<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 16, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
WMX TECHNOLOGIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 36-2660763
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
3003 BUTTERFIELD ROAD
OAK BROOK, ILLINOIS 60521
PHONE: 630-572-8800
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
HERBERT A. GETZ, SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
WMX TECHNOLOGIES, INC.
3003 BUTTERFIELD ROAD
OAK BROOK, ILLINOIS 60521
630-572-8800
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPY TO:
MAYER, BROWN & PLATT
190 SOUTH LASALLE STREET
CHICAGO, ILLINOIS 60603
ATTN: DAVID SCHUETTE
312-782-0600
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of the Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE TO BE OFFERING PRICE OFFERING REGISTRATION
REGISTERED REGISTERED(1) PER UNIT(2) PRICE(1)(2) FEE
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<S> <C> <C> <C> <C>
Debt Securities........ $1,000,000,000 100% $1,000,000,000 $303,030.30(3)
</TABLE>
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(1) In U.S. dollars or the equivalent thereof in other currencies or composite
securities, and, if any Debt Securities are to be issued at an original
issue discount, such greater amount as shall result in an aggregate
offering price of $1,000,000,000.
(2) Estimated solely for the purpose of calculating the registration fee.
(3) Pursuant to Rule 429 the combined Prospectus and Prospectus Supplement
included in this Registration Statement cover $250,000,000 of Debt
Securities from a previous registration statement (No. 333-6879), as to
which a registration fee of $86,206.90 was paid, in addition to the
securities registered hereby.
Pursuant to Rule 429 under the Securities Act of 1933, the combined
Prospectus and Prospectus Supplement included in this Registration Statement
also relate to the previously filed registration statement on Form S-3 of the
registrant, Registration No. 333-6879.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE>
EXPLANATORY NOTE
This Registration Statement contains a Prospectus relating to $1,250,000,000
aggregate principal amount of debt securities of WMX Technologies, Inc. (the
"Company") and a Prospectus Supplement relating to the offering of such debt
securities as Medium-Term Notes, Series E, due from Nine Months to 60 years
from Date of Issue ("Medium-Term Notes") of the Company. The Medium-Term Notes
of the Company may be offered by the Company from time to time after the
effectiveness of this Registration Statement, subject to market conditions.
Debt securities covered by the Registration Statement other than Medium-Term
Notes may also be offered from time to time. Upon the public offering or sale
of such other debt securities registered under this Registration Statement, a
Prospectus Supplement describing the particular terms of such debt securities
and such offer or sale will be filed in accordance with the rules of the
Securities and Exchange Commission incorporating the Prospectus which is filed
herewith.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION, DATED APRIL 16, 1997
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED APRIL , 1997)
LOGO
WMX TECHNOLOGIES, INC.
U.S. $1,250,000,000
MEDIUM-TERM NOTES, SERIES E
DUE FROM NINE MONTHS TO 60 YEARS FROM DATE OF ISSUE
-----------
WMX Technologies, Inc. (the "Company") may from time to time offer its
unsecured debt securities ("Debt Securities") consisting of Medium-Term Notes,
Series E (the "Notes"). The aggregate principal amount of Notes to be offered
will not exceed an aggregate amount sufficient to result in net proceeds to the
Company of U.S. $1,250,000,000 or the equivalent thereof in other currencies or
composite currencies, subject to reduction as the result of the sale of other
Debt Securities. The Notes will be offered at varying maturities from nine
months to 60 years from their dates of issue, may be subject to redemption at
the option of the Company or repayment at the option of the holder prior to
maturity, and may be denominated in U.S. dollars or in other currencies,
European Currency Units ("ECUs") or other composite currencies (the "Specified
Currency"), all as set forth in a pricing supplement (the "Pricing Supplement")
to this Prospectus Supplement. See "Important Currency Information" and
"Certain Currency Risks." Each Note will bear interest at either a fixed rate
(a "Fixed Rate Note"), which may be zero in the case of certain Notes issued at
a price representing a discount from the principal amount payable at maturity
(a "Zero-Coupon Note"), or a floating rate (a "Floating Rate Note") determined
by reference to one or more of the CD Rate, the Commercial Paper Rate, the
Federal Funds Rate, LIBOR, the Prime Rate, the Treasury Rate, or other rate
index, as set forth in the applicable Pricing Supplement. A Note may be issued
as an indexed note (an "Indexed Note"), the principal amount of which, payable
at maturity, is determined by the relationship between the currency in which
such Note is denominated and another currency or composite currency. See
"Description of Notes--Indexed Notes."
Unless otherwise specified in the applicable Pricing Supplement, interest on
Fixed Rate Notes, other than in the case of Zero-Coupon Notes, is payable each
February 15 and August 15 and at maturity. Interest on Floating Rate Notes is
payable on the dates determined at the time of issuance and set forth in the
applicable Pricing Supplement. The Notes will be issued only in denominations
of U.S. $1,000 or any amount which is an integral multiple of U.S. $1,000 or in
the case of Notes denominated in a Specified Currency other than U.S. dollars,
in the denominations set forth in the applicable Pricing Supplement.
Unless the applicable Pricing Supplement specifies that a Note initially will
be issued as a certificate in definitive registered form ("Certificated
Notes"), each Note initially will be represented by a global certificate (a
"Book-Entry Note") registered in the name of a nominee of The Depository Trust
Company ("DTC") or other depositary (DTC or such other depositary as is
specified in the applicable Pricing Supplement is herein referred to as the
"Depositary"). A beneficial interest in a Book-Entry Note will be shown on, and
transfers thereof will be effected only through, records maintained by the
Depositary and its participants. See "Description of Debt Securities--Book-
Entry, Delivery and Form" in the accompanying Prospectus.
The Specified Currency, any applicable interest rate or formula, the issue
price, the maturity, any interest payment dates, any redemption and repayment
provisions, whether a Note will be a Book-Entry Note or a Certificated Note,
whether a Note is an Indexed Note and any other terms applicable to each Note
will be established at the date of issue of such Note and set forth in the
applicable Pricing 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. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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<TABLE>
<CAPTION>
PRICE TO
PUBLIC(1) AGENTS' COMMISSION(2) PROCEEDS TO COMPANY(2)(3)
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<S> <C> <C> <C>
Per Note............... 100% .125% to .750% 99.250% to 99.875%
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U.S.$1,562,500 to U.S.$1,240,625,000 to
Total(4)............... U.S.$1,250,000,000 $9,375,000 $1,248,437,500
</TABLE>
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(1) The Notes will be issued at 100% of their principal amount, unless
otherwise specified in the applicable Pricing Supplement.
(2) The Company will pay a commission to Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated or Donaldson, Lufkin & Jenrette
Securities Corporation, each as agent (collectively the "Agents"), which
may be in the form of a discount, ranging from .125% to .750%, depending on
the maturity of the Note, of the principal amount of any Note sold through
such Agent (provided, that the commission payable with respect to Notes
with maturities greater than 30 years will be negotiated at the time of
issuance of such Notes). The Company may also sell Notes to an Agent as
principal at or above par or at a discount to be agreed upon at the time of
sale or resale to investors at varying prices related to prevailing market
prices at the time of resale, as determined by such Agent.
(3) Before deducting expenses payable by the Company estimated to be $642,030,
including reimbursement of certain of the Agents' expenses.
(4) Or the equivalent thereof in other currencies or composite currencies.
-----------
The Notes are being offered on a continuous basis by the Company through the
Agents, each of whom has agreed to use its best efforts to solicit offers to
purchase the Notes. The Notes may be sold at or above par or at a discount to
any Agent as principal for resale to investors at varying prices related to
prevailing market prices at the time of resale as determined by such Agent. The
Notes may also be sold at or above par or at a discount through any Agent to
investors and to other purchasers. The Company may also sell Notes directly to
investors on its behalf. The Notes will not be listed on any securities
exchange, and there can be no assurance that the Notes offered hereby will be
sold or that there will be a secondary market for any of the Notes. The Company
reserves the right to withdraw, cancel or modify the offer made hereby without
notice. The Company or the Agent who solicits any offer may reject such offer
in whole or in part. See "Plan of Distribution."
MERRILL LYNCH & CO. DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
The date of this Prospectus Supplement is April , 1997.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE AGENTS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
USE OF PROCEEDS
Net proceeds to the Company from the sale of the Notes will be used to
retire outstanding indebtedness of the Company arising from the Company's
issuance of commercial paper or other debt bearing interest rates and maturing
as specified in the applicable Pricing Supplement, to fund future
acquisitions, to repurchase shares of the Company and its publicly-traded
subsidiaries and for general corporate purposes. Pending any such application,
the proceeds may be invested in short-term securities.
IMPORTANT CURRENCY INFORMATION
Purchasers are required to pay for Notes in the Specified Currency
applicable thereto. Currently, there are limited facilities in the United
States for conversion of U.S. dollars into foreign currencies and vice versa,
and banks generally do not offer non-U.S. dollar checking or savings account
facilities in the United States. However, if requested by a prospective
purchaser of Notes denominated in a Specified Currency other than U.S.
dollars, the Agent soliciting the offer to purchase may arrange for the
conversion of U.S. dollars into such Specified Currency to enable the
purchaser to pay for such Notes. Such requests must be made on or before the
fifth Business Day preceding the date of delivery of the Notes, or by such
other date as determined by such Agent. Each such conversion will be made by
the relevant Agent on such terms and subject to such conditions, limitations
and charges as such Agent may from time to time establish in accordance with
its regular foreign exchange practice. All costs of exchange will be borne by
purchasers of the Notes.
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes offered
hereby (referred to in the accompanying Prospectus as the "Offered Debt
Securities") supplements, and to the extent inconsistent therewith replaces,
the description of the general terms and provisions of the Debt Securities set
forth in the Prospectus, to which description reference is hereby made. The
following description will apply to each Note unless otherwise specified in
the applicable Pricing Supplement.
GENERAL
The Notes constitute a single series of Debt Securities (as defined in the
accompanying Prospectus) to be issued under the Indenture dated as of June 1,
1993, between the Company and The Fuji Bank and Trust Company, as trustee (the
"Trustee"). The Notes will be offered on a continuing basis and will mature
from nine months to 60 years from the date of issue, as selected by the
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
maturity as set forth under "Redemption and Repayment." The Notes are limited
to an aggregate amount sufficient to result in net proceeds to the Company of
up to U.S. $1,250,000,000 or the equivalent thereof in other currencies or
composite currencies, subject to reduction as a result of the sale of other
Debt Securities. The U.S. dollar equivalent of Notes denominated in currencies
other than U.S. dollars will be determined by the Exchange Rate Agent (as
defined below) on the basis of the noon buying rate for cable transfers in The
City of New York, as determined by the Federal Reserve Bank of New York (the
"Market Exchange Rate"), for such currencies on the applicable issue dates.
The Notes will be unsecured obligations of the Company and will rank on a
parity with all other unsecured and unsubordinated indebtedness of the
Company.
S-2
<PAGE>
Unless the applicable Pricing Supplement states to the contrary, the
Indenture provisions described under "Description of Debt Securities--
Redemption at the Option of the Holders in Certain Circumstances" in the
accompanying Prospectus will not be applicable to the Notes. Other than such
provisions, the Indenture does not contain any covenants or other provisions
which might afford holders of Notes protection in the event of a highly
leveraged transaction, change in credit rating of the Notes or other similar
occurrence.
Each Note will be denominated in U.S. dollars or in other currencies,
European Currency Units ("ECUs") or such other composite currencies (the
"Specified Currency") as is specified in the applicable Pricing Supplement.
Each Note will bear interest at either (i) a fixed rate (a "Fixed Rate Note"),
which may be zero in the case of certain Notes issued at an Issue Price (as
defined below) representing a discount from the principal amount payable at
maturity (a "Zero-Coupon Note"), or (ii) a floating rate (a "Floating Rate
Note") determined by reference to the interest rate basis or combination of
interest rate bases (the "Base Rate") specified in the applicable Pricing
Supplement which may be adjusted by a Spread or Spread Multiplier (each as
defined below).
The Notes may be issued as Indexed Notes the principal amount of which,
payable at maturity, will be determined by the relationship between the
currency in which such Note is denominated and another currency or composite
currency set forth in the applicable Pricing Supplement. See "Indexed Notes."
Each Note offered hereby will be issued initially as either a beneficial
interest in a global note (a "Book-Entry Note") registered in the name of a
nominee of The Depository Trust Company ("DTC") or other depositary (DTC or
such other depositary as is specified in the applicable Pricing Supplement is
herein referred to as the "Depositary") or a Note issued as a certificate in
definitive registered form (a "Certificated Note"). One or more global notes
(each a "Global Security") will represent all Book-Entry Notes issued on the
same day and having the same terms, including, but not limited to, the same
Specified Currency, interest payment dates, rates of interest (if any),
maturity and repayment and redemption provisions (if any). Ownership of
beneficial interests in Book-Entry Notes will be shown on, and transfers
thereof will be effected only through, records maintained by the Depositary
(with respect to interests of participants) and its participants (with respect
to interests of persons other than participants). Payments of principal and
interest on beneficial interests in Book-Entry Notes will be made through the
Trustee to the Depositary. Book-Entry Notes will not be exchangeable for
Certificated Notes and, except as set forth under "Description of Debt
Securities--Book-Entry, Delivery and Form" in the accompanying Prospectus,
will not otherwise be issuable in definitive form. Unless otherwise specified
in the applicable Pricing Supplement, Notes denominated in a Specified
Currency other than U.S. dollars will not be issued as Book-Entry Notes. See
"Description of Debt Securities--Book-Entry, Delivery and Form" in the
accompanying Prospectus.
The authorized denominations of the Notes denominated in U.S. dollars will
be U.S. $1,000 or any amount that is an integral multiple of U.S. $1,000. The
authorized denominations of Notes denominated in a Specified Currency other
than U.S. dollars will be set forth in the applicable Pricing Supplement.
"Business Day" means any day, other than a Saturday or Sunday, that meets
each of the following applicable requirements: the day is (i) not a day on
which banking institutions are authorized or required by law or regulation to
be closed in The City of New York, New York, (ii) if the Note is denominated
in a Specified Currency other than U.S. dollars (a) not a day on which banking
institutions are authorized or required by law or regulation to be closed in
the financial center of the country issuing the Specified Currency (which in
the case of ECUs shall be Brussels, Belgium) and (b) a day on which banking
institutions in such financial center are carrying out transactions in such
Specified Currency and (iii) with respect to LIBOR Notes, a London Banking
Day. "London Banking Day" means any day on which dealings in deposits in U.S.
dollars are transacted in the London interbank market.
"Original Issue Discount Note" means (i) a Note, including any Zero-Coupon
Note, that has a stated redemption price at maturity that exceeds its Issue
Price by at least .25% of its stated redemption price at maturity multiplied
by the number of full years from the Original Issue Date to the Stated
Maturity Date (each as defined below) for such Note and (ii) any other Note
designated by the Company as issued with original issue discount for United
States federal income tax purposes.
S-3
<PAGE>
The Pricing Supplement relating to each Note will describe the following
terms: (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, including the authorized denominations); (ii) the price (which may
be 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 Date") and whether the Stated
Maturity Date may be extended by the Company and, if so, the Final Maturity
Date (as defined below); (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 dates if
different from those set forth below under "Fixed Rate Notes" and whether such
rate may be changed by the Company prior to the Stated Maturity Date; (vii) if
such note is a Floating Rate Note, the Base Rate, the Interest Payment Period,
the Initial Interest Rate, the Interest Reset Period, the Interest Reset
Dates, the Interest Payment Period, the interest payment dates, the Index
Maturity, the Maximum Interest Rate, if any, the Minimum Interest Rate, if
any, the Spread or 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 such Spread or Spread Multiplier may be changed by
the Company prior to the Stated Maturity Date; (viii) whether such Note is an
Original Issue Discount Note and if so, the yield to maturity; (ix) whether
such Note is an Indexed Note and, if so, the Face Amount, the Denominated
Currency, the Indexed Currency, the Base Exchange Rate, the Determination
Agent and the Reference Dealers (all as defined herein) relating to such
Indexed Note; (x) whether such Note may be repaid at the option of the holder
or redeemed at the option of the Company prior to the Stated Maturity Date and
if so, the provisions relating to such repayment or redemption; (xi) whether
such Note will be issued initially as a Book-Entry Note or a Certificated
Note; and (xii) any other terms of such Note not inconsistent with the
provisions of the Indenture.
PAYMENT OF PRINCIPAL AND INTEREST
The principal of and any premium and interest on each Note will be
denominated in the Specified Currency indicated in the Pricing Supplement for
such Note. If the Specified Currency for a Note is other than U.S. dollars,
the Company will, unless otherwise specified in the applicable Pricing
Supplement, appoint an agent (initially The Fuji Bank and Trust Company) (the
"Exchange Rate Agent") to determine the exchange rate for converting all
payments in respect of such Note into U.S. dollars in the manner described in
the following paragraph. Notwithstanding the foregoing, the holder of a Note
having a Specified Currency other than U.S. dollars may (if the Note and the
applicable Pricing Supplement so indicate) elect to receive all such payments
in the Specified Currency by delivery of a written request to the Paying Agent
(as defined below) at Two World Trade Center, 81st Floor, New York, New York
10048, Attention: Trust Administrative Department, which must be received by
the Paying Agent on or prior to the applicable record date or at least 15
calendar days prior to maturity, as the case may be. Such election shall
remain in effect unless and until changed by written notice to the Paying
Agent, but the Paying Agent must receive written notice of any such change on
or prior to the applicable Record Date or at least 15 calendar days prior to
maturity, as the case may be. Any such election or change thereof shall be
deemed to be made for all Notes denominated in such Specified Currency which
are registered in the name of such holder, unless such holder specifies in
such written request the particular Notes (by the Note number of each such
Note) with regard to which such election or change thereof shall not apply.
However, such election may not be effective under certain circumstances as
described below under "Currency Risks--Payment Currency." In the absence of
manifest error, all determinations by the Exchange Rate Agent shall be final
and binding on the Company and all holders of Notes. Until the Notes are paid
or payment thereof is duly provided for, the Company will, at all times,
maintain a paying agent (the "Paying Agent") in The City of New York, New York
or Chicago, Illinois capable of performing the duties described herein to be
performed by the Paying Agent. The Company has initially appointed the Trustee
as the Paying Agent. The Company will notify the holders of the Notes, in
accordance with the Indenture, of any change in the Paying Agent or its
address.
In the case of a Note denominated in a Specified Currency other than U.S.
dollars, unless the holder has elected otherwise, payment in respect of such
Note shall be made in U.S. dollars based upon the exchange rate as determined
by the Exchange Rate Agent based on the highest firm bid quotation expressed
in U.S. dollars
S-4
<PAGE>
received by such Exchange Rate Agent at approximately 11:00 A.M., New York
City time, on the second Business Day preceding the applicable payment date
from three recognized foreign exchange dealers in The City of New York, New
York or Chicago, Illinois selected by the Exchange Rate Agent and approved by
the Company (one of which may be the Exchange Rate Agent) for the purchase by
the quoting dealer, for settlement on such payment date, of the aggregate
amount of the Specified Currency payable to all holders of Notes denominated
in such Specified Currency electing to receive payment in U.S. dollars on such
payment date. If no such bid quotations are available, payments will be made
in the Specified Currency, unless such Specified Currency is unavailable due
to the imposition of exchange controls or to other circumstances beyond the
Company's control, in which case payment will be made as described below under
"Certain Currency Risks--Payment Currency." All currency exchange costs will
be borne by the holders of such Notes by deductions from such payments.
