<PAGE>
Filed pursuant to Rule 424(b)(5)
Registration No. 33-50955
PROSPECTUS SUPPLEMENT
(To Prospectus dated November 20, 1996)
$125,000,000
WISCONSIN BELL, INC.
6.35% DEBENTURES DUE 2026
------------------
INTEREST PAYABLE JUNE 1 AND DECEMBER 1
------------------
The Debentures will mature on December 1, 2026. The Debentures may be repaid
in whole or in part at the option of the holder thereof on December 1, 2006
(the "Repayment Date"), at their principal amount plus accrued interest to the
Repayment Date.
The Debentures will be represented by one or more global securities
registered in the name of a nominee of The Depository Trust Company, as
Depository. Ownership of interests in the global securities will be shown on,
and the transfer thereof will be effected only through, records maintained by
the Depository or its nominee for such global securities and on the records of
participants. Except as otherwise described under "Certain Terms of the
Debentures--Book Entry Procedures" below or "Description of Debt Securities--
Global Securities" in the accompanying Prospectus, owners of beneficial
interests in the global securities will not be entitled to receive Debentures
in definitive form and will not be considered the holders thereof. Settlement
for the Debentures will be made in immediately available funds. The Debentures
will trade in the Depository's Same-Day Funds Settlement System and secondary
market trading activity for the Debentures will therefore settle in
immediately available funds. See "Certain Terms of the Debentures--Settlement
and Payment."
------------------
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.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT(2) COMPANY(1)(3)
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Debenture.................... 99.991% .65% 99.341%
- -------------------------------------------------------------------------------------------
Total............................ $124,988,750 $812,500 $124,176,250
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) Plus accrued interest, if any, from November 25, 1996.
(2) The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
(3) Before deducting expenses payable by the Company estimated at $185,000.
------------------
The Debentures offered by this Prospectus Supplement are offered by the
Underwriter subject to prior sale, withdrawal, cancellation or modification of
the offer without notice, to delivery to and acceptance by the Underwriter and
to certain further conditions. It is expected that delivery of the Debentures
will be made in book-entry form through The Depository Trust Company on or
about November 25, 1996.
------------------
LEHMAN BROTHERS
November 20, 1996
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE DEBENTURES
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
The net proceeds from the sale of the Debentures offered hereby will be used
to repay short-term indebtedness of Wisconsin Bell, Inc. (the "Company")
borrowed under financing arrangements between the Company and Ameritech
Corporation, the Company's parent ("Ameritech"), which provide that the
Company may borrow or repay amounts on a daily basis at market rates.
CERTAIN TERMS OF THE DEBENTURES
The Debentures are to be issued under an Indenture, dated as of May 15, 1993
(the "Indenture"), between the Company and Harris Trust and Savings Bank, as
trustee (the "Trustee"). The following summaries of certain provisions of the
Indenture and the Debentures offered hereby (referred to in the accompanying
Prospectus as "Debt Securities" and "Offered Debt Securities") supplement, and
to the extent inconsistent therewith replace, the description of the general
terms and provisions of the Debt Securities set forth in the accompanying
Prospectus, to which description reference is hereby made. The following
summaries 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.
Capitalized terms used but not defined herein or in the accompanying
Prospectus shall have the meanings given to them in the Indenture.
GENERAL
The Debentures will represent unsecured and unsubordinated obligations of
the Company and will rank on a parity with all other unsecured and
unsubordinated indebtedness of the Company. The Debentures will be limited to
$125,000,000 aggregate principal amount and will mature on December 1, 2026.
The Debentures will bear interest at the annual rate shown on the cover page
of this Prospectus Supplement from November 25, 1996 or from the most recent
date on which interest has been paid or provided for, payable semi-annually on
June 1 and December 1 of each year, commencing June 1, 1997, to the persons in
whose names such Debentures were registered at the close of business on the
next preceding May 15 and November 15, respectively.
Until the Debentures 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, Chicago, Illinois, or Milwaukee, Wisconsin
capable of performing the duties described herein to be performed by the
Paying Agent. The Company has initially appointed Harris Trust and Savings
Bank, 311 West Monroe Street, Chicago, Illinois 60606, as the Paying Agent.
The Company will notify the holders of the Debentures, in accordance with the
Indenture, of any change in the Paying Agent or its address. Harris Trust and
Savings Bank also serves as Trustee under the Indenture.
Any payment otherwise required to be made in respect of a Debenture on a
date that is not a Business Day for such Debenture 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.
The Indenture does not contain covenants or other provisions designed to
afford holders of Debentures protection in the event of a highly leveraged
transaction, change in credit or other similar occurrence.
S-2
<PAGE>
The Debentures are not subject to redemption prior to maturity and are not
entitled to any sinking fund.
REPAYMENT AT OPTION OF HOLDER
The Debentures may be repaid in whole or in part in increments of $1,000 on
the Repayment Date shown on the cover page of this Prospectus Supplement, at
the option of the holder thereof, at a repayment price equal to 100% of the
principal amount together with interest thereon payable to the Repayment Date
(the "Repayment Amount"). If the Repayment Date is not a Business Day, the
Company will pay the Repayment Amount for Debentures with respect to which it
has received the required notice (as hereinafter described) on the next
succeeding Business Day. In order for a holder to be repaid, the Company must
receive at the office of the Trustee's New York affiliate, Harris Trust
Company of New York, at 77 Water Street, 4th Floor, New York, New York 10005,
during the period from and including October 1, 2006 to and including October
31, 2006 or, if such date is not a Business Day, the next succeeding Business
Day (the "Election Period"), (i) a Debenture with the form entitled "Option to
Elect Repayment" on the reverse side of the Debenture duly completed, or (ii)
a telegram, telex, facsimile transmission or letter from a member of a
national securities exchange or the National Association of Securities
Dealers, Inc. or a commercial bank or a trust company in the United States of
America setting forth the name of the holder of the Debenture, the principal
amount of the Debenture, the amount of the Debenture to be repaid, a statement
that the option to elect repayment is being exercised thereby and a guarantee
that the Debenture to be repaid with the form entitled "Option to Elect
Repayment" on the reverse of the Debenture duly completed will be received by
the Company not later than five Business Days after the date of such telegram,
telex, facsimile transmission or letter and such Debenture and form duly
completed are received by the Company by such fifth Business Day. Any such
election shall be irrevocable. All questions as to the validity, eligibility
(including time of receipt) and acceptance of any Debenture for repayment will
be determined by the Company, whose determination will be final and binding.
After the Election Period, the holders of the Debentures shall not have any
option to elect repayment.
As long as the Debentures are represented by global securities, the
Depository (as hereinafter defined) or the Depository's nominee will be the
registered holder of the Debentures and therefore will be the only entity that
can exercise a right of repayment. As a result, a beneficial owner of a
Debenture wishing to exercise the repayment option must direct the applicable
participant in sufficient time prior to the expiration of the Election Period
for such participant to direct the Depository, and for the Depository, to
comply with the above instructions. Different firms may have different
deadlines for accepting instructions from their customers. Accordingly,
beneficial owners of Debentures should consult the participants through which
they own their interests therein for the respective deadlines for such
participants.
