Filed Pursuant to Rule 424(b)(2) relating
to Registration Statement No. 33-59415
PROSPECTUS SUPPLEMENT
(To Prospectus Dated May 26, 1995)
$750,000,000
COMMERCIAL CREDIT COMPANY
MEDIUM-TERM NOTES, SIXTH SERIES
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
-------------------
Commercial Credit Company (the "Company") may offer from time to time its
Medium-Term Notes, Sixth Series (the "Notes"), in an aggregate principal face
amount of up to $750,000,000 (or (i) the equivalent thereof in other currencies
or currency units or (ii) such greater amount if Notes are issued at an original
issue discount, as shall result in aggregate proceeds of $750,000,000), subject
to reduction under certain circumstances as a result of the sale of other
Securities (as defined in the accompanying Prospectus). The Notes will be
offered at varying maturities of nine months or more from the date of issue as
selected by the purchaser and agreed to by the Company, and may be subject to
redemption at the option of the Company or repayment at the option of the holder
thereof prior to the Stated Maturity thereof (as defined below). The Notes
offered by this Prospectus Supplement will constitute unsecured unsubordinated
indebtedness of the Company and will rank pari passu with all
(Continued on following page)
--------------
THESE NOTES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT,
ANY PRICING SUPPLEMENT HERETO OR THE PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
=================================================================================================
PRICE TO AGENTS' COMMISSIONS PROCEEDS TO
PUBLIC(1)(2) OR DISCOUNTS(2)(3) COMPANY(1)(4)
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Note.................... 100% .125%-.750% 99.875%-99.250%
- -------------------------------------------------------------------------------------------------
Total....................... $750,000,000 $937,500-$5,625,000 $749,062,500-$744,375,000
=================================================================================================
</TABLE>
(1) Unless otherwise specified in the applicable Pricing Supplement, Notes
will be issued at 100% of the principal amount thereof.
(2) Or the equivalent thereof in the Specified Currency.
(3) The Company will pay commissions to the Agents in the form of discounts,
ranging from 0.125% to 0.750% (or, with respect to Notes for which the
Stated Maturity is in excess of 30 years, such commission as shall be
agreed upon by the Company and the related Agent at the time of sale). The
Company may also sell Notes to an Agent for resale to investors or other
purchasers at varying prices related to prevailing market prices at the
time of resale to be determined by such Agent or, if so agreed, at a fixed
public offering price. Unless otherwise specified in the applicable
Pricing Supplement, any Note sold to an Agent as principal will be
purchased by such Agent at a price equal to 100% of the principal amount
thereof less a percentage equal to the commission applicable to an agency
sale of a Note of identical maturity, and may be resold by such Agent. The
Company may also sell Notes directly to investors on its own behalf, in
which case no commission will be payable. The Company has agreed to
indemnify the Agents against certain civil liabilities, including
liabilities under the Securities Act of 1933, as amended.
(4) Before deducting expenses payable by the Company estimated at $175,000,
including fees and disbursements of counsel for the Agents.
-------------------
SMITH BARNEY INC.
LEHMAN BROTHERS
MERRILL LYNCH & CO.
J.P. MORGAN SECURITIES INC.
MORGAN STANLEY & CO.
INCORPORATED
The date of this Prospectus Supplement is June 20, 1995.
<PAGE>
(Continued from previous page)
other unsecured unsubordinated indebtedness of the Company. Each Note will
be denominated in U.S. dollars or in other currencies or currency units
(the "Specified Currency"), including European Currency Units ("ECU"), as
set forth in a pricing supplement (the "Pricing Supplement") to this Pro-
spectus Supplement. See "Important Currency Exchange Information" and
"Foreign Currency Risks."
Each Note will bear interest (i) at a fixed rate (a "Fixed Rate
Note"), which may be zero in the case of certain Notes issued at a price
representing a substantial discount from the principal amount payable at
Stated Maturity, (ii) at a floating rate (a "Floating Rate Note") or (iii)
at a combination of fixed and floating rates. A Fixed Rate Note may pay
both interest and principal amortized over the life of the Note (an "Amor-
tizing Note"). See "Description of Notes--Fixed Rate Notes," "Description
of Notes--Floating Rate Notes" and "Description of Notes--Floating
Rate/Fixed Rate Notes." The principal amount payable at Maturity (as
defined below) and/or the interest (or premium, if any) on each Note may be
determined by reference to the relationship between two or more currencies,
to the price of one or more specified securities or commodities or to one
or more securities or commodities exchange indices or other indices or by
other similar methods (an "Indexed Note"), as described in the applicable
Pricing Supplement. An Indexed Note whose principal amount payable at
Maturity and/or the interest rate of which is determined by reference to
the relationship between two currencies, two composite currencies or a
currency and a composite currency is referred to herein as a "Currency
Indexed Note." See "Description of Notes--Currency Indexed Notes" and "De-
scription of Notes--Other Indexed Notes and Certain Terms Applicable to All
Indexed Notes."
Unless otherwise specified in the applicable Pricing Supplement,
the dates, if any, on which interest will be payable for each Fixed Rate
Note (other than an Amortizing Note) will be March 15 and September 15 of
each year and at Maturity. The dates on which interest will be payable for
each Floating Rate Note will be established on the date of issue of such
Note and will be set forth in the applicable Pricing Supplement. Amortiz-
ing Notes will pay principal and interest semi-annually each March 15 and
September 15, or quarterly each March 15, June 15, September 15 and
December 15, and at Maturity, or otherwise, as specified in the applicable
Pricing Supplement. See "Description of Notes--Payment of Principal and
Interest." Interest rates and interest rate formulae are subject to change
by the Company, but no change will affect any Note already issued or as to
which an offer to purchase has been accepted by the Company.
Each Note will be issued in fully registered form and will be
represented by a global security (a "Global Security") registered in the
name of a nominee of The Depository Trust Company ("DTC") or other
depositary (DTC or such other depositary as is specified in the applicable
Pricing Supplement is herein referred to as the "Depositary"). An interest
in a Global Security will be shown on, and transfers thereof will be
effected only through, records maintained by the Depositary or its
participants. Except as described under "Description of Notes--Book-Entry
Notes", owners of Notes will not be entitled to receive physical delivery
of Notes in definitive form, and the Depositary, and not the owners of
beneficial interests in the Notes, will be considered the holder thereof.
Unless otherwise specified in the applicable Pricing Supplement, Notes will
be issued only in registered form in minimum denominations of $1,000 and
any amount in excess thereof that is an integral multiple of $1,000 or, in
the case of Notes denominated in a Specified Currency other than U.S.
dollars, the authorized denominations set forth in the applicable Pricing
Supplement. See "Description of Notes--General."
S-2
<PAGE>
The Specified Currency, any applicable interest rate or formula,
the Issue Price (as defined below), the Stated Maturity, any Interest
Payment Dates (as defined below), any principal payment dates, any redemp-
tion or repayment provisions, the extent to which such Note is a Fixed Rate
Note, a Floating Rate Note, an Amortizing Note or an Indexed Note and any
other terms applicable to each Note and established at the time of offering
will be set forth in the applicable Pricing Supplement.
The Notes are being offered on a continuing basis by the Company
through the Agents, all of which have agreed to use their reasonable best
efforts to solicit offers to purchase the Notes. The Company has reserved
the right to sell Notes directly on its own behalf or to the Agents acting
as principals for resale to investors and other purchasers or through other
agents (provided that any other agent will execute an agreement with the
Company which contains substantially the same terms and conditions as its
agreement with the Agents). Unless otherwise specified in an applicable
Pricing Supplement, the Notes will not be listed on any securities
exchange, 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 applicable
Agent may reject any order in whole or in part. See "Plan of Distribution."
This Prospectus Supplement and the accompanying Prospectus,
together with an appropriate Pricing Supplement, may be used by Smith
Barney Inc., an Agent and an affiliate of the Company ("SBI"), in
connection with offers and sales of the Notes in market-making transactions
at negotiated prices related to prevailing market prices at the time of
sale. SBI may act as principal or agent in such transactions.
S-3
<PAGE>
<TABLE><CAPTION>
RATIO OF EARNINGS TO FIXED CHARGES
Three Months Ended
March 31, Year Ended December 31,
----------------------- --------------------------------------
1995 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to
fixed charges. . . . . . . . 1.63 1.83 2.09 2.12(1) 1.67 1.54
</TABLE>
The ratio of earnings to fixed charges has been computed by dividing
earnings before income taxes and fixed charges by the fixed charges. For
purposes of this ratio, fixed charges consist of interest expense and that
portion of rentals deemed representative of the appropriate interest
factor.
- -----------------------
(1) Included in earnings from continuing operations before income taxes
for 1992 (used in this computation) are net gains of $47.0 million
resulting from the sale of stock of Inter-Regional Financial Group, Inc.,
the sale of the Company's investment in the common stock of Musicland
Stores Corporation and the sale of 50% of Commercial Insurance Resources,
Inc. Without giving effect to these net gains, the ratio of earnings to
fixed charges for 1992 would have been 1.99.
DESCRIPTION OF NOTES
The following description of the terms of the Notes offered hereby
(referred to in the accompanying Prospectus as the "Offered Securities")
supplements, and to the extent inconsistent therewith replaces, the de-
scription of the general terms and provisions of Securities set forth under
the heading "Description of Securities" in the accompanying Prospectus, to
which description reference is hereby made. The following summary of the
Notes is qualified in its entirety by reference thereto and to the
Indenture referred to therein. Capitalized terms not otherwise defined in
this Prospectus Supplement or the accompanying Prospectus shall have the
meanings given to them in the Indenture. The provisions of the Notes summa-
rized herein apply to the Notes unless otherwise specified in the applica-
ble Pricing Supplement and the applicable Note.
General
The Notes offered by this Prospectus Supplement are limited to
$750,000,000 aggregate principal face amount (or (i) the equivalent thereof
in one or more currencies or (ii) such greater amount if Notes are issued
at an original issue discount, as shall result in aggregate proceeds of
$750,000,000), subject to reduction under certain circumstances as a result
of the sale of other Securities covered by the Registration Statement of
which the Prospectus accompanying this Prospectus Supplement is a part.
The Notes will be issued under an Indenture, dated as of December 1, 1986,
between the Company and Citibank, N.A.("Citibank"), as Trustee (the
"Trustee"), as supplemented by the First Supplemental Indenture, dated as
of June 13, 1990, between the Company and the Trustee (the indenture as so
supplemented is hereinafter referred to as the "Indenture"). The Indenture
is further described under the heading "Description of Securities" in the
accompanying Prospectus. The provisions of the Indenture and the
designation of the Notes provide the Company with the ability to reopen the
series that is the Notes and to issue additional securities of that series.
The U.S. dollar equivalent of Notes denominated in a currency or currency
unit other than U.S. dollars will be determined upon issuance by the
Exchange
S-4
<PAGE>
Rate Agent (as defined below), on the basis of the Market Exchange Rate (as
defined below) for such other currency on the applicable trade dates. The
Notes will be subject to defeasance and covenant defeasance as described in
the accompanying Prospectus under the heading "Description of Securities--
Defeasance." The statements herein concerning the Notes and the Indenture
do not purport to be complete and are subject to, and are qualified in
their entirety by reference to, the Indenture, including the definitions
therein of certain terms. Whenever particular defined terms not otherwise
defined herein are referred to, such defined terms are incorporated herein
by reference.
The Notes constitute one series of Securities (as defined in the
Indenture), unlimited as to principal amount, established by the Company
pursuant to the Indenture.
Notes will be offered on a continuing basis and will mature from
nine months or more from the date of issue, as selected by the purchaser
and agreed to by the Company, and may be subject to redemption at the
option of the Company or repayment at the option of the holder prior to
Stated Maturity as set forth below under "Redemption and Repayment." Each
Note will bear interest from the Original Issue Date (as defined below) or
from such other date as may be specified in the applicable Pricing Sup-
plement at (i) a fixed rate, which may be zero in the case of a Note issued
at an Issue Price representing a substantial discount from the principal
amount payable at Stated Maturity (a "Zero-Coupon Note"), (ii) a floating
rate or rates determined by reference to a Base Rate, which may be adjusted
by a Spread and/or a Spread Multiplier (each as defined below), or (iii) a
combination of fixed and floating rates.
Each Note will be issued in fully registered form without coupons
and will be represented by a Global Security registered in the name of a
nominee of the Depositary. All Notes issued on the same day and having the
same terms, including, but not limited to, the same designation, Specified
Currency, Interest Payment Dates, rate of interest, Stated Maturity and re-
demption or repayment provisions may be represented by a single Global
Security. An interest in a Global Security will be shown on, and transfers
thereof will be effected only through, records maintained by the Depositary
or its participants. Payments of principal and interest on Notes
represented by a Global Security will be made by the Company or its paying
agent to the Depositary or its nominee. See "Description of Notes--Book-
Entry Notes."
Unless otherwise specified in the applicable Pricing Supplement, the
authorized denominations of Notes (other than Global Securities) denominat-
ed in U.S. dollars will be $1,000 and any amount in excess thereof that is
an integral multiple of $1,000. The authorized denominations of Notes
denominated in a Specified Currency other than U.S. dollars will be as set
forth in the applicable Pricing Supplement.
The Notes will constitute unsecured unsubordinated indebtedness of
the Company and will rank pari passu with all other unsecured
unsubordinated indebtedness of the Company. The Pricing Supplement will
indicate whether the Notes will be redeemable at the option of the Company,
or repayable at the option of the holder, or both, on or after a specified
date prior to their Stated Maturity. Unless otherwise specified in the
applicable Pricing Supplement, the Notes, other than Amortizing Notes, will
not be subject to any sinking fund. See "Description of Notes--Redemption
and Repayment."
The amount of any Discount Note (as defined below) payable in the
event of redemption by the Company, repayment at the option of the holder
or acceleration of its Stated Maturity, in lieu of the stated principal
amount due at the Stated Maturity, shall be the Amortized Face Amount (as
defined below) of such Discount Note as of the date of such redemption,
repayment or acceleration. For the purpose of determining whether holders
of the requisite amount of Securities outstanding under the Indenture have
S-5
<PAGE>
made a demand or given a notice or waiver or taken any other action, the
outstanding principal amount will be deemed to be the Amortized Face
Amount. A "Discount Note" means a Note, including any Zero-Coupon Note,
issued with more than a de minimis amount of original issue discount (as
determined under United States federal income tax rules applicable to
original issue discount instruments). The "Amortized Face Amount" of a
Discount Note shall be the amount equal to (i) the Issue Price of such Dis-
count Note set forth in the applicable Pricing Supplement plus (ii) the
portion of the difference between the Issue Price and the principal amount
of such Discount Note that has accrued at the yield to maturity set forth
in the Pricing Supplement (computed in accordance with generally accepted
United States bond yield computation principles) at the date as of which
the Amortized Face Amount is calculated, but in no event shall the
Amortized Face Amount of such Discount Note exceed its stated principal
amount. See "Certain Federal Income Tax Considerations--U.S. Holders--
Discount Notes."