Unless otherwise specified in the applicable Pricing Supplement, payments in
U.S. dollars of interest on Certificated Notes (other than interest payable at
maturity or upon earlier redemption or repayment) will be made by mailing a
check to the holder at the address of such holder appearing on the security
register on the applicable record date. Notwithstanding the foregoing, a
holder of U.S. $10,000,000 or more in aggregate principal amount of
Certificated Notes of like tenor and terms (or a holder of the equivalent
thereof in a Specified Currency other than U.S. dollars) shall be entitled to
receive such payments in U.S. dollars by wire transfer of immediately
available funds, but only if appropriate payment instructions have been
received in writing by the Paying Agent not less than 15 calendar days prior
to the applicable Interest Payment Date (as defined below). Simultaneously
with the election by any holder to receive payments in a Specified Currency
other than U.S. dollars (by written request to the Paying Agent, as provided
above), such holder shall provide appropriate payment instructions to the
Paying Agent, and all such payments will be made in immediately available
funds to an account maintained by the payee in the Specified Currency.
Beneficial owners of interests in Book-Entry Notes will be paid in accordance
with the Depositary's and the participant's procedures in effect from time to
time as described under "Description of Debt Securities--Book-Entry, Delivery
and Form" in the accompanying Prospectus. Unless otherwise specified in the
applicable Pricing Supplement, principal and any premium and interest payable
at maturity or upon earlier redemption or repayment in respect of a
Certificated Note will be paid in immediately available funds upon surrender
of such Note accompanied by wire transfer instructions at the office of the
Paying Agent.
Any payment otherwise required to be made in respect of a Note on a date
that is not a Business Day for such Note need not be made on such date, but
may be made on the next succeeding Business Day with the same force and effect
as if made on such date, and no additional interest shall accrue as a result
of such delayed payment.
Unless otherwise specified in the applicable Pricing Supplement, if the
principal of any Original Issue Discount Note is declared to be due and
payable immediately as described in the Prospectus under "Description of Debt
Securities--Events of Default; Notice and Waiver" or in the event of the
redemption or repayment thereof prior to its Stated Maturity Date, the amount
of principal due and payable with respect to such Note shall 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 shall be the amount equal to (i) the Issue Price set forth
in the applicable Pricing Supplement plus (ii) the portion of the difference
between the Issue Price and the principal amount of such Note that has accrued
at the yield to maturity set forth in the Pricing Supplement (computed in
accordance with generally accepted United States bond yield computation
principles) to such date of declaration, redemption or repayment, as the case
may be, but in no event shall the Amortized Face Amount of an Original Issue
Discount Note exceed its principal amount.
The "Record Date" with respect to any Interest Payment Date shall be the
date (whether or not a Business Day) 15 calendar days immediately preceding
such Interest Payment Date. Interest payable and punctually paid or duly
provided for on any Interest Payment Date will be paid to the person in whose
name a Note is registered at the close of business on the Record Date
immediately preceding such Interest Payment Date; provided, however, that the
first payment of interest on any Note with an Original Issue Date between a
Record Date and
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an Interest Payment Date or on an Interest Payment Date will be made on the
Interest Payment Date following the next succeeding Record Date to the
registered holder on such next succeeding Record Date; provided, further, that
interest payable at maturity or upon earlier redemption or repayment will be
payable to the person to whom principal shall be payable.
All percentages resulting from any calculation will be rounded, if
necessary, to the nearest one hundred-thousandth of a percentage point, with
five one-millionths of a percentage point being rounded upward (e.g.,
9.876545% (or .09876545) being rounded to 9.87655% (or .0987655) and 9.876544%
(or .09876544) being rounded to 9.87654% (or .0987654)), and all currency or
currency unit amounts used in or resulting from such calculation on the Notes
will be rounded to the nearest one hundredth of a unit, with five one-
thousandths of a unit being rounded upward.
The interest rate on the Notes will in no event be higher than the maximum
rate permitted by Illinois law as the same may be modified by United States
law of general application. Under present Illinois law, no maximum rate of
interest would apply to the Notes.
FIXED RATE NOTES
Each Fixed Rate Note will bear interest from its Original Issue Date at the
rate per annum stated on the face thereof until the principal amount thereof
is paid or payment thereof is duly provided for, except as described below
under "Subsequent Interest Periods" and "Extension of Maturity." Unless
otherwise set forth in the applicable Pricing Supplement, interest on each
Fixed Rate Note will be payable semiannually on each February 15 and August 15
of each year (each such date and any other payment date specified in the
applicable Pricing Supplement being referred to herein as an "Interest Payment
Date") and at maturity or upon earlier redemption or repayment. Each payment
of interest in respect of an Interest Payment Date will include interest
accrued to but excluding such Interest Payment Date. Interest on Fixed Rate
Notes will be computed on the basis of a 360-day year of twelve 30-day months.
FLOATING RATE NOTES
Each Floating Rate Note will bear interest from its Original Issue Date at
rates determined by reference to the Base Rate plus or minus the Spread, if
any, or multiplied by the Spread Multiplier, if any (each as specified in the
applicable Pricing Supplement), until the principal amount thereof is paid or
payment thereof is duly provided for. 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. Any Floating Rate Note may also
have either or both of the following; (i) a maximum numerical interest rate
limitation, or ceiling, on the rate of interest that may accrue during any
interest period (the "Maximum Interest Rate") and (ii) a minimum numerical
interest rate limitation, or floor, on the rate of interest that may accrue
during any interest period (the "Minimum Interest Rate"). The applicable
Pricing Supplement will designate one of the following Base Rates (all as
defined below) as applicable to each Floating Rate Note: (a) the CD Rate (a
"CD Rate Note"), (b) the Commercial Paper Rate (a "Commercial Paper Rate
Note"), (c) the Federal Funds Rate (a "Federal Funds Rate Note"), (d) LIBOR (a
"LIBOR Note"), (e) the Prime Rate (a "Prime Rate Note"), (f) the Treasury Rate
(a "Treasury Rate Note"), or (g) such other Base Rate as is specified in the
applicable Pricing Supplement.
The rate of interest on each Floating Rate Note will be reset daily, weekly,
monthly, quarterly, semiannually or annually (such period being the "Interest
Reset Period" for such Note, and the first day of each Interest 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 that reset
daily, each Business Day; in the case of Floating Rate Notes (other than
Treasury Rate Notes) that reset weekly, Wednesday of each week; in the case of
Treasury Rate Notes that reset weekly, Tuesday of each week (except as
provided below); in the case of Floating Rate Notes that reset monthly, the
third Wednesday of
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each month; in the case of Floating Rate Notes that reset quarterly, the third
Wednesday of March, June, September and December; in the case of Floating Rate
Notes that reset semiannually, the third Wednesday of each of the two months
specified in the applicable Pricing Supplement; and in the case of Floating
Rate Notes that reset annually, the third Wednesday of the month specified in
the applicable Pricing Supplement. If any Interest Reset Date for any Floating
Rate Note would otherwise be a day that is not a Business Day, such Interest
Reset Date shall be postponed to the next day that is a Business Day, except,
in the case of a LIBOR Note, if such Business Day is in the next succeeding
calendar month, such Interest Reset Date shall be the immediately preceding
Business Day. If a Treasury bill (as defined below) auction falls on a day
that is an Interest Reset Date for Treasury Rate Notes, the Interest Reset
Date shall be postponed to the next day that is a Business Day.
Except as provided below or in the applicable Pricing Supplement, interest
on Floating Rate Notes will be payable, (i) in the case of Floating Rate Notes
that reset daily, weekly or monthly, on the third Wednesday of each month or
on the third Wednesday of March, June, September and December of each year, as
specified on the face thereof and in the applicable Pricing Supplement; (ii)
in the case of Floating Rate Notes that reset quarterly, on the third
Wednesday of March, June, September and December of each year; (iii) in the
case of Floating Rate Notes that reset semiannually, on the third Wednesday of
each of two months of each year specified on the face thereof and in the
applicable Pricing Supplement; and (iv) in the case of Floating Rate Notes
that reset annually, on the third Wednesday of one month of each year
specified on the face thereof and in the applicable Pricing Supplement (each
such day being on "Interest Payment Date") and, in each case, at maturity. If
any Interest Payment Date, other than maturity, for any Floating Rate Note
would otherwise be a day that is not a Business Day, such Interest Payment
Date shall be postponed to the next day that is a Business Day, except that in
the case of a LIBOR Note, if such Business Day is in the next succeeding
calendar month, such Interest Payment Date shall be the immediately preceding
Business Day. If the maturity for any Floating Rate Note falls on a day that
is not a Business Day, payment of principal, premium, if any, and interest
with respect to such Note will be made on the next succeeding Business Day
with the same force and effect as if made on the due date, and no additional
interest shall be payable as a result of such delayed payment.
Interest payments on each Interest Payment Date for Floating Rate Notes
(except in the case of Floating Rate Notes that reset daily or weekly) will
include accrued interest from and including the Original Issue Date or from
and including the last date in respect of which interest has been paid, as the
case may be, to, but excluding, such Interest Payment Date. In the case of
Floating Rate Notes that reset daily or weekly, interest payments will include
accrued interest from and including the Original Issue Date or from and
including the last date in respect of which interest has been paid, as the
case may be, to, and including, the Record Date immediately preceding the
applicable Interest Payment Date, and at maturity the interest payments will
include accrued interest from and including the Original Issue Date, or from
and including the last date in respect of which interest has been paid, as the
case may be, to, but excluding, the Stated Maturity Date.
Accrued interest will be calculated by multiplying the principal amount of a
Floating Rate Note by an accrued interest factor. This accrued interest factor
will be computed by adding the interest factors calculated for each day in the
period for which accrued interest is being calculated. The interest factor
(expressed as a decimal) for each such day will be computed by dividing the
interest rate applicable to such day by 360, in the case of CD Rate Notes,
Commercial Paper Rate Notes, Federal Funds Rate Notes, LIBOR Notes, and Prime
Rate Notes, or by the actual number of days in the year, in the case of
Treasury Rate Notes. The interest rate in effect on each day will be (i) if
such day is an Interest Reset Date, the interest rate with respect to the
Interest Determination Date (as defined below) pertaining to such Interest
Reset Date, or (ii) if such day is not an Interest Reset Date, the interest
rate with respect to the Interest Determination Date pertaining to the next
preceding Interest Reset Date, subject in either case to any Maximum or
Minimum Interest Rate limitation referred to above and to any adjustment by a
Spread or Spread Multiplier referred to above; provided, however, that the
interest rate in effect for the period from the Original Issue Date to the
first Interest Reset Date set forth in the applicable Pricing Supplement will
be the "Initial Interest Rate" specified in the applicable Pricing Supplement.
The "Interest Determination Date" pertaining to an Interest Reset Date for
CD Rate Notes, Commercial Paper Rate Notes, Federal Funds Rate Notes or Prime
Rate Notes will be the second Business Day next preceding such Interest Reset
Date. The Interest Determination Date pertaining to an Interest Reset Date for
a LIBOR Note
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will be the second London Banking Day next preceding such Interest Reset Date.
The Interest Determination Date pertaining to an Interest Reset Date for a
Treasury Rate Note will be the day of the week in which such Interest Reset
Date falls on which Treasury bills of the Index Maturity specified on the face
of such Note are auctioned. Treasury bills are normally sold at auction on
Monday of each week, unless that day is a legal holiday, in which case the
auction is normally held on the following Tuesday, except that such auction
may be held on the preceding Friday. If, as the result of a legal holiday, an
auction is so held on the preceding Friday, such Friday will be the Interest
Determination Date pertaining to the Interest Reset Date occurring in the next
succeeding week.
The "Calculation Date," where applicable, pertaining to an Interest
Determination Date is the tenth calendar day after such Interest Determination
Date or, if such day is not a Business Day, the next succeeding Business Day.
Unless otherwise specified in the applicable Pricing Supplement, The Fuji
Bank and Trust Company shall be the calculation agent (the "Calculation
Agent") with respect to Floating Rate Notes. Upon request of the holder of any
Floating Rate Note, the Calculation Agent will provide the interest rate then
in effect and, if determined, the interest rate that will become effective on
the next Interest Reset Date with respect to such Floating Rate Note.
CD Rate Notes
Each CD Rate Note will bear interest at the interest rate (calculated with
reference to the CD Rate and the Spread or Spread Multiplier, if any)
specified in such Note and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "CD Rate"
means, with respect to any Interest Determination Date, the rate on such date
for negotiable certificates of deposit having the specified maturity (an
"Index Maturity") designated in the applicable Pricing Supplement as published
by the Board of Governors of the Federal Reserve System in "Statistical
Release H.15(519), Selected Interest Rates" or any successor publication of
the Board of Governors of the Federal Reserve System ("H.15(519)") under the
heading "CDs (Secondary Market)." If such rate is not published by 9:00 A.M.,
New York City time, on the Calculation Date pertaining to such Interest
Determination Date, then the CD Rate with respect to such Interest
Determination Date will be the rate on such Interest Determination Date for
negotiable certificates of deposit of the Index Maturity specified in the
applicable Pricing Supplement as published by the Federal Reserve Bank of New
York in its daily statistical release "Composite 3:30 P.M. Quotations for U.S.
Government Securities" or any successor publication of Federal Reserve Bank of
New York ("Composite Quotations") under the heading "Certificates of Deposit."
If such rate is not published by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, then the CD
Rate with respect to such Interest Determination Date will be calculated by
the Calculation Agent and will be the arithmetic mean of the secondary market
offered rates as of 10:00 A.M., New York City time, on such Interest
Determination Date, of three leading nonbank dealers in negotiable U.S. dollar
certificates of deposit in New York City selected by such Calculation Agent
(after consultation with the Company) for negotiable certificates of deposit
of major United States money center banks of the highest credit standing in
the market for negotiable certificates of deposit with a remaining maturity
closest to the Index Maturity designated in the Pricing Supplement in the
denomination of $5,000,000; provided, however, that if the dealers selected as
aforesaid by such Calculation Agent are not quoting as set forth above, the CD
Rate with respect to such Interest Determination Date will be the CD Rate in
effect on such Interest Determination Date.
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 or
Spread Multiplier, if any) specified in such Note and in the applicable
Pricing Supplement.
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Unless otherwise specified in the applicable Pricing Supplement, "Commercial
Paper Rate" means, with respect to any Interest Determination Date, the Money
Market Yield (calculated as described below) of the rate on that date for
commercial paper having the Index Maturity specified in the applicable Pricing
Supplement as such rate is published in H.15(519) under the heading
"Commercial Paper." If such rate is not published by 9:00 A.M., New York City
time, on the Calculation Date pertaining to such Interest Determination Date,
then the Commercial Paper Rate with respect to such Interest Determination
Date shall be the Money Market Yield of the rate on that Interest
Determination Date for commercial paper having the Index Maturity specified in
the applicable Pricing Supplement as published in Composite Quotations under
the heading "Commercial Paper." If such rate is not published by 3:00 P.M.,
New York City time, on the Calculation Date pertaining to such Interest
Determination Date, then the Commercial Paper Rate with respect to such
Interest Determination Date shall be calculated by the Calculation Agent and
shall be the Money Markey Yield of the arithmetic mean of the offered rates of
three leading dealers of commercial paper in The City of New York, New York
selected by the Calculation Agent (after consultation with the Company) as of
11:00 A.M., New York City time, on the Interest Determination Date, for
commercial paper having the Index Maturity designated in the applicable
Pricing Supplement placed for an industrial issuer whose senior debt rating is
"AA," or the equivalent, from a nationally recognized rating agency; provided,
however, that, if the dealers selected as aforesaid by the Calculation Agent
are not quoting as set forth above, the Commercial Paper Rate with respect to
such Interest Determination Date will be the Commercial Paper Rate in effect
on such Interest Determination Date.
"Money Market Yield" shall be a yield calculated in accordance with the
following formula:
D X 360
------------
Money Market Yield = X 100
360 - (D X
M)
where "D" refers to the applicable per annum rate for commercial paper, quoted
on a bank discount basis and expressed as a decimal, and "M" refers to the
actual number of days in the interest period for which interest is being
calculated.
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 or Spread
Multiplier, if any) specified in such Note and in the applicable Pricing
Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Federal
Funds Rate" means, with respect to any Interest Determination Date, the rate
on such day for Federal Funds as published in H.15(519) under the heading
"Federal Funds (Effective)." If such rate is not so published by 9:00 A.M.,
New York City time, on the Calculation Date pertaining to such Interest
Determination Date, then the Federal Funds Rate with respect to such Interest
Determination Date will be the rate on such Interest Determination Date as
published in Composite Quotations under the heading "Federal Funds/Effective
Rate". If such rate is not published by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, the Federal
Funds Rate for such Interest Determination Date will be calculated by the
Calculation Agent and will be the arithmetic mean of the rates for the last
transaction in overnight Federal Funds arranged by each of three leading
dealers of Federal Funds transactions in New York City selected by the
Calculation Agent (after consultation with the Company) as of 11:00 A.M., New
York City time, on such Interest Determination Date; provided, however, that
if the dealers selected as aforesaid by the Calculation Agent are not quoting
as set forth above, the Federal Funds Rate with respect to such Interest
Determination Date will be the Federal Funds Rate in effect on such Interest
Determination Date.
LIBOR Notes
Each LIBOR Note will bear interest at the interest rate (calculated with
reference to LIBOR and the Spread or Spread Multiplier, if any) specified in
such Note and in the applicable Pricing Supplement.
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Unless otherwise specified in the applicable Pricing Supplement, "LIBOR"
will be determined by the Calculation Agent in accordance with the following
provisions:
(i) With respect to any Interest Determination Date, LIBOR will be
either: (a) if "LIBOR Reuters" is specified in the Note and the applicable
Pricing Supplement, the arithmetic mean of the offered rates (unless the
specified Designated LIBOR Page (as defined below) by its terms provides
only for a single rate, in which case such single rate shall be used) for
deposits in the Designated LIBOR Currency (as defined below) having the
Index Maturity designated in the Note and the applicable Pricing
Supplement, commencing on the second London Banking Day immediately
following the Interest Determination Date, which appear on the Designated
LIBOR Page specified in the Note and the applicable Pricing Supplement as
of 11:00 A.M., London time, on that Interest Determination Date, if at
least two such offered rates appear (unless, as aforesaid, only a single
rate is required) on such Designated LIBOR Page, or (b) if "LIBOR Telerate"
is specified in the Note and the applicable Pricing Supplement, the rate
for deposits in the Designated LIBOR Currency (as defined below) having the
Index Maturity designated in the Note and the applicable Pricing
Supplement, commencing on the second London Banking Day immediately
following such Interest Determination Date, which appears on the Designated
LIBOR Page specified in the Note and the applicable Pricing Supplement as
of 11:00 A.M. London time on that Interest Determination Date.
Notwithstanding the foregoing, if fewer than two offered rates appear on
the Designated LIBOR Page with respect to LIBOR Reuters (unless the
specified Designated LIBOR Page with respect to LIBOR Reuters by its terms
provides only for a single rate, in which case such single rate shall be
used), or if no rate appears on the Designated LIBOR Page with respect to
LIBOR Telerate, whichever may be applicable, LIBOR in respect of the
related Interest Determination Date will be determined as if the parties
had specified the rate described in clause (ii) below.