BOOK-ENTRY PROCEDURES
The Debentures will be issued initially in the form of fully registered
global securities which will be deposited with, or on behalf of, The
Depository Trust Company, New York, New York (the "Depository"), and
registered in the name of the Depository's nominee. Except as set forth in the
Prospectus under "Description of Debt Securities--Global Securities," the
Debentures will not be issuable in certificated form.
The Depository has advised the Company and Lehman Brothers Inc. (the
"Underwriter") as follows: The Depository 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. The Depository holds
securities that its participants ("Participants") deposit with the Depository.
The Depository also facilitates the settlement among Participants of
securities transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in Participants'
accounts,
S-3
<PAGE>
thereby eliminating the need for physical movement of securities certificates.
Direct Participants include securities brokers and dealers (including the
Underwriter), banks, trust companies, clearing corporations and certain other
organizations. The Depository is owned by a number of its Direct Participants
and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc.
and the National Association of Securities Dealers, Inc. Access to the
Depository'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. The
rules applicable to the Depository and its Participants are on file with the
Securities and Exchange Commission.
A further description of the Depository's procedures with respect to global
securities is set forth in the Prospectus under "Description of Debt
Securities--Global Securities."
SETTLEMENT AND PAYMENT
Settlement for the Debentures will be made by the Underwriter in immediately
available funds. All payments of principal and interest will be made by the
Company in immediately available funds. The Debentures will trade in the
Depository's Same-Day Funds Settlement System until maturity, and secondary
market trading in the Debentures will therefore be required by the Depository
to settle in immediately available funds.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement,
the Company has agreed to sell to the Underwriter, and the Underwriter has
agreed to purchase, the entire principal amount of the Debentures.
The Company has been advised that the Underwriter proposes initially to
offer the Debentures to the public at the public offering price set forth on
the cover page of this Prospectus Supplement, and to certain dealers at such
price less a concession not in excess of 0.40% of the principal amount. The
Underwriter may allow and such dealers may reallow a concession not in excess
of 0.25% of the principal amount to certain other dealers. After the initial
public offering, the public offering price and such concessions may be
changed.
The Debentures are a new issue of securities with no established trading
market. The Company has been advised by the Underwriter that the Underwriter
intends to make a market in the Debentures but is not obligated to do so and
may discontinue market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for the Debentures.
Lehman Brothers Inc. and certain of its affiliates have engaged and may in
the future engage in transactions with and perform services for the Company
and for affiliates of the Company in the ordinary course of business.
The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
The Underwriter has agreed to reimburse the Company for certain of its
expenses in connection with the offering of the Debentures.
S-4
<PAGE>
PROSPECTUS
WISCONSIN BELL, INC.
DEBT SECURITIES
Wisconsin Bell, Inc. (the "Company") from time to time may offer its
unsecured notes, debentures, or other debt securities (the "Debt Securities"),
in one or more series, in an aggregate principal amount sufficient to result
in net proceeds to the Company of up to U.S. $200,000,000 (or its equivalent
in foreign denominated currencies or European Currency Units or other
composite currencies). Debt Securities may be issued in registered form
without coupons ("Registered Securities"), in bearer form with or without
coupons attached ("Bearer Securities") or in the form of one or more global
securities (each a "Global Security").
When a particular series of Debt Securities is offered, a supplement to this
Prospectus will be delivered (the "Prospectus Supplement") together with this
Prospectus setting forth the terms of such Debt Securities, including, where
applicable, the specific designation, aggregate principal amount, currency or
currencies in which the principal, premium, if any, and interest are payable,
denominations, maturity, rate (which may be fixed or variable) and time of
payment of interest, any terms for redemption, any terms for repayment at the
option of the holder, any terms for sinking fund payments, the initial public
offering price, the names of, and the principal amounts to be purchased by or
sold through, underwriters, agents or dealers and the compensation of such
underwriters, agents or dealers, any listing of the Debt Securities on a
securities exchange and the other terms in connection with the offering and
sale of such Debt Securities.
The Company may sell the Debt Securities to or through dealers or
underwriters, directly to other purchasers or through agents. If an agent of
the Company or a dealer or an underwriter is involved in the sale of the Debt
Securities in respect of which this Prospectus is being delivered, the agent's
commission or dealer's or underwriter's discount will be set forth in, or may
be calculated from, the Prospectus Supplement. The net proceeds to the Company
from such sale, which will be set forth in the Prospectus Supplement, will be
the purchase price of such Debt Securities less such commission in the case of
an agent, the purchase price of such Debt Securities in the case of a dealer
or the public offering price less such discount in the case of an underwriter,
and less, in each case, the other attributable issuance expenses. See "Plan of
Distribution" for possible indemnification arrangements for any agents,
dealers or underwriters.
This Prospectus may not be used to consummate sales of Debt Securities
unless accompanied by the Prospectus Supplement applicable to the Debt
Securities being sold.
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 November 20, 1996.
<PAGE>
IN CONNECTION WITH ANY OFFERING OF DEBT SECURITIES, UNDERWRITERS OR AGENTS
MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET
PRICES OF THE DEBT SECURITIES 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.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports and other information filed by the
Company with the Commission may be inspected and copied at the public
reference facilities maintained by the Commission at its principal office at
Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549,
and at the Commission's regional offices located at Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and at Seven World
Trade Center, Suite 1300, New York, New York 10048. Copies of such materials
can be obtained by mail from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Such
material may also be inspected and copied at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005, on which exchange certain
of the Company's debt securities are listed. The Commission also maintains a
web site (http://www.sec.gov) that contains reports and other information
regarding registrants that file electronically with the Commission.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information, reference is hereby made to the Registration Statement.
The Company is not required to, nor does it intend to, provide annual or
other reports to holders of the Debt Securities.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission (File No.
1-6589) are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995.
2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1996, June 30, 1996 and September 30, 1996.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the Debt Securities shall be deemed to
be incorporated by reference into this Prospectus and to be a 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.
2
<PAGE>
The Company will provide without charge to each person, including any
beneficial owner, to whom a Prospectus is delivered, upon written or oral
request of such person, a copy of any or all of the documents which are
incorporated by reference herein, other than exhibits to such documents which
are not specifically incorporated by reference therein. Requests should be
directed to the Vice President--Investor Relations, Ameritech Corporation, 30
South Wacker Drive, Chicago, Illinois 60606 (telephone number (312) 750-5353).
WISCONSIN BELL, INC.
The Company is incorporated under the laws of the State of Wisconsin and has
its principal executive offices at 722 North Broadway, Milwaukee, Wisconsin
53202 (telephone number (800) 257-0902). The Company was an associated company
of the Bell System and a wholly owned subsidiary of American Telephone and
Telegraph Company ("AT&T") through December 31, 1983. Effective January 1,
1984, the Company became a wholly owned subsidiary of Ameritech Corporation
("Ameritech") pursuant to a court-ordered divestiture of certain AT&T assets.
Ameritech was incorporated in October 1983 under the laws of the State of
Delaware and has its principal executive offices at 30 South Wacker Drive,
Chicago, Illinois 60606 (telephone number (800) 257-0902). In 1990, the
Company elected to operate without a Board of Directors as a statutory close
corporation as permitted under Wisconsin law. The responsibility for decisions
formerly made by the Board of Directors of the Company has been assumed by
Ameritech as sole shareholder through Ameritech's Board of Directors and a
management team comprised of senior officers of Ameritech.