The Pricing Supplement relating to each Note will describe the fol-
lowing terms, as applicable: (1) the Specified Currency with respect to
such Note (and, if such Specified Currency is other than U.S. dollars,
certain other terms relating to such Note); (2) the extent to which such
Note is a Fixed Rate Note, an Amortizing Note, a Floating Rate Note, a
Discount Note or a Zero-Coupon Note; (3) whether such Note is a Currency
Indexed Note or other Indexed Note, and if so, the specific terms thereof;
(4) the price (expressed as a percentage of the aggregate principal amount
thereof) at which such Note will be issued (the "Issue Price"); (5) the
date on which such Note will be issued (the "Original Issue Date") and the
date from which interest shall accrue (if different from the Original Issue
Date); (6) the date on which such Note will mature (the "Stated Maturity")
and whether the Stated Maturity may be extended by the Company and if so,
the Extension Periods and the Final Maturity Date (each as defined below);
(7) if such Note is a Fixed Rate Note, the rate per annum at which such
Note will bear interest, if any (the "Interest Rate"), the Interest Payment
Date or Dates and, if so specified in the applicable Pricing Supplement,
that such rate may be changed by the Company prior to the Stated Maturity
and, if so, the basis or formula for such change, if any; (8) if such Note
is a Floating Rate Note, the Base Rate, the Initial Interest Rate or
formula for determining such, the Interest Reset Period, the Interest Reset
Date or Dates, the Interest Payment Date or Dates, the Index Maturity, the
Maximum Interest Rate and/or the Minimum Interest Rate, if any, and the
Spread and/or Spread Multiplier, if any (all as defined below), and any
other terms relating to the particular method of calculating the Interest
Rate for such Note and, if so specified in the applicable Pricing Supple-
ment, that any such Spread and/or Spread Multiplier may be changed by the
Company prior to the Stated Maturity and, if so, the basis or formula for
such change, if any; (9) if such Note is an Amortizing Note, whether pay-
ments of principal thereof and interest thereon will be made quarterly or
semi-annually, and the repayment information in respect thereof; (10)
whether the interest rate on such Note may be reset upon the occurrence of
certain events or at the option of the Company; (11) whether such Note may
be redeemed at the option of the Company, or repaid at the option of the
holder, prior to the Stated Maturity, and if so, the provisions relating to
such redemption or repayment; (12) certain special federal income tax
consequences of the purchase, ownership and disposition of certain Notes,
if any; (13) whether such Note is a Renewable Note (as defined below), and,
if so, the specific terms thereof; (14) the use of proceeds, if such use
materially differs from that disclosed in the accompanying Prospectus; and
(15) any other terms of such Note not inconsistent with the provisions of
the Indenture.
Payment Currency
Unless otherwise specified in the applicable Pricing Supplement, and
except as otherwise described herein with respect to Currency Indexed
Notes, principal (and premium, if any) and interest, if any, on each Note
will be paid by the Company in U.S. dollars in the manner described in the
S-6
<PAGE>
following paragraphs, even if such Note is denominated in a Specified
Currency other than U.S. dollars; provided that, if the applicable Pricing
Supplement and the Note so indicate, the holder of a Note denominated in a
Specified Currency other than U.S. dollars may elect to receive all such
payments in respect of such Note in such Specified Currency, subject to
certain conditions described in the following paragraphs, by delivery of a
written election to the Company's paying agent (the "Paying Agent") in The
City of New York. Except as otherwise provided herein with respect to
Global Securities, any such election must be received by the Paying Agent
on or prior to the applicable Regular Record Date (as defined below) or at
least 15 calendar days prior to Maturity, as the case may be, and no such
change of election may be made with respect to payments on any Note with
respect to which (i) an Event of Default has occurred, (ii) the Company has
exercised any of its defeasance or covenant defeasance options, or (iii)
the Company has given notice of redemption. Such election shall remain in
effect unless and until changed by written notice to the Paying Agent,
received on or prior to the applicable Regular Record Date or at least 15
calendar days prior to Maturity, as the case may be. Until the Notes are
paid or payment thereof is provided for, the Company will, at all times,
maintain a Paying Agent in The City of New York capable of performing the
duties described herein to be performed by the Paying Agent and, to the
extent permitted by the Indenture, the Company may be the Paying Agent.
The Company has initially appointed Citibank, New York, New York as Paying
Agent under the Indenture. The Company will notify the holders of the
Notes in accordance with the Indenture of any change in the Paying Agent or
its address. Except as may otherwise be provided in a Pricing Supplement
with respect to Currency Indexed Notes, all currency exchange costs related
to a Note, if any, will be borne by the holder of such Note by deductions
from payments otherwise due such holder.
Unless otherwise specified in the applicable Pricing Supplement, in
the case of a Note denominated in a Specified Currency other than U.S.
dollars, the amount of U.S. dollar payments in respect of such Note will be
determined by an agent for the Company specified in the applicable Pricing
Supplement (the "Exchange Rate Agent"), based on the indicative quotation
in The City of New York selected by such Exchange Rate Agent at approxi-
mately 11:00 a.m., New York City time, on the second Business Day preceding
the applicable payment date, that yields the largest number of U.S. dollars
upon conversion of the Specified Currency. Except with respect to LIBOR
Notes and LIBID Notes (each as defined below), "Business Day" means each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in New York City are authorized or obligated by law or
executive order to close and, with respect to Notes denominated in or
indexed to a Specified Currency other than U.S. dollars or ECU, each
Monday, Tuesday, Wednesday, Thursday or Friday which is not a day on which
banking institutions in the principal financial center of the country
issuing the Specified Currency are authorized or required by law or
regulation to close and a day on which banking institutions in such
principal financial center are carrying out transactions in such Specified
Currency and, with respect to Notes denominated in or indexed to ECU, each
day which is not a day that banking institutions in Luxembourg are autho-
rized or required by law or regulation to close and which is an ECU
clearing day, as determined by the ECU Banking Association in Paris. If
the Notes are LIBOR Notes or LIBID Notes, "Business Day" shall mean each
day as determined pursuant to the preceding sentence which is also a
"London Business Day." "London Business Day" means any day on which
dealings in deposits in the Designated Deposit Currency (as defined below)
are transacted in the London interbank market. Unless otherwise specified
in the applicable Pricing Supplement, such selection shall be made from
among the quotations of at least three banks agreed to by the Company and
the Exchange Rate Agent appearing on the bank composite or multi-contribu-
tor pages of the Reuters Monitor Foreign Exchange Service, or if not
available, the Telerate Monitor Foreign Exchange Service (the "Exchange
Rate"). If such quotations are unavailable from either such foreign
exchange service, such selection shall be made as specified in the applica-
ble Pricing Supplement. If a payment is to be made in a Specified Currency
and such
S-7
<PAGE>
Specified Currency is unavailable due to the imposition of exchange
controls or to other circumstances beyond the Company's control, or is no
longer used by the government of the country issuing such Specified
Currency or for the settlement of transactions by public institutions of or
within the international banking community, the Company will be entitled to
make payments in U.S. dollars on the basis of the noon buying rate in The
City of New York for cable transfers in the Specified Currency as certified
for customs purposes by the Federal Reserve Bank of New York (the "Market
Exchange Rate") for such Specified Currency on the second Business Day
prior to such payment date, or on such other basis as shall be specified in
the applicable Pricing Supplement. In the event such Market Exchange Rate
is not then available, the Company will be entitled to make payments in
U.S. dollars (i) if such Specified Currency is not a composite currency, on
the basis of the most recently available Market Exchange Rate for such
Specified Currency or (ii) if such Specified Currency is a composite
currency, including, without limitation, ECU, in an amount determined by
the Exchange Rate Agent to be the sum of the results obtained by
multiplying the number of units of each component currency of such
composite currency, as of the most recent date on which such composite
currency was used, by the Market Exchange Rate for such component currency
on the second Business Day prior to such payment date (or if such Market
Exchange Rate is not then available, by the most recently available Market
Exchange Rate for such component currency, or as otherwise specified in the
applicable Pricing Supplement). Unless otherwise provided in the
applicable Pricing Supplement, Citibank will be the Exchange Rate Agent
with respect to the Notes.
Unless otherwise specified in the applicable Pricing Supplement, if
a holder of a Note denominated in a Specified Currency other than U.S.
dollars or ECU shall have elected to receive payments of principal (and
premium, if any) and interest, if any, on such Note in such Specified
Currency as described above, or if the Denominated Currency (as defined
herein) of a Currency Indexed Note is a foreign currency (other than ECU),
and such Specified Currency or Denominated Currency is unavailable as of
the due date for any payment thereon because of the imposition of exchange
controls or other circumstances beyond the Company's control, or is no
longer used by the government of the country issuing such Specified
Currency or Denominated Currency or for the settlement of transactions by
public institutions of or within the international banking community, then
all payments due on such due date with respect to such Note shall be made
in U.S. dollars. The amount so payable on any date in such Specified
Currency or Denominated Currency shall be converted into U.S. dollars at a
rate determined by the Exchange Rate Agent on the basis of the most
recently available Market Exchange Rate, or as otherwise specified in the
applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, if
a holder of a Note denominated in ECU shall have elected to receive pay-
ments of principal (and premium, if any) and interest, if any, on such Note
in ECU as described above, or if the Denominated Currency of a Currency
Indexed Note is ECU, and ECU are unavailable as of the due date for any
payment thereon because of the imposition of exchange controls or other
circumstances beyond the Company's control, or are no longer used in the
European Monetary System, all payments due on that due date with respect to
such Note shall be made in U.S. dollars. The amount so payable on any date
in ECU shall be converted into U.S. dollars at a rate determined by the
Exchange Rate Agent as of the second Business Day prior to the date on
which such payment is due on the following basis: The component currencies
of ECU for this purpose shall be the currency amounts that were components
of the ECU as of the last date on which ECU were used in the European
Monetary System. The equivalent of ECU in U.S. dollars shall be calculated
by aggregating the U.S. dollar equivalents of such component currencies.
The U.S. dollar equivalent of each of such component currencies shall be
determined by the Exchange Rate Agent on the
S-8
<PAGE>
basis of the most recently available Market Exchange Rate, or as otherwise
specified in the applicable Pricing Supplement.
If the official unit of any component currency of a composite cur-
rency is altered by way of combination or subdivision, the number of units
of that currency as a component shall be divided or multiplied in the same
proportion. If two or more component currencies are consolidated into a
single currency, the amounts of those currencies as components shall be
replaced by an amount in such single currency equal to the sum of the
amounts of the consolidated component currencies expressed in such single
currency. If any component currency is divided into two or more curren-
cies, the amount of that currency as a component shall be replaced by
amounts of such two or more currencies having an aggregate value on the
date of division equal to the amount of the former component currency
immediately before such division.
All determinations referred to above made by the Exchange Rate Agent
shall be at its sole discretion and, in the absence of manifest error,
shall be conclusive for all purposes and binding on holders of the Notes,
and the Exchange Rate Agent shall have no liability therefor.
Each Note will provide that, in the event of an official
redenomination of the Specified Currency thereof (including, without
limitation, an official redenomination of any such Specified Currency that
is a composite currency), the obligations of the Company with respect to
payments on Notes denominated in such Specified Currency shall, in all
cases, be deemed immediately following such redenomination to provide for
the payment of that amount of redenominated currency representing the
amount of such obligations immediately before such redenomination. Except
to the extent Currency Indexed Notes provide for the adjustment of the
principal amount payable at Maturity thereof pursuant to application of the
formulae described under "Description of Notes--Currency Indexed Notes--
Payment of Principal and Interest," or any other formulae provided for in
the applicable Pricing Supplement, Notes will not provide for any ad-
justment to any amount payable under such Notes as a result of (i) any
change in the value of the Specified Currency thereof relative to any other
currency due solely to fluctuations in exchange rates or (ii) any
redenomination of any component currency of any composite currency (unless
such composite currency is itself officially redenominated).
Currently, there are limited facilities in the United States for
conversion of U.S. dollars into foreign currencies, and vice versa. In
addition, banks do not generally offer non-U.S. dollar-denominated checking
or savings account facilities in the United States. Accordingly, payments
on Notes made in a currency other than U.S. dollars will be made from an
account at a bank located outside the United States unless otherwise speci-
fied in the applicable Pricing Supplement.
Payment of Principal and Interest
Principal and interest on the Notes will be paid in accordance with
the Depositary's and the participant's procedures in effect from time to
time as described under "Description of Notes--Book-Entry Notes."
Simultaneously with the election of any holder of a Note to receive
payments in a Specified Currency other than U.S. dollars (as provided
above), such holder may, if so entitled as described above, elect to
receive such payments in immediately available funds by providing complete
and appropriate instructions to the Paying Agent, and all payments in
respect of principal or premium, if any, of, or interest, if any, on, such
Note will be made in immediately available funds to an account maintained
by the payee with a bank located outside the United States or as otherwise
provided in the applicable Pricing Supplement. Unless otherwise specified
in the applicable Pricing Supplement, principal, premium, if any,
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and interest, if any, payable at Maturity will be paid by the Paying Agent
by wire transfer in immediately available funds (unless otherwise specified
in the applicable Pricing Supplement, payable to an account maintained by
the payee with a bank located outside the United States if payable in a
Specified Currency other than U.S. dollars) to an account specified by the
Depositary. See "Important Currency Exchange Information." Unless
otherwise specified in the applicable Pricing Supplement, payments of
interest, and principal of Amortizing Notes (in each case, other than at
Maturity), will be made in same-day funds in accordance with existing
arrangements between the Paying Agent and the Depositary. The Company will
pay any administrative costs imposed by banks in connection with making
payments in immediately available funds, but any tax, assessment or
governmental charge imposed upon payments, including, without limitation,
any withholding tax, will be borne by the holders of the Notes in respect
of which such payments are made.
Interest and Interest Rates
Each Note other than a Zero-Coupon Note will bear interest from its
Original Issue Date (or such other date on which such Note otherwise begins
to accrue interest if different from the Original Issue Date) or from the
most recent Interest Payment Date to which interest on such Note has been
paid or duly provided for at a fixed rate or rates per annum, or at a rate
or rates per annum determined pursuant to a Base Rate stated therein and in
the applicable Pricing Supplement that may be adjusted by a Spread and/or
Spread Multiplier, until the principal thereof is paid or made available
for payment. Interest will be payable on each Interest Payment Date and at
Maturity. "Maturity" means the date on which the principal of a Note or an
installment of principal becomes due and payable in full in accordance with
its terms and the terms of the Indenture, whether at Stated Maturity or by
declaration of acceleration, call for redemption, repayment or otherwise.
Interest will be payable to the holder at the close of business on the
Regular Record Date next preceding such Interest Payment Date; provided,
however, that interest payable at Maturity will be payable to the person to
whom principal shall be payable. The first payment of interest on any Note
originally issued between a Regular Record Date for such Note and the
succeeding Interest Payment Date will be made on the Interest Payment Date
following the next succeeding Regular Record Date for such Note to the
Holder on such next Regular Record Date.
Interest rates and interest rate formulae are subject to change by
the Company, but, unless set forth in the applicable Pricing Supplement and
agreed to by the purchaser of such Notes, no such change will affect any
Note already issued or as to which an offer to purchase has been accepted
by the Company. The Interest Payment Dates and the Regular Record Dates
for each Fixed Rate Note shall be as described below under "Fixed Rate
Notes." The Interest Payment Dates for each Floating Rate Note shall be as
described below under "Floating Rate Notes" and in the applicable Pricing
Supplement, and the Regular Record Dates for a Floating Rate Note will be
the fifteenth day (whether or not a Business Day) next preceding each
Interest Payment Date.