(ii) With respect to any Interest Determination Date on which fewer than
two offered rates appear on the Designated LIBOR Page with respect to LIBOR
Reuters (unless the Designated LIBOR Page by its terms provides only for a
single rate, in which case such single rate shall be used), or if no rate
appears on the Designated LIBOR Page with respect to LIBOR Telerate, as the
case may be, the Calculation Agent will request the principal London office
of each of four major banks in the London interbank market selected by the
Calculation Agent (after consultation with the Company) to provide the
Calculation Agent with its offered rate quotation for deposits in the
Designated LIBOR Currency (as defined below) for the period of the Index
Maturity designated in the Note and the applicable Pricing Supplement
commencing on the second London Banking Day immediately following such
Interest Determination Date, to prime banks in the London interbank market
as of 11:00 A.M., London time, on such Interest Determination Date and in a
principal amount that is representative for a single transaction in such
Designated LIBOR Currency in such market at such time. If at least two such
quotations are provided, LIBOR determined on such Interest Determination
Date will be the arithmetic mean of such quotations. If fewer than two
quotations are provided, LIBOR determined on such Interest Determination
Date will be the arithmetic mean of the rates quoted as of 11:00 A.M. in
the applicable Principal Financial Center (as defined below), on such
Interest Determination Date by three major banks in such Principal
Financial Center selected by the Calculation Agent (after consultation with
the Company) for loans in the Designated LIBOR Currency to leading banks,
having the Index Maturity designated in the Note and the applicable Pricing
Supplement in a principal amount that is representative for a single
transaction in such Designated LIBOR Currency in such market at such time;
provided, however, that if the banks so selected by the Calculation Agent
are not quoting as mentioned in this sentence, LIBOR determined on such
Interest Determination Date will be LIBOR in effect on such Interest
Determination Date.
"Designated LIBOR Currency" means, as with respect to any LIBOR Note, the
currency (including a composite currency), if any, designated in the Note and
the applicable Pricing Supplement as the Designated LIBOR Currency. If no such
currency is designated in the Note and the applicable Pricing Supplement, the
Designated LIBOR Currency shall be U.S. dollars.
"Designated LIBOR Page" means either (a) the display on the Reuters Monitor
Money Rates Service for the purpose of displaying the London interbank rates
of major banks for the applicable Designated LIBOR Currency (if "LIBOR
Reuters" is designated in the Note and the applicable Pricing Supplement), or
(b) the
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display on the Dow Jones Telerate Service for the purpose of displaying the
London interbank rates of major banks for the applicable Designated LIBOR
Currency (if "LIBOR Telerate" is designated in the Note and the applicable
Pricing Supplement). If neither LIBOR Reuters nor LIBOR Telerate is specified
in the Note and applicable Pricing Supplement, LIBOR for the applicable
Designated LIBOR Currency will be determined as if LIBOR Telerate (and, if the
U.S. dollar is the Designated LIBOR Currency, page 3750) had been chosen.
"Principal Financial Center" means, with respect to any LIBOR Note, unless
otherwise specified in the Note and the applicable Pricing Supplement, the
capital city of the country that issues as its legal tender the Designated
LIBOR Currency of such Note, except that with respect to U.S. dollars and ECUs
the Principal Financial Center shall be The City of New York and Brussels,
respectively.
If LIBOR with respect to any LIBOR Note is indexed to the offered rates for
deposits in a Specified Currency other than U.S. dollars, the applicable
Pricing Supplement will set forth the method for determining such rate.
Prime Rate Notes
Each Prime Rate Note will bear interest at the interest rate (calculated
with reference to the Prime Rate and the Spread or Spread Multiplier, if any)
specified in such Note and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Prime
Rate" means, with respect to an Interest Determination Date, the rate set
forth on such date in H.15(519) under the heading "Bank Prime Loan." If such
rate is not published prior to 9:00 A.M., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, then the
Prime Rate will be determined 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 NYMF Page (as defined below) and such bank's
prime rate or base lending rate as in effect for that Interest Determination
Date. If fewer than four such rates but more than one such rate appear on the
Reuters Screen NYMF Page for the Interest Determination Date, the Prime Rate
with respect to such Interest Determination Date will be determined 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 a 360-day year
as of the close of business on such Interest Determination Date by major money
center banks in New York City selected by the Calculation Agent (after
consultation with the Company). If fewer than two such rates appear on the
Reuters Screen NYMF Page, the Prime Rate with respect to such Interest
Determination Date will be determined by the Calculation Agent on the basis of
the rates furnished in New York City on such Interest Determination Date by
the appropriate number of substitute banks or trust companies organized and
doing business under the laws of the United States, or any State thereof,
having total equity capital of at least U.S. $500,000,000 and being subject to
supervision or examination by Federal or State authority, selected by the
Calculation Agent (after consultation with the Company) to provide such rate
or rates; provided, however, that if the banks selected as aforesaid are not
quoting as set forth above, the Prime Rate with respect to such Interest
Determination Date will be the Prime Rate in effect on such Interest
Determination Date. "Reuters Screen NYMF Page" means the display designated as
page "NYMF" on the Reuters Monitor Money Rates Service (or such other pages
that may replace the NYMF page on that service for the purpose of displaying
prime rates or base lending rates of major United States banks).
Treasury Rate Notes
Each Treasury Rate Note will bear interest at the interest rate (calculated
with reference to the Treasury Rate and the Spread or Spread Multiplier, if
any) specified in such Note and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Treasury
Rate" means, with respect to any Interest Determination Date, the rate for the
auction held on such Interest Determination Date of direct obligations of the
United States ("Treasury bills") having the Index Maturity designated in the
applicable
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Pricing Supplement as such rate is published in H.15(519) under the heading
"U.S. Government Securities--Treasury bills--auction average (investment)" or,
if such rate is not so published by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, then the
Treasury Rate shall be the auction average rate (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) as otherwise announced by the United States
Department of the Treasury. In the event that the results of the auction of
Treasury bills having the Index Maturity designated in the applicable Pricing
Supplement are not published or reported as provided above by 3:00 P.M., New
York City time, on such Calculation Date or if no such auction is held in a
particular week, then the Treasury Rate for that Interest Determination Date
shall be calculated by the Calculation Agent and shall be a yield to maturity
(expressed as a bond equivalent, on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) of the arithmetic mean of the
secondary market bid rates, as of approximately 3:30 P.M., New York City time,
on such Interest Determination Date, of three leading primary United States
government securities dealers selected by the Calculation Agent (after
consultation with the Company) for the issue of Treasury bills with a
remaining maturity closest to the Index Maturity designated in the applicable
Pricing Supplement; provided, however, that if the dealers selected as
aforesaid by the Calculation Agent are not quoting as set forth above, the
Treasury Rate with respect to such Interest Determination Date will be the
Treasury Rate in effect on such Interest Determination Date.
INDEXED NOTES
General
The Company may from time to time offer Notes ("Indexed Notes") the
principal amount of which payable at the Stated Maturity Date is determined by
the rate of exchange between the currency or composite currency in which such
Notes are denominated (the "Denominated Currency") and the other currency or
composite currency (the "Indexed Currency") specified in the applicable
Pricing Supplement. Unless otherwise specified in the applicable Pricing
Supplement, holders of Indexed Notes will be entitled to receive a principal
amount of such Indexed Notes exceeding the amount designated as the face
amount of such Indexed Notes in the applicable Pricing Supplement (the "Face
Amount") if, at the Stated Maturity Date, the rate at which the Denominated
Currency can be exchanged for the Indexed Currency is greater than the rate of
such exchange designated as the Base Exchange Rate, expressed in units of the
Indexed Currency per one unit of the Denominated Currency, in the applicable
Pricing Supplement (the "Base Exchange Rate"), and will be entitled to receive
a principal amount of such Indexed Notes less than the Face Amount of such
Indexed Notes, if, at the Stated Maturity Date, the rate at which the
Denominated Currency can be exchanged for the Indexed Currency is less than
such Base Exchange Rate, in each case determined as described below under
"Payment of Principal and Interest." Information as to the relative value of
the applicable Denominated Currency against the applicable Indexed Currency,
any currency and/or exchange controls applicable to such Denominated Currency
or Indexed Currency, and the tax consequences to holders will be set forth in
the applicable Pricing Supplement. An investment in Indexed Notes entails
significant risks that are not associated with a similar investment in a
security the principal amount of which payable at maturity is not determined
by the rate of exchange between two currencies or composite currencies. See
"Certain Currency Risks."
Unless otherwise specified in the applicable Pricing Supplement, the term
"Exchange Rate Day" shall mean any day which is a Business Day in The City of
New York, New York and, (a) if the Denominated Currency or Indexed Currency is
the Canadian Dollar, in Toronto, Canada, (b) if the Denominated Currency or
Indexed Currency is the Australian Dollar, in Melbourne, Australia, (c) if the
Denominated Currency or the Indexed Currency is the ECU, in Brussels, Belgium,
and/or (d) if the Denominated Currency or the Indexed Currency is any other
currency or currency unit (other than the U.S. Dollar), in the principal
financial center of the country of such Denominated Currency or Indexed
Currency.
Payment of Principal and Interest
Unless otherwise specified in the applicable Pricing Supplement, interest
will be payable by the Company in the Denominated Currency based on the Face
Amount of the Indexed Notes and at the rate and times and in the manner set
forth herein and in the applicable Pricing Supplement.
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Unless otherwise specified in the applicable Pricing Supplement, principal of
an Indexed Note will be payable by the Company in the Denominated Currency at
the Stated Maturity Date in an amount equal to the Face Amount of the Indexed
Note, plus or minus an amount determined by the determination agent specified
in the applicable Pricing Supplement (the "Determination Agent") by reference
to the difference between the Base Exchange Rate and the rate at which the
Denominated Currency can be exchanged for the Indexed Currency as determined on
the second Exchange Rate Day (the "Determination Date") prior to the Stated
Maturity Date of such Indexed Note by the Determination Agent based upon the
arithmetic mean of the open market spot offer quotations for the Indexed
Currency (spot bid quotations for the Denominated Currency) obtained by the
Determination Agent from the Reference Dealers (as defined below) in The City
of New York, New York at 11:00 A.M., New York City time, on the Determination
Date, for an amount of Indexed Currency equal to the Face Amount of such
Indexed Note multiplied by the Base Exchange Rate, with the Denominated
Currency for settlement at the Stated Maturity Date (such rate of exchange, as
so determined, expressed in units of the Indexed Currency per one unit of the
Denominated Currency, is hereafter referred to as the "Spot Rate"). If such
quotations from the Reference Dealers are not available on the Determination
Date due to circumstances beyond the control of the Company or the
Determination Agent, the Spot Rate will be determined on the basis of the most
recently available quotations from the Reference Dealers. The principal amount
of the Indexed Notes determined by the Determination Agent to be payable at the
Stated Maturity Date will be payable to the holders thereof in the manner set
forth herein and in the applicable Pricing Supplement. As used herein, the term
"Reference Dealers" shall mean the three banks or firms specified as such in
the applicable Pricing Supplement or, if any of them shall be unwilling or
unable to provide the requested quotations, such other major money center bank
or banks in The City of New York, New York selected by the Company, in
consultation with the Determination Agent, to act as Reference Dealer or
Dealers in replacement therefor. In the absence of manifest error, the
determination by the Determination Agent of the Spot Rate and the principal
amount of Indexed Notes payable at the Stated Maturity Rate thereof shall be
final and binding on the Company and the holders of such Indexed Notes.
Unless otherwise specified in the applicable Pricing Supplement, on the basis
of the aforesaid determination by the Determination Agent and the formulae and
limitations set forth below, (i) if the Base Exchange Rate equals the Spot Rate
for any Indexed Note, then the principal amount of such Indexed Note payable at
the Stated Maturity Date would be equal to the Face Amount of such Indexed
Note; (ii) if the Spot Rate exceeds the Base Exchange Rate (i.e., the
Denominated Currency has appreciated against the Indexed Currency during the
term of the Indexed Note), then the principal amount so payable would be
greater than the Face Amount of such Indexed Note up to an amount equal to
twice the Face Amount of such Indexed Note; (iii) if the Spot Rate is less than
the Base Exchange Rate (i.e., the Denominated Currency has depreciated against
the Indexed Currency during the term of the Indexed Note) but is greater than
one half of the Base Exchange Rate, then the principal amount so payable would
be less than the Face Amount of such Indexed Note; and (iv) if the Spot Rate is
less than or equal to one-half of the Base Exchange Rate, then the Spot Rate
will be deemed to be one-half of the Base Exchange Rate and no principal amount
of the Indexed Note would be payable at the Stated Maturity Date.
Unless otherwise specified in the applicable Pricing Supplement, the formulae
to be used by the Determination Agent to determine the principal amount of an
Indexed Note payable at the Stated Maturity Date will be as follows:
If the Spot Rate exceeds or equals the Base Exchange Rate, the principal
amount of an Indexed Note payable at the Stated Maturity Date shall equal:
Spot Rate - Base Exchange Rate
Face Amount + ( Face Amount X ------------------------------ )
Spot Rate
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If the formulae set forth above are applicable to an Indexed Note, the
maximum principal amount payable at the Stated Maturity Date in respect of such
Indexed Note would be an amount equal to twice the Face Amount and the minimum
principal amount payable would be zero.
Unless otherwise specified in the applicable Pricing Supplement, in the event
of any redemption or repayment of the Indexed Notes prior to the Stated
Maturity Date, the term "Stated Maturity Date" used above would refer to the
redemption or repayment date of such Indexed Notes.
SUBSEQUENT INTEREST PERIODS
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 or Spread Multiplier, in
the case of a Floating Rate Note, and, if so, the date or dates on which such
interest rate or such Spread or Spread Multiplier, as the case may be, may be
reset (each an "Optional Reset Date").
The Company may exercise such option with respect to a Note by notifying the
Trustee of such exercise at least 45 but not more than 60 days prior to the
Optional Reset Date for such Note. Not later than 40 days prior to such
Optional Reset Date, the Trustee will mail to the holder of such Note a notice
(the "Reset Notice"), first class, postage prepaid, setting forth (i) the
election of the Company to reset the interest rate, in the case of a Fixed Rate
Note, or the Spread or Spread Multiplier, in the case of a Floating Rate Note,
(ii) such new interest rate or such new Spread or Spread Multiplier, as the
case may be, and (iii) the provisions, if any, for redemption during the period
from such Optional Reset Date to the next Optional Reset Date or, if there is
no such next Optional Reset Date, to the Stated Maturity Date of such Note
(each such period being referred to herein as 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 days prior to an Optional
Reset Date for a Note, the Company may, at its option, revoke the interest
rate, in the case of a Fixed Rate Note, or the Spread or Spread Multiplier, in
the case of a Floating Rate Note, provided for in the Reset Notice and
establish a higher interest rate, in the case of a Fixed Rate Note, or a higher
Spread or Spread Multiplier, in the case of a Floating Rate Note, for the
Subsequent Interest Period commencing on such Optional Reset Date by causing
the Trustee to mail notice of such higher interest rate or higher Spread or
Spread Multiplier, as the case may be, first class, postage prepaid, to the
holder of such Note. Such notice shall be irrevocable. All Notes with respect
to which the interest rate or Spread or Spread Multiplier is reset on an
Optional Reset Date will bear such higher interest rate, in the case of a Fixed
Rate Note, or higher Spread or Spread Multiplier, in the case of a Floating
Rate Note, whether or not tendered for repayment.
If the Company elects to reset the interest rate or the Spread or Spread
Multiplier of a Note, the holder of such Note will have the option to elect
repayment of such Note by the Company on any Optional Reset Date at a price
equal to the principal amount thereof plus any accrued interest to such
Optional Reset Date. In order for a Note to be so repaid on an Optional 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 Note or notification to the Trustee shall be at least 25 but
not more than 35 days prior to such Optional Reset Date and except that a
holder who has tendered a Note for repayment pursuant to a Reset Notice may, by
written notice to the Trustee, revoke any such tender for repayment until the
close of business on the tenth day prior to such Optional 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 Date of such 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") set forth in such
Pricing Supplement.
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The Company may exercise such option with respect to a Note by notifying the
Trustee of such exercise at least 45 but not more than 60 days prior to the
Stated Maturity Date of such Note in effect prior to the exercise of such
option (the "Original Stated Maturity Date"). Not later than 40 days prior to
the Original Stated Maturity Date, the Trustee will mail to the holder of such
Note a notice (the "Extension Notice") relating to such Extension Period,
first class, postage prepaid, setting forth (i) the election of the Company to
extend the Stated Maturity Date of such Note, (ii) the new Stated Maturity
Date, (iii) in the case of a Fixed Rate Note, the interest rate applicable to
the Extension Period, or in the case of the Floating Rate Note, the Spread or
Spread Multiplier, if any, applicable to the Extension Period, and (iv) the
provisions, if any, for redemption during the Extension Period, including the
date or dates on which, or the period or periods during which, and the price
or prices at which, such redemption may occur during the Extension Period.
Upon the mailing by the Trustee of an Extension Notice to the holder of a
Note, the Stated Maturity Date of such Note shall be extended automatically,
and, except as modified by the Extension Notice and as described in the next
paragraph, such Note will have the same terms as prior to the mailing of such
Extension Notice.
Notwithstanding the foregoing, not later than 20 days prior to the Original
Stated Maturity Date for a Note, the Company may, at its option, revoke the
interest rate, in the case of a Fixed Rate Note, or the Spread or Spread
Multiplier, in the case of a Floating Rate Note, provided for in the Extension
Notice and establish a higher interest rate, in the case of a Fixed Rate Note,
or a higher Spread or Spread Multiplier, in the case of a Floating Rate Note,
for the Extension Period by causing the Trustee to mail notice of such higher
interest rate or higher Spread or Spread Multiplier, as the case may be, first
class, postage prepaid, to the holder of such Note. Such notice shall be
irrevocable. All Notes with respect to which the Stated Maturity Date is
extended will bear such higher interest rate, in the case of a Fixed Rate
Note, or higher Spread or Spread Multiplier, in the case of a Floating Rate
Note, for the Extension Period, whether or not tendered for repayment.
If the Company elects to extend the Stated Maturity Date of a Note, the
holder of such Note will have the option to elect repayment of such Note by
the Company on the Original Stated Maturity Date at a price equal to the
principal amount thereof plus any accrued interest to such date. In order for
a Note to be so repaid on the Original Stated Maturity 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
Note or notification to the Trustee shall be at least 25 but not more than 35
days prior to the Original Stated Maturity date and except that a holder who
has tendered a Note for repayment pursuant to an Extension Notice may, by
written notice to the Trustee, revoke any such tender for payment until the
close of business on the tenth day prior to the Original Stated Maturity Date.
REDEMPTION AND REPAYMENT
The Pricing Supplement relating to each Note will indicate either that such
Note cannot be redeemed prior to maturity or that such Note will be redeemable
at the option of the Company on a date or dates specified prior to maturity at
a price or prices set forth in the applicable Pricing Supplement, together
with accrued interest to the date of redemption. Unless otherwise specified in
the applicable Pricing Supplement, the Notes will not be subject to any
sinking fund. The Company may redeem any of the Notes that are redeemable and
remain outstanding either in whole or from time to time in part, upon not less
than 30 nor more than 60 days' notice. If less than all of the Notes with like
tenor and terms are to be redeemed, the Notes to be redeemed shall be selected
by the Trustee by such method as the Trustee shall deem fair and appropriate.
The Pricing Supplement relating to each Note will indicate either that such
Note cannot be repaid prior to maturity or that such Note will be repayable at
the option of the holder on a date or dates specified prior to maturity at a
price or prices set forth in the applicable Pricing Supplement, together with
accrued interest to the date of repayment.