The Company is engaged in the business of furnishing telecommunications
services within Wisconsin, primarily consisting of local exchange, intraLATA
toll and network access services. The Company primarily markets its services
under the names "Ameritech" and "Ameritech Wisconsin."
RATIOS OF EARNINGS TO FIXED CHARGES OF THE COMPANY
The following table sets forth the ratio of earnings to fixed charges of the
Company for the periods indicated.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------------- ----------------------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
------ ------ ----- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
10.83 10.01 10.01 5.87 6.73 4.55 4.30
</TABLE>
For the purpose of calculating this ratio, earnings consist of income before
interest expense, income tax, extraordinary charge, the cumulative effect of
change in accounting principles, undistributed equity earnings and the portion
of rental expense representative of the interest factor. Fixed charges
comprise total interest expense including capital lease obligations, together
with capitalized interest, and the portion of rental expense (one-third) the
Company considers to be the amount representing return on capital.
The results for 1995 reflect a $24.1 million pretax credit primarily from
settlement gains resulting from lump sum pension payments from the Ameritech
pension plan to former employees who left the Company in a nonmanagement work
force restructuring, partially offset by increased work force costs related to
the restructuring started in 1994. Results for 1994 reflect a $71.8 million
pretax charge associated with the nonmanagement work force restructuring.
Costs of the work force restructuring program have largely been funded from
the Ameritech pension plan.
USE OF PROCEEDS
The Company expects to use the net proceeds from the sale of the Debt
Securities to refinance or retire certain outstanding debt and for general
corporate purposes.
3
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions of
the Debt Securities to which any Prospectus Supplement may relate. The
particular terms and provisions of the series of Debt Securities offered by a
Prospectus Supplement (the "Offered Debt Securities"), and the extent to which
such general terms and provisions described below may apply thereto, will be
described in the Prospectus Supplement relating to such Offered Debt
Securities.
The Debt Securities are to be issued under an Indenture (the "Indenture"),
between the Company and Harris Trust and Savings Bank, as trustee (the
"Trustee"), a copy of which is incorporated by reference as an exhibit to the
Registration Statement of which this Prospectus is a part.
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 provisions of the Debt Securities and
the Indenture, including the definitions therein of capitalized terms which
are used but are not defined herein. All section references used herein are to
sections in the Indenture.
GENERAL
The Indenture does not limit the amount of Debt Securities that may be
issued thereunder and provides that Debt Securities may be issued thereunder
from time to time in one or more series. (Section 301). The Indenture does not
limit the amount of other indebtedness or securities which may be issued by
the Company.
Each series of Debt Securities will constitute unsecured and unsubordinated
indebtedness of the Company and will rank on a parity with the Company's other
unsecured and unsubordinated indebtedness.
The Indenture does not contain covenants or other provisions designed to
afford Holders (as defined in the Indenture) of the Debt Securities protection
in the event of a highly leveraged transaction, change in credit rating or
other similar occurrence.
Reference is made to the Prospectus Supplement relating to the particular
Offered Debt Securities offered thereby for the following terms of the Offered
Debt Securities: (i) the title of the Offered Debt Securities or the
particular series thereof; (ii) any limit on the aggregate principal amount of
the Offered Debt Securities; (iii) whether the Offered Debt Securities are to
be issuable as Registered Securities or Bearer Securities or both, whether any
of the Offered Debt Securities are to be issuable initially in temporary
global form and whether any of the Offered Debt Securities are to be issuable
in permanent global form; (iv) the price or prices (generally expressed as a
percentage of the aggregate principal amount thereof) at which the Offered
Debt Securities will be issued; (v) the date or dates on which the Offered
Debt Securities will mature; (vi) the rate or rates per annum, or the formula
by which such rate or rates shall be determined, at which the Offered Debt
Securities will bear interest, if any, and the dates from which any such
interest will accrue; (vii) the Interest Payment Dates on which any such
interest on the Offered Debt Securities will be payable, the Regular Record
Date for any interest payable on any Offered Debt Securities that are
Registered Securities on any Interest Payment Date and the extent to which, or
the manner in which, any interest payable on a Global Security on an Interest
Payment Date will be paid if other than in the manner described below under
"Global Securities"; (viii) any mandatory or optional sinking fund or
analogous provisions; (ix) each office or agency where, subject to the terms
of the Indenture as described below under "Payments and Paying Agents", the
principal of and any premium and interest on the Offered Debt Securities will
be payable and each office or agency where, subject to the terms of the
Indenture as described below under "Denominations, Registration and Transfer",
the Offered Debt Securities may be presented for registration of transfer or
exchange; (x) the date, if any, after which and the price or prices at which
the Offered Debt Securities may, pursuant to any optional or mandatory
redemption provisions, be redeemed, in whole or in part, and the other
detailed terms and provisions of any such optional or mandatory redemption
provisions; (xi) the date, if any, after which and the price or prices at
which the Offered Debt Securities will be repayable at the option of the
holder thereof prior to maturity; (xii) the denominations in which
4
<PAGE>
any Offered Debt Securities which are Registered Securities will be issuable,
if other than denominations of U.S. $1,000 and any integral multiple thereof,
and the denominations in which any Offered Debt Securities which are Bearer
Securities will be issuable, if other than denominations of U.S. $5,000;
(xiii) the currency or currencies of payment of principal of and any premium
and interest on the Offered Debt Securities; (xiv) any index used to determine
the amount of payments of principal of and any premium and interest on the
Offered Debt Securities; (xv) any additional covenants applicable to the
Offered Debt Securities; and (xvi) any other terms and provisions of the
Offered Debt Securities not inconsistent with the terms and provisions of the
Indenture. Any such Prospectus Supplement will also describe any special
provisions for the payment of additional amounts with respect to the Offered
Debt Securities. (Section 301).
If the purchase price of any of the Debt Securities is denominated in a
foreign currency or currencies or foreign currency unit or units or if the
principal of and any premium and interest on any series of Debt Securities is
payable in a foreign currency or currencies or foreign currency unit or units,
the restrictions, elections, general tax considerations, specific terms and
other information with respect to such issue of Debt Securities and such
foreign currency or currencies or foreign currency unit or units will be set
forth in the applicable Prospectus Supplement.
Some of the Debt Securities may be issued as original issue discount
securities (bearing no interest or interest at a rate which at the time of
issuance is below market rates) to be sold at a substantial discount below
their stated principal amount. Federal income tax considerations and other
special considerations applicable to original issue discount securities will
be set forth in the applicable Prospectus Supplement.
DENOMINATIONS, REGISTRATION AND TRANSFER
The Debt Securities will be issuable as Registered Securities, Bearer
Securities or both. Debt Securities may be issuable in the form of one or more
Global Securities, as described below under "Global Securities". Unless
otherwise provided in the applicable Prospectus Supplement, Registered
Securities denominated in U.S. dollars will be issued only in denominations of
$1,000 or any integral multiple thereof and Bearer Securities denominated in
U.S. dollars will be issued only in denominations of $5,000 with coupons
attached. A Global Security will be issued in a denomination equal to the
aggregate principal amount of outstanding Debt Securities represented by such
Global Security. The Prospectus Supplement relating to Debt Securities
denominated in a foreign or composite currency will specify the denominations
thereof. (Sections 201, 203, 301 and 302).