Fixed Rate Notes
Each Fixed Rate Note will bear interest from its Original Issue Date
or such other date on which such Note otherwise begins to accrue interest
(if different from the Original Issue Date) at the rate per annum set forth
thereon and in the applicable Pricing Supplement until the principal amount
thereof is paid, or made available for payment, in full, except as
described below under "Description of Notes--Subsequent Interest Periods"
and "Description of Notes--Extension of Maturity." Unless otherwise speci-
fied in the applicable Pricing Supplement, interest on each Fixed Rate Note
(other than a Zero-Coupon Note or an Amortizing Note) will be payable semi-
annually each March 15 and September 15, and at
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Maturity, and the Regular Record Dates will be each March 1 and September
1. Unless otherwise specified in the applicable Pricing Supplement,
principal of and interest on each Amortizing Note will be payable either
quarterly on each March 15, June 15, September 15 and December 15, or semi-
annually on each March 15 and September 15 as set forth in the applicable
Pricing Supplement, and at Maturity. Unless otherwise specified in the
applicable Pricing Supplement, the Regular Record Dates will be each March
1, June 1, September 1 and December 1 for each Amortizing Note that is
payable quarterly and each March 1 and September 1 for each Amortizing Note
that is payable semi-annually. Payments with respect to Amortizing Notes
will be applied first to interest due and payable thereon and then to the
reduction of the unpaid principal amount thereof. A table setting forth
repayment information in respect of each Amortizing Note will be included
in the applicable Pricing Supplement and set forth on such Notes. Each
payment of interest on a Fixed Rate Note shall include interest accrued
through the day before the Interest Payment Date or date of Maturity, as
the case may be. Any payment of principal (and premium, if any) or inter-
est required to be made on a Fixed Rate Note on a day that is not a Busi-
ness Day need not be made on such day, but may be made on the next
succeeding Business Day with the same force and effect as if made on such
day, and no additional interest shall accrue as a result of such delayed
payment. Unless otherwise specified in the applicable Pricing Supplement,
interest on Fixed Rate Notes, if any, will be computed on the basis of a
360-day year of twelve 30-day months.
Floating Rate Notes
Except for the period from the Original Issue Date (or the date on
which such Note otherwise begins to accrue interest (if different from the
Original Issue Date)) to the first Interest Reset Date set forth in the
applicable Pricing Supplement, each Floating Rate Note will bear interest
at a rate determined by reference to an interest rate base (the "Base
Rate"), which may be adjusted by a Spread and/or a Spread Multiplier. The
applicable Pricing Supplement will designate one or more of the following
Base Rates as applicable to a Floating Rate Note: (a) the CD Rate (a "CD
Rate Note"), (b) the Commercial Paper Rate (a "Commercial Paper Rate
Note"), (c) LIBID (a "LIBID Note"), (d) LIBOR (a "LIBOR Note"), (e) the
Treasury Rate (a "Treasury Rate Note"), (f) the Federal Funds Rate (a
"Federal Funds Rate Note"), (g) the Prime Rate (a "Prime Rate Note"), (h)
the J.J. Kenny Rate (a "J.J. Kenny Rate Note"), (i) the Eleventh District
Cost of Funds Rate (an "Eleventh District Cost of Funds Rate Note"), (j)
the CMT Rate (a "CMT Rate Note") or (k) such other Base Rate or formula as
is set forth in such Pricing Supplement and in such Floating Rate Note.
The "Index Maturity" for any Floating Rate Note is the period to maturity
(as specified in the applicable Pricing Supplement) of the instrument or
obligation from which the Base Rate is calculated.
As specified in the applicable Pricing Supplement, a Floating Rate
Note may also have either or both of the following: (i) a maximum limi-
tation, or ceiling, on the rate at which interest may accrue during any
interest period ("Maximum Interest Rate"); and/or (ii) a minimum limi-
tation, or floor, on the rate at which interest may accrue during any
interest period ("Minimum Interest Rate"). In addition to any Maximum
Interest Rate that may be applicable to any Floating Rate Note pursuant to
the above provisions, the interest rate on a Floating Rate Note will in no
event be higher than the maximum rate permitted by applicable law
(including, without limitation, New York law, which is stated to govern the
Notes and the Indenture), as the same may be modified by United States law
of general application. Under present New York law, the maximum rate of
interest, with certain exceptions, is 25% per annum on a simple interest
basis. This limit may not apply to Notes in which $2,500,000 or more has
been invested, including Notes purchased by an Agent in such aggregate
principal amount or more for resale to investors.
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<PAGE>
Unless otherwise specified herein or in the applicable Pricing
Supplement, all percentages resulting from any calculation of the rate of
interest on a Floating Rate Note will be rounded upward, if necessary, to
the nearest one hundred-thousandth of a percent (.0000001), with five one-
millionths of a percentage point being rounded upward, and all currency
amounts used in or resulting from such calculation on Floating Rate Notes
will be rounded to the nearest one-hundredth of a unit (with five one-thou-
sandths of a unit being rounded upwards).
The rate of interest on each Floating Rate Note will be reset daily,
weekly, monthly, quarterly, semi-annually or annually (the "Interest Reset
Period"), as or unless otherwise specified in the applicable Pricing
Supplement. Unless otherwise specified in the applicable Pricing
Supplement, the date or dates on which interest will be reset (each an
"Interest Reset Date") will be, in the case of Floating Rate Notes that
reset daily, each Business Day; in the case of Floating Rate Notes (other
than Treasury Rate Notes) that reset weekly, the Wednesday of each week; in
the case of Treasury Rate Notes that reset weekly, the Tuesday of each week
(except as provided below); in the case of Floating Rate Notes that reset
monthly, the third Wednesday of each month (with the exception of monthly
reset Eleventh District Cost of Funds Rate Notes, which reset on the first
calendar day of each month); in the case of Floating Rate Notes that reset
quarterly, the third Wednesday of each March, June, September and December;
in the case of Floating Rate Notes that reset semi-annually, the third
Wednesday of the two months of each year specified in the applicable
Pricing Supplement; and in the case of Floating Rate Notes that reset
annually, the third Wednesday of the month of each year specified in the
applicable Pricing Supplement; provided that the interest rate in effect
from the Original Issue Date (or the date on which such Notes otherwise
begin to accrue interest (if different from the Original Issue Date)) to
the first Interest Reset Date will be the Initial Interest Rate (as defined
below). If any Interest Reset Date for any Floating Rate Note would
otherwise be a day that is not a Business Day, such Interest Reset Date
shall be the succeeding Business Day, except that, in the case of a LIBID
Note or a LIBOR Note, if such Business Day is in the succeeding calendar
month, such Interest Reset Date shall be the next preceding Business Day.
If an auction of direct obligations of the United States Treasury Bills
("Treasury bills") falls on a day that is an Interest Reset Date for
Treasury Rate Notes, the Interest Reset Date shall be the succeeding
Business Day. The interest rate or the formula for establishing the inter-
est rate in effect with respect to a Floating Rate Note from the Original
Issue Date (or the date on which such Note otherwise begins to accrue
interest (if different from the Original Issue Date)) to the first Interest
Reset Date (the "Initial Interest Rate") will be specified in the appli-
cable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
interest rate on each Floating Rate Note will be calculated by reference to
the specified Base Rate (i) plus or minus the Spread, if any, and/or (ii)
multiplied by the Spread Multiplier, if any. The "Spread" is the number of
basis points (one basis point equals one-hundredth of a percentage point)
to be added to or subtracted from the related Base Rate applicable to such
Floating Rate Note, and the "Spread Multiplier" is the percentage of the
related Base Rate applicable to such Floating Rate Note by which said Base
Rate is to be multiplied to determine the applicable interest rate on such
Floating Rate Note. Each Floating Rate Note and the applicable Pricing
Supplement will specify the Spread and/or Spread Multiplier, if any, appli-
cable to each such Floating Rate Note.
Unless otherwise specified in the applicable Pricing Supplement, the
interest payable on each Interest Payment Date or at Maturity for Floating
Rate Notes will be the amount of interest accrued from and including the
Original Issue Date (or the date on which such Notes otherwise begin to
accrue interest (if different from the Original Issue Date)) or from and
including the last Interest Payment Date to which interest has been paid
to, but excluding, such Interest Payment Date or date of Maturity, as the
case may
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be (an "Interest Period"); provided that in the case of Floating Rate Notes
that reset daily or weekly, interest payments will include interest accrued
to and including the next preceding Regular Record Date, except that at
Maturity or earlier redemption, the interest payable will include interest
accrued to, but excluding, the Maturity date or the date of redemption, as
the case may be.
With respect to a Floating Rate Note, unless otherwise specified in
the applicable Pricing Supplement, accrued interest will be calculated by
multiplying the principal amount of such Floating Rate Note by an accrued
interest factor. Unless otherwise specified in the applicable Pricing
Supplement, such accrued interest factor will be computed by adding the
interest factors calculated for each day in the Interest Period for which
accrued interest is being calculated. Unless otherwise specified in the
applicable Pricing Supplement, the interest factor for each such day is
computed by dividing the interest rate applicable on such day by 360, in
the cases of CD Rate Notes, Commercial Paper Rate Notes, LIBID Notes, LIBOR
Notes, Federal Funds Rate Notes, Prime Rate Notes, J.J. Kenny Rate Notes or
Eleventh District Cost of Funds Rate Notes, or by the actual number of days
in the year, in the case of Treasury Rate Notes and CMT Rate Notes. The
interest rate applicable to any day that is an Interest Reset Date is the
interest rate as determined, in accordance with the procedures hereinafter
set forth, with respect to the Interest Determination Date (as defined
below) pertaining to such Interest Reset Date. The interest rate applica-
ble to any other day is the interest rate for the immediately preceding
Interest Reset Date (or, if none, the Initial Interest Rate).
Unless otherwise specified in the applicable Pricing Supplement, in-
terest will be payable, in the case of Floating Rate Notes that reset daily
or weekly or monthly (other than Eleventh District Cost of Funds Rate
Notes), on the third Wednesday of each month or on the third Wednesday of
March, June, September and December of each year, as specified in the
applicable Pricing Supplement, or, in the case of Eleventh District Cost of
Funds Rate Notes, on the first calendar day of each month or the first
calendar day of each March, June, September and December, as specified in
the applicable Pricing Supplement; in the case of Floating Rate Notes that
reset quarterly, on the third Wednesday of March, June, September and
December of each year; in the case of Floating Rate Notes that 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 that reset annually, on the third Wednesday of the month of each year
specified in the applicable Pricing Supplement, and in each case at Matu-
rity (each such day being an "Interest Payment Date"). Unless otherwise
specified in the applicable Pricing Supplement, if an Interest Payment Date
(other than at Maturity) with respect to any Floating Rate Note would
otherwise be a day that is not a Business Day, such Interest Payment Date
shall be the succeeding Business Day, except, in the case of a LIBID Note
or a LIBOR Note, if such day would fall in the succeeding calendar month,
such Interest Payment Date will be the preceding Business Day. Any payment
of principal (and premium, if any) and interest required to be made on a
Floating Rate Note on a date of Maturity that is not a Business Day will be
made on the succeeding Business Day (in each case with the same force and
effect as if made on such date of Maturity and no additional interest shall
accrue as a result of any such delayed payment).
Unless otherwise specified in the applicable Pricing Supplement, the
"Interest Determination Date" pertaining to an Interest Reset Date for CD
Rate Notes (the "CD Interest Determination Date"), Commercial Paper Rate
Notes (the "Commercial Paper Interest Determination Date"), Federal Funds
Rate Notes (the "Federal Funds Interest Determination Date"), Prime Rate
Notes (the "Prime Interest Determination Date"), J.J. Kenny Rate Notes (the
"J.J. Kenny Interest Determination Date") and CMT Rate Notes (the "CMT
Interest Determination Date") will be the second Business Day preceding
such Interest Reset Date. Unless otherwise specified in the applicable
Pricing Supplement, the Interest Deter-
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mination Date pertaining to an Interest Reset Date for LIBID Notes (the
"LIBID Interest Determination Date") and LIBOR Notes (the "LIBOR Interest
Determination Date") will be the second London Business 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 of the applicable Index Maturity are auctioned.
Treasury bills are normally sold at auction on Monday of each week, unless
that day is a legal holiday, in which case the auction is normally held on
the following Tuesday, except that such auction may be held on the preced-
ing 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 Determi-
nation Date pertaining to the Interest Reset Date occurring in the succeed-
ing week. Unless otherwise specified in the applicable Pricing Supplement,
the Interest Determination Date pertaining to an Interest Reset Date for an
Eleventh District Cost of Funds Rate Note (the "Eleventh District Cost of
Funds Interest Determination Date") will be the last working day of the
month immediately preceding such Interest Reset Date on which the Federal
Home Loan Bank of San Francisco (the "FHLB of San Francisco") publishes the
monthly Eleventh District Cost of Funds Index (as defined below).
Unless otherwise specified in the applicable Pricing Supplement, the
"Calculation Date," where applicable, pertaining to an Interest De-
termination Date will be the earlier of (i) the tenth calendar day after
such Interest Determination Date, or, if any such day is not a Business
Day, the next succeeding Business Day or (ii) the Business Day preceding
the applicable Interest Payment Date or date of Maturity, as the case may
be.
The Company will appoint, and enter into an agreement with, an agent
(the "Calculation Agent") to calculate interest on the Floating Rate Notes.
Unless otherwise specified in the applicable Pricing Supplement, Citibank
will be the calculation agent with respect to Floating Rate Notes. Upon
the request of the holder of any Floating Rate Note, the Calculation Agent
will advise such holder of the interest rate then in effect and, if deter-
mined, the interest rate that will become effective on the next Interest
Reset Date with respect to such Floating Rate Note. All determinations to
be made by the Calculation Agent shall be at its sole discretion and, in
the absence of manifest error, shall be conclusive for all purposes and
binding on holders of the Notes, and the Calculation Agent shall have no
liability therefor.
CD Rate Notes
CD Rate Notes will bear interest at the interest rates (calculated
with reference to the CD Rate and the Spread and/or Spread Multiplier, if
any) specified in the CD Rate Notes and in the applicable Pricing
Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "CD
Rate" means, with respect to any CD Interest Determination Date, the rate
on such date for negotiable certificates of deposit having the Index
Maturity designated in the applicable Pricing Supplement as made available
and subsequently published by the Board of Governors of the Federal Reserve
System in "Statistical Release H.15(519), Selected Interest Rates" or any
successor publication of the Board of Governors of the Federal Reserve
System ("H.15(519)") under the heading "CDs (Secondary Market)." In the
event that such rate is not made available prior to 3:00 P.M., New York
City time, on the Calculation Date pertaining to such CD Interest Determi-
nation Date, then the CD Rate will be the rate on such CD Interest Deter-
mination Date for negotiable certificates of deposit having the specified
Index Maturity as made available and
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subsequently published by the Federal Reserve Bank of New York in its daily
statistical release "Composite 3:30 P.M. Quotations for U.S. Government
Securities" or any successor publication ("Composite Quotations") under the
heading "Certificates of Deposit." If by 3:00 P.M., New York City time, on
the Calculation Date pertaining to such CD Interest Determination Date the
rate for such CD Interest Determination Date has not yet been made
available in either H.15(519) or Composite Quotations, then the CD Rate for
such CD Interest Determination Date will be calculated by the Calculation
Agent and will be the arithmetic mean of the secondary market offered rates
as of 10:00 A.M., New York City time, on such CD Interest Determination
Date of three leading nonbank dealers in negotiable U.S. dollar certif-
icates of deposit in The City of New York selected by the Calculation Agent
for negotiable certificates of deposit of major United States money center
banks of the highest credit standing (in the market for negotiable certifi-
cates of deposit) having a remaining maturity closest to the specified
Index Maturity in a denomination of $5,000,000; provided, however, that if
the dealers selected as aforesaid by the Calculation Agent are not quoting
as mentioned in this sentence, the CD Rate with respect to such CD Interest
Determination Date will be the CD Rate in effect on such CD Interest Deter-
mination Date.
CD Rate Notes, like other Notes, are not deposit obligations of a
bank and are not insured by the Federal Deposit Insurance Corporation.
Commercial Paper Rate Notes
Commercial Paper Rate Notes will bear interest at the interest rates
(calculated with reference to the Commercial Paper Rate and the Spread
and/or Spread Multiplier, if any) specified in the Commercial Paper Rate
Notes and in the applicable Pricing Supplement.
