<PAGE>
PROSPECTUS SUPPLEMENT
(To Prospectus dated March 13, 1995)
$150,000,000
JOHN DEERE CAPITAL CORPORATION
FLOATING RATE NOTES DUE MARCH 20, 1998
The Notes will mature on March 20, 1998. Interest on the Notes will be payable
on the twentieth day of March, June, September and December, commencing June 20,
1995. The rate of interest will be reset daily as described herein based on (i)
the Federal Funds Rate (as defined herein) plus (ii) a spread of .320%. See
"Description of Notes--Interest." The Notes are not redeemable prior to maturity
and will not be entitled to any sinking fund. The Notes will be issued only in
registered form in denominations of $1,000 and integral multiples thereof.
The Notes will be represented by a single permanent global Note registered in
the name of The Depository Trust Company ("DTC") or its nominee. Beneficial
interests in the global Note will be shown on, and transfers thereof will be
effected only through, records maintained by DTC and its participants. Except in
limited circumstances, Notes in certificated form will not be issued. See
"Description of Notes--General" and "Description of Debt Securities--Book-Entry
Debt Securities." Settlement for the Notes will be made in immediately available
funds. The Notes will trade in DTC's Same-Day Funds Settlement System until
maturity, and secondary market trading activity for the Notes will therefore
settle in immediately available funds. All payments of principal and interest
will be made by the Capital Corporation in immediately available funds. See
"Description of Notes--Same-Day Settlement and Payment."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
PRICE TO UNDERWRITING PROCEEDS TO CAPITAL
PUBLIC(1) DISCOUNT CORPORATION(1)(2)
<S> <C> <C> <C>
Per Note................... 100.000% .149% 99.851%
Total...................... $150,000,000 $223,500 $149,776,500
---------------------------------------------------------------------------------------------
<FN>
(1) Plus accrued interest, if any, from March 20, 1995.
(2) Before deducting expenses payable by the Capital Corporation estimated at
$150,000.
</TABLE>
The Notes are offered subject to receipt and acceptance by the Underwriters, to
prior sale and to the Underwriters' right to reject orders in whole or in part
and to withdraw, cancel or modify the offer without notice. It is expected that
delivery of the global Note will be made through the facilities of DTC on or
about March 20, 1995.
SALOMON BROTHERS INC CHEMICAL SECURITIES INC.
The date of this Prospectus Supplement is March 13, 1995.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES AT A
LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
SELECTED FINANCIAL DATA
The following are selected financial data of the Capital Corporation and its
consolidated subsidiaries (collectively called the "Company"). Results for the
three-month periods ended January 31, 1995 and 1994 are unaudited but include
all adjustments, consisting of normal recurring adjustments, which the Capital
Corporation considers necessary for a fair presentation of the results of
operations for these periods. This summary is qualified in its entirety by the
detailed information and consolidated financial statements, including notes
thereto, and management's discussion and analysis in the documents incorporated
herein by reference. See "Incorporation of Certain Documents by Reference" in
the prospectus.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JANUARY 31 YEAR ENDED OCTOBER 31
------------------------ -----------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
----------- ----------- --------- --------- --------- --------- ---------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME DATA:
Finance income earned....................... $ 112.8 $ 91.8 $ 414.1 $ 417.9 $ 449.9 $ 472.5 $ 411.3
Income before changes in accounting......... 27.4 23.0 104.9 111.0 95.0 73.0 66.3
Net income (1).............................. 27.4 23.0 104.9 107.2 95.0 73.0 66.3
BALANCE SHEET DATA (AT END OF PERIOD) :
Total assets................................ $ 4,670.6(2) $ 3,771.3(2) $ 4,289.6 $ 3,753.5 $ 4,204.7 $ 4,506.0 $ 3,671.8
Short-term borrowings....................... 2,622.7 1,579.3 2,316.2 1,298.7 2,016.8 2,427.0 1,810.1
Long-term borrowings........................ 1,083.6 1,261.3 1,034.5 1,478.2 1,238.9 1,188.5 982.2
Stockholder's equity........................ 646.4 612.1 634.0 739.1 713.9 688.9 665.9
RATIO OF EARNINGS TO FIXED CHARGES (3)........ 1.76 1.97 1.96 1.99 1.74 1.48 1.46
<FN>
------------------------------
(1) In 1993, the Company adopted Financial Accounting Standards Board (FASB)
Statements No. 106 and 112 relating to postretirement and postemployment
benefits, effective November 1, 1992. Accordingly, results for the first
quarter of 1993 were restated for the cumulative after-tax effect of these
changes in accounting as of November 1, 1992, which totaled $3.8 million.
(2) Receivables and leases financed by the Company were $4.288 billion at
January 31, 1995 compared with $3.556 billion at January 31, 1994.
Receivables and leases administered, which include receivables previously
securitized and sold, amounted to $5.275 billion at January 31, 1995
compared with $4.735 billion at January 31, 1994.
(3) Earnings consist of income before income taxes and changes in accounting to
which are added fixed charges. Fixed charges consist of interest on
indebtedness, amortization of debt discount and expense, an estimated
amount of rental expense under capitalized leases which is deemed to be
representative of the interest factor and rental expense under operating
leases. Under the terms of certain credit agreements, the Company is
required to maintain its consolidated ratio of earnings before fixed
charges to fixed charges at no less than 1.05 to 1 for each fiscal quarter.
In addition, the Company's ratio of senior debt to total stockholder's
equity plus subordinated debt may not be more than 8 to 1 at the end of any
fiscal quarter.
</TABLE>
S-2
<PAGE>
USE OF PROCEEDS
The Capital Corporation expects to apply the net proceeds from the sale of
the Notes offered hereby to the reduction of its United States commercial paper.
Pending such application, such proceeds may be invested in short-term
securities. At January 31, 1995, the Company had outstanding $2.101 billion of
United States commercial paper, bearing interest at discount rates ranging from
4.82% to 6.65%, issued to finance current operations. The Company will continue
to incur short-term indebtedness, primarily through the issuance of commercial
paper, to finance current operations. See "Use of Proceeds" in the prospectus.
DESCRIPTION OF NOTES
The Notes are to be issued under the Indenture dated as of February 1, 1991
(the "Senior Indenture") between the Capital Corporation and The Bank of New
York, Trustee, which Senior Indenture is more fully described in the prospectus.
The following description of the particular terms of the Notes offered hereby
supplements, and to the extent inconsistent therewith replaces, the description
of the general terms and provisions of Debt Securities set forth in the
prospectus under the caption "Description of Debt Securities". Whenever
particular defined terms of the Senior Indenture are referred to, such defined
terms are incorporated herein by reference.
GENERAL
The Notes will mature on March 20, 1998 and will be limited to $150,000,000
aggregate principal amount. The Notes may not be redeemed by the Capital
Corporation prior to maturity and are not subject to a sinking fund.
The Notes will be issued only in fully registered form, without coupons, in
denominations of $1,000 and integral multiples thereof. The Notes will be
represented by a single permanent global Note registered in the name of DTC, or
its nominee, and payment of principal of, and interest on, the Notes will be
made in immediately available funds to DTC or its nominee, as the case may be,
as the registered holder thereof. See "-- Same-Day Settlement and Payment" and
"Description of Debt Securities -- Book-Entry Debt Securities."
INTEREST
Interest on the Notes will be payable on the twentieth day of March, June,
September and December (each an "Interest Payment Date"), commencing June 20,
1995. Any payment of principal or interest required to be made on a day that is
not a Business Day need not be made on such day, but may be made on the next
succeeding Business Day with the same force and effect as if made on such day
and no interest shall accrue as a result of such delayed payment. Interest
payable on each Interest Payment Date will include interest accrued from and
including March 20, 1995 or from and including the most recent Interest Payment
Date to which interest has been paid, as the case may be, to but excluding such
Interest Payment Date. Interest payable on any Interest Payment Date will be
payable to the registered holders at the close of business on the fifteenth day
(whether or not a Business Day) preceding such Interest Payment Date.
The interest rate on the Notes will be payable at a floating rate that will
be subject to daily adjustment and will be a per annum rate equal to the Federal
Funds Rate (determined as described below) plus a spread of .320%.
Each day on which the interest rate is adjusted is referred to herein as a
"Reset Date." The "Interest Determination Date" pertaining to a Reset Date will
be the Business Day preceding such Reset Date. The first Reset Date will be
March 20, 1995, using an Interest Determination Date of March 17, 1995.
"Federal Funds Rate" means, with respect to any Interest Determination Date,
the rate on that day for federal funds as published in H.15(519) under the
heading "Federal Funds ("Effective") or, if not so published by 3:30 P.M, New
York City time, on the Calculation Date pertaining to such Interest
Determination Date, the rate on such Interest Determination Date as published in
Composite Quotations under the heading "Federal Funds/Effective Rate". If, by
3:30 P.M., New York City time, on the Calculation Date
S-3
<PAGE>
pertaining to such Interest Determination Date such rate is not yet published in
either H.15(519) or Composite Quotations, the Federal Funds Rate for such
Interest Determination Date will be calculated by the Calculation Agent and will
be the arithmetic mean of the rates for the last transaction in overnight
federal funds arranged by three leading dealers of federal funds transactions in
The City of New York, which dealers have been selected by the Calculation Agent
(after consultation with the Capital Corporation, if the Capital Corporation is
not then acting as Calculation Agent), as of 9:00 A.M., New York City time, on
such Interest Determination Date; PROVIDED, HOWEVER, that if the dealers
selected as aforesaid by the Calculation Agent are not quoting as mentioned in
this sentence, the Federal Funds Rate for the period commencing on the Reset
Date following such Interest Determination Date will be the Federal Funds Rate
in effect on such Interest Determination Date.
"Business Day" means any day other than a Saturday or a Sunday or a day on
which banking institutions are generally authorized or obligated by law or by
executive order to close in The City of New York.
"Calculation Agent" will be the Capital Corporation or a bank or
broker-dealer designated by the Capital Corporation.
"Calculation Date" means, with respect to an Interest Determination Date,
the Business Day preceding the applicable Interest Payment Date.
Accrued interest on any Note from March 20, 1995 or the preceding Interest
Payment Date, as the case may be, is calculated by multiplying the principal
amount of such Note by an accrued interest factor. This accrued interest factor
is computed by adding the interest factor calculated for each day from March 20,
1995 or the preceding Interest Payment Date, as the case may be, to but
excluding the date for which accrued interest is being calculated. The interest
factor (expressed as a decimal rounded, if necessary, to the nearest one
ten-millionth of one percentage point, with five one hundred-millionths of one
percentage point rounded upwards) for each such day is computed by dividing the
interest rate (expressed as a decimal rounded, if necessary, to the nearest one
hundred-thousandth of one percentage point, with five one-millionths of one
percentage point rounded upwards) applicable to such date by 360. The amount of
interest payable on any Note on any Interest Payment Date will be equal to the
amount of accrued interest to but excluding such Interest Payment Date
determined using the applicable accrued interest factor.
