<PAGE>
RULE NO. 424(b)(3)
REGISTRATION NO. 33-54533
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JULY 15, 1994
$275,400,000
[LOGO] BOISE CASCADE CORPORATION
MEDIUM-TERM NOTES, SERIES A
DUE 9 MONTHS OR MORE FROM DATE OF ISSUE
--------------
Boise Cascade Corporation (the "Company") may offer from time to time its
medium-term notes. The Medium-Term Notes, Series A (the "Notes") offered by
this Prospectus Supplement are offered in an aggregate principal amount of up
to $275,400,000, subject to reduction as a result of the sale of other Debt
Securities. Each Note will mature 9 months or more from its date of original
issuance ("Issue Date"), as selected by the initial purchaser and agreed to by
the Company. The Notes may be subject to optional redemption or repayment, or
obligate the Company to redeem or purchase the Notes pursuant to sinking fund
or analogous provisions, as specified in an accompanying Prospectus Supplement
to this Prospectus Supplement (a "Pricing Supplement"). The Notes will be
issued in fully registered form in denominations of $1,000 and integral
multiples thereof. See "Description of Notes" and "Plan of Distribution of
Notes".
The interest rate or interest rate formula, issue price, Stated Maturity,
interest payment dates, and redemption and repayment provisions, if any, and
certain other terms, if applicable, for each Note will be established by the
Company at the date of issuance of such Note and will be indicated in a
Pricing Supplement. Each Note will bear interest at either (a) a fixed rate (a
"Fixed Rate Note") or (b) a variable rate determined by reference to an
interest rate formula (a "Floating Rate Note"), which may be adjusted by
adding or subtracting the Spread or multiplying by the Spread Multiplier,
unless otherwise indicated in the applicable Pricing Supplement. Unless
otherwise indicated in the applicable Pricing Supplement, the interest rate
formula for a Floating Rate Note will be the Commercial Paper Rate, the
Federal Funds Effective Rate, LIBOR or the Treasury Rate. Interest rates, or
interest rate formulas, are subject to change by the Company from time to
time, but no such change will affect any Note already issued or as to which an
offer to purchase has been accepted by the Company.
Notes may be issued in definitive form or may be represented by a permanent
global Note or Notes, as specified in the applicable Pricing Supplement,
registered in the name of The Depository Trust Company, as Depositary, or a
nominee of the Depositary (each such Note represented by a permanent global
Note being referred to herein as a "Book-Entry Note"). Beneficial interests in
Book-Entry Notes will only be evidenced by, and transfers thereof will only be
effected through, records maintained by participants of the Depositary. Except
as described under "Description of Notes--Book-Entry Notes", owners of
beneficial interests in a permanent global Note will not be entitled to
receive physical delivery of Notes in definitive form and will not be
considered the Holders thereof.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
--------------
<TABLE>
<CAPTION>
PRICE TO AGENTS' PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) COMPANY(2)(3)
--------- -------------- -------------
<S> <C> <C> <C>
Per Note............. 100% .125%-.750% 99.875%-99.250%
Total(4)............. $275,400,000 $344,250-$2,065,500 $275,055,750-273,334,500
</TABLE>
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(1) Unless otherwise indicated in the applicable Pricing Supplement, each Note
will be issued at 100% of its principal amount.
(2) The Company will pay Goldman, Sachs & Co. and Salomon Brothers Inc (the
"Agents"), as agents, a commission ranging from .125% to .750% of the
principal amount of any Note with a maturity of 9 months to 30 years,
depending on its Stated Maturity and a commission to be negotiated for
Notes with longer maturities, sold through any such Agent. The Company
also may sell Notes to any Agent, or to a group of underwriters for which
such Agent will act as representative, at a discount 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. The Company also may sell
Notes directly to investors or agents on its own behalf at varying prices
related to prevailing market prices at the time of sale, as determined by
the Company.
(3) Before deducting other expenses payable by the Company estimated at
$150,000.
(4) Assuming all Notes are issued at 100% of Principal Amount and sold through
one or more of the Agents.
--------------
The Notes may be offered from time to time by the Company on a continuing
basis through the Agents, each of which has agreed to use reasonable efforts
to solicit offers to purchase the Notes. The Company also may sell Notes
directly to investors on its own behalf or to any Agent acting as principal,
or to a group of underwriters for which such Agent acts as representative, for
resale to one or more investors. The Notes will not be listed on any
securities exchange, unless otherwise indicated in the applicable Pricing
Supplement, and there can be no assurance that the Notes offered by this
Prospectus Supplement will be sold or that there will be a secondary market
for the Notes. The Company reserves the right to withdraw, cancel or modify
the offer made hereby without notice. The Company or any Agent may reject any
offer to purchase Notes, in whole or in part. See "Plan of Distribution of
Notes".
GOLDMAN, SACHS & CO. SALOMON BROTHERS INC
--------------
The date of this Prospectus Supplement is May 22, 1996.
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IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE 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.
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes offered
hereby supplements the description of the general terms and conditions of Debt
Securities set forth under the heading "Description of Debt Securities" in the
Prospectus, to which description reference is hereby made. See "Glossary" for
definitions of certain terms used in this Prospectus Supplement.
GENERAL
The Notes offered hereby will be issued under the Indenture referred to in
the accompanying Prospectus between the Company and Morgan Guaranty Trust
Company of New York, as Trustee, as amended by the First Supplemental
Indenture, dated as of December 20, 1989, and the Second Supplemental
Indenture, dated as of August 1, 1990 (the "Indenture"). As of September 2,
1994, First Trust of New York, National Association, became the successor
Trustee (the "Trustee") under the Indenture. The Company conducts banking
transactions with affiliates of the Trustee in the normal course of the
Company's business and uses the Trustee or its affiliates as trustee for
various debt issues.
The Notes constitute a single series for purposes of the Indenture, which
series is not limited as to principal amount. The Notes offered hereby are
limited to an aggregate principal amount of $275,400,000, less an amount equal
to the aggregate initial offering price of any other Debt Securities (as
defined in the accompanying Prospectus) sold by the Company (including any
other series of medium-term notes). See "Plan of Distribution of Notes". The
foregoing limit may be increased by the Company if in the future it determines
that it may wish to sell additional Notes. The Notes are referred to in the
accompanying Prospectus as the "Offered Securities". For a description of the
rights attaching to different series of Securities under the Indenture, see
"Description of Debt Securities" in the Prospectus.
Each Note will mature nine months or more from its Issue Date, as selected
by the initial purchaser and agreed to by the Company.
The Notes will be issuable only in fully registered form in denominations of
$1,000 and integral multiples thereof. Notes may be issued in definitive form
or may be represented by a permanent global Note or Notes, as indicated in the
applicable Pricing Supplement, registered in the name of the Depositary or its
nominee. See "Description of Notes--Book-Entry Notes" below.
The applicable Pricing Supplement will indicate either that a Note cannot be
redeemed or repaid prior to its Stated Maturity or that a Note will be
redeemable at the option of the Company or repayable at the option of the
holder thereof on or after a specified date prior to its Stated Maturity at a
specified price or prices (which may include a premium), together with accrued
interest to the date of redemption or repayment, as the case may be. In
addition, the applicable Pricing Supplement will indicate either that the
Company will not be obligated to redeem or purchase a Note pursuant to any
sinking fund or analogous provisions or that the Company will be so obligated.
If the Company will be so obligated, the applicable Pricing Supplement will
indicate the period or periods within which and the price or prices at which
the applicable Notes will be redeemed or purchased, in whole or in part,
pursuant to such obligation and the other detailed terms and provisions of
such obligation.