Unless otherwise 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) on such date of the rate for commercial paper having the
Index Maturity designated in the applicable Pricing Supplement as made
available and subsequently published in H.15(519) under the heading
"Commercial Paper." In the event that such rate is not made available by
3:00 P.M., New York City time, on the Calculation Date pertaining to such
Commercial Paper Interest Determination Date, then the Commercial Paper
Rate shall be the Money Market Yield of the rate on that Commercial Paper
Interest Determination Date for commercial paper having the Index Maturity
designated in the applicable Pricing Supplement as made available and
subsequently published in Composite Quotations under the heading "Com-
mercial Paper." If by 3:00 P.M., New York City time, on such Calculation
Date such rate has not yet been made available in either H.15(519) or Com-
posite Quotations, the Commercial Paper Rate for such Commercial Paper In-
terest Determination Date shall be calculated by the Calculation Agent and
shall be the Money Market Yield of the arithmetic mean of the offered rates
as of 11:00 A.M., New York City time, on such Commercial Paper Interest
Determination Date of three leading dealers of commercial paper in The City
of New York selected by the Calculation Agent for commercial paper having
the Index Maturity designated in the applicable Pricing Supplement placed
for an industrial issuer whose senior unsecured bond rating is "AA," or the
equivalent, from a nationally recognized securities rating agency; provid-
ed, however, that if the dealers selected as aforesaid by the Calculation
Agent are not quoting as mentioned in this sentence, the Commercial Paper
Rate with respect to such Commercial Paper Interest Determination Date will
be the Commercial Paper Rate in effect on such Commercial Paper Interest
Determination Date.
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<PAGE>
"Money Market Yield" shall be a yield (expressed as a percentage)
calculated in accordance with the following formula:
D x 360
Money Market Yield = ------------- x 100
360 - (D x M)
where "D" refers to the per annum rate for the 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.
LIBID Notes
LIBID Notes will bear interest at the interest rates (calculated by
reference to LIBID and the Spread and/or Spread Multiplier, if any) speci-
fied in the LIBID Notes and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement,
LIBID will be determined by the Calculation Agent in accordance with the
following provisions:
(i) With respect to a LIBID Interest Determination Date, LIBID
will be as specified in the applicable Pricing Supplement, either
LIBID Reuters (as defined below) or LIBID Telerate (as defined
below), subject to the last sentence of this paragraph. "LIBID
Reuters" means the arithmetic mean of the bid rates (unless the
specified Designated LIBO Page (as defined below) by its terms
provides for only a single rate, in which case such single rate
shall be used) for deposits in the Designated Deposit Currency
having the Index Maturity designated in the applicable Pricing
Supplement, commencing on the second London Business Day
immediately following such LIBID Interest Determination Date,
that appear on the Designated LIBO Page specified in the
applicable Pricing Supplement as of 11:00 A.M., London time, on
such LIBID Interest Determination Date, if at least two such bid
rates appear on the Reuters Screen LIBO Page (unless, as
aforesaid, only a single rate is required). "LIBID Telerate"
means the rate for deposits in the Designated Deposit Currency
having the Index Maturity designated in the applicable Pricing
Supplement, commencing on the second London Business Day immedi-
ately following that LIBID Interest Determination Date, that
appears on the Designated Telerate Page (as defined below)
specified in the applicable Pricing Supplement as of 11:00 A.M.,
London time, on such LIBID Interest Determination Date. If nei-
ther LIBID Reuters nor LIBID Telerate is specified in the appli-
cable Pricing Supplement, LIBID will be determined as if LIBID
Telerate had been specified. If fewer than two bid rates appear
(unless the specified Designated LIBO Page with respect to LIBID
Reuters by its terms provides for only a single rate, in which
case such single rate shall be used), or if no rate appears, as
applicable, LIBID in respect of such LIBID Interest Determination
Date will be determined as if the parties had specified the rate
described in (ii) below.
(ii) With respect to a LIBID Interest Determination Date on
which fewer than two bid rates appear (unless the specified
Designated LIBO Page with respect to LIBID Reuters by its terms
provides for only a single rate, in which case such single rate
shall be used), or
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<PAGE>
on which no rate appears, as applicable, LIBID will be determined on
the basis of the bid rates at which deposits in the Designated
Deposit Currency, having the Index Maturity designated in the
applicable Pricing Supplement, are quoted at approximately 11:00
A.M., London time, on such LIBID Interest Determination Date to
prime banks in the London interbank market by four major banks in
the London interbank market selected by the Calculation Agent (the
"LIBID Reference Banks") commencing on the second London Business
Day immediately following such LIBID Interest Determination Date and
in a principal amount equal to an amount of not less than U.S.
$1,000,000 (or the equivalent in the Designated Deposit Currency)
that is representative for a single transaction in such market at
such time. The Calculation Agent will request the principal London
office of each of such LIBID Reference Banks to provide a quotation
of its rate. If at least two such quotations are provided, LIBID in
respect of such LIBID Interest Determination Date will be the arith-
metic mean of such quotations. If fewer than two quotations are
provided, LIBID in respect of such LIBID Interest Determination Date
will be the arithmetic mean of the rates quoted in the applicable
Principal Financial Center (as defined below), on such LIBID Inter-
est Determination Date by three major banks in such Principal Finan-
cial Center selected by the Calculation Agent for loans in the
Designated Deposit Currency to leading banks, having the Index Matu-
rity designated in the applicable Pricing Supplement, commencing on
the second London Business Day immediately following the LIBID
Interest Determination Date and in a principal amount equal to an
amount of not less than U.S. $1,000,000 (or the equivalent in the
Designated Deposit Currency) that 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, LIBID with respect to such
LIBID Interest Determination Date will be LIBID in effect on such
LIBID Interest Determination Date.
LIBOR Notes
LIBOR Notes will bear interest at the interest rates (calculated
with reference to LIBOR and the Spread and/or Spread Multiplier, if any)
specified in the LIBOR Notes and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement,
LIBOR will be determined by the Calculation Agent in accordance with the
following provisions:
(i) With respect to a LIBOR Interest Determination Date, LIBOR
will be as specified in the applicable Pricing Supplement, either
LIBOR Reuters (as defined below) or LIBOR Telerate (as defined
below), subject to the last sentence of this paragraph. "LIBOR
Reuters" means the arithmetic mean of the offered rates (unless
the specified Designated LIBO Page by its terms provides for only
a single rate, in which case such single rate shall be used) for
deposits in the Designated Deposit Currency having the Index
Maturity designated in the applicable Pricing Supplement, com-
mencing on the second London Business Day immediately following
such LIBOR Interest Determination Date, that appear on the
Designated LIBO Page specified in the applicable Pricing
Supplement as of 11:00 A.M., London time, on such LIBOR Interest
Determination Date, if at least two such offered rates appear on
the Designated LIBO Page (unless, as aforesaid, only a single
rate is required). "LIBOR Telerate" means the rate for deposits
in the Designated Deposit Currency having the Index Maturity
designated in the applicable Pricing Supplement,
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commencing on the second London Business Day immediately following
that LIBOR Interest Determination Date, that appears on the
Designated Telerate Page specified in the applicable Pricing
Supplement as of 11:00 A.M., London time, on such LIBOR Interest De-
termination Date. If neither LIBOR Reuters nor LIBOR Telerate is
specified in the applicable Pricing Supplement, LIBOR will be deter-
mined as if LIBOR Telerate had been specified. If fewer than two of-
fered rates appear (unless the specified Designated LIBO Page with
respect to LIBOR Reuters by its terms provides for only a single
rate, in which case such single rate shall be used), or if no rate
appears, as applicable, LIBOR in respect of such LIBOR Interest
Determination Date will be determined as if the parties had spec-
ified the rate described in (ii) below.
(ii) With respect to a LIBOR Interest Determination Date on
which fewer than two offered rates appear (unless the specified
Designated LIBO Page with respect to LIBOR Reuters by its terms
provides for only a single rate, in which case such single rate
shall be used), or on which no rate appears, as applicable, LIBOR
will be determined on the basis of the rates at which deposits in
the Designated Deposit Currency, having the Index Maturity
designated in the applicable Pricing Supplement, are offered at
approximately 11:00 A.M., London time, on such LIBOR Interest De-
termination Date by four major banks in the London interbank
market selected by the Calculation Agent (the "LIBOR Reference
Banks") to prime banks in the London interbank market commencing
on the second London Business Day immediately following such
LIBOR Interest Determination Date and in a principal amount equal
to an amount of not less than U.S. $1,000,000 (or the equivalent
in the Designated Deposit Currency) that is representative for a
single transaction in such market at such time. The Calculation
Agent will request the principal London office of each of such
LIBOR Reference Banks to provide a quotation of its rate. If at
least two such quotations are provided, LIBOR in respect of such
LIBOR Interest Determination Date will be the arithmetic mean of
such quotations. If fewer than two quotations are provided, LIBOR
in respect of such LIBOR Interest Determination Date will be the
arithmetic mean of the rates quoted in the applicable Principal
Financial Center, on such LIBOR Interest Determination Date by
three major banks in such Principal Financial Center selected by
the Calculation Agent for loans in the Designated Deposit
Currency to leading banks, having the Index Maturity designated
in the applicable Pricing Supplement, commencing on the second
London Business Day immediately following the LIBOR Interest
Determination Date and in a principal amount equal to an amount
of not less than U.S. $1,000,000 (or the equivalent in the
Designated Deposit Currency) that 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 with respect to
such LIBOR Interest Determination Date will be LIBOR in effect on
such LIBOR Interest Determination Date.
"Designated Deposit Currency" means, with respect to any LIBID Note
or LIBOR Note, the currency (including a composite currency), if any,
designated in the applicable LIBID Note or LIBOR Note as the Designated
Deposit Currency. If no such currency is designated in the applicable
LIBID Note or LIBOR Note, the Designated Deposit Currency shall be U.S.
dollars.
"Designated LIBO Page" means the display designated as page "LIBO"
on the Reuters Monitor Money Rates Service (or such other page as may
replace the LIBO page on that service for the purpose
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of displaying London interbank bid and offered rates of major banks) for
the Designated Deposit Currency.
"Designated Telerate Page" means the display designated as page
"3750" on the Telerate Service where the Designated Deposit Currency is
U.S. Dollars or such other applicable Telerate Page where the Designated
Deposit Currency is other than U.S. Dollars (or such other page as may
replace the 3750 page or such other applicable page on that service or such
other service or services as may be nominated by the British Bankers'
Association for the purpose of displaying London interbank bid and offered
rates for deposits in the Designated Deposit Currency).
"Principal Financial Center" means, with respect to any LIBID Note
or LIBOR Note, unless otherwise specified in the applicable Pricing
Supplement, the capital city of the country that issues as its legal tender
the Designated Deposit Currency of such LIBID Note or LIBOR Note, except
that with respect to U.S. dollars, Deutsche Marks, Dutch Guilders, Italian
Lire, Swiss Francs and ECUs, the Principal Financial Center shall be The
City of New York, Frankfurt, Amsterdam, Milan, Zurich and Luxembourg,
respectively.
Treasury Rate Notes
Treasury Rate Notes will bear interest at the interest rates (cal-
culated with reference to the Treasury Rate and the Spread and/or Spread
Multiplier, if any) specified in the Treasury Rate Notes and in the
applicable Pricing Supplement.
Unless otherwise 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 Treasury bills having the
Index Maturity designated in the applicable Pricing Supplement as made
available and subsequently published in H.15(519) under the heading "U.S.
Government Securities--Treasury bills-auction average (investment)" or, if
not so made available by 3:00 P.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 to the nearest one
hundredth of a percent, with five one thousandths of a percent rounded
upward, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) for such auction or as otherwise announced by the
United States Department of the Treasury. In the event that the results of
the auction of Treasury bills having the Index Maturity designated in the
applicable Pricing Supplement are not otherwise made available or published
or reported as provided above by 3:00 P.M., New York City time, on such
Calculation Date, or if no such auction is held in a particular week, then
the Treasury Rate shall be calculated by the Calculation Agent and shall be
a yield to maturity (expressed as a bond equivalent, rounded to the nearest
one-hundredth of a percent, with five one-thousandths of a percent rounded
upward, 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 Trea-
sury 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 Index
Maturity designated in the applicable Pricing Supplement; provided,
however, that if the dealers selected as aforesaid by the Calculation Agent
are not quoting bid rates as mentioned in this sentence, the Treasury Rate
with respect to such Treasury Interest Determination Date will be the
Treasury Rate in effect on such Treasury Interest Determination Date.
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Federal Funds Rate Notes
Federal Funds Rate Notes will bear interest at the interest rates
(calculated with reference to the Federal Funds Rate and the Spread and/or
Spread Multiplier, if any) specified in the Federal Funds Rate Notes and in
the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement,
"Federal Funds Rate" means, with respect to any Federal Funds Interest
Determination Date, the rate on such date for Federal Funds as made
available and subsequently published in H.15(519) under the heading "Feder-
al Funds (Effective)." In the event that such rate has not been made
available by 3:00 P.M., New York City time, on the Calculation Date per-
taining to such Federal Funds Interest Determination Date, the Federal
Funds Rate will be the rate on such Federal Funds Interest Determination
Date as made available and subsequently published in Composite Quotations
under the heading "Federal Funds/Effective Rate." If such rate is not made
available in H.15(519) or in Composite Quotations by 3:00 P.M., New York
City time, on such Calculation Date, then the Federal Funds Rate for such
Federal Funds Interest Determination Date will be calculated by the
Calculation Agent and will be the arithmetic mean of the rates as of 9:00
A.M., New York City time, on such Federal Funds Interest Determination Date
for the last transaction in overnight Federal Funds arranged by three
leading brokers of Federal Funds transactions in New York City selected by
the Calculation Agent; provided, however, that if the brokers selected as
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the Federal Funds Rate with respect to such Federal Funds
Interest Determination Date will be the Federal Funds Rate in effect on
such Federal Funds Interest Determination Date.
Prime Rate Notes
Prime Rate Notes will bear interest at the interest rates (calculat-
ed with reference to the Prime Rate and the Spread and/or Spread Multi-
plier, if any) specified in the Prime Rate Notes and in the applicable
Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement,
"Prime Rate" means, with respect to any Prime Interest Determination Date,
the rate made available and subsequently published on such date in
H.15(519) under the heading "Bank Prime Loan." In the event that such rate
has not been made available prior to 3:00 P.M., New York City time, on the
Calculation Date pertaining to such Prime Interest Determination Date, the
Prime Rate will be calculated by the Calculation Agent and will be the
arithmetic mean of the rates of interest publicly announced by each bank
that appears on the Reuters Screen NYMF Page (as defined below) as such
bank's prime rate or base lending rate as in effect for such Prime Interest
Determination Date. If fewer than four such rates but more than one such
rate appear on the Reuters Screen NYMF Page for the Prime Interest Determi-
nation Date, the rate shall be the arithmetic mean of the prime rates
quoted on the basis of the actual number of days in the year divided by 360
as of the close of business on such Prime Interest Determination Date by
four major money center banks in The City of New York selected by the
Calculation Agent. If fewer than two such rates appear on the Reuters
Screen NYMF Page, the Prime Rate will be calculated by the Calculation
Agent and will be the arithmetic mean of the prime rates quoted in The City
of New York on such Prime Interest Determination Date by at least three
substitute banks or trust companies organized and doing business under the
laws of the United States, or any State thereof, having total equity
capital of at least U.S. $500,000,000 and being subject to supervision or
examination by Federal or State authority, selected by the Calculation
Agent to provide such rate or rates; provided, however, that if the banks
or trust companies selected as aforesaid by the Calculation Agent are not
quoting as mentioned in this sentence,
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the Prime Rate with respect to such Prime Interest Determination Date will
be the Prime Rate in effect on such Prime Interest Determination Date.