In order for a Note to be repaid, the Paying Agent must receive at least 30
days but not more than 45 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 or letter from a
member of a national
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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 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 shall be irrevocable, except as otherwise provided
above under "Subsequent Interest Periods" and "Extension of Maturity". 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 repayment is an authorized denomination.
If a Note is represented by a Global Security, the Depositary's nominee will
be the holder of such Note and therefore will be the only entity that can
exercise a right to repayment. In order to ensure that the Depositary's
nominee will timely exercise a right to repayment with respect to a particular
Note, the beneficial owner of an interest in such Note must instruct the
broker or other direct or indirect participant through which it holds an
interest in such Note to notify the Depositary of its desire to exercise a
right to repayment. Different firms have different cut-off times for accepting
instructions from their customers and, accordingly, each beneficial owner
should consult the broker or other direct or indirect participant through
which it holds an interest in a Note in order to ascertain the cut-off time by
which such an instruction must be given in order for timely notice to be
delivered to the Depositary.
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
of redemption or repayment prior to its Stated Maturity Date shall be the
Amortized Face Amount of such Note as of the date of redemption or the date of
repayment, as the case may be. The "Amortized Face Amount" of an Original
Issue Discount Note shall be the amount equal to (i) the Issue Price set forth
in the applicable Pricing Supplement plus (ii) that portion of the difference
between the Issue Price and the principal amount of such Note that has accrued
at the yield to maturity set forth in the Pricing Supplement (computed in
accordance with generally accepted United States bond yield computation
principles) to such date of redemption or repayment, but in no event shall the
Amortized Face Amount of an Original Issue Discount Note exceed its principal
amount.
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.
DEFEASANCE OF CERTAIN COVENANTS
Unless the applicable Pricing Supplement otherwise specifies, the Company
will have the option to omit to comply with the covenants described under the
headings "Description of Debt Securities--Limitation on Security Interests,"
"--Limitation on Sale and Leaseback Transactions" and "--Limitation on Funded
Debt of Restricted Subsidiaries" in the accompanying Prospectus. See
"Description of Debt Securities--Defeasance of Certain Covenants" in the
accompanying Prospectus.
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CERTAIN CURRENCY RISKS
EXCHANGE RATES AND EXCHANGE CONTROLS
An investment in a Note denominated in a Specified Currency other than the
currency of the country in which a purchaser is resident or the currency
(including any composite currency) in which a purchaser conducts its primary
business (the "home currency") entails significant risks that are not
associated with a similar investment in a security denominated and payable in
the home currency. Similarly, an investment in an Indexed Note entails
significant risks that are not associated with a similar investment in Notes
which are not Indexed Notes. Such risks include, without limitation, the
possibility of significant changes in rates of exchange between the home
currency and the Specified Currency or the Indexed Currency and the
possibility of the imposition or modification of foreign exchange controls
with respect to the Specified Currency or the Indexed Currency. Such risks
generally depend on factors over which the Company has no control, such as
economic and political events and the supply of and demand for the relevant
currencies. In recent years, rates of exchange for certain currencies have
been highly volatile, and such volatility may be expected 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 in
which a Note is denominated against the relevant home currency 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 home
currency basis. Similarly, depreciation of the Denominated Currency of an
Indexed Note against the relevant Indexed Currency would result in the
principal amount payable at the Stated Maturity Date being less than the Face
Amount of such Indexed Note which, in turn, would decrease the effective yield
of such Note below its stated interest rate and could also result in a loss to
the investor. See "Description of Notes--Indexed Notes."
Governments have from time to time imposed, and may in the future impose,
exchange controls that could affect exchange rates as well as the availability
of a Specified Currency for making payments with respect to a Note. At
present, the Company has identified the following currencies and currency
units in which payments on Notes may be made: Australian dollars, British
pounds sterling, Canadian dollars, Danish kroner, German deutsche marks,
Italian lire, Japanese yen, New Zealand dollars, Swiss francs, United States
dollars and ECUs. There can be no assurances that exchange controls will not
restrict or prohibit payments in any such currency or currency unit. Even if
there are no actual exchange controls, it is possible that on a payment date
with respect to any particular Note, the Specified Currency for such Note
would not be available to the Company to make payments then due. In that
event, the Company will make such payments in the manner set forth below under
"Payment Currency."
THIS PROSPECTUS SUPPLEMENT, ANY PRICING SUPPLEMENT HERETO AND THE PROSPECTUS
DO NOT DESCRIBE ALL THE RISKS OF AN INVESTMENT IN NOTES DENOMINATED OR INDEXED
IN A CURRENCY (INCLUDING ANY COMPOSITE CURRENCY) OTHER THAN A PROSPECTIVE
PURCHASER'S HOME CURRENCY, OR OF AN INVESTMENT IN INDEXED NOTES, AND THE
COMPANY DISCLAIMS ANY RESPONSIBILITY TO ADVISE PROSPECTIVE PURCHASERS OF SUCH
RISKS AS THEY EXIST AT THE DATE OF THIS PROSPECTUS SUPPLEMENT OR AS SUCH RISKS
MAY CHANGE FROM TIME TO TIME. PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR OWN
FINANCIAL AND LEGAL ADVISORS AS TO THE RISKS ENTAILED BY AN INVESTMENT IN
NOTES DENOMINATED, OR INDEXED IN A CURRENCY (INCLUDING ANY COMPOSITE CURRENCY)
OTHER THAN THE PARTICULAR HOME CURRENCY OR OF AN INVESTMENT IN INDEXED NOTES.
SUCH NOTES ARE NOT AN APPROPRIATE INVESTMENT FOR PERSONS WHO ARE
UNSOPHISTICATED WITH RESPECT TO FOREIGN CURRENCY TRANSACTIONS.
Unless otherwise provided in the applicable Pricing Supplement, Notes
denominated in foreign currencies other than ECUs will not be sold in, or to
residents of, the country of the Specified Currency in which particular Notes
are denominated.
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The Pricing Supplement relating to each Note denominated in a Specified
Currency other than U.S. dollars or any Indexed Note will contain information
concerning historical exchange rates for such Specified Currency against U.S.
dollars, Denominated Currency and/or Indexed Currency, as the case may be, a
description of such currency or currencies and any exchange controls affecting
such currency or currencies.
PAYMENT CURRENCY
Except as set forth below, if payment on a Note is required to be made in a
Specified Currency other than U.S. dollars and on a payment date with respect
to such Note such currency is unavailable due to the imposition of exchange
controls or other circumstances beyond the Company's control, or is no longer
used by the government of the country issuing such currency or for the
settlement of transactions by public institutions of or within the
international banking community, then all payments due on such payment date
shall be made in U.S. dollars. The amount so payable on any payment date in
such foreign currency shall be converted into U.S. dollars at a rate
determined by the Exchange Rate Agent on the basis of the Market Exchange Rate
as of the second Business Day prior to such payment date or, if no Market
Exchange Rate is available as of such date, as of the most recently available
Market Exchange Rate for such currency, or as otherwise indicated in the
applicable Pricing Supplement. Any payment in respect of such Note made under
such circumstances will not constitute an Event of Default under the
Indenture.
If payment on a Note is required to be made in ECUs and on a payment date
with respect to such Note ECUs are unavailable due to the imposition of
exchange controls or other circumstances beyond the Company's control, or are
no longer used in the European Monetary System, then all payments due on such
payment date shall be made in U.S. dollars. The amount so payable on any
payment date in ECUs shall be converted into U.S. dollars at a rate determined
by the Exchange Rate Agent as of the second Business Day prior to the date on
which such payment is due on the following basis: The component currencies of
the ECUs for this purpose (the "Components") shall be the currency amounts
that were components of the ECUs as of the last date on which ECUs were used
in the European Monetary System. The equivalent of ECUs in U.S. dollars shall
be calculated by aggregating the U.S. dollar equivalents of the Components.
The U.S. dollar equivalent of each of the Components shall be determined by
the Exchange Rate Agent on the basis of the Market Exchange Rate as of the
second Business Day prior to such payment date or, if no Market Exchange Rate
is available as of such date, as of the most recently available Market
Exchange Rate for the Components, or as otherwise indicated in the applicable
Pricing Supplement.
If the official unit of any component currency is altered by way of
combination or subdivision, the number of units of that currency as a
Component shall be divided or multiplied in the same proportion. If two or
more component currencies are consolidated into a single currency, the amounts
of those currencies as Components shall be replaced by an amount in such
single currency equal to the sum of the amounts of the consolidated component
currencies expressed in such single currency. If any component currency is
divided into two or more currencies, the amount of that currency as a
Component shall be replaced by amounts of such two or more currencies, each of
which shall have a value on the date of division equal to the amount of the
former component currency divided by the number of currencies into which that
currency was divided.
All determinations referred to above made by the Exchange Rate Agent shall
be at its sole discretion (except to the extent expressly provided herein or
in the applicable Pricing Supplement that any determination is subject to
approval by the Company) and, in the absence of manifest error, shall be
conclusive for all purposes and binding on holders of the Notes and the
Company, and the Exchange Rate Agent shall have no liability therefor.
FOREIGN CURRENCY JUDGMENTS
The Notes will be governed by and construed in accordance with the laws of
the State of Illinois. Judgments for money damages by courts in the United
States, including a money judgment based on an obligations expressed in a
foreign currency, have ordinarily been rendered only in U.S. dollars. Certain
Illinois decisions have permitted the conversion of an amount of money damages
denominated in a foreign currency into a
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judgment in U.S. dollars at the rate of exchange prevailing either on the date
the cause of action arose or the date the judgment was entered. However, under
Illinois law, a judgment of an Illinois court on a claim under an obligation
expressed in a currency other than U.S. dollars must be stated in the currency
of the claim. Unless otherwise provided in the obligation, such a judgment is
payable in the currency of the judgment, or, at the option of the debtor, in
U.S. dollars based upon the spot rate of exchange on the banking day next
preceding the date on which the judgment is satisfied.
CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS
The following summary of certain United States federal income tax
consequences of the ownership of a Note is based upon the advice of Bell, Boyd
& Lloyd, tax counsel to the Company. This summary is based on the Internal
Revenue Code of 1986, as amended (the "Code"), temporary and final regulations
(the "Regulations"), rulings and decisions in effect on the date of this
Prospectus Supplement and proposed regulations under the Code, all of which
are subject to change. It deals only with Notes held as capital assets and
does not address tax considerations applicable to investors that may be
subject to special tax rules, such as financial institutions, tax-exempt
organizations, insurance companies or dealers in securities or currencies,
persons that will hold Notes as a position in a "straddle" or as part of a
hedging transaction for tax purposes, persons that have a "functional
currency" other than U.S. dollars or purchasers of Notes that are denominated
in certain hyperinflationary currencies. It does not deal with holders of the
Notes other than original purchasers. Additional United States federal income
tax considerations applicable to particular Notes may be set forth in the
applicable Pricing Supplement.
Potential investors should consult their own tax advisors in determining the
tax considerations that may be relevant in connection with holding, purchasing
or disposing of the Notes, including the application to their particular
situation of the tax considerations discussed below, as well as the
application of state, local, foreign or other tax laws.
UNITED STATES HOLDERS
For purposes of the following discussion, "United States holder" means (i)
an individual who is a citizen or resident of the United States for United
States federal income tax purposes, a corporation, partnership or other entity
created or organized in or under the laws of the United States or of any
political subdivision thereof, an estate the income of which is subject to
United States federal income taxation regardless of its source or any trust if
a court within the United States is able to exercise primary supervision over
the administration of the trust and one or more United States fiduciaries have
the authority to control all substantial decisions of the trust ("United
States persons"), or (ii) any other person or entity that otherwise is subject
to United States federal income taxation on a net income basis in respect of a
Note. The following discussion pertains only to United States holders. Certain
federal income tax consequences of the ownership of Notes by persons other
than United States holders ("non-United States holders") are summarized below
under "Non-United States Holders."
Payments of Interest
Payments of interest on a Note will be taxable to a United States holder as
ordinary interest income at the time that such payments are accrued or are
received (in accordance with the United States holder's method of tax
accounting). The treatment of interest payments on a Note denominated in a
currency or currency unit other than the U.S. dollar (a "Foreign Currency
Note") is described below under "Foreign Currency Notes."
Purchase, Sale and Retirement of Notes
A United States holder's tax basis in a Note generally will equal the cost
of such Note to such holder, increased by any amounts includible in income by
the holder as original issue discount and reduced by any amortized premium and
any payments other than interest made on such Note.
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Upon the sale, exchange or retirement of a Note, a United States holder
generally will recognize gain or loss equal to the difference between the
amount realized on the sale, exchange or retirement (less any accrued interest,
which will be taxable as such) and the holder's tax basis in the Note. The
treatment of the purchase, sale and retirement of a Foreign Currency Note is
described below under "Foreign Currency Notes."
Except as discussed below with respect to foreign currency gain or loss, gain
or loss recognized by a United States holder on the sale, exchange or
retirement of a Note generally will be long-term capital gain or loss if the
United States holder has held the Note for more than one year at the time of
such disposition. Capital gains recognized to United States holders which are
corporations will generally be taxed in the same manner as ordinary income.
Long-term capital gains recognized to United States holders other than
corporations will be subject to tax at a maximum rate of 28%. Capital losses in
excess of capital gains may be deducted from ordinary income by United States
holders other than corporations only in an amount not to exceed $3,000 in any
taxable year; capital losses are deductible by United States holders which are
corporations only to the extent of capital gains.
Original Issue Discount
United States holders of Original Issue Discount Notes generally will be
subject to the special tax accounting rules for original issue discount
obligations provided by the Code, the Regulations and certain proposed
regulations thereunder. United States holders of such Notes should be aware
that, as described in greater detail below, they generally must include
original issue discount in ordinary gross income for United States federal
income tax purposes as it accrues, in advance of the receipt of cash
attributable to that income. Additional rules applicable to Original Issue Date
Discount Notes that also are Foreign Currency Notes are set forth below under
"Foreign Currency Notes."
In general, each United States holder of an Original Issue Discount Note,
whether such holder uses the cash or the accrual method of tax accounting, will
be required to include in ordinary gross income the sum of the "daily portions"
of original issue discount on the Note for all days during the taxable year on
which the United States holder owns the Note. The daily portions of original
issue discount on an Original Issue Discount Note are determined by allocating
to each day in any accrual period a pro rata portion of the original issue
discount allocable to that accrual period. The "accrual period" for an Original
Issue Discount Note 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
each scheduled payment of principal or interest occurs on the first day or the
final day of an accrual period. The amount of original issue discount on an
Original Issue Discount Note allocable to each accrual period is determined by
(i) multiplying the "adjusted issue price" (as defined below) of the Note at
the beginning of an accrual period by a fraction, the numerator of which is the
applicable yield to maturity (determined by compounding at the end of each
accrual period and properly adjusted for the length of the accrual period) of
the Note and the denominator of which is the number of accrual periods in a
year and (ii) subtracting from that product the amount payable as interest
during that accrual period. The "adjusted issue price" of an Original Issue
Discount Note at the beginning of any accrual period will be the sum of its
issue price (including accrued interest) and the amount of original issue
discount allocable to all prior accrual periods, reduced by the amount of all
payments other than interest payments made with respect to such Note in all
prior accrual periods. As a result of this "constant yield" method of including
original issue discount income, the amounts so includible in income by a United
States holder in respect of an Original Issue Discount Note are lesser in the
earlier years and greater in the later years than the amounts that would be
includible on a straight-line basis (ignoring the effect of foreign currency
exchange rate fluctuations in the case of a Foreign Currency Note).
For purposes of determining the yield to maturity and the amount of original
issue discount of an Original Issue Discount Note, all Notes issued to a holder
as part of the same issue (i.e., Notes with the same credit and payment terms
and sold at substantially the same time pursuant to a common plan of marketing)
may be aggregated as a single Note.
The Regulations also set forth certain rules regarding the treatment of a
debt instrument that may be either purchased or retired by the issuer before
its stated maturity date, or have its maturity date extended, at the option
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of the issuer or the holder of such debt instrument. Pursuant to these rules,
the debt instrument will be presumed to be purchased or retired by the issuer
or to have its maturity date extended, depending on the impact of such action
on the yield to maturity of such debt instrument. These rules may affect the
amount of original issue discount of an Original Issue Discount Note depending
on the specific terms of such Note.
In the case of a Floating Rate Note, if the rate of interest on such Note is
based on current values of a single "qualified floating rate" and the Note is
an Original Issue Discount Note, then the "yield to maturity," the "adjusted
issue price" and the "amount payable as interest" will be determined for
purposes of computing the original issue discount on such Note allocable to
each accrual period as if the Note were to bear interest in all periods at a
fixed rate equal to the level of the Base Rate (as adjusted by the applicable
Spread or Spread Multiplier) on the Original Issue Date. Interest on such Note
that is actually paid to the holder on an Interest Payment Date will be
includible by the holder in income, as described above. If the rate of interest
on such Note is not based on current values of an "objective rate" or
"qualified floating rates," then such Note will be treated as a contingent
payment debt instrument. In general, the amount of original issue discount will
be determined pursuant to a projected payment schedule constructed by the
issuer.
In general, a holder of a Note who uses the cash method of tax accounting
(e.g., an individual) is not required to accrue original issue discount with
respect to an Original Issue Discount Note that matures one year or less from
the date of its issuance (a "short-term Original Issue Discount Note") unless
an election is made by such holder to do so. A United States holder who reports
income for United States federal income tax purposes on the accrual method of
tax accounting or who makes the election to accrue original issue discount with
respect to such a Note is required to include original issue discount on such a
Note on a straight-line basis, unless an election is made to accrue the
original issue discount according to a constant interest method based on daily
compounding. In the case of a United States holder who 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 the short-term Original
Issue Discount Note will be ordinary income to the extent of the original issue
discount accrued on a straight-line basis (or, if elected, according to a
constant interest method based on daily compounding) through the date of sale,
exchange or retirement. In addition, such a non-electing holder who is not
subject to the current inclusion requirement described in this paragraph will
be required to defer deductions for any interest paid on indebtedness incurred
or continued to purchase or carry such a short-term Original Issue Discount
Note in an amount not exceeding the deferred interest income, until such
deferred interest income is realized.
Premium
A United States holder of a Note who purchases the Note at a cost greater
than its principal amount generally will be considered to have purchased the
Note at a premium. Such holder may amortize such premium, using a constant
yield method, over the remaining term of the Note and, except as future
regulations issued by the United States Treasury Department may otherwise
provide, may apply such amortized amounts to reduce the amount of interest
income reportable with respect to such Note over the period from the purchase
date to the date of maturity of the Note. The treatment of premium on a Foreign
Currency Note is described below under "Foreign Currency Notes."
Foreign Currency Notes
The following is a summary of certain United States federal income tax
considerations that may be relevant to a United States holder of a Foreign
Currency Note. Certain United States federal income tax considerations that may
be relevant to a non-United States holder of a Foreign Currency Note are
summarized under "Non-United States Holders" below.