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Payments of principal (and premium, if any) and interest payable at Maturity
on Notes, other than Book-Entry Notes, will be made in immediately available
funds at the Corporate Trust Office of First Trust of New York, National
Association, in the Borough of Manhattan, The City of New York, provided that
the Note is presented to the Trustee in time for the Trustee to make such
payments in such funds in accordance with its normal procedures. All other
interest payments will be made by check mailed to the address of the Person
entitled thereto as it appears in the Security Register. With respect to
payments at Maturity on Book-Entry Notes, see "Description of Notes--Book-
Entry Notes".
The Notes, other than Book-Entry Notes, may be presented for registration of
transfer or exchange in the manner described in the accompanying Prospectus.
With respect to transfers of Book-Entry Notes and exchanges of permanent
global Notes representing Book-Entry Notes, see "Description of Notes--Book-
Entry Notes".
The covenants contained in the Indenture and the Notes would not necessarily
afford holders of the Notes protection in the event of a highly leveraged or
other transaction involving the Company that may adversely affect holders of
the Company's debt securities. The Company has issued and may in the future
issue from time to time unsecured debt securities containing covenants similar
to those contained in the Indenture and the Notes and which also contain other
covenants that are intended to provide the holders of such debt securities
protection in the event of a highly leveraged or other transaction involving
the Company.
APPLICABILITY OF DEFEASANCE PROVISIONS
The Indenture provisions relating to defeasance and discharge and covenant
defeasance which are described in the accompanying Prospectus under
"Description of Debt Securities--Satisfaction, Discharge, and Defeasance Prior
to Maturity or Redemption" will apply to the Notes.
INTEREST
Each Note will bear interest from and including its Issue Date or from and
including the most recent Interest Payment Date (or in the case of a Floating
Rate Note with daily or weekly Interest Reset Dates, the day following the
most recent Regular Record Date) with respect to which interest on such Note
(or any predecessor Note) has been paid or duly provided for at the fixed rate
per annum, or at the rate per annum determined pursuant to the interest rate
formula, stated therein and in the applicable Pricing Supplement until the
principal thereof is paid or made available for payment. Interest will be
payable on each Interest Payment Date and at Maturity. Interest will be
payable generally to the person (which, in the case of a permanent global Note
representing Book-Entry Notes, shall be the Depositary) in whose name a Note
(or any predecessor Note) is registered at the close of business on the
Regular Record Date next preceding each Interest Payment Date; provided,
however, that interest payable at Maturity will be payable to the person
(which, in the case of a permanent global Note representing Book-Entry Notes,
shall be the Depositary) to whom principal shall be payable. Unless otherwise
indicated in the applicable Pricing Supplement, the first payment of interest
on any Note originally issued between a Regular Record Date and the
corresponding Interest Payment Date will be made on the second Interest
Payment Date following the Issue Date of such Note to the registered owner
(which, in the case of a permanent global Note representing Book-Entry Notes,
shall be the Depositary) on the Regular Record Date immediately preceding such
Interest Payment Date. With respect to payments of interest on Book-Entry
Notes, see "Description of Notes--Book-Entry Notes".
Interest rates, or interest rate formulas, are subject to change by the
Company from time to time, but no such change will affect any Note already
issued or as to which an offer to purchase has been accepted by the Company.
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FIXED RATE NOTES
The applicable Pricing Supplement relating to a Fixed Rate Note will
designate a fixed rate of interest per annum payable on such Note. Unless
otherwise indicated in the applicable Pricing Supplement, the Interest Payment
Dates with respect to Fixed Rate Notes shall be February 1 and August 1 of
each year and at Maturity and the Regular Record Dates for such Notes shall be
the January 16 and July 16 next preceding the February 1 and August 1 Interest
Payment Dates. Unless otherwise indicated in the applicable Pricing
Supplement, interest payments for Fixed Rate Notes shall be the amount of
interest accrued to, but excluding, the relevant Interest Payment Date.
Interest on such Notes will be computed on the basis of a 360-day year of
twelve 30-day months.
FLOATING RATE NOTES
The applicable Pricing Supplement relating to a Floating Rate Note will
designate an interest rate formula for such Floating Rate Note. Such formula
may be: (a) the Commercial Paper Rate, in which case such Note will be a
Commercial Paper Rate Note, (b) the Federal Funds Effective Rate, in which
case such Note will be a Federal Funds Effective Rate Note, (c) LIBOR, in
which case such Note will be a LIBOR Note, (d) the Treasury Rate, in which
case such Note will be a Treasury Rate Note, or (e) such other interest rate
formula as is set forth in such Pricing Supplement. The applicable Pricing
Supplement for a Floating Rate Note also will specify the interest rate
formula and the Spread or Spread Multiplier, if any, and the maximum or
minimum interest rate limitation, if any, applicable to each Note. In
addition, such Pricing Supplement will define or particularize for each
Floating Rate Note the following terms, if applicable: Calculation Agent,
Calculation Dates, Initial Interest Rate, Interest Payment Dates, Regular
Record Dates, Index Maturity, Interest Determination Dates and Interest Reset
Dates with respect to such Note. See "Glossary" for definitions of certain
terms used in this Prospectus Supplement.
The rate of interest on each Floating Rate Note will be reset daily, weekly,
monthly, quarterly, semi-annually or annually (each an "Interest Reset Date"),
as specified in the applicable Pricing Supplement. The Interest Reset Date
will be, in the case of Floating Rate Notes which reset daily, each Market
Day; in the case of Floating Rate Notes (other than Treasury Rate Notes) which
reset weekly, the Wednesday of each week; in the case of Treasury Rate Notes
which reset weekly, except as provided below, the Tuesday of each week; in the
case of Floating Rate Notes which reset monthly, the third Wednesday of each
month; in the case of Floating Rate Notes which reset quarterly, the third
Wednesday of March, June, September and December; in the case of Floating Rate
Notes which reset semi-annually, the third Wednesday of two months of each
year, as indicated in the applicable Pricing Supplement; and in the case of
Floating Rate Notes which reset annually, the third Wednesday of one month of
each year, as indicated in the applicable Pricing Supplement; provided,
however, that the interest rate in effect from the Issue Date of a Floating
Rate Note (or that of a predecessor Note) to the first Interest Reset Date
with respect to such Floating Rate Note will be the Initial Interest Rate (as
set forth in the applicable Pricing Supplement).
The Interest Determination Date pertaining to an Interest Reset Date for a
Commercial Paper Rate Note (the "Commercial Paper Interest Determination
Date") or a Federal Funds Effective Rate Note (the "Federal Funds Effective
Interest Determination Date") will be the second Market Day preceding such
Interest Reset Date, unless otherwise specified in the applicable Pricing
Supplement. The Interest Determination Date pertaining to an Interest Reset
Date for a LIBOR Note (the "LIBOR Interest Determination Date") will be the
second London Market Day preceding such Interest Reset Date, unless otherwise
specified in the applicable Pricing Supplement. The Interest Determination
Date pertaining to an Interest Reset Date for a Treasury Rate Note (the
"Treasury Interest Determination Date") will be the day of the week in which
such Interest Reset Date falls on which Treasury bills would normally be
auctioned, unless otherwise specified in the applicable Pricing Supplement.
Treasury bills are usually sold at auction on Monday of each week, unless that
day is a legal holiday, in which case
S-4
<PAGE>
the auction is usually 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 Treasury
Interest Determination Date pertaining to the Interest Reset Date occurring in
the next succeeding week. If an auction date shall fall on any Interest Reset
Date for a Treasury Rate Note, then such Interest Reset Date shall instead be
the first Market Day immediately following such auction date.
A Floating Rate Note may have either or both of the following: (a) a maximum
numerical interest rate limitation, or ceiling, on the rate of interest which
may accrue during any interest period; and (b) a minimum numerical interest
rate limitation, or floor, on the rate of interest which may accrue during any
interest period. In addition to any maximum interest rate which may be
applicable to any Floating Rate Note, the interest rate on the Floating Rate
Notes will in no event be higher than the maximum rate permitted by New York
law, as the same may be modified by United States law of general application.
