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RULE NO. 424(b)(5)
REGISTRATION NO. 333-33644
PROSPECTUS SUPPLEMENT
(To prospectus dated June 23, 2000)
$800,000,000
Medium-Term Notes, Series D
[LOGO OF COLGATE-PALMOLIVE COMPANY]
Due One Year or More from Date of Issue
The notes:
. We will offer notes from time to time and specify the terms and conditions
of each issue of notes in a pricing supplement.
. The notes will be senior unsecured debt securities of Colgate.
. The notes will have stated maturities of one year or more from the date they
are originally issued.
. We will pay amounts due on the notes in U.S. dollars or any other
consideration described in the applicable pricing supplement.
. The notes may bear interest at fixed or floating rates or may not bear any
interest. If the notes bear interest at a floating rate, the floating rate
may be based on one or more indices or formulas.
. We will specify in the applicable pricing supplement whether the notes can
be redeemed or repaid before their maturity and whether they are subject to
mandatory redemption, redemption at the option of Colgate or repayment at
the option of the holder of the notes.
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Investing in the notes involves certain risks. See "Risk Factors" on page S-3.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus supplement, the accompanying prospectus or any pricing
supplement is truthful or complete. Any representation to the contrary is a
criminal offense.
We may sell notes to the agents referred to below as principals for resale at
varying or fixed offering prices or through the agents as agents using their
reasonable efforts on our behalf. We may also sell notes without the
assistance of the agents, whether acting as principal or as agent.
If we sell other securities referred to in the accompanying prospectus, the
amount of notes that we may offer and sell under this prospectus supplement
may be reduced.
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Chase Securities Inc.
Deutsche Banc Alex. Brown
Goldman, Sachs & Co.
Merrill Lynch & Co.
J.P. Morgan & Co.
Salomon Smith Barney
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The date of this prospectus supplement is June 23, 2000.
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TABLE OF CONTENTS
Prospectus Supplement
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Risk Factors............................................................... S-3
Description of the Notes................................................... S-5
Special Provisions Relating to Foreign Currency Notes...................... S-25
United States Federal Income Taxation...................................... S-27
Plan of Distribution....................................................... S-34
Validity of the Notes...................................................... S-35
Prospectus
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About This Prospectus...................................................... 2
Colgate-Palmolive Company.................................................. 2
Use of Proceeds............................................................ 2
Ratio of Earnings to Fixed Charges......................................... 3
Description of Debt Securities............................................. 3
Plan of Distribution....................................................... 9
Where You Can Find More Information........................................ 10
Incorporation of Information We File With the SEC.......................... 11
Experts.................................................................... 11
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You should rely only on the information contained or incorporated by
reference in this prospectus supplement, the accompanying prospectus and any
pricing supplement. Neither we nor any agent acting on our behalf has
authorized any other person to provide you with different or additional
information. If anyone provides you with different or additional information,
you should not rely on it. Neither we nor any agent acting on our behalf is
making an offer to sell these securities in any jurisdiction where the offer or
sale is not permitted. You should assume that the information contained or
incorporated by reference in this prospectus supplement, the accompanying
prospectus and any pricing supplement is accurate only as of the date on the
front cover of the applicable pricing supplement.
References in this prospectus supplement to "Colgate," "we," "us" and "our"
are to Colgate-Palmolive Company.
References in this prospectus supplement to "agent" or "agents" are to any
or all, respectively, of Chase Securities Inc., Deutsche Bank Securities Inc.,
Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P.
Morgan Securities Inc., Salomon Smith Barney Inc. or any other agent appointed
by us.
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RISK FACTORS
Your investment in the notes is subject to certain risks, especially if the
notes involve in some way a foreign currency. This prospectus supplement does
not describe all of the risks of an investment in the notes, whether arising
because the notes are denominated in a currency other than U.S. dollars or
because the return on the notes is linked to one or more interest rate or
currency indices or formulas. You should consult your own financial and legal
advisors about the risks entailed by an investment in the notes and the
suitability of your investment in the notes in light of your particular
circumstances. The notes are not an appropriate investment for you if you are
unsophisticated with respect to transactions involving an index or formula used
to determine amounts payable or transactions in which foreign currencies are
involved. Before investing in the notes, you should consider carefully, among
other factors, the matters described below.
Structure Risks of Notes Indexed to Interest Rate, Currency or Other Indices or
Formulas
If you invest in notes indexed to one or more interest rate, currency or
other indices or formulas, there will be significant risks not associated with
a conventional fixed rate or floating rate debt security. Indexation of the
interest rate of a note may result in lower (or no) interest compared to a
conventional fixed rate debt security issued at the same time. Indexation of
the principal of a note may result in the payment of a lower amount of
principal compared to the original purchase price of the note. The value of an
index can fluctuate based on a number of interrelated factors, including
economic, financial and political events over which we have no control.
Additionally, if the formula that we specify to determine the amount of
principal, and/or interest payable with respect to indexed notes contains a
multiplier or leverage factor, that feature will magnify the effect of any
change in the index. You should not view the historical experience of an index
as an indication of its future performance.
Redemption May Adversely Affect Your Return on the Notes
If your notes are redeemable at our option or are otherwise subject to
mandatory redemption, we may, in the case of optional redemption, or must, in
the case of mandatory redemption, choose to redeem your notes at times when
prevailing interest rates may be relatively low. Accordingly, you generally
will not be able to reinvest the redemption proceeds in a comparable security
at an effective interest rate as high as that of the notes.
There May Be an Uncertain Trading Market for Your Notes; Many Factors Affect
the Trading Value of Your Notes
We cannot assure you a trading market for your notes will ever develop or be
maintained. Many factors independent of our creditworthiness may affect the
trading market of your notes. These factors include:
. the complexity and volatility of the index or formula applicable to the
notes,
. the method of calculating the principal, premium and interest in respect
of the notes,
. the time remaining to the maturity of the notes,
. the outstanding amount of the notes,
. the redemption features of the notes,
. the amount of other securities linked to the index or formula applicable
to the notes, and
. the level, direction and volatility of market interest rates generally.
In addition, because some notes were designed for specific investment
objectives or strategies, these notes will have a more limited trading market
and experience more price volatility. There may be a limited number of buyers
for these notes. This may affect the price you receive for these notes or your
ability to sell these notes at all. You should not purchase notes unless you
understand and know you can bear the related investment risks.
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Our Credit Ratings May Not Reflect All Risks of an Investment in the Notes
Our credit ratings are an assessment of our ability to pay our obligations.
Consequently, real or anticipated changes in our credit ratings will generally
affect the market value of your notes. Our credit ratings, however, may not
reflect the potential impact of risks related to structure, market or other
factors discussed above on the value of your notes.
Exchange Rates and Exchange Controls May Affect the Value of Foreign Currency
Notes
If you invest in foreign currency notes or currency indexed notes, your
investment will be subject to significant risks not associated with investments
in debt securities denominated in U.S. dollars or U.S. dollar-based indexes.
These risks include the possibility of significant changes in the rate of
exchange between the U.S. dollar and your payment currency and the possibility
of the imposition or modification of foreign exchange controls by either the
United States or the applicable foreign governments. We have no control over
the factors that generally affect these risks, such as economic, financial and
political events and the supply and demand for the applicable currencies. In
recent years, rates of exchange between the U.S. dollar and certain foreign
currencies have been volatile and that volatility may continue in the future.
Past fluctuations in any particular exchange rate are not necessarily
indicative, however, of fluctuations that may occur in the future. Fluctuations
in exchange rates against the U.S. dollar could result in a decrease in the
U.S. dollar-equivalent yield of your foreign currency notes or currency indexed
notes, in the U.S. dollar-equivalent value of the principal or any premium
payable at maturity of your notes and, generally, in the U.S. dollar-equivalent
market value of your notes. We may further describe the currency risks with
respect to your foreign currency notes or currency indexed notes in the
applicable pricing supplement.
Foreign exchange rates can either float or be fixed by sovereign
governments. Governments, however, often do not voluntarily allow their
currencies to float freely in response to economic forces. Instead, governments
use a variety of techniques, such as intervention by that country's central
bank, or the imposition of regulatory controls or taxes, to affect the exchange
rate of their currencies. Governments may also issue a new currency to replace
an existing currency or alter the exchange rate or relative exchange
characteristics by the devaluation or revaluation of a currency. Thus, an
important risk in purchasing foreign currency notes or currency indexed notes
for U.S. dollar-based investors is that their U.S. dollar-equivalent yields
could be affected by governmental actions that could change or interfere with
currency valuation that was previously freely determined, fluctuations in
response to other market forces and the movement of currencies across borders.
We will make no adjustment or change in the terms of the foreign currency notes
or currency indexed notes if exchange rates become fixed, or if any devaluation
or revaluation or imposition of exchange or other regulatory controls or taxes
occur, or if other developments affecting the U.S. dollar or any applicable
currency occur.
The paying agent will make all calculations relating to foreign currency
notes or currency indexed notes. The determinations made by the paying agent
will, in the absence of clear error, be binding on holders of the notes.
On January 1, 1999, Austria, Belgium, Finland, France, Germany, Ireland,
Italy, Luxembourg, The Netherlands, Portugal and Spain (the "Participating
States") commenced a new stage of economic and monetary union and introduced a
single currency (the "euro"), which is legal tender in the Participating States
in substitution for the national currencies of those countries. Bills and coins
denominated in euro will be circulated for the first time on January 1, 2002,
and for a three-year transitional period, until December 31, 2001, the current
currencies of the Participating States remain legal tender in those countries
as a subdivision of the euro. The conversion rate between the current
currencies of each Participating State and the euro have been fixed irrevocably
by the Council of European Union on January 1, 1999. The Council of European
Union has adopted regulations providing specific rules for the introduction of
the euro.
For notes with a specified currency other than U.S. dollars we will include
in the applicable pricing supplement information concerning historical exchange
rates for that currency against the U.S. dollar and a brief description of any
relevant exchange controls.
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Exchange Rates May Affect the Value of a Judgement of a U.S. Court Involving
Foreign Currency Notes
The indenture and the notes, including foreign currency notes, except to the
extent that we specify otherwise in a pricing supplement, will be governed by,
and construed in accordance with, the laws of the State of New York. As a
holder of notes, you may bring an action based upon an obligation payable in a
currency other than U.S. dollars in courts in the United States. However,
courts in the United States have not customarily rendered judgments for money
damages denominated in any currency other than U.S. dollars. In addition, it is
not clear whether in granting such a judgment, the rate of conversion would be
determined with reference to the date of default, the date judgment is rendered
or any other date. The Judiciary Law of the State of New York provides,
however, that an action based upon an obligation payable 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 the judgment or decree is entered. In these cases, holders of foreign
currency notes would bear the risk of exchange rate fluctuations between the
time the dollar amount of the judgment is calculated and the time U.S. dollars
were paid to the holders.
DESCRIPTION OF THE NOTES
The notes will be issued as a new series of debt securities under a senior
indenture, dated as of September 15, 1992 (the "indenture"), between Colgate
and The Bank of New York, as trustee. The term "senior debt securities," as
used in this prospectus supplement, refers to all securities issued and
issuable from time to time under the indenture and includes the notes. The
senior debt securities and the indenture are more fully described in the
accompanying prospectus. The following summary of the material provisions of
the notes and of the indenture is not complete and is qualified in its entirety
by reference to the indenture, a copy of which has been filed as an exhibit to
the registration statement of which this prospectus supplement and the
accompanying prospectus are a part.
The following description of notes will apply unless otherwise specified in an
applicable pricing supplement.
Terms of the Notes
All senior debt securities, including the notes, issued and to be issued
under the indenture will be unsecured general obligations of Colgate and will
rank equally with all our other unsecured and unsubordinated indebtedness of
Colgate from time to time outstanding.
The indenture does not limit the aggregate principal amount of senior debt
securities which we may issue. We may issue our senior debt securities from
time to time as a single series or in two or more separate series up to the
aggregate principal amount from time to time as we may authorize for each
series. We may, from time to time, without the consent of the holders of the
notes, provide for the issuance of notes or other senior debt securities under
the indenture in addition to the $800,000,000 aggregate principal amount of
notes offered by this prospectus supplement. As of December 31, 1999, we had
$1.16 billion aggregate principal amount of senior debt securities issued and
outstanding.
The notes will be offered on a continuing basis and will mature on a day one
year or more from the date of issue, as selected by the purchaser and agreed to
by us. Interest-bearing notes will bear interest at either fixed or floating
rates as specified in the applicable pricing supplement. Some notes may not
bear interest. Notes may be issued at significant discounts from their
principal amount payable at maturity, which will be either the stated maturity
date or any date before the stated maturity date on which the principal or an
installment of principal of a note becomes due and payable, whether by the
declaration of acceleration, call for redemption at our option, repayment at
the option of the holder or otherwise. The stated maturity date or such prior
date, as the case may be, is referred to as the "Maturity Date" with respect to
the principal, and premium, if any, repayable on that date. For further
information regarding such discount notes, see "--Original Issue Discount
Notes" and "United States Federal Income Taxation--U.S. Holders-Original Issue
Discount".
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Unless otherwise indicated in a note and in the applicable pricing
supplement, the notes will be denominated in United States dollars and we will
make payments of principal of, and premium, if any, and interest on, the notes
in United States dollars. For further information regarding foreign currency
notes, see "Risk Factors" and "Special Provisions Relating to Foreign Currency
Notes".
Each note will be issued in fully registered book-entry form or certificated
form, without coupons, in denominations of $1,000 and integral multiples of
$1,000, unless otherwise specified in the applicable pricing supplement. Notes
in book-entry form may be transferred or exchanged only through a participating
member of The Depository Trust Company, also known as DTC, or any other
depository as is identified in an applicable pricing supplement. See "--Book-
Entry Notes". Registration of transfer of notes in certificated form will be
made at the corporate trust office of the trustee. There will be no service
charge for any registration of transfer or exchange of notes, but we may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection with any transfer or exchange, other than
exchanges pursuant to the indenture not involving any transfer.
The pricing supplement relating to a note will describe the following terms:
. whether the note will bear interest at a fixed rate or at a floating
rate, or will not bear any interest;
. the price (expressed as a percentage of the aggregate principal amount)
at which the note will be issued;
. the date on which the note will be issued;
. the date on which the note will mature;
. if the note is a fixed rate note, the rate per annum at which the note
will bear interest and the interest payment dates;
. if the note is a floating rate note, the terms relating to the
determination and payment of the variable interest rate and the interest
payment dates;
. if the note may be redeemed at our option, or repaid at the option of
the holder, prior to the stated maturity, a description of the
provisions relating to the redemption or repayment;
. any sinking fund or other mandatory redemption provisions applicable to
the note;
. if the note will be issued as a certificated note, a statement to that
effect;
. any other terms of the note not inconsistent with the provisions of the
indenture;
. the identity of any additional agent through or to whom the note is
being sold; and
. the amount of discounts or commissions to be paid to an agent if
different from those specifically set forth in the distribution
agreement which is filed as an exhibit to the registration statement of
which this prospectus supplement and the accompanying prospectus are a
part.
The interest rates we offer with respect to the notes may differ depending
upon, among other things, the aggregate principal amount of notes purchased in
any single transaction. We may change interest rates or formulas and other
terms of the notes from time to time, but no change will affect any note
already issued or as to which we have accepted an offer to purchase. We may
offer notes with similar variable terms other than interest rates concurrently
at any time. We may also concurrently offer notes having different variable
terms to different investors.
Payment of Principal, Premium and Interest
We will make payments of principal of, and premium and interest, if any, on
notes in book-entry form through the trustee to the depository or its nominee.
See "--Book-Entry Notes".
In the case of notes in certificated form, we will make payment of principal
and premium, if any, at the maturity of each note in immediately available
funds upon presentation and surrender of the note and, in the case of any
repayment on an optional repayment date, upon submission of a duly completed
election form if
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and as required by the provisions described below, at the corporate trust
office of the trustee in the Borough of Manhattan, The City of New York, or at
any other place as we may designate. Payment of interest, if any, due at
maturity will be made to the person to whom payment of the principal and
premium, if any, of the note in certificated form will be made. Payment of
interest, if any, due on notes in certificated form other than at maturity will
be made at the corporate trust office of the trustee or, at our option by check
mailed to the address of the person entitled to receive payment as the address
shall appear in the security register. Notwithstanding the immediately
preceding sentence, a holder of $10,000,000 or more in aggregate principal
amount of notes in certificated form, whether having identical or different
terms and provisions, having the same interest payment dates will, at our
option, be entitled to receive interest payments, other than at maturity, if
any, by wire transfer of immediately available funds if appropriate wire
transfer instructions have been received in writing by the trustee not less
than 15 days prior to the applicable interest payment date. Any wire
instructions received by the trustee shall remain in effect until revoked by
the holder.