In connection with its original issuance, no Bearer Security shall be mailed
or otherwise delivered to any location in the United States (or its
possessions) (as defined below under "Certain Limitations on Issuance of
Bearer Securities") and a Bearer Security may be delivered in connection with
its original issuance only if the person entitled to receive such Bearer
Security furnishes written certification, in the form required by the
Indenture, to the effect that such Bearer Security is not being acquired by or
on behalf of a United States person (as defined below under "Certain
Limitations on Issuance of Bearer Securities"), or, if a beneficial interest
in such Bearer Security is being acquired by or on behalf of a United States
person, that such United States person is a financial institution which agrees
to comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the
United States Internal Revenue Code of 1986, as amended (the "Code"), and the
regulations thereunder. (Sections 303 and 304). See "Global Securities" and
"Certain Limitations on Issuance of Bearer Securities" below.
Registered Securities of any series will be exchangeable for other
Registered Securities of the same series and of a like aggregate principal
amount and tenor of different authorized denominations. In addition, if Debt
Securities of any series are issuable as both Registered Securities and as
Bearer Securities, at the option of the holder upon request confirmed in
writing, and subject to the terms of the Indenture, Bearer Securities (with
all unmatured coupons, except as provided below, and all matured coupons in
default attached) of such series will be exchangeable for Registered
Securities of the same series of any authorized denominations and of a like
aggregate principal amount and tenor. Unless otherwise indicated in an
applicable Prospectus Supplement, any
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Bearer Security surrendered in exchange for a Registered Security between a
Regular Record Date or a Special Record Date and the relevant date for payment
of interest shall be surrendered without the coupon relating to such date for
payment of interest attached and interest will not be payable in respect of
the Registered Security issued in exchange for such Bearer Security, but will
be payable only to the holder of such coupon when due in accordance with the
terms of the Indenture. Except as provided in an applicable Prospectus
Supplement, Bearer Securities will not be issued in exchange for Registered
Securities. (Section 305).
Debt Securities may be presented for exchange as provided above, and
Registered Securities (other than a Global Security) may be presented for
registration of transfer (with the form of transfer duly executed), at the
office of the Security Registrar designated by the Company or at the office of
any transfer agent designated by the Company for such purpose with respect to
any series of Debt Securities and referred to in an applicable Prospectus
Supplement, without service charge and upon payment of any taxes and other
governmental charges as described in the Indenture. Such transfer or exchange
will be effected upon the Security Registrar or such transfer agent, as the
case may be, being satisfied with the documents of title and identity of the
person making the request. The Company has initially appointed the Trustee as
the Security Registrar under the Indenture. (Section 305). If a Prospectus
Supplement refers to any transfer agent (in addition to the Security
Registrar) initially designated by the Company with respect to any series of
Debt Securities, the Company may at any time rescind the designation of any
such transfer agent or approve a change in the location through which any such
transfer agent acts, except that, if Debt Securities of a series are issuable
only as Registered Securities, the Company will be required to maintain a
transfer agent in each Place of Payment for such series and, if Debt
Securities of a series are issuable as Bearer Securities, the Company will be
required to maintain (in addition to the Security Registrar) a transfer agent
in a Place of Payment for such series located outside the United States (or
its possessions). The Company may at any time designate additional transfer
agents with respect to any series of Debt Securities. (Section 1002).
In the event of any redemption in part, the Company shall not be required to
(i) issue, register the transfer of or exchange Debt Securities of any series
during a period beginning at the opening of business 15 days before the day of
the mailing of a notice of redemption of Debt Securities of that series
selected to be redeemed and ending at the close of business on (a) if Debt
Securities of the series are issuable only as Registered Securities, the day
of mailing of the relevant notice of redemption and (b) if Debt Securities of
the series are issuable only as Bearer Securities, the day of the first
publication of the relevant notice of redemption or, if Debt Securities of
that series are also issuable as Registered Securities and there is no
publication, the mailing of the relevant notice of redemption; (ii) register
the transfer of or exchange any Registered Security, or portion thereof,
called for redemption, except the unredeemed portion of any Registered
Security being redeemed in part; or (iii) exchange any Bearer Security called
for redemption, except to exchange such Bearer Security for a Registered
Security of that series and like tenor which is immediately surrendered for
redemption. (Section 305).
PAYMENTS AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and any premium and interest on Registered Securities (other
than a Global Security) will be made at the office of such Paying Agent or
Paying Agents as the Company may designate from time to time, except that, at
the option of the Company, payment of any interest may be made (i) by check
mailed to the address of the payee entitled thereto as such address shall
appear in the Security Register or (ii) by wire transfer to an account
maintained by such payee as specified in the Security Register. (Sections 305,
307 and 1002). Unless otherwise indicated in an applicable Prospectus
Supplement, payment of any installment of interest on Registered Securities
will be made to the person in whose name such Registered Security is
registered at the close of business on the Regular Record Date for such
interest payment. (Section 307).
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and any premium and interest on Bearer Securities will be
payable (subject to applicable laws and regulations) at the offices of such
Paying Agent or Paying Agents outside the United States (or its possessions)
as the Company may designate from time to time, except that, at the option of
the Company, payment of any interest may be
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made by check or by wire transfer to an account maintained by the payee
outside the United States (or its possessions). (Sections 307 and 1002).
Unless otherwise indicated in an applicable Prospectus Supplement, payment of
interest on Bearer Securities on any Interest Payment Date will be made only
against surrender of the coupon relating to such Interest Payment Date.
(Section 1001). No payment with respect to any Bearer Security will be made at
any office or agency of the Company in the United States (or its possessions)
or by check mailed to any address in the United States (or its possessions) or
by transfer to an account maintained in the United States (or its
possessions). Payments will not be made in respect of Bearer Securities or
coupons appertaining thereto pursuant to presentation to the Company or its
Paying Agents within the United States (or its possessions) or any other
demand for payment to the Company or its Paying Agents within the United
States (or its possessions). Notwithstanding the foregoing, payment of
principal of and any premium and interest on Bearer Securities denominated and
payable in U.S. dollars will be made at the office of the Company's Paying
Agent in the United States if, and only if, payment of the full amount thereof
in U.S. dollars at all offices or agencies outside the United States (or its
possessions) is illegal or effectively precluded by exchange controls or other
similar restrictions. (Section 1002).
