeasance or Covenant Defeasance will not cause the trustee
to have a conflicting interest under the Trust Indenture Act; (vi) such
Defeasance or Covenant Defeasance will not result in a breach of or default
under any other agreement to which the Company or Tupperware is a party or by
which it is bound; (vii) such Defeasance or Covenant Defeasance will not
result in the trust arising from such deposit constituting an investment
company within the meaning of the Investment Company Act unless the trust is
registered or exempted thereunder; and (viii) delivery by the Company and
Tupperware to the Trustee of any Officer's Certificate and Opinion of Counsel,
each stating that all conditions precedent with respect to such Defeasance or
Covenant Defeasance have been complied with. (Section 10.4).
MODIFICATION OF THE INDENTURE AND WAIVER
The Indenture contains provisions permitting the Company, Tupperware and the
Trustee, with the consent of the holders of more than 50% of the principal
amount of the Debt Securities of all series then outstanding affected by such
supplemental indenture (treated as one class), to execute supplemental
indentures adding any provisions to or changing or eliminating any of the
provisions of the Indenture or modifying the rights of the holders of Debt
Securities of each such series, except that no such supplemental indenture
may, among other things, (i) extend the final maturity of any Debt Securities,
or reduce the rate or extend the time of payment of interest thereon, or
reduce the principal amount thereof, or reduce any amount payable upon any
redemption
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thereof without the consent of the holder of each Debt Security so affected,
(ii) reduce the aforesaid percentage of Debt Securities, the consent of the
holders of which is required for any such supplemental indenture, or (iii)
change the substantive provisions of the Guarantees without the consent of the
holders of all outstanding Debt Securities. (Section 8.2).
RESIGNATION AND REMOVAL OF TRUSTEE
The trustee with respect to a series of Debt Securities may at any time
resign by giving notice thereof to the Company, Tupperware and to the Holders
of such Debt Securities. Upon receipt of such notice, the Company and
Tupperware will promptly appoint a successor trustee meeting the
qualifications specified in the Indenture. If no successor trustee shall have
been so appointed within thirty days after mailing of such notice of
resignation, the resigning trustee or any person who shall have been the
Holder of any of such Debt Securities for at least six months may petition a
court of competent jurisdiction for the appointment of a successor trustee.
(Section 6.10).
If at any time the trustee with respect to a series of Debt Securities shall
(i) fail to eliminate a conflicting interest or resign after a written request
to do so by the Company, Tupperware or any person who shall have been the
holder of any of such Debt Securities for at least six months; (ii) cease to
be eligible to act as trustee and fail to resign after a written request to do
so by the Company, Tupperware or any holder of Debt Securities; or (iii)
become incapable of acting as trustee with respect to such Debt Securities or
be adjudged bankrupt or insolvent, then in any such case, the Company or
Tupperware may remove such trustee and appoint a successor trustee, or any
person who shall have been the holder of any of such Debt Securities for at
least six months may petition a court of competent jurisdiction for the
removal of such trustee and the appointment of a successor trustee. (Section
6.10).
The holders of a majority in aggregate principal amount of the Debt
Securities of any series may at any time remove the trustee with respect to
such Debt Securities and appoint a successor trustee with respect to such Debt
Securities. (Section 6.10).
GOVERNING LAW
The Indenture, the Debt Securities and the Guarantees are governed by and
construed in accordance with the laws of the State of New York. Under New York
law, claims for payment of principal, premium, if any, and interest will be
barred by the statute of limitations six years after such amounts become due
and payable. (Section 11.8).
NETHERLANDS TAXATION
Payments of principal and interest or any other payment by the Company with
respect to the Debt Securities or the Warrants can be made free of withholding
or deduction, for or on account of any taxes of whatsoever nature imposed,
levied, withheld, or assessed by The Netherlands or any political subdivision
or taxing authority thereof or therein, provided that the holder of a Debt
Security or Warrant is not in any way related to the Company. In this respect,
the holder of a Debt Security or Warrant is considered as related to the
Company when such holder owns, directly or indirectly, an interest or a deemed
interest in the share capital and/or profits of the Company, or when a person
owns, directly or indirectly, an interest in the share capital and/or profits
of both such holder and the Company.