If a United States holder elects to receive payments of interest pursuant to
the terms of a Foreign Currency Note in a currency or composite currency other
than U.S. dollars ( a "foreign currency"), the amount of interest income
realized by the United States holder will be the U.S. dollar value of the
foreign currency payment (determined as of the time that such payment is
accrued or is received, in accordance with the United States
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holder's method of tax accounting), regardless of whether the payment in fact
is converted into U.S. dollars. A United States holder that is required to
accrue interest income (pursuant to the original issue discount provisions, as
described above, or because it uses an accrual method of accounting for tax
purposes) will recognize foreign currency gain or loss, as the case may be, on
the receipt of a foreign currency interest payment or an interest payment in
U.S. dollars, the amount of which is determined by reference to the value of a
foreign currency, if the exchange rate in effect on the date the payment is
received differs from the average exchange rate applicable for the accrual
period. An additional foreign currency gain or loss could result on the sale
or other disposition of foreign currency received if the exchange rate on the
date of sale or other disposition differs from the exchange rate on the date
of receipt. A United States holder will have a tax basis in foreign currency
equal to the U.S. dollar value of such foreign currency, determined at the
time of receipt. Any foreign currency gain or loss recognized by a United
States holder on the accrual of interest income or on a sale or other
disposition of foreign currency (including its exchange for U.S. dollars) will
be treated as ordinary income or loss, and will not be treated as interest
income or expense.
Treasury Regulations currently specify the exchange rates to be used to
convert foreign currency denominated interest payments into U.S. dollars for
United States federal income tax purposes. These exchange rates may not be the
same exchange rates as those determined by the Exchange Rate Agent for
converting interest payments on a Foreign Currency Note into U.S. dollars.
Therefore, a holder of a Foreign Currency Note that receives interest payments
in U.S. dollars may realize more or less interest income for United States
federal income tax purposes than it receives in cash.
The cost of a Foreign Currency Note to a United States holder will be the
U.S. dollar value of the foreign currency purchase price on the date of
purchase. The amount of any subsequent adjustments to a United States holder's
tax basis in a Foreign Currency Note in respect of original issue discount and
premium will be determined in the manner described generally above and more
specifically below. A United States holder who purchases a Note with foreign
currency will recognize foreign currency gain or loss attributable to the
difference, if any, between his tax basis in the foreign currency and the fair
market value of the Note in U.S. dollars on the date of purchase of such Note.
If a United States holder elects to receive foreign currency in respect of
the sale, exchange or retirement of a Foreign Currency Note, the amount
realized generally will be the U.S. dollar value of the foreign currency
received (on the date that payment is received or the Note is disposed of, in
accordance with the United States holder's method of tax accounting). In
addition, a holder will recognize foreign currency gain or loss on the
principal of a Foreign Currency Note attributable to the movement in exchange
rates between the time of purchase and the time of sale, exchange or
retirement of the Note. Such foreign currency gain or loss cannot exceed the
related non-exchange gain or loss. An additional foreign currency gain or loss
could result on the sale or other disposition of the foreign currency received
if the exchange rate on the date of sale or other disposition differs from the
exchange rate on the date of receipt. A United States holder will have a tax
basis in any foreign currency received on the sale, exchange or retirement of
a Note equal to the U.S. dollar value of such foreign currency, determined at
the time of such sale, exchange or retirement. Any foreign currency gain or
loss realized by a United States holder on the sale, exchange or retirement of
a Foreign Currency Note or on a sale or other disposition of foreign currency
(including its exchange for U.S. dollars) will be treated as ordinary income
or loss and will not be treated as interest income or expense.
A holder who receives U.S. dollar payments on the sale, exchange or
retirement of a Foreign Currency Note may have a different amount realized for
United States federal income tax purposes than the amount it receives in cash,
because the relevant exchange rates required to be used for United States
federal income tax purposes may not be the same as the exchange rates used by
the Exchange Rate Agent to convert foreign currency payments into U.S. dollar
payments.
In the case of a Foreign Currency Note that is also an Original Issue
Discount Note, a United States holder should determine the U.S. dollar amount
includible in income as original issue discount for each accrual period by (i)
calculating the amount of original issue discount allocable to each accrual
period in the foreign currency
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using the constant yield method described above and (ii) translating the
foreign currency amount so derived at the average exchange rate in effect
during that accrual period. Because exchange rates may fluctuate, a United
States holder of a Foreign Currency Note that is also an Original Issue
Discount Note may recognize a different amount of original issue discount
income in each accrual period than would the holder of a similar Original
Issue Discount Note denominated in U.S. dollars. As noted above, such holder
may recognize foreign currency gain or loss with respect to original issue
discount on a Foreign Currency Note that is also an Original Issue Discount
Note.
A United States holder should calculate the amortizable premium on a Foreign
Currency Note in the foreign currency in which the Note is denominated (or in
which the payments are determined). Amortizable premium generally will reduce
the United States holder's interest income measured in foreign currency.
Foreign currency exchange gain or loss will be realized with respect to
amortizable premium based on the difference between the spot exchange rate on
the date the premium is paid to acquire the Note and the spot exchange rate on
the date the premium is treated as being returned as part of the stated
interest.
The provisions governing the taxation of foreign currency transactions
otherwise may affect the taxation of payments received by a United States
holder of a Foreign Currency Note. Thus, for example, the source of foreign
currency gains and losses is generally determined by reference to the
residence of the taxpayer.
Indexed Notes
Because of the lack of existing authority, potential investors should
consult their own tax advisors in determining the tax consequences of holding,
purchasing or disposing of Indexed Notes, including the application of the
United States federal income tax laws to their particular situations, as well
as the application of state, local, foreign or other tax laws.
NON-UNITED STATES HOLDERS
Under present United States federal income tax law, and subject to the
discussion of backup withholding below, interest and principal payments,
including premium, and original issue discount on an Original Issue Discount
Note, made by the Company or any of its paying agents on a Note to any holder
which is not a United States holder (a "foreign holder") will not be subject
to United States withholding tax, provided that in the case of original issue
discount or interest, (i) the 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) the holder is not a controlled foreign
corporation that is related to the Company through stock ownership, (iii) the
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 to
the Company or its agent, under penalties of perjury, that it is not a United
States person (as defined above) and provides its 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 on behalf of the beneficial owner
certifies to the Company or its agent, under penalties of perjury, that such
statement 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.
If a foreign holder of a Note 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, such holder,
although exempt from the withholding tax discussed in the preceding paragraph,
may be subject to United States federal income tax on such interest and
original issue discount in the same manner as if it were a United States
holder. In lieu of the certificate described in the preceding paragraph, such
a holder must provide the payor with a properly executed Internal Revenue
Service Form 4224 to claim an exemption from United States federal withholding
tax. However, such holder of a Note may still be required to provide the
certification described in the preceding paragraph in order to obtain an
exemption from "backup" withholding, discussed below. In addition, if such a
holder is a foreign corporation, it may be subject to a branch profits tax
equal to 30% of its effectively connected earnings and profits for the taxable
year, subject to certain adjustments. For this purpose,
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<PAGE>
interest and original issue discount on a Note will be included in earnings
and profits if the interest and original issue discount is effectively
connected with the conduct of the United States trade or business of the
holder.
A foreign holder will not be subject to United States federal income tax on
gain realized on the sale, exchange or retirement of a Note if such gain is
not effectively connected with the conduct of a United States trade or
business and, in the case of a foreign holder who is an individual, such
holder is not present in the United States for a total of 183 days or more
during the taxable year in which such gain is realized.
A Note held by an individual who at the time of death is not a citizen or
resident of the United States (including its territories, possessions and
other areas subject to its jurisdiction, such as the Commonwealth of Puerto
Rico) will not be subject to United States federal estate tax as a result of
such individual's death if the individual 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 and, at the time of the individual's death,
payments with respect to the Note would not have been effectively connected
with the conduct of a trade or business by the individual in the United
States.
Recently proposed Treasury Regulations, generally effective for payments
made after December 31, 1997, could affect the procedures to be followed by a
foreign holder in establishing eligibility for a withholding tax reduction, or
exemption. In general, the proposed regulations would require certain foreign
holders to provide additional information in order to establish an exemption
from or reduction in the rate of, withholding tax or backup withholding tax,
and in particular would require that foreign partnerships and partners of a
foreign partnership provide certain information and comply with certain
certification requirements not required under existing law. It is not possible
to predict whether, or in what form, the proposed regulations ultimately will
be adopted.
INFORMATION REPORTING AND BACKUP WITHHOLDING
The 31% "back-up" withholding and information reporting requirements apply
to certain payments of principal (and premium, if any) and interest on an
obligation, and to certain payments of proceeds of the sale or redemption of
an obligation, to certain noncorporate United States persons. The Company, its
agent, a broker, the Trustee or the Paying Agent, as the case may be, will be
required to withhold from any payment that is subject to backup withholding a
tax equal to 31% of such payment if the holder fails to furnish his taxpayer
identification number (social security number or employer number), to certify
that such holder is not subject to backup withholding, or to otherwise comply
with the applicable requirements of the backup withholding rules. Certain
holders (including, among others, all corporations and persons who are not
United States persons) are not subject to the backup withholding and reporting
requirements.
Under the Regulations, backup withholding and information reporting will not
apply to payments made by the Company or any agent thereof (in its capacity as
such) to a holder of a Note with respect to which the holder has provided
certification that it is not a United States person under penalties of perjury
as set forth in clause (iv) in the first paragraph under "Non-United States
Holders", or has otherwise established an exemption (provided that neither the
Company nor such agent has actual knowledge that the holder is a United States
person or that the conditions of any other exemption are not in fact
satisfied).
Under the Regulations, payments on the sale, exchange or retirement of a
Note to or through a foreign office of a broker will be subject to information
reporting if the broker is a United States person, a controlled foreign
corporation for United States federal income tax purposes or a foreign person
50% or more of whose gross income from all sources is effectively connected
with the conduct of a United States trade or business for a specified three-
year period, unless the broker has in its records documentary evidence that
the beneficial owner is not a United States person and certain other
conditions are met , or the beneficial owner otherwise establishes an
exemption. However, under the Regulations such payments will not be subject to
backup withholding unless the payor has actual knowledge that the payee is a
United States person. Payment of the proceeds from the sale
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<PAGE>
of a Note to or through the United States office of a broker is subject to
information reporting and backup withholding unless the holder or beneficial
owner certifies that it is not a United States person or otherwise establishes
an exemption from information reporting and backup withholding. Provisions
relating to information reporting and backup withholding are the subject of
proposed regulations which would modify the current rules in certain respects
for payments made after December 31, 1997.
Any amounts withheld under the backup withholding rules from a payment to a
holder will be allowed as a refund or a credit against such holder's United
States federal income tax liability, provided that the required information is
provided to the Internal Revenue Service.
PLAN OF DISTRIBUTION
The Notes are being offered on a continuous basis by the Company through
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated and
Donaldson, Lufkin & Jenrette Securities Corporation, which have agreed to use
their best efforts to solicit purchases of the Notes, and may also be sold to
any Agent for resale to investors at varying prices related to prevailing
market prices at the time of resale to be determined by such Agent. The Company
reserves the right to sell Notes directly on its own behalf, through an
affiliated entity or through other agents on substantially similar terms. The
Company will have the sole right to accept offers to purchase Notes. The
Company or the Agents may reject any proposed purchase of Notes in whole or in
part. The Company will pay each Agent a commission, which may be in the form of
a discount, of .125% to .750%, depending upon maturity, of the principal amount
of Notes sold through such Agent (provided that the commission payable with
respect to Notes with maturities greater than 30 years will be negotiated at
the time of issuance of such Notes), and may also sell Notes to any Agent, as
principal, at or above par or at a discount to be agreed upon at the time of
sale for resale to one or more investors at varying prices related to
prevailing market prices at the time of resale, as determined by such Agent.
No Note will have an established trading market when issued. The Notes will
not be listed on any securities exchange. Each Agent may make a market in the
Notes, but no Agent is obligated to do so and may discontinue any market-making
at any time without notice. There can be no assurance that the Notes offered
hereby will be sold or that there will be a secondary market for any of the
Notes.
The Company has agreed to indemnify the Agents against certain liabilities,
including liabilities under the Securities Act of 1933. The Company has also
agreed to reimburse the Agents for certain expenses.
The Agents engage in transactions with and perform various investment banking
and other services for the Company.
LEGAL OPINIONS
The validity of the Notes offered hereby will be passed on for the Company by
Herbert A. Getz, Esq., General Counsel of the Company, and for the Agents by
Mayer, Brown & Platt, 190 South LaSalle Street, Chicago, Illinois 60603. As of
March 31, 1997, Mr. Getz, his wife and his children had an aggregate beneficial
ownership of 81,545 shares of common stock of the Company and options to
purchase 279,714 shares of common stock of the Company. Mr. Getz disclaims
beneficial ownership of his wife's and children's shares.
Attorneys who are members or employees of Bell, Boyd & Lloyd, tax counsel to
the Company with respect to the offer and sale of Notes, had aggregate
beneficial ownership as of March 31, 1997 of 2,990 shares of common stock of
the Company.
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<PAGE>
PROSPECTUS
$1,250,000,000
LOGO
WMX TECHNOLOGIES, INC.
DEBT SECURITIES
----------------
WMX Technologies, Inc. (the "Company") intends from time to time to issue up
to U.S. $1,250,000,000, or the equivalent thereof in other currencies or
composite currencies, aggregate principal amount of its unsecured debt
securities (the "Debt Securities"). The Debt Securities will be offered for
sale on terms to be determined when the agreement to sell is made or at the
time of sale, as the case may be. For each issue of Debt Securities in respect
of which this Prospectus is being delivered (the "Offered Debt Securities")
there is an accompanying Prospectus Supplement (the "Prospectus Supplement")
that sets forth the designation, designated currency, aggregate principal
amount, rate or method of calculation of interest, if any, and dates for
payment thereof, maturity, authorized denominations, initial price, any
redemption or prepayment rights at the option of the Company or the holder and
other special terms of the Offered Debt Securities, together with the terms of
the offering of the Offered Debt Securities and the net proceeds to the
Company from the sale thereof. In the event of the issuance of Debt Securities
at original issue discount, the aggregate principal amount of Debt Securities
offered hereby will be a higher amount, provided that the total price at which
Debt Securities are sold to the public pursuant to this Prospectus will not
exceed U.S. $1,250,000,000, or the equivalent thereof in other currencies or
composite currencies. If any agents of the Company or any underwriters are
involved in the sale of the Offered Debt Securities in respect of which this
Prospectus is being delivered, the names of such agents or underwriters and
any applicable commissions and discounts are set forth in the Prospectus
Supplement.
The Debt Securities will be sold directly, through agents designated from
time to time, or through underwriters or dealers.
The Company may make application to list one or more series of Debt
Securities on one or more national securities exchanges. Any such application
to list the Offered Debt Securities is described in the Prospectus Supplement
related thereto.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
----------------
The date of this Prospectus is April , 1997
<PAGE>
AVAILABLE INFORMATION
WMX Technologies, Inc. (the "Company") is subject to the informational
requirements of the Securities Exchange Act of 1934 (the "1934 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 maintained by the Commission at Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549; and at the regional offices of
the Commission at Seven World Trade Center, New York, New York 10048, and 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material can be obtained at prescribed rates from the Public Reference Section
of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. The
Commission maintains a Web site that contains reports, proxy and information
statements and other information concerning registrants that file
electronically with the Commission, which can be accessed at
http://www.sec.gov. Such reports and other information concerning the Company
can also be inspected at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005.
This Prospectus constitutes a part of two Registration Statements (the
"Registration Statements") filed by the Company with the Commission under the
Securities Act of 1933. This Prospectus omits certain of the information
contained in the Registration Statements, and reference is hereby made to the
Registration Statements and to the exhibits relating thereto for further
information with respect to the Company and the Debt Securities offered
hereby. Any statements contained herein concerning the provisions of any
document are not necessarily complete, and, in each instance, reference is
hereby made to the copy of such document filed as an exhibit to the
Registration Statements or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
DOCUMENTS INCORPORATED BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended December 31,
1996 and Current Reports on Form 8-K dated February 4, February 18, April 1
and April 15, 1997, heretofore filed by the Company with the Commission under
the 1934 Act, are incorporated herein by reference.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the 1934 Act after the date of this Prospectus and prior to the
termination of the offering of the Debt Securities offered hereby (except to
the extent specified therein or in rules or regulations of the Commission)
shall be deemed to be incorporated in this Prospectus by reference and to be
part hereof 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.
The Company will provide without charge to each person to whom a copy of
this Prospectus has been delivered, on the written or oral request of such
person, a copy of any or all of the documents referred to above which have
been or may be incorporated in this Prospectus by reference other than
exhibits to such documents, unless such exhibits are specifically incorporated
by reference into the incorporated document. Requests for such copies should
be directed to: WMX Technologies, Inc., 3003 Butterfield Road, Oak Brook,
Illinois 60521, Attention: Communications Department (telephone: 630/572-
8800).
2
<PAGE>
WMX TECHNOLOGIES, INC.
WMX Technologies, Inc. (the "Company") is a leading international provider of
waste management services.
The Company provides integrated solid waste management services in North
America through Waste Management, Inc., a wholly owned subsidiary of the
Company (referred to herein, together with its subsidiaries and certain
affiliated companies providing waste management and related services, as "Waste
Management"). The Company's solid waste management services are provided to
commercial, industrial, municipal and residential customers, as well as to
other waste management companies and consist of solid waste collection,
transfer, resource recovery and disposal services. As part of these services,
the Company is engaged in providing, through its Recycle America(R), Recycle
Canada(R) and other programs, paper, glass, plastic and metal recycling
services to commercial and industrial operations and curbside collection of
such materials from residences and in removing methane gas from sanitary
landfill facilities for use in electricity generation. In addition, through
Waste Management the Company provides Port-O-Let(R) portable sanitation
services to municipalities and commercial and special event customers. Waste
Management also manages the on-site industrial cleaning services businesses
owned by the Company's Rust International Inc. subsidiary.
The Company also provides hazardous waste management services. The Company's
chemical waste treatment, storage, disposal and related services in North
America are provided through Waste Management and Chemical Waste Management,
Inc., a wholly owned subsidiary of the Company, and are provided to commercial
and industrial customers, as well as to other waste management companies and to
governmental entities. Through Advanced Environmental Technical Services,
L.L.C., a 60%-owned subsidiary of the Company, the Company provides on-site
integrated hazardous waste management services, including hazardous waste
identification, packaging, removal and recycling services to industrial,
institutional and governmental customers. Through its wholly owned Chem-Nuclear
Systems, L.L.C. subsidiary, the Company also furnishes radioactive waste
management services, primarily to electric utilities and governmental entities.
The Company provides comprehensive waste management and related services
outside North America through Waste Management International plc, a subsidiary
owned approximately 56% by the Company and 12% each by the Company's Rust
International Inc. and Wheelabrator Technologies Inc. subsidiaries (referred to
herein, together with its subsidiaries, as "Waste Management International").
Waste Management International provides a wide range of solid and hazardous
waste management and related services (or has interests in projects or
companies providing such services) in ten countries in Europe, seven countries
in the Asia-Pacific region and Argentina, Brazil and Israel. Until February
1997, when the interest was sold, Waste Management International also had an
approximately 20% interest in Wessex Water Plc, an English publicly traded
company providing water treatment, water distribution, wastewater treatment and
sewage services.
Wheelabrator Technologies Inc. an approximately 65% owned subsidiary of the
Company (referred to herein, together with its subsidiaries, as "WTI"), is a
leading developer of facilities and systems for, and provider of services to,
the trash-to-energy and waste fuel powered independent power markets. WTI
develops, arranges financing for, operates and owns facilities that dispose of
trash and other waste materials in an environmentally acceptable manner by
recycling them into electrical or steam energy. WTI is also pursuing the
development, ownership and operation of power plants for industrial customers.