Unless otherwise indicated in an applicable Prospectus Supplement, the
principal office of the Trustee in Chicago, Illinois will be designated as the
Company's Paying Agent office for payments with respect to Debt Securities
which are issuable solely as Registered Securities. Any Paying Agent outside
the United States and any other Paying Agent in the United States initially
designated by the Company for the Debt Securities will be named in the
applicable Prospectus Supplement. The Company may at any time designate
additional Paying Agents or rescind the designation of any Paying Agent or
approve a change in the office through which any Paying Agent acts, except
that, if Debt Securities of a series are issuable only as Registered
Securities, the Company will be required to maintain a Paying Agent in each
Place of Payment for such series and, if Debt Securities of a series are
issuable as Bearer Securities, the Company will be required to maintain (i) a
Paying Agent in each Place of Payment for such series in the United States for
payments with respect to any Registered Securities of such series (and for
payments with respect to Bearer Securities of such series in the circumstances
described above, but not otherwise), (ii) a Paying Agent in each Place of
Payment located outside the United States where (subject to applicable laws
and regulations) Debt Securities of such series and any coupons appertaining
thereto may be presented and surrendered for payment; provided that if the
Debt Securities of such series are listed on The International Stock Exchange,
London or the Luxembourg Stock Exchange or any other stock exchange located
outside the United States and such stock exchange shall so require, the
Company will maintain a Paying Agent in London or Luxembourg City or any other
required city located outside the United States, as the case may be, for Debt
Securities of such series, and (iii) a Paying Agent in each Place of Payment
located outside the United States where (subject to applicable laws and
regulations) Registered Securities of such series may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company may be served. (Section 1002).
All moneys paid by the Company to a Paying Agent for the payment of
principal of and any premium or interest on any Debt Security that remains
unclaimed at the end of two years after such principal, premium or interest
shall have become due and payable will be repaid to the Company and thereafter
the holder of such Debt Security or any coupon appertaining thereto will look
only to the Company for payment thereof. (Section 1003).
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on
behalf of, a depository identified in the applicable Prospectus Supplement
(the "Depository"). Global Securities may be issued in either registered or
bearer form and in either temporary or permanent form. (Section 305). Unless
and until it is exchanged for Debt Securities in definitive form, a temporary
Global Security in registered form may not be transferred except as a whole by
the Depository for such Global Security to a nominee of such Depository or by
a nominee of such Depository to such Depository or another nominee of such
Depository or by such Depository or any such nominee to a successor of such
Depository or a nominee of such successor. (Section 304).
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The specific terms of the depository arrangement with respect to a series of
Debt Securities or any part thereof will be described in the applicable
Prospectus Supplement. The Company anticipates that the following provisions
will apply to all depository arrangements relating to Global Securities.
Upon the issuance of a Global Security, the Depository for such Global
Security or its nominee will credit the accounts of persons holding beneficial
interests in such Global Security with the respective principal amounts of the
Debt Securities represented by such Global Security. Such accounts shall be
designated by the underwriters or agents with respect to such Debt Securities
or by the Company if such Debt Securities are offered and sold directly by the
Company. Ownership of beneficial interests in a Global Security will be
limited to persons that have accounts with the Depository for such Global
Security or its nominee ("participants") or persons that may hold interests
through participants. Ownership of beneficial interests in such Global
Security will be shown on, and the transfer of that ownership will be effected
only through, records maintained by the Depository or its nominee (with
respect to interests of participants) for such Global Security and on the
records of participants (with respect to interests of persons other than
participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limitation and such laws may impair the ability to transfer beneficial
interests in a Global Security.
So long as the Depository for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depository or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture. (Section 308). Except as provided below, owners of beneficial
interests in a Global Security will not be entitled to have Debt Securities
represented by such Global Security registered in their names, will not
receive or be entitled to receive physical delivery of such Debt Securities in
definitive form and will not be considered the owners or holders thereof under
the Indenture.
Payment of principal of and any premium and interest on Debt Securities
registered in the name of a Depository or its nominee will be made to the
Depository or its nominee, as the case may be, as the registered owner of the
Global Security representing such Debt Securities. Neither the Company, the
Trustee, any Paying Agent nor the Security Registrar for such Debt Securities
will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests of
the Global Security for such Debt Securities or for maintaining, supervising
or receiving any records relating to such beneficial ownership interests.
Subject to the restrictions discussed under "Certain Limitations on Issuance
of Bearer Securities" below, the Company expects that the Depository or its
nominee, as the case may be, upon receipt of any payment of principal, premium
or interest, will credit immediately participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the
principal amount of the Global Security for such Debt Securities as shown on
the records of such Depository or its nominee. The Company also expects that
payments by participants to owners of beneficial interests in such Global
Security held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name",
and will be the responsibility of such participants. Receipt by owners of
beneficial interests in a temporary Global Security of payments in respect of
such temporary Global Security will be subject to restrictions discussed under
"Certain Limitations on Issuance of Bearer Securities" below.
If the Depository is at any time unwilling or unable to continue as
depository and a successor depository is not appointed by the Company within
90 days, the Company will issue Debt Securities of such series in definitive
form in exchange for the Global Security representing such series of Debt
Securities. In addition, the Company may at any time and in its sole
discretion determine not to have the Registered Securities of a series
represented by a Global Security and, in such event, the Company will issue
Registered Securities of such series in definitive form in exchange for the
Global Security representing such series of Registered Securities. Further, if
the Company so specifies with respect to the Debt Securities of a series, an
owner of a beneficial interest in a Global
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Security representing Debt Securities of such series may, on terms acceptable
to the Company and the Depository, receive Debt Securities of such series in
definitive form. In any such instance, an owner of a beneficial interest in a
Global Security will be entitled to physical delivery in definitive form of
Debt Securities of the series represented by such Global Security equal in
principal amount to such beneficial interest and to have such Debt Securities
registered in its name (if the Debt Securities of such series are issuable as
Registered Securities). Debt Securities of such series so issued in definitive
form will be issued (i) as Registered Securities in denominations, unless
otherwise specified by the Company, of U.S. $1,000 and integral multiples
thereof if the Debt Securities of such series are issuable as Registered
Securities, (ii) as Bearer Securities in denominations, unless otherwise
specified by the Company, of U.S. $5,000 with coupons attached if the Debt
Securities of such series are issuable as Bearer Securities, or (iii) as
either Registered or Bearer Securities, if the Debt Securities of such series
are issuable in either form. (Section 305). See, however, "Certain Limitations
on Issuance of Bearer Securities" below for a description of certain
restrictions on the issuance of a Bearer Security in definitive form in
exchange for an interest in a Global Security.
CERTAIN LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
In compliance with United States federal tax laws and regulations, Bearer
Securities may not be offered, sold, resold or delivered in connection with
their original issue in the United States (or its possessions) or to United
States persons (each as defined in the Code and the regulations thereunder)
other than to offices located outside of the United States of United States
financial institutions which agree to comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the Code and the regulations thereunder, and any
underwriters, agents and dealers participating in the offering of Debt
Securities must agree that they will not offer any Bearer Securities for sale
or resale in the United States (or its possessions) or to United States
persons (other than the financial institutions described above) nor deliver
Bearer Securities within the United States (or its possessions).
Bearer Securities and any coupons appertaining thereto will bear a legend
substantially to the following effect: "Any United States person who holds
this obligation will be subject to limitations under the United States income
tax laws, including the limitations provided in Sections 165(j) and 1287(a) of
the Internal Revenue Code". Under Sections 165(j) and 1287(a) of the Code,
holders that are United States persons, with certain exceptions, will not be
entitled to deduct any loss on Bearer Securities and must treat as ordinary
income any gain realized on the sale or other disposition (including the
receipt of principal) of Bearer Securities.