"Reuters Screen NYMF Page" means the display designated as page "NYMF" on
the Reuters Monitor Money Rates Service (or such other page as may replace
the NYMF page on that service for the purpose of displaying prime rates or
base lending rates of major United States banks).
J.J. Kenny Rate Notes
J.J. Kenny Rate Notes will bear interest at the interest rates
(calculated by reference to the J.J. Kenny Rate and the Spread and/or
Spread Multiplier, if any) specified in the J.J. Kenny Rate Notes and in
the applicable Pricing Supplement.
Unless otherwise indicated in an applicable Pricing Supplement,
"J.J. Kenny Rate" means, with respect to any J.J. Kenny Interest Determina-
tion Date, the per annum rate on such date equal to the index made
available and subsequently published by Kenny Information Systems or its
successor, based upon 30-day yield evaluations at par of bonds, the
interest on which is excludable from gross income for federal income tax
purposes under the Internal Revenue Code of 1986, as amended (the "Code"),
of not less than five "high grade" component issuers selected from time to
time by Kenny Information Systems, including without limitation, issuers of
general obligation bonds; provided, however, that the bonds on which the
index is based shall not include any bonds the interest on which is subject
to an "alternate minimum tax" or similar tax under the Code, unless all
tax-exempt bonds are subject to such tax. If such rate is not made
available by 3:00 P.M., New York City time, on the Calculation Date per-
taining to such J.J. Kenny Interest Determination Date, the J.J. Kenny Rate
shall be the rate quoted by a successor indexing agent selected by the
Company equalling the prevailing rate for bonds rated in the highest short-
term rating category by Moody's Investors Service, Inc. and Standard &
Poor's Corporation in respect of issuers selected by such successor
indexing agent most closely resembling the "high grade" component issuers
selected by Kenny Information Systems that are subject to tender by the
holders thereof for purchase on not more than seven days notice and the
interest on which is (A) variable on a weekly basis, (B) excludable from
gross income for federal income tax purposes under the Code, and (C) not
subject to an "alternate minimum tax" or similar tax under the Code, unless
all tax-exempt bonds are subject to such tax; provided, however, that if a
successor indexing agent is not available, the J.J. Kenny Rate with respect
to such J.J. Kenny Interest Determination Date will be the J.J. Kenny Rate
for the immediately preceding Interest Reset Period (or, if there was no
such Interest Reset Period, the Initial Interest Rate).
Eleventh District Cost of Funds Rate Notes
Eleventh District Cost of Funds Rate Notes will bear interest at the
interest rates (calculated by reference to the Eleventh District Cost of
Funds Rate and the Spread and/or Spread Multiplier, if any) specified in
the Eleventh District Cost of Funds Rate Notes and in the applicable
Pricing Supplement.
Unless otherwise indicated in an applicable Pricing Supplement,
"Eleventh District Cost of Funds Rate" means, with respect to any Eleventh
District Cost of Funds Interest Determination Date, the rate equal to the
monthly weighted average cost of funds for the calendar month preceding
such Eleventh District Cost of Funds Interest Determination Date as set
forth under the caption "11th District" on Telerate Page 7058 as of 11:00
A.M., San Francisco time, on such Eleventh District Cost of Funds Interest
Determination Date. If such rate does not appear on Telerate Page 7058 on
any related Eleventh District Cost of Funds Interest Determination Date,
the Eleventh District Cost of Funds Rate for such Eleventh District Cost of
Funds Interest Determination Date shall be the monthly weighted average
cost
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of funds paid by member institutions of the Eleventh Federal Home Loan Bank
District that was most recently announced (the "Eleventh District Cost of
Funds Rate Index") by the FHLB of San Francisco as such cost of funds for
the calendar month preceding the date of such announcement. If the FHLB of
San Francisco fails to announce such rate for the calendar month next
preceding such Eleventh District Cost of Funds Interest Determination Date,
then the Eleventh District Cost of Funds Rate for such Eleventh District
Cost of Funds Interest Determination Date will be the Eleventh District
Cost of Funds Rate in effect on such Eleventh District Cost of Funds
Interest Determination Date.
CMT Rate Notes
CMT Rate Notes will bear interest at the interest rates (calculated
by reference to the CMT Rate and the Spread and/or Spread Multiplier, if
any) specified in the CMT Rate Notes and in the applicable Pricing
Supplement.
Unless otherwise indicated in an applicable Pricing Supplement, "CMT
Rate" means, with respect to any CMT Interest Determination Date, the CMT
Rate for Treasury bills on such date having the Index Maturity designated
in the applicable Pricing Supplement as made available and subsequently
published in H.15(519) under the heading "Treasury constant maturities" or,
if not so made available by 3:00 P.M., New York City time, on the Calcu-
lation Date pertaining to such CMT Interest Determination Date, as dis-
played on Telerate Page 7052 under the heading "Treasury Constant Maturi-
ties." If by 3:00 P.M., New York City time, on the Calculation Date per-
taining to such CMT Interest Determination Date the rate has not yet been
made available in H.15(519) or displayed on Telerate Page 7052, then the
CMT Rate shall be calculated by the Calculation Agent and shall be a yield
to maturity (expressed as a bond equivalent, rounded to the nearest one-
hundredth of a percent, with five one-thousandths of a percent rounded
upward, 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 CMT
Interest Determination Date of three leading primary United States govern-
ment securities dealers selected by the Calculation Agent for the issue of
Treasury bills with a remaining maturity closest to the Index Maturity
designated in the applicable Pricing Supplement; provided, however, that if
the dealers selected as aforesaid by the Calculation Agent are not quoting
bid rates as mentioned in this sentence, the CMT Rate with respect to such
CMT Interest Determination Date will be the CMT Rate in effect immediately
prior to such CMT Interest Determination Date.
Inverse Floating Rate Notes
Any Floating Rate Note may be designated in the applicable Pricing
Supplement as an "Inverse Floating Rate Note," in which event, unless
otherwise specified in the applicable Pricing Supplement, the interest rate
on such Floating Rate Note will be equal to (i) in the case of the period,
if any, commencing on the Original Issue Date (or the date on which such
Note otherwise begins to accrue interest (if different from the Original
Issue Date)) up to the first Interest Reset Date, a fixed rate of interest
established by the Company as described in the applicable Pricing Sup-
plement and (ii) in the case of each period commencing on an Interest Reset
Date, a fixed rate of interest specified in the Pricing Supplement minus
the interest rate determined by reference to the Base Rate as adjusted by
the Spread and/or Spread Multiplier, if any; provided, however, that (x)
the interest rate thereon will not be less than zero and (y) the interest
rate in effect for the ten days immediately prior to the date of Maturity
of such Inverse Floating Rate Note will be that in effect on the tenth day
preceding such date.
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Floating Rate/Fixed Rate Notes
The applicable Pricing Supplement may provide that a Note will be a
Floating Rate Note for a specified portion of its term and a Fixed Rate
Note for the remainder of its term, in which event the interest rate on
such Note will be determined as herein provided as if it were a Floating
Rate Note and a Fixed Rate Note hereunder for each such respective period,
all as specified in such applicable Pricing Supplement.
Currency Indexed Notes
General
The Company may from time to time offer Notes, the principal amount
payable at Maturity and/or the interest rate of which is determined by
reference to the rate of exchange between the currency or composite cur-
rency in which such Notes are denominated (the "Denominated Currency") and
the other currency or composite currency specified as the Indexed Currency
(the "Indexed Currency") in the applicable Pricing Supplement, or as deter-
mined in such other manner as may be specified in the applicable Pricing
Supplement ("Currency Indexed Notes"). Unless otherwise specified in the
applicable Pricing Supplement, holders of Currency Indexed Notes will be
entitled to receive (i) an amount in respect of such Currency Indexed Notes
exceeding the amount designated as the face amount of the principal (the
"Face Amount") of, and/or interest calculated at the designated rate of
interest on, such Currency Indexed Notes in the applicable Pricing Supple-
ment if, on the date of Maturity or upon the relevant Interest Payment
Date, as the case may be, the rate at which the Denominated Currency can be
exchanged for the Indexed Currency is greater than the rate of such ex-
change designated as the Base Exchange Rate, expressed in units of the
Indexed Currency per one unit of the Denominated Currency, in the applica-
ble Pricing Supplement (the "Base Exchange Rate"), or (ii) an amount in
respect of such Currency Indexed Notes less than the Face Amount and/or
interest calculated at such designated interest rate of such Currency
Indexed Notes if, at Maturity or upon the relevant Interest Payment Date,
as the case may be, the rate at which the Denominated Currency can be ex-
changed for the Indexed Currency is less than such Base Exchange Rate, in
each case determined as described below under "Payment of Principal and
Interest." Information as to the relative historical value (which infor-
mation is not necessarily indicative of relative future value) of the
applicable Denominated Currency against the applicable Indexed Currency,
any exchange controls applicable to such Denominated Currency or Indexed
Currency and the U.S. federal income tax consequences of the purchase,
ownership and disposition of Currency Indexed Notes will be set forth in
the applicable Pricing Supplement. See "Foreign Currency Risks."
Unless otherwise specified in the applicable Pricing Supplement, the
term "Exchange Rate Day" shall mean any day which is a Business Day in The
City of New York, and if the Denominated Currency or Indexed Currency is
any currency or composite currency other than the U.S. dollar, in the
principal financial center of the country of such Denominated Currency or
Indexed Currency.
Payment of Principal and Interest
Unless otherwise specified in the applicable Pricing Supplement, the
payment of principal at Maturity and interest on Currency Indexed Notes on
each Interest Payment Date (until principal thereof is paid or made
available for payment) will be payable in the Denominated Currency (except
in the
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circumstances of the unavailability of such currency, as otherwise
described under "Payment Currency" above) in amounts calculated in the
manner described below.
Unless otherwise specified in the applicable Pricing Supplement,
principal at Maturity, if indexed, will be payable in an amount equal to
the Face Amount of the Currency Indexed Note, plus or minus an amount of
the Denominated Currency determined by the determination agent specified in
the applicable Pricing Supplement (the "Determination Agent") by reference
to the difference between the Base Exchange Rate and the rate at which the
Denominated Currency can be exchanged for the Indexed Currency on the
second Exchange Rate Day (the "Determination Date") prior to the date of
Maturity of such Currency Indexed Note. Such rate of exchange shall be the
highest bid of the open market spot offer quotations for the Indexed
Currency (spot bid quotations for the Denominated Currency) obtained by the
Determination Agent from the Reference Dealers (as defined below) in The
City of New York at 11:00 A.M., New York City time, on the Determination
Date, for an amount of Indexed Currency equal to the Face Amount of such
Currency Indexed Note multiplied by the Base Exchange Rate, with settlement
on the date of Maturity to be in the Denominated Currency (such rate of
exchange, as so determined and expressed in units of the Indexed Currency
per one unit of the Denominated Currency, is hereafter referred to as the
"Spot Rate"). If such quotations from the Reference Dealers are not avail-
able on the Determination Date due to circumstances beyond the control of
the Company or the Determination Agent, the Spot Rate will be determined on
the basis of the most recently available quotations from the Reference
Dealers. As used herein, the term "Reference Dealers" shall mean the three
banks or firms specified as such in the applicable Pricing Supplement, or
if any of them shall be unwilling or unable to provide the requested
quotations, such other major money center bank or banks in The City of New
York selected by the Determination Agent to act as Reference Dealer or
Dealers in replacement therefor. In the absence of manifest error, the
determination by the Determination Agent of the Spot Rate and the principal
amount of and interest on the Currency Indexed Notes payable at Maturity
thereof shall be final and binding on the Company and the holders of such
Currency Indexed Notes.
Unless otherwise specified in the applicable Pricing Supplement, on
the basis of the aforesaid determination by the Determination Agent and the
formulae and limitations set forth below, (i) if the Base Exchange Rate
equals the Spot Rate for any Currency Indexed Note, then the principal
amount of such Currency Indexed Note payable at Maturity would be equal to
the Face Amount of such Currency Indexed Note; (ii) if the Spot Rate
exceeds the Base Exchange Rate (i.e., the Denominated Currency has
appreciated against the Indexed Currency during the term of the Currency
Indexed Note), then the principal amount so payable would be greater than
the Face Amount of such Currency Indexed Note up to an amount equal to
twice the Face Amount of such Currency Indexed Note; (iii) if the Spot Rate
is less than the Base Exchange Rate (i.e., the Denominated Currency has
depreciated against the Indexed Currency during the term of the Currency
Indexed Note) but is greater than one-half of the Base Exchange Rate, then
the principal amount so payable would be less than the Face Amount of such
Currency Indexed Note; and (iv) if the Spot Rate is less than or equal to
one-half of the Base Exchange Rate, then the Spot Rate will be deemed to be
one-half of the Base Exchange Rate and no principal amount of the Currency
Indexed Note would be payable at Maturity.
With respect to the payment of interest on each Interest Payment
Date, if indexed, the amount will be the Face Amount multiplied by the
relevant interest rate, indexed as specified in the applicable Pricing
Supplement.
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Unless otherwise specified in the applicable Pricing Supplement, the
formula to be used by the Determination Agent to determine the principal
amount of a Currency Indexed Note payable at Maturity will be as follows:
As to principal, if the Spot Rate exceeds or equals the Base Ex-
change Rate, the principal amount of a Currency Indexed Note payable at
Maturity shall equal:
Face Amount + (Face Amount X Spot Rate - Base Exchange Rate)
------------------------------
Spot Rate
and if the Base Exchange Rate exceeds the Spot Rate, the principal amount
of a Currency Indexed Note payable at Maturity (which shall, in no event,
be less than zero) shall equal:
Face Amount - (Face Amount X Base Exchange Rate - Spot Rate)
------------------------------
Spot Rate
Unless otherwise specified in the applicable Pricing Supplement, if
the formulae set forth above are applicable to a Currency Indexed Note, the
maximum principal amount payable at Maturity in respect of such a Currency
Indexed Note would be an amount equal to twice the Face Amount and the
minimum principal amount payable would be zero.
Other Indexed Notes And Certain Terms Applicable To All Indexed Notes
The Notes may be issued as Indexed Notes, other than Currency
Indexed Notes, the principal amount of which payable at Maturity or the
interest (or premium, if any) thereon, or both, may be determined by
reference to the relationship between two or more currencies, to the price
of one or more specified securities or commodities, to one or more
securities or commodities exchange indices or other indices or by other
similar methods or formulae. The Pricing Supplement relating to such an
Indexed Note will describe, as applicable, the method by which the amount
of interest payable on any Interest Payment Date and the amount of princi-
pal payable at Maturity in respect of such Indexed Note will be determined,
the U.S. federal income tax consequences of the purchase, ownership and
disposition of such Notes, certain risks associated with an investment in
such Notes and other information relating to such Notes. See "Foreign
Currency Risks."
Unless otherwise specified in the applicable Pricing Supplement, the
maximum principal amount payable at Maturity in respect of any Indexed Note
will be an amount equal to twice the Face Amount of such Note and the mini-
mum principal amount so payable will be zero.
Unless otherwise specified in the applicable Pricing Supplement, (i)
for the purpose of determining whether holders of the requisite principal
amount of Securities outstanding under the Indenture have made a demand or
given a notice or waiver or taken any other action, the outstanding
principal amount of Indexed Notes will be deemed to be the Face Amount
thereof, and (ii) in the event of an acceleration of the Stated Maturity of
an Indexed Note, the principal amount payable to the holder of such Note
upon acceleration will be the principal amount determined by reference to
the formula by which the principal amount of such Note would be determined
on the Stated Maturity thereof, as if the date of acceleration were the
Stated Maturity.