Redemption at the Option of Colgate
Unless otherwise provided in the applicable pricing supplement, the notes
will not be subject to any sinking fund. We may redeem the notes at our option
prior to their stated maturity only if an initial redemption date is specified
in the applicable notes and in the applicable pricing supplement. If so
indicated in the applicable pricing supplement, on and after the initial
redemption date, we may redeem the related note at any time in whole or from
time to time in part at our option at the applicable redemption price referred
to below together with interest on the principal of the applicable note payable
to the redemption date. Unless otherwise specified in the applicable pricing
supplement, we must provide notice of a redemption not more than 60 nor less
than 30 days before the redemption date. We will redeem the notes in increments
of $1,000, provided that any remaining principal amount will be an authorized
denomination of the applicable note. Unless otherwise specified in the
applicable pricing supplement, the redemption price with respect to a note will
initially mean a percentage (i.e. the initial redemption percentage), of the
principal amount of the note to be redeemed specified in the applicable pricing
supplement and shall decline at each anniversary of the initial redemption date
by a percentage specified in the applicable pricing supplement (i.e. the annual
redemption percentage reduction) of the principal amount to be redeemed until
the redemption price is 100% of the principal amount.
Repayment at the Option of the Holder
If so indicated in the applicable pricing supplement, we will repay the
notes in whole or in part at the option of the holders of the notes on any
optional repayment date specified in the applicable pricing supplement. If no
optional repayment date is indicated with respect to a note, it will not be
repayable at the option of the holder before its stated maturity date. Any
repayment in part will be in an amount equal to $1,000 or integral multiples of
$1,000, provided that any remaining principal amount will be an authorized
denomination of the applicable note. The repurchase price for any note so
repurchased will be 100% of the principal amount to be repaid, together with
any unpaid interest on the principal of the applicable note payable to the date
of repayment. For any note to be repaid, the trustee must receive, at its
office maintained for such purpose in the Borough of Manhattan, The City of New
York, currently the corporate trust office of the trustee, not more than 60 nor
less than 30 days before the optional repayment date:
. in the case of a note in certificated form, the note and the form
entitled "Option to Elect Repayment" duly completed, or
. in the case of a note in book-entry form, instructions to that effect
from the applicable beneficial owner of the global security representing
the notes to the depository and forwarded by the depository.
Any notice of election from a holder to exercise the repayment option must
be received by the trustee by 5:00 p.m., New York City time, on the last day
for giving such notice. Exercise of the repayment option by the holder of a
note will be irrevocable.
Only the depository may exercise the repayment option in respect of global
securities representing notes in book-entry form. Accordingly, beneficial
owners that desire to have all or any portion of their notes in book-
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entry form represented by global securities repaid must instruct the
participant through which they own their interest to direct the depository to
exercise the repayment option on their behalf by forwarding the repayment
instructions to the trustee as discussed above. In order to ensure that the
instructions are received by the trustee on a particular day, the applicable
beneficial owner must so instruct the participant through which it owns its
interest before that participant's deadline for accepting instructions for that
day. Different firms may have different deadlines for accepting instructions
from their customers. Accordingly, beneficial owners of notes in book-entry
form should consult the participants through which they own their interest for
the respective deadlines. All instructions given to participants from
beneficial owners of notes in book-entry form relating to the option to elect
repayment will be irrevocable. In addition, at the time instructions are given,
each beneficial owner will cause the participant through which it owns its
interest to transfer its interest in the global security or securities
representing the related notes in book-entry form, on the depository's records,
to the trustee. See "--Book-Entry Notes".
If applicable, we will comply with the requirements of Section 14(e) of the
Securities Exchange Act of 1934 and the rules promulgated thereunder and any
other securities laws or regulations in connection with any repayment at the
option of the holder.
We may at any time purchase notes at any price or prices in the open market
or otherwise. Notes that we purchase may, at our discretion, be held, resold or
surrendered to the trustee for cancellation.
Interest and Interest Rates
Unless otherwise specified in an applicable pricing supplement, each
interest-bearing note will bear interest from the date of issue at the rate per
annum or, in the case of a floating rate note, pursuant to the interest rate
formula, stated in the applicable note and in the applicable pricing supplement
until the principal of the note is paid or made available for payment. Interest
payments on fixed rate notes and floating rate notes will equal the amount of
interest accrued from and including the immediately preceding interest payment
date in respect of which interest has been paid or made available for payment
or from and including the date of issue, if no interest has been paid or made
available for payment with respect to the note, to, but excluding, the related
interest payment date or Maturity Date, as the case may be.
We will pay interest in arrears on each interest payment date specified in
the applicable pricing supplement on which an installment of interest is due
and payable and on the Maturity Date. We will pay interest to the persons in
whose names the notes are registered as of the regular record date. However,
interest that we pay on the Maturity Date, if any, will be payable to the
persons to whom the principal will be payable. If any note is originally issued
between a regular record date and the related interest payment date, we will
make the first payment of interest on that note on the interest payment date
immediately following the next succeeding regular record date to the registered
holder on that next succeeding regular record date. The regular record date
will be the fifteenth calendar day, whether or not a Business Day, immediately
preceding the related interest payment date.
"Business Day" means any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which commercial banks are authorized or
required by law, regulation or executive order to close in The City of New
York; provided, however, that, with respect to non-United States dollar-
denominated notes, the day is also not a day on which commercial banks are
authorized or required by law, regulation or executive order to close in the
Principal Financial Center, as defined below, of the country issuing the
specified currency or, if the specified currency is euro, the day is also a day
on which the Trans-European Automated Real-Time Gross Settlement Express
Transfer (TARGET) System is open; provided, further, that, with respect to
floating rate notes as to which LIBOR is an applicable Interest Rate Basis, the
day is also a London Banking Day, as defined below, and that, with respect to
floating rate notes as to which EURIBOR is an applicable Interest Rate Basis,
the day is also a day on which the TARGET System is open.
"London Banking Day" means a day on which commercial banks are open for
business, including dealings in the Designated LIBOR Currency, as defined below
under "--Floating Rate Notes--LIBOR", in London.
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"Principal Financial Center" means, unless otherwise specified in the
applicable pricing supplement,
(1) the capital city of the country issuing the specified currency, or
(2) the capital city of the country to which the Designated LIBOR Currency
relates,
except, in each case, that with respect to United States dollars, Australian
dollars, Canadian dollars, Deutsche marks, Dutch guilders, Italian lire,
Portuguese escudos, South African rand and Swiss francs, the "Principal
Financial Center" will be The City of New York, Sydney and (solely in the case
of the specified currency) Melbourne, Toronto, Frankfurt, Amsterdam, Milan,
London (solely in the case of the Designated LIBOR Currency), Johannesburg and
Zurich, respectively.
Fixed Rate Notes
Unless otherwise specified in the applicable pricing supplement, interest on
fixed rate notes will be computed on the basis of a 360-day year of twelve 30-
day months, and will be payable semiannually on June 1 and December 1 of each
year and on the Maturity Date.
If any interest payment date or the Maturity Date of a fixed rate note falls
on a day that is not a Business Day, the related payment of principal, premium,
if any, or interest will be made on the next succeeding Business Day as if made
on the date the applicable payment was due, and no interest will accrue on the
amount payable for the period from and after the interest payment date or
Maturity Date, as the case may be, to the date of such payment on the next
succeeding Business Day.
Floating Rate Notes
Interest on floating rate notes will be determined by reference to the
applicable Interest Rate Basis or Interest Rate Bases, which may be one or more
of the following:
. the CD Rate,
. the CMT Rate,
. the Commercial Paper Rate,
. the Eleventh District Cost of Funds Rate,
. the Federal Funds Rate,
. LIBOR,
. EURIBOR,
. the Prime Rate,
. the Treasury Rate or
. any other Interest Rate Basis or interest rate formula that is specified
in the applicable pricing supplement.
Terms. Each applicable pricing supplement will specify the terms of the
floating rate note being delivered, including the following:
. whether the floating rate note is
. a "Regular Floating Rate Note",
. a "Floating Rate/Fixed Rate Note", or
. an "Inverse Floating Rate Note",
. the Interest Rate Basis or Bases,
. the Initial Interest Rate,
. the Interest Reset Dates,
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. the interest payment dates,
. the period to maturity of the instrument or obligation with respect to
which the Interest Rate Basis or Bases will be calculated (the "Index
Maturity"),
. the Maximum Interest Rate and Minimum Interest Rate, if any,
. the number of basis points to be added to or subtracted from the related
Interest Rate Basis or Bases (the "Spread"),
. the percentage of the related Interest Rate Basis or Bases by which the
Interest Rate Basis or Bases will be multiplied to determine the
applicable interest rate (the "Spread Multiplier"),
. if one or more of the specified Interest Rate Bases is LIBOR, the
Designated LIBOR Currency and the Designated LIBOR Page, and
. if one or more of the specified Interest Rate Bases is the CMT Rate, the
CMT Telerate Page and the weekly average or the monthly average.
The interest rate borne by the floating rate notes will be determined as
follows:
Regular Floating Rate Notes. Unless a floating rate note is designated as a
Floating Rate/Fixed Rate Note, an Inverse Floating Rate Note or as having an
Addendum attached or as having "other provisions" apply relating to a different
interest rate formula, it will be a "Regular Floating Rate Note" and, except as
described below or in an applicable pricing supplement, will bear interest at
the rate determined by reference to the applicable Interest Rate Basis or
Bases:
. plus or minus the applicable Spread, if any, and/or
. multiplied by the applicable Spread Multiplier, if any.
Commencing on the first Interest Reset Date, as defined below, the rate at
which interest on the Regular Floating Rate Note will be payable will be reset
as of each Interest Reset Date; provided, however, that the interest rate in
effect for the period from the date of issue to the first Interest Reset Date
will be the Initial Interest Rate.
Floating Rate/Fixed Rate Notes. If a floating rate note is designated as a
"Floating Rate/Fixed Rate Note", it will bear interest at the rate determined
by reference to the applicable Interest Rate Basis or Bases:
. plus or minus the applicable Spread, if any, and/or
. multiplied by the applicable Spread Multiplier, if any.
Commencing on the first Interest Reset Date, the rate at which interest on the
applicable Floating Rate/Fixed Rate Note will be payable will be reset as of
each Interest Reset Date; provided, however, that:
. the interest rate in effect for the period from the date of issue to the
first Interest Reset Date will be the Initial Interest Rate, and
. the interest rate in effect commencing on, and including, the date on
which interest begins to accrue on a fixed rate basis to maturity will
be the Fixed Interest Rate specified in the applicable pricing
supplement, or if no Fixed Interest Rate is specified, the interest rate
in effect on the Floating Rate/Fixed Rate Note on the day immediately
preceding the date on which interest begins to accrue on a fixed rate
basis.
Inverse Floating Rate Notes. If a floating rate note is designated as an
"Inverse Floating Rate Note", except as described below, it will bear interest
equal to the Fixed Interest Rate specified in the related pricing supplement
minus the rate determined by reference to the applicable Interest Rate Basis or
Bases:
. plus or minus the applicable Spread, if any, and/or
. multiplied by the applicable Spread Multiplier, if any;
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provided, however, that the interest rate on the applicable Inverse Floating
Rate Note will not be less than zero percent. Commencing on the first Interest
Reset Date, the rate at which interest on the applicable Inverse Floating Rate
Note is payable will be reset as of each Interest Reset Date; provided,
however, that the interest rate in effect for the period from the date of issue
to the first Interest Reset Date will be the Initial Interest Rate.
Each Interest Rate Basis shall be the rate determined in accordance with the
applicable provisions below. Except as set forth above or in the applicable
pricing supplement, the interest rate in effect on each day will be:
. if the day is an Interest Reset Date, the interest rate determined as of
the Interest Determination Date (as defined below) immediately preceding
the applicable Interest Reset Date or
. if the day is not an Interest Reset Date, the interest rate determined
as of the Interest Determination Date immediately preceding the most
recent Interest Reset Date; provided, however, that the interest rate in
effect for the period from the date of issue to the first Interest Reset
Date will be the Initial Interest Rate specified in the applicable
pricing supplement.
Interest Reset Dates. The applicable pricing supplement will specify the
dates on which the interest rate on the related floating rate note will be
reset (each, an "Interest Reset Date"). Unless otherwise specified in the
applicable pricing supplement, the Interest Reset Dates will be, in the case of
floating rate notes which reset:
. daily--each Business Day;
. weekly--the Wednesday of each week, with the exception of weekly reset
floating rate notes as to which the Treasury Rate is an applicable
Interest Rate Basis, which will reset the Tuesday of each week, except
as described below;
. monthly--the third Wednesday of each month, with the exception of
monthly reset floating rate notes as to which the Eleventh District Cost
of Funds Rate is an applicable Interest Rate Basis, which will reset on
the first calendar day of the month;
. quarterly--the third Wednesday of March, June, September and December of
each year;
. semiannually--the third Wednesday of the two months specified in the
applicable pricing supplement; and
. annually--the third Wednesday of the month specified in the applicable
pricing supplement;
provided, however, that with respect to Floating Rate/Fixed Rate Notes, the
rate of interest will not reset after the applicable date on which interest on
a fixed rate basis begins to accrue.
If any Interest Reset Date for any floating rate note would otherwise be a
day that is not a Business Day, the applicable Interest Reset Date will be
postponed to the next succeeding day that is a Business Day, except that in the
case of a floating rate note as to which LIBOR or EURIBOR is an applicable
Interest Rate Basis, if the Business Day falls in the next succeeding calendar
month, then the Interest Reset Date will be the immediately preceding Business
Day. In addition, in the case of a floating rate note for which the Treasury
Rate is an applicable Interest Rate Basis, if the Interest Determination Date
would otherwise fall on an Interest Reset Date, then the applicable Interest
Reset Date will be postponed to the next succeeding Business Day.
Maximum and Minimum Interest Rates. A floating rate note may also have
either or both of the following:
. a maximum numerical limitation, or ceiling, on the rate at which
interest may accrue during any interest period (a "Maximum Interest
Rate"), and
. a minimum numerical limitation, or floor, on the rate at which interest
may accrue during any period (a "Minimum Interest Rate").
The indenture is, and any notes issued under the indenture will be, governed
by and construed in accordance with the laws of the State of New York. Under
present New York law, the maximum rate of interest
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is 25% per annum on a simple interest basis. This limit may not apply to
securities in which $2,500,000 or more has been invested. While we believe that
New York law would be given effect by a state or federal court sitting outside
of New York, state laws frequently regulate the amount of interest that may be
charged to and paid by a borrower, including, in some cases, corporate
borrowers. We suggest that prospective investors consult their personal
advisors with respect to the applicability of these laws. We have agreed for
the benefit of the beneficial owners of the notes, to the extent permitted by
law, not to claim voluntarily the benefits of any laws concerning usurious
rates or interest against a beneficial owner of the notes.
Interest Payments. Each applicable pricing supplement will specify the dates
on which interest will be payable. Each floating rate note will bear interest
from the date of issue at the rates specified in the applicable floating rate
note until the principal of the applicable note is paid or otherwise made
available for payment. Except as provided below or in the applicable pricing
supplement, the interest payment dates with respect to floating rate notes will
be, in the case of floating rate notes which reset:
. daily, weekly or monthly--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;
. quarterly--the third Wednesday of March, June, September and December of
each year;
. semiannually--the third Wednesday of the two months of each year
specified in the applicable pricing supplement;
. annually--the third Wednesday of the month of each year specified in the
applicable pricing supplement; and
. the Maturity Date.
If any interest payment date for any floating rate note, other than an
interest payment date on the Maturity Date, would otherwise be a day that is
not a Business Day, the interest payment date will be postponed to the next
succeeding day that is a Business Day except that in the case of a floating
rate note as to which LIBOR or EURIBOR is an applicable Interest Rate Basis, if
the Business Day falls in the next succeeding calendar month, the applicable
interest payment date will be the immediately preceding Business Day. If the
Maturity Date of a floating rate note falls on a day that is not a Business
Day, the payment of principal, premium, if any, and interest will be made on
the next succeeding Business Day, and no interest on such payment will accrue
for the period from and after the Maturity Date to the date of that payment on
the next succeeding Business Day.
All percentages resulting from any calculation on floating rate notes will
be rounded to the nearest one hundred thousandth of a percentage point, with
five one millionths of a percentage point rounded upwards. For example,
9.876545%, or .09876545, would be rounded to 9.87655%, or .0987655. All dollar
amounts used in or resulting from any calculation on floating rate notes will
be rounded to the nearest cent with one half cent being rounded upward.
With respect to each floating rate note, accrued interest is calculated by
multiplying its principal amount by an accrued interest factor. Unless
otherwise specified in the applicable pricing supplement, the accrued interest
factor is computed by adding the interest factor calculated for each day in the
period for which accrued interest is being calculated.
. In the case of notes for which the Interest Rate Basis is the CD Rate,
the Commercial Paper Rate, the Eleventh District Cost of Funds Rate, the
Federal Funds Rate, LIBOR, EURIBOR or the Prime Rate, the interest
factor for each day will be computed by dividing the interest rate
applicable to each day by 360.
. In the case of notes for which the Interest Rate Basis is the CMT Rate
or the Treasury Rate, the interest factor for each day will be computed
by dividing the interest rate applicable to each day by the actual
number of days in the year.
. The interest factor for floating rate notes for which the interest rate
is calculated with reference to two or more Interest Rate Bases will be
calculated in each period in the same manner as if only one of the
applicable Interest Rate Bases applied.