Other restrictions and additional tax considerations may apply to the
issuance and holding of Bearer Securities. Holders of Bearer Securities should
consult their tax advisors concerning any such tax restrictions.
LIENS ON ASSETS
If at any time the Company mortgages, pledges, or otherwise subjects to any
lien the whole or any part of any property or assets now owned or hereafter
acquired by it, except as hereinafter provided, the Company will secure the
outstanding Debt Securities, and any other obligations of the Company which
may be then outstanding and entitled to the benefit of a covenant similar in
effect to this covenant, equally and ratably with the indebtedness or
obligations secured by such mortgage, pledge, or lien, for as long as any such
indebtedness or obligation is so secured. The foregoing covenant does not
apply to the creation, extension, renewal or refunding of purchase-money
mortgages or liens, landlords' liens, liens with respect to the sale or
financing of accounts or chattel paper, other liens to which any property or
asset acquired by the Company is subject as of the date of its acquisition by
the Company or to the making of any deposit or pledge to secure public or
statutory obligations or with any governmental agency at any time required by
law in order to qualify the Company to conduct its business or any part
thereof or in order to entitle it to maintain self-insurance or to obtain the
benefits of any law relating to workers' compensation, unemployment insurance,
old age pensions or other social security, or with any court, board,
commission, or governmental agency as security incident to the proper conduct
of any proceeding before it. Nothing contained in the Indenture prevents any
entity other than the Company from mortgaging, pledging, or subjecting to any
lien any of its property or assets, whether or not acquired by such Person
from the Company. (Section 1006).
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RESTRICTIONS ON MERGERS AND SALES OF ASSETS
The Company may not consolidate with or merge into any other corporation, or
convey, transfer or lease its properties and assets substantially as an
entirety to any Person, and the Company may not permit any Person to
consolidate with or merge into the Company or convey, transfer or lease its
properties and assets substantially as an entirety to the Company unless (i)
the corporation formed by such consolidation or into which the Company is
merged or the Person to which the properties and assets of the Company are
transferred substantially as an entirety shall be a corporation organized and
existing under the laws of the United States, any State thereof or the
District of Columbia and shall expressly assume the payment of the principal
of, premium, if any, and interest, if any, on the Debt Securities and the
performance of the other covenants of the Company under the Indenture, (ii)
after giving effect to such transaction, no Event of Default (as defined
below), or event which after notice or lapse of time or both would become an
Event of Default, shall have occurred and be continuing and (iii) if, as a
result of such transaction, properties or assets of the Company would become
subject to a Mortgage not permitted by Section 1006 of the Indenture without
equally and ratably securing the Debt Securities as provided therein (see
"Liens on Assets" above), steps shall have been taken to secure the Debt
Securities equally and ratably with (or prior to) all indebtedness secured
thereby pursuant to Section 1006 of the Indenture. (Section 801).
MODIFICATION AND WAIVER
Certain modifications and amendments of the Indenture, including the rights
of Holders of a series of Outstanding Debt Securities, may be made by the
Company and the Trustee only with the consent of the Holders of a majority in
aggregate principal amount of the Outstanding Debt Securities of each series
affected by the modification or amendment, provided that no such modification
or amendment may, without the consent of the Holder of each Outstanding Debt
Security affected thereby: (i) change the stated maturity date of the
principal of, or any installment of principal or interest on, any such Debt
Security; (ii) reduce the principal amount of, premium, if any, or interest,
if any, on any such Debt Security (including in the case of an Original Issue
Discount Security the amount payable upon acceleration of the Maturity
thereof); (iii) change the Place of Payment where, or the coin or currency in
which, any principal of, premium, if any, or interest, if any, on any such
Debt Security is payable; (iv) impair the right to institute suit for the
enforcement of any payment on or with respect to any such Debt Security; (v)
reduce the above-stated percentage of Outstanding Debt Securities of any
series the consent of the Holders of which is necessary to modify or amend the
Indenture; or (vi) modify the foregoing requirements or reduce the percentage
of aggregate principal amount of Outstanding Debt Securities of any series
necessary for waiver of compliance with certain provisions of the Indenture or
for waiver of certain defaults. (Section 902).
The Holders of a majority in aggregate principal amount of the Outstanding
Debt Securities of any series may, on behalf of the Holders of all Debt
Securities of such series, waive, insofar as such series is concerned,
compliance by the Company with certain restrictive provisions of the
Indenture. (Section 1007). The Holders of a majority in aggregate principal
amount of the Outstanding Debt Securities of any series may, on behalf of the
Holders of all Debt Securities of such series, waive any past default under
the Indenture with respect to such series, except a default in the payment of
the principal of, premium, if any, or interest, if any, on any Debt Security
of such series or in respect of a provision under which the Indenture cannot
be modified or amended without consent of the Holder of each Outstanding Debt
Security of such series affected. (Section 513).
EVENTS OF DEFAULT
The Indenture defines an Event of Default with respect to any series of Debt
Securities as being any one of the following events: (i) default for 90 days
in any payment of interest on such series; (ii) default in any payment of
principal of, or premium, if any, on such series when due; (iii) default in
the payment of any sinking fund installment with respect to such series when
due; (iv) default for 90 days after appropriate notice by the Holders of not
less than 25% in aggregate principal amount of the Outstanding Debt Securities
in performance of any
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other covenant or warranty in the Indenture (other than a covenant or warranty
included in the Indenture solely for the benefit of series of Debt Securities
other than such series); or (v) certain events in bankruptcy, insolvency or
reorganization with respect to the Company. In case an Event of Default shall
occur and be continuing with respect to any series of Debt Securities, the
Trustee or the Holders of not less than 25% in aggregate principal amount of
the Outstanding Debt Securities of such series may declare the principal of
such series (or, if the Debt Securities of such series are Original Issue
Discount Securities, such portion of the principal as may be specified in the
terms of such series) to be due and payable. Any Event of Default with respect
to a particular series of Debt Securities may be waived by the Holders of a
majority in aggregate principal amount of the Outstanding Debt Securities of
such series, except in each case a failure to pay the principal of, premium,
if any, or interest, if any, on such Debt Security. (Sections 501, 502 and
513).
The Company is required to furnish the Trustee, not less often than
annually, with a certificate as to the Company's compliance with all
conditions and covenants under the Indenture. (Section 704(d)).
Reference is made to the Prospectus Supplement relating to each series of
Offered Debt Securities which are Original Issue Discount Securities for the
particular provisions relating to acceleration of the Maturity of a portion of
the principal amount of such Original Issue Discount Securities upon the
occurrence of an Event of Default and the continuation thereof.
The Indenture provides that the Trustee may withhold notice to the Holders
of the Debt Securities of any default (except in the payment of principal,
premium, if any, or interest, if any, or any sinking fund installment) if it
considers it in the interest of the Holders of the Debt Securities to do so.
(Section 602).
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, the
Indenture provides that the Trustee shall be under no obligation to exercise
any of its rights or powers under the Indenture at the request, order or
direction of the Holders of the Debt Securities unless such Holders shall have
offered to the Trustee reasonable indemnity. (Sections 601 and 603(e)).