In addition, WTI is involved in the treatment and management of biosolids
resulting from the treatment of wastewater by converting them into useful
fertilizers and the recycling of organic wastes into compost material useable
for horticultural and agricultural purposes. WTI also designs, fabricates and
installs technologically advanced air pollution control systems and equipment.
In 1996, WTI sold its water process, manufacturing and custom engineering
business and on April 1, 1997, sold its water contract operations, outsourcing
and privatization business.
Rust International Inc., a subsidiary owned approximately 60% by the Company
and 40% by WTI (referred to herein, together with its subsidiaries, as "Rust"),
provides a variety of on-site industrial cleaning services, a
3
<PAGE>
business which is managed by Waste Management, and provides hazardous,
radioactive and mixed waste program and facilities management services,
primarily to the United States Department of Energy and other federal
government agencies. Such services include waste treatment, storage,
characterization and disposal and privatization services. Rust also has an
approximately 41% interest in NSC Corporation, a publicly traded provider of
asbestos abatement and other specialty contracting services, and an
approximately 37% interest in OHM Corporation, a publicly traded provider of
environmental remediation services. Rust also provides environmental and
infrastructure engineering and consulting services, a business which is to be
sold or otherwise disposed of. In 1996, Rust sold its process engineering,
construction, specialty contracting and related services business and its
scaffolding rental and erection business.
Until April 1, 1997, when the interest was sold, the Company also owned an
approximately 20% interest in ServiceMaster Limited Partnership, a provider of
management services, including management of health care, education and
commercial facilities, and lawn care, pest control and other consumer
services.
The Company's strategic plans call for the Company to focus on the provision
of waste management services and to sell or discontinue various businesses
which do not fit within that focus. The Company has therefore reported its
continuing operations as being within a single industry segment--waste
management services. The Company's continuing consolidated revenues were
approximately $8.5 billion in 1994, $9.1 billion in 1995 and $9.2 billion in
1996. For information relating to the expenses and assets of the Company's
operations, see the Company's Consolidated Financial Statements incorporated
in this Prospectus by reference to the Company's Annual Report on Form 10-K
for the year ended December 31, 1996, and for information relating to the
Company's operations in different geographic groups, see Note 13 thereto. For
interim periods, the revenues and net income of certain of the Company's
operations may fluctuate for a number of reasons, including there being for
some businesses less activity in the winter months.
Regulatory or technological developments relating to the environment may
require companies engaged in waste management services and related businesses,
including the Company, to modify, supplement or replace equipment and
facilities at costs which may be substantial. Because the continuing business
in which the Company is engaged is intrinsically connected with the protection
of the environment and the potential discharge of materials into the
environment, a material portion of the Company's capital expenditures is,
directly or indirectly, related to such items. See "Management's Discussion
and Analysis of Results of Operations and Financial Condition" incorporated in
this Prospectus by reference to the Company's Annual Report on Form 10-K for
the year ended December 31, 1996 for a review of property and equipment
expenditures by the Company for the last three years. The Company does not
expect such expenditures, which are incurred in the ordinary course of
business, to have a materially adverse impact on its and its subsidiaries'
combined earnings or its or its subsidiaries' competitive position in the
foreseeable future because the Company's businesses are based upon compliance
with environmental laws and regulations and its services are priced
accordingly.
Although the Company strives to conduct its operations in compliance with
applicable laws and regulations, the Company believes that in the existing
climate of heightened legal, political and citizen awareness and concerns,
companies in the waste management services industry, including the Company,
will be faced, in the normal course of operating their businesses, with fines
and penalties and the need to expend funds for remedial work and related
activities with respect to waste treatment, disposal and trash-to-energy
facilities. Where the Company concludes that it is probable that a liability
has been incurred, a provision is made in the Company's financial statements
for the Company's best estimate of the liability based on management's
judgment and experience, information available from regulatory agencies and
the number, financial resources and relative degree of responsibility of other
potentially responsible parties who are jointly and severally liable for
remediation of a specific site, as well as the typical allocation of costs
among such parties. If a range of possible outcomes is estimated and no amount
within the range appears to be a better estimate than any other, then the
Company provides for the minimum amount within the range, in accordance with
generally accepted accounting principles. Such estimates are subsequently
revised, as necessary, as additional information becomes available.
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While the Company does not anticipate that the amount of any such revision
will have a material adverse effect on the Company's operations or financial
condition, the measurement of environmental liabilities is inherently
difficult and the possibility remains that technological, regulatory or
enforcement developments, the results of environmental studies, or other
factors could materially alter this expectation at any time. Such matters
could have a material adverse impact on earnings for one or more fiscal
quarters or years.
While in general the Company's business has benefited from increased
governmental regulation, the business itself is subject to extensive and
evolving regulation by federal, state, local and foreign authorities. Due to
the complexity of regulation of the industry and to public pressure,
implementation of existing and future laws, regulations or initiatives by
different levels of government may be inconsistent and difficult to foresee.
In addition, the demand for certain of the Company's services may be adversely
affected by the amendment or repeal, or reduction in enforcement of, federal,
state and foreign laws and regulations on which the Company's business is
dependent. Demand for certain of the Company's services may also be adversely
affected by delays or reductions in funding, or failure of legislative bodies
to fund, agencies or programs under such laws and regulations. The Company
makes a continuing effort to anticipate regulatory, political and legal
developments that might affect its operations but is not always able to do so.
The Company cannot predict the extent to which any legislation or regulation
that may be enacted, amended, repealed or enforced, or any failure or delay in
enactment or enforcement of legislation or regulations or funding of agencies
or programs, in the future may affect its operations.
The Company was incorporated in Delaware in 1968 and subsequently succeeded
to certain businesses owned by its organizers and others. The Company's common
stock is listed on the New York Stock Exchange under the trading symbol "WMX"
and is also listed on the Frankfurt Stock Exchange, the London Stock Exchange,
the Chicago Stock Exchange and the Swiss Stock Exchanges in Basle, Zurich and
Geneva.
USE OF PROCEEDS
Except as otherwise set forth in the Prospectus Supplement relating to the
Offered Debt Securities, net proceeds to be received by the Company from the
sale of the Debt Securities will be used to retire outstanding indebtedness of
the Company arising from the Company's issuance of commercial paper or other
debt, to fund future acquisitions by the Company, to repurchase shares of the
Company and its publicly-traded subsidiaries and for general corporate
purposes. Pending any such application, the proceeds may be invested
temporarily in short-term securities.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities are to be issued under an Indenture (the "Indenture")
dated as of June 1, 1993, between the Company and The Fuji Bank and Trust
Company, as trustee (the "Trustee"). A copy of the Indenture has been
incorporated by reference as an exhibit to the Registration Statements. The
following summaries of certain provisions of the Debt Securities 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 Indenture,
including the definitions therein of certain terms. Wherever particular
provisions or defined terms of the Indenture (or of any Form of Debt Security
which is adopted pursuant to the Indenture) are referred to, such provisions
or defined terms are incorporated herein by reference.
GENERAL
The Indenture does not limit the amount of Debt Securities which can be
issued thereunder and provides that Debt Securities may be issued thereunder
in one or more series up to the aggregate principal amount which may be
authorized from time to time by the Company. Reference is made to the
Prospectus Supplement for the
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following terms of the Offered Debt Securities: (i) the designation, aggregate
principal amount and authorized denominations of the Offered Debt Securities;
(ii) the percentage of their principal amount at which such Offered Debt
Securities will be issued; (iii) the date on which the Offered Debt Securities
will mature; (iv) the rate per annum at which the Offered Debt Securities will
bear interest, if any; (v) the times at which such interest will be payable;
and (vi) any redemption terms and other special terms. Reference is also made
to the Prospectus Supplement relating to the Offered Debt Securities for
information with respect to any additional covenants that may be included in
the terms of such securities.
The Debt Securities will be issued only in fully registered form without
coupons, which form may be a Global Debt Security as described below. See
"Book-Entry, Delivery and Form." The Company will not charge a service charge
for any registration of transfer or exchange of Debt Securities but may
require payment of a sum sufficient to cover any tax or other governmental
charge in connection therewith. (Section 2.6.)
The Debt Securities will be direct obligations of the Company and will be
unsecured. The Indenture does not restrict the amount of additional unsecured
debt which the Company may incur.
Some of the Debt Securities may be issued at a substantial discount below
their stated principal amount. Certain federal income tax consequences and
other special considerations applicable to any such discounted Debt Securities
will be described in the Prospectus Supplement relating thereto.
BOOK-ENTRY, DELIVERY AND FORM
If the accompanying Prospectus Supplement so indicates, the Offered Debt
Securities will be issued in the form of one or more fully registered global
debt securities (each a "Global Debt Security"). Each Global Debt Security
will be deposited with, or on behalf of, The Depository Trust Company, New
York, New York ("DTC") and registered in the name of DTC's nominee. DTC
currently limits the maximum denomination of any single Global Debt Security
to $200,000,000. Therefore for purposes hereof, "Global Debt Security" refers
to the Global Debt Security or Global Debt Securities representing the entire
issue of Offered Debt Securities.
A Global Debt Security will represent all Offered Debt Securities issued on
the same day and having the same terms, including, but not limited to, the
same interest payment dates, rates of interest (if any), maturity and
repayment and redemption provisions (if any). Ownership of beneficial
interests in Global Debt Securities will be shown on, and transfers thereof
will be effected only through, records maintained by DTC (with respect to
interests of participants) and its participants (with respect to interests of
persons other than participants). Payments of principal and interest on
beneficial interests in Global Debt Securities will be made through the
Trustee to DTC. Global Debt Securities will not be exchangeable for a
certificate in definitive registered form ("Certificated Notes") and, except
as set forth herein, will not otherwise be issuable in definitive form.
Except as set forth below, the Global Debt Security may be transferred, in
whole and not in part, only to another nominee of DTC or to a successor of DTC
or its nominee.
DTC has advised the Company and any underwriters named in the accompanying
Prospectus Supplement as follows: DTC is a limited-purpose trust company
organized under the New York Banking Law, a "banking organization" within the
meaning of the New York Banking Law, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the New York Uniform Commercial
Code, and a "clearing agency" registered pursuant to the provisions of Section
17A of the Securities Exchange Act of 1934, as amended. DTC holds securities
that its participants ("Participants") deposit with DTC. DTC also facilitates
the settlement among Participants of securities transactions, such as
transfers and pledges, in deposited securities through electronic computerized
book-entry changes in each Participant's account, thereby eliminating the need
for physical movement of securities certificates. Direct Participants ("Direct
Participants") include securities brokers and dealers, banks, trust companies,
clearing corporations, and certain other organizations. DTC is owned by a
number of its Direct Participants and by the New York Stock Exchange, Inc.,
the American Stock Exchange,
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Inc. and the National Association of Securities Dealers, Inc. Access to DTC's
system is also available to others such as securities brokers and dealers,
banks and trust companies that clear through or maintain a custodial
relationship with a Direct Participant, either directly or indirectly
("Indirect Participants"). The rules applicable to DTC and its Participants
are on file with the Commission.
Purchases of beneficial interests in Global Debt Securities under DTC's
system must be made by or through Direct Participants, which will receive a
credit for the beneficial interests in Global Debt Securities on DTC's
records. The ownership interest of each actual purchaser of each beneficial
interest in a Global Debt Security ("Beneficial Owner") is in turn to be
recorded on the Direct and Indirect Participants' records. Beneficial Owners
will not receive written confirmation from DTC of their purchase, but
Beneficial Owners are expected to receive written confirmations providing
details of the transactions, as well as periodic statements of their holdings,
from the Direct or Indirect Participant through which the Beneficial Owner
entered into the transaction. Transfers of beneficial interests in Global Debt
Securities are to be accomplished by entries made on the books of Participants
acting on behalf of the Beneficial Owners. Beneficial Owners will not receive
certificates representing their ownership interests in Global Debt Securities,
except in the event that use of the book-entry system for one or more Debt
Securities is discontinued.
To facilitate subsequent transfers, all Global Debt Securities deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Global Debt Securities with DTC and their
registration in the name of Cede & Co. effect no change in beneficial
ownership. DTC has no knowledge of the actual Beneficial Owners of the Global
Debt Securities; DTC's records reflect only the identity of the Direct
Participants to whose accounts such Global Debt Securities are credited, which
may or may not be the Beneficial Owners. The Participants will remain
responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed
by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of the
Global Debt Securities within an issue are being redeemed, DTC's current
practice is to determine by lot the amount of the interest of each Direct
Participant in such issue to be redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to Global Debt
Securities. Under its usual procedures, DTC will mail an "Omnibus Proxy" to
the Company as soon as possible after the record date. The Omnibus Proxy
assigns Cede & Co.'s consenting or voting rights to those Direct Participants
to whose accounts the Global Debt Securities are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
Principal and interest payments on the Global Debt Securities will be made
to DTC. DTC's practice is to credit Direct Participants' accounts on the
payable date in accordance with their respective holdings shown on DTC's
records unless DTC has reason to believe that it will not receive payment on
the payable date. Payments by Participants to Beneficial Owners will be
governed by standing instructions and customary practices, as in the case of
securities held for the accounts of customers in bearer form or registered in
"street name," and will be the responsibility of such Participant and not of
DTC, or the Company, subject to any statutory or regulatory requirements as
may be in effect from time to time. Payment of principal and interest to DTC
is the responsibility of the Company, disbursement of such payments to Direct
Participants shall be the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners shall be the responsibility of Direct and
Indirect Participants.
A Beneficial Owner shall give notice to elect to have its interest in a
Global Debt Security purchased or tendered, through its Participant, to the
Paying Agent, and shall effect delivery of such interest in a Global Debt
Security by causing the Direct Participant to transfer the Participant's
interest, on DTC's records, to the Paying
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Agent. The requirement for physical delivery of Global Debt Securities in
connection with a demand for purchase or a mandatory purchase will be deemed
satisfied when the ownership rights in the Global Debt Securities are
transferred by a Direct Participant on DTC's records.
DTC may discontinue providing its services as securities depositary with
respect to the Global Debt Securities at any time by giving reasonable notice
to the Company or the agents or underwriters involved in the sale of the
Global Debt Securities. Under such circumstances, in the event that a
successor securities depositary is not obtained, Certificated Notes will be
printed and delivered in exchange for the Global Debt Securities held by DTC.
The Company may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depositary). In that event,
Certificated Notes will be printed and delivered in exchange for the Global
Debt Securities held by DTC.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company believes to be reliable, but
the Company takes no responsibility for the accuracy thereof.
Neither the Company, the Trustee, any Paying Agent nor the registrar for the
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 a Global Debt Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
REDEMPTION AT THE OPTION OF THE HOLDERS IN CERTAIN CIRCUMSTANCES
The Indenture provides, if such provision is made applicable to the Debt
Securities of any series, that if, during the period beginning on the date of
first public announcement by the Company or any other Person (including,
without limitation, directors or officers of the Company) of an intention to
effect or the occurrence of (whichever is the first to occur) a Restructuring
Event and ending 90 days thereafter (or such longer period as the rating of
the Debt Securities of such series shall be under publicly announced
consideration by Moody's or Standard & Poor's), both Moody's and Standard &
Poor's shall have (A) lowered their rating of the Debt Securities of such
series from an Investment Grade rating to a rating below Investment Grade, or
(B) withdrawn an Investment Grade rating from and ceased to rate the Debt
Securities of such series (a "Rating Event") (it being understood that, if the
Debt Securities of such series are already rated below Investment Grade by
Moody's or Standard & Poor's at the beginning of such period, a subsequent
lowering or withdrawal of such rating shall not be deemed to be a Rating
Event), the Company shall give notice of such Rating Event not more than 15
days after the occurrence of such Rating Event, to the trustee and to each
Holder, together with the information referred to in the penultimate sentence
of this paragraph (the "Put Option Notice"). Each Holder shall have the option
(the "Put Option") exercisable during the period of 30 days commencing on the
date such Put Option Notice is given (the "Option Period") to have all his
Debt Securities of such series (or any portion thereof designated by such
Holder and having an aggregate principal amount of $1,000 or a whole multiple
thereof) redeemed on the date falling 15 days after the end of the Option
Period, or if such day is not a Business Day, on the next succeeding Business
Day (the "Payment Date"), at their principal amount together with interest
accrued to the Payment Date. To exercise the Put Option, a Holder must deliver
to the Company or the Put Agent, if any, on or before the end of the Option
Period, (i) written notice of such Holder's exercise of such Put Option, which
notice shall set forth expressly the name and address of such Holder and the
aggregate principal amount of Debt Securities of such series with respect to
which such Put Option is exercised and (ii) the Debt Security or Debt
Securities of such series as to which such Holder is exercising such Put
Option, duly endorsed, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Put Agent, if any, duly executed by
such Holder or his attorney duly authorized in writing. Once a Holder has
exercised his Put Option, such exercise may not be withdrawn without the prior
written consent of the Company. The Company shall include in the Put Option
Notice a statement of facts showing that a Rating Event has occurred
(including
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details of the first public announcement, or (as the case may be) the
occurrence, of the Restructuring Event) and a statement to the effect that
each Holder has the benefit of the Put Option referred to above and shall also
specify the dates of the Option Period, the Payment Date, the fact that
interest will cease to accrue on and after the Payment Date, the Put Agent, if
any, and the manner in which Holders will be able to exercise the Put Option.
Notwithstanding the foregoing, the Company need not give the Put Option
Notice, and Holders shall not have a Put Option, with respect to a Rating
Event if either Moody's or Standard & Poor's shall have publicly announced
that such Rating Event was solely the result of events or circumstances wholly
unrelated to a Restructuring Event. (Article 10.)
For the purposes of this provision, the following terms shall have the
following meanings:
(i) "Restructuring Event" means any of the following: (1) any Person
becoming the Beneficial Owner of Voting Stock of the Company having more
than 30 percent of the voting power or all of the then outstanding Voting
Stock of the Company; (2) individuals who are not Continuing Directors
constituting a majority of the Board of Directors of the Company; (3) the
Company consolidating with or merging into any other Person, or any other
Person consolidating with or merging into the Company, pursuant to a
transaction in which capital stock of the Company then outstanding (other
than capital stock held by the Company or capital stock held by any Person
which is a party to such consolidation or merger) is changed or exchanged;
(4) the Company, in one transaction or a series of related transactions,
conveying, transferring or leasing, directly or indirectly, all or
substantially all of the assets of the Company and its Subsidiaries taken
as a whole (other than to a wholly owned subsidiary of the Company); or (5)
the Company or any of its Subsidiaries paying or effecting a dividend or
distribution (including by way of recapitalization or reclassification) in
respect of its capital stock (other than solely to the Company or any of
its wholly owned subsidiaries and other than solely for capital stock of
the Company), or purchasing, redeeming, retiring, exchanging or otherwise
acquiring for value any of its capital stock (other than solely from the
Company or any of its wholly owned subsidiaries and other than solely for
capital stock of the Company), if the cash and Fair Market Value of the
securities and assets paid or distributed (except to the Company or any
Subsidiary) in connection therewith (determined on the record date for such
dividend or distribution or the effective date for such purchase,
redemption, retirement, exchange or other acquisition), together with the
cash and Fair Market Value of the securities and assets paid or distributed
in connection with all other such dividends, distributions, purchases,
redemptions, retirements, exchanges and acquisitions effected (except as
received by the Company or any Subsidiary) within the 12-month period
preceding the record date for such dividend or distribution or the
effective date for such purchase, redemption, retirement, exchange or other
acquisition (any such Fair Market Value being determined on the respective
record or effective dates for such other dividends, distributions,
purchases, redemptions, retirements, exchanges and acquisitions), exceeds
30 percent of the aggregate Fair Market Value of all capital stock of the
Company outstanding on the record date for such dividend or distribution or
the effective date for such purchase, redemption, retirement, exchange or
other acquisition (determined on such record or effective date);
(ii) "Moody's" means Moody's Investors Service, Inc. and "Standard &
Poor's" means Standard & Poor's Corporation or, in either case, any of
their respective successors carrying on substantially the same business of
providing ratings for securities as carried on by the predecessor
corporation;
(iii) "Investment Grade" means a rating of at least Baa3 (or the
equivalent thereof), in the case of a rating by Moody's, and a rating of at
least BBB- (or the equivalent thereof), in the case of a rating by Standard
& Poor's.