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Interest Determination Dates. The interest rate applicable to each interest
reset period commencing on the related Interest Reset Date will be the rate
determined as of the applicable "Interest Determination Date" and calculated on
or prior to the calculation date, as defined below.
. The Interest Determination Date with respect to the CD Rate, the CMT
Rate, the Commercial Paper Rate and EURIBOR will be the second Business
Day preceding each Interest Reset Date for the related note.
. The Interest Determination Date with respect to the Federal Funds Rate
and the Prime Rate will be the first Business Day preceding each
Interest Reset Date for the related note.
. The Interest Determination Date with respect to LIBOR will be the second
London Banking Day preceding each Interest Reset Date.
. The Interest Determination Date with respect to the Eleventh District
Cost of Funds Rate will be the last working day of the month immediately
preceding each Interest Reset Date on which the Federal Home Loan Bank
of San Francisco publishes the Index, as defined below under "--Eleventh
District Cost of Funds Rate".
. The Interest Determination Date with respect to the Treasury Rate will
be the day in the week in which the related Interest Reset Date falls on
which day Treasury Bills, as defined below under "--Treasury Rate", are
normally auctioned. Treasury Bills are normally sold at auction on
Monday of each week, unless that Monday is a legal holiday, in which
case the auction is normally held on the immediately following Tuesday,
except that the auction may be held on the preceding Friday; provided,
however, that if an auction is held on the Friday of the week preceding
the related Interest Reset Date, the related Interest Determination Date
will be such preceding Friday; and provided, further, that if an auction
falls on any Interest Reset Date, then the related Interest Reset Date
will instead be the first Business Day following the auction.
. The Interest Determination Date pertaining to a floating rate note the
interest rate of which is determined with reference to two or more
Interest Rate Bases will be the most recent Business Day which is at
least two Business Days before the applicable Interest Reset Date for
the applicable floating rate note on which each Interest Reset Basis is
determinable. Each Interest Rate Basis will be determined as of the
Interest Determination Date, and the applicable interest rate will take
effect on the related Interest Reset Date.
Calculation Date. Unless otherwise provided in the applicable pricing
supplement, The Bank of New York will be the calculation agent. Upon the
request of the holder of any floating rate note, the calculation agent will
provide the interest rate then in effect and, if determined, the interest rate
that will become effective as a result of a determination made for the next
succeeding Interest Reset Date with respect to that floating rate note. Unless
otherwise specified in the applicable pricing supplement, the calculation date,
if applicable, pertaining to any Interest Determination Date will be the
earlier of:
. the tenth calendar day after the applicable Interest Determination Date,
or, if the tenth calendar day is not a Business Day, the next succeeding
Business Day or
. the Business Day preceding the applicable Interest Payment Date or the
Maturity Date, as the case may be.
CD Rate. CD Rate Notes will bear interest at the rates, calculated with
reference to the CD Rate and the Spread and/or Spread Multiplier, if any,
specified in the applicable CD Rate Notes and in any applicable pricing
supplement.
"CD Rate" means:
(1) the rate on the applicable Interest Determination Date for negotiable
United States dollar certificates of deposit having the Index Maturity
specified in the applicable pricing supplement published in H.15(519)
under the heading "CDs (secondary market)", or
(2) if the rate referred to in clause (1) above is not so published by 3:00
P.M., New York City time, on the related calculation date, the rate on
the applicable Interest Determination Date for negotiable
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United States dollar certificates of deposit of the Index Maturity
specified in the applicable pricing supplement as published in H.15
Daily Update, or other recognized electronic source used for the purpose
of displaying the applicable rate, under the caption "CDs (secondary
market)", or
(3) if the rate referred to in clause (2) is not so published by 3:00 P.M.,
New York City time, on the related calculation date, the rate on the
applicable Interest Determination Date calculated by the calculation
agent as the arithmetic mean of the secondary market offered rates as
of 10:00 A.M., New York City time, on the applicable Interest
Determination Date, of three leading non-bank dealers in negotiable
United States dollar certificates of deposit in The City of New York
(which may include an agent or its affiliates) selected by the
calculation agent for negotiable United States dollar certificates of
deposit of major United States money market banks for negotiable United
States dollar certificates of deposit with a remaining maturity closest
to the Index Maturity specified in the applicable pricing supplement in
an amount that is representative for a single transaction in that
market at that time, or
(4) if the dealers selected by the calculation agent are not quoting as
mentioned in clause (3) above, the CD Rate in effect on the applicable
Interest Determination Date.
"H.15(519)" means the weekly statistical release designated as H.15(519),
or any successor publication, published by the Board of Governors of the
Federal Reserve System.
"H.15 Daily Update" means the daily update of H.15(519), available through
the world-wide-web site of the Board of Governors of the Federal Reserve
System at http://www.bog.frb.fed.us/releases/h15/update, or any successor site
or publication.
CMT Rate. CMT Rate Notes will bear interest at the rates, calculated with
reference to the CMT Rate and the Spread and/or Spread Multiplier, if any,
specified in the applicable CMT Rate Notes and in any applicable pricing
supplement.
"CMT Rate" means:
(1) if CMT Telerate Page 7051 is specified in the applicable pricing
supplement:
(a) the percentage equal to the yield for United States Treasury
securities at "constant maturity" having the Index Maturity
specified in the applicable pricing supplement as published in
H.15(519) under the caption "Treasury Constant Maturities", as the
yield is displayed on Bridge Telerate, Inc., (or any successor
service), on page 7051 or any other page as may replace page 7051 on
that service ("Telerate Page 7051"), for the applicable Interest
Determination Date, or
(b) if the rate referred to in clause (a) does not appear on Telerate
Page 7051, the percentage equal to the yield for United States
Treasury securities at "constant maturity" having the Index Maturity
specified in the applicable pricing supplement and for the
applicable Interest Determination Date as published in H.15(519)
under the caption "Treasury Constant Maturities", or
(c) if the rate referred to in clause (b) does not appear in H.15(519),
the rate on the applicable Interest Determination Date for the
period of the Index Maturity specified in the applicable pricing
supplement as may then be published by either the Federal Reserve
System Board of Governors or the United States Department of the
Treasury that the calculation agent determines to be comparable to
the rate which would otherwise have been published in H.15(519), or
(d) if the rate referred to in clause (c) is not published, the rate on
the applicable Interest Determination Date calculated by the
calculation agent as a yield to maturity based on the arithmetic
mean of the secondary market bid prices at approximately 3:30 P.M.,
New York City time, on the applicable Interest Determination Date of
three leading primary United States government securities dealers in
The City of New York, which may include the agents or their
affiliates (each, a "Reference Dealer"), selected by the calculation
agent from five Reference Dealers selected by the calculation agent
and eliminating the highest quotation, or, in the event
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of equality, one of the highest, and the lowest quotation or, in the
event of equality, one of the lowest, for United States Treasury
securities with an original maturity equal to the Index Maturity
specified in the applicable pricing supplement, a remaining term to
maturity no more than 1 year shorter than the Index Maturity
specified in the applicable pricing supplement and in a principal
amount that is representative for a single transaction in the
securities in the market at that time, or
(e) if fewer than five but more than two of the prices referred to in
clause (d) are provided as requested, the rate on the applicable
Interest Determination Date calculated by the calculation agent
based on the arithmetic mean of the bid prices obtained and neither
the highest nor the lowest of the quotations shall be eliminated, or
(f) if fewer than three prices referred to in clause (d) are provided as
requested, the rate on the applicable Interest Determination Date
calculated by the calculation agent as a yield to maturity based on
the arithmetic mean of the secondary market bid prices as of
approximately 3:30 P.M., New York City time, on the applicable
Interest Determination Date of three Reference Dealers selected by
the calculation agent from five Reference Dealers selected by the
calculation agent and eliminating the highest quotation or, in the
event of equality, one of the highest and the lowest quotation or,
in the event of equality, one of the lowest, for United States
Treasury securities with an original maturity greater than the Index
Maturity specified in the applicable pricing supplement, a remaining
term to maturity closest to the Index Maturity specified in the
applicable pricing supplement and in a principal amount that is
representative for a single transaction in the securities in the
market at that time, or
(g) if fewer than five but more than two prices referred to in clause
(f) are provided as requested, the rate on the applicable Interest
Determination Date calculated by the calculation agent based on the
arithmetic mean of the bid prices obtained and neither the highest
nor the lowest of the quotations will be eliminated, or
(h) if fewer than three prices referred to in clause (f) are provided as
requested, the CMT Rate in effect on the applicable Interest
Determination Date.
(2) if CMT Telerate Page 7052 is specified in the applicable pricing
supplement:
(a) the percentage equal to the one-week or one-month, as specified in
the applicable pricing supplement, average yield for United States
Treasury securities at "constant maturity" having the Index Maturity
specified in the applicable pricing supplement as published in
H.15(519) opposite the caption "Treasury Constant Maturities", as
the yield is displayed on Bridge Telerate, Inc., or any successor
service, on page 7052 or any other page as may replace that
specified page on that service ("Telerate Page 7052"), for the week
or month, as applicable, ended immediately preceding the week or
month, as applicable, in which the related Interest Determination
Date falls, or
(b) if the rate referred to in clause (a) does not appear on Telerate
Page 7052, the percentage equal to the one-week or one-month, as
specified in the applicable pricing supplement, average yield for
United States Treasury securities at "constant maturity" having the
Index Maturity specified in the applicable pricing supplement and
for the week or month, as applicable, preceding the applicable
Interest Determination Date as published in H.15(519) opposite the
caption "Treasury Constant Maturities," or
(c) if the rate referred to in clause (b) does not appear in H.15(519),
the one-week or one-month, as specified, average yield for United
States Treasury securities at "constant maturity" having the Index
Maturity specified in the applicable pricing supplement as otherwise
announced by the Federal Reserve Bank of New York for the week or
month, as applicable, ended immediately preceding the week or month,
as applicable, in which the related Interest Determination Date
falls, or
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(d) if the Federal Reserve Bank of New York does not publish the rate
referred to in clause (c), the rate on the applicable Interest
Determination Date calculated by the calculation agent as a yield
to maturity based on the arithmetic mean of the secondary market
bid prices at approximately 3:30 P.M., New York City time, on the
applicable Interest Determination Date of three Reference Dealers
selected by the calculation agent from five Reference Dealers
selected by the calculation agent and eliminating the highest
quotation, or, in the event of equality, one of the highest, and
the lowest quotation or, in the event of equality, one of the
lowest, for United States Treasury securities with an original
maturity equal to the Index Maturity specified in the applicable
pricing supplement, a remaining term to maturity no more than 1
year shorter than the Index Maturity specified in the applicable
pricing supplement and in a principal amount that is representative
for a single transaction in the securities in the market at that
time, or
(e) if fewer than five but more than two of the prices referred to in
clause (d) are provided as requested, the rate on the applicable
Interest Determination Date calculated by the calculation agent
based on the arithmetic mean of the bid prices obtained and neither
the highest nor the lowest of the quotations shall be eliminated,
or
(f) if fewer than three prices referred to in clause (d) are provided
as requested, the rate on the applicable Interest Determination
Date calculated by the calculation agent as a yield to maturity
based on the arithmetic mean of the secondary market bid prices as
of approximately 3:30 P.M., New York City time, on the applicable
Interest Determination Date of three Reference Dealers selected by
the calculation agent from five Reference Dealers selected by the
calculation agent and eliminating the highest quotation or, in the
event of equality, one of the highest and the lowest quotation or,
in the event of equality, one of the lowest, for United States
Treasury securities with an original maturity greater than the
Index Maturity specified in the applicable pricing supplement, a
remaining term to maturity closest to the Index Maturity specified
in the applicable pricing supplement and in a principal amount that
is representative for a single transaction in the securities in the
market at the time, or
(g) if fewer than five but more than two prices referred to in clause
(f) are provided as requested, the rate on the applicable Interest
Determination Date calculated by the calculation agent based on the
arithmetic mean of the bid prices obtained and neither the highest
nor the lowest of the quotations will be eliminated, or
(h) if fewer than three prices referred to in clause (f) are provided
as requested, the CMT Rate in effect on the applicable Interest
Determination Date.
If two United States Treasury securities with an original maturity greater
than the Index Maturity specified in the applicable pricing supplement have
remaining terms to maturity equally close to the Index Maturity specified in
the applicable pricing supplement, the quotes for the United States Treasury
security with the shorter original remaining term to maturity will be used.
Commercial Paper Rate. Commercial Paper Rate Notes will bear interest at the
rates, calculated with reference to the Commercial Paper Rate and the Spread
and/or Spread Multiplier, if any, specified in the applicable Commercial Paper
Rate Notes and in any applicable pricing supplement.
"Commercial Paper Rate" means:
(1) the Money Market Yield on the applicable Interest Determination Date of
the rate for commercial paper having the Index Maturity specified in
the applicable pricing supplement published in H.15(519) under the
caption "Commercial Paper-Nonfinancial", or
(2) if the rate described in clause (1) is not so published by 3:00 P.M.,
New York City time, on the related calculation date, the Money Market
Yield of the rate on the applicable Interest Determination Date for
commercial paper having the Index Maturity specified in the applicable
pricing supplement published in H.15 Daily Update, or other recognized
electronic source used for the purpose of displaying the applicable
rate, under the caption "Commercial Paper-Nonfinancial", or
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(3) if the rate is referred to in clause (2) is not so published by 3:00
P.M., New York City time, on the related calculation date, the rate on
the applicable Interest Determination Date calculated by the
calculation agent as the Money Market Yield of the arithmetic mean of
the offered rates at approximately 11:00 A.M., New York City time, on
the applicable Interest Determination Date of three leading dealers of
United States dollar commercial paper in The City of New York, which
may include an agent and its affiliates, selected by the calculation
agent for commercial paper having the Index Maturity specified in the
applicable pricing supplement placed for industrial issuers whose bond
rating is "Aa", or the equivalent, from a nationally recognized
statistical rating organization, or
(4) if the dealers selected by the calculation agent are not quoting as
mentioned in clause (3), the Commercial Paper Rate in effect on the
applicable Interest Determination Date.
"Money Market Yield" means a yield calculated in accordance with the
following formula and expressed as a percentage:
D x 360
Money Market Yield = ------------- X 100
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper quoted
on a bank discount basis and expressed as a decimal, and "M" refers to the
actual number of days in the applicable interest reset period.
Eleventh District Cost of Funds Rate. Eleventh District Cost of Funds Rate
Notes will bear interest at the rates, calculated with reference to the
Eleventh District Cost of Funds Rate and the Spread and/or Spread Multiplier,
if any, specified in the applicable Eleventh District Cost of Funds Rate Notes
and in any applicable pricing supplement.
"Eleventh District Cost of Funds Rate" means:
(1) the rate equal to the monthly weighted average cost of funds for the
calendar month immediately preceding the month in which the applicable
Interest Determination Date falls as set forth under the caption "11th
District" on the display on Bridge Telerate, Inc. or any successor
service on page 7058 or any other page as may replace that specified
page on that service ("Telerate Page 7058") as of 11:00 A.M., San
Francisco time, on the applicable Interest Determination Date, or
(2) if the rate referred to in clause (1) does not appear on Telerate Page
7058 on the related Interest Determination Date, the monthly weighted
average cost of funds paid by member institutions of the Eleventh
Federal Home Loan Bank District that was most recently announced (the
"Index") by the Federal Home Loan Bank of San Francisco as the cost of
funds for the calendar month immediately preceding the applicable
Interest Determination Date, or
(3) if the Federal Home Loan Bank of San Francisco fails to announce the
Index on or before the applicable Interest Determination Date for the
calendar month immediately preceding the applicable Interest
Determination Date, the Eleventh District Cost of Funds Rate in effect
on the applicable Interest Determination Date.
Federal Funds Rate. Federal Funds Rate Notes will bear interest at the
rates, calculated with reference to the Federal Funds Rate and the Spread
and/or Spread Multiplier, if any, specified in the applicable Federal Funds
Rate Notes and in any applicable pricing supplement.
"Federal Funds Rate" means:
(1) the rate on the applicable Interest Determination Date for United
States dollar federal funds as published in H.15(519) under the heading
"Federal Funds (Effective)", as displayed on Bridge Telerate, Inc., or
any successor service, on page 120 or any other page as may replace
that specified page on that service ("Telerate Page 120"), or
(2) if the rate referred to in clause (1) does not appear on Telerate Page
120 or is not so published by 3:00 P.M., New York City time, on the
related calculation date, the rate on the applicable Interest
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Determination Date for United States dollar federal funds published in
H.15 Daily Update, or other recognized electronic source used for the
purpose of displaying the applicable rate, under the caption "Federal
Funds (Effective)", or
(3) if the rate referred to in clause (2) does not appear on Telerate Page
120 or is not so published by 3:00 P.M., New York City time, on the
related calculation date, the rate on the applicable Interest
Determination Date calculated by the calculation agent as the
arithmetic mean of the rates for the last transaction in overnight
United States dollar federal funds arranged by three leading brokers of
United States dollar federal funds transactions in The City of New
York, which may include an agent or its affiliates, selected by the
calculation agent before 9:00 A.M., New York City time, on the
applicable Interest Determination Date, or
(4) if the brokers selected by the calculation agent are not quoting as
mentioned in clause (3), the Federal Funds Rate in effect on the
applicable Interest Determination Date.