A holder of a Debt Security or Warrant will not be subject to Netherlands
taxes on income or capital gains in respect of any payment under the Debt
Securities or the Warrants or in respect of any gains realized on the disposal
of the Debt Securities or the Warrants, provided that: (i) such holder is not
- - for Dutch tax purposes - a resident or a deemed resident of The Netherlands;
and (ii) such holder does not have an enterprise or an interest in an
enterprise which in its entirety or in part is carried on through a permanent
establishment or a permanent representative in The Netherlands and to which
enterprise or to which part of an enterprise the Debt Securities
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or Warrants are attributable; and (iii) such holder does not carry out and has
not carried out employment activities in The Netherlands connected with the
holding of the Debt Securities or Warrants; and (iv) such holder does not
have, directly or indirectly, a substantial interest or a deemed substantial
interest as defined in the Income Tax Code of The Netherlands in the share
capital of the Company or, in the event that he does have such an interest, it
forms part of the assets of an enterprise carried out by him or for his
account.
A holder of a Debt Security or Warrant will not be subject to Netherlands
net wealth tax in respect of such Debt Security or Warrant, provided that such
holder is not an individual or, if he is an individual, provided that the
conditions in (i) and (ii) in the previous paragraph are met.
No gift, estate or inheritance taxes will arise in The Netherlands on the
transfer of a Debt Security or Warrant by way of gift by, or on the death of,
a person who is neither a resident nor a deemed resident of The Netherlands,
provided that: (i) such transfer is not construed as a gift made by or on
behalf of a person who is a resident or a deemed resident of The Netherlands;
and (ii) such Debt Security or Warrant is not attributable to an enterprise
which in its entirety or in part is carried on through a permanent
establishment or a permanent representative in The Netherlands and which
enterprise was owned by the donor or deceased or in which enterprise the donor
or the deceased owned an interest.
No Netherlands registration tax, custom duty, capital duty, stamp duty or
any other similar tax or duty other than court fees is payable in The
Netherlands in respect of or in connection with the execution, delivery and
enforcement by legal proceedings (including the enforcement of any foreign
judgment by the Courts of The Netherlands) of the Debt Securities or Warrants
or the performance of the Company's obligations under the Debt Securities or
the Warrants.
No Netherlands turnover tax (value added tax) shall be due by the Company or
a holder of a Debt Security or Warrant in respect of the execution and
delivery of the Debt Securities or the Warrants, the payment of interest or
the payment of principal to the holders of the Debt Securities or Warrants.
PLAN OF DISTRIBUTION
The Company and Tupperware may sell the Securities in four ways: (i)
directly to purchasers, (ii) through agents, (iii) to or through underwriters
and (iv) to dealers.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Securities, underwriters or agents may
receive compensation from the Company, from Tupperware or from purchasers of
Securities for whom they may act as agents in the form of discounts,
concessions or commissions. Underwriters may sell the Securities to or through
dealers, and such dealers may receive compensation in the form of discounts,
concessions or commissions from the underwriters and/or commissions from the
purchasers from whom they may act as agents. Any underwriters or agents
participating in the distribution of Securities may be deemed to be
underwriters, and any discounts or commissions received by them from the
Company or Tupperware and any profit on the resale of Securities may be deemed
to be underwriting discounts and commissions under the Securities Act of 1933,
as amended (the "Securities Act").
Offers to purchase Securities may be solicited directly by the Company or
Tupperware and sales thereof may be made by the Company or Tupperware directly
to institutional investors or others. The terms of any such sales will be set
forth in the accompanying Prospectus Supplement.
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Offers to purchase Securities may be solicited by agents designated by the
Company or Tupperware from time to time. Any such agent, who may be deemed to
be an underwriter as that term is defined in the Securities Act, involved in
the offer or sale of the Securities in respect of which this Prospectus is
delivered will be named, and any commissions payable by the Company or
Tupperware to such agent will be set forth, in the accompanying Prospectus
Supplement. Unless otherwise indicated in the accompanying Prospectus
Supplement, any such agent will be acting on a reasonable efforts basis for
the period of its appointment. Agents may be entitled under agreements which
may be entered into with the Company and/or Tupperware to indemnification by
the Company and/or Tupperware against certain civil liabilities, including
liabilities under the Securities Act, and may be customers of, engage in
transactions with or perform services for the Company or Tupperware in the
ordinary course of business.
If any underwriters are utilized in the sale of the Securities in respect of
which this Prospectus is delivered, the Company and/or Tupperware will enter
into an underwriting agreement with such underwriters at the time of sale to
them and the names of the specific managing underwriter or underwriters, as
well as any other underwriters and the terms of the transaction will be set
forth in the accompanying Prospectus Supplement, which will be used by the
underwriters to make resales of the Securities in respect of which this
Prospectus is delivered to the public. The underwriters may be entitled, under
the relevant underwriting agreement, to indemnification by the Company and/or
Tupperware against certain liabilities, including liabilities under the
Securities Act, and may be customers of, engage in transactions with, or
perform services for, the Company and/or Tupperware in the ordinary course of
business.