If such provision is made applicable to the Debt Securities of any series,
the Board of Directors will have no authority under the Indenture to waive
such provision.
The Company has agreed that for so long as any of the Debt Securities of
such series are outstanding and the Put Option has not arisen, it shall
provide such information, pay such customary rating service fees and related
expenses and take all other reasonable action as shall be necessary or
appropriate to enable each of Moody's and Standard & Poor's to provide a
rating of the Debt Securities of such series. There can be no assurance that
the Company will have available funds for redemption of Debt Securities on the
Payment Date.
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The Company will comply with Section 14(e) under the 1934 Act to the extent
applicable, and any other tender offer rules under the 1934 Act which may then
be applicable, in connection with any obligation of the Company to purchase
Offered Debt Securities at the option of the holders thereof as described
above. Any such obligation applicable to a series of Debt Securities will be
described in the Prospectus Supplement or Prospectus Supplements relating
thereto.
MERGERS AND SALES OF ASSETS BY THE COMPANY
The Company may consolidate with or merge into any other corporation, or
transfer or lease all or substantially all of its assets to another
corporation, provided that (i) the corporation formed by such consolidation or
into which the Company is merged or the corporation to which all or
substantially all of the Company's assets are transferred or leased shall
expressly assume the payment of the principal of the Debt Securities and the
performance of the other covenants of the Company under the Debt Securities
and the Indenture, and (ii) no Event of Default, or event which, after notice
or lapse of time or both, would become an Event of Default, shall exist
immediately after such transaction. (Section 5.1.)
LIMITATION ON SECURITY INTERESTS
The Company covenants in the Indenture that it will not, nor will it permit
any Restricted Subsidiary to, create, incur, assume or suffer to exist any
Indebtedness if such Indebtedness is secured by a Security Interest upon any
property or assets of the Company or a Restricted Subsidiary, whether owned at
the date of the Indenture or thereafter acquired, without effectively securing
the Debt Securities equally and ratably with (or prior to) such Indebtedness.
The foregoing restriction does not apply to (i) any Security Interest on any
property acquired, constructed, developed or improved which is created or
assumed within 120 days after such acquisition, construction, development or
improvement, or the commencement of operation or use of such property, to
secure or provide for the payment of the purchase price or cost thereof; (ii)
any Security Interest existing on property at the time it is acquired, or any
conditional sales agreement or other title retention agreement with respect to
property acquired, by the Company or a Restricted Subsidiary, any Security
Interest existing on any property or shares of stock of a corporation or firm
at the time it is merged into or consolidated with, or sells, leases or
disposes of its property as an entirety to, the Company or a Restricted
Subsidiary, or becomes a Restricted Subsidiary, or any Security Interest
existing on the property, assets or capital stock of any successor to the
Company; provided, in each case, that such Security Interest shall not apply
to any property or assets theretofore owned by the Company or a Restricted
Subsidiary; (iii) any mechanics', materialmen's, carriers' or other similar
liens arising in the ordinary course of business in respect of obligations
which are not yet due or which are being contested in good faith; (iv) any
Security Interest arising by reason of deposits with, or the giving of any
form of security to, any governmental agency or similar body, which is
required by law or regulation as a condition to the transaction of any
business or the exercise of any privilege, franchise or license; (v) any
Security Interest for taxes, assessments or governmental charges or levies not
yet delinquent, or already delinquent but the validity of which is being
contested in good faith; (vi) any Security Interest arising in connection with
legal proceedings being contested in good faith, including any judgment lien
so long as execution thereon is stayed; (vii) any landlord's lien on fixtures
located on premises leased by the Company or a Restricted Subsidiary in the
ordinary course of business; (viii) any Security Interest securing an
obligation issued by the United States or any state or any political
subdivision thereof in connection with financing the cost of construction or
acquisition of property; (ix) any Security Interest arising by reason of
deposits necessary to qualify the Company or any Restricted Subsidiary to
conduct business, maintain self-insurance, or obtain the benefit of, or comply
with, any law; (x) any Security Interest that secures any Indebtedness of a
Restricted Subsidiary owing to the Company or another Restricted Subsidiary;
and (xi) extensions, renewals or refundings of the foregoing. (Section 4.4.)
The foregoing restriction does not apply to the creation, incurrence,
assumption or sufferance by the Company or any Restricted Subsidiary of
Indebtedness secured by a Security Interest that would otherwise be subject to
such restriction up to an aggregate amount which, together with all other
Indebtedness secured by Security Interests (not including secured Indebtedness
permitted under the foregoing exceptions) and the
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Attributable Debt (generally defined as discounted net rental payments)
associated with Sale and Leaseback Transactions existing at such time (other
than Sale and Leaseback Transactions the proceeds of which have been or will
be applied as set forth in clause (c) or (d) of the next succeeding caption
"Limitation on Sale and Leaseback Transactions", other than Sale and Leaseback
Transactions in which the property involved would have been permitted to be
secured under clause (i) of the immediately preceding paragraph and other than
Sale and Leaseback Transactions between the Company and a Subsidiary), does
not exceed 20% of the consolidated net worth of the Company and its
Subsidiaries as shown on the latest available published consolidated balance
sheet of the Company and its Subsidiaries. (Section 4.4.)
The Indenture defines "Restricted Subsidiary" as any Subsidiary (other than
any Subsidiary of which the Company owns less than all of the outstanding
voting stock) principally engaged in, or whose principal assets consist of
property used by the Company or any Restricted Subsidiary in, the storage,
collection, transfer, interim processing or disposal of waste within the
United States or Canada, or which the Company designates as a Restricted
Subsidiary.
LIMITATION ON SALE AND LEASEBACK TRANSACTIONS
The Company covenants in the Indenture that neither it nor any Restricted
Subsidiary will enter into any arrangement (other than with a Subsidiary)
providing for the leasing to the Company or any Restricted Subsidiary of any
property (except for temporary leases for a term, including renewals, of not
more than three years and except for leases between the Company and any
Restricted Subsidiary or between any Restricted Subsidiaries) which has been
or is to be sold by the Company or such Restricted Subsidiary to the lessor
unless (a) the Company or such Restricted Subsidiary would be entitled to
incur Indebtedness secured by a Security Interest on the property to be leased
without securing the Debt Securities under clause (i) of the first paragraph
under the preceding caption "Limitation on Security Interests", (b) the
Attributable Debt associated therewith would be an amount permitted under the
second paragraph under the preceding caption, (c) the Company applies an
amount equal to the fair value (as determined by the Board of Directors) of
such property to the retirement of Debt Securities or certain funded debt of
the Company or a Restricted Subsidiary, or (d) the Company enters into a bona
fide commitment to expend for the acquisition or capital improvement of an
Important Property an amount at least equal to the fair value of such
property. (Section 4.5.)
LIMITATION ON FUNDED DEBT OF RESTRICTED SUBSIDIARIES
The Company covenants in the Indenture that it will not permit any
Restricted Subsidiary (a) to create, assume or suffer to exist any funded debt
other than (i) funded debt secured by a Security Interest which is permitted
to such Restricted Subsidiary under the limitations set forth under the
preceding caption "Limitation on Security Interests," (ii) funded debt owed to
the Company or any Subsidiary, (iii) funded debt of a corporation or other
entity existing at the time it becomes a Restricted Subsidiary or is merged
with or into the Company or a Restricted Subsidiary or other entity, (iv)
funded debt of a corporation or other entity assumed by the Company or a
Restricted Subsidiary in the acquisition of all or a portion of the business
of such corporation or other entity, (v) funded debt existing as of the date
of the Indenture, or (vi) funded debt created in connection with, or with a
view to, compliance by such Restricted Subsidiary with the requirements of,
any program adopted by any federal, state or local governmental authority and
applicable to such Restricted Subsidiary and providing financial or tax
benefits to such Restricted Subsidiary which are not available directly to the
Company on substantially the same terms as such Restricted Subsidiary, or (b)
to guarantee, directly or indirectly through any arrangement which is
substantially the equivalent of a guarantee, any funded debt except for (i)
guarantees existing as of the date of the Indenture, (ii) guarantees which, as
of the date of the Indenture, a Restricted Subsidiary is obligated to give,
(iii) guarantees issued to the Company or any Restricted Subsidiary or (iv)
guarantees of funded debt which is permitted to a Restricted Subsidiary under
the preceding clause (a).
Notwithstanding the foregoing, any Restricted Subsidiary may create, assume
or guarantee funded debt in addition to that permitted under the preceding
paragraph, and renew, extend or replace such funded debt,
11
<PAGE>
provided that at the time of such creation, assumption, guarantee, renewal,
extension or replacement, and after giving effect thereto, funded debt of
Restricted Subsidiaries not otherwise permitted pursuant to provisions
described in the preceding paragraph does not exceed 10% of the consolidated
net worth of the Company and its Subsidiaries as shown on the latest available
published consolidated balance sheet of the Company and its Subsidiaries.
(Section 4.6.)
EVENTS OF DEFAULT; NOTICE AND WAIVER
The Indenture provides that, if an Event of Default specified therein occurs
and is continuing with respect to any series of Debt Securities, either the
Trustee or the Holders of not less than 25% in aggregate principal amount of
the Debt Securities then outstanding of the series may declare the principal
of such series (or such portion of the principal as may be specified as due
upon acceleration at that time in the terms of that series), to be immediately
due and payable. (Section 6.2.)
Events of Default with respect to any series of Debt Securities are defined
as: (i) default in the payment of interest on such Debt Securities which has
continued for a period of 30 days, (ii) default in the payment of principal on
such Debt Securities when such becomes due and payable, (iii) failure by the
Company to comply with any of its other agreements in the Debt Securities of
such series or in the Indenture upon the specified notice to the Company of
such default by the Trustee or by the Holders of not less than 25% in
aggregate principal amount of the Debt Securities then outstanding of the
series, and the Company's failure to cure such Default with 60 days after
receipt of such notice, or (iv) certain events of bankruptcy or insolvency.
(Section 6.1.)
The Trustees shall mail to the Holders of each series of Debt Securities a
notice of any continuing Default known to the Trustee with respect to such
series within 90 days of the occurrence of such Default, but the Trustee may
withhold from such Holders such notice as to any Default other than a Default
in any payment on any Debt Security if the Trustee determines in good faith
that the withholding of such notice is in the interests of such Holders.
(Section 7.5.)
No Holder of any Debt Security of any series will have any right to
institute any proceeding with respect to the Indenture or for any remedy
thereunder, unless (i) such Holder shall have previously given to the Trustee
written notice of a continuing Event of Default with respect to that series,
(ii) the Holders of at least 25% in aggregate principal amount of the
outstanding Debt Securities of the series shall have made written request to
the Trustee to institute such proceeding as Trustee, (iii) such Holders have
offered to the Trustee indemnity satisfactory to the Trustee, (iv) the Trustee
shall not have complied with the request within 60 days after receipt of the
request and offer of indemnity, and (v) the Trustee shall not have received
from the Holders of a majority in aggregate principal amount of the
outstanding Debt Securities of the series a direction inconsistent with such
request within such 60 day period. A Holder of any series may not use the
Indenture to prejudice the rights of another Holder of that series or to
obtain a preference or priority over another Holder of that series. (Section
6.6.) The Holder of any Debt Security, however, has an absolute right to
receive payment of the principal of such Debt Security, and any interest
thereon, on or after the due date expressed in such Debt Security and to
institute suit for the enforcement of any such payment. (Section 6.7.) The
Holders of a majority in aggregate principal amount of the outstanding Debt
Securities of any series may, with proper notice to the Trustee, waive an
existing Default other than a Default in any payment of the principal of, or
any interest on, such Debt Security of that series. (Section 6.4.)
The Company will be required to furnish to the Trustee annually a statement
as to any default by the Company in the performance and observance of its
obligations under the Indenture. (Section 4.3.)
MODIFICATION
The Company and the Trustee may amend the Indenture or the Debt Securities
of any series with the written consent of the Holders of at least a majority
in aggregate principal amount of the outstanding Debt Securities of such
series affected by the amendment. However, without the consent of the Holder
of each Debt Security
12
<PAGE>
affected thereby, no amendment may, among other things: (i) reduce the amount
of Debt Securities whose Holders must consent to an amendment; (ii) reduce the
rate or change the time for payment of interest on any such Debt Security;
(iii) reduce the principal of or change the fixed maturity of any such Debt
Security; or (iv) make any such Debt Security payable in money other than that
stated in the Debt Security. (Section 9.2.)
DEFEASANCE AND DISCHARGE
The Indenture provides that the Company and the Trustee may, without the
consent of the Holders, execute a supplemental indenture to provide that the
Company will be discharged from any and all obligations in respect of the Debt
Securities of any series (except for certain obligations to register the
transfer or exchange of Debt Securities, to replace stolen, lost or mutilated
Debt Securities, to maintain a paying agency and to hold moneys for payment in
trust) upon the deposit with the Trustee, in trust, of money or U.S.
Government Obligations or both, which through the payment of interest and
principal in respect thereof in accordance with their terms will provide money
in an amount sufficient to pay the principal of, and any interest on, and any
mandatory sinking fund or analogous payments in respect of, the Debt
Securities of that series on the date such amounts are due and payable, in
accordance with the terms of the Indenture and such Debt Securities. Such a
supplemental indenture may only be executed if the Company has received from,
or there has been published by, the United States Internal Revenue Service a
ruling to the effect that such a discharge will not be deemed, or result in, a
taxable event with respect to the Holders. The provisions of such a
supplemental indenture will not be applicable to any series of Debt Securities
then listed on the New York Stock Exchange if the provision would cause that
series to be delisted as a result thereof. (Section 9.1.)
DEFEASANCE OF CERTAIN COVENANTS
The terms of the Debt Securities may provide the Company with the option to
omit to comply with the covenants described under the headings "Limitation on
Security Interests", "Limitation on Sale and Lease-back Transactions" and
"Limitation on Funded Debt of Restricted Subsidiaries" above. If such terms
make such option available with respect to the Debt Securities of any series,
the Company, in order to exercise such option, will be required to deposit
with the Trustee, in trust, money or U.S. Government Obligations or both,
which through the payment of interest and principal in respect thereof in
accordance with their terms will provide money in an amount sufficient to pay
the principal of, and any interest on, and any mandatory sinking fund or
analogous payments in respect of, the Debt Securities of that series on the
date such amounts are due and payable, in accordance with the terms of the
Indenture and such Debt Securities. The Company must also deliver to the
Trustee an opinion of counsel to the effect that the deposit and related
covenant defeasance will not cause the Holders of such Debt Securities to
recognize income, gain or loss for federal income tax purposes. (Section 4.7.)
INFORMATION CONCERNING THE TRUSTEE
The Fuji Bank and Trust Company is the Trustee under the Indenture. The
Company has issued various series of debt securities under the Indenture, as
well as another indenture pursuant to which the Trustee is trustee. The
Company maintains deposit accounts and conducts other banking and trust
transactions and activities with the Trustee in the ordinary course of
business.
Under the Indenture, the Trustee is required to transmit annual reports to
all Holders regarding its eligibility and qualifications as Trustee under the
Indenture and certain related matters. (Section 7.6.)
Subject to certain exceptions, the Holders of a majority in aggregate
principal amount of outstanding Debt Securities of any series may direct the
Trustee in its exercise of the trust and powers conferred upon it by the
Indenture (Section 6.5.), and may remove the Trustee with the giving of proper
notice. (Section 7.8.)
13
<PAGE>
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities in any of three ways: (i) through
underwriters or dealers, (ii) directly to a limited number of purchasers or to
a single purchaser or (iii) through agents. The Prospectus Supplement with
respect to the Offered Debt Securities sets forth the terms of the offering of
the Offered Debt Securities, including the name or names of any underwriters,
the purchase price of the Offered Debt Securities and the proceeds to the
Company from such sale, any delayed delivery arrangements, any underwriting
discounts and other items constituting underwriters' compensation, any initial
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers. Any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be changed from time
to time.
If underwriters are used in the sale, the Debt Securities will be acquired
by the underwriters for their own account and may be resold from time to time
in one or more transactions, including negotiated transactions, at a fixed
public offering price or at varying prices determined at the time of sale. The
Debt Securities may be offered to the public either through underwriting
syndicates represented by one or more managing underwriters or directly by one
or more firms acting as underwriters. The underwriter or underwriters with
respect to a particular underwritten offering of Offered Debt Securities are
named in the Prospectus Supplement relating to such offering and, if in an
underwriting syndicate is used, the managing underwriter or underwriters are
set forth on the cover of such Prospectus Supplement. Unless otherwise set
forth in the Prospectus Supplement, the obligations of the underwriters to
purchase the Offered Debt Securities will be subject to certain conditions
precedent and the underwriters will be obligated to purchase all the Offered
Debt Securities if any are purchased.
The Debt Securities may be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the offer
or sale of the Offered Debt Securities in respect of which this Prospectus is
delivered is named, and any commissions payable by the Company to such agent
are set forth, in the Prospectus Supplement relating thereto. Unless otherwise
indicated in the Prospectus Supplement, any such agent is acting on a best
efforts basis for the period of its appointment.
If so indicated in the Prospectus Supplement, the Company will authorize
agents, underwriters or dealers to solicit offers from certain types of
institutions to purchase Offered Debt Securities from the Company at the
public offering price set forth in the Prospectus Supplement pursuant to
delayed delivery contracts providing for payment and delivery on a specified
date in the future.
Agents and underwriters may be entitled under agreements entered into with
the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act of 1933. Agents
and underwriters may be customers of, engage in transactions with, or perform
services for the Company in the ordinary course of business.
LEGAL OPINIONS
Certain legal matters in connection with this offering will be passed upon
from the Company by Herbert A. Getz, General Counsel of the Company, and for
any underwriters or agents by Mayer, Brown & Platt, 190 South LaSalle Street,
Chicago, Illinois 60603. Mayer, Brown & Platt acts as counsel for the Company
from time to time on other matters.
EXPERTS
The audited consolidated financial statements and schedule of WMX
Technologies, Inc. and subsidiaries for the year ended December 31, 1996,
incorporated by reference in this Prospectus, have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their reports
with respect thereto, and are incorporated by reference herein in reliance
upon the authority of said firm as experts in auditing and accounting in
giving said reports.
14
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMA-
TION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS SUPPLEMENT
(INCLUDING THE ACCOMPANYING PRICING SUPPLEMENT) OR THE PROSPECTUS AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER OR AGENT. THIS PRO-
SPECTUS SUPPLEMENT (INCLUDING THE ACCOMPANYING PRICING SUPPLEMENT) AND THE
PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO
WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. THE DELIVERY OF
THIS PROSPECTUS SUPPLEMENT (INCLUDING THE ACCOMPANYING PRICING SUPPLEMENT) OR
THE PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN OR
THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THEIR RESPECTIVE DATES.