Subject to such provisions for indemnification and certain other rights of the
Trustee, the Indenture provides that the Holders of a majority in aggregate
principal amount of the Outstanding Debt Securities of any series affected
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee with respect to the Debt Securities of such
series. (Sections 512 and 603).
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 Debt
Securities of such series, (ii) the Holders of not less than 25% in aggregate
principal amount of the Outstanding Debt Securities of such series shall have
made written request, and offered reasonable indemnity, to the Trustee to
institute such proceeding as trustee, and (iii) the Trustee shall not have
received from the Holders of a majority in aggregate principal amount of the
Outstanding Debt Securities of such series a direction inconsistent with such
request and shall have failed to institute such proceeding within 60 days.
(Section 507). However, the Holder of any Debt Security will have an absolute
right to receive payment of the principal of, premium, if any, and interest,
if any, on such Debt Security on or after the due dates expressed in such Debt
Security and to institute suit for the enforcement of any such payment.
(Section 508).
DEFEASANCE
Defeasance and Discharge. If the terms of a series of Debt Securities so
provide and the Company deposits or causes to be deposited with the Trustee as
trust funds in trust for that purpose money and/or U.S. Government Obligations
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
and discharge (i) the principal of, and premium, if any, and each installment
of principal and premium, if any, and interest, if any, on the Outstanding
Debt Securities of
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such series on the Stated Maturity of such principal or installment of
principal or interest (or on the Redemption Date of the Outstanding Debt
Securities of such series if the Company has elected to redeem such
Outstanding Debt Securities in accordance with Section 1102 of the Indenture),
and (ii) any mandatory (or, if applicable, optional) sinking fund payments
applicable to the Outstanding Debt Securities of such series on the day on
which such payments are due and payable, then the Indenture will cease to be
of further effect with respect to such series (except for certain obligations
to compensate, reimburse and indemnify the Trustee, to register the transfer
or exchange of Debt Securities, to replace stolen, lost or mutilated Debt
Securities, to maintain paying agencies and to hold monies for payment in
trust and to pay any tax indemnity), and the Company will be deemed to have
satisfied and discharged the Indenture with respect to such series. (Section
403). In the event of any such defeasance, holders of Debt Securities of such
series would be able to look only to such trust fund for payment of principal
of, premium, if any, and interest, if any, on such Debt Securities.
Under current United States federal income tax law, such defeasance will be
treated as a taxable exchange of the related Debt Securities for an interest
in the trust. As a consequence, each holder of such Debt Securities will
recognize gain or loss equal to the difference between the holder's adjusted
tax basis for the Debt Securities and the fair market value of the holder's
interest in the trust. To the extent attributable to accrued but unpaid
interest, the fair market value of the holder's interest in the trust will be
treated as payment of interest and will not be taken into account in
determining such gain or loss. Thereafter such holder will be required to
include in income a share of the income, gain and loss of the trust, including
gain or loss recognized in connection with any substitution of collateral, as
described below under "Substitution of Collateral". Prospective investors are
urged to consult their own tax advisors as to the specific consequences of
such a defeasance.
Defeasance of Certain Covenants and Certain Events of Default. If the terms
of the Debt Securities of any series so provide, the Company may omit to
comply with certain restrictive covenants in Section 801 (Consolidation,
Merger, Conveyance, Transfer or Lease) and Sections 1005 (Purchase of
Securities by Company or Subsidiary) and 1006 (Lien on Assets), and Sections
501(d), 501(e) and 501(f) of the Indenture, as described in clauses (iv) and
(v) under "Events of Default" above, shall not be deemed to be Events of
Default under the Indenture with respect to such series, upon the deposit with
the Trustee, in trust, of money and/or U.S. Government Obligations 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 and
discharge (i) the principal (and premium, if any) and each installment of
principal, and premium, if any, and interest on the Outstanding Debt
Securities of such series on the Stated Maturity of such principal or
installment of principal or interest (or on the Redemption Date of the
Outstanding Debt Securities of such series if the Company has elected to
redeem such Outstanding Debt Securities in accordance with Section 1102 of the
Indenture) and (ii) any mandatory (or, if applicable, optional) sinking fund
payments applicable to the Outstanding Debt Securities of such series on the
day on which such payments are due and payable. The obligations of the Company
under the Indenture and the Debt Securities other than with respect to the
covenants referred to above and the Events of Default other than the Events of
Default referred to above shall remain in full force and effect. (Section
1008).
In the event the Company exercises its option to omit compliance with
certain covenants of the Indenture with respect to the Debt Securities of any
series as described above and the Debt Securities of such series are declared
due and payable because of the occurrence of any Event of Default other than
Events of Default described in clauses (iv) and (v) under "Events of Default"
above, the amount of money and/or U.S. Government Obligations on deposit with
the Trustee will be sufficient to pay amounts due on the Debt Securities of
such series on their Stated Maturity or Redemption Date, but may not be
sufficient to pay amounts due on such Debt Securities at the time of the
acceleration resulting from such Event of Default. However, the Company shall
remain liable for such payments. (Section 1008).
Limitation on Defeasance. To exercise either option referred to above under
Defeasance and Discharge and Defeasance of Certain Covenants and Certain
Events of Default, the Company is required to deliver to the Trustee an
opinion of outside counsel (which opinion, in the case of the option referred
to under Defeasance and Discharge above, is based on there having been, since
the date of the Indenture, a change in the applicable United
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States federal income tax law (including a change in official interpretation
thereof)), or a ruling from or published by the Internal Revenue Service, to
the effect that the exercise of such option will not cause holders of Debt
Securities to recognize income, gain or loss for United States federal income
tax purposes, and that such holders of Debt Securities will be subject to
United States federal income tax on the same amount and in the same manner and
at the same time as would have been the case if such option had not been
exercised.
Substitution of Collateral. If the terms of a series of Debt Securities so
provide, the Company will be permitted at any time to withdraw any money or
U.S. Government Obligations deposited pursuant to the foregoing defeasance
provisions, provided that the Company in substitution therefor simultaneously
deposits money and/or U.S. Government Obligations which would then be
sufficient to satisfy the Company's payment obligations in respect of the Debt
Securities in the manner contemplated by such defeasance provisions.
NOTICES
Except as may otherwise be set forth in an applicable Prospectus Supplement,
notices to holders of Bearer Securities will be given by publication in a
daily newspaper in the English language of general circulation in The City of
New York and in London, and so long as such Bearer Securities are listed on
the Luxembourg Stock Exchange and the Luxembourg Stock Exchange shall so
require, in a daily newspaper of general circulation in Luxembourg City or, if
not practical, elsewhere in Western Europe. Such publication is expected to be
made in The Wall Street Journal, the Financial Times and the Luxemburger Wort.
Notices to holders of Registered Securities will be given by mail to the
addresses of such holders as they appear in the Security Register. (Sections
101 and 106).
TITLE
Title to any temporary global Debt Security, any permanent global Debt
Security, any Bearer Securities and any coupons appertaining thereto will pass
by delivery. The Company, the Trustee and any agent of the Company or the
Trustee may treat the bearer of any Bearer Security, the bearer of any coupon
and the registered owner of any Registered Security as the absolute owner
thereof (whether or not such Debt Security or coupon shall be overdue and
notwithstanding any notice to the contrary) for the purpose of making payment
and for all other purposes. (Section 308).