If a dealer is utilized in the sale of the Securities in respect of which
this Prospectus is delivered, the Company or Tupperware will sell such
Securities to the dealer, as principal. The dealer may then resell such
Securities to the public at varying prices to be determined by such dealer at
the time of resale. Dealers may be entitled to indemnification by the Company
and/or Tupperware against certain liabilities, including liabilities under the
Securities Act, and may be customers of, engaged in transactions with, or
perform services of, the Company or Tupperware in the ordinary course of
business.
Securities may also be offered or sold, if so indicated in the accompanying
Prospectus Supplement, in connection with a remarketing upon their purchase,
in accordance with their terms, by one or more firms ("remarketing firms"),
acting as principals for their own accounts or as agents for the Company or
Tupperware. Any remarketing firm will be identified and the terms of its
agreement, if any, with the Company and/or Tupperware and its compensation
will be described in the accompanying Prospectus Supplement. Remarketing firms
may be entitled under agreements which may be entered into with the Company
and/or Tupperware to indemnification by the Company and/or Tupperware against
certain civil liabilities, including liabilities under the Securities Act, and
may be customers of, engage in transactions with, or perform services for, the
Company or Tupperware in the ordinary course of business.
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If so indicated in the accompanying Prospectus Supplement, the Company or
Tupperware will authorize agents and underwriters or dealers to solicit offers
by certain purchasers to purchase Securities from the Company or Tupperware at
the public offering price set forth in the accompanying Prospectus Supplement
pursuant to delayed delivery contracts providing for payments and delivery on
a specified date in the future. Such contracts will be subject to only those
conditions set forth in the accompanying Prospectus Supplement, and the
accompanying Prospectus Supplement will set forth the commission payable for
solicitation of such offers. The obligations of any purchaser under any such
contract will be subject to the condition that the purchase of such Securities
shall not at the time of delivery be prohibited under the laws of the
jurisdiction to which such purchaser is subject. The underwriters and such
other agents will not have any responsibility in respect of the validity or
performance of such contracts.
Any underwriters, agents or dealers utilized in the sale of Securities will
not confirm sales to accounts over which they exercise discretionary
authority.
LEGAL MATTERS
The validity of the Securities and the Guarantees will be passed upon for
Tupperware by Thomas M. Roehlk, Esq., the Senior Vice President, General
Counsel and Secretary of Tupperware, and Sidley & Austin, counsel to
Tupperware, for the Company by Baker & McKenzie and for any underwriters,
dealers or agents by Mayer, Brown & Platt. As of September 16, 1996, Mr.
Roehlk beneficially owned 35,882 shares of Common Stock of Tupperware,
including 22,581 shares over which he has the right to acquire beneficial
ownership through the exercise of stock options granted under the incentive
plan of Tupperware.
EXPERTS
The consolidated financial statements as of December 30, 1995 and December
31, 1994 and for each of the three years in the period ended December 30,
1995, incorporated in this Prospectus by reference to the Form 10/A4 of
Tupperware Corporation dated May 21, 1996, have been so incorporated in
reliance on the report of Price Waterhouse LLP, independent accountants, given
upon the authority of said firm as experts in auditing and accounting.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND
THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PRO-
SPECTUS SUPPLEMENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS
NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CRE-
ATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COM-
PANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN OR THEREIN
IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Description of Notes....................................................... S-2
United States Federal Income Tax Consequences.............................. S-20
Supplemental Plan of Distribution.......................................... S-35
Foreign Currency Risks..................................................... S-36
Experts.................................................................... S-37
</TABLE>
PROSPECTUS
<TABLE>
<S> <C>
Available Information..................................................... 2
Incorporation of Certain Documents by Reference........................... 2
Tupperware Corporation.................................................... 3
Tupperware Finance Company B.V............................................ 3
Enforceability of Civil Liabilities and Related Matters................... 3
Use of Proceeds........................................................... 3
Ratio of Earnings to Fixed Charges of Tupperware Corporation.............. 3
Description of Debt Securities, Warrants and Guarantees................... 5
Netherlands Taxation...................................................... 17
Plan of Distribution...................................................... 18
Legal Matters............................................................. 20
Experts................................................................... 20
</TABLE>
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$100,000,000
TUPPERWARE FINANCE
COMPANY B.V.
MEDIUM-TERM NOTES,
SERIES A
DUE 9 MONTHS OR MORE
FROM DATE OF ISSUE
PAYMENT OF PRINCIPAL AND INTEREST
UNCONDITIONALLY GUARANTEED BY
TUPPERWARE CORPORATION
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PROSPECTUS SUPPLEMENT
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GOLDMAN, SACHS & CO.
MORGAN STANLEY & CO.
INCORPORATED
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