---------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Use of Proceeds............................................................ S-2
Important Currency Information............................................. S-2
Description of Notes....................................................... S-2
Certain Currency Risks..................................................... S-17
Certain United States Federal Tax Considerations........................... S-19
Plan of Distribution....................................................... S-25
Legal Opinions............................................................. S-25
PROSPECTUS
Available Information...................................................... 2
Documents Incorporated by Reference........................................ 2
WMX Technologies, Inc. .................................................... 3
Use of Proceeds............................................................ 5
Description of Debt Securities............................................. 5
Plan of Distribution....................................................... 14
Legal Opinions............................................................. 14
Experts.................................................................... 14
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
LOGO
WMX TECHNOLOGIES, INC.
U.S. $1,250,000,000
MEDIUM-TERM NOTES, SERIES E DUE FROM NINE MONTHS TO 60 YEARS FROM DATE OF
ISSUE
-----------------
PROSPECTUS SUPPLEMENT
-----------------
MERRILL LYNCH & CO.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
APRIL , 1997
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The registrant estimates that expenses in connection with the offering
described in this Registration Statement will be as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee.............. $303,030
Printing expenses................................................ 10,000
Accountants' fees and expenses................................... 10,000
Legal fees and expenses.......................................... 10,000
Blue Sky fees and expenses....................................... 10,000
Trustee fees..................................................... 1,500
Rating Agency fees............................................... 282,500
Miscellaneous.................................................... 15,000
--------
Total.......................................................... $642,030
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of Delaware empowers the
registrant to indemnify, subject to the standards set forth therein, any
person in connection with any action, suit or proceeding brought or threatened
by reason of the fact that he is or was a director, officer, employee or agent
of the registrant, or is or was serving as such with respect to another
corporation at the request of the registrant. The General Corporation Law of
Delaware also provides that the registrant may purchase indemnification
insurance on behalf of any such director, officer, employee or agent. Article
Twelfth of the registrant's Restated Certificate of Incorporation and Section
6 of Article VII of the registrant's by-laws provide for the indemnification
by the registrant of each director, officer, employee or agent of the
registrant to the full extent permitted by the General Corporation Law of
Delaware.
Under an insurance policy maintained by the registrant, the directors and
officers of the registrant are insured, within the limits and subject to the
limitations of the policy, against certain expenses in connection with the
defense of certain claims, actions, suits or proceedings, and certain
liabilities which might be imposed as a result of such claims, actions, suits
or proceedings, which may be brought against them by reason of being or having
been such directors or officers.
The proposed form of Underwriting Agreement--Basic Provisions incorporated
by reference as Exhibit 1(a) and the proposed form of Distribution Agreement
incorporated by reference as Exhibit 1(b) to this Registration Statement
provide for indemnification of the registrant's directors and its officers who
signed the Registration Statement against certain liabilities, including
liabilities under the Securities Act of 1933.
ITEM 16. EXHIBITS.
A list of the exhibits included or incorporated by reference as part of this
Registration Statement is set forth in the Exhibit Index which immediately
precedes such exhibits, and is hereby incorporated by reference herein.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
II-1
<PAGE>
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (i) and (ii) do not apply if the
registration statement is on Form S-3 or Form S-8 and the information required
to be included in a post-effective amendment by those paragraphs is contained
in periodic reports filed by the registrant pursuant to section 13 or section
15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that
is incorporated by reference in this Registration Statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(6) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
a registration statement in reliance upon Rule 430A and contained in the
form of prospectus filed by a Registrant pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act of 1933 shall be deemed to be part of
the registration statement as of the time it was declared effective.
(7) For the purpose of determining any liability under the Security Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-2
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT, OR AMENDMENT THERETO, TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN OAK BROOK, ILLINOIS ON APRIL 16, 1997.
WMX Technologies, Inc.
/s/ Dean L. Buntrock
By ___________________________________
DEAN L. BUNTROCK, Chairman of the
Board and Chief Executive Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT, OR AMENDMENT THERETO, HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN
THE CAPACITIES AND ON THE DATE INDICATED.
SIGNATURE TITLE DATE
/s/ Dean L. Buntrock Director, Chairman of
- ------------------------------------- the Board and Chief
DEAN L. BUNTROCK Executive Officer
/s/ Jerry E. Dempsey Director
- -------------------------------------
JERRY E. DEMPSEY
/s/ Donald F. Flynn Director
- -------------------------------------
DONALD F. FLYNN
/s/ Peer Pedersen Director
- -------------------------------------
PEER PEDERSEN
/s/ James R. Peterson Director
- -------------------------------------
JAMES R. PETERSON
/s/ Alexander B. Trowbridge Director
- -------------------------------------
ALEXANDER B. TROWBRIDGE
/s/ James B. Edwards Director
- -------------------------------------
JAMES B. EDWARDS
/s/ H. Jesse Arnelle Director
- -------------------------------------
H. JESSE ARNELLE April 16,
1997
/s/ Pastora San Juan Cafferty Director
- -------------------------------------
PASTORA SAN JUAN CAFFERTY
/s/ Paul M. Montrone Director
- -------------------------------------
PAUL M. MONTRONE
/s/ Steven G. Rothmeier Director
- -------------------------------------
STEVEN G. ROTHMEIER
/s/ Peter H. Huizenga Director
- -------------------------------------
PETER H. HUIZENGA
/s/ Howard H. Baker, Jr. Director
- -------------------------------------
HOWARD H. BAKER, JR.
/s/ Thomas C. Hau Vice President and
- ------------------------------------- Principal Accounting
THOMAS C. HAU Officer
/s/ John D. Sanford Senior Vice President,
- ------------------------------------- Treasurer and
JOHN D. SANFORD Principal Financial
Officer
II-3
<PAGE>
WMX TECHNOLOGIES, INC.
EXHIBIT INDEX
<TABLE>
<CAPTION>
NUMBER AND DESCRIPTION OF EXHIBIT
---------------------------------
<C> <S>
1(a) Form of proposed Underwriting Agreement--Basic Provisions, including Terms
Agreement (incorporated by reference to Exhibit 1 to registrant's
registration statement on Form S-3, Registration No. 33-30190)
1(b) Form of proposed Distribution Agreement (incorporated by reference to
Exhibit 1(b) to registrant's registration statement on Form S-3,
Registration No. 33-38746)
2 None
4(a) Indenture dated as of June 1, 1993 between the Company and The Fuji Bank and
Trust Company, as Trustee (incorporated by reference to Exhibit 4 to
registrant's Form 8-K Current Report dated July 15, 1993, registrant file
no. 1-7327)
4(b) Form of Fixed Rate Note (incorporated by reference to Exhibit 4(b) to
registrant's Form 8-K Current Report dated December 12, 1990, registrant
file no. 1-7327)
4(c) Form of Debenture (incorporated by reference to Exhibit 4(c) to registrant's
registration statement on Form S-3, Registration No. 33-30190)
5 Opinion of Herbert A. Getz, Senior Vice President, General Counsel and
Secretary, including consent
8 Opinion of Bell, Boyd & Lloyd as to certain tax matters, including consent
12 Computation of Ratio of Earnings to Fixed Charges for the years ended
December 31, 1992, 1993, 1994, 1995 and 1996 (incorporated by reference to
Exhibit 12 to registrant's Annual Report on Form 10-K for the year ended
December 31, 1996, registrant file no. 1-7327)
15 None
23(a) Consent of Herbert A. Getz, Senior Vice President, General Counsel and
Secretary (included in Exhibit 5)
23(b) Consent of Independent Public Accountants
23(c) Consent of Bell, Boyd & Lloyd (included in Exhibit 8)
25 Statement of Eligibility of Trustee on Form T-1
26 None
27 None
28 None
</TABLE>
<PAGE>
Exhibit 5
April 14, 1997
WMX Technologies, Inc.
3003 Butterfield Road
Oak Brook, Illinois 60521
Ladies and Gentlemen:
$1,000,000,000 aggregate purchase price
of debt securities
---------------------------------------
In my capacity as General Counsel of WMX Technologies, Inc., a Delaware
corporation (the "Company"), I have represented the Company in connection with
the registration under the Securities Act of 1933 of $1,000,000,000 aggregate
principal amount of the Company's debt securities (the "Securities") to be
issued in one or more series under an indenture dated as of June 1, 1993 (the
"Indenture"), between the Company and The Fuji Bank and Trust Company, as
trustee, and to be registered with the Securities and Exchange Commission (the
"Commission") by the filing of a registration statement on Form S-3 (the
"Registration Statement").
In this connection, I have examined originals, or copies certified or
otherwise identified to my satisfaction, of such documents, corporate and other
records, certificates and other papers as I have deemed it necessary to examine
for the purpose of this opinion.
Based on such examination, it is my opinion that:
1. The Company is a corporation duly organized and validly existing in
good standing under the laws of the State of Delaware.
2. Upon issuance of Securities in accordance with the Indenture and the
sale of such Securities as described in the prospectus and the applicable
prospectus supplement, the Securities will be legally issued and will
constitute the valid and binding obligations of the Company in accordance
with their terms and the terms of the Indenture and the related board
resolution, except as enforcement may be limited by bankruptcy, insolvency
or other laws generally affecting the enforcement of creditors' rights, and
by general principles of equity.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement referred to above, and to the reference made to me in the
Registration Statement under the caption "Legal Opinions." In giving this
consent, I do not admit that I am within the category of persons whose consent
is required by section 7 of the Securities Act of 1933.
Very truly yours,
/s/ Herbert A. Getz
Herbert A. Getz
General Counsel
WMX Technologies, Inc.
<PAGE>
EXHIBIT 8
[LETTERHEAD OF BELL, BOYD & LLOYD]
April 14, 1997
WMX Technologies, Inc.
3003 Butterfield Road
Oak Brook, Illinois 60521
Re: WMX Technologies, Inc. Medium-Term Notes, Series E
Due From 9 Months to 60 Years From Date of Issue
Ladies & Gentlemen:
In connection with the Prospectus Supplement (the "Prospectus Supplement")
being filed on or about the date of this letter with the Securities and
Exchange Commission as part of the registration statement on Form S-3 to which
this letter is filed as an exhibit and a previously filed registration
statement (no. 333-6879) by WMX Technologies, Inc., a Delaware corporation (the
"Company"), relating to the offer of up to $1,250,000,000 of aggregate purchase
price of the Company's Medium-Term Notes, Series E, due from 9 months to 60
years from date of issue, we hereby consent to the use of our name and confirm
to you, as of the date of this letter, our advice as set forth under "Certain
United States Federal Tax Considerations" in the Prospectus Supplement.
Very truly yours,
/s/ Bell, Boyd & Lloyd
Bell, Boyd & Lloyd
<PAGE>
Exhibit 23(b)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement and Registration Statement No.
333-6879 of WMX Technologies, Inc. of our reports dated February 3, 1997
included (or incorporated by reference) in the WMX Technologies, Inc. Form 10-K
for the year ended December 31, 1996 and to all references to our Firm included
in such Registration Statements.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Chicago, Illinois
April 14, 1997
<PAGE>
Registration No.
_______________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________
FORM T-1
STATEMENT OF ELIGIBILITY AND QUALIFICATION
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an application to determine eligibility of a trustee
pursuant to Section 305 (b) (2) _____
_________________________________________
THE FUJI BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
New York 13-2794155
(State of incorporation (I.R.S. employer
if not a national bank) identification no.)
Two World Trade Center
New York, New York 10048
(Address of principal executive offices) (Zip Code)
________________________________________
WMX TECHNOLOGIES, INC.
(Exact name of obligor as specified in its charter)
Delaware
(State of other jurisdiction of
incorporation or organization)
36-2660763
(I.R.S. employer identification no.)
3003 Butterfield Road
Oak Brook, Illinois 60521
(Address of principal executive offices) (Zip Code)
_______________________________________
DEBT SECURITIES
(Title of the Indenture Securities)
<PAGE>
Item 1. General Information
-------------------
Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
New York Banking Department, Albany, New York.
Federal Deposit Insurance Corporation, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with Obligor and Underwriters
------------------------------------------
If the obligor or any underwriter for the obligor is an affiliate of
the Trustee, describe each such affiliation.
None.
Item 16. List of Exhibits
----------------
List below all exhibits filed as part of this statement of
eligibility and qualifications.
Exhibit 1 - Copy of Organization Certificate of the Trustee,
incorporated herein by reference to Exhibit 1 of Form T-1,
Registration No. 333-6879
Exhibit 2 - Copy of certificate of authority of the Trustee to
commence business, incorporated herein by reference to
Exhibit 2 of Form T-1, Registration No. 333-6879
Exhibit 3 - Copy of authorization of the Trustee to exercise trust
powers, incorporated herein by reference to Exhibit 3 of Form T-1,
Registration No. 333-6879
Exhibit 4 - Copy of existing By-Laws of the Trustee incorporated
herein by reference to Exhibit 4 of Form T-1, Registration No., 333-
6879
Exhibit 5 - Not applicable
Exhibit 6 - The consent of the Trustee required by Section 321(b) of
the Trust Indenture Act of 1939, as amended by The Trust Indenture
Reform Act of 1990, incorporated herein by reference to Exhibit 6 of
Form T-1, Registration No. 333-6879
Exhibit 7 - Copy of the latest Report of Condition of the Trustee
as of December 31, 1996
Exhibit 8 - Not applicable
Exhibit 9 - Not applicable
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
The Fuji Bank and Trust Company, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
The City of New York and State of New York, on the 10th day of April 1997.
THE FUJI BANK AND TRUST COMPANY
Sharon Chase Moore
--------------------
Sharon Chase Moore
Vice President
<PAGE>
<TABLE>
<CAPTION>
Exhibit 7
Name of Bank: The Fuji Bank & Trust Company Call Date: 12/31/96 ST-BK: 36-5168 FFIEC 031
Address: Two World Trade Center, 79th-82nd Floor Page RC-1
City, State, Zip: New York, NY 10 48-0042
Certificate No: 21843
Consolidated Report of Condition for Insured Commercial and State-Chartered
Saving Banks for December 31, 1996
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
_____
| C400|
---------------------
Dollar Amounts in Thousands| RCFD Bil Mil Thou |
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS | ////////////////// |
1. Cash and balances due from depository institutions (from Schedule RC-A): | ////////////////// |
a. Noninterest-bearing balances and currency and coin(1).................................. | 0081 40,708 | 1.a.
b. Interest-bearing balances(2)........................................................... | 0071 296,127 | 1.b.
2. Securities: | ////////////////// |
a. Held-to-maturity securities (from Schedule RC-B, column A)............................. | 1754 127 | 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D)........................... | 1773 10,704 | 2.b.
3. Federal funds sold and securities purchased under agreements to resell in | ////////////////// |
domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs: | ////////////////// |
a. Federal funds sold..................................................................... | 0276 287,000 | 3.a.
b. Securities purchased under agreements to resell........................................ | 0277 0 | 3.b.
4. Loans and lease financing receivables: _________________________| ////////////////// |
a. Loans and leases, net of unearned income (from Schedule RC-C) |RCFD 2122 | 1,854,723 | ////////////////// |
b. LESS: Allowance for loan and lease losses.................... |RCFD 3123 | 30,901 | ////////////////// |
c. LESS: Allocated transfer risk reserve........................ |RCFD 3128 | 0 | ////////////////// |
d. Loans and leases, net of unearned income, -------------------------| ///////////////// |
allowance, and reserve (item 4.a minus 4.b and 4.c).................................... | 2125 1,823,822 | 4.d.
5. Trading assets (from Schedule RC-D)....................................................... | 3545 2,284 | 5.
6. Premises and fixed assets (including capitalized leases).................................. | 2145 2,584 | 6.
7. Other real estate owned (from Schedule RC-M).............................................. | 2150 0 | 7.
8. Investments in unconsolidated subsidiaries and associated companies (from | |
Schedule RC-M)............................................................................ | 2130 0 | 8.
9. Customers' liability to this bank on acceptances outstanding.............................. | 2155 881 | 9.
10. Intangible assets (from Schedule RC-M).................................................... | 2143 470 | 10.
11. Other assets (from Schedule RC-F)......................................................... | 2160 19,475 | 11.
12. Total assets (sum of items 1 through 11).................................................. | 2170 2,484,182 | 12.
-----------------
- -------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Name of Bank: The Fuji Bank and Trust Company Call Date: 12/31/96 ST-BK: 36-5168 FFIEC 031
Address: Two World Trade Center, 79th-82nd Floor Page RC-2
City, State Zip: New York, NY 10048-0042
Certificate No.: 21843
Schedule RC--Continued
Dollar Amounts in Thousands Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
<S> <C> <C>
13. Deposits:
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E.
part 1)........................................................................ RCON 2200 190,335 13.a.
(1) Noninterest-bearing (1)..........................RCON 6631 165,89 13.a.(1)
(2) Interest-bearing.................................RCON 6636 25 46 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule
RC-E, part II)................................................................. RCFN 2200 889,284 13.b.
(1) Noninterest-bearing..............................RCFN 6631 419 13.b.(1)
(2) Interest-bearing.................................RCFN 6636 888,865 13.b.(2)
14. Federal funds purchased and securities sold under agreements to repurchase in
domestic offices of the bank and of its Edge and Agreement subsidiaries, and
in IBFs:
a. Federal funds purchased........................................................ RCFD 0278 40,000 14.a.
b. Securities sold under agreements to repurchase................................. RCFD 0279 0 14.b.
15. a. Demand notes issued to the U.S. Treasury....................................... RCON 2840 0 15.a.
b. Trading liabilities (from Schedule RC-D)....................................... RCFD 3548 2,259 15.b.
16. Other borrowed money:
a. With a remaining maturity of one year or less.................................. RCFD 2332 728,728 16.a.
b. With a remaining maturity of more than one year................................ RCFD 2333 291,910 16.b.
17. Mortage indebtedness and obligations under capitalized leases..................... RCFD 2910 0 17.
18. Bank's liability on acceptance executed and outstanding........................... RCFD 2920 881 18.
19. Subordinated notes and debentures................................................. RCFD 3200 43,500 19.
20. Other liabilities (from Schedule RC-G)............................................ RCFD 2930 16,829 20.
21. Total liabilities (sum of items 13 through 20).................................... RCFD 2948 2,203,726 21.
22. Limited-life preferred stock and related surplus.................................. RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus..................................... RCFD 3838 0 23.
24. Common stock...................................................................... RCFD 3230 98,474 24.
25. Surplus (exclude all surplus related to preferred stock).......................... RCFD 3839 153,975 25.
26. a. Undivided profits and capital reserves......................................... RCFD 3632 29,737 26.a.
b. Net unrealized holding gains (losses) on available-for-sale securities......... RCFD 8434 (7) 26.b.
27. Cumulative foreign currency translation adjustments............................... RCFD 3284 (1,723) 27.
28. Total equity capital (sum of items 23 through 27)................................. RCFD 3210 280,456 28.
29. Total liabilities limited-life preferred stock, and equity capital (sum of items
21, 22, and 28)................................................................... RCFD 3300 2,484,182 29.
----------------------------------
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best Number
describe the most comprehensive level of auditing work performed for the bank by -------------------------
independent external auditors as of any date during 1995................................... RCFD 6724 N/A M.1.
-------------------------
1 = Independent audit of the bank conducted in accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in accordance with generally accepted auditing standards by a
certified public accounting firm which submits a report on the consolidated holding company (but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally accepted auditing standards by a certified public
accounting firm (may be required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors (may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- --------------------
(1) Includes total demand deposits and noninterest-bearing time and savings deposits.
</TABLE>