REPLACEMENT OF SECURITIES AND COUPONS
Any mutilated Security or a Security with a mutilated coupon appertaining
thereto will be replaced by the Company at the expense of the Holder upon
surrender of such Security to the Trustee. Securities or coupons that become
destroyed, stolen or lost will be replaced by the Company at the expense of
the Holder upon delivery to the Trustee of the Security and coupons or
evidence of the destruction, loss or theft thereof satisfactory to the Company
and the Trustee; in the case of any coupon which becomes destroyed, stolen or
lost, such coupon will be replaced by issuance of a new Security in exchange
for the Security to which such coupon appertains. In the case of a destroyed,
lost or stolen Security or coupon, an indemnity satisfactory to the Trustee
and the Company may be required at the expense of the Holder of such Security
or coupon before a replacement Security will be issued. (Section 306).
GOVERNING LAW
The Indenture and the Debt Securities are governed by and construed in
accordance with the laws of the State of Wisconsin. The interest rate on the
Debt Securities will in no event be higher than the maximum rate permitted by
Wisconsin law as the same may be modified by United States law of general
application. Under present Wisconsin law, no maximum rate of interest would
apply to the Debt Securities.
CONCERNING THE TRUSTEE
The Company, Ameritech and certain of Ameritech's subsidiaries maintain
banking relationships in the ordinary course of business with the Trustee, and
the Trustee has a commitment of $50,000,000 under a revolving credit facility
available to Ameritech. The Trustee also serves as indenture trustee under a
mortgage
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granted by Illinois Bell Telephone Company, a wholly-owned subsidiary of
Ameritech, in connection with its publicly issued First Mortgage Bonds and
under certain other unsecured indentures entered into with other subsidiaries
of Ameritech.
PLAN OF DISTRIBUTION
GENERAL
The Company may sell the Debt Securities being offered hereby: (i) directly
to purchasers, (ii) through agents, (iii) through underwriters, (iv) through
dealers or (v) through a combination of any such methods of sale.
The distribution of the Debt Securities may be effected from time to time in
one or more transactions either (i) at a fixed price or prices, which may be
changed; (ii) at market prices prevailing at the time of sale; (iii) at prices
related to such prevailing market prices; or (iv) at negotiated prices.
Offers to purchase Debt Securities may be solicited directly by the Company
or by agents designated by the Company from time to time. Any such agent,
which may be deemed to be an underwriter, as that term is defined in the
Securities Act, involved in the offer or sale of the Debt Securities in
respect of which this Prospectus is delivered will be named, and any
commissions payable by the Company to such agent will be set forth, in the
Prospectus Supplement or in a pricing supplement thereto (the "Pricing
Supplement"). Unless otherwise indicated in the Prospectus Supplement or
Pricing Supplement, any such agent will be acting on a best efforts basis for
the period of its appointment.
If an underwriter or underwriters are utilized in the sale, the Company will
execute an underwriting agreement with such underwriters at the time of sale
to them and the names of the underwriters and the terms of the transaction
will be set forth in the Prospectus Supplement or Pricing Supplement, which
will be used by the underwriters to make resales of the Debt Securities.
If a dealer is utilized in the sale of the Debt Securities in respect of
which this Prospectus is delivered, the Company will sell such Debt Securities
to the dealer, as principal. The dealer may then resell such Debt Securities
to the public at varying prices to be determined by such dealer at the time of
resale.
Underwriters, dealers, agents, and other persons may be entitled, under
agreements which may be entered into with the Company, to indemnification
against, or contribution with respect to, certain civil liabilities, including
liabilities under the Securities Act. Underwriters, dealers and agents may be
customers of, engage in transactions with, or perform services for, the
Company in the ordinary course of business.
DELAYED DELIVERY ARRANGEMENTS
If so indicated in the Prospectus Supplement, the Company will authorize
dealers or other persons acting as the Company's agents to solicit offers by
certain institutions to purchase Debt Securities from the Company pursuant to
contracts providing for payment and delivery on a future date. Institutions
with which such contracts may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions, and others, but in all cases, such institutions must
be approved by the Company. The obligations of any purchaser under any such
contract will not be subject to any conditions except that (a) the purchase of
the Debt Securities shall not at the time of delivery be prohibited under the
laws of the jurisdiction to which such purchaser is subject; and (b) if the
Debt Securities are also being sold to underwriters, the Company shall have
sold to such underwriters the Debt Securities not sold for delayed delivery.
The dealers and such other persons will not have any responsibility in respect
of the validity or performance of such contracts.
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EXPERTS
The financial statements and financial statement schedule of the Company
included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1995 have been audited by Arthur Andersen LLP, independent public
accountants, as set forth in the report of such firm. The financial statements
and financial statement schedule referred to above are incorporated by
reference herein in reliance upon the authority of Arthur Andersen LLP, as
experts in giving said report.
LEGAL OPINIONS
Certain matters relating to the legality of the Debt Securities to be
offered hereby will be passed upon for the Company by Michael Paulson,
Assistant Secretary of the Company, and by Winston & Strawn, 35 West Wacker
Drive, Chicago, Illinois 60601, and for the agents or underwriters, if any, by
Mayer, Brown & Platt, 190 South LaSalle Street, Chicago, Illinois 60603. The
opinions of Mr. Paulson, Winston & Strawn and Mayer, Brown & Platt with
respect to the Debt Securities may be conditioned upon, and subject to certain
assumptions regarding, future action to be taken by the Company and the
Trustee in connection with the issuance and sale of particular Debt
Securities, the specific terms of Debt Securities and other matters that may
affect the validity of Debt Securities but that cannot be ascertained on the
date of such opinions. Mayer, Brown & Platt from time to time acts as counsel
in certain matters for the Company and certain of its affiliates. As of the
date of this Prospectus, Mr. Paulson owned beneficially and had options to
acquire shares of Common Stock of Ameritech which in the aggregate constituted
less than .01% of the total issued and outstanding shares of the Common Stock
of Ameritech.
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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
OR THE ACCOMPANYING PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REP-
RESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR
ANY AGENT OR UNDERWRITER. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PRO-
SPECTUS 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. NEITHER THE DELIVERY OF
THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS NOR ANY SALE MADE
HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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PROSPECTUS SUPPLEMENT
<S> <C>
Use of Proceeds............................................................ S-2
Certain Terms of the Debentures............................................ S-2
Underwriting............................................................... S-4
PROSPECTUS
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
Wisconsin Bell, Inc........................................................ 3
Ratios of Earnings to Fixed Charges of the Company......................... 3
Use of Proceeds............................................................ 3
Description of Debt Securities............................................. 4
Plan of Distribution....................................................... 14
Experts.................................................................... 15
Legal Opinions............................................................. 15
</TABLE>
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$125,000,000
WISCONSIN BELL, INC.
6.35% DEBENTURES
DUE 2026
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PROSPECTUS SUPPLEMENT
NOVEMBER 20, 1996
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LEHMAN BROTHERS
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