<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 1, 1996
REGISTRATION NO. 333-00589
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
------------------------
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AIR PRODUCTS AND CHEMICALS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction
of incorporation or organization)
23-1274455
(I.R.S. Employer
Identification No.)
7201 HAMILTON BOULEVARD
ALLENTOWN, PENNSYLVANIA 18195-1501
(610) 481-4911
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
JAMES H. AGGER, ESQ.
Vice President, General Counsel and Secretary
AIR PRODUCTS AND CHEMICALS, INC.
7201 HAMILTON BOULEVARD
ALLENTOWN, PENNSYLVANIA 18195-1501
(610) 481-4911
(Name and address, including zip code, and telephone number, including area
code, of agent for service)
COPY TO:
D. COLLIER KIRKHAM, ESQ.
CRAVATH, SWAINE & MOORE
Worldwide Plaza
825 Eighth Avenue
New York, New York 10019
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /-----------------
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /------------------------
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. /X/
------------------------
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Proposed
Proposed maximum
Title of each class Amount maximum aggregate Amount of
of securities to be offering price offering registration
to be registered registered(1) per unit(2) price(2) fee(2)
<S> <C> <C> <C> <C>
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Debt Securities............................. $300,000,000 100% $300,000,000 $103,449
</TABLE>
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(1) Any offering of Debt Securities denominated in any foreign currencies or
foreign currency units will be treated as the equivalent in U.S. dollars
based on the exchange rate applicable to the purchase of such Debt
Securities of the Registrant.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act of 1933.
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE> 2
SUBJECT TO COMPLETION, DATED APRIL 1, 1996
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED APRIL , 1996)
$300,000,000
AIR PRODUCTS AND CHEMICALS, INC.
MEDIUM-TERM NOTES, SERIES E
DUE FROM 9 MONTHS TO 30 YEARS FROM DATE OF ISSUE