LIBOR. LIBOR Notes will bear interest at the rates, calculated with
reference to LIBOR and the Spread and/or Spread Multiplier, if any, specified
in the applicable LIBOR Notes and in any applicable pricing supplement.
"LIBOR" means:
(1) if "LIBOR Telerate" is specified in the applicable pricing supplement
or if neither "LIBOR Reuters" nor "LIBOR Telerate" is specified in the
applicable pricing supplement as the method for calculating LIBOR, the
rate for deposits in the Designated LIBOR Currency having the Index
Maturity specified in the applicable pricing supplement, commencing on
the applicable Interest Reset Date, that appears on the Designated
LIBOR Page as of 11:00 A.M., London time, on the applicable Interest
Determination Date, or
(2) if "LIBOR Reuters" is specified in the applicable pricing supplement,
the arithmetic mean of the offered rates for deposits in the Designated
LIBOR Currency having the Index Maturity specified in the applicable
pricing supplement, commencing on the applicable Interest Reset Date,
that appear on the Designated LIBOR Page specified in the applicable
pricing supplement as of 11:00 A.M., London time, on the applicable
Interest Determination Date; provided, that if the Designated LIBOR
Page by its terms provides only for a single rate, then the single rate
will be used, or
(3) if fewer than two offered rates appear, or no rate appears, as the case
may be, on the applicable Interest Determination Date on the Designated
LIBOR Page as specified in clauses (1) and (2), respectively, the rate
calculated by the calculation agent as the arithmetic mean of at least
two quotations obtained by the calculation agent after requesting the
principal London offices of each of four major reference banks, which
may include affiliates of the agents, in the London interbank market to
provide the calculation agent with its offered quotation for deposits
in the Designated LIBOR Currency for the period of the Index Maturity
specified in the applicable pricing supplement, commencing on the
applicable Interest Reset Date, to prime banks in the London interbank
market at approximately 11:00 A.M., London time, on the applicable
Interest Determination Date and in a principal amount that is
representative for a single transaction in the Designated LIBOR
Currency in that market at that time, or
(4) if fewer than two quotations referred to in clause (3) are so provided,
the rate on the applicable Interest Determination Date calculated by
the calculation agent as the arithmetic mean of the rates quoted at
approximately 11:00 A.M., in the applicable Principal Financial Center
on the applicable Interest Determination Date by three major banks,
which may include affiliates of the agents, in such Principal Financial
Center selected by the calculation agent for loans in the Designated
LIBOR Currency to leading European banks, having the Index Maturity
designated in the applicable pricing supplement and in a principal
amount that is representative for a single transaction in the
Designated LIBOR Currency in that market at that time, or
(5) if the banks so selected by the calculation agent are not quoting as
mentioned in clause (4), LIBOR in effect on the applicable Interest
Determination Date.
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"Designated LIBOR Currency" means the currency specified in the applicable
pricing supplement as to which LIBOR will be calculated or, if no such currency
is specified in the applicable pricing supplement, United States dollars.
"Designated LIBOR Page" means either:
. if "LIBOR Telerate" is designated in the applicable pricing supplement
or neither "LIBOR Reuters" nor "LIBOR Telerate" is specified in the
applicable pricing supplement as the method for calculating LIBOR, the
display on Bridge Telerate, Inc. or any successor service on the page
specified in such pricing supplement or any page as may replace the
specified page on that service for the purpose of displaying the London
interbank rates of major banks for the Designated LIBOR Currency, or
. if "LIBOR Reuters" is specified in the applicable pricing supplement,
the display on the Reuter Monitor Money Rates Service or any successor
service on the page specified in the applicable pricing supplement or
any other page as may replace the specified page on that service for the
purpose of displaying the London interbank rates of major banks for the
Designated LIBOR Currency.
EURIBOR. EURIBOR Notes will bear interest at the rates, calculated with
reference to the European Interbank Offered Rate for deposits in euros, or
"EURIBOR", and the Spread and/or Spread Multiplier, if any, specified in the
applicable EURIBOR Notes and in any applicable pricing supplement.
"EURIBOR" means:
(1) the rate for deposits in euros as sponsored, calculated and published
jointly by the European Banking Federation and ACI--The Financial
Market Association, or any company established by the joint sponsors
for purposes of compiling and publishing those rates, having the Index
Maturity specified in the applicable pricing supplement, commencing on
the applicable Interest Reset Date, as that rate appears on Bridge
Telerate, Inc., or any successor service, on page 248 or any other page
as may replace that specified page on that service ("Telerate Page
248") as of 11:00 A.M., Brussels time, on the applicable Interest
Determination Date, or
(2) if the rate referred to in clause (1) does not appear on Telerate Page
248, or is not so published by 11:00 A.M., Brussels time, on the
applicable Interest Determination Date, the rate calculated by the
calculation agent as the arithmetic mean of at least two quotations
obtained by the calculation agent after requesting the principal Euro-
zone (as defined below) offices of four major banks in the Euro-zone
interbank market, which may include affiliates of the agent, to provide
the calculation agent with its offered quotation for deposits in euros
for the period of the Index Maturity designated in the applicable
pricing supplement, commencing on the applicable Interest Reset Date,
to prime banks in the Euro-zone interbank market at approximately 11:00
A.M., Brussels time, on the applicable Interest Determination Date and
in a principal amount not less than the equivalent of U.S. $1 million
in euros that is representative for a single transaction in euro in
that market at that time, or
(3) if fewer than two quotations referred to in clause (2) are so provided,
the rate on the applicable Interest Determination Date calculated by
the calculation agent as the arithmetic mean of the rates quoted at
approximately 11:00 A.M., Brussels time, on such Interest Determination
Date by four major banks in the Euro-zone for loans in euro to leading
European banks, having the Index Maturity designated in the applicable
pricing supplement, commencing on the applicable Interest Reset Date
and in a principal amount not less than the equivalent of U.S. $1
million in euros that is representative for a single transaction in
euros in that market at that time, or
(4) if the banks so selected by the calculation agent are not quoting as
mentioned in clause (3), EURIBOR in effect on the applicable Interest
Determination Date.
"Euro-zone" means the region comprised of member states of the European
Union that adopt the single currency in accordance with the treaty establishing
the European Community, as amended by the treaty on European Union.
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Prime Rate. Prime Rate Notes will bear interest at the rates, calculated
with reference to the Prime Rate and the Spread and/or Spread Multiplier, if
any, specified in the applicable Prime Rate Notes and any applicable pricing
supplement.
"Prime Rate" means:
(1) the rate on the applicable Interest Determination Date as published in
H.15(519) under the heading "Bank Prime Loan", or
(2) if the rate referred to in clause (1) is not so published by 3:00 P.M.,
New York City time, on the related calculation date, the rate on the
applicable Interest Determination Date published in H.15 Daily Update,
or such other recognized electronic source used for the purpose of
displaying the applicable rate under the caption "Bank Prime Loan", or
(3) if the rate referred to in clause (2) is not so published by 3:00 P.M.,
New York City time, on the related calculation date, the rate
calculated by the calculation agent as the arithmetic mean of the rates
of interest publicly announced by at least four banks that appear on
the Reuters Screen US PRIME 1 Page as the particular bank's prime rate
or base lending rate as of 11:00 A.M., New York City time, on the
applicable Interest Determination Date, or
(4) if fewer than four rates described in clause (3) so appear on the
Reuters Screen US PRIME 1 Page, the rate on the applicable Interest
Determination Date calculated by the calculation agent as the
arithmetic mean of the prime rates or base lending rates quoted on the
basis of the actual number of days in the year divided by a 360-day
year as of the close of business on the applicable Interest
Determination Date by three major banks, which may include affiliates
of the agents, in The City of New York selected by the calculation
agent, or
(5) if the banks selected by the calculation agent are not quoting as
mentioned in clause (4), the Prime Rate in effect on the applicable
Interest Determination Date.
"Reuters Screen US PRIME 1 Page" means the display on the Reuter Monitor
Money Rates Service or any successor service on the "US PRIME 1" page or other
page as may replace the US PRIME 1 Page on such service, for the purpose of
displaying prime rates or base lending rates of major United States banks.
Treasury Rate. Treasury Rate Notes will bear interest at the rates,
calculated with reference to the Treasury Rate and the Spread and/or Spread
Multiplier, if any, specified in the applicable Treasury Rate Notes and in any
applicable pricing supplement.
"Treasury Rate" means:
(1) the rate from the auction held on the applicable Interest Determination
Date (the "Auction") of direct obligations of the United States
("Treasury Bills") having the Index Maturity specified in the
applicable pricing supplement under the caption "INVESTMENT RATE" on
the display on Bridge Telerate, Inc., or any successor service, on page
56 or any other page as may replace that specified page on that service
("Telerate Page 56") or page 57 or any other page as may replace that
specified page on that service ("Telerate Page 57"), or
(2) if the rate described in clause (1) is not so published by 3:00 P.M.,
New York City time, on the related calculation date, the Bond
Equivalent Yield of the rate for the applicable Treasury Bills as
published in H.15 Daily Update, or other recognized electronic source
used for the purpose of displaying the applicable rate, under the
caption "U.S. Government Securities/Treasury Bills/Auction High", or
(3) if the rate described in clause (2) is not so published by 3:00 P.M.,
New York City time, on the related calculation date, the Bond
Equivalent Yield of the auction rate of the applicable Treasury Bills
as announced by the United States Department of the Treasury, or
(4) in the event that the rate referred to in clause (3) is not announced
by the United States Department of the Treasury, or if the Auction is
not held, the Bond Equivalent Yield of the rate on the applicable
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Interest Determination Date of Treasury Bills having the Index Maturity
specified in the applicable pricing supplement published in H.15(519)
under the caption "U.S. Government Securities/Treasury Bills/Secondary
Market", or
(5) if the rate referred to in clause (4) is not so published by 3:00 P.M.,
New York City time, on the related calculation date, the rate on the
applicable Interest Determination Date of the applicable Treasury Bills
as published in H.15 Daily Update, or other recognized electronic
source used for the purpose of displaying the applicable rate, under
the caption "U.S. Government Securities/Treasury Bills/Secondary
Market", or
(6) if the rate referred to in clause (5) is not so published by 3:00 P.M.,
New York City time, on the related calculation date, the rate
calculated by the calculation agent as the Bond Equivalent Yield of the
arithmetic mean of the secondary market bid rates, as of approximately
3:30 P.M., New York City time, on the applicable Interest Determination
Date, of three primary United States government securities dealers,
which may include an agent or its affiliates, selected by the
calculation agent, for the issue of Treasury Bills with a remaining
maturity closest to the Index Maturity specified in the applicable
pricing supplement, or
(7) if the dealers selected by the calculation agent are not quoting as
mentioned in clause (6), the Treasury Rate in effect on the applicable
Interest Determination Date.
"Bond Equivalent Yield" means a yield calculated in accordance with the
following formula and expressed as a percentage:
_________
D x N
Bond Equivalent Yield = ------------- X 100
360 - (D x M)
where "D" refers to the applicable per annum rate for Treasury Bills quoted on
a bank discount basis, "N" refers to 365 or 366, as the case may be, and "M"
refers to the actual number of days in the applicable interest reset period.
Other Provisions; Addenda
Any provisions with respect to an issue of notes, including the
determination of one or more Interest Rate Bases, the specification of one or
more Interest Rate Bases, the calculation of the interest rate applicable to a
floating rate note, the applicable interest payment dates, the stated maturity
date, any redemption or repayment provisions or any other matters relating to
the applicable notes may be modified or supplemented by the terms as specified
under "Other/Additional Provisions" on the face of the applicable notes or in
an Addendum relating to the applicable notes, if so specified on the face of
the applicable notes and in the applicable pricing supplement.
Original Issue Discount Notes
We may from time to time offer notes at a price less than their redemption
price at maturity, resulting in the applicable notes being treated as if they
were issued with original issue discount for Federal income tax purposes
("Discount Notes"). Discount Notes may pay no interest currently or may bear
interest at a rate which at the time of issuance is below market rates.
Additional considerations relating to any Discount Notes will be described in
the applicable pricing supplement. For further information regarding the
Federal income tax implications for U.S. Holders of Discount Notes, see
"United States Federal Income Taxation--U.S. Holders--Original Issue
Discount".
Amortizing Notes
We may from time to time offer notes ("Amortizing Notes"), with amounts of
principal and interest payable in installments over the term of the notes.
Unless otherwise specified in the applicable pricing supplement, interest on
each Amortizing Note will be computed on the basis of a 360-day year of twelve
30-day months. Payments with respect to Amortizing Notes will be applied first
to interest due and payable on the
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Amortizing Notes and then to the reduction of the unpaid principal amount of
the Amortizing Notes. Further information concerning additional terms and
conditions of any issue of Amortizing Notes will be provided in the applicable
pricing supplement. A table setting forth repayment information in respect of
each Amortizing Note will be included in the applicable note and the applicable
pricing supplement.
Linked Notes
We may from time to time offer notes ("Linked Notes") the principal value of
which at maturity will be determined by reference to:
(a) one or more equity or debt securities, including, but not limited to,
the price or yield of such securities,
(b) any statistical measure of economic or financial performance,
including, but not limited to, any currency, consumer price or mortgage
index, or
(c) the price or value of any commodity or any other item or index or any
combination thereof,
(collectively, the "Linked Securities"). The payment or delivery of any
consideration on any Linked Note at maturity will be determined by the decrease
or increase, as applicable, in the price or value of the applicable Linked
Securities. The terms of and any additional considerations, including any
material tax consequences, relating to any Linked Notes will be described in
the applicable pricing supplement.
Book-Entry Notes
Description of the Global Securities
Upon issuance, all notes in book-entry form having the same date of issue,
interest rate or formula, maturity and redemption and/or repayment provisions,
if any, and otherwise having identical terms and provisions will be represented
by one or more fully registered global notes (the "Global Notes"). Each Global
Note will be deposited with, or on behalf of, The Depository Trust Company as
depository registered in the name of the depository or a nominee of the
depository. Unless and until it is exchanged in whole or in part for notes in
certificated form, no Global Note may be transferred except as a whole by (1)
the depository to a nominee of the depository, (2) by a nominee of the
depository to the depository or to another nominee of the depository or (3) by
the depository or any of its nominees to a successor of the depository or a
nominee of the successor.
DTC Procedures
The following is based on information furnished by the depository:
DTC will act as securities depository for the notes in book-entry form. The
notes in book-entry form will be issued as fully registered securities
registered in the name of Cede & Co., DTC's partnership nominee. One fully
registered Global Note will be issued for each issue of notes in book-entry
form, each in the aggregate principal amount of the issue, and will be
deposited with the depository. If, however, the aggregate principal amount of
any issue exceeds $400,000,000, one Global Note will be issued with respect to
each $400,000,000 of principal amount and an additional Global Note will be
issued with respect to any remaining principal amount of the issue.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participating members, referred to as participants,
deposit with DTC. DTC also facilitates the settlement among participants of
securities transactions, such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes in participants' accounts,
thereby eliminating the need for physical
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movement of securities certificates. Direct participants of DTC include
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations. DTC is owned by a number of its direct
participants and by the New York Stock Exchange, Inc., the American Stock
Exchange LLC, and the National Association of Securities Dealers, Inc. Access
to DTC's system is also available to others such as securities brokers and
dealers, banks and trust companies, referred to as indirect participants, that
clear through or maintain a custodial relationship with a direct participant,
either directly or indirectly. The rules applicable to DTC and its participants
are on file with the SEC.
Purchasers of notes in book-entry form under DTC's system must be made by or
through direct participants, which will receive a credit for those notes in
book-entry form on the DTC's records. The ownership interest of each actual
purchaser of each note in book-entry form represented by a Global Note is, in
turn, to be recorded on the records of direct participants and indirect
participants. Beneficial owners in book-entry form will not receive written
confirmation from DTC of their purchase, but beneficial owners are expected to
receive written confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the direct participants or indirect
participants through which the beneficial owner entered into the transaction.
Transfers of ownership interests in a Global Note representing notes in book-
entry form are to be accomplished by entries made on the books of participants
acting on behalf of beneficial owners. Beneficial owners of a Global Note
representing notes in book-entry form will not receive notes in certificated
form representing their ownership interests therein, except in the event that
use of the book-entry system for such notes is discontinued.
To facilitate subsequent transfers, all Global Notes representing notes in
book-entry form which are deposited with, or on behalf of, DTC are registered
in the name of DTC's nominee, Cede & Co. The deposit of Global Notes with, or
on behalf of, the depository and their registration in the name of Cede & Co.
effect no change in beneficial ownership. DTC has no knowledge of the actual
beneficial owners of the Global Notes representing the notes in book-entry
form; DTC's records reflect only the identity of the direct participants to
whose accounts such notes in book-entry form are credited, which may or may not
be the beneficial owners. The participants will remain responsible for keeping
account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants, and by direct
participants and indirect participants to beneficial owners, will be governed
by arrangements among them, subject to any statutory or regulatory requirements
as may be in effect from time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to the Global
Notes representing the notes in book-entry form. Under its usual procedures,
DTC mails an omnibus proxy to Colgate as soon as possible after the applicable
record date. The omnibus proxy assigns Cede & Co.'s consenting or voting rights
to those direct participants, identified in a listing attached to the omnibus
proxy, to whose accounts the notes in book- entry form are credited on the
applicable record date.
We will make principal, premium, if any, and/or interest, if any, payments
on the Global Notes representing the notes in book-entry form in immediately
available funds to DTC. DTC's practice is to credit direct participants'
accounts on the applicable payment date in accordance with their respective
holdings shown on its records unless the depository has reason to believe that
it will not receive payment on the applicable payment date. Payments by
participants to beneficial owners will be governed by standing instructions and
customary practices, as is the case with securities held for the accounts of
customers in bearer form or registered in "street name", and will be the
responsibility of the applicable participant and not of DTC, the trustee or
Colgate, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of principal, premium, if any, and/or
interest, if any, to DTC is the responsibility of Colgate and the trustee,
disbursement of payments to direct participants will be the responsibility of
DTC, and disbursement of payments to the beneficial owners will be the
responsibility of direct participants and indirect participants.
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If applicable, redemption notices shall be sent to Cede & Co. If less than
all of the notes in book-entry form of like tenor and terms are being redeemed,
DTC's practice is to determine by lot the amount of the interest of each direct
participant in the issue to be redeemed.
A beneficial owner will give notice of any option to elect to have its notes
in book-entry form repaid by Colgate, through its participant, to the trustee,
and will effect delivery of the applicable notes in book-entry form by causing
the direct participant to transfer the participant's interest in the Global
Note representing notes in book-entry form, on DTC's records, to the trustee.
DTC may discontinue providing its services as securities depository with
respect to the notes in book-entry form at any time by giving reasonable notice
to Colgate or the trustee. In the event that a successor securities depository
is not obtained, notes in certificated form are required to be printed and
delivered.
We may decide to discontinue use of the system of book-entry transfers
through DTC or a successor securities depository. In that event, notes in
certificated form will be printed and delivered.
The laws of some states may require that certain purchasers of securities
take physical delivery of securities in definitive form. Such limits and such
laws may impair the ability to own, transfer or pledge beneficial interests in
Global Notes.
So long as DTC, or its nominee, is the registered owner of a Global Note,
DTC or its nominee, as the case may be, will be considered the sole owner or
holder of the notes represented by that Global Note for all purposes under the
indenture. Except as provided below, beneficial owners of a Global Note will
not be entitled to have the notes represented by a Global Note registered in
their names, will not receive or be entitled to receive physical delivery of
the notes in definitive form and will not be considered the owners or holders
thereof under the indenture. Accordingly, each person owning a beneficial
interest in a Global Note must rely on the procedures of DTC or any successor
depository and, if that person is not a participant, on the procedures of the
participant through which that person owns its interest, to exercise any rights
of a holder under the indenture. We understand that under existing industry
practices, if we request any action of holders or if an owner of a beneficial
interest in a Global Note desires to give or take any action which a holder is
entitled to give or take under the indenture, DTC would authorize the
participants holding the relevant beneficial interests to give or take the
desired action, and the participants would authorize beneficial owners owning
through the participants to give or take the desired action or would otherwise
act upon the instructions of beneficial owners.
Exchange for Notes in Certificated Form
If:
(a) DTC is at any time unwilling or unable to continue as depository and we
do not appoint a successor depository within 60 days,
(b) We execute and deliver to the trustee a company order to the effect
that the Global Notes shall be exchangeable, or
(c) a default or an event of default has occurred and is continuing with
respect to the notes,
the Global Note or Global Notes will be exchangeable for notes in certificated
form of like tenor and terms and of an equal aggregate principal amount. The
certificated notes will be registered in the name or names as DTC instructs the
trustee. It is expected that instructions may be based upon directions received
by DTC from participants with respect to ownership of beneficial interests in
Global Notes.
The information in this section concerning DTC and DTC's system has been
obtained from sources that we believe to be reliable, but we take no
responsibility for the accuracy of the information.
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SPECIAL PROVISIONS RELATING TO FOREIGN CURRENCY NOTES
General
Unless we indicate otherwise in the applicable pricing supplement, we will
denominate the notes in U.S. dollars, we will make payments of principal,
premium, if any and interest on the notes in U.S. dollars and you must pay the
purchase price of the notes in U.S. dollars in immediately available funds. If
any of the notes ("foreign currency notes") are to be denominated or payable in
a currency or basket of currencies other than U.S. dollars (a "specified
currency"), the following provisions will apply in addition to, and to the
extent inconsistent therewith will replace, the description of general terms
and provisions of notes set forth in the accompanying prospectus and elsewhere
in this prospectus supplement.
A pricing supplement with respect to any foreign currency note, (which may
include information with respect to applicable current foreign exchange
controls), is a part of this prospectus supplement and the accompanying
prospectus. Any information we provide you concerning exchange rates is
provided as a matter of information only and you should not regard it as
indicative of the range of or trends in fluctuations in currency exchange rates
that may occur in the future.
Currencies
We may offer foreign currency notes denominated and/or payable in a
specified currency or specified currencies. Unless we indicate otherwise in the
applicable pricing supplement, you are required to pay for foreign currency
notes in the specified currency. At the present time, there are limited
facilities in the United States for conversion of U.S. dollars into specified
currencies and vice versa, and banks may elect not to offer non-U.S. dollar
checking or savings account facilities in the United States. However, at your
request on or prior to the third Business Day preceding the date of delivery of
the foreign currency notes, or by such other day as determined by the agent who
presents the offer to purchase foreign currency notes to us, that agent may be
prepared to arrange for the conversion of U.S. dollars into the applicable
specified currency set forth in the applicable pricing supplement to enable the
purchasers to pay for the foreign currency notes. Each such conversion will be
made by the agent or agents on the terms and subject to the conditions,
limitations and charges as the agent may from time to time establish in
accordance with their regular foreign exchange practices. If you purchase
foreign currency notes you will pay all costs of exchange.
The applicable pricing supplement will set forth information about the
specified currency in which a particular foreign currency note is denominated
and/or payable, including historical exchange rates and a description of the
currency and any exchange controls, and, in the case of a basket of currencies,
will include a description of that basket and a description of provisions for
payment in the event that currency basket is no longer used for the purposes
for which it was established.
Payment of Principal, Premium and Interest
We will pay the principal of, premium, if any and/or interest on foreign
currency notes in the specified currency. Currently, banks do not generally
offer non-U.S. dollar denominated account facilities in their offices in the
United States, although they are permitted to do so. Accordingly, if you are a
holder of foreign currency notes you will be paid in U.S. dollars converted
from the specified currency unless you elect to be paid in the specified
currency or unless the applicable pricing supplement provides otherwise.
We will base U.S. dollar amounts that we owe to holders of foreign currency
notes on the highest bid quotation received by the exchange rate agent
specified in the applicable pricing supplement in The City of New York at
approximately 11:00 A.M., New York City time, on the second Business Day
preceding the applicable payment date. The exchange rate agent will obtain that
highest quote by asking three recognized foreign exchange dealers approved by
us (one of whom may be the exchange rate agent) for their bid quotations for
the purchase of the specified currency in exchange for U.S. dollars for
settlement on the relevant payment date, in the aggregate amount of the
specified currency payable to all holders of foreign currency
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notes scheduled to receive U.S. dollar payments, and at which the applicable
dealer commits to execute a contract. If three such bid quotations are not
available, we will make payments in the specified currency. All currency
exchange costs will be borne by the holders of foreign currency notes by
deductions from such payments.
Unless we indicate otherwise in the applicable pricing supplement, as a
holder of foreign currency notes you may elect to receive payment of the
principal of, premium, if any and/or interest on the foreign currency notes in
the specified currency by transmitting a written request for such payment to
the corporate trust office of the trustee in The City of New York on or prior
to the regular record date or at least fifteen calendar days prior to the
Maturity Date, as the case may be. You may make this request in writing (mailed
or hand delivered) or sent by facsimile transmission. As a holder of a foreign
currency note you may elect to receive payment in the specified currency for
all payments of principal, premium, if any and/or interest and need not file a
separate election for each payment. Your election will remain in effect until
revoked by written notice to the trustee, but written notice of any such
revocation must be received by the trustee on or prior to the regular record
date or at least fifteen calendar days prior to the Maturity Date, as the case
may be. If your foreign currency notes are held in the name of a broker or
nominee, you should contact your broker or nominee to determine whether and how
you may elect to receive payments in the specified currency.
If a note is represented by a Global Note, DTC or its nominee will be the
holder of the note and will be entitled to all payments on the note. Although
DTC can hold notes denominated in foreign currencies, all payments to DTC will
be made in U.S. dollars. Accordingly, a beneficial owner of the related Global
Note who elects to receive payments of principal, premium, if any, and/or
interest in the specified currency must notify the participant through which it
owns its interest on or prior to the applicable regular record date, in the
case of a payment of interest, or at least fifteen calendar days prior to the
Maturity Date, in the case of a payment of principal and/or premium, of that
beneficial owner's election. The participant must notify DTC of that election
on or prior to the third Business Day after the regular record date or at least
twelve calendar days prior to the Maturity Date, as the case may be. DTC will
notify the trustee of the election on or prior to the fifth Business Day after
the regular record date or at least ten calendar days prior to the Maturity
Date, as the case may be. If the participant receives complete instructions
from the beneficial owner and those instructions are forwarded by the
participant to DTC, and by DTC to the trustee, on or prior to such dates, then
the beneficial owner will receive payments in the specified currency. For more
information about Global Notes, see "Description of the Notes-Book-Entry
Notes."
We will pay principal, any premium and/or interest on foreign currency notes
to be paid in U.S. dollars in the manner specified in the accompanying
prospectus and this prospectus supplement with respect to notes denominated in
U.S. dollars. See "Description of the Notes--Payment of Principal, Premium and
Interest". We will pay interest on foreign currency notes in the specified
currency by check mailed on the relevant interest payment date to the persons
entitled thereto as their addresses shall appear in the security register or,
at our option by wire transfer to a bank account maintained by the holder in
the country of the specified currency. The principal of foreign currency notes,
together with any premium and any interest accrued and unpaid thereon, due at
maturity will be paid in immediately available funds upon surrender of the
notes at the corporate trust office of the trustee in The City of New York or,
at our option, by wire transfer to that bank account.
Payment Currency
If a specified currency is not available for the payment of principal,
premium or interest with respect to a foreign currency note due to the
imposition of exchange controls or other circumstances beyond our control, we
will be entitled to satisfy our obligations to holders of foreign currency
notes by making that payment in U.S. dollars on the basis of the noon buying
rate in The City of New York for cable transfers of the specified currency as
certified for customs purposes (or, if not so certified, as otherwise
determined) by the Federal Reserve Bank of New York (the "Market Exchange
Rate") as computed by the exchange rate agent on the basis of the most recently
available Market Exchange Rate on or before the date that payment is due, or as
otherwise indicated in an applicable pricing supplement. Any payment made under
such circumstances in U.S.
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dollars where the required payment is in a specified currency will not
constitute a default under the indenture with respect to the notes.
All determinations referred to above made by the exchange rate agent will be
at its sole discretion and will, in the absence of clear error, be conclusive
for all purposes and binding on the holders of the foreign currency notes.
As indicated above, if you invest in foreign currency notes or currency
indexed notes your investment will be subject to substantial risks, the extent
and nature of which change continuously. As with any investment that you make
in a security, you should consult your own financial and legal advisors as to
the risks entailed in an investment in foreign currency notes or currency
indexed notes. Such notes are not an appropriate investment for you if you are
unsophisticated with respect to foreign currency matters.
UNITED STATES FEDERAL INCOME TAXATION
The following summary of certain United States Federal income tax
consequences of the purchase, ownership and disposition of the notes is based
upon laws, regulations, rulings and decisions now in effect, all of which are
subject to change, including changes in effective dates, or possible differing
interpretations. It deals only with notes held as capital assets and does not
purport to deal with persons in special tax situations, such as financial
institutions, insurance companies, regulated investment companies, 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 United States dollar. It also does not deal with
holders other than original purchasers, except where otherwise specifically
noted. Persons considering the purchase of the notes should consult their own
tax advisors concerning the application of United States Federal income tax
laws to their particular situations as well as any consequences of the
purchase, ownership and disposition of the notes arising under the laws of any
other taxing jurisdiction.
As used in this prospectus, the term "U.S. Holder" means a beneficial owner
of a note that is for United States Federal income tax purposes:
(1) a citizen or resident of the United States,
(2) a corporation or a partnership (including an entity treated as a
corporation or a partnership for United States Federal income tax
purposes) created or organized in or under the laws of the United
States, any state thereof or the District of Columbia (unless, in the
case of a partnership, Treasury regulations are adopted that provide
otherwise),
(3) an estate whose income is subject to United States Federal income tax
regardless of its source,
(4) a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United
States persons have the authority to control all substantial decisions
of the trust, or
(5) any other person whose income or gain in respect of a note is
effectively connected with the conduct of a United States trade or
business.
Certain trusts not described in clause (4) above in existence on August 20,
1996 that elect to be treated as a United States person will also be a U.S.
Holder for purposes of the following discussion. As used herein, the term "non-
U.S. Holder" means a beneficial owner of a note that is not a U.S. Holder.
U.S. Holders
Payments of Interest. Payments of interest on a note generally will be
taxable to a U.S. Holder as ordinary interest income at the time such payments
are accrued or are received (in accordance with the U.S. Holder's regular
method of tax accounting).
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Original Issue Discount. The following summary is a general discussion of
the United States Federal income tax consequences to U.S. Holders of the
purchase, ownership and disposition of notes issued with original issue
discount, i.e., Discount Notes. The following summary is based upon final
Treasury regulations (the "OID Regulations") released by the Internal Revenue
Service on January 27, 1994, as amended on June 11, 1996, under the original
issue discount provisions of the Code.
For United States Federal income tax purposes, original issue discount is
the excess of the stated redemption price at maturity of a note over its issue
price, if such excess equals or exceeds a de minimis amount (generally 1/4 of
1% of the note's stated redemption price at maturity multiplied by the number
of complete years to its maturity from its issue date or, in the case of a note
providing for the payment of any amount other than qualified stated interest
(as defined below) prior to maturity, multiplied by the weighted average
maturity of the note). The issue price of each note of an issue of notes equals
the first price at which a substantial amount of the notes has been sold
(ignoring sales to bond houses, brokers, or similar persons or organizations
acting in the capacity of underwriters, placement agents, or wholesalers). The
stated redemption price at maturity of a note is the sum of all payments
provided by the note other than "qualified stated interest" payments. The term
"qualified stated interest" generally means stated interest that is
unconditionally payable in cash or property (other than debt instruments of the
issuer) at least annually at a single fixed rate. In addition, under the OID
Regulations, if a note bears interest for one or more accrual periods at a rate
below the rate applicable for the remaining term of the note (e.g., notes with
teaser rates or interest holidays), and if the greater of either the resulting
foregone interest on the note or any "true" discount on the note (i.e., the
excess of the note's stated principal amount over its issue price) equals or
exceeds a specified de minimis amount, then the stated interest on the note
would be treated as original issue discount rather than qualified stated
interest.
Payments of qualified stated interest on a note are taxable to a U.S. Holder
as ordinary interest income at the time such payments are accrued or are
received (in accordance with the U.S. Holder's regular method of tax
accounting). A U.S. Holder of a Discount Note must include original issue
discount in income as ordinary interest for United States Federal income tax
purposes as it accrues under a constant yield method in advance of receipt of
the cash payments attributable to such income, regardless of the U.S. Holder's
regular method of tax accounting. In general, the amount of original issue
discount included in income by the initial U.S. Holder of a Discount Note is
the sum of the daily portions of original issue discount with respect to the
Discount Note for each day during the taxable year (or portion of the taxable
year) on which the U.S. Holder held the Discount Note. The "daily portion" of
original issue discount on any Discount Note is determined by allocating to
each day in any accrual period a ratable portion of the original issue discount
allocable to that accrual period. An "accrual period" may be of any length and
the accrual periods may vary in length over the term of the Discount Note,
provided that each accrual period is no longer than one year and each scheduled
payment of principal or interest occurs either on the final day of an accrual
period or on the first day of an accrual period. The amount of original issue
discount allocable to each accrual period is generally equal to the difference
between:
. the product of the Discount Note's adjusted issue price at the beginning
of such accrual period and its yield to maturity (determined on the
basis of compounding at the close of each accrual period and
appropriately adjusted to take into account the length of the particular
accrual period) and
. the amount of any qualified stated interest payments allocable to such
accrual period.
The "adjusted issue price" of a Discount Note at the beginning of any accrual
period is the sum of the issue price of the Discount Note plus the amount of
original issue discount allocable to all prior accrual periods minus the amount
of any prior payments on the Discount Note that were not qualified stated
interest payments. Under these rules, U.S. Holders generally will have to
include in income increasingly greater amounts of original issue discount in
successive accrual periods.
A U.S. Holder who purchases a Discount Note for an amount that is greater
than its adjusted issue price as of the purchase date and less than or equal to
the sum of all amounts payable on the Discount Note after the purchase date
other than payments of qualified stated interest, will be considered to have
purchased the
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Discount Note at an "acquisition premium". Under the acquisition premium rules,
the amount of original issue discount which such U.S. Holder must include in
its gross income with respect to such Discount Note for any taxable year (or
portion thereof in which the U.S. Holder holds the Discount Note) will be
reduced (but not below zero) by the portion of the acquisition premium properly
allocable to the period.
Under the OID Regulations, floating rate notes and indexed notes (referred
to herein as "Variable Notes") are subject to special rules whereby a Variable
Note will qualify as a "variable rate debt instrument" if
. its issue price does not exceed the total noncontingent principal
payments due under the Variable Note by more than a specified de minimis
amount and
. it provides for stated interest, paid or compounded at least annually,
at current values of:
. one or more qualified floating rates,
. a single fixed rate and one or more qualified floating rates,
. a single objective rate, or
. a single fixed rate and a single objective rate that is a qualified
inverse floating rate.
A "qualified floating rate" is any variable rate where variations in the
value of such rate can reasonably be expected to measure contemporaneous
variations in the cost of newly borrowed funds in the currency in which the
Variable Note is denominated. Although a multiple of a qualified floating rate
will generally not itself constitute a qualified floating rate, a variable rate
equal to the product of a qualified floating rate and a fixed multiple that is
greater than .65 but not more than 1.35 will constitute a qualified floating
rate. A variable rate equal to the product of a qualified floating rate and a
fixed multiple that is greater than .65 but not more than 1.35, increased or
decreased by a fixed rate, will also constitute a qualified floating rate. In
addition, under the OID Regulations, two or more qualified floating rates that
can reasonably be expected to have approximately the same values throughout the
term of the Variable Note (e.g., two or more qualified floating rates with
values within 25 basis points of each other as determined on the Variable
Note's issue date) will be treated as a single qualified floating rate.
Notwithstanding the foregoing, a variable rate that would otherwise constitute
a qualified floating rate but which is subject to one or more restrictions such
as a maximum numerical limitation (i.e., a cap) or a minimum numerical
limitation (i.e., a floor) may, under certain circumstances, fail to be treated
as a qualified floating rate under the OID Regulations unless such cap or floor
is fixed throughout the term of the note. An "objective rate" is a rate that is
not itself a qualified floating rate but which is determined using a single
fixed formula that is based on objective financial or economic information. A
rate will not qualify as an objective rate if it is based on information that
is within the control of the issuer (or a related party) or that is unique to
the circumstances of the issuer (or a related party), such as dividends,
profits, or the value of the issuer's stock (although a rate does not fail to
be an objective rate merely because it is based on the credit quality of the
issuer). A "qualified inverse floating rate" is any objective rate where such
rate is equal to a fixed rate minus a qualified floating rate, as long as
variations in the rate can reasonably be expected to inversely reflect
contemporaneous variations in the qualified floating rate. The OID Regulations
also provide that if a Variable Note provides for stated interest at a fixed
rate for an initial period of one year or less followed by a variable rate that
is either a qualified floating rate or an objective rate and if the variable
rate on the Variable Note's issue date is intended to approximate the fixed
rate (e.g., the value of the variable rate on the issue date does not differ
from the value of the fixed rate by more than 25 basis points), then the fixed
rate and the variable rate together will constitute either a single qualified
floating rate or objective rate, as the case may be.
If a Variable Note that provides for stated interest at either a single
qualified floating rate or a single objective rate throughout the term thereof
qualifies as a "variable rate debt instrument" under the OID Regulations, and
if the interest on a Variable Note is unconditionally payable in cash or
property (other than debt instruments of the issuer) at least annually, then
all stated interest on the Variable Note will constitute qualified stated
interest and will be taxed accordingly. Thus, a Variable Note that provides for
stated interest at either a single qualified floating rate or a single
objective rate throughout the term thereof and that qualifies as a
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"variable rate debt instrument" under the OID Regulations will generally not be
treated as having been issued with original issue discount unless the Variable
Note is issued at a "true" discount (i.e., at a price below the Variable Note's
stated principal amount) in excess of a specified de minimis amount. The amount
of qualified stated interest and the amount of original issue discount, if any,
that accrues during an accrual period on such a Variable Note is determined
under the rules applicable to fixed rate debt instruments by assuming that the
variable rate is a fixed rate equal to:
(1) in the case of a qualified floating rate or qualified inverse floating
rate, the value as of the issue date, of the qualified floating rate or
qualified inverse floating rate, or
(2) in the case of an objective rate (other than a qualified inverse
floating rate), a fixed rate that reflects the yield that is reasonably
expected for the Variable Note.
The qualified stated interest allocable to an accrual period is increased (or
decreased) if the interest actually paid during an accrual period exceeds (or
is less than) the interest assumed to be paid during the accrual period
pursuant to the foregoing rules.
In general, any other Variable Note that qualifies as a "variable rate debt
instrument" will be converted into an "equivalent" fixed rate debt instrument
for purposes of determining the amount and accrual of original issue discount
and qualified stated interest on the Variable Note. The OID Regulations
generally require that such a Variable Note be converted into an "equivalent"
fixed rate debt instrument by substituting any qualified floating rate or
qualified inverse floating rate provided for under the terms of the Variable
Note with a fixed rate equal to the value of the qualified floating rate or
qualified inverse floating rate, as the case may be, as of the Variable Note's
issue date. Any objective rate (other than a qualified inverse floating rate)
provided for under the terms of the Variable Note is converted into a fixed
rate that reflects the yield that is reasonably expected for the Variable Note.
In the case of a Variable Note that qualifies as a "variable rate debt
instrument" and provides for stated interest at a fixed rate in addition to
either one or more qualified floating rates or a qualified inverse floating
rate, the fixed rate is initially converted into a qualified floating rate (or
a qualified inverse floating rate, if the Variable Note provides for a
qualified inverse floating rate). Under such circumstances, the qualified
floating rate or qualified inverse floating rate that replaces the fixed rate
must be such that the fair market value of the Variable Note as of the Variable
Note's issue date is approximately the same as the fair market value of an
otherwise identical debt instrument that provides for either the qualified
floating rate or qualified inverse floating rate rather than the fixed rate.
Subsequent to converting the fixed rate into either a qualified floating rate
or a qualified inverse floating rate, the Variable Note is then converted into
an "equivalent" fixed rate debt instrument in the manner described above.
Once the Variable Note is converted into an "equivalent" fixed rate debt
instrument pursuant to the foregoing rules, the amount of original issue
discount and qualified stated interest, if any, are determined for the
"equivalent" fixed rate debt instrument by applying the general original issue
discount rules to the "equivalent" fixed rate debt instrument and a U.S. Holder
of the Variable Note will account for such original issue discount and
qualified stated interest as if the U.S. Holder held the "equivalent" fixed
rate debt instrument. Each accrual period appropriate adjustments will be made
to the amount of qualified stated interest or original issue discount assumed
to have been accrued or paid with respect to the "equivalent" fixed rate debt
instrument in the event that such amounts differ from the actual amount of
interest accrued or paid on the Variable Note during the accrual period.
If a Variable Note does not qualify as a "variable rate debt instrument"
under the OID Regulations, then the Variable Note would be treated as a
contingent payment debt obligation. On June 11, 1996, the Treasury Department
issued final regulations (the "CPDI Regulations") concerning the proper United
States Federal income tax treatment of contingent payment debt instruments. In
general, the CPDI Regulations would cause the timing and character of income,
gain or loss reported on a contingent payment debt instrument to substantially
differ from the timing and character of income, gain or loss reported on a
contingent payment debt instrument under general principles of current United
States Federal income tax law. Specifically, the CPDI Regulations generally
require a U.S. Holder of such an instrument to include future contingent and
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noncontingent interest payments in income as such interest accrues based upon a
projected payment schedule. Moreover, in general, under the CPDI Regulations,
any gain recognized by a U.S. Holder on the sale, exchange, or retirement of a
contingent payment debt instrument will be treated as ordinary income and all
or a portion of any loss realized could be treated as ordinary loss as opposed
to capital loss (depending upon the circumstances). The CPDI Regulations apply
to debt instruments issued on or after August 13, 1996. The proper United
States Federal income tax treatment of Variable Notes that are treated as
contingent payment debt obligations will be more fully described in the
applicable pricing supplement. Furthermore, any other special United States
Federal income tax considerations, not otherwise discussed herein, which are
applicable to any particular issue of notes will be discussed in the applicable
pricing supplement.
Colgate may issue notes which;
. may be redeemable at the option of Colgate prior to their stated
maturity (a "call option") and/or
. may be repayable at the option of the holder prior to their stated
maturity (a "put option").
Notes containing such features may be subject to rules that differ from the
general rules discussed above. Investors intending to purchase notes with such
features should consult their own tax advisors, since the original issue
discount consequences will depend, in part, on the particular terms and
features of the purchased notes.
U.S. Holders may generally, upon election, include in income all interest
(including stated interest, acquisition discount, original issue discount, de
minimis original issue discount, market discount, de minimis market discount,
and unstated interest, as adjusted by any amortizable bond premium or
acquisition premium) that accrues on a debt instrument by using the constant
yield method applicable to original issue discount, subject to certain
limitations and exceptions.
Foreign-Currency Notes. The United States Federal income tax consequences of
the purchase, ownership and disposition of notes providing for payments
denominated in a currency other than U.S. dollars will be more fully described
in the applicable pricing supplement.
Short-Term Notes. Notes that have a fixed maturity of one year or less
("Short-Term Notes") will be treated as having been issued with original issue
discount. In general, an individual or other cash method U.S. Holder is not
required to accrue such original issue discount unless the U.S. Holder elects
to do so. If such an election is not made, any gain recognized by the U.S.
Holder on the sale, exchange or maturity of the Short-Term Note will be
ordinary income to the extent of the original issue discount accrued on a
straight-line basis, or upon election under the constant yield method (based on
daily compounding), through the date of sale or maturity, and a portion of the
deductions otherwise allowable to the U.S. Holder for interest on borrowings
allocable to the Short-Term Note will be deferred until a corresponding amount
of income is realized. U.S. Holders who report income for United States Federal
income tax purposes under the accrual method, and certain other holders
including banks and dealers in securities, are required to accrue original
issue discount on a Short-Term Note on a straight-line basis unless an election
is made to accrue the original issue discount under a constant yield method
(based on daily compounding).
Market Discount. If a U.S. Holder purchases a note, other than a Discount
Note, for an amount that is less than its issue price (or, in the case of a
subsequent purchaser, its stated redemption price at maturity) or, in the case
of a Discount Note, for an amount that is less than its adjusted issue price as
of the purchase date, such U.S. Holder will be treated as having purchased the
note at a "market discount", unless such market discount is less than a
specified de minimis amount.
Under the market discount rules, a U.S. Holder will be required to treat any
partial principal payment (or, in the case of a Discount Note, any payment that
does not constitute qualified stated interest) on, or any gain realized on the
sale, exchange, retirement or other disposition of, a note as ordinary income
to the extent of the lesser of:
. the amount of such payment or realized gain or
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. the market discount which has not previously been included in income and
is treated as having accrued on the note at the time of such payment or
disposition.
Market discount will be considered to accrue ratably during the period from the
date of acquisition to the Maturity Date of the note, unless the U.S. Holder
elects to accrue market discount on the basis of semiannual compounding.
A U.S. Holder may be required to defer the deduction of all or a portion of
the interest paid or accrued on any indebtedness incurred or maintained to
purchase or carry a note with market discount until the maturity of the note or
certain earlier dispositions, because a current deduction is only allowed to
the extent the interest expense exceeds an allocable portion of market
discount. A U.S. Holder may elect to include market discount in income
currently as it accrues (on either a ratable or semiannual compounding basis),
in which case the rules described above regarding the treatment as ordinary
income of gain upon the disposition of the note and upon the receipt of certain
cash payments and regarding the deferral of interest deductions will not apply.
Generally, such currently included market discount is treated as ordinary
interest for United States Federal income tax purposes. Such an election will
apply to all debt instruments acquired by the U.S. Holder on or after the first
day of the taxable year to which such election applies and may be revoked only
with the consent of the IRS.
Premium. If a U.S. Holder purchases a note for an amount that is greater
than the sum of all amounts payable on the note after the purchase date other
than payments of qualified stated interest, the U.S. Holder will be considered
to have purchased the note with "amortizable bond premium" equal in amount to
such excess. A U.S. Holder may elect to amortize such premium using a constant
yield method over the remaining term of the note and may offset interest
otherwise required to be included in respect of the note during any taxable
year by the amortized amount of such excess for the taxable year. However, if
the note may be optionally redeemed after the U.S. Holder acquires it at a
price in excess of its stated redemption price at maturity, special rules would
apply which could result in a deferral of the amortization of some bond premium
until later in the term of the note. Any election to amortize bond premium
applies to all taxable debt instruments held by the U.S. Holder at the
beginning of the first taxable year to which the election applies and all
taxable debt instruments acquired on or after such date and may be revoked only
with the consent of the IRS.
Disposition of a Note. Except as discussed above, 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 on the sale, exchange
or retirement (other than amounts representing accrued and unpaid interest) and
the U.S. Holder's adjusted tax basis in the note. A U.S. Holder's adjusted tax
basis in a note generally will equal the U.S. Holder's initial investment in
the note increased by any original issue discount included in income (and
accrued market discount, if any, if the U.S. Holder has included such market
discount in income) and decreased by the amount of any payments, other than
qualified stated interest payments, received and amortizable bond premium taken
with respect to the note. Such gain or loss generally will be long-term capital
gain or loss if the note were held for more than one year. The deductibility of
capital losses is subject to certain limitations. Prospective investors should
consult their own tax advisors concerning these tax law provisions.
Non-U.S. Holders
A non-U.S. Holder will not be subject to United States Federal income taxes
on payments of principal, premium (if any) or interest (including original
issue discount, if any) on a note, unless such non-U.S. Holder is a direct or
indirect 10% or greater shareholder of Colgate, a controlled foreign
corporation related to Colgate or a bank receiving interest described in
section 881(c)(3)(A) of the Code. To qualify for the exemption from taxation,
the last United States payor in the chain of payment prior to payment to a non-
U.S. Holder (the "Withholding Agent") must have received in the year in which a
payment of interest or principal occurs, or in either of the two preceding
calendar years, a statement that (1) is signed by the beneficial owner of the
note under penalties of perjury, (2) certifies that such owner is not a U.S.
Holder and (3) provides the name and address of the beneficial owner. The
statement may be made on an IRS Form W-8 or a substantially similar form, and
the beneficial owner must inform the Withholding Agent of any change in the
information on the
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statement within 30 days of such change. If a note is held through a securities
clearing organization or certain other financial institutions, the organization
or institution may provide a signed statement to the Withholding Agent.
However, in such case, the signed statement must be accompanied by a copy of
the IRS Form W-8 or the substitute form provided by the beneficial owner to the
organization or institution. The Treasury Department is considering
implementation of further certification requirements aimed at determining
whether the issuer of a debt obligation is related to holders thereof.
On October 6, 1997, the Treasury Department issued new regulations (the "New
Regulations") which were subsequently amended on May 15, 2000 and which make
certain modifications to the withholding, backup withholding and information
reporting rules. The New Regulations attempt to unify certification
requirements and modify reliance standards. The New Regulations will generally
be effective for payments made after December 31, 2000, subject to certain
transition rules. Prospective investors are urged to consult their own tax
advisors regarding the New Regulations.
Generally, a non-U.S. Holder will not be subject to United States Federal
income taxes on any amount which constitutes capital gain upon retirement or
disposition of a note, provided the gain is not effectively connected with the
conduct of a trade or business in the United States by the non-U.S. Holder.
Certain other exceptions may be applicable, and a non-U.S. Holder should
consult its tax advisor in this regard.
The notes will not be includible in the estate of a non-U.S. Holder unless
the individual is a direct or indirect 10% or greater shareholder of Colgate
or, at the time of such individual's death, payments in respect of the notes
would have been effectively connected with the conduct by such individual of a
trade or business in the United States.
Backup Withholding
Backup withholding of United States Federal income tax at a rate of 31% may
apply to payments made in respect of the notes to registered owners who are not
"exempt recipients" and who fail to provide certain identifying information,
such as the registered owner's taxpayer identification number, in the required
manner.
Generally, individuals are not exempt recipients, whereas corporations and
certain other entities generally are exempt recipients. Payments made in
respect of the notes to a U.S. Holder must be reported to the IRS, unless the
U.S. Holder is an exempt recipient or establishes an exemption. Compliance with
the identification procedures described in the preceding section would
establish an exemption from backup withholding for those non-U.S. Holders who
are not exempt recipients.
In addition, upon the sale of a note to (or through) a broker, the broker
must withhold 31% of the entire purchase price, unless either:
. the broker determines that the seller is a corporation or other exempt
recipient or
. the seller provides, in the required manner, certain identifying
information and, in the case of a non-U.S. Holder, certifies that such
seller is a non-U.S. Holder (and certain other conditions are met).
Such a sale must also be reported by the broker to the IRS, unless either:
. the broker determines that the seller is an exempt recipient or
. the seller certifies its non-U.S. status (and certain other conditions
are met).
Certification of the registered owner's non-U.S. status would be made normally
on an IRS Form W-8 under penalties of perjury, although in certain cases it may
be possible to submit other documentary evidence. In addition, prospective U.S.
Holders are strongly urged to consult their own tax advisors with respect to
the New Withholding Regulations. See "United States Federal Income Taxation--
Non-U.S. Holders".
Any amounts withheld under the backup withholding rules from a payment to a
beneficial owner would be allowed as a refund or a credit against such
beneficial owner's United States Federal income tax provided the required
information is furnished to the IRS.
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PLAN OF DISTRIBUTION
We are offering the notes for sale on a continuing basis through Chase
Securities Inc., Deutsche Bank Securities Inc., Goldman, Sachs & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities Inc. and
Salomon Smith Barney Inc. Unless otherwise specified in an applicable pricing
supplement, the agents will purchase the notes, as principal, from us for
resale to investors and other purchasers at varying prices relating to
prevailing market prices at the time of resale as determined by the applicable
agent, or, if so specified in an applicable pricing supplement, for resale at a
fixed public offering price. Unless otherwise specified in an applicable
pricing supplement, any note sold to an agent as principal will be purchased by
the agent at a price equal to 100% of the principal amount of the note less a
percentage of the principal amount equal to the commission applicable to an
agency sale as described below of a note of identical maturity.
If agreed to by Colgate and an agent, the agent may utilize its reasonable
efforts on an agency basis to solicit offers to purchase the notes at 100% of
the principal amount of the notes, unless otherwise specified in an applicable
pricing supplement, and we will pay a commission to the agent, ranging from
.150% to .750% of the principal amount of a note, depending upon its stated
maturity or, with respect to a note for which the stated maturity is in excess
of 30 years, a commission that we and the agent or agents agree to at the time
of sale. In an agency sale, we will receive from 99.850% to 99.250% of the
principal amount of each note, before deducting a portion of the aggregate
offering expenses of approximately $500,000.
An agent may resell notes it has purchased from us as principal to other
dealers for resale to investors, and may allow any portion of the discount
received in connection with those purchases from us to such dealers. After the
initial public offering of notes, the public offering price, in the case of
notes to be resold at a fixed public offering price, the concession and the
discount allowed to dealers may be changed.
We reserve the right to withdraw, cancel or modify the offer made by this
prospectus supplement without notice and may reject orders, in whole or in
part, whether placed directly with us or through the agents. The agents will
have the right, in their discretion reasonably exercised, to reject in whole or
in part any offer to purchase notes received by the agents.
Unless otherwise specified in an applicable pricing supplement, payment of
the purchase price of the notes will be required to be made in immediately
available funds in U.S. dollars or the specified currency, as the case may be,
in New York City on the date of settlement.
No note will have an established trading market when issued. Unless
specified in the applicable pricing supplement, we will not list the notes on
any securities exchange. The agents may from time to time purchase and sell
notes in the secondary market, but the agents are not obligated to do so, and
there can be no assurance that there will be a secondary market for the notes
or liquidity in the secondary market if one develops. From time to time, the
agents may make a market in the notes, but the agents are not obligated to do
so and may discontinue any market-making activity at any time.
The agents may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended. We have agreed to indemnify the agents
against or to make contributions relating to certain civil liabilities,
including liabilities under the Securities Act of 1933, or to contribute to
payments the agents may be required to make in respect thereof. We have also
agreed to reimburse the agents for certain expenses.
From time to time we may issue and sell other securities described in the
accompanying prospectus, and the amount of notes that we may offer and sell
under this prospectus supplement may be reduced as a result of those sales.
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The agents and/or their affiliates may engage in transactions with, and
perform services for us in the ordinary course of business. Reuben Mark,
Chairman of the Board, Chief Executive Officer and Director of Colgate, is also
a director of Citigroup Inc., an affiliate of Salomon Smith Barney Inc. Jill K.
Conway, a Director of Colgate, is also a member of the board of directors of
Merrill Lynch & Co., Inc.
In connection with the offering of notes purchased by an agent as principal
on a fixed price basis, the agent is permitted to engage in certain
transactions that stabilize the price of the notes. These transactions may
consist of bids or purchases for the purpose of pegging, fixing or maintaining
the price of the notes. If the agent creates a short position in the notes in
connection with the offering, i.e., if it sells notes in an aggregate principal
amount exceeding that set forth in the applicable pricing supplement, then the
agent may reduce that short position by purchasing notes in the open market. In
general, purchases of notes for the purpose of stabilization or to reduce a
short position could cause the price of the notes to be higher than in the
absence of these purchases.
Neither we nor the agents are making any representation or prediction as to
the direction or magnitude of any effect that the transactions described above
may have on the price of the notes. In addition, neither we nor the agents are
making any representation that an agent will engage in any such transactions or
that such transactions, once commenced, will not be discontinued without
notice.
VALIDITY OF THE NOTES
The validity of the notes will be passed upon for Colgate by Andrew D.
Hendry, Esq., Senior Vice President, General Counsel and Secretary of Colgate
and for the agents by Brown & Wood LLP, New York, New York. As of May 30, 2000,
Mr. Hendry held 201,198 shares of Common Stock of Colgate (either directly or
held by the Savings and Investment Plan trustee), 18,263 restricted shares of
Common Stock of Colgate, 320,872 options to purchase shares of Common Stock of
Colgate, and 602 shares of Series B Convertible Preferred Stock of Colgate
(held by the Savings and Investment Plan trustee).
S-35
<PAGE>
PROSPECTUS
$800,000,000
[LOGO OF COLGATE-PALMOLIVE COMPANY]
Debt Securities
. By this prospectus, we may offer from time to time up to $800,000,000 of our
debt securities.
. When we offer debt securities, we will provide you with a prospectus
supplement describing the terms of the specific issue of securities
including the offering price of the securities.
. You should read this prospectus and the prospectus supplement relating to
the specific offering of securities carefully before you invest.
-----------------------------------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
-----------------------------------------------------
The date of this prospectus is June 23, 2000.
<PAGE>
ABOUT THIS PROSPECTUS
We will disclose information about the debt securities in this prospectus
and prospectus supplements. The term "prospectus supplement" as used in this
prospectus includes any pricing supplements relating to particular offerings of
debt securities. The relevant prospectus supplements will provide most of the
financial and other specific terms of any particular offering of debt
securities, many of which are determined at the time of pricing. Because the
information provided in the prospectus supplements may also add, delete or
change information contained in this prospectus, you should rely on the
information in the applicable prospectus supplement or supplements that is
inconsistent with the information in this prospectus.
COLGATE-PALMOLIVE COMPANY
Colgate-Palmolive Company, which was organized under the laws of the State
of Delaware in 1923, is a leading consumer products company whose products are
marketed in over 200 countries throughout the world. Our principal executive
offices are located at 300 Park Avenue, New York, New York 10022 (telephone
(212) 310-2000).
We manage our business in two distinct product segments: (1) Oral, Personal
and Household Care, and (2) Pet Nutrition. Our Oral Care products include
toothbrushes, toothpaste, mouth rinses and dental floss, and pharmaceutical
products for dentists and other oral health professionals. Significant recent
product launches in this segment include Colgate Total Fresh Stripe toothpaste,
and Colgate Navigator and Colgate Actibrush toothbrushes.
We lead many segments of the Personal Care market with several products
including bar and liquid soaps, shampoos, conditioners, deodorants and
antiperspirants, and baby and shave products. Strong brands in this segment
include Irish Spring, Softsoap and Palmolive, which is available as a soap and,
in many countries, as a shampoo and conditioner. We also manufacture and market
Mennen deodorants and men's toiletries and baby products.
We manufacture and market a wide array of products for household care. Major
products include Palmolive and Ajax dishwashing liquids and antibacterial hand
soaps and new Palmolive Spring Sensations. We also market other household names
in cleaning and laundry products such as Fab, Ajax and Murphy's oil soap. In
our major markets outside the U.S., our leading brands include Suavitel in
Latin America, Soupline in Europe and Softlan in Asia.
Through our Hill's Pet Nutrition subsidiary, we sell high quality pet
nutrition products for dogs and cats. Hill's markets pet foods primarily under
two names: Science Diet, which is sold by authorized pet supply retailers,
breeders and veterinarians for every day nutritional needs, and Prescription
Diet for dogs and cats with disease conditions.
If you want to find more information about us, please see the sections
entitled "Where You Can Find More Information" and "Incorporation of
Information We File with the SEC" in this prospectus.
USE OF PROCEEDS
We intend to use the net proceeds from the sale of the debt securities for
general corporate purposes, unless otherwise specified in the applicable
prospectus supplement.
2
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our historical ratios of earnings to fixed
charges for the periods indicated:
<TABLE>
<CAPTION>
Year Ended December 31,
1995 1996 1997 1998 1999
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges..................... 2.2 4.4 4.9 5.8 6.3
</TABLE>
For the purpose of calculating the ratio of earnings to fixed charges,
"earnings" consist of earnings from continuing operations before income taxes
and fixed charges, excluding capitalized interest and preferred security
dividend requirements. "Fixed charges" consist of interest costs, the interest
factor in rentals, amortization of debt issuance costs and capitalized
interest.
DESCRIPTION OF DEBT SECURITIES
General
Colgate will offer the debt securities described in this prospectus from
time to time in one or more distinct series for an aggregate initial public
offering price of $800,000,000 or its equivalent in foreign currencies or units
of two or more currencies, based on the applicable exchange rate at the time of
offering, as Colgate shall designate at the time of offering.
Unless otherwise specified in the applicable prospectus supplement, the debt
securities will be issued under an indenture, dated as of September 15, 1992,
as supplemented from time to time, between Colgate and The Bank of New York, as
trustee. A copy of the indenture is filed as an exhibit to the registration
statement of which this prospectus is a part. The following summaries of
material provisions of the debt securities and of the indenture are not
complete and are subject to, and qualified in their entirety by reference to,
the provisions of the indenture, including the definitions of terms.
The indenture does not limit the amount of debt, secured or unsecured, which
Colgate may issue. The debt securities offered by this prospectus are unsecured
and rank equally with Colgate's other unsecured and unsubordinated
indebtedness.
Terms of the Debt Securities
Colgate may issue the debt securities from time to time, without limitation
as to aggregate principal amount and in one or more series. Colgate may issue
debt securities upon the satisfaction of conditions, including the delivery to
the trustee of a supplemental indenture, or a resolution of Colgate's Board of
Directors or a committee of the Board of Directors, or a certificate of an
officer of Colgate who has been authorized by the Board of Directors to take
that kind of action, which fixes or establishes the terms of the debt
securities being issued. Any resolution or officer's certificate approving the
issuance of any issue of debt securities will include the following terms of
that issue of debt securities:
. the aggregate principal amount and whether there is any limit upon the
aggregate principal amount that Colgate may subsequently issue;
. the stated maturity date;
. the principal amount payable whether at maturity or upon earlier
acceleration;
. if the amount of payments of principal (and premium, if any) or interest
may be determined with reference to an index, formula or other method,
the manner in which such amounts will be determined;
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<PAGE>
. whether and how the principal amount will be determined, whether by
reference to an index, formula or other method;
. the rate or rates (or manner of calculating the rate or rates) at which
the debt securities will bear interest, if any, and the date or dates
from which any interest will accrue;
. the interest payment dates and regular record dates for any interest
payable;
. if in addition to or other than the Borough of Manhattan, The City of
New York, the place or places where the principal (and premium, if any)
and interest, if any, will be payable, and where the debt securities may
be delivered for registration, transfer or exchange;
. any provisions for redemption of the debt securities, the redemption
price or prices and any remarketing arrangements;
. any mandatory redemption or sinking fund or analogous provisions;
. whether the debt securities are denominated or payable in United States
dollars or in one or more currencies or units of two or more currencies;
. the form in which Colgate will issue the debt securities, whether
registered, bearer or both, and any restrictions applicable to the
exchange of one form for another and/or to the offer, sale and delivery
of the debt securities in either form;
. whether and under what circumstances Colgate will pay additional amounts
under any debt securities held by a person who is not a U.S. person for
specified taxes, assessments or other governmental charges and whether
Colgate has the option to redeem the affected debt securities rather
than pay any such additional amounts;
. whether the debt securities are to be issued in global form and if so,
the depositary for the global securities;
. the title of the debt securities and the series of which the debt
securities are a part;
. the minimum denominations in which any debt securities will be issuable
if other than denominations of $1,000 and any integral multiple thereof;
. any additional covenants or events of default of Colgate; and
. any other terms of the debt securities which are not inconsistent with
the provisions of the indenture.
Please see the applicable prospectus supplement for the terms of the
specific debt securities being offered.
Prospective purchasers of debt securities should be aware that special U.S.
Federal income tax, accounting and other considerations may be applicable to
instruments such as the debt securities. The prospectus supplement relating to
an issue of debt securities will describe these considerations, if they apply.
The provisions of the indenture permit Colgate, without the consent of the
holders of any debt securities, to issue additional debt securities with terms
different from those of debt securities previously issued and to reopen a
previous series of debt securities and issue additional debt securities of
that series.
Colgate will pay or deliver principal and any premium, additional amounts
and interest in the manner, at the places and subject to the restrictions set
forth in the indenture, the debt securities and the applicable prospectus
supplement. However, at its option, Colgate may pay any interest by check
mailed to the holders of registered debt securities at their registered
addresses.
Holders may present debt securities for exchange, and registered debt
securities for transfer or exchange, in the manner, at the places and subject
to the restrictions set forth in the indenture, the debt securities and the
prospectus supplement. Holders may transfer debt securities in bearer form for
registered debt securities by
4
<PAGE>
delivering the bearer debt securities and related coupons, if any, to the
office or agency of the registrar for that series of debt securities. If any
series of debt securities is issued in global form, the prospectus supplement
will describe the circumstances, if any, under which beneficial owners of
interests in any global debt security may exchange those interests for
definitive debt securities of that same series and of like tenor and principal
amount, in any authorized form and denomination. There will be no service
charge for any transfer or exchange of debt securities, but Colgate may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection with a transfer or exchange other than certain exchanges
not involving any transfer.
Merger and Consolidation
Colgate may consolidate or merge with or into any other corporation, and
Colgate may sell, lease or convey all or substantially all of its assets to any
corporation, provided that:
. the resulting corporation, if other than Colgate, is a corporation
organized and existing under the laws of the United States of America or
any U.S. state and assumes all of Colgate's obligations to:
(1) pay or deliver the principal of or any premium, interest or
additional amounts on the debt securities; and
(2) perform and observe all of Colgate's other obligations under the
indenture, and
. Colgate or any successor corporation, as the case may be, is not,
immediately after any such consolidation, merger or sale of assets, in
default under the indenture.
Modification and Waiver
Colgate and the trustee may modify and amend the indenture with the consent
of holders of at least a majority in principal amount or aggregate issue price
of each series of debt securities affected. However, the consent of each holder
of any debt security affected must be obtained if the amendment or
modification:
. changes the stated maturity of the principal of, or any premium or
installment of interest or additional amounts on, any debt security;
. reduces the principal amount due and payable at maturity or upon
acceleration of maturity of, or the rate of interest or additional
amounts payable on, or any premium payable on redemption or otherwise
on, any debt security;
. adversely affects any right of repayment at the option of the holders;
. changes the place of delivery of, or currency of, the payment of
principal or any premium, interest or additional amounts on any debt
security or impairs the right to institute suit for the enforcement of
any such payment or delivery;
. reduces the percentage in principal amount or aggregate issue price of
the outstanding debt securities of any series, the consent of whose
holders is required to modify or amend the indenture; or
. modifies the foregoing requirements or reduces the percentage to less
than a majority in principal amount or aggregate issue price of
outstanding debt securities necessary to waive certain past defaults by
Colgate under the indenture.
The holders of at least a majority in principal amount or aggregate issue
price of the outstanding debt securities of any series may, with respect to
that series, waive past defaults under the indenture and waive compliance by
Colgate with certain provisions of the indenture, except as described under "--
Events of Default".
5
<PAGE>
Events of Default
Except as otherwise provided in the applicable prospectus supplement, each
of the following constitutes an event of default with respect to each series of
debt securities issued under the indenture:
. default in the payment of any interest or additional amounts when due
and continuing for 30 days;
. default in the payment of any principal or premium when due and payable
at maturity;
. default in the payment of any sinking fund payment when due;
. default in the performance of, or breach, of any other obligation of
Colgate under the indenture, or under provisions of a series of debt
securities that are applicable to all series of debt securities, and
continuing for 60 days after written notice of the default to Colgate as
provided in the indenture;
. specified events of bankruptcy, insolvency or reorganization of Colgate;
and
. any other event of default with respect to debt securities of that
series.
If an event of default occurs and is continuing for any series of debt
securities, the trustee or the holders of at least 25% in principal amount or
aggregate issue price of the outstanding debt securities of that series may
declare the principal of all the debt securities of that series, or any lesser
amount provided for in the debt securities of that series, due and payable
immediately. At any time after such a declaration of acceleration with respect
to the debt securities of any series has been made, but before the trustee has
obtained a judgment or decree for payment of the money due, the holders of a
majority in principal amount or aggregate issue price of the outstanding debt
securities of that series by written notice may rescind any declaration of
acceleration and its consequences, provided that all payments and/or deliveries
due, other than those due as a result of acceleration, have been made and all
events of default have been remedied or waived.
The holders of a majority in principal amount or aggregate issue price of
the outstanding debt securities of any series may waive an event of default
with respect to that series, except a default:
. in the payment of any amounts due and payable or deliverable under the
debt securities of that series; or
. in respect of an obligation of Colgate contained in, or a provision of,
the indenture which cannot be modified under the terms of the indenture
without the consent of each holder of outstanding debt securities
affected.
The holders of a majority in principal amount or aggregate issue price of
the outstanding debt securities of a series may direct the time, method and
place of conducting any proceeding for any remedy available to the trustee or
exercising any trust or power conferred on the trustee with respect to debt
securities of that series, provided that the direction is not in conflict with
any rule of law, the indenture or the debt securities of that series. The
trustee must, within 90 days after a default occurs notify the holders of the
applicable series of debt securities of the default, unless the default is
cured or waived. The trustee may withhold notice of default, except default in
payment of principal, any premium, interest or sinking fund payment, if it
determines that it is in the interest of the holders to do so. Before
proceeding to exercise any right or power under the indenture at the direction
of the holders, the trustee is entitled to receive from those holders
reasonable security or indemnity against the costs, expenses and liabilities
which might be incurred by it in complying with any such direction.
Unless otherwise stated in the prospectus supplement, any series of debt
securities issued under the indenture will not have the benefit of any cross-
default provisions with other indebtedness of Colgate.
Colgate will be required to furnish to the trustee annually a statement as
to the performance by Colgate of all of its obligations and conditions under
the indenture.
6
<PAGE>
Limitations Upon Liens
The debt securities will not be secured by any mortgage, pledge or other
lien. Unless a prospectus supplement with respect to a particular series of
debt securities states otherwise, the covenants described below will apply to
each series of debt securities.
Colgate covenants in the indenture not to create or suffer to exist, or
permit any of its Principal Domestic Subsidiaries to create or suffer to exist,
any Lien on any Restricted Property, whether owned on the date of the indenture
or thereafter acquired, without making effective provision (and Colgate
covenants and agrees in the indenture that it will make or cause to be made
effective provision) whereby the debt securities shall be directly secured by
such Lien equally and ratably with (or prior to) all other indebtedness secured
by such Lien as long as such other indebtedness shall be so secured; provided,
however, that there shall be excluded from the foregoing restrictions:
. Liens securing Debt not exceeding $10,000,000 which are existing on the
date of the indenture on Restricted Property; and, if any property owned
or leased as of the date of the indenture by Colgate or by a Principal
Domestic Subsidiary at any time thereafter becomes a Principal Domestic
Manufacturing Property, any Liens existing on the date of the indenture
on such property securing the Debt secured or evidenced thereby on the
date of the indenture;
. Liens on Restricted Property of a Principal Domestic Subsidiary as a
security for Debt of such Subsidiary to Colgate or to another Principal
Domestic Subsidiary;
. in the case of any corporation which becomes a Principal Domestic
Subsidiary after the date of the indenture, Liens on Restricted Property
of such Principal Domestic Subsidiary which are in existence at the time
it becomes a Principal Domestic Subsidiary and which were not incurred
in contemplation of it becoming a Principal Domestic Subsidiary;
. any Lien existing prior to the time of acquisition of any Principal
Domestic Manufacturing Property acquired by Colgate or a Principal
Domestic Subsidiary after the date of the indenture through purchase,
merger, consolidation or otherwise;
. any Lien on any Principal Domestic Manufacturing Property (other than a
Major Domestic Manufacturing Property) acquired or constructed by
Colgate or a Principal Domestic Subsidiary after the date of the
indenture which is placed on such Property at the time of or within 180
days after the acquisition thereof or prior to, at the time of or within
180 days after completion of construction thereof to secure all or a
portion of the price of such acquisition or construction or funds
borrowed to pay all or a portion of the price of such acquisition or
construction;
. extensions, renewals or replacements of any Lien referred to in the
first, third, fourth or fifth bullet points above to the extent that the
principal amount of the Debt secured or evidenced thereby is not
increased, provided that the Lien is not extended to any other
Restricted Property;
. Liens imposed by law, such as carriers', warehousemen's, mechanics',
materialmen's, vendors' and landlords' liens, and liens arising out of
judgments or awards against Colgate or any Principal Domestic Subsidiary
with respect to which Colgate or such Subsidiary at the time shall
currently be prosecuting an appeal or proceedings for review and with
respect to which it shall have secured a stay of execution pending such
appeal or proceedings for review;
. Liens securing the payment of taxes, assessments and governmental
charges or levies, either (i) not delinquent or (ii) being contested in
good faith by appropriate legal or administrative proceedings and as to
which Colgate or a Principal Domestic Subsidiary, as the case may be, to
the extent required by generally accepted accounting principles applied
on a consistent basis, shall have set aside on its books adequate
reserves;
. minor survey exceptions, minor encumbrances, easements or reservations
of, or rights of others for, rights of way, sewers, electric lines,
telegraph and telephone lines and other similar purposes and
7
<PAGE>
zoning or other restrictions as to the use of any Principal Domestic
Manufacturing Property, which exceptions, encumbrances, easements,
reservations, rights and restrictions do not, in the opinion of Colgate,
in the aggregate materially detract from the value of such Principal
Domestic Manufacturing Property or materially impair its use in the
operation of the business of Colgate and its Principal Domestic
Subsidiaries; and
. any Lien on Restricted Property not referred to above if, at the time
such Lien is created, incurred, assumed or suffered to be created,
incurred or assumed, and after giving effect thereto and to the Debt
secured or evidenced thereby, the aggregate amount of all outstanding
Debt of Colgate and its Principal Domestic Subsidiaries secured or
evidenced by Liens on Restricted Property which are not referred to
above and which do not equally and ratably secure the debt securities,
shall not exceed 15% of Consolidated Net Tangible Assets.
"Code" means the Internal Revenue Code of 1986, as amended.
"Consolidated Net Tangible Assets" means the aggregate amount of assets
(less applicable reserves and other properly deductible items) after deducting
therefrom (i) all current liabilities and (ii) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles of Colgate and its consolidated subsidiaries, all as set forth on
the most recent balance sheet of Colgate and its consolidated subsidiaries
prepared in accordance with generally accepted accounting principles as
practiced in the United States.
"Debt" means (i) indebtedness for borrowed money, (ii) obligations
evidenced by bonds, debentures, notes or other similar instruments, (iii)
obligations to pay the deferred purchase price of property or services (other
than accounts payable in the ordinary course of business), (iv) obligations as
a lessee under leases which shall have been or should be, in accordance with
generally accepted accounting principles, recorded as capital leases, and (v)
obligations under direct or indirect guaranties in respect of, and obligations
(contingent or otherwise) to purchase or otherwise acquire, or otherwise to
assure a creditor against loss in respect of, indebtedness or obligations of
others of the kinds referred to in clauses (i) through (iv) above.
"Domestic Subsidiary" means any Subsidiary a majority of the business of
which is conducted within the United States of America, or a majority of the
properties and assets of which are located within the United States of
America, except (i) any Subsidiary all of the assets of which consist of the
securities of Subsidiaries which are not Domestic Subsidiaries, (ii) any
Subsidiary which is a FSC as defined in Section 992 of the Code and (iii) any
Subsidiary for any period during which an election under Section 936 of the
Code applies to such Subsidiary.
"Instruments" of any corporation means and includes (i) all capital stock
of all classes of and all other equity interests in such corporation and all
rights, options or warrants to acquire the same, and (ii) all promissory
notes, debentures, bonds and other evidences of Debt of such corporation.
"Lien" means any mortgage, lien, pledge, security interest, encumbrance or
charge of any kind, any conditional sale or other title retention agreement or
any lease in the nature thereof, provided that the term "Lien" shall not
include any lease involved in a sale and lease-back transaction.
"Major Domestic Manufacturing Property" means any Principal Domestic
Manufacturing Property the net depreciated book value of which on the date as
of which the determination is made exceeds 3% of the Consolidated Net Tangible
Assets.
"Principal Domestic Manufacturing Property" means any building, structure
or facility (including the land on which it is located and the improvements
and fixtures constituting a part thereof) used primarily for manufacturing or
processing which is owned or leased by Colgate or any of its Subsidiaries, is
located in the United States of America and the net depreciated book value of
which on the date as of which the determination is made exceeds 1% of
Consolidated Net Tangible Assets, except any such building, structure or
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facility which the Board of Directors of Colgate by resolution declares is not
of material importance to the total business conducted by Colgate and its
Subsidiaries as an entirety.
"Principal Domestic Subsidiary" means (i) each Subsidiary which owns or
leases a Principal Domestic Manufacturing Property, (ii) each Domestic
Subsidiary the consolidated net worth of which exceeds 3% of Consolidated Net
Tangible Assets (as set forth in the most recent financial statements delivered
pursuant to the indenture) and (iii) each Domestic Subsidiary of each
Subsidiary referred to in the foregoing clause (i) or (ii) except any such
Subsidiary the accounts receivable and inventories of which have an aggregate
net book value of less than $5,000,000.
"Restricted Property" means and includes (i) all Principal Domestic
Manufacturing Properties, (ii) all Instruments of all Principal Domestic
Subsidiaries and (iii) all inventories and accounts receivable of Colgate and
its Principal Domestic Subsidiaries.
"Subsidiary" means any Corporation of which at the time of determination
Colgate or one or more Subsidiaries owns or controls directly or indirectly
more than 50% of the shares of Voting Stock.
"Voting Stock" means stock of a Corporation of the class or classes having
general voting power under ordinary circumstances to elect at least a majority
of the board of directors, managers or trustees of such Corporation, provided
that, for the purpose hereof, stock which carries only the right to vote
conditionally on the happening of an event shall not be considered voting stock
whether or not such event shall have happened.
Other capitalized terms used but not defined in this prospectus shall have
the meaning given those terms in the indenture.
Governing Law
The indenture and the debt securities will be governed by, and construed in
accordance with, the laws of the State of New York.
PLAN OF DISTRIBUTION
Colgate may sell debt securities:
. to the public through underwriters acting individually or through a
group of underwriters which may be managed or co-managed by one or more
underwriters designated by Colgate,
. through agents or dealers,
. directly to one or more other purchasers, or
. by any combination of these methods of sale.
The prospectus supplement with respect to the particular series of debt
securities being offered will describe the terms of the offering of that
series, including the name or names of any agents or underwriters, the public
offering or purchase price, the proceeds to Colgate from the offering, any
discounts and commissions to be allowed or paid to the agents or underwriters,
all other items constituting underwriting compensation, any discounts and
commissions to be allowed or paid to dealers, any initial public offering price
and any exchanges on which the debt securities may be listed. Underwriters,
dealers and agents that participate in the distribution of the debt securities
may be deemed to be underwriters, and any discounts or commissions received by
them from Colgate and any profit on the resale of the debt securities by them
may be deemed to be underwriting discounts and commissions, under the
Securities Act of 1933.
Under certain circumstances, Colgate may repurchase debt securities and
reoffer them to the public as set forth above. Colgate may also arrange for
repurchases and resales of the debt securities by dealers.
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No particular offering of debt securities will have an established trading
market when issued. Unless specified in the applicable prospectus supplement,
Colgate will not list the notes on any securities exchange. The underwriters
may from time to time purchase and sell notes in the secondary market, but they
are not obligated to do so, and there can be no assurance that there will be a
secondary market for the notes or liquidity in the secondary market if one
develops. In addition, the underwriters may discontinue any market-making
activity at any time.
To facilitate a debt securities offering, any underwriter may engage in
over-allotment, stabilizing transactions, short covering transactions and
penalty bids in accordance with Regulation M under the Exchange Act.
. Over-allotment involves sales in excess of the offering size, which
creates a short position.
. Stabilizing transactions permit bids to purchase the underlying security
so long as the stabilizing bids do not exceed a specified maximum.
. Short covering transactions involve purchases of the securities in the
open market after the distribution is completed to cover short
positions.
. Penalty bids permit the underwriters to reclaim a selling concession
from a dealer when the securities originally sold by the dealer are
purchased in a covering transaction to cover short positions.
Those activities may cause the price of the securities to be higher than it
would otherwise be. If commenced, the underwriters may discontinue those
activities at any time.
If so indicated in the prospectus supplement, Colgate will authorize
underwriters to solicit offers by certain institutions to purchase debt
securities from Colgate pursuant to delayed delivery contracts providing for
payment and delivery on the date stated in the prospectus supplement. Each
contract will be for an amount not less than, and, unless Colgate otherwise
agrees, the aggregate principal amount of debt securities sold pursuant to the
contracts shall not be more than, the respective amounts stated in the
prospectus supplement. Institutions with whom the contracts, when authorized,
may be made include commercial and savings banks, insurance companies, pension
funds, investment companies, educational and charitable institutions, and other
institutions, but shall in all cases be subject to the approval of Colgate.
Delayed delivery contracts will not be subject to any conditions except that
the purchase by an institution of the debt securities covered under any such
contract shall not at the time of delivery be prohibited under the laws of any
jurisdiction in the United States to which that institution is subject.
Colgate has agreed to indemnify the agents and the underwriters against
certain civil liabilities, including liabilities under the Securities Act of
1933, or to contribute to payments the agents or the underwriters may be
required to make in connection with those liabilities. Agents, underwriters and
dealers may be customers of, engage in transactions with, or perform services
for Colgate in the ordinary course of business.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the SEC. Our
SEC filings are also available over the Internet at the SEC's web site at
http://www.sec.gov. You may also read and copy any document we file by visiting
the SEC's public reference rooms in Washington, D.C., New York, New York, and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information about the public reference rooms. You may also inspect our SEC
reports and other information at the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005.
We have filed a registration statement on Form S-3 with the SEC covering the
debt securities. For further information on Colgate and the debt securities,
you should refer to our registration statement and its exhibits. This
prospectus summarizes certain provisions of contracts and other documents that
we refer you to. Because the prospectus may not contain all the information
that you may find important, you should review the full text of these
documents. We have included copies of these documents as exhibits to our
registration statement of which this prospectus is a part.
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INCORPORATION OF INFORMATION WE FILE WITH THE SEC
The SEC allows us to incorporate by reference the information we file with
them, which means:
. incorporated documents are considered part of this prospectus;
. we can disclose important information to you by referring you to those
documents; and
. information that we file with the SEC will automatically update and, to
the extent inconsistent, supersede this prospectus and previously
incorporated information.
We incorporate by reference the documents listed below which were filed with
the SEC under the Securities Exchange Act of 1934:
. annual report of Colgate on Form 10-K for the year ended December 31,
1999; and
. quarterly report of Colgate on Form 10-Q for the quarter ended March 31,
2000.
We also incorporate by reference each of the following documents that we
will file with the SEC after the date of this prospectus until this offering is
completed:
. all documents filed under Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act, including definitive proxy or information statements filed
under Section 14 of the Exchange Act in connection with any subsequent
stockholders' meeting; and
. any reports filed under Section 15(d) of the Exchange Act.
You should rely only on information contained or incorporated by reference
in this prospectus. We have not, and any agent or underwriter acting on our
behalf has not, authorized any other person to provide you with different or
additional information. If anyone provides you with different or inconsistent
information, you should not rely on it. We are not, and any agent or
underwriter acting on our behalf is not, making an offer to sell these
securities in any jurisdiction where the offer or sale is not permitted.
You should assume that the information appearing in this prospectus is
accurate as of the date of this prospectus only. Our business, financial
condition and results of operations may have changed since that date.
You may request a copy of any filings referred to above (excluding
exhibits), at no cost, by contacting us at the following address: Investor
Relations, Colgate-Palmolive Company, 300 Park Avenue, New York, New York
10022-7499, Telephone: (212) 310-2000.
EXPERTS
The consolidated financial statements and the related financial statement
schedule incorporated in this prospectus by reference from the Annual Report on
Form 10-K of Colgate-Palmolive Company and its subsidiaries have been audited
by Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are incorporated herein by reference in
reliance upon the authority of said firm as experts in giving said report.
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$800,000,000
[LOGO OF COLGATE-PALMOLIVE COMPANY]
Medium-Term Notes, Series D
Due One Year or More
From Date of Issue
----------------------------
PROSPECTUS SUPPLEMENT
----------------------------
Chase Securities Inc.
Deutsche Banc Alex. Brown
Goldman, Sachs & Co.
Merrill Lynch & Co.
J.P. Morgan & Co.
Salomon Smith Barney
June 23, 2000