Under present New York law the maximum rate of interest is 25% per annum on a
simple interest basis. The limit does not apply to Floating Rate Notes in
which U.S. $2,500,000 or more has been invested.
Unless otherwise indicated in the applicable Pricing Supplement and except
as provided below, interest will be payable, in the case of Floating Rate
Notes which reset daily or weekly, on the third Wednesday of March, June,
September and December of each year; in the case of Floating Rate Notes which
reset monthly, on the third Wednesday of each month or on the third Wednesday
of March, June, September and December of each year (as indicated in the
applicable Pricing Supplement); in the case of Floating Rate Notes which reset
quarterly, on the third Wednesday of March, June, September and December of
each year; in the case of Floating Rate Notes which reset semi-annually, on
the third Wednesday of the two months of each year specified in the applicable
Pricing Supplement; and in the case of Floating Rate Notes which reset
annually, on the third Wednesday of the month specified in the applicable
Pricing Supplement (each an "Interest Payment Date"), and in each case, at
Maturity. If an Interest Payment Date with respect to any Floating Rate Note
would otherwise be a day that is not a Market Day, such Interest Payment Date
shall be postponed to the next day that is a Market Day, except that in the
case of a LIBOR Note, if such day is in the next succeeding calendar month,
such Interest Payment Date shall be the immediately preceding Market Day.
Unless otherwise indicated in the applicable Pricing Supplement, the Regular
Record Date with respect to Floating Rate Notes shall be the date 15 calendar
days prior to each Interest Payment Date, whether or not such date shall be a
Market Day.
Unless otherwise indicated in the applicable Pricing Supplement, interest
payments for a Floating Rate Note shall be the amount of interest accrued to,
but excluding, the Interest Payment Date; provided, however, that if the
Interest Reset Dates with respect to any Floating Rate Note are daily or
weekly, interest payable on any Interest Payment Date, other than interest
payable on any date on which principal on any such Note is payable, will
include interest accrued to and including the Regular Record Date next
preceding such Interest Payment Date.
The interest accrued for any period is calculated by multiplying the face
amount of such Floating Rate Note by an accrued interest factor. Such accrued
interest factor is computed by adding the interest factor calculated for each
day in such period. Unless otherwise specified in the applicable Pricing
Supplement, the interest factor (expressed as a decimal rounded upwards, if
necessary, as described below) for each such day is computed by dividing the
interest rate (expressed as a decimal rounded upwards, if necessary, as
described below) applicable to such date by 360, in the case of Commercial
Paper Rate Notes, Federal Funds Effective Rate Notes or LIBOR Notes, or by the
actual number of days in the year, in the case of Treasury Rate Notes.
Unless otherwise specified in a Pricing Supplement or herein, all
percentages resulting from any calculation on Floating Rate Notes will be
rounded, if necessary, to the nearest one-hundred
S-5
<PAGE>
thousandth of a percentage point, with five one-millionths of a percentage
point rounded upwards (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 dollar amounts used in or resulting from such
calculation on Floating Rate Notes will be rounded to the nearest cent (with
one-half cent being rounded upwards).
Upon the request of the Holder of any Floating Rate Note, the Calculation
Agent will provide the interest rate then in effect, and, if different, the
interest rate which will become effective as a result of a determination made
on the most recent Interest Determination Date with respect to such Floating
Rate Note.
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 on the face of such Commercial Paper Rate
Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Commercial
Paper Rate" means, with respect to any Commercial Paper Interest Determination
Date, the Money Market Yield (calculated as described below) of the rate on
such date for commercial paper having the Index Maturity specified in the
applicable Pricing Supplement as published in H.15(519) under the heading
"Commercial Paper". In the event that such rate is not published prior to 9:00
A.M., New York City time, on the Calculation Date pertaining to such
Commercial Paper Interest Determination Date, then the Commercial Paper Rate
shall be the Money Market Yield of the rate on such Commercial Paper Interest
Determination Date for commercial paper having the Index Maturity specified in
the applicable Pricing Supplement as published in Composite Quotations under
the heading "Commercial Paper". If such rate was neither published in
H.15(519) by 9:00 A.M., New York City time, on such Calculation Date nor in
Composite Quotations by 3:00 P.M., New York City time, on such date, the
Commercial Paper Rate for that Commercial Paper Interest Determination Date
shall be calculated by the Calculation Agent and shall be the Money Market
Yield of the arithmetic mean (rounded upwards, if necessary, to the next
higher one-hundred thousandth of a percentage point) of the offered rates, as
of 11:00 A.M., New York City time, on that Commercial Paper Interest
Determination Date, of three leading dealers of commercial paper in The City
of New York selected by the Calculation Agent for commercial paper having the
Index Maturity specified in the applicable Pricing Supplement placed for an
industrial issuer whose bond rating is "AA", or the equivalent, from a
nationally recognized rating agency; provided, however, that if the dealers
selected as aforesaid by the Calculation Agent are not quoting as mentioned in
this sentence, the Commercial Paper Rate will be the Commercial Paper Rate in
effect on such Commercial Paper Interest Determination Date.
"Money Market Yield" shall be a yield (expressed as a percentage rounded
upwards, if necessary, to the next higher one-hundred thousandth of a
percentage point) calculated in accordance with the following formula:
D X 360
Money Market Yield = _____________ X 100
360 - (D X M)
where "D" refers to the per annum rate for commercial paper quoted on a
bank discount basis and expressed as a decimal; and "M" refers to the
actual number of days in the interest period for which interest is
being calculated.
Federal Funds Effective Rate Notes
Each Federal Funds Effective Rate Note will bear interest at the interest
rate (calculated with reference to the Federal Funds Effective Rate and the
Spread or Spread Multiplier, if any) specified on the face of such Federal
Funds Effective Rate Note and in the applicable Pricing Supplement.
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Unless otherwise indicated in the applicable Pricing Supplement, "Federal
Funds Effective Rate" means, with respect to any Federal Funds Effective
Interest Determination Date, the rate on such date for Federal Funds having
the Index Maturity specified in the applicable Pricing Supplement as published
in H.15(519) under the heading "Federal Funds (Effective)". In the event that
such rate is not published prior to 9:00 A.M., New York City time, on the
Calculation Date pertaining to such Federal Funds Effective Interest
Determination Date, then the Federal Funds Effective Rate will be the rate on
such Federal Funds Effective Interest Determination Date as published in
Composite Quotations under the heading "Federal Funds/Effective Rate". If such
rate was neither published in H.15(519) by 9:00 A.M., New York City time, on
such Calculation Date nor in Composite Quotations by 3:00 P.M., New York City
time, on such date, the Federal Funds Effective Rate for that Federal Funds
Effective Interest Determination Date shall be calculated by the Calculation
Agent and shall be the arithmetic mean (rounded upwards, if necessary, to the
next higher one-hundred thousandth of a percentage point) of the rates, as of
9:00 A.M., New York City time, on that Federal Funds Effective Interest
Determination Date, for the last transaction in overnight Federal Funds
arranged by three leading brokers of Federal Funds transactions in The City of
New York selected by the Calculation Agent; provided, however, that if the
brokers selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the Federal Funds Effective Rate will be the
Federal Funds Effective Rate in effect on such Federal Funds Effective
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 on
the face of such LIBOR Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, LIBOR will
be determined by the Calculation Agent in accordance with the following
provisions:
(a) With respect to any LIBOR Interest Determination Date, LIBOR will be
either (i) if "LIBOR Reuters" is specified in the applicable Pricing
Supplement, the arithmetic mean (rounded upward, if necessary, to the next
higher one-hundred thousandth of a percentage point) of the offered rates
for deposits of not less than U.S.$1,000,000 having the Index Maturity
specified in such Pricing Supplement, commencing on the applicable Interest
Reset Date, that appear on the Designated LIBOR Page as of 11:00 A.M.,
London time, on such LIBOR Interest Determination Date, or (ii) if "LIBOR
Telerate" is specified in the applicable Pricing Supplement or if neither
"LIBOR Reuters" nor "LIBOR Telerate" is specified in the applicable Pricing
Supplement as the method of calculating LIBOR, the rate for deposits of not
less than U.S.$1,000,000 having the Index Maturity specified in such
Pricing Supplement, commencing on such Interest Reset Date, that appears on
the Designated LIBOR Page as of 11:00 A.M., London time, on such LIBOR
Interest Determination Date. If fewer than two such offered rates appear,
if LIBOR Reuters is specified in the applicable Pricing Supplement, or if
no such rate appears, if LIBOR Telerate is specified in the applicable
Pricing Supplement, LIBOR for such LIBOR Interest Determination Date will
be determined as described in (b) below.
(b) With respect to a LIBOR Interest Determination Date on which LIBOR is
to be determined pursuant to this clause (b), LIBOR will be determined on
the basis of the rates at approximately 11:00 A.M., London time, on such
LIBOR Interest Determination Date at which deposits in U.S. dollars having
the Index Maturity specified in the applicable Pricing Supplement are
offered to prime banks in the London interbank market by four major banks
in the London interbank market selected by the Calculation Agent commencing
on the second London Market Day immediately following such LIBOR Interest
Determination Date and in a principal amount equal to an amount of not less
than U.S.$1,000,000 that in the Calculation Agent's judgment is
representative for a single transaction in such market at such time. The
Calculation Agent will request the principal
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<PAGE>
London office of each of such banks to provide a quotation of its rate. If
at least two such quotations are provided, LIBOR for such LIBOR Interest
Determination Date will be the arithmetic mean (rounded upwards, if
necessary, to the next higher one-hundred thousandth of a percentage point)
of such quotations. If fewer than two quotations are provided, LIBOR for
such LIBOR Interest Determination Date will be the arithmetic mean (rounded
upwards, if necessary, to the next higher one-hundred thousandth of a
percentage point) of the rates quoted at approximately 11:00 A.M., New York
City time, on such LIBOR Interest Determination Date by three major banks
in The City of New York, selected by the Calculation Agent, for loans in
U.S. dollars to leading European banks having the specified Index Maturity
commencing on the second London Market Day immediately following such LIBOR
Interest Determination Date and in a principal amount equal to an amount of
not less than U.S. $1,000,000 that in the Calculation Agent's judgment is
representative for a single transaction in such market at such time;
provided, however, that if the banks selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, LIBOR will
be the LIBOR in effect on such LIBOR Interest Determination Date.
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 on the face of such Treasury Rate Note and in the applicable
Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Treasury
Rate" means, with respect to any Treasury Interest Determination Date, the
rate for the most recent auction of direct obligations of the United States
("Treasury bills") having the Index Maturity specified in the applicable
Pricing Supplement as published in H.15(519) under the heading, "U.S.
Government Securities--Treasury Bills--auction average (investment)" or, if
not so published by 9:00 A.M., New York City time, on the Calculation Date
pertaining to such Treasury Interest Determination Date, the auction average
rate (expressed as a bond equivalent, rounded upwards, if necessary, to the
next higher one-hundred thousandth of a percentage point, on the basis of a
year of 365 or 366 days, as applicable, and applied on a daily basis) for such
auction 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 specified in the applicable Pricing Supplement are
neither published in H.15(519) by 9:00 A.M., New York City time, on such
Calculation Date, nor otherwise published or reported as provided above by
3:00 P.M., New York City time, on such date, or if no such auction is held in
a particular week, then the Treasury Rate shall be calculated by the
Calculation Agent and shall be a yield to Maturity (expressed as a bond
equivalent, rounded upwards, if necessary, to the next higher one-hundred
thousandth of a percentage point, on the basis of a year of 365 or 366 days,
as applicable, and applied on a daily basis) of the arithmetic mean of the
secondary market bid rates as of approximately 3:30 P.M., New York City time,
on such Treasury Interest Determination Date, of three leading primary United
States government securities dealers selected by the Calculation Agent, for
the issue of Treasury bills with a remaining maturity closest to the specified
Index Maturity; provided, however, that if the dealers selected as aforesaid
by the Calculation Agent are not quoting as mentioned in this sentence, the
Treasury Rate will be the Treasury Rate in effect on such Treasury Interest
Determination Date.
BOOK-ENTRY NOTES
Upon issuance, all Book-Entry Notes of like tenor and having the same Issue
Date will be represented by a single permanent global Note. Each permanent
global Note representing Book-Entry Notes will be deposited with, or on behalf
of, The Depository Trust Company, as U.S. Depositary (the "Depositary"),
located in the Borough of Manhattan, The City of New York, and will be
registered in the name of the Depositary or a nominee of the Depositary.
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Ownership of beneficial interests in a permanent global Note representing
Book-Entry Notes will be limited to institutions that have accounts with the
Depositary or its nominee ("participants") or persons that may hold interests
through participants. In addition, ownership of beneficial interests by
participants in such a permanent global Note will only be evidenced by, and
the transfer of that ownership interest will only be effected through, records
maintained by the Depositary or its nominee for such permanent global Note.
Ownership of beneficial interests in such a permanent global Note by persons
that hold through participants will only be evidenced by, and the transfer of
that ownership interest within such participant will only be effected through,
records maintained by such participant. The laws of some jurisdictions require
that certain purchasers of securities take physical delivery of such
securities in definitive form. Such laws may impair the ability to transfer
beneficial interests in such a permanent global Note.
The Company has been advised by the Depositary that upon the issuance of a
permanent global Note representing Book-Entry Notes, and the deposit of such
permanent global Note with the Depositary, the Depositary will immediately
credit, on its book-entry registration and transfer system, the respective
principal amounts of the Book-Entry Notes represented by such permanent global
Note to the accounts of participants. The accounts to be credited shall be
designated by the soliciting Agent or, to the extent that the Book-Entry Notes
are offered and sold directly, by the Company.
Payment of principal (and premium, if any) and interest on Book-Entry Notes
represented by any permanent global Note registered in the name of or held by
the Depositary, or its nominee will be made to the Depositary or its nominee,
as the case may be, as the registered owner and Holder of the permanent global
Note representing such Book-Entry Notes. None of the Company, the Trustee or
any agent of the Company or the Trustee will have any responsibility or
liability for any aspect of the Depositary's records or any participant's
records relating to, or payments made on account of, beneficial ownership
interests in a permanent global Note representing such Book-Entry Notes or for
maintaining, supervising or reviewing any of the Depositary's records or any
participant's records relating to such beneficial ownership interests.
The Company has been advised by the Depositary that upon receipt of any
payment of principal (or premium, if any) or interest in respect of a
permanent global Note, the Depositary will immediately credit, on its book-
entry registration and transfer system, accounts of participants with payments
in amounts proportionate to their respective beneficial interests in the
principal amount of such permanent global Note as shown on the records of the
Depositary. Payments by participants to owners of beneficial interests in a
permanent global Note held through such participants will be governed by
standing instructions and customary practices, as is the case with securities
held for the accounts of customers registered in "street name", and will be
the sole responsibility of such participants.
No permanent global Note described above may be transferred except as a
whole by the Depositary for such permanent global Note to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary.
A permanent global Note representing Book-Entry Notes is exchangeable for
definitive Notes in registered form, of like tenor and of an equal aggregate
principal amount, only if (x) the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary for such permanent global Note
or if at any time the Depositary ceases to be a clearing agency registered as
such under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), (y) the Company in its sole discretion determines that such permanent
global Note shall be exchangeable for definitive Notes in registered form or
(z) there shall have occurred and be continuing an Event of Default with
respect to the Notes. Any permanent global Note that is exchangeable pursuant
to the preceding sentence shall be exchangeable in whole for definitive Notes
in registered form, of like tenor and of an equal aggregate principal amount,
in denominations of $1,000 and integral multiples thereof. Such definitive
Notes shall be registered in the name or names of such person or persons as
the Depositary shall
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instruct the Trustee. It is expected that such instructions may be based upon
directions received by the Depositary from its participants with respect to
ownership of beneficial interests in such permanent global Note.
Except as provided above, owners of beneficial interests in such permanent
global Note will not be entitled to receive physical delivery of Notes in
definitive form and will not be considered the Holders thereof for any purpose
under the Indenture, and no permanent global Note representing Book-Entry
Notes shall be exchangeable, except for another permanent global Note of like
denomination and tenor to be registered in the name of the Depositary or its
nominee. Accordingly, each person owning a beneficial interest in such
permanent global Note must rely on the procedures of the Depositary and, if
such person is not a participant, on the procedures of the participant through
which such person owns its interest, to exercise any rights of a Holder under
the Indenture. The Indenture provides that the Depositary, as a Holder, may
grant proxies and otherwise authorize participants to give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action which a Holder is entitled to give or take under the Indenture. The
Company understands that under existing industry practices, in the event that
the Company requests any action of Holders or an owner of a beneficial
interest in such permanent global Note desires to give or take any action that
a Holder is entitled to give or take under the Indenture, the Depositary would
authorize the participants holding the relevant beneficial interests to give
or take such action, and such participants would authorize beneficial owners
owning through such participants to give or take such action or would
otherwise act upon the instructions of beneficial owners owning through them.
The Depositary has advised the Company that the Depositary is a limited-
purpose trust company organized under the laws of the State of New York, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered under the Exchange Act. The Depositary was created to hold
securities of its participants and to facilitate the clearance and settlement
of securities transactions among its participants in such securities through
electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. The
Depositary's participants include securities brokers and dealers (including
the Agents), banks, trust companies, clearing corporations, and certain other
organizations, some of whom (and/or their representatives) own the Depositary.
Access to the Depositary's book-entry system is also available to others, such
as banks, brokers, dealers and trust companies that clear through or maintain
a custodial relationship with a participant, either directly or indirectly.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following summary of the principal United States federal income tax
consequences of ownership of Notes deals only with Notes held as capital
assets by initial purchasers, and not with special classes of holders, such as
dealers in securities or currencies, banks, tax-exempt organizations, life
insurance companies, persons that hold Notes that are a hedge or that are
hedged against currency risks or that are part of a straddle or conversion
transaction, persons that are not "United States Holders", as defined below,
or persons whose functional currency is not the U.S. dollar. Moreover, the
summary deals only with Notes that are due to mature 30 years or less from the
date on which they are issued. The United States federal income tax
consequences of ownership of Notes that are due to mature more than 30 years
from their date of issue will be discussed in an applicable Pricing
Supplement. The summary is based on the Internal Revenue Code of 1986, as
amended (the "Code"), its legislative history, existing and proposed
regulations thereunder, published rulings and court decisions, all as
currently in effect and all subject to change at any time, perhaps with
retroactive effect.
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Prospective purchasers of Notes should consult their own tax advisors
concerning the consequences, in their particular circumstances, under the Code
and the laws of any other taxing jurisdiction, of ownership of Notes.
UNITED STATES HOLDERS
Payments of Interest
Interest on a Note, other than interest on a "Discount Note" that is not
"qualified stated interest" (each as defined below under "Original Issue
Discount--General"), will be taxable to a United States Holder as ordinary
income at the time it is received or accrued, depending on the holder's method
of accounting for tax purposes. A United States Holder is a beneficial owner
who or that is (i) a citizen or resident of the United States, (ii) a domestic
corporation or (iii) otherwise subject to United States federal income
taxation on a net income basis in respect of the Note.
Original Issue Discount
General. A Note, other than a Note with a term of one year or less (a
"short-term Note"), will be treated as issued at an original issue discount (a
"Discount Note") if the excess of the Note's "stated redemption price at
maturity" over its issue price is more than a "de minimis amount" (as defined
below). Generally, the issue price of a Note will be the first price at which
a substantial amount of Notes included in the issue of which the Note is a
part is sold to other than bond houses, brokers, or similar persons or
organizations acting in the capacity of underwriters, placement agents, or
wholesalers. The stated redemption price at maturity of a Note is the total of
all payments provided by the Note that are not payments of "qualified stated
interest". A qualified stated interest payment is generally any one of a
series of stated interest payments on a Note that are unconditionally payable
at least annually at a single fixed rate (with certain exceptions for lower
rates paid during some periods) applied to the outstanding principal amount of
the Note. Special rules for "Floating Rate Notes" (as defined below under
"Original Issue Discount--Floating Rate Notes") are described below under
"Original Issue Discount--Floating Rate Notes".
In general, if the excess of a Note's stated redemption price at maturity
over its issue price is less than 1/4 of 1 percent of the Note's stated
redemption price at maturity multiplied by the number of complete years to its
maturity (the "de minimis amount"), then such excess, if any, constitutes "de
minimis original issue discount" and the Note is not a Discount Note. Unless
the election described below under "Election to Treat All Interest as Original
Issue Discount" is made, a United States Holder of a Note with de minimis
original issue discount must include such de minimis original issue discount
in income as stated principal payments on the Note are made. The includible
amount with respect to each such payment will equal the product of the total
amount of the Note's de minimis original issue discount and a fraction, the
numerator of which is the amount of the principal payment made and the
denominator of which is the stated principal amount of the Note.
United States Holders of Discount Notes having a maturity of more than one
year from their date of issue must, generally, include original issue discount
("OID") in income calculated on a constant-yield method before the receipt of
cash attributable to such income, and generally will have to include in income
increasingly greater amounts of OID over the life of the Note. The amount of
OID includible in income by a United States Holder of a Discount Note is the
sum of the daily portions of OID with respect to the Discount Note for each
day during the taxable year or portion of the taxable year on which the United
States Holder holds such Discount Note ("accrued OID"). The daily portion is
determined by allocating to each day in any "accrual period" a pro rata
portion of the OID allocable to that accrual period. Accrual periods with
respect to a Note may be of any length selected by the United States Holder
and may vary in length over the term of the Note as long as (i) no accrual
period is longer than one year and (ii) each scheduled payment of interest or
principal on the Note occurs on
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either the final or first day of an accrual period. The amount of OID
allocable to an accrual period equals the excess of (a) the product of the
Discount Note's adjusted issue price at the beginning of the accrual period
and such Note's yield to maturity (determined on the basis of compounding at
the close of each accrual period and properly adjusted for the length of the
accrual period) over (b) the sum of the payments of qualified stated interest
on the Note allocable to the accrual period. The "adjusted issue price" of a
Discount Note at the beginning of any accrual period is the issue price of the
Note increased by (x) the amount of accrued OID for each prior accrual period
and decreased by (y) the amount of any payments previously made on the Note
that were not qualified stated interest payments. For purposes of determining
the amount of OID allocable to an accrual period, if an interval between
payments of qualified stated interest on the Note contains more than one
accrual period, the amount of qualified stated interest payable at the end of
the interval (including any qualified stated interest that is payable on the
first day of the accrual period immediately following the interval) is
allocated pro rata on the basis of relative lengths to each accrual period in
the interval, and the adjusted issue price at the beginning of each accrual
period in the interval must be increased by the amount of any qualified stated
interest that has accrued prior to the first day of the accrual period but
that is not payable until the end of the interval. The amount of OID allocable
to an initial short accrual period may be computed using any reasonable method
if all other accrual periods other than a final short accrual period are of
equal length. The amount of OID allocable to the final accrual period is the
difference between (x) the amount payable at the maturity of the Note (other
than any payment of qualified stated interest) and (y) the Note's adjusted
issue price as of the beginning of the final accrual period.
Acquisition Premium. A United States Holder that purchases a Note for an
amount less than or equal to the sum of all amounts payable on the Note after
the purchase date other than payments of qualified stated interest but in
excess of its adjusted issue price (any such excess being "acquisition
premium") and that does not make the election described below under "Election
to Treat All Interest as Original Issue Discount" is permitted to reduce the
daily portions of OID by a fraction, the numerator of which is the excess of
the United States Holder's adjusted basis in the Note immediately after its
purchase over the adjusted issue price of the Note, and the denominator of
which is the excess of the sum of all amounts payable on the Note after the
purchase date, other than payments of qualified stated interest, over the
Note's adjusted issue price.
Market Discount. A Note, other than a short-term Note, will be treated as
purchased at a market discount (a "Market Discount Note") if (i) the amount
for which a United States Holder purchased the Note is less than the Note's
issue price (as determined above under "Original Issue Discount--General") and
(ii) the Note's stated redemption price at maturity or, in the case of a
Discount Note, the Note's "revised issue price", exceeds the amount for which
the United States Holder purchased the Note by at least 1/4 of 1 percent of
such Note's stated redemption price at maturity or revised issue price,
respectively, multiplied by the number of complete years to the Note's
maturity. If such excess is not sufficient to cause the Note to be a Market
Discount Note, then such excess constitutes "de minimis market discount". The
Code provides that, for these purposes, the "revised issue price" of a Note
generally equals its issue price, increased by the amount of any OID that has
accrued on the Note.
Any gain recognized on the maturity or disposition of a Market Discount Note
will be treated as ordinary income to the extent that such gain does not
exceed the accrued market discount on such Note. Alternatively, a United
States Holder of a Market Discount Note may elect to include market discount
in income currently over the life of the Note. Such an election shall apply to
all debt instruments with market discount acquired by the electing United
States Holder on or after the first day of the first taxable year to which the
election applies. This election may not be revoked without the consent of the
Service.
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Market discount on a Market Discount Note will accrue on a straight-line
basis unless the United States Holder elects to accrue such market discount on
a constant-yield method. Such an election shall apply only to the Note with
respect to which it is made and may not be revoked. A United States Holder of
a Market Discount Note that does not elect to include market discount in
income currently generally will be required to defer deductions for interest
on borrowings allocable to such Note in an amount not exceeding the accrued
market discount on such Note until the maturity or disposition of such Note.
Pre-Issuance Accrued Interest. If (i) a portion of the initial purchase
price of a Note is attributable to pre-issuance accrued interest, (ii) the
first stated interest payment on the Note is to be made within one year of the
Note's issue date and (iii) the payment will equal or exceed the amount of
pre-issuance accrued interest, then the United States Holder may elect to
decrease the issue price of the Note by the amount of pre-issuance accrued
interest. In that event, a portion of the first stated interest payment will
be treated as a return of the excluded pre-issuance accrued interest and not
as an amount payable on the Note.
Notes Subject to Contingencies Including Optional Redemption. In general, if
a Note provides for an alternative payment schedule or schedules applicable
upon the occurrence of a contingency or contingencies and the timing and
amounts of the payments that comprise each payment schedule are known as of
the issue date, the yield and maturity of the Note are determined by assuming
that the payments will be made according to the Note's stated payment
schedule. If, however, based on all the facts and circumstances as of the
issue date, it is more likely than not that the Note's stated payment schedule
will not occur, then, in general, the yield and maturity of the Note are
computed based on the payment schedule most likely to occur.
Notwithstanding the general rules for determining yield and maturity in the
case of Notes subject to contingencies, if the Company or the Holder has an
unconditional option or options that, if exercised, would require payments to
be made on the Note under an alternative payment schedule or schedules, then
(i) in the case of an option or options of the Company, the Company will be
deemed to exercise or not exercise an option or combination of options in the
manner that minimizes the yield on the Note and (ii) in the case of an option
or options of the Holder, the Holder will be deemed to exercise or not
exercise an option or combination of options in the manner that maximizes the
yield on the Note. For purposes of those calculations, the yield on the Note
is determined by using any date on which the Note may be redeemed or
repurchased as the maturity date and the amount payable on such date in
accordance with the terms of the Note as the principal amount payable at
maturity.
If a contingency (including the exercise of an option) actually occurs or
does not occur contrary to an assumption made according to the above rules (a
"change in circumstances") then, except to the extent that a portion of the
Note is repaid as a result of the change in circumstances and solely for
purposes of the accrual of OID, the yield and maturity of the Note are
redetermined by treating the Note as reissued on the date of the change in
circumstances for an amount equal to the Note's adjusted issue price on that
date.
Election to Treat All Interest as Original Issue Discount. A United States
Holder may elect to include in gross income all interest that accrues on a
Note using the constant-yield method described above under the heading
"Original Issue Discount--General", with the modifications described below.
For purposes of this election, interest includes stated interest, OID, de
minimis original issue discount, market discount, de minimis market discount
and unstated interest, as adjusted by any amortizable bond premium (described
below under "Notes Purchased at a Premium") or acquisition premium.
In applying the constant-yield method to a Note with respect to which this
election has been made, the issue price of the Note will equal the electing
United States Holder's adjusted basis in the Note immediately after its
acquisition, the issue date of the Note will be the date of its acquisition by
the
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electing United States Holder, and no payments on the Note will be treated as
payments of qualified stated interest. This election will generally apply only
to the Note with respect to which it is made and may not be revoked without
the consent of the Service. If this election is made with respect to a Note
with amortizable bond premium, then the electing United States Holder will be
deemed to have elected to apply amortizable bond premium against interest with
respect to all debt instruments with amortizable bond premium (other than debt
instruments the interest on which is excludible from gross income) held by the
electing United States Holder as of the beginning of the taxable year in which
the Note with respect to which the election is made is acquired or thereafter
acquired. The deemed election with respect to amortizable bond premium may not
be revoked without the consent of the Service.
If the election to apply the constant-yield method to all interest on a Note
is made with respect to a Market Discount Note, the electing United States
Holder will be treated as having made the election discussed above under
"Original Issue Discount--Market Discount" to include market discount in
income currently over the life of all debt instruments held or thereafter
acquired by such United States Holder.
Floating Rate Notes. A "Floating Rate Note" is a Note that: (i) has an issue
price that does not exceed the total noncontingent principal payments by more
than the lesser of (1) the product of (x) the total noncontingent principal
payments, (y) the number of complete years to maturity from the issue date and
(z) .015, or (2) 15 percent of the total noncontingent principal payments, and
(ii) provides for stated interest compounded or paid at least annually at (1)
one or more "qualified floating rates", (2) a single fixed rate and one or
more qualified floating rates, (3) a single "objective rate" or (4) a single
fixed rate and a single objective rate that is a "qualified inverse floating
rate".
A qualified floating rate or objective rate in effect at any time during the
term of the instrument must be set at a "current value" of that rate. A
"current value" of a rate is the value of the rate on any day that is no
earlier than 3 months prior to the first day on which that value is in effect
and no later than 1 year following that first day.
A variable rate is a "qualified floating rate" if (i) variations in the
value of the rate can reasonably be expected to measure contemporaneous
variations in the cost of newly borrowed funds in the currency in which the
Note is denominated or (ii) it is equal to the product of such a rate and
either (a) a fixed multiple that is greater than zero but not more than 1.35,
or (b) a fixed multiple greater than zero but not more than 1.35, increased or
decreased by a fixed rate. A rate is not a qualified floating rate, however,
if the rate is subject to certain restrictions (including caps, floors,
governors, or other similar restrictions) unless such restrictions are fixed
throughout the term of the Note or are not reasonably expected to
significantly affect the yield on the Note.
An "objective rate" is a rate, other than a qualified floating rate, that is
determined using a single, fixed formula and that is based on (i) one or more
qualified floating rates, (ii) one or more rates each of which would be a
qualified floating rate for a debt instrument denominated in a currency other
than the currency in which the debt instrument is denominated, (iii) the yield
or changes in the price of one or more actively traded items of personal
property other than stock or debt of the issuer or a related party, or (iv) a
combination of objective rates. A variable rate is not an objective rate,
however, if it is reasonably expected that the average value of the rate
during the first half of the Note's term will be either significantly less
than or significantly greater than the average value of the rate during the
final half of the Note's term. An objective rate is a "qualified inverse
floating rate" if (i) the rate is equal to a fixed rate minus a qualified
floating rate, and (ii) the variations in the rate can reasonably be expected
to inversely reflect contemporaneous variations in the cost of newly borrowed
funds. Under these rules, Commercial Paper Rate Notes, LIBOR Notes, Treasury
Rate Notes, and Federal Funds Effective Rate Notes will generally be treated
as Floating Rate Notes.
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In general, if a Floating Rate Note provides for stated interest at a single
qualified floating rate or objective rate, all stated interest on the Note is
qualified stated interest and the amount of OID, if any, is determined by
using, in the case of a qualified floating rate or qualified inverse floating
rate, the value as of the issue date of the qualified floating rate or
qualified inverse floating rate, or, in the case of any other objective rate,
a fixed rate that reflects the yield reasonably expected for the Note.
If a Floating Rate Note does not provide for stated interest at a single
qualified floating rate or objective rate or at a fixed rate (other than at a
single fixed rate for an initial period), the amount of interest and OID
accruals on the Note are generally determined by (i) determining a fixed rate
substitute for each variable rate provided under the Floating Rate Note
(generally, the value of each variable rate as of the issue date or, in the
case of an objective rate that is not a qualified inverse floating rate, a
rate that reflects the reasonably expected yield on the Note), (ii)
constructing the equivalent fixed rate debt instrument (using the fixed rate
substitute described above), (iii) determining the amount of qualified stated
interest and OID with respect to the equivalent fixed rate debt instrument,
and (iv) making the appropriate adjustments for actual variable rates during
the applicable accrual period.
If a Floating Rate Note provides for stated interest either at one or more
qualified floating rates or at a qualified inverse floating rate, and in
addition provides for stated interest at a single fixed rate (other than at a
single fixed rate for an initial period), the amount of interest and OID
accruals are determined as in the immediately preceding paragraph with the
modification that the Floating Rate Note is treated, for purposes of the first
three steps of the determination, as if it provided for a qualified floating
rate (or a qualified inverse floating rate, as the case may be) rather than
the fixed rate. The qualified floating rate (or qualified inverse floating
rate) replacing the fixed rate must be such that the fair market value of the
Floating Rate Note as of the issue date would be approximately the same as the
fair market value of an otherwise identical debt instrument that provides for
the qualified floating rate (or qualified inverse floating rate) rather than
the fixed rate.
Short-Term Notes. In general, an individual or other cash basis United
States Holder of a short-term Note is not required to accrue OID (as specially
defined below for the purposes of this paragraph) for United States federal
income tax purposes unless it elects to do so (but may be required to include
any stated interest in income as the interest is received). Accrual basis
United States Holders and certain other United States Holders, including
banks, regulated investment companies, dealers in securities, common trust
funds, United States Holders who hold Notes as part of certain identified
hedging transactions, certain pass-thru entities and cash basis United States
Holders who so elect, are required to accrue OID on short-term Notes on either
a straight-line basis or under the constant-yield method (based on daily
compounding), at the election of the United States Holder. In the case of a
United States Holder not required and not electing to include OID in income
currently, any gain realized on the sale or retirement of the short-term Note
will be ordinary income to the extent of the OID accrued on a straight-line
basis (unless an election is made to accrue the OID under the constant-yield
method) through the date of sale or retirement. United States Holders who are
not required and do not elect to accrue OID on short-term Notes will be
required to defer deductions for interest on borrowings allocable to short-
term Notes in an amount not exceeding the deferred income until the deferred
income is realized.
For purposes of determining the amount of OID subject to these rules, all
interest payments on a short-term Note, including stated interest, are
included in the short-term Note's stated redemption price at maturity.
Notes Purchased at a Premium
A United States Holder that purchases a Note for an amount in excess of its
principal amount may elect to treat such excess as "amortizable bond premium",
in which case the amount required to be
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included in the United States Holder's income each year with respect to
interest on the Note will be reduced by the amount of amortizable bond premium
allocable (based on the Note's yield to maturity) to such year. Any election
to amortize bond premium shall apply to all bonds (other than bonds the
interest on which is excludible from gross income) held by the United States
Holder at the beginning of the first taxable year to which the election
applies or thereafter acquired by the United States Holder, and is irrevocable
without the consent of the Service. See also "Original Issue Discount--
Election to Treat All Interest as Original Issue Discount".
Purchase, Sale and Retirement of the Notes
A United States Holder's tax basis in a Note will generally be its U.S.
dollar cost (as defined below), increased by the amount of any OID or market
discount included in the United States Holder's income with respect to the
Note and the amount, if any, of income attributable to de minimis original
issue discount and de minimis market discount included in the United States
Holder's income with respect to the Note, and reduced by (i) the amount of any
payments that are not qualified stated interest payments, and (ii) the amount
of any amortizable bond premium applied to reduce interest on the Note.
A United States Holder will generally recognize gain or loss on the sale or
retirement of a Note equal to the difference between the amount realized on
the sale or retirement and the tax basis of the Note. Except to the extent
described above under "Original Issue Discount--Short-Term Notes" or "Original
Issue Discount--Market Discount" or attributable to accrued but unpaid
interest, gain or loss recognized on the sale or retirement of a Note will be
capital gain or loss and will be long-term capital gain or loss if the Note
was held for more than one year.
BACKUP WITHHOLDING AND INFORMATION REPORTING
In general, information reporting requirements will apply to payments of
principal, any premium and interest on a Note and the proceeds of the sale of
a Note before maturity within the United States to, and to the accrual of OID
on a Discount Note with respect to, non-corporate United States Holders, and
"backup withholding" at a rate of 31% will apply to such payments and to
payments of OID if the United States Holder fails to provide an accurate
taxpayer identification number or to report all interest and dividends
required to be shown on its federal income tax returns.
PLAN OF DISTRIBUTION OF NOTES
Under the terms of an Agency Agreement, dated May 22, 1996 (the "Agency
Agreement"), the Notes may be offered from time to time by the Company on a
continuing basis through the Agents, each of which has agreed to use
reasonable efforts to solicit purchases of the Notes. The Company will pay
each Agent a commission ranging from .125% to .750% of the principal amount of
each Note with a maturity of 9 months to 30 years, depending on its Stated
Maturity, and a commission to be negotiated for Notes with longer maturities,
sold through such Agent. The Company will have the sole right to accept offers
to purchase Notes and may reject any such offer, in whole or in part. Each
Agent shall have the right, in its discretion reasonably exercised, without
notice to the Company, to reject any offer to purchase Notes received by it,
in whole or in part. The Company also may sell Notes to any Agent, acting as
principal, or to a group of underwriters named in the applicable Pricing
Supplement for whom such Agent will act as representative, 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 such resale,
as determined by such Agent, or to certain securities dealers at the public
offering price set forth on the cover page of the applicable Pricing
Supplement less the applicable concession, expressed as a percentage, of the
principal amount of the Notes. The offering price and other selling terms for
such resales may from time to time be varied by such Agent. The Company also
may sell
S-16
<PAGE>
Notes directly to investors on its own behalf at varying prices related to
prevailing market prices at the time of sale, as determined by the Company.
Unless otherwise indicated in the applicable Pricing Supplement, payment of
the purchase price of Notes will be required to be made in immediately
available funds in The City of New York.