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An investment in Indexed Notes entails significant risks, including
wide fluctuations in market value as well as in the amounts of payments due
thereunder, that are not associated with a similar investment in a conven-
tional debt security. If the interest rate of a Note is indexed it may
result in an interest rate that is less than that payable on a conventional
fixed rate debt security issued at the same time, including the possibility
that no interest will be paid, and, if the principal amount of a Note is
indexed, the principal amount payable at Maturity may be less than the
original purchase price of such Note, including the possibility that no
principal will be paid. The risks entailed by an investment in Indexed
Notes depend on a number of factors including supply and demand for the
particular commodity and economic and political events over which the
Company has no control. To the extent the formula used to determine the
principal amount of, or interest payable with respect to, any Indexed Notes
contains a multiple or leverage factor, the effect of any change in the
applicable currency, commodity, security or index will be increased.
Fluctuations in the price of any particular security or commodity, in the
rates of exchange between particular currencies or in particular indices
that have occurred in the past are not necessarily indicative of fluctua-
tions in the price or rates of exchange that may occur during the term of
any Indexed Notes. The credit ratings assigned to the Company's medium-
term note program are a reflection of the Company's credit status and in no
way are a reflection of the potential impact of the factors discussed
above, or any other factors, on the market value of the Notes.
Accordingly, prospective investors should consult their own financial and
legal advisors as to the risks entailed by an investment in Indexed Notes.
Indexed Notes are not an appropriate investment for investors who are
unsophisticated with respect to securities, commodities and/or foreign
currency transactions.
Dual Currency Notes
The Company may from time to time offer Notes (the "Dual Currency
Notes") as to which the Company has a one time option, exercisable on any
one of the dates specified in the applicable Pricing Supplement (each an
"Option Election Date") in whole, but not in part, with respect to all Dual
Currency Notes issued on the same day and having the same terms (a
"Tranche"), of thereafter making all payments of principal, premium, if
any, and interest (which payments would otherwise be made in the Specified
Currency of such Notes) in the optional currency specified in the
applicable Pricing Supplement (the "Optional Payment Currency").
Information as to the relative value of the Specified Currency compared to
the Optional Payment Currency will be set forth in the applicable Pricing
Supplement.
The Pricing Supplement for each issuance of Dual Currency Notes will
specify, among other things, the Specified Currency and Optional Payment
Currency of such issuance and the Designated Exchange Rate for such issu-
ance, which will be a fixed exchange rate used for converting amounts
denominated in the Specified Currency into amounts denominated in the
Optional Payment Currency (the "Designated Exchange Rate"). The Pricing
Supplement will also specify the Option Election Dates and Interest Payment
Dates for the related issuance of Dual Currency Notes. Each Option
Election Date will be a certain number of days before an Interest Payment
Date or the Maturity Date, as set forth in the applicable Pricing Supple-
ment, and will be the date on which the Company may select whether to make
all scheduled payments due thereafter in the Optional Payment Currency
rather than in the Specified Currency.
If the Company makes such an election, the amount payable in the
Optional Payment Currency shall be determined using the Designated Exchange
Rate specified in the applicable Pricing Supplement. If such election is
made, notice of such election shall be mailed in accordance with the terms
of the applicable Tranche of Dual Currency Notes within two Business Days
of the Option Election Date and shall state (i) the first date, whether an
Interest Payment Date and/or the Maturity Date, on which
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scheduled payments in the Optional Payment Currency will be made and (ii)
the Designated Exchange Rate. Any such notice by the Company, once given,
may not be withdrawn. The equivalent value in the Specified Currency of
payments made after such an election may be less, at the then current
exchange rate, than if the Company had made such payment in the Specified
Currency.
The U.S. federal income tax consequences of the purchase, ownership
and disposition of Dual Currency Notes will be set forth in the applicable
Pricing Supplement.
Subsequent Interest Periods
The Pricing Supplement relating to each Note will indicate whether
the Company has the option with respect to such Note to reset the interest
rate, in the case of a Fixed Rate Note, or to reset the Spread and/or
Spread Multiplier, in the case of a Floating Rate Note, and, if so, the
date or dates on which such interest rate or such Spread and/or Spread
Multiplier, as the case may be, may be reset (each an "Optional Reset
Date"). If the Company has such option with respect to any Note, the
following procedures shall apply, unless modified as set forth in the
applicable Pricing Supplement.
The Company may exercise such option with respect to a Note by
notifying the Trustee of such exercise at least 45 but not more than 60
days prior to an Optional Reset Date for such Note. Not later than 40 days
prior to such Optional Reset Date, the Trustee will mail to the holder of
such Note a notice (the "Reset Notice") setting forth (i) the election of
the Company to reset the interest rate, in the case of a Fixed Rate Note,
or the Spread and/or Spread Multiplier, in the case of a Floating Rate
Note, (ii) such new interest rate or such new Spread and/or Spread
Multiplier, as the case may be, and (iii) the provisions, if any, for
redemption during the period from such Optional Reset Date to the next
Optional Reset Date or, if there is no such next Optional Reset Date, to
the Stated Maturity of such Note (each such period a "Subsequent Interest
Period"), including the date or dates on which or the period or periods
during which and the price or prices at which such redemption may occur
during such Subsequent Interest Period. Upon the transmittal by the
Trustee of a Reset Notice to the holder of a Note, such new interest rate
or such new Spread and/or Spread Multiplier, as the case may be, shall take
effect automatically, and, except as modified by the Reset Notice and as
described in the next paragraph, such Note will have the same terms as
prior to the transmittal of such Reset Notice.
Notwithstanding the foregoing, not later than 20 days prior to an
Optional Reset Date for a Note, the Company may, at its option, revoke the
interest rate, in the case of a Fixed Rate Note, or the Spread and/or
Spread Multiplier, in the case of a Floating Rate Note, provided for in the
Reset Notice and establish an interest rate, in the case of a Fixed Rate
Note, or a Spread and/or Spread Multiplier, in the case of a Floating Rate
Note, that is higher than the interest rate or Spread and/or Spread Multi-
plier, as the case may be, provided for in the Reset Notice, for the
Subsequent Interest Period commencing on such Optional Reset Date by
causing the Trustee to transmit notice of such higher interest rate or
higher Spread and/or Spread Multiplier, as the case may be, to the holder
of such Note. Such notice shall be irrevocable. All Notes with respect to
which the interest rate or Spread and/or Spread Multiplier is reset on an
Optional Reset Date and with respect to which the holders of such Notes
have not tendered such Notes for repayment (or have validly revoked any
such tender) pursuant to the next succeeding paragraph will bear such
higher interest rate, in the case of a Fixed Rate Note, or higher Spread
and/or Spread Multiplier, in the case of a Floating Rate Note, for the
Subsequent Interest Period.
If the Company elects to reset the interest rate or the Spread
and/or Spread Multiplier of a Note as described above, the holder of such
Note will have the option to elect repayment of such Note by the
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Company on any Optional Reset Date at a price equal to the aggregate
principal amount thereof outstanding on, plus any interest accrued to, such
Optional Reset Date. In order for a Note to be so repaid on an Optional
Reset Date, the holder thereof must follow the procedures set forth below
under "Redemption and Repayment" for optional repayment, except that the
period for delivery of such Note or notification to the Trustee shall be at
least 25 but not more than 35 days prior to such Optional Reset Date and
except that a holder who has tendered a Note for repayment pursuant to a
Reset Notice may, by written notice to the Trustee, revoke any such tender
for repayment until the close of business on the tenth day prior to such
Optional Reset Date.
Extension Of Maturity
The Pricing Supplement relating to each Note (other than an
Amortizing Note) will indicate whether the Company has the option to extend
the Stated Maturity of such Note for one or more periods (each an
"Extension Period") up to but not beyond the date (the "Final Maturity
Date") set forth in such Pricing Supplement. If the Company has such
option with respect to any Note (other than an Amortizing Note), the
following procedures shall apply, unless modified as set forth in the
applicable Pricing Supplement.
The Company may exercise such option with respect to a Note (other
than an Amortizing Note) by notifying the Trustee of such exercise at least
50 but not more than 60 days prior to the Stated Maturity of such Note in
effect prior to the exercise of such option (the "Original Stated
Maturity"). Not later than 40 days prior to the Original Stated Maturity,
the Trustee will mail to the holder of such Note a notice (the "Extension
Notice") relating to such Extension Period, setting forth (i) the election
of the Company to extend the Original Stated Maturity, (ii) the new Stated
Maturity, (iii) in the case of a Fixed Rate Note, the interest rate
applicable to the Extension Period or, in the case of a Floating Rate Note,
the Spread and/or Spread Multiplier applicable to the Extension Period and
(iv) the provisions, if any, for redemption during the Extension Period,
including the date or dates on which or the period or periods during which
and the price or prices at which such redemption may occur during the
Extension Period. Upon the transmittal by the Trustee of an Extension
Notice to the holder of a Note, the Original Stated Maturity shall be
extended automatically, and, except as modified by the Extension Notice and
as described in the next paragraph, such Note will have the same terms as
prior to the transmittal of such Extension Notice.
Notwithstanding the foregoing, not later than 20 days prior to the
Original Stated Maturity for a Note, the Company may, at its option, revoke
the interest rate, in the case of a Fixed Rate Note, or the Spread and/or
Spread Multiplier, in the case of a Floating Rate Note, provided for in the
Extension Notice and establish an interest rate, in the case of a Fixed
Rate Note, or a Spread and/or Spread Multiplier, in the case of a Floating
Rate Note, that is higher than the interest rate or Spread and/or Spread
Multiplier, as the case may be, provided for in the Extension Notice, for
the Extension Period by causing the Trustee to transmit notice of such
higher interest rate or higher Spread and/or Spread Multiplier, as the case
may be, to the holder of such Note. Such notice shall be irrevocable. All
Notes with respect to which the Stated Maturity is extended and with
respect to which the holders of such Notes have not tendered such Notes for
repayment (or have validly revoked any such tender) pursuant to the next
succeeding paragraph will bear such higher interest rate, in the case of a
Fixed Rate Note, or higher Spread and/or Spread Multiplier, in the case of
a Floating Rate Note, for the Extension Period.
If the Company elects to extend the Stated Maturity of a Note, the
holder of such Note will have the option to elect repayment of such Note by
the Company on the Original Stated Maturity at a price
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equal to the aggregate principal amount thereof outstanding plus any ac-
crued interest to such date. In order for a Note to be so repaid on the
Original Stated Maturity, the holder thereof must follow the procedures set
forth below under "Redemption and Repayment" for optional repayment, except
that the period for delivery of such Note or notification to the Trustee
shall be at least 25 but not more than 35 days prior to the Original Stated
Maturity and except that a holder who has tendered a Note for repayment
pursuant to an Extension Notice may, by written notice to the Trustee,
revoke any such tender for repayment until the close of business on the
tenth day prior to the Original Stated Maturity.
Renewable Notes
The Company may from time to time offer Notes which will mature on
an Interest Payment Date specified in the applicable Pricing Supplement
occurring in or prior to the twelfth month following the Original Issue
Date of such Notes (the "Initial Maturity Date") unless the term of all or
any portion of any such Note (a "Renewable Note") is renewed in accordance
with the procedures described below.
On the Interest Payment Date occurring in the sixth month (unless a
different interval (the "Special Election Interval") is specified in the
applicable Pricing Supplement) prior to the Initial Maturity Date of a
Renewable Note (the "Initial Renewal Date") and on the Interest Payment
Date occurring in each sixth month (or in the last month of each Special
Election Interval) after such Initial Renewal Date (each, together with the
Initial Renewal Date, a "Renewal Date"), the term of such Renewable Note
may be extended to the Interest Payment Date occurring in the twelfth month
(or, if a Special Election Interval is specified in the applicable Pricing
Supplement, the last month in a period equal to twice the Special Election
Interval) after such Renewal Date, if the holder of such Renewable Note
elects to extend the term of such Renewable Note or any portion thereof as
described below. If a holder does not elect to extend the term of any
portion of the principal amount of a Renewable Note during the specified
period prior to any Renewal Date, such portion will become due and payable
on the Interest Payment Date occurring in the sixth month (or the last
month in the Special Election Interval) after such Renewal Date (the "New
Maturity Date").
A holder of a Renewable Note may elect to renew the term of such
Renewable Note, or if so specified in the applicable Pricing Supplement,
any portion thereof, by delivering a notice to such effect to the Trustee
(or any duly appointed paying agent) at the Corporate Trust Office not less
than 15 nor more than 30 days prior to such Renewal Date (unless another
period is specified in the applicable Pricing Supplement as the "Special
Election Period"). Such election will be irrevocable and will be binding
upon each subsequent holder of such Renewable Note. An election to renew
the term of a Renewable Note may be exercised with respect to less than the
entire principal amount of such Renewable Note only if so specified in the
applicable Pricing Supplement and only in such principal amount, or any
integral multiple in excess thereof, as is specified in the applicable
Pricing Supplement. Notwithstanding the foregoing, the term of the
Renewable Notes may not be extended beyond the Stated Maturity specified
for such Renewable Notes in the applicable Pricing Supplement. If the
holder does not elect to renew the term, such Renewable Note must be
presented to the Trustee (or any duly appointed paying agent).
Combination of Provisions
If so specified in the applicable Pricing Supplement, any Note may
be subject to all of the provisions, or any combination of the provisions,
described above under "Subsequent Interest Periods," "Extension of Maturi-
ty" and "Renewable Notes."
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Redemption and Repayment
The Pricing Supplement relating to each Note will indicate either
that such Note cannot be redeemed prior to its Stated Maturity or that such
Note will be redeemable, in whole or in part, at the option of the Company
on a date or dates specified prior to such Stated Maturity at a price or
prices, set forth in the applicable Pricing Supplement, together with
accrued interest to the date of redemption. Unless otherwise specified in
the applicable Pricing Supplement, the Notes, other than Amortizing Notes,
will not be subject to any sinking fund. The Company may redeem any of the
Notes that are redeemable and remain outstanding, either in whole or from
time to time in part, upon not less than 30 nor more than 60 days' notice.
Unless otherwise specified in the applicable Pricing Supplement, if less
than all of the Notes with like tenor and terms are to be redeemed, the
Notes to be redeemed shall be selected by the Trustee by such method as the
Trustee shall deem fair and appropriate.
The Pricing Supplement relating to each Note will indicate either
that such Note cannot be repaid at the option of the holder prior to its
Stated Maturity or that such Note will be repayable at the option of the
holder thereof on a date or dates specified prior to its Stated Maturity at
a price or prices set forth in the applicable Pricing Supplement, together
with accrued interest to the date of repayment.
Unless otherwise specified in the applicable Pricing Supplement, in
order for a Note to be repaid at the option of the holder thereof, the
Company must receive at least 30 days but not more than 45 days prior to
the repayment date the Note with the form entitled "Option to Elect Repay-
ment" on the reverse of or otherwise accompanying the Note duly completed.
Exercise of the repayment option by the holder of a Note shall be irrevo-
cable, except as otherwise described above under "Description of Notes--
Subsequent Interest Periods" and "Description of Notes--Extension of
Maturity." The repayment option may be exercised by the holder of a Note
for less than the aggregate principal amount of the Note then outstanding
provided that the principal amount of the Note remaining outstanding after
repayment is an authorized denomination.
The Depositary's nominee will be the holder of a Global Security and
therefore will be the only entity that can exercise a right to repayment.
See "Description of Notes--Book-Entry Notes" below. In order to ensure
that the Depositary's nominee will timely exercise a right to repayment
with respect to a particular beneficial interest in a Global Security, the
beneficial owner of such interest must instruct the broker or other direct
or indirect participant through which it holds a beneficial interest in
such Global Security to notify the Depositary of its desire to exercise a
right to repayment. Different firms have different cut-off times for
accepting instructions from their customers and, accordingly, each benefi-
cial owner should consult the broker or other direct or indirect
participant through which it holds an interest in a Global Security in
order to ascertain the cut-off time by which such an instruction must be
given in order for timely notice to be delivered to the Depositary.
Repurchase
The Company may at any time purchase Notes at any price or prices in
the open market or otherwise. Notes so purchased by the Company may, at
the discretion of the Company, be held or resold or cancelled by the
Trustee.
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Other Provisions
Any provisions with respect to the determination of an interest rate
basis, the specification of an interest rate basis, calculation of the
interest rate applicable to, or the principal payable at Maturity on, any
Note, its Interest Payment Dates or any other matter relating thereto may
be modified by the terms as specified under "Other Provisions" in the
applicable Pricing Supplement.
Book-Entry Notes
Global Securities will be deposited with, or on behalf of, the
Depositary and registered in the name of the Depositary's nominee. Except
as set forth below, a Global Security may not be transferred except as a
whole by the Depositary to a nominee of the Depositary or by a nominee of
the Depositary to the Depositary or another nominee of the Depositary or by
the Depositary or any such nominee to a successor of the Depositary or a
nominee of such successor. Unless otherwise specified in the applicable
Pricing Supplement, DTC will be the Depositary.
DTC has advised the Company and the Agent that it 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 pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934, as amended. DTC was created to hold securities for
its participants and to facilitate the clearance and settlement of securi-
ties 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.
DTC's participants include securities brokers and dealers (including the
Agent), banks (including the initial Paying Agent), trust companies,
clearing corporations and certain other organizations, some of whom (or
their representatives, or both) own DTC. Access to DTC'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. Persons who are not
participants may beneficially own securities held by DTC only through
participants.
Principal and interest payments on the Notes represented by one or
more Global Securities will be made by the Company to the Depositary or its
nominee, as the case may be, as the registered owner of the related Global
Security or Securities. The Company expects that the Depositary or its
nominee, upon receipt of any payment of principal or interest in respect of
Global Securities, will credit immediately the accounts of the related
participants with payment in amounts proportionate to their respective
holdings in principal amount of beneficial interests in such Global
Securities as shown on the records of the Depositary. Neither the Company
nor the Trustee or any Paying Agent will have any responsibility or
liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests of Global Securities, or for
maintaining, supervising or reviewing any records relating to such
beneficial interests. The Company also expects that payments by
participants to owners of beneficial interests in Global Securities held
through such participants will be governed by standing customer
instructions and customary practices, as is the case with securities
registered in "street name." Such instructions will be the responsibility
of such participants.
If an issue of Notes is denominated in a currency other than the
U.S. dollar, the Company will make payments of principal and any interest
in the currency in which the Notes are denominated (the "foreign currency")
or in U.S. dollars. DTC has elected to have all such payments of principal
and inter-
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est in U.S. dollars unless notified by any of its participants through
which an interest in the Notes is held that it elects, in accordance with
and to the extent permitted by the applicable Pricing Supplement and the
Note, to receive such payment of principal or interest in the foreign
currency. On or prior to the third Business Day after the record date for
payment of interest and twelve days prior to the date for payment of
principal, such participant shall notify DTC of (i) its election to receive
all, or the specified portion, of such payment in the foreign currency and
(ii) its instructions for wire transfer of such payment to a foreign
currency account.
DTC will notify the Paying Agent on or prior to the fifth Business
Day after the record date for payment of interest and ten days prior to the
date for payment of principal of the portion of such payment to be received
in the foreign currency and the applicable wire transfer instructions, and
the Paying Agent shall use such instructions to pay the participants
directly. If DTC does not so notify the Paying Agent, it is understood
that only U.S. dollar payments are to be made. The Paying Agent shall
notify DTC on or prior to the second Business Day prior to the payment date
of the conversion rate to be used and the resulting U.S. dollar amount to
be paid per $1,000 face amount. In the event that the Paying Agent's
quotation to convert the foreign currency into U.S. dollars is not
available, the Paying Agent shall notify DTC's Dividend Department that the
entire payment is to be made in the foreign currency. In such event, DTC
will ask its participants for payment instructions and forward such
instructions to the Paying Agent and the Paying Agent shall use such
instructions to pay the participants directly.
If the Depositary is at any time unwilling, unable or ineligible to
continue as depositary and a successor depositary is not appointed by the
Company within 90 days, the Company will issue Notes in certificated form
in exchange for beneficial interests in the Global Securities. In addi-
tion, the Company may at any time determine not to have its Notes
represented by one or more Global Securities, and, in such event, will
issue Notes in certificated form in exchange for beneficial interests in
Global Securities. In any such instance, an owner of a beneficial interest
in a Global Security will be entitled to physical delivery in certificated
form of Notes equal in principal amount to such beneficial interest and to
have such Notes registered in its name. Notes so issued in certificated
form will be issued in denominations of $1,000 or any amount in excess
thereof that is an integral multiple of $1,000 and will be issued in
registered form only, without coupons. Certain provisions described in
this Prospectus Supplement pertaining to Global Securities, including
without limitation, provisions regarding the payment of principal and
interest thereon, may not be applicable to Notes in certificated form. In
the event Notes in certificated form are issued, the Company will provide
supplemental information setting forth the terms applicable to such Notes
to each holder thereof.
A further description of the Depositary's procedures with respect to
Global Securities is set forth in the accompanying Prospectus under
"Description of Securities--Global Securities."
IMPORTANT CURRENCY EXCHANGE INFORMATION
Each purchaser of a Note is required to pay for such Note in the
Specified Currency thereof. Currently, there are limited facilities in the
United States for conversion of U.S. dollars into foreign currencies and
vice versa, and banks do not generally offer non-U.S. dollar checking or
savings account facilities in the United States. However, if requested by
a prospective purchaser of Notes denominated in a Specified Currency other
than U.S. dollars, the applicable Agent will arrange for the conversion of
U.S. dollars into such Specified Currency to enable the purchaser to pay
for such Notes. Such request must be made on or before the fifth Business
Day preceding the date of delivery of the Notes, or by such other date as
is determined by such Agent. Each such conversion will be made by the
applicable Agent
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on such terms and subject to such conditions, limitations and charges as
such Agent may from time to time establish in accordance with its regular
foreign exchange practice. All costs of any such exchange will be borne by
the purchasers of the Notes requesting such conversion.
FOREIGN CURRENCY RISKS
Governing Law And Judgments
The Notes will state that they will be governed by and construed in
accordance with the laws of the State of New York. Courts in the United
States have not customarily rendered judgments for money damages denomi-
nated in any currency other than the U.S. dollar. The Judiciary Law of the
State of New York provides, however, that judgment rendered in an action
based upon an obligation denominated in a currency other than U.S. dollars
will be rendered in the foreign currency of the underlying obligation and
converted into U.S. dollars at a rate of exchange prevailing on the date of
the entry of the judgment or decree.
Exchange Rates And Exchange Controls
An investment in Notes that are denominated in a Specified Currency
other than U.S. dollars ("Foreign Currency Notes") entails significant
risks that are not associated with a similar investment in a security
denominated in U.S. dollars. Similarly, an investment in a Currency
Indexed Note entails significant risks that are not associated with a
similar investment in non-Indexed Notes. Such risks include, without
limitation, the possibility of significant market changes in rates of ex-
change between U.S. dollars and such Specified Currency (or, in the case of
each Currency Indexed Note, the rate of exchange between the Denominated
Currency and the Indexed Currency for such Currency Indexed Note), the
possibility of significant changes in rates of exchange between U.S.
dollars and such Specified Currency (or, in the case of each Currency
Indexed Note, changes in rates of exchange between the Denominated Currency
and the Indexed Currency for such Currency Indexed Note) resulting from
official redenomination with respect to such Specified Currency (or, in the
case of each Currency Indexed Note, with respect to the Denominated
Currency or the Indexed Currency therefor) and the possibility of the
imposition or modification of foreign exchange controls by either the
United States or foreign governments. Such risks generally depend on
factors over which the Company has no control, such as economic and
political events, and on the supply of and demand for the relevant curren-
cies. In recent years, rates of exchange between the U.S. dollar and
certain foreign currencies, and between certain foreign currencies and
other foreign currencies, have been volatile, and such volatility may be
expected in the future. Fluctuations that have occurred in any particular
exchange rate in the past are not necessarily indicative, however, of
fluctuations that may occur in the rate during the term of any Foreign
Currency Note or any Currency Indexed Note. Depreciation of the Specified
Currency of a Foreign Currency Note against U.S. dollars would result in a
decrease in the effective yield of such Foreign Currency Note below its
coupon rate and, in certain circumstances, could result in a loss to the
investor on a U.S. dollar basis. Similarly, depreciation of the
Denominated Currency with respect to a Currency Indexed Note against the
applicable Indexed Currency would result in the principal amount payable
with respect to such Currency Indexed Note at the date of Maturity being
less than the Face Amount of such Currency Indexed Note which, in turn,
would decrease the effective yield of such Currency Indexed Note below its
stated interest rate and could also result in a loss to the investor. See
"Description of Notes--Currency Indexed Notes."
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Governments have imposed from time to time, and may in the future
impose, exchange controls that could affect exchange rates as well as the
availability of a Specified Currency (other than U.S. dollars) at the time
of payment of principal of, or premium, if any, or interest on, a Foreign
Currency Note. There can be no assurance that exchange controls will not
restrict or prohibit payments of principal (and premium, if any) or
interest in any such Specified Currency. Even if there are no actual
exchange controls, it is possible that such Specified Currency would not be
available to the Company when payments on such Note are due because of
circumstances beyond the control of the Company. In any such event, the
Company will make required payments in U.S. dollars on the basis described
herein. See "Description of Notes--Payment Currency" and "Description of
Notes--Currency Indexed Notes--Payment of Principal and Interest."
THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS DO NOT,
AND ANY PRICING SUPPLEMENT WILL NOT, DESCRIBE ALL THE RISKS OF AN
INVESTMENT IN NOTES DENOMINATED IN, OR THE PAYMENT OF WHICH IS RELATED TO
THE VALUE OF, A CURRENCY OR COMPOSITE CURRENCY OTHER THAN U.S. DOLLARS, AND
THE COMPANY DISCLAIMS ANY RESPONSIBILITY TO ADVISE PROSPECTIVE INVESTORS OF
SUCH RISKS AS THEY EXIST AT THE DATE OF THIS PROSPECTUS SUPPLEMENT OR AS
SUCH RISKS MAY CHANGE FROM TIME TO TIME. PROSPECTIVE INVESTORS SHOULD
CONSULT THEIR OWN FINANCIAL AND LEGAL ADVISORS AS TO THE RISKS ENTAILED BY
AN INVESTMENT IN SUCH NOTES. SUCH NOTES ARE NOT AN APPROPRIATE INVESTMENT
FOR INVESTORS WHO ARE UNSOPHISTICATED WITH RESPECT TO FOREIGN CURRENCY
TRANSACTIONS.
Unless otherwise specified in the applicable Pricing Supplement, no
Foreign Currency Note will be sold in or to residents of the country
issuing the Specified Currency of such Foreign Currency Note. The
information set forth in this Prospectus Supplement is directed to pro-
spective purchasers who are United States residents, and the Company
disclaims any responsibility to advise prospective purchasers who are
residents of countries other than the United States with respect to any
matters that may affect the purchase, holding or receipt of payments of
principal (and premium, if any) or interest on such Foreign Currency Notes.
Such persons should consult their own counsel with regard to such matters.
Pricing Supplements relating to Foreign Currency Notes or Currency
Indexed Notes will contain information concerning historical exchange rates
for the applicable Specified Currency or Denominated Currency against the
U.S. dollar or other relevant currency (including, in the case of Currency
Indexed Notes, the applicable Indexed Currency), a description of such
currency or currencies and any exchange controls affecting such currency or
currencies. The information therein concerning exchange rates is furnished
as a matter of information only and should not be regarded as indicative of
the range of or trends in fluctuations in currency exchange rates that may
occur in the future.
CERTAIN FEDERAL TAX CONSEQUENCES
The following is a summary of certain United States federal income
tax consequences of the purchase, ownership and disposition of the Notes as
of the date hereof. It deals only with Notes held as capital assets and
does not deal with persons in special tax situations, such as financial
institutions, insurance companies, tax-exempt organizations, dealers in
securities or currencies, persons holding Notes as a hedge against currency
risks or as a position in a "straddle" for tax purposes, or persons whose
functional currency is not the U.S. dollar. It also does not deal with
state, local or foreign tax
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consequences or with holders other than original purchasers. This summary
is based upon the provisions of the Code and regulations, rulings and judi-
cial decisions thereunder as of the date hereof, which authorities may be
repealed, revoked or modified, possibly with retroactive effect, so as to
result in federal income tax consequences different from those discussed
below.
Persons considering the purchase of the Notes should consult their
tax advisors concerning the application of United States federal income tax
laws to their particular situations as well as any consequences arising
under the laws of any state, local or foreign taxing jurisdiction. The
material federal income tax consequences of Indexed Notes, Currency Indexed
Notes, Dual Currency Notes, or Notes containing terms that result in
consequences other than those described below will be addressed in the
applicable pricing supplement.
As used herein, the term "U.S. Holder" means a beneficial owner of a
Note that is for United States federal income tax purposes (i) a citizen or
resident of the United States, (ii) a corporation, partnership or other
entity created or organized in or under the laws of the United States or of
any political subdivision thereof, or (iii) an estate or trust the income
of which is subject to United States federal income taxation regardless of
its source. As used herein, the term "non-U.S. Holder" means a holder of a
Note that is not a U.S. Holder.
U.S. Holders
Payments of Interest on the Notes
Interest paid on a Note (whether in U.S. dollars or in other than
U.S. dollars) that is not a Discount Note (as defined below) will generally
be taxable to a U.S. Holder as ordinary interest income at the time it
accrues or is received, in accordance with the U.S. Holder's method of
accounting for federal income tax purposes.
Discount Notes
The following discussion is a summary of the principal United States
federal income tax consequences of the ownership and disposition of
Discount Notes (as defined below) by U.S. Holders, which is based upon cer-
tain Treasury regulations issued on January 27, 1994 (the "OID Regula-
tions"). Additional rules applicable to Discount Notes that are denominat-
ed in a Specified Currency (as defined below) other than the U.S. dollar,
or have payments of interest or principal determined by reference to the
value of one or more currencies or currency units other than the U.S.
dollar, are described under "Foreign Currency Notes" below.
Under the OID Regulations, a Note with an "issue price" that is less
than its "stated redemption price at maturity" generally will carry
original issue discount ("OID") for United States federal income tax
purposes (a "Discount Note"), unless such difference is less than a
specified de minimis amount. In general, the stated redemption price at
maturity of a Discount Note is the total of all payments required to be
made under the Discount Note other than "qualified stated interest"
payments. "Qualified stated interest" is stated interest that is uncondi-
tionally payable in cash or property (other than debt instruments of the
issuer) at least annually at a single fixed rate of interest. In addition,
qualified stated interest includes stated interest with respect to a
variable rate debt instrument that is unconditionally payable at least
S-35
<PAGE>
annually at a single qualified floating rate or a rate that is determined
using a single fixed formula based on one or more qualified floating rates.
A U.S. Holder of Discount Notes is required to include qualified
stated interest in income at the time it is received or accrued, in
accordance with such holder's method of accounting. In addition, U.S.
Holders of Discount Notes that mature more than one year from the date of
issuance will be required to include OID in income for United States
federal income tax purposes as it accrues, in accordance with a constant
yield method, before the receipt of cash payments attributable to such
income, but such holders will not be required to include separately in
income cash payments received on such Notes, even if denominated as
interest, to the extent they do not constitute qualified stated interest.
All stated interest on a Note that matures one year or less from
its date of issuance (a "short-term Discount Note") is included in its
stated redemption price at maturity. In general, a U.S. Holder who uses
the cash method of tax accounting is not required to accrue OID on a short-
term Discount Note unless such holder elects to do so. U.S. Holders who
report income on the accrual method, cash method U.S. Holders who elect to
include OID on short-term Discount Notes in income, and certain other
holders, including banks and dealers in securities, are required to include
OID (or, alternatively, acquisition discount) on such short-term Discount
Notes on a straight-line basis, unless an election is made to accrue the
OID according to a constant yield method. In the case of a U.S. Holder who
is not required, and does not elect, to include OID in income currently,
(i) any gain realized on the sale, exchange or retirement of a short-term
Discount Note will be ordinary interest income to the extent of the OID
accrued on a straight-line basis (or, alternatively, upon election, under
the constant yield method) through the date of sale, exchange or retirement
and (ii) such U.S. Holder will be required to defer the deduction of all or
a portion of any interest paid on indebtedness incurred to purchase or
carry short-term Discount Notes until a corresponding amount of OID is
included in such holder's income.
U.S. Holders are permitted to elect to include all interest on a
Note, including stated interest, acquisition discount, OID, de minimis OID,
market discount, de minimis market discount, and unstated interest, as ad-
justed by any amortizable bond premium or acquisition premium, under a
constant yield method. U.S. Holders considering such an election should
consult their tax advisor.
Market Discount and Acquisition Premium
A Note (other than a Discount Note) purchased for an amount that is
less than its stated redemption price at maturity or, in the case of a Dis-
count Note, its revised issue price, will have "market discount" equal to
such difference, which generally will be taxable as ordinary income upon
disposition of such Note (unless such difference is less than a specified
de minimis amount). A Discount Note purchased for an amount that is great-
er than its revised issue price, but less than or equal to the sum of all
amounts payable on the Note after the purchase date (other than qualified
stated interest), will have "acquisition premium" equal to such excess,
which reduces the OID with respect to such Note for any taxable year by a
certain fraction.
Amortizable Bond Premium
A Note purchased for an amount greater than its stated redemption
price at maturity will have "amortizable bond premium" equal to such ex-
cess, which a U.S. Holder may elect to amortize, using a constant yield
method.
S-36
<PAGE>
Sale, Exchange or Retirement of the Notes
Upon the sale, exchange or retirement of a Note, a U.S. Holder
generally will recognize taxable gain or loss equal to the difference
between the amount realized and such holder's adjusted tax basis in the
Note, except to the extent attributable to accrued interest or market
discount. A U.S. Holder's adjusted tax basis in a Note generally will
equal the cost of the Note to such holder, increased by the amounts of any
market discount, OID and de minimis OID previously included in income by
the holder with respect to such Note and reduced by any amortized bond
premium and any principal payments received by the U.S. Holder and, in the
case of a Discount Note, by the amounts of any other payments that do not
constitute qualified stated interest.
Foreign Currency Notes
The following discussion summarizes the principal United States
federal income tax consequences to a U.S. Holder of the ownership and
disposition of certain Notes (other than Indexed Notes, Currency Indexed
Notes and Dual Currency Notes) that are denominated in a Specified Currency
other than the U.S. dollar or the payments of interest or principal on
which are payable in one or more currencies or currency units other than
the U.S. dollar (a "Foreign Currency Note"). Such Foreign Currency Notes
also may be subject to the rules discussed above regarding original issue
discount, market discount, acquisition premium, etc. The summary generally
is based upon certain Treasury regulations issued pursuant to Section 988
of the Code on March 16, 1992 (the "Section 988 Regulations").
Payments of Interest on Foreign Currency Notes
Cash Method. A U.S. Holder who uses the cash method of accounting
for federal income tax purposes and who receives a payment of qualified
stated interest on a Foreign Currency Note will be required to include in
income the U.S. dollar value of the foreign currency payment (determined at
the spot rate on the date such payment is received or paid) regardless of
whether the payment is in fact converted to U.S. dollars at that time, and
such U.S. dollar value will be the U.S. Holder's tax basis in such foreign
currency. No exchange gain or loss will be recognized with respect to the
receipt of such payment.
Accrual Method. A U.S. Holder who uses the accrual method of
accounting for federal income tax purposes, or who otherwise is required to
accrue interest prior to receipt (e.g., under the OID rules), will be re-
quired to include in income the U.S. dollar value of the amount of interest
income (including OID (as adjusted for acquisition premium, if any) or
market discount and reduced by amortizable bond premium to the extent
applicable) that has accrued and is otherwise required to be taken into ac-
count with respect to a Foreign Currency Note during an accrual period.
The U.S. dollar value of such accrued income will be determined by
translating such income at the average rate of exchange for the accrual
period or, with respect to an accrual period that spans two taxable years,
at the average rate for the partial period within the taxable year. A U.S.
Holder may elect, however, to translate such accrued interest income using
the rate of exchange on the last day of the accrual period or, with respect
to an accrual period that spans two taxable years, using the rate of
exchange on the last day of the taxable year. A U.S. Holder will recognize
exchange gain or loss (which will be treated as ordinary income or loss)
with respect to accrued interest income on the date such income is re-
ceived.
Rules similar to those described above apply in the case of OID,
market discount and amortizable bond premium.
S-37
<PAGE>
Sale, Exchange or Retirement of Foreign Currency Notes
A U.S. Holder will have a tax basis in any foreign currency received
on the sale, exchange or retirement of a Foreign Currency Note equal to the
U.S. dollar value of such foreign currency, determined at the time of such
sale, exchange or retirement. Any gain or loss realized by a U.S. Holder
on a sale or other disposition of foreign currency (including its exchange
for U.S. dollars or its use to purchase Foreign Currency Notes) will be
ordinary income or loss.
A U.S. Holder's tax basis in, and amount realized on the sale of, a
Foreign Currency Note, and the amount of any subsequent adjustment to the
holder's tax basis, will be the U.S. dollar value of the foreign currency
amount paid for such Foreign Currency Note, or of the foreign currency
amount of the adjustment, determined on the date of such purchase or
adjustment.
Gain or loss realized upon the sale, exchange or retirement of a
Foreign Currency Note will be ordinary income or loss to the extent it is
attributable to fluctuations in currency exchange rates.
Backup Withholding and Information Reporting
Under current federal income tax law, information reporting and a
31% backup withholding tax are required with respect to certain interest
and principal payments made to, and the proceeds of sales before maturity
by, certain holders (other than corporations) if such persons fail to
supply taxpayer identification numbers and other information. Amounts
withheld under the backup withholding rules would be allowed as a refund or
a credit against the U.S. Holder's federal income tax provided that the
required information is furnished to the Internal Revenue Service (the
"Service").
Non-U.S. Holders
A non-U.S. Holder will generally not be subject to U.S. federal
income taxes, including withholding taxes, on payments of principal,
premium, if any, or interest (including OID, if any) on a Note or coupon,
or any gain arising from the sale or disposition of a Note or coupon,
provided that (i) any such income is not effectively connected with the
conduct of a trade or business within the U.S., (ii) such non-U.S. Holder
is not a person who owns (directly or by attribution) ten percent or more
of the total combined voting power of all classes of stock of the Company,
(iii) with respect to any gain, such non-U.S. Holder (if an individual) is
not present in the U.S. 183 days or more during the taxable year of the
disposition and does not have a "tax home" (as defined in section 911(d)(3)
of the Code) in the U.S. and (iv) required certification of the non-U.S.
status of the beneficial owner is provided to the Company or its agents.
The 31% "backup" withholding and information reporting requirements
will generally not apply to payments by the Company or its agents of
principal, premium, if any, and interest on a Note, and to proceeds of the
sale or redemption of a Note before maturity, with respect to a non-U.S.
Holder that provides the Company or its agent with the certification of
non-U.S. status.
A Note held by an individual who at death is not a citizen or
resident of the United States, as defined for estate tax purposes, will not
be includible in the individual's gross estate for purposes of the United
States federal estate tax if the individual did not own actually or
constructively ten percent or more of the total combined voting power of
all classes of stock of the Company and interest on the Note would
S-38
<PAGE>
not have been effectively connected with a United States trade or business
of the individual if such interest were received by the decedent at the
time of his or her death.
Non-U.S. Holders of Notes should consult their tax advisors
regarding the application of information reporting and backup withholding
in their particular situations, the availability of an exemption therefrom,
and the procedure for obtaining such an exemption, if available. Any
amounts withheld from a payment to a non-U.S. Holder under the backup
withholding rules will be allowed as a credit against such holder's U.S.
federal income tax liability and may entitle such holder to a refund, pro-
vided that the required information is furnished to the Service.
PLAN OF DISTRIBUTION
The Notes are being offered on a continuing basis by the Company
through Smith Barney Inc., Lehman Brothers, Lehman Brothers Inc. (including
its affiliate Lehman Government Securities Inc.), Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities
Inc. and Morgan Stanley & Co. Incorporated, as agents (the "Agents"), all
of which have agreed to use their reasonable best efforts to solicit
purchases of the Notes. The Company also may sell Notes to an Agent, as
principal. Unless otherwise indicated in the applicable Pricing Supplement,
a Note sold to an Agent as principal will be purchased by such Agent at a
price equal to 100% of the principal amount thereof less a percentage equal
to the commission applicable to an agency sale of a note of identical
maturity. Such Notes may be resold to investors and other purchasers from
time to time at market prices prevailing at the time of sale, at prices
related to such prevailing prices, at a fixed price or prices, which may be
changed, or at negotiated prices. The Agents may sell Notes that they have
purchased as principal to other dealers and such Notes may be sold at a
discount which, unless otherwise specified in the applicable Pricing
Supplement, will not exceed the discount to be received by such Agents from
the Company. After the initial public offering of the Notes, the public
offering price (in the case of Notes to be resold at a fixed public
offering price), the concession and the discount may be changed. The
Company reserves the right to sell Notes directly on its own behalf, by
itself or through an affiliate, in those jurisdictions where authorized to
do so. Notes also may be offered through other agents, which offerings will
be on substantially the same terms and conditions as those described above
for offerings through the Agents. In such case, the names of the other
agents and any terms of such agency which differ from those described
herein will be set forth in a Pricing Supplement. The Company will have the
sole right to accept offers to purchase Notes and may reject any proposed
purchase of Notes in whole or in part. Each Agent will have the right, in
its discretion reasonably exercised, to reject any proposed purchase of
Notes through it in whole or in part. The Company will pay each Agent a
commission in the form of a discount ranging from 0.125% to 0.750% of the
principal amount of Notes sold through such Agent depending upon Note
maturity. Commissions with respect to Notes with Stated Maturities in
excess of 30 years that are sold through an Agent will be negotiated
between the Company and such Agent at the time of such sale. No commission
will be payable on any sales made directly by the Company.
Payment of the purchase price of the Notes will be required to be
made in immediately available funds in New York City on the date of
settlement.
The Agents may be deemed to be "underwriters" within the meaning of
the Securities Act of 1933, as amended (the "Securities Act"). The Company
has agreed to indemnify the Agents against certain liabilities, including
liabilities under the Securities Act, or to contribute to the payments the
Agents may be required to make in respect thereof, and will reimburse those
firms for certain legal and other expenses incurred by them in connection
with the offer and sale of the Notes.
S-39
<PAGE>
The Agents have advised the Company that they may make a market in
the Notes as permitted by applicable laws and regulations; however, the
Agents are not obligated to do so. There can be no assurance that there
will be a secondary market for the Notes.
Concurrently with the offering of Notes through the Agents as
described herein, the Company may issue other Securities pursuant to the
Indenture referred to in the Prospectus.
The Agents and certain of their affiliates engage in transactions
(which may include commercial banking transactions) with and perform
services for the Company or one or more of its affiliates in the ordinary
course of business.
SBI is a member of the NASD and an affiliate of the Company.
Accordingly, offers and sales by SBI of the Notes will conform with the
requirements set forth in any applicable sections of Schedule E to the By-
Laws of the NASD.
LEGAL OPINIONS
The validity of the Notes offered hereby will be passed upon for the
Company by Charles O. Prince, III, Esq., as counsel for the Company, 388
Greenwich Street, New York, New York 10013 and for the Agents by Dewey
Ballantine, 1301 Avenue of the Americas, New York, New York 10019. Mr.
Prince, Senior Vice President, General Counsel and Secretary of the
Company, beneficially owns, or has rights to acquire under Travelers Group
Inc. employee benefit plans, an aggregate of less than 1% of the common
stock of Travelers Group Inc. Dewey Ballantine has from time to time acted
as counsel for Travelers Group Inc. and certain of its subsidiaries and may
do so in the future.
EXPERTS
The consolidated financial statements and schedules of the Company
as of December 31, 1994 and 1993, and for each of the years in the three-
year period ended December 31, 1994, included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1994, have been
incorporated by reference herein, in reliance upon the report (also
incorporated by reference herein) of KPMG Peat Marwick LLP, independent
certified public accountants, and upon the authority of said firm as
experts in accounting and auditing. The report of KPMG Peat Marwick LLP
covering the December 31, 1994 consolidated financial statements and
schedules refers to changes in the Company's method of accounting for
certain investments in debt and equity securities in 1994, methods of
accounting for postretirement benefits other than pensions and accounting
for postemployment benefits in 1993, and method of accounting for income
taxes in 1992.
S-40
<PAGE>
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NO DEALER, SALESPERSON OR ANY OTHER PERSON
HAS BEEN AUTHORIZED TO GIVE INFORMATION, OR
TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS SUPPLEMENT AND
THE ACCOMPANYING PROSPECTUS OR THE DOCUMENTS
INCORPORATED BY REFERENCE HEREIN OR THEREIN
CONTAINED IN THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS, AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR ANY AGENT. NEITHER THIS PROSPECTUS
SUPPLEMENT NOR THE ACCOMPANYING PROSPECTUS
CONSTITUTES AN OFFER TO SELL, OR A SOLICITATION
OF AN OFFER TO BUY, ANY SECURITIES OTHER THAN
THOSE TO WHICH IT RELATES OR AN OFFER TO SELL,
OR A SOLICITATION OF AN OFFER TO BUY, THOSE TO
WHICH IT RELATES IN ANY STATE TO ANY PERSON TO
WHOM IT IS NOT LAWFUL TO MAKE SUCH OFFER OR
SOLICITATION IN SUCH STATE. THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT THE
INFORMATION CONTAINED IN EITHER IS CORRECT AS OF
ANY TIME SUBSEQUENT TO ITS DATE.
---------------------
TABLE OF CONTENTS
PAGE
----
PROSPECTUS SUPPLEMENT
Ratio of Earnings to Fixed Charges... S-4
Description of Notes................. S-4
Important Currency Exchange
Information........................ S-32
Foreign Currency Risks............... S-33
Certain Federal Tax Consequences..... S-34
Plan of Distribution................. S-39
Legal Opinions....................... S-40
Experts.............................. S-40
PROSPECTUS
Available Information................ 2
Incorporation of Certain Documents
by Reference....................... 3
The Company.......................... 3
Use of Proceeds...................... 4
Ratio of Earnings to Fixed Charges... 4
Description of Securities............ 4
Plan of Distribution................. 11
ERISA Matters........................ 12
Experts.............................. 12
Legal Matters........................ 12
$750,000,000
COMMERCIAL CREDIT
COMPANY
MEDIUM-TERM NOTES, SIXTH SERIES
---------------------
PROSPECTUS SUPPLEMENT
JUNE 20, 1995
(INCLUDING PROSPECTUS
DATED MAY 26, 1995)
---------------------
SMITH BARNEY INC.
LEHMAN BROTHERS
MERRILL LYNCH & CO.
J.P. MORGAN SECURITIES INC.
MORGAN STANLEY & CO.
INCORPORATED
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