The interest rate on the Notes will in no event be higher than the maximum
rate permitted by New York law as the same may be modified by United States law
of general application. Under present New York law, the maximum rate of interest
is 25% per annum on a simple interest basis. This limit may not apply to Notes
in which $2,500,000 or more has been invested.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriters (as defined below
in "Underwriting") in immediately available funds. So long as the Notes are
represented by a permanent global Note, all payments of principal and interest
will be made by the Capital Corporation in immediately available funds.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearing-house or next-day funds. In contrast, so long as
the Notes are represented by a permanent global Note registered in the name of
DTC or its nominee, the Notes will trade in DTC's Same-Day Funds Settlement
System, and secondary market trading activity in the Notes will therefore be
required by DTC to settle in immediately available funds. No assurance can be
given as to the effect, if any, of settlement in immediately available funds on
trading activity in the Notes.
S-4
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
Basic Provisions and the Terms Agreement relating to the Notes (the
"Underwriting Agreement") among the Capital Corporation and Salomon Brothers Inc
and Chemical Securities Inc. (the "Underwriters"), the Capital Corporation has
agreed to sell to each of the Underwriters, and each of the Underwriters has
severally agreed to purchase, the amount of Notes set forth opposite its name
below:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
UNDERWRITER OF NOTES
------------------------------------------------------------------------------ --------------
<S> <C>
Salomon Brothers Inc.......................................................... $ 75,000,000
Chemical Securities Inc....................................................... 75,000,000
--------------
Total....................................................................... $ 150,000,000
--------------
--------------
</TABLE>
In the Underwriting Agreement, the several Underwriters have agreed, subject
to the terms and conditions set forth therein, to purchase all of the Notes
offered hereby if any Notes are purchased.
The Capital Corporation has been advised by the Underwriters that they
propose initially to offer the Notes to the public at the public offering price
set forth on the cover page of this Prospectus Supplement and to certain dealers
at such price less a concession of not more than .100% of the principal amount
of the Notes. The Underwriters may allow and such dealers may reallow a
concession of not more than .075% of the principal amount of the Notes to
certain other dealers. After the initial public offering, the public offering
price and such concessions may be changed.
The Underwriting Agreement provides that the Capital Corporation will
indemnify the Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933, or contribute to payments that the
Underwriters may be required to make in respect thereof.
The Capital Corporation does not intend to apply for listing of the Notes on
any national securities exchange, but has been advised by the Underwriters that
they presently intend to make a market in the Notes as permitted by applicable
laws and regulations. However, an Underwriter is not obligated to make a market
in the Notes and any such market making may be discontinued by it at any time in
its sole discretion. Accordingly, no assurance can be given as to the liquidity
of, or trading markets for, the Notes.
Chemical Bank, a banking affiliate of Chemical Securities Inc., has in the
past performed, and may in the future perform, commercial banking and corporate
trust services for Deere & Company and the Capital Corporation.
S-5
<PAGE>
PROSPECTUS
JOHN DEERE CAPITAL CORPORATION
DEBT SECURITIES
WARRANTS TO PURCHASE DEBT SECURITIES
PREFERRED STOCK
John Deere Capital Corporation (the "Capital Corporation") may offer from time
to time under this prospectus, together or separately, its debt securities
("Debt Securities"), warrants ("Debt Warrants") to purchase Debt Securities or
shares of preferred stock (the "Preferred Stock" and, together with the Debt
Securities and the Debt Warrants, the "Securities"), on terms to be determined
at the time of offering. Securities (including Debt Securities (the "Underlying
Debt Securities") issuable upon the exercise of Debt Warrants) with an aggregate
public offering price of up to $500,000,000 (or the equivalent thereof if any of
the Securities are denominated in a currency, currency unit or composite
currency ("Currency") other than the U.S. dollar) may be issued, in one or more
series, under this prospectus.
The Debt Securities will be direct unsecured obligations of the Capital
Corporation and may be either senior debt securities ("Senior Securities") or
subordinated debt securities ("Subordinated Securities"). The Senior Securities
will rank equally with all other unsecured and unsubordinated indebtedness of
the Capital Corporation. The Subordinated Securities will be subordinated to all
existing and future Senior Indebtedness of the Capital Corporation, as defined.
See "Description of Debt Securities".
The prospectus supplement accompanying this prospectus sets forth, with respect
to the particular series or issue of Securities (the "Offered Securities") for
which this prospectus and the prospectus supplement are being delivered: the
terms of any Debt Securities offered (the "Offered Debt Securities"), including,
where applicable, whether such Debt Securities are Senior Securities or
Subordinated Securities, the specific designation, aggregate principal amount,
authorized denominations, maturity, rate (or manner of calculation thereof) and
time of payment of interest, if any, any redemption or repayment terms, the
Currency or Currencies in which the Offered Debt Securities shall be denominated
or payable, any index, formula or other method pursuant to which principal,
premium or interest may be determined and the form of the Offered Debt
Securities (which may be in registered, bearer or global form) (and, if Debt
Warrants are being offered, similar information with respect to the Underlying
Debt Securities); the terms of any Debt Warrants offered, including the exercise
price, detachability, expiration date and other terms; the terms of any
Preferred Stock offered (the "Offered Preferred Stock"), including the specific
designation and stated value, any dividend rights and any liquidation,
redemption, voting and other rights not described in this prospectus; and any
initial public offering price, the purchase price and net proceeds to the
Capital Corporation and the other specific terms of such offering of Securities.
The Capital Corporation may sell Securities to or through underwriters, dealers
or agents, and also may sell Securities directly to other purchasers. See "Plan
of Distribution". No Securities may be sold without delivery of a prospectus
supplement describing such series or issue of Offered Securities and the method
and terms of offering thereof.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is March 13, 1995.
<PAGE>
AVAILABLE INFORMATION
John Deere Capital Corporation is subject to the informational requirements
of the Securities Exchange Act of 1934 and in accordance therewith files reports
and other information with the Securities and Exchange Commission (the
"Commission"). Such reports and other information may be inspected and copied at
the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549; 500 W. Madison Street, Chicago, Illinois
60661; and Seven World Trade Center, New York, New York 10048; and copies of
such material may be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. Reports and other information concerning the Capital Corporation may also
be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Capital Corporation with the Commission
are incorporated in this prospectus by reference: (i) annual report on Form 10-K
for the fiscal year ended October 31, 1994, (ii) quarterly report on Form 10-Q
for the quarter ended January 31, 1995 and (iii) current reports on Form 8-K
dated December 6, 1994 and February 21, 1995.
All documents subsequently filed by the Capital Corporation pursuant to
section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 prior
to the termination of any offering of the Securities made by this prospectus
shall be deemed to be incorporated by reference in this prospectus and to be a
part of this prospectus from the date of the filing of such documents. Any
statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this prospectus to the extent that a statement contained herein
(or in the accompanying prospectus supplement) or in any other subsequently
filed document which also is or is deemed to be incorporated by reference
modifies or replaces such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this prospectus.
The Capital Corporation will provide without charge to each person to whom
this prospectus is delivered, on the written or oral request of such person, a
copy of any or all of the documents referred to above that have been or may be
incorporated by reference in this prospectus, other than exhibits to such
documents. Such written or oral request should be directed to John Deere Capital
Corporation, Suite 600, First Interstate Bank Building, 1 East First Street,
Reno, Nevada 89501, Attention: Manager (702/786-5527).
2
<PAGE>
THE COMPANY
The principal business of the Capital Corporation and its subsidiaries
(collectively called the "Company") is providing and administering financing for
retail purchases of new and used John Deere agricultural, industrial and lawn
and grounds care equipment. The Company purchases retail installment sales and
loan contracts (retail notes) from Deere & Company and its wholly-owned
subsidiaries (collectively called "John Deere"). These retail notes are acquired
by John Deere through John Deere retail dealers in the United States. The
Company also purchases and finances retail notes unrelated to John Deere,
representing primarily recreational vehicle and recreational marine product
notes acquired from independent dealers of those products and from marine
product mortgage service companies. The Company also leases John Deere equipment
to retail customers, finances and services unsecured revolving charge accounts
acquired from and offered through merchants in the agricultural, lawn and
grounds care and marine retail markets, and provides wholesale financing for
wholesale inventories of recreational vehicles, manufactured housing units,
yachts and John Deere engines owned by dealers of those products.
A substantial part of the retail sales and leases of John Deere products is
financed by financial institutions outside of the John Deere organization.
John Deere Credit Company, a wholly-owned finance holding subsidiary of
Deere & Company, is the parent of the Capital Corporation.
John Deere's operations are categorized into five business segments:
John Deere's worldwide AGRICULTURAL EQUIPMENT segment manufactures and
distributes a full range of equipment used in commercial farming--including
tractors; tillage, soil preparation, planting and harvesting machinery; and
crop handling equipment.
John Deere's worldwide INDUSTRIAL EQUIPMENT segment manufactures and
distributes a broad range of machines used in construction, earthmoving and
forestry--including backhoe loaders; crawler dozers and loaders;
four-wheel-drive loaders; scrapers; motor graders; excavators; and log
skidders. This segment also includes the manufacture and distribution of
engines and drivetrain components for the original equipment manufacturer
(OEM) market.
John Deere's worldwide LAWN AND GROUNDS CARE EQUIPMENT segment
manufactures and distributes equipment for commercial and residential
uses--including small tractors for lawn, garden and utility purposes; riding
and walk-behind mowers; golf course equipment; utility transport vehicles;
snowblowers; hand held products such as chain saws, string trimmers and leaf
blowers; and other outdoor power products.
The products produced by the equipment segments are marketed primarily
through independent retail dealer networks.
The CREDIT segment includes the operations of the Company, John Deere
Credit Company and John Deere Finance Limited, which primarily purchases and
finances retail notes from John Deere's equipment sales branches in Canada.
The INSURANCE AND HEALTH CARE segment issues policies in the United
States and Canada primarily for: a general line of property and casualty
insurance to John Deere and non-Deere dealers and to the general public;
group life and group accident and health insurance for employees of
participating John Deere dealers and employees of John Deere; and life and
annuity products to the general public. This segment also provides health
management programs and related administrative services in the United States
to corporate customers and employees of John Deere.
The Capital Corporation's executive offices are located at Suite 600, First
Interstate Bank Building, 1 East First Street, Reno, Nevada 89501. Its telephone
number is 702/786-5527.
3
<PAGE>
USE OF PROCEEDS
Except as may be described otherwise in a prospectus supplement, the net
proceeds from the sale of the Securities will be added to the general funds of
the Company and will be used for working capital and other general corporate
purposes, and will be available for, among other things, the purchase of
receivables. Such proceeds may be applied initially to the reduction of
short-term indebtedness.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed charges for
the Company for the periods indicated. The Company to date has not issued
preferred stock; therefore, the ratios of earnings to combined fixed charges and
preferred stock dividends are unchanged from the ratios presented here.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JANUARY 31, YEAR ENDED OCTOBER 31,
-------------------- -----------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges (1).............. 1.76 1.97 1.96 1.99 1.74 1.48 1.46
<FN>
------------------------
(1) Earnings consist of income before income taxes and changes in accounting to
which are added fixed charges. Fixed charges consist of interest on
indebtedness, amortization of debt discount and expense, an estimated
amount of rental expense under capitalized leases which is deemed to be
representative of the interest factor and rental expense under operating
leases. Under the terms of certain credit agreements, the Company is
required to maintain its consolidated ratio of earnings before fixed
charges to fixed charges at no less than 1.05 to 1 for each fiscal quarter.
In addition, the Company's ratio of senior debt to total stockholder's
equity plus subordinated debt may not be more than 8 to 1 at the end of any
fiscal quarter.
</TABLE>
DESCRIPTION OF DEBT SECURITIES
The Senior Securities are to be issued under an indenture dated as of
February 1, 1991, as supplemented from time to time (the "Senior Indenture"),
between the Capital Corporation and The Bank of New York, Trustee, and the
Subordinated Securities are to be issued under an indenture dated as of February
1, 1991, as supplemented from time to time (the "Subordinated Indenture"),
between the Capital Corporation and The First National Bank of Chicago, Trustee.
The term "Trustee" as used herein shall refer to either The Bank of New York or
The First National Bank of Chicago as appropriate for Senior Securities or
Subordinated Securities. The forms of the Senior Indenture and the Subordinated
Indenture (being sometimes referred to herein collectively as the "Indentures"
and individually as an "Indenture") are filed as exhibits to the registration
statement. The Indentures are subject to and governed by the Trust Indenture Act
of 1939, as amended (the "TIA"). The statements made under this heading relating
to the Debt Securities and the Indentures are summaries of the provisions
thereof and do not purport to be complete and are qualified in their entirety by
reference to the Indentures, including the definitions of certain terms therein.
Parenthetical references below are to the Indentures or to the TIA, as
applicable.
GENERAL
The Debt Securities will be direct, unsecured obligations of the Capital
Corporation. The indebtedness represented by the Senior Securities will rank
equally with all other unsecured and unsubordinated indebtedness of the Capital
Corporation. The indebtedness represented by the Subordinated Securities will be
subordinated in right of payment to the prior payment in full of the Senior
Indebtedness of the Capital Corporation as described under "Subordination".
The Debt Securities may be issued in one or more series. The particular
terms of the Offered Debt Securities (including any Underlying Debt Securities),
as well as any modifications of or additions to the general terms of the Senior
Securities or the Subordinated Securities as described herein that may be
applicable in the case of the Offered Debt Securities, are described in the
prospectus supplement relating to
4
<PAGE>
the Offered Debt Securities. Accordingly, for a description of the terms of the
Offered Debt Securities, reference must be made to both the prospectus
supplement relating thereto and the description of Debt Securities set forth in
this prospectus.
Reference is made to the prospectus supplement for the following terms of
the Offered Debt Securities (including any Underlying Debt Securities) being
offered thereby:
(1) The title of such Debt Securities and whether such Debt Securities
are Senior Securities or Subordinated Securities.
(2) The aggregate principal amount of such Debt Securities and any limit
on the aggregate principal amount of Debt Securities of such series.
(3) The percentage of the principal amount at which such Debt Securities
will be issued and, if other than the principal amount thereof, the portion
of the principal amount thereof payable upon declaration of acceleration of
the maturity thereof or the method by which such portion shall be
determined.
(4) The date or dates, or the method by which such date or dates will be
determined or extended, on which the principal of such Debt Securities will
be payable.
(5) The rate or rates at which such Debt Securities will bear interest,
if any, or the method by which such rate or rates shall be determined, the
date or dates from which such interest, if any, shall accrue or the method
by which such date or dates shall be determined, the date or dates on which
such interest, if any, will be payable and the Regular Record Date or Dates,
if any, for the interest payable on any Registered Security on any Interest
Payment Date, or the method by which any such date shall be determined, and
the basis upon which interest shall be calculated if other than that of a
360-day year of twelve 30-day months.
(6) The period or periods within which, the price or prices at which,
the Currency or Currencies in which, and the other terms and conditions upon
which, such Debt Securities may be redeemed in whole or in part at the
option of the Capital Corporation and whether the Capital Corporation is to
have that option.
(7) The obligation, if any, of the Capital Corporation to redeem, repay
or purchase such Debt Securities pursuant to any sinking fund or analogous
provision or at the option of a holder thereof and the period or periods
within which or the date or dates on which, the price or prices at which,
the Currency or Currencies in which and the other terms and conditions upon
which, such Debt Securities shall be redeemed, repaid or purchased, in whole
or in part, pursuant to such obligation.
(8) Whether such Debt Securities are to be issuable as Registered
Securities, Bearer Securities or both, any restrictions applicable to the
offer, sale or delivery of Bearer Securities and the terms upon which Bearer
Securities of the series may be exchanged for Registered Securities of the
series and VICE VERSA (if permitted by applicable laws and regulations),
whether such Debt Securities are to be issuable initially in temporary
global form (a "Global Security"), whether any such Debt Securities are to
be issuable in permanent global form with or without coupons and, if so,
whether beneficial owners of interests in any such permanent Global Security
may exchange such interests for Debt Securities of such series and of like
tenor of any authorized form and denomination and the circumstances under
which any such exchanges may occur, if other than in the manner provided in
the applicable Indenture, and, if Registered Securities of the series are to
be issuable as a Global Security, the identity of the depository for such
series.
(9) If other than U.S. dollars, the Currency or Currencies in which
payments of the principal of (and premium, if any) or any interest or
Additional Amounts, if any, on such Debt Securities will be payable or in
which such Debt Securities will be denominated.
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(10) Whether the amount of payments of principal of (and premium, if any)
or interest, if any, on such Debt Securities may be determined with
reference to an index, formula or other method (which index, formula or
method may be based on one or more Currencies, commodities, equity indices
or other indices) and the manner in which such amounts shall be determined.
(11) Whether the Capital Corporation or a holder may elect payment of the
principal of (and premium, if any) or interest, if any, on such Debt
Securities in one or more Currencies, other than that in which such Debt
Securities are denominated or stated to be payable, the period or periods
within which, and the terms and conditions upon which, such election may be
made, and the time and manner of determining the exchange rate between the
Currency or Currencies in which such Debt Securities are denominated or
stated to be payable and the Currency or Currencies in which such Debt
Securities are to be so payable.
(12) The place or places, if any, other than or in addition to, in
respect of the Senior Securities, New York, New York and, in respect of the
Subordinated Securities, Chicago, Illinois and New York, New York, where the
principal of (and premium, if any), interest, if any, on, and any Additional
Amounts payable in respect of, such Debt Securities shall be payable, any
Registered Securities may be surrendered for registration of transfer or
exchange and notices or demands to or upon the Capital Corporation in
respect of such Debt Securities and the applicable Indenture may be served.
(13) If other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any Registered Securities of the series
shall be issuable and, if other than the denomination of $5,000, the
denomination or denominations in which any Bearer Securities of the series
shall be issuable.
(14) If other than the applicable Trustee, the identity of each Security
Registrar and/or Paying Agent.
(15) The date as of which any Bearer Securities of the series and any
temporary Global Security representing Outstanding Securities of the series
shall be dated if other than the date of original issuance of the first Debt
Security of the series to be issued.
(16) The applicability, if at all, to such Debt Securities of the
provisions of Article Fourteen of the respective Indenture described under
"Defeasance and Covenant Defeasance" and any provisions in modification of,
in addition to or in lieu of any of the provisions of such Article.
(17) The Person to whom any interest on any Registered Security of the
series shall be payable, if other than the Person in whose name such
Registered Security (or one or more Predecessor Securities) is registered at
the close of business on the Regular Record Date for such interest, the
manner in which, or the Person to whom, any interest on any Bearer Security
of the series shall be payable, if otherwise than upon presentation and
surrender of the coupons appertaining thereto as they severally mature, and
the extent to which, or the manner in which, any interest payable on a
temporary Global Security on an Interest Payment Date will be paid if other
than in the manner provided in the applicable Indenture.
(18) If the Debt Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a temporary
Debt Security of such series) only upon receipt of certain certificates or
other documents or satisfaction of other conditions, the form and/or terms
of such certificates, documents or conditions.
(19) If such Debt Securities are to be issued upon the exercise of Debt
Warrants, the time, manner and place for such Debt Securities to be
authenticated and delivered.
(20) Whether and under what circumstances the Capital Corporation will
pay Additional Amounts as contemplated by Section 1006 of the applicable
Indenture on such Debt Securities to any holder who is not a United States
person (including any modification to the definition of such term as
contained in the applicable Indenture as originally executed) in respect of
any tax, assessment or governmental charge and, if so, whether the Capital
Corporation will have the option to redeem such Debt Securities rather than
pay such Additional Amounts (and the terms of any such option).
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(21) The provisions, if any, granting special rights to the holders of
such Debt Securities upon the occurrence of such events as may be specified.
(22) Any deletions from, modifications of or additions to the Events of
Default or covenants of the Capital Corporation with respect to such Debt
Securities, whether or not such Events of Default or covenants are
consistent with the Events of Default or covenants set forth in the general
provisions of the applicable Indenture.
(23) The designation of the initial Exchange Rate Agent, if any.
(24) Any other terms of such Debt Securities.
Each Indenture provides that the Debt Securities referred to on the cover
page of this prospectus and additional unsecured debt securities of the Capital
Corporation unlimited as to aggregate principal amount may be issued in one or
more series thereunder, in each case as authorized from time to time by or
pursuant to authority granted by the Board of Directors of the Capital
Corporation. (Section 301 of each Indenture) The Debt Securities referred to on
the cover page of this prospectus and any such additional debt securities so
issued under the applicable Indenture are herein collectively referred to, when
a single Trustee is acting for all debt securities issued under such Indenture,
as the "Indenture Securities". Each Indenture also provides that there may be
more than one Trustee thereunder, each with respect to one or more different
series of Indenture Securities. See also "Resignation of Trustee" herein. At a
time when two or more Trustees are acting under either Indenture, each with
respect to only certain series, the term "Indenture Securities", as used herein,
shall mean the one or more series with respect to which each respective Trustee
is acting. In the event that there is more than one Trustee under either
Indenture, the powers and trust obligations of each Trustee as described herein
shall extend only to the one or more series of Indenture Securities for which it
is Trustee. If more than one Trustee is acting under either Indenture, then the
Indenture Securities (whether of one or more than one series) for which each
Trustee is acting shall in effect be treated as if issued under separate
indentures.
Some or all of the Indenture Securities may provide for less than the entire
principal amount thereof to be payable upon declaration of acceleration of the
Maturity thereof ("Original Issue Discount Securities"). Federal income tax
consequences and other special considerations applicable to any such Original
Issue Discount Securities will be described in the prospectus supplement
relating thereto.
The general provisions of the Indentures do not contain any provisions that
would limit the ability of the Capital Corporation to incur indebtedness or that
would afford holders of Debt Securities protection in the event of a highly
leveraged or similar transaction involving the Company. However, the general
provisions of each Indenture do provide that neither the Capital Corporation nor
any Subsidiary will pledge or subject to any lien any of its property or assets
unless the Indenture Securities issued under such Indenture are secured by such
pledge or lien equally and ratably with other indebtedness thereby secured. See
"Limitation on Liens". Reference is made to the prospectus supplement related to
the Offered Debt Securities for information applicable to such Debt Securities
with respect to any deletions from, modifications of or additions to the Events
of Default or covenants of the Capital Corporation that are described below,
including any addition of a covenant or other provision providing event risk or
similar protection.
Under the Indentures, the Capital Corporation will have the ability, in
addition to the ability to issue Indenture Securities with terms different from
those of Indenture Securities previously issued, without the consent of the
holders, to reopen a previous issue of a series of Indenture Securities and
issue additional Indenture Securities of such series (unless such reopening was
restricted when such series was created), in an aggregate principal amount
determined by the Capital Corporation. (Section 301 of each Indenture)
DENOMINATIONS, REGISTRATION AND TRANSFER
Debt Securities of a series may be issuable solely as Registered Securities,
solely as Bearer Securities or as both Registered Securities and Bearer
Securities. Registered Securities will be issuable in denominations of $1,000
and integral multiples of $1,000 and Bearer Securities will be issuable in the
denomination of $5,000 or, in each case, in such other denominations as may be
in the terms of the Debt Securities of any
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particular series. The Indentures also provide that Debt Securities of a series
may be issuable in global form. See "Book-Entry Debt Securities". Unless
otherwise indicated in the prospectus supplement, Bearer Securities will have
interest coupons attached. (Section 201 of each Indenture)
Registered Securities of any series will be exchangeable for other
Registered Securities of the same series and of a like aggregate principal
amount, tenor and rank, and of different authorized denominations. If (but only
if) provided in the prospectus supplement, Bearer Securities (with all unmatured
coupons, except as provided below, and all matured coupons in default) of any
series may be exchanged for Registered Securities of the same series of any
authorized denominations and of a like aggregate principal amount and tenor. In
such event, Bearer Securities surrendered in a permitted exchange for Registered
Securities between a Regular Record Date or a Special Record Date and the
relevant date for payment of interest shall be surrendered without the coupon
relating to such date for payment of interest, and interest will not be payable
on such date for payment of interest in respect of the Registered Security
issued in exchange for such Bearer Security, but will be payable only to the
holder of such coupon when due in accordance with the terms of the applicable
Indenture. Unless otherwise specified in the prospectus supplement, Bearer
Securities will not be issued in exchange for Registered Securities. (Section
305 of each Indenture)
The Debt Securities may be presented for exchange as described above, and
Registered Securities may be presented for registration of transfer (duly
endorsed or accompanied by a written instrument of transfer), initially at the
corporate trust office of the applicable Trustee or at the office of any
transfer agent designated by the Capital Corporation for such purpose with
respect to any series of Debt Securities and referred to in the prospectus
supplement. No service charge will be made for any transfer or exchange of Debt
Securities, but the Capital Corporation may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
(Section 305 of each Indenture) If a prospectus supplement refers to any
transfer agent (in addition to the applicable Trustee) initially designated by
the Capital Corporation with respect to any series of Debt Securities, the
Capital Corporation may at any time rescind the designation of any such transfer
agent or approve a change in the location through which any such transfer agent
acts, except that, if Debt Securities of a series are issuable solely as
Registered Securities, the Capital Corporation will be required to maintain a
transfer agent in each Place of Payment for such series and, if Debt Securities
of a series are issuable solely as Bearer Securities or both as Registered
Securities and as Bearer Securities, the Capital Corporation will be required to
maintain (in addition to the applicable Trustee) a transfer agent in a Place of
Payment for such series located outside the United States. The Capital
Corporation may at any time designate additional transfer agents with respect to
any series of Debt Securities. (Section 1002 of each Indenture)
In the event of any redemption, the Capital Corporation shall not be
required to (i) issue, register the transfer of or exchange Debt Securities of
any series during a period beginning at the opening of business 15 days before
any selection of Debt Securities of that series to be redeemed and ending at the
close of business on (A) if Debt Securities of the series are issuable only as
Registered Securities, the day of mailing of the relevant notice of redemption
and (B) if Debt Securities of the series are issuable as Bearer Securities, the
day of the first publication of the relevant notice of redemption, or, if Debt
Securities of the series are also issuable as Registered Securities and there is
no publication, the day of mailing of the relevant notice of redemption; (ii)
register the transfer of or exchange any Registered Security, or portion
thereof, called for redemption, except the unredeemed portion of any Registered
Security being redeemed in part; (iii) exchange any Bearer Security called for
redemption, except to exchange such Bearer Security for a Registered Security of
that series and like tenor which is simultaneously surrendered for redemption;
or (iv) issue, register the transfer of or exchange any Debt Security which has
been surrendered for repayment at the option of the holder, except the portion,
if any, of such Debt Security not to be so repaid. (Section 305 of each
Indenture)
LIMITATION ON LIENS
In each Indenture, the Capital Corporation covenants that neither it nor any
Subsidiary will pledge or subject to any lien any of its property or assets
unless the Indenture Securities issued under such Indenture are secured by such
pledge or lien equally and ratably with other indebtedness thereby secured.
There are
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excluded from this covenant liens created to secure obligations for the purchase
price of physical property, liens of a Subsidiary securing indebtedness owed to
the Capital Corporation, liens existing on property acquired upon exercise of
rights arising out of defaults on receivables acquired in the ordinary course of
business, sales of receivables accounted for as secured indebtedness in
accordance with generally accepted accounting principles, certain liens not
related to the borrowing of money and other liens not securing borrowed money
aggregating less than $500,000. (Section 1004 of each Indenture)
EVENTS OF DEFAULT
Each Indenture provides, with respect to any series of Debt Securities
outstanding thereunder, that the following shall constitute Events of Default:
(i) default in the payment of any interest upon or any Additional Amounts
payable in respect of any Debt Security of that series, or of any coupon
appertaining thereto, when the same becomes due and payable, continued for 30
days; (ii) default in the payment of the principal of or any premium on any Debt
Security of that series at its Maturity; (iii) default in the deposit of any
sinking fund payment when due by the terms of any Debt Security of that series;
(iv) default in the performance, or breach, of any covenant or warranty of the
Capital Corporation in the Indenture with respect to any Debt Security of that
series, continued for 60 days after written notice to the Capital Corporation;
(v) certain events in bankruptcy, insolvency or reorganization; and (vi) any
other Event of Default provided with respect to Debt Securities of that series.
(Section 501 of each Indenture) The Capital Corporation is required to file with
each Trustee, annually, an officer's certificate as to the Capital Corporation's
compliance with all conditions and covenants under the applicable Indenture.
(Section 1005 of each Indenture) Each Indenture provides that the applicable
Trustee may withhold notice to the holders of a series of Debt Securities of any
default (except payment defaults on such Debt Securities) if it considers it in
the interest of the holders of such series of Debt Securities to do so. (Section
601 of each Indenture)
If an Event of Default with respect to Debt Securities of a particular
series shall occur and be continuing, the applicable Trustee or the holders of
not less than 25% in principal amount of Outstanding Debt Securities of that
series may declare the principal amount (or, if the Debt Securities of that
series are Original Issue Discount Securities or Indexed Securities, such
portion of the principal amount as may be specified in the terms of that series)
of all of the Outstanding Debt Securities of that series due and payable
immediately. (Section 502 of each Indenture)
Subject to the provisions of each Indenture relating to the duties of the
applicable Trustee, in case an Event of Default with respect to Debt Securities
of a particular series shall occur and be continuing, the applicable Trustee
shall be under no obligation to exercise any of its rights or powers under such
Indenture at the request, order or direction of any of the holders of Debt
Securities of that series, unless such holders shall have offered to the
applicable Trustee reasonable indemnity against the expenses and liabilities
which might be incurred by it in compliance with such request. (Section 507 of
each Indenture and TIA Section 315) Subject to such provisions for the
indemnification of the applicable Trustee, the holders of a majority in
principal amount of the Outstanding Debt Securities of such series shall have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the applicable Trustee under such Indenture, or
exercising any trust or power conferred on the applicable Trustee with respect
to the Debt Securities of that series. (Section 512 of each Indenture)
The holders of not less than a majority in principal amount of the
Outstanding Debt Securities of any series under either Indenture may on behalf
of the holders of all the Debt Securities of such series and any related coupons
waive any past default under that Indenture with respect to such series and its
consequences, except a default (i) in the payment of the principal of (or
premium, if any) or interest on or Additional Amounts payable in respect of any
Debt Security of such series or any related coupons, or (ii) in respect of a
covenant or provision that cannot be modified or amended without the consent of
the holder of each Outstanding Debt Security of such series affected thereby.
(Section 513 of each Indenture)
MERGER OR CONSOLIDATION
Each Indenture provides that the Capital Corporation may not consolidate
with or merge with or into any other corporation or convey or transfer its
properties and assets substantially as an entirety to any Person, unless either
the Capital Corporation is the continuing corporation or such corporation or
Person
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assumes by supplemental indenture all the obligations of the Capital Corporation
under such Indenture and the Indenture Securities issued thereunder and
immediately after the transaction no default shall exist. In addition, no such
consolidation, merger or transfer may be made if as a result thereof any
property or assets of the Capital Corporation or a Subsidiary would become
subject to any mortgage, lien or other encumbrance unless either (i) such
mortgage, lien or other encumbrance could be created pursuant to Section 1004 of
such Indenture (see "Limitation on Liens" above) without equally and ratably
securing the Indenture Securities issued under such Indenture or (ii) such
Indenture Securities are secured equally and ratably with the debt secured by
such mortgage, lien or other encumbrance. (Section 801 of each Indenture)
MODIFICATION OR WAIVER
Modification and amendment of either Indenture may be made by the Capital
Corporation and the respective Trustee thereunder with the consent of the
holders of not less than a majority in principal amount of all Outstanding
Indenture Securities issued under such Indenture that are affected by such
modification or amendment; provided that no such modification or amendment may,
without the consent of the holder of each Outstanding Indenture Security
affected thereby, among other things: (i) change the Stated Maturity of the
principal of (or premium, if any, on) or any installment of principal of or
interest on any such Indenture Security; (ii) reduce the principal amount or the
rate of interest on or any Additional Amounts payable in respect of, or any
premium payable upon the redemption of, any such Indenture Security; (iii)
change any obligation of the Capital Corporation to pay Additional Amounts in
respect of any such Indenture Security; (iv) reduce the amount of the principal
of an Original Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof or provable in bankruptcy;
(v) adversely affect any right of repayment at the option of the holder of any
such Indenture Security; (vi) change the place or currency of payment of
principal of, or any premium or interest on, any such Indenture Security; (vii)
impair the right to institute suit for the enforcement of any such payment on or
after the Stated Maturity thereof or on or after any Redemption Date or
Repayment Date therefor; (viii) reduce the above-stated percentage in principal
amount of such Outstanding Indenture Securities, the consent of whose holders is
necessary to modify or amend such Indenture or to consent to any waiver
thereunder or reduce the requirements for voting or quorum described below; or
(ix) modify any of the foregoing requirements or reduce the percentage of such
Outstanding Indenture Securities necessary to waive any past default or
compliance with certain restrictive provisions. (Section 902 of each Indenture)
In addition, under the Subordinated Indenture, no modification or amendment
thereof shall, without the consent of the holder of each Outstanding
Subordinated Security affected thereby, modify any of the provisions of the
Subordinated Indenture relating to the subordination of the Subordinated
Securities in a manner adverse to the holders thereof and no such modification
or amendment shall adversely affect the rights of any holder of Senior
Indebtedness under Article Sixteen of the Subordinated Indenture (described
under the caption "Subordination") without the consent of such holder of Senior
Indebtedness. (Sections 902 and 907 of the Subordinated Indenture)
The holders of a majority in aggregate principal amount of Outstanding
Indenture Securities issued under either Indenture have the right to waive
compliance by the Capital Corporation with certain covenants contained in such
Indenture. (Section 1007 of each Indenture)
Modification and amendment of either Indenture may be made by the Capital
Corporation and the applicable Trustee thereunder, without the consent of any
holder, for any of the following purposes: (i) to evidence the succession of
another Person to the Capital Corporation as obligor under such Indenture; (ii)
to add to the covenants of the Capital Corporation for the benefit of the
holders of all or any series of Indenture Securities issued under such Indenture
and any related coupons or to surrender any right or power conferred upon the
Capital Corporation by such Indenture; (iii) to add Events of Default for the
benefit of the holders of all or any series of such Indenture Securities; (iv)
to add to or change any of the provisions of the applicable Indenture to
facilitate the issuance of, or to liberalize the terms of, Bearer Securities, or
to permit or facilitate the issuance of Indenture Securities in uncertificated
form, PROVIDED that any such actions shall not adversely affect the holders of
such Indenture Securities or any related coupons; (v) to change or eliminate any
provisions of the applicable Indenture, provided that any such change or
elimination shall become effective only when there are no such Indenture
Securities Outstanding of any series created prior thereto which are entitled to
the benefit of such provision; (vi) to secure such Indenture Securities pursuant
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to the requirements of Section 801 or Section 1004 of the applicable Indenture,
or otherwise; (vii) to establish the form or terms of such Indenture Securities
of any series and any related coupons; (viii) to provide for the acceptance of
appointment by a successor Trustee or facilitate the administration of the
trusts under the applicable Indenture by more than one Trustee; (ix) to cure any
ambiguity, defect or inconsistency in the applicable Indenture, provided such
action does not adversely affect the interests of holders of such Indenture
Securities of any series in any material respect; or (x) to supplement any of
the provisions of the applicable Indenture to the extent necessary to permit or
facilitate defeasance and discharge of any series of such Indenture Securities,
provided that such action shall not adversely affect the interests of the
holders of any such Indenture Securities and any related coupons in any material
respect. (Section 901 of each Indenture)
The Indentures provide that in determining whether the holders of the
requisite principal amount of Indenture Securities of a series then outstanding
have given any request, demand, authorization, direction, notice, consent or
waiver thereunder or whether a quorum is present at a meeting of holders of
Indenture Securities, (i) the principal amount of an Original Issue Discount
Security that shall be deemed to be outstanding shall be the amount of the
principal thereof that would be due and payable as of the date of such
determination upon acceleration of the Maturity thereof, (ii) the principal
amount of an Indenture Security denominated in a foreign Currency or Currencies
shall be the U.S. dollar equivalent, determined on the trade date for such
Indenture Security, of the principal amount (or, in the case of an Original
Issue Discount Security, the U.S. dollar equivalent on the trade date of such
Indenture Security of the amount determined as provided in (i) above), (iii) the
principal amount of any Indexed Security that may be counted in making such
determination or calculation and that shall be deemed outstanding for such
purpose shall be equal to the principal face amount of such Indexed Security at
original issuance, unless otherwise provided with respect to such Indexed
Security pursuant to Section 301 of the applicable Indenture, and (iv) Indenture
Securities owned by the Capital Corporation or any other obligor upon the
Indenture Securities or any Affiliate of the Capital Corporation or of such
other obligor shall be disregarded. (Section 101 of each Indenture)
The Indentures contain provisions for convening meetings of the holders of
Indenture Securities of a series if Indenture Securities of that series are
issuable as Bearer Securities. (Section 1501 of each Indenture) A meeting may be
called at any time by the applicable Trustee, and also, upon request, by the
Capital Corporation or the holders of at least 10% in principal amount of the
Indenture Securities of such series Outstanding, in any such case upon notice
given as provided in the applicable Indenture. (Section 1502 of each Indenture)
Except for any consent that must be given by the holder of each Indenture
Security affected thereby, as described above, any resolution presented at a
meeting or adjourned meeting duly reconvened at which a quorum is present may be
adopted by the affirmative vote of the holders of a majority in principal amount
of the Outstanding Indenture Securities of that series; PROVIDED, HOWEVER, that
any resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action that may be made, given or taken by the
holders of a specified percentage, which is less than a majority, in principal
amount of the Outstanding Indenture Securities of a series may be adopted at a
meeting or adjourned meeting duly reconvened at which a quorum is present by the
affirmative vote of the holders of such specified percentage in principal amount
of the Outstanding Indenture Securities of that series. Any resolution passed or
decision taken at any meeting of holders of Indenture Securities of any series
duly held in accordance with the applicable Indenture will be binding on all
holders of Indenture Securities of that series and the related coupons. The
quorum at any meeting called to adopt a resolution, and at any reconvened
meeting, will be persons holding or representing a majority in principal amount
of the Outstanding Indenture Securities of a series; PROVIDED, HOWEVER, that if
any action is to be taken at such meeting with respect to a consent or waiver
which may be given by the holders of not less than a specified percentage in
principal amount of the Outstanding Indenture Securities of a series, the
persons holding or representing such specified percentage in principal amount of
the Outstanding Indenture Securities of such series will constitute a quorum.
Notwithstanding the foregoing provisions, if any action is to be taken at a
meeting of holders of Indenture Securities of any series with respect to any
request, demand, authorization, direction, notice, consent, waiver or other
action that the applicable Indenture expressly provides may be made, given or
taken
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by the holders of a specified percentage in principal amount of all Outstanding
Indenture Securities affected thereby, or of the holders of such series and one
or more additional series: (i) there shall be no minimum quorum requirement for
such meeting and (ii) the principal amount of the Outstanding Indenture
Securities of such series that vote in favor of such request, demand,
authorization, direction, notice, consent, waiver or other action shall be taken
into account in determining whether such request, demand, authorization,
direction, notice, consent, waiver or other action has been made, given or taken
under such Indenture. (Section 1504 of each Indenture)
SUBORDINATION
Upon any distribution of assets of the Capital Corporation upon any
dissolution, winding up, liquidation or reorganization, the payment of the
principal of (and premium, if any) and interest on and any Additional Amounts
payable in respect of the Subordinated Securities is to be subordinated to the
extent provided in the Subordinated Indenture in right of payment to the prior
payment in full of all Senior Indebtedness (Sections 1601 and 1602 of the
Subordinated Indenture), but the obligation of the Capital Corporation to make
payment of the principal of (and premium, if any) and interest on and any
Additional Amounts payable in respect of the Subordinated Securities will not
otherwise be affected. (Section 1604 of the Subordinated Indenture) No payment
on account of principal (or premium, if any), sinking funds, interest or
Additional Amounts may be made on the Subordinated Securities at any time when
there is a default in the payment of principal, premium, if any, sinking funds
or interest on Senior Indebtedness. (Section 1603 of the Subordinated Indenture)
Subject to payment in full of Senior Indebtedness, the holders of the
Subordinated Securities will be subrogated to the rights of the holders of the
Senior Indebtedness to the extent of payments made to the holders of such Senior
Indebtedness out of the distributive share of the Subordinated Securities.
(Section 1602 of the Subordinated Indenture) By reason of such subordination, in
the event of a distribution of assets upon insolvency, certain general creditors
of the Capital Corporation may recover more, ratably, than holders of the
Subordinated Securities. The Subordinated Indenture provides that the
subordination provisions thereof shall not apply to money and securities held in
trust pursuant to the defeasance provisions of the Subordinated Indenture.
(Section 1402 of the Subordinated Indenture)
Senior Indebtedness is defined in the Subordinated Indenture as the
principal of (and premium, if any) and unpaid interest on (i) indebtedness of
the Capital Corporation (including indebtedness of others guaranteed by the
Capital Corporation), whether outstanding on the date hereof or thereafter
created, incurred, assumed or guaranteed, for money borrowed (other than the
Indenture Securities issued under the Subordinated Indenture and the 9 5/8%
Subordinated Notes due 1998 and the 8 5/8% Subordinated Debentures due 2019 of
the Capital Corporation), unless in the instrument creating or evidencing the
same or pursuant to which the same is outstanding it is provided that such
indebtedness is not senior or prior in right of payment to the Subordinated
Securities and (ii) renewals, extensions, modifications and refundings of any
such indebtedness. (Section 101 of the Subordinated Indenture) If this
prospectus is being delivered in connection with a series of Subordinated
Securities, the accompanying prospectus supplement or the information
incorporated by reference will set forth the approximate amount of Senior
Indebtedness outstanding as of a recent date.
The Subordinated Securities of, or within, any series are neither senior or
prior nor junior or subordinate in right of payment to the 9 5/8% Subordinated
Notes due 1998 or the 8 5/8% Subordinated Debentures due 2019 of the Capital
Corporation or to the Subordinated Securities of or within any other series
issued under the Subordinated Indenture. (Section 101 of the Subordinated
Indenture)
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The Capital Corporation may discharge certain obligations to holders of any
series of Indenture Securities which have not already been delivered to the
applicable Trustee for cancellation and which either have become due and payable
or are by their terms due and payable within one year (or scheduled for
redemption within one year) by irrevocably depositing with the applicable
Trustee in trust funds in an amount sufficient to pay the entire indebtedness on
such Indenture Securities for principal (and premium, if
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any) and interest, and any Additional Amounts with respect thereto, to the date
of such deposit (if such Indenture Securities have become due and payable) or to
the Stated Maturity or Redemption Date, as the case may be. (Section 401 of each
Indenture)
Each Indenture provides that, if the provisions of Article Fourteen are made
applicable to the Debt Securities of or within any series and any related
coupons pursuant to Section 301 of such Indenture, the Capital Corporation may
elect either (a) to defease and be discharged from any and all obligations with
respect to such Debt Securities and any related coupons (except for the
obligation to pay Additional Amounts, if any, upon the occurrence of certain
events of tax, assessment or governmental charge with respect to payments on
such Debt Securities and the obligations to register the transfer or exchange of
such Debt Securities and any related coupons, to replace temporary or mutilated,
destroyed, lost or stolen Debt Securities and any related coupons, to maintain
an office or agency in respect of such Debt Securities and any related coupons
and to hold moneys for payment in trust) ("defeasance") (Section 1402 of each
Indenture) or (b) to be released from its obligations with respect to such Debt
Securities and any related coupons under Section 1004 of such Indenture (being
the restrictions described under "Limitation on Liens") or, if provided pursuant
to Section 301 of such Indenture, its obligations with respect to any other
covenant, and any omission to comply with such obligations shall not constitute
a default or an Event of Default with respect to such Debt Securities and any
related coupons ("covenant defeasance") (Section 1403 of each Indenture), in
either case upon the irrevocable deposit by the Capital Corporation with the
applicable Trustee (or other qualifying trustee), in trust, of (i) an amount, in
the Currency or Currencies in which such Debt Securities and any related coupons
are then specified as payable at Stated Maturity, (ii) Government Obligations
(as defined below) applicable to such Debt Securities and any related coupons
(with such applicability being determined on the basis of the Currency in which
such Debt Securities are then specified as payable at Stated Maturity) which
through the payment of principal and interest in accordance with their terms
will provide money in an amount or (iii) a combination thereof in an amount,
sufficient to pay the principal of (and premium, if any) and interest, if any,
on such Debt Securities and any related coupons, and any mandatory sinking fund
or analogous payments thereon, on the scheduled due dates therefor.
Such a trust may only be established if, among other things, the Capital
Corporation has delivered to the applicable Trustee an Opinion of Counsel (as
specified in the applicable Indenture) to the effect that the holders of such
Debt Securities and any related coupons will not recognize income, gain or loss
for United States federal income tax purposes as a result of such defeasance or
covenant defeasance and will be subject to United States federal income tax on
the same amounts, in the same manner and at the same times as would have been
the case if such defeasance or covenant defeasance had not occurred, and such
Opinion of Counsel, in the case of defeasance under clause (a) above, must refer
to and be based upon a ruling of the Internal Revenue Service or a change in
applicable United States federal income tax law occurring after the date of the
Indenture. (Section 1404 of each Indenture)
"Government Obligations" means securities which are (i) direct obligations
of the United States of America or the government which issued the foreign
currency in which the Debt Securities of a particular series are payable, for
the payment of which its full faith and credit is pledged or (ii) obligations of
a Person controlled or supervised by and acting as an agency or instrumentality
of the United States of America or such government which issued the foreign
currency in which the Debt Securities of such series are payable, the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States of America or such other government, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank or trust company as custodian with
respect to any such Government Obligation or a specific payment of interest on
or principal of any such Government Obligation held by such custodian for the
account of the holder of a depository receipt; provided that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the Government Obligation or the specific payment of
interest on or principal of the Government Obligation evidenced by such
depository receipt. (Section 101 of each Indenture)
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Unless otherwise provided in the prospectus supplement, if, after the
Capital Corporation has deposited funds and/or Government Obligations to effect
defeasance or covenant defeasance with respect to Debt Securities of any series,
(a) the holder of a Debt Security of such series is entitled to, and does, elect
pursuant to the terms of the applicable Indenture or of such Debt Security to
receive payment in a Currency other than that in which such deposit has been
made in respect of such Debt Security, or (b) the Currency in which such deposit
has been made in respect of any Debt Security of such series (i) is a foreign
Currency, and it ceases to be used both by the government of the country that
issued the Currency and by a central bank or other public institutions of or
within the international banking community for the settlement of transactions,
(ii) is the ECU, and it ceases to be used both within the European Monetary
System and for the settlement of transactions by public institutions of or
within the European Communities or (iii) is any currency unit (or composite
currency) other than the ECU, and it ceases to be used for the purposes for
which it was established (each of the events described in clauses (i) through
(iii), a "Conversion Event"), then the indebtedness represented by such Debt
Security shall be deemed to have been, and will be, fully discharged and
satisfied through the payment of the principal of (and premium, if any) and
interest, if any, on such Debt Security as they become due out of the proceeds
yielded by converting the amount so deposited in respect of such Debt Security
into the Currency in which such Debt Security becomes payable as a result of
such election or such Conversion Event based on the applicable Market Exchange
Rate. (Section 1405 of each Indenture) Unless otherwise provided in the
prospectus supplement, all payments of principal of (and premium, if any) and
interest, if any, and Additional Amounts, if any, on any Debt Security that is
payable in a foreign Currency with respect to which a Conversion Event occurs
shall be made in U.S. dollars. (Section 312 of each Indenture)
In the event the Capital Corporation effects covenant defeasance with
respect to any Debt Securities and any related coupons and such Debt Securities
and any related coupons are declared due and payable because of the occurrence
of any Event of Default other than the Event of Default described in clause (iv)
under "Events of Default" with respect to Section 1004 of such Indenture (which
Section would no longer be applicable to such Debt Securities or any related
coupons) or described in clause (iv) or (vi) under "Events of Default" with
respect to any other covenant with respect to which there has been defeasance,
the amount in such Currency in which such Debt Securities and any related
coupons are payable, and Government Obligations that are on deposit with the
applicable Trustee will be sufficient to pay amounts due on such Debt Securities
and any related coupons at the time of their Stated Maturity but may not be
sufficient to pay amounts due on such Debt Securities and any related coupons at
the time of the acceleration resulting from such Event of Default. However, the
Capital Corporation would remain liable to make payment of such amounts due at
the time of acceleration.
If the applicable Trustee or any applicable Paying Agent is unable to apply
any money in accordance with the applicable Indenture by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Capital Corporation's
obligations under such Indenture and such Debt Securities and any related
coupons shall be revived and reinstated as though no deposit had occurred
pursuant to such Indenture, until such time as such Trustee or Paying Agent is
permitted to apply all such money in accordance with such Indenture; PROVIDED,
HOWEVER, that if the Capital Corporation makes any payment of principal of (or
premium, if any) or interest on any such Debt Security or any related coupon
following the reinstatement of its obligations, the Capital Corporation shall be
subrogated to the rights of the holders of such Debt Securities and any related
coupons to receive such payment from the money held by such Trustee or Paying
Agent.
The prospectus supplement may further describe the provisions, if any,
permitting such defeasance or covenant defeasance, including any modifications
to the provisions described above, with respect to the Debt Securities of or
within a particular series and any related coupons.
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PAYMENT AND PAYING AGENTS
Unless otherwise provided in the prospectus supplement, principal, premium,
if any, and interest, if any, and Additional Amounts, if any, on Registered
Securities will be payable at any office or agency to be maintained by the
Capital Corporation, in the case of the Senior Securities, in New York, New York
and, in the case of the Subordinated Securities, in Chicago, Illinois and New
York, New York, except that at the option of the Capital Corporation interest
(including Additional Amounts, if any) may be paid (i) by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register or (ii) by wire transfer to an account maintained by the
Person entitled thereto as specified in the Security Register. (Sections 301,
1001 and 1002 of each Indenture) Unless otherwise provided in the prospectus
supplement, payment of any installment of interest on Registered Securities will
be made to the Person in whose name such Registered Security is registered at
the close of business on the Regular Record Date for such interest. (Section 307
of each Indenture)
Unless otherwise provided in the prospectus supplement, principal, premium,
if any, and interest, if any, and Additional Amounts, if any, on Bearer
Securities will be payable, subject to any applicable laws and regulations, at
the offices of such Paying Agents outside the United States as the Capital
Corporation may designate from time to time. (Section 1002 of each Indenture)
Such payment on Bearer Securities also may be made by transfer to an account
maintained by the payee with a bank located outside the United States. (Section
307 of each Indenture) Unless otherwise provided in the prospectus supplement,
payment of interest and certain Additional Amounts on Bearer Securities on any
Interest Payment Date will be made only against surrender of the coupon relating
to such Interest Payment Date. (Section 1001 of each Indenture) Unless otherwise
provided in the prospectus supplement, no payment with respect to any Bearer
Security will be made at any office or agency of the Capital Corporation in the
United States or by check mailed to any address in the United States or by
transfer to an account maintained with a bank located in the United States.
Notwithstanding the foregoing, payments of principal, interest, if any, and
Additional Amounts, if any, in respect of Bearer Securities payable in U.S.
dollars will be made at the office of the Capital Corporation's Paying Agent in
New York, New York, if (but only if) payment of the full amount thereof in U.S.
dollars at all offices or agencies outside the United States is illegal or
effectively precluded by exchange controls or other similar restrictions.
(Section 1002 of each Indenture)
Any Paying Agents in the United States in addition to or in place of the
Trustee at its corporate trust office and any Paying Agents outside the United
States initially designated by the Capital Corporation for the Offered Debt
Securities will be named in the prospectus supplement. The Capital Corporation
may at any time designate additional Paying Agents or rescind the designation of
any Paying Agent or approve a change in the office through which any Paying
Agent acts, except that, if Debt Securities of a series are issuable only as
Registered Securities, the Capital Corporation will be required to maintain a
Paying Agent in each Place of Payment for such series and, if Debt Securities of
a series are also issuable as Bearer Securities, the Capital Corporation will be
required to maintain (i) a Paying Agent in New York, New York for payments with
respect to any Registered Securities of the series (and for payments with
respect to Bearer Securities of the series in the circumstances described above,
but not otherwise), and (ii) a Paying Agent in a Place of Payment located
outside the United States where Debt Securities of such series and any coupons
appertaining thereto may be presented and surrendered for payment; PROVIDED
that, if the Debt Securities of such series are listed on the Luxembourg Stock
Exchange or any other stock exchange located outside the United States and such
stock exchange shall so require, the Capital Corporation will maintain a Paying
Agent in Luxembourg or any other required city located outside the United
States, as the case may be, for the Debt Securities of such series. (Section
1002 of each Indenture)
BOOK-ENTRY DEBT SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on behalf
of, a depository identified in the prospectus supplement. Global Securities may
be issued in either registered or bearer form and in either temporary or
permanent form. Unless otherwise provided in the prospectus supplement, Debt
Securities that are represented by a
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Global Security will be issued in denominations of $1,000 and any integral
multiple thereof, and will be issued in registered form only, without coupons.
Payments of principal of (premium, if any) and interest on Debt Securities
represented by a Global Security will be made by the relevant Trustee to the
depository.
The Capital Corporation anticipates that any Global Securities will be
deposited with, or on behalf of, The Depository Trust Company, New York, New
York ("DTC"), that such Global Securities will be registered in the name of
DTC's nominee, and that the following provisions will apply to the depository
arrangements with respect to any such Global Securities. Additional or differing
terms of the depository arrangement will be described in the prospectus
supplement relating to a particular series of Debt Securities issued in the form
of Global Securities.
So long as DTC or its nominee is the registered owner of a Global Security,
DTC or its nominee, as the case may be, will be considered the sole holder of
the Debt Securities represented by such Global Security for all purposes under
the applicable Indenture. Except as provided below, owners of beneficial
interests in a Global Security will not be entitled to have Debt Securities
represented by such Global Security registered in their names, will not receive
or be entitled to receive physical delivery of Debt Securities in certificated
form and will not be considered the owners or holders thereof under the
applicable Indenture. The laws of some states require that certain purchasers of
securities take physical delivery of such securities in certificated form; such
laws may limit the transferability of beneficial interests in a Global Security.
If DTC is at any time unwilling or unable to continue as depository and a
successor depository is not appointed by the Capital Corporation within 90 days,
the Capital Corporation will issue individual Debt Securities in certificated
form in exchange for the Global Securities. In addition, the Capital Corporation
may at any time, and in its sole discretion, determine not to have any Debt
Securities represented by one or more Global Securities and, in such event, will
issue individual Debt Securities in certificated form in exchange for the
relevant Global Securities. In any such instance, an owner of a beneficial
interest in a Global Security will be entitled to physical delivery of
individual Debt Securities in certificated form of like tenor and rank, equal in
principal amount to such beneficial interest and to have such Debt Securities in
certificated form registered in its name. Unless otherwise provided in the
prospectus supplement, Debt Securities so issued in certificated form will be
issued in denominations of $1,000 or any integral multiple thereof and will be
issued in registered form only, without coupons.
The following is based on information furnished by DTC:
DTC will act as securities depository for the Debt Securities. The
Debt Securities will be issued as fully registered securities registered in
the name of Cede & Co. (DTC's partnership nominee). One fully registered
Debt Security certificate is issued with respect to each $200 million of
principal amount of the Debt Securities of a series, and an additional
certificate is issued with respect to any remaining principal amount of such
series.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and
a "clearing agency" registered pursuant to the provisions of Section 17A of
the Securities Exchange Act of 1934. DTC holds securities that its
participants ("Participants") deposit with DTC. DTC also facilitates the
settlement among Participants of securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized
book-entry changes in Participants' accounts, thereby eliminating the need
for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations ("Direct Participants"). DTC is
owned by a number of its Direct Participants and by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc. and the National
Association of Securities Dealers, Inc. Access to the DTC system is also
available to others such as securities brokers and dealers, banks and trust
companies that clear through or maintain a custodial relationship with a
Direct Participant, either directly or indirectly ("Indirect Participants").
The rules applicable to DTC and its Participants are on file with the
Commission.
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Purchases of Debt Securities under the DTC system must be made by or
through Direct Participants, which will receive a credit for the Debt
Securities on DTC's records. The ownership interest of each actual purchaser
of each Debt Security ("Beneficial Owner") is in turn recorded on the Direct
and Indirect Participants' records. A Beneficial Owner does not receive
written confirmation from DTC of its purchase, but such Beneficial Owner is
expected to receive a written confirmation providing details of the
transaction, as well as periodic statements of its holdings, from the Direct
or Indirect Participant through which such Beneficial Owner entered into the
transaction. Transfers of ownership interests in Debt Securities are
accomplished by entries made on the books of Participants acting on behalf
of Beneficial Owners. Beneficial Owners do not receive certificates
representing their ownership interests in Debt Securities, except in the
event that use of the book-entry system for the Debt Securities is
discontinued.
To facilitate subsequent transfers, the Debt Securities are
registered in the name of DTC's partnership nominee, Cede & Co. The deposit
of the Debt Securities with DTC and their registration in the name of Cede &
Co. will effect no change in beneficial ownership. DTC has no knowledge of
the actual Beneficial Owners of the Debt Securities; DTC records reflect
only the identity of the Direct Participants to whose accounts Debt
Securities are credited, which may or may not be the Beneficial Owners. The
Participants remain responsible for keeping account of their holdings on
behalf of their customers.
Delivery 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 are 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. consents or votes with respect to the
Debt Securities. Under its usual procedures, DTC mails a proxy (an "Omnibus
Proxy") to the issuer as soon as possible after the record date. The Omnibus
Proxy assigns Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts the Debt Securities are credited on the
record date (identified on a list attached to the Omnibus Proxy).
Principal, premium, if any, and interest payments on the Debt
Securities are made to DTC. DTC's practice is to credit Direct Participants'
accounts on the payable date in accordance with their respective holdings as
shown on DTC's records unless DTC has reason to believe that it will not
receive payment on the payable date. Payments by Participants to Beneficial
Owners are 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 are the responsibility of such
Participant and not of DTC, the applicable Paying Agent or the Capital
Corporation, subject to any statutory or regulatory requirements as may be
in effect from time to time. Payment of principal, premium, if any, and
interest to DTC is the responsibility of the Capital Corporation or the
applicable Paying Agent, disbursement of such payments to Direct
Participants is the responsibility of DTC, and disbursement of such payments
to the Beneficial Owners is the responsibility of Direct and Indirect
Participants.
DTC may discontinue providing its services as securities depository
with respect to the Debt Securities at any time by giving reasonable notice
to the Capital Corporation or the applicable Paying Agent. Under such
circumstances, in the event that a successor securities depository is not
appointed, Debt Security certificates are required to be printed and
delivered.
The Capital Corporation may decide to discontinue use of the system
of book-entry transfers through DTC (or a successor securities depository).
In that event, Debt Security certificates will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources (including DTC) that the Capital Corporation
believes to be reliable, but the Capital Corporation takes no responsibility for
the accuracy thereof.
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Unless stated otherwise in the prospectus supplement, the underwriters or
agents with respect to a series of Debt Securities issued as Global Securities
will be Direct Participants in DTC.
None of the Capital Corporation, any underwriter or agent, the applicable
Trustee or any applicable Paying Agent will have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial interests in a Global Security, or for maintaining, supervising or
reviewing any records relating to such beneficial interests.
RESIGNATION OF TRUSTEE
Each Trustee may resign or be removed with respect to one or more series of
Indenture Securities and a successor Trustee may be appointed to act with
respect to such series. (Section 608 of each Indenture) In the event that two or
more persons are acting as Trustee with respect to different series of Indenture
Securities issued under one of the Indentures, each such Trustee shall be a
Trustee of a trust under such Indenture separate and apart from the trust
administered by any other such Trustee (Section 609 of each Indenture), and any
action described herein to be taken by the "Trustee" may then be taken by each
such Trustee with respect to, and only with respect to, the one or more series
of Indenture Securities for which it is Trustee.
THE TRUSTEES UNDER THE INDENTURES
The Bank of New York and The First National Bank of Chicago are two of a
number of banks with which the Capital Corporation and Deere & Company maintain
ordinary banking relationships and from which the Capital Corporation and Deere
& Company have obtained credit facilities and lines of credit. The Bank of New
York and The First National Bank of Chicago each also serves as trustee under
other indentures under which the Capital Corporation is the obligor.
RISK FACTORS RELATING TO FOREIGN CURRENCIES
Debt Securities denominated or payable in foreign Currencies may entail
significant risks. These risks include, without limitation, the possibility of
significant fluctuations in the foreign currency markets, the imposition or
modification of foreign exchange controls and potential illiquidity in the
secondary market. These risks will vary depending upon the Currency or
Currencies involved and will be more fully described in the applicable
prospectus supplement.
DESCRIPTION OF DEBT WARRANTS
The Capital Corporation may issue (together with Debt Securities or
separately) Debt Warrants for the purchase of Debt Securities ("Offered Debt
Warrants"). The Debt Warrants are to be issued under warrant agreements (each a
"Debt Warrant Agreement") to be entered into between the Capital Corporation and
a bank or trust company, as warrant agent (the "Debt Warrant Agent"), all as
shall be set forth in the prospectus supplement relating to Debt Warrants being
offered thereby. A copy of the form of Debt Warrant Agreement, including the
form of warrant certificates representing the Debt Warrants (the "Debt Warrant
Certificates"), reflecting the alternative provisions to be included in the Debt
Warrant Agreements that will be entered into with respect to particular
offerings of Debt Warrants, is filed as an exhibit to the registration
statement. The following summaries of certain provisions of the Debt Warrant
Agreement and the Debt Warrant Certificates do not purport to be complete and
are subject to, and are qualified in their entirety by reference to, all the
provisions of the Debt Warrant Agreement and the Debt Warrant Certificates,
respectively, including the definitions therein of certain terms.
GENERAL
The prospectus supplement will describe the terms of the Offered Debt
Warrants, the Debt Warrant Agreement relating to such Debt Warrants and the Debt
Warrant Certificates representing such Debt Warrants, including the following:
(1) The title and aggregate number of such Debt Warrants.
(2) The offering price of such Debt Warrants.
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(3) The designation, aggregate principal amount and terms of the
Underlying Debt Securities purchasable upon exercise of such Debt Warrants.
(4) The designation, aggregate principal amount and terms of any related
Debt Securities with which such Debt Warrants are issued and the number of
such Debt Warrants issued with each such Debt Security.
(5) The date, if any, on and after which such Debt Warrants and the
related Debt Securities will be separately transferable.
(6) The principal amount of Underlying Debt Securities purchasable upon
exercise of each such Debt Warrant and the price at which such principal
amount of Debt Securities may be purchased upon such exercise.
(7) The date on which the right to exercise such Debt Warrants shall
commence and the date on which such right shall expire (the "Expiration
Date").
(8) A discussion of federal income tax considerations applicable to the
Underlying Debt Securities and the exercise of such Debt Warrants.
(9) Whether the Debt Warrant Certificates evidencing such Debt Warrants
will be issued in registered or bearer form, and, if registered, where they
may be transferred and registered.
(10) Any other terms of such Debt Warrants.
Debt Warrant Certificates will be exchangeable for new Debt Warrant
Certificates of different denominations and Debt Warrants may be exercised at
the corporate trust office of the Debt Warrant Agent or any other office
indicated in the prospectus supplement. Prior to the exercise of their Debt
Warrants, holders of Debt Warrants will not be entitled to payments of principal
(or premium, if any) or interest, if any, on or Additional Amounts, if any, in
respect of the Underlying Debt Securities purchasable upon such exercise.
EXERCISE OF DEBT WARRANTS
Each Debt Warrant will entitle the holder of such Debt Warrant to purchase
for cash such principal amount of Underlying Debt Securities at such exercise
price as shall be set forth in, or be determinable as set forth in, the
prospectus supplement relating to the Offered Debt Warrants. Offered Debt
Warrants may be exercised at any time up to the close of business on the
Expiration Date set forth in the prospectus supplement relating thereto. After
the close of business on the Expiration Date, unexercised Debt Warrants will
become void.
Offered Debt Warrants may be exercised as set forth in the prospectus
supplement relating thereto. Upon receipt of payment and the Debt Warrant
Certificate properly completed and duly executed at the corporate trust office
of the Debt Warrant Agent or any other office indicated in the prospectus
supplement, the Capital Corporation will, as soon as practicable, forward the
Underlying Debt Securities purchasable upon such exercise. If less than all of
the Debt Warrants represented by such Debt Warrant Certificate are exercised, a
new Debt Warrant Certificate will be issued for the remaining amount of Debt
Warrants.
DESCRIPTION OF PREFERRED STOCK
Under its Certificate of Incorporation (the "Certificate of Incorporation"),
the Capital Corporation is authorized to adopt resolutions providing for the
issuance, in one or more series, of up to 10,000 shares of its preferred stock,
$1.00 par value, with such powers, preferences and relative, participating,
optional or other special rights and qualifications, limitations or restrictions
thereof as shall be adopted by the Board of Directors or a duly authorized
committee thereof. At March 13, 1995, the Capital Corporation had no outstanding
shares of preferred stock.
The description below sets forth certain general terms and provisions of the
preferred stock covered by this prospectus, which are referred to herein as the
"Preferred Stock". The specific terms of the Offered Preferred Stock will be
described in the prospectus supplement relating to such Offered Preferred Stock.
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The following summaries of certain provisions of the Preferred Stock do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, the Certificate of Incorporation and the Certificate of
Designations relating to the particular series of Preferred Stock.
If so indicated in the prospectus supplement, the terms of the Offered
Preferred Stock may differ from the terms set forth below.
GENERAL
Unless otherwise specified in the prospectus supplement relating to the
Offered Preferred Stock, each series of Preferred Stock will rank on a parity as
to dividends, upon liquidation and in all other respects with all other
Preferred Stock.
The Preferred Stock will, when issued, be fully paid and nonassessable. The
Preferred Stock will not be convertible into shares of Common Stock ("Common
Stock") or other shares of the Capital Corporation and holders thereof will have
no preemptive rights. The Preferred Stock will have the dividend, liquidation,
redemption and voting rights set forth below unless otherwise provided in the
prospectus supplement relating to the Offered Preferred Stock.
Reference is made to the prospectus supplement relating to the Offered
Preferred Stock offered thereby for specific terms, including:
(1) The title and stated value of such Preferred Stock.
(2) The number of shares of such Preferred Stock offered, the liquidation
preference per share and the offering price of such Preferred Stock.
(3) The dividend rate(s), period(s) and/or payment date(s) or method(s) of
calculation thereof applicable to such Preferred Stock.
(4) The date from which dividends on such Preferred Stock shall accumulate,
if applicable.
(5) The procedures for any auction and remarketing, if any, of such
Preferred Stock.
(6) The provision for a sinking fund, if any, for such Preferred Stock.
(7) The provision for redemption, if applicable, of such Preferred Stock.
(8) Any listing of such Preferred Stock on any securities exchange.
(9) Any other specific terms, preferences, rights, limitations or
restrictions of such Preferred Stock.
Subject to the terms of the Offered Preferred Stock, the remaining
authorized shares of undesignated preferred stock may be issued by the Capital
Corporation in one or more series, at any time or from time to time, with such
designations, preferences and relative, participating, optional or other special
rights and qualifications, limitations or restrictions thereof, as the Board of
Directors or any duly authorized committee thereof shall determine, all without
further action of the stockholders, including holders of the preferred stock, of
the Capital Corporation.
As used herein, the term "Pari Passu Preferred" means the Preferred Stock
and any shares of stock issued by the Capital Corporation ranking on a parity
with the Preferred Stock as to payment of dividends and upon distribution of
assets and the term "Junior Stock" means the Common Stock and any other stock
issued by the Capital Corporation ranking junior to the Pari Passu Preferred.
DIVIDENDS
Holders of the Offered Preferred Stock will be entitled to receive cash
dividends, when, as and if declared by the Board of Directors of the Capital
Corporation out of assets of the Capital Corporation legally available for
payment, at such rate and on such dates as will be set forth in the applicable
prospectus supplement. Each dividend will be payable to holders of record as
they appear on the stock books of the Capital Corporation on the record dates
fixed by the Board of Directors of the Capital Corporation. Dividends, if
cumulative, will be cumulative from and after the date set forth in the
applicable prospectus
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supplement. If, for any dividend period or periods, dividends on any Pari Passu
Preferred have not been paid or declared and set apart for payment, the Capital
Corporation may not declare any dividends (except a dividend payable in Junior
Stock or in options, rights or warrants to purchase or acquire Junior Stock) on,
or make any distribution (except as aforesaid) on the Junior Stock, or make any
payment on account of the purchase, redemption or other retirement of Junior
Stock (except out of the proceeds of the sale of Junior Stock). Dividends in
full may not be declared or paid or set apart for payment on any series of Pari
Passu Preferred unless (i) there shall be no arrearages in dividends for any
past dividend periods on any series of Pari Passu Preferred and (ii) to the
extent that such dividends are cumulative, dividends in full for the current
dividend period have been declared or paid on all Pari Passu Preferred. Any
dividends declared or paid when dividends are not so declared, paid or set apart
in full shall be shared ratably by the holders of all series of Pari Passu
Preferred in proportion to such respective arrearages and undeclared and unpaid
current cumulative dividends. No interest, or sum of money in lieu of interest,
shall be payable in respect of any dividend payment or payments which may be in
arrears.
LIQUIDATION RIGHTS
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Capital Corporation, the holders of the Offered Preferred
Stock will be entitled to receive out of assets of the Capital Corporation
available for distribution to stockholders, before any distribution of assets is
made to holders of any Junior Stock, liquidating distributions in the amount set
forth in the applicable prospectus supplement plus all accrued and unpaid
dividends. If, upon any voluntary or involuntary liquidation, dissolution or
winding up of the Capital Corporation, the amounts payable with respect to the
Pari Passu Preferred are not paid in full, the holders of Pari Passu Preferred
will share ratably in any such distribution of assets of the Capital Corporation
in proportion to the full respective preferential amounts to which they are
entitled. After payment of the full amount of the liquidating distribution to
which they are entitled, the holders of the Pari Passu Preferred will not be
entitled to any further participation in any distribution of assets by the
Capital Corporation. A consolidation or merger of the Capital Corporation with
or into any other corporation or corporations or a sale of all or substantially
all of the assets of the Capital Corporation shall not be deemed to be a
liquidation, dissolution or winding up of the Capital Corporation.
REDEMPTION
If so determined by the Board of Directors, the Offered Preferred Stock will
be redeemable in whole or in part at the option of the Capital Corporation, at
the times and at the redemption prices set forth in the applicable prospectus
supplement.
If dividends on any series of Pari Passu Preferred have not been paid in
full or declared and set apart for payment, no series of Pari Passu Preferred
may be redeemed as a whole or in part, unless all series of Pari Passu Preferred
are simultaneously redeemed, and the Capital Corporation may not purchase or
acquire any shares of Pari Passu Preferred otherwise than pursuant to an
exchange offer made on the same terms to all holders of Pari Passu Preferred,
without in either case the consent of the holders of at least two-thirds of all
Pari Passu Preferred voting together as a single class without regard to series;
PROVIDED, HOWEVER, that (1) to meet its purchase or sinking fund obligations
with respect to any series of Pari Passu Preferred, the Capital Corporation may
use shares of such Pari Passu Preferred then held as treasury stock and (2) the
Capital Corporation may complete the purchase or redemption of shares of Pari
Passu Preferred for which a contract was entered into for any purchase or
sinking fund purposes.
VOTING RIGHTS
Except as indicated below or in the prospectus supplement, or except as
expressly required by applicable law, the holders of the Preferred Stock will
not be entitled to vote. If the equivalent of six quarterly dividends payable on
any series of Preferred Stock or any other series of Pari Passu Preferred that
has comparable voting rights are in default (whether or not declared or
consecutive), the number of directors of the Capital Corporation shall be
increased by two and the holders of all outstanding series of Preferred Stock
and such Pari Passu Preferred (whether or not dividends thereon are in default),
voting as a single class without regard to series, will be entitled to elect the
two additional directors until all dividends in default have been paid or
declared and set apart for payment. The holders of Preferred Stock and such Pari
Passu
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Preferred may exercise such special class voting rights at meetings of the
shareholders for the election of directors or, under certain circumstances, at
special meetings for the purpose of electing such directors, in either case at
which the holders of not less than one-third of the aggregate number of shares
of Preferred Stock and such Pari Passu Preferred are present in person or by
proxy.
The affirmative vote of the holders of at least two-thirds of the
outstanding Pari Passu Preferred, voting as a single class without regard to
series, will be required (i) for any amendment of the Certificate of
Incorporation that will adversely affect the preferences, rights or voting
powers of the Pari Passu Preferred, but, in any case in which one or more, but
not all, series of Pari Passu Preferred would be so affected as to their
preferences, rights or voting powers, only the consent of the holders of at
least two-thirds of the shares of each series that would be so affected, voting
separately as a class, shall be required or (ii) to issue any class of stock
that shall have preference as to dividends or distribution of assets over any
outstanding Pari Passu Preferred.
PLAN OF DISTRIBUTION
The Capital Corporation may sell the Securities to or through underwriters
or dealers, and also may sell the Securities directly to one or more other
purchasers or through agents.
The prospectus supplement sets forth the terms of the offering of the
particular series of Securities to which such prospectus supplement relates,
including, as applicable, (i) the name or names of any underwriters or agents
with whom the Capital Corporation has entered into arrangements with respect to
the sale of such series of Securities, (ii) the initial public offering or
purchase price of such series of Securities, (iii) any underwriting discounts,
commissions and other items constituting underwriters' compensation from the
Capital Corporation and any other discounts, concessions or commissions allowed
or reallowed or paid by any underwriters to other dealers, (iv) any commissions
paid to any agents, (v) the net proceeds to the Capital Corporation and (vi) the
securities exchanges, if any, on which such Securities will be listed.
Unless otherwise set forth in the prospectus supplement relating to a
particular series of Securities, the obligations of the underwriters to purchase
such series of Securities will be subject to certain conditions precedent and
each of the underwriters with respect to such series of Securities will be
obligated to purchase all of the Securities of such series allocated to it if
any such Securities are purchased. Any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers may be changed
from time to time.
The Securities may be offered and sold by the Capital Corporation directly
or through agents designated by the Capital Corporation from time to time.
Unless otherwise indicated in the prospectus supplement, any such agent or
agents will be acting on a best efforts basis for the period of its or their
appointment. Any agent participating in the distribution of the Securities may
be deemed to be an "underwriter," as that term is defined in the Securities Act
of 1933, as amended (the "Securities Act"), of the Securities so offered and
sold. The Securities also may be sold to dealers at the applicable price to the
public set forth in the prospectus supplement relating to a particular series of
Securities who later resell to investors. Such dealers may be deemed to be
"underwriters" within the meaning of the Securities Act.
Underwriters, dealers and agents may be entitled, under agreements entered
into with the Capital Corporation, to indemnification by the Capital Corporation
against certain civil liabilities, including liabilities under the Securities
Act.
If so indicated in the prospectus supplement relating to a particular series
of Securities, the Capital Corporation will authorize underwriters, dealers or
agents to solicit offers by certain institutions to purchase Securities of such
series from the Capital Corporation pursuant to delayed delivery contracts
providing for payment and delivery at a future date. Such contracts will be
subject only to those conditions set forth in the prospectus supplement, and the
prospectus supplement will set forth the commission payable for solicitation of
such contracts.
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LEGAL OPINIONS
The validity of the Securities will be passed upon for the Capital
Corporation by Shearman & Sterling, 599 Lexington Avenue, New York, New York
10022, and for any underwriters, dealers or agents by Brown & Wood, One World
Trade Center, New York, New York 10048.
EXPERTS
The annual consolidated financial statements and related financial statement
schedule of the Capital Corporation and its subsidiaries, incorporated in this
prospectus by reference from the Capital Corporation's Annual Report on Form
10-K have been audited by Deloitte & Touche LLP, independent auditors, as stated
in their report, which is incorporated herein by reference, and has been so
incorporated in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES
DESCRIBED IN THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS OR AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN
WHICH SUCH OFFER OR SOLICATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER OR
THEREUNDER SHALL, UNDER ANY CIRCUMSTANCE, CREATE ANY IMPLICATION THAT THE
INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE OF SUCH INFORMATION.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
PROSPECTUS SUPPLEMENT
Selected Financial Data....................... S-2
Use of Proceeds............................... S-3
Description of Notes.......................... S-3
Underwriting.................................. S-5
PROSPECTUS
Available Information......................... 2
Incorporation of Certain Documents by
Reference................................... 2
The Company................................... 3
Use of Proceeds............................... 4
Ratios of Earnings to Fixed Charges........... 4
Description of Debt Securities................ 4
Description of Debt Warrants.................. 18
Description of Preferred Stock................ 19
Plan of Distribution.......................... 22
Legal Opinions................................ 23
Experts....................................... 23
</TABLE>
$150,000,000
JOHN DEERE
CAPITAL
CORPORATION
FLOATING RATE NOTES
DUE MARCH 20, 1998
[LOGO]
SALOMON BROTHERS INC
CHEMICAL SECURITIES INC.
PROSPECTUS SUPPLEMENT
DATED MARCH 13, 1995