The Agents may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933 (the "Act"). The Company has agreed to indemnify the
Agents against and contribute toward certain liabilities, including
liabilities under the Act. The Company has agreed to reimburse the Agents for
certain expenses.
Unless otherwise indicated in the applicable Pricing Supplement, the Notes
will not be listed on any securities exchange. The Agents have advised the
Company that they intend to make a market in the Notes, but the Agents will
not be obligated to do so and may discontinue any market making at any time
without notice. No assurance can be given as to the liquidity of the trading
market for the Notes.
Goldman, Sachs & Co. and Salomon Brothers Inc each engage in transactions
with and perform services for the Company in the ordinary course of business.
VALIDITY OF NOTES
The validity of the Notes will be passed upon for the Company by John W.
Holleran, Vice President and General Counsel of the Company, and for the
Agents by Sullivan & Cromwell, New York, New York. The opinions of Mr.
Holleran and Sullivan & Cromwell will be conditioned upon, and subject to
certain assumptions regarding, future action required to be taken by the
Company and the Trustee in connection with the issuance and sale of any
particular Note, the specific terms of Notes and other matters which may
affect the validity of Notes but which cannot be ascertained on the date of
such opinions. As of December 31, 1995, Mr. Holleran held 997 shares of the
Company's common stock. Mr. Holleran holds options to purchase shares of the
Company's common stock under a Company stock option plan and holds 632 shares
of Convertible Preferred Stock, Series D, in the Company's Employee Stock
Option Plan.
GLOSSARY
Set forth below are definitions, or the locations elsewhere of definitions,
of some of the terms used in this Prospectus Supplement.
"Calculation Agent" means the agent appointed by the Company to calculate
interest rates for Floating Rate Notes. Unless otherwise provided in a Pricing
Supplement, the Calculation Agent will be First Trust of New York, National
Association.
"Calculation Date" means the date on which the Calculation Agent is to
calculate an interest rate for a Floating Rate Note, which is the applicable
date set forth below, unless otherwise indicated in the applicable Pricing
Supplement:
"Commercial Paper Rate"--Tenth day after the related Commercial Rate
Interest Determination Date or, if such day is not a Market Day, the next
succeeding Market Day.
"Federal Funds Effective Rate"--Tenth day after the related Federal Funds
Effective Interest Determination Date or, if such day is not a Market Day,
the next succeeding Market Day.
"LIBOR"--The LIBOR Interest Determination Date.
"Treasury Rate"--Tenth day after the related Treasury Interest
Determination Date or, if such day is not a Market Day, the next succeeding
Market Day.
"Commercial Paper Rate" means the rate calculated as set forth under the
heading "Description of Notes--Floating Rate Notes--Commercial Paper Rate
Notes", unless otherwise indicated in the applicable Pricing Supplement.
S-17
<PAGE>
"Composite Quotations" means the daily statistical release entitled
"Composite 3:30 P.M. Quotations for U.S. Government Securities", or any
successor publication, published by the Federal Reserve Bank of New York.
"Depositary" shall have the meaning set forth under the heading "Book-Entry
Notes".
"Designated LIBOR Page" means (a) if "LIBOR Reuters" is specified in the
applicable Pricing Supplement, the display on the Reuter Monitor Money Rates
Service (or any successor service) for the purpose of displaying the London
interbank rates of major banks, or (b) if "LIBOR Telerate" is specified in the
applicable Pricing Supplement or neither "LIBOR Reuters" nor "LIBOR Telerate"
is specified in the applicable Pricing Supplement as the method for
calculating LIBOR, the display on the Dow Jones Telerate Service (or any
successor service) for the purpose of displaying the London interbank rates of
major banks.
"Federal Funds Effective Rate" means the rate calculated as set forth under
the heading "Description of Notes--Floating Rate Notes--Federal Funds
Effective Rate Notes", unless otherwise indicated in the applicable Pricing
Supplement.
"Federal Funds Effective Rate"--Tenth day after the related Federal Funds
Effective Interest Determination Date or, if such day is not a Market Day, the
next succeeding Market Day.
"Fixed Rate Note" shall have the meaning set forth under the heading
"Description of Notes--Interest".
"Floating Rate Notes" shall have the meaning set forth under the heading
"Description of Notes--Interest".
"H.15(519)" means the weekly statistical release entitled "Statistical
Release H.15(519), Selected Interest Rates", or any successor publication,
published by the Board of Governors of the Federal Reserve System.
"Index Maturity" means, with respect to a Floating Rate Note, the period to
maturity of the instrument or obligation on which the interest rate formula is
based, as indicated in the applicable Pricing Supplement.
"Initial Interest Rate" means the rate at which a Floating Rate Note will
bear interest from its Issue Date (or that of a predecessor Note) to the first
Reset Date, as indicated in the applicable Pricing Supplement.
"Interest Determination Date" means the date as of which the interest rate
for a Floating Rate Note is to be calculated, to be effective as of the
following Reset Date and calculated on the related Calculation Date (except in
the case of LIBOR, which is calculated on the related LIBOR Interest
Determination Date). See the third paragraph under the heading "Description of
Notes--Floating Rate Notes" for the Interest Determination Dates for Floating
Rate Notes. The Interest Determination Dates for any Floating Rate Note will
also be indicated in the applicable Pricing Supplement.
"LIBOR"--The LIBOR Interest Determination Date.
"LIBOR" means the rate calculated as set forth under the heading
"Description of Notes--Floating Rate Notes--LIBOR Notes", unless otherwise
indicated in the applicable Pricing Supplement.
"London Market Day" means any day on which dealings in deposits in U.S.
dollars are transacted in the London interbank market.
"Market Day" means (a) with respect to any Note, any day that is not a
Saturday or Sunday and that, in The City of New York, is not a day on which
banking institutions generally are authorized or obligated by law or executive
order to close, and (b) with respect to LIBOR Notes only, any such day on
which dealings in deposits in U.S. dollars are transacted in the London
interbank market.
S-18
<PAGE>
"Reset Date" means the date on which a Floating Rate Note will begin to bear
interest at the variable interest rate determined as of any Interest
Determination Date. See the second paragraph under the heading "Floating Rate
Notes" for the applicable Reset Dates for such Notes. The Reset Dates with
respect to any Floating Rate Note will also be set forth in the applicable
Pricing Supplement and in such Note.
"Spread" means the number of basis points specified in the applicable
Pricing Supplement as being applicable to the interest rate for a particular
Floating Rate Note.
"Spread Multiplier" means the percentage specified in the applicable Pricing
Supplement as being applicable to the interest rate for a particular Floating
Rate Note.
"Treasury Rate"--Tenth day after the related Treasury Interest Determination
Date or, if such day is not a Market Day, the next succeeding Market Day.
"Treasury Rate" means the interest rate calculated as set forth under the
heading "Description of Notes--Floating Rate Notes--Treasury Rate Notes",
unless otherwise indicated in the applicable Pricing Supplement.
S-19
<PAGE>
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND
THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PRO-
SPECTUS SUPPLEMENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS
NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CRE-
ATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COM-
PANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN OR THEREIN
IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Description of Notes....................................................... S-2
Certain Federal Income Tax Considerations.................................. S-10
Plan of Distribution of Notes.............................................. S-16
Validity of Notes.......................................................... S-17
Glossary................................................................... S-17
PROSPECTUS
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
The Company................................................................ 3
Use of Proceeds............................................................ 3
Selected Financial Information............................................. 4
Description of Debt Securities............................................. 5
Plan of Distribution....................................................... 12
Legal Opinions............................................................. 13
Experts.................................................................... 13
</TABLE>
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$275,400,000
BOISE CASCADE CORPORATION
MEDIUM-TERM NOTES,
SERIES A
DUE NINE MONTHS OR
MORE FROM DATE OF
ISSUE
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PROSPECTUS SUPPLEMENT
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GOLDMAN, SACHS & CO.
SALOMON BROTHERS INC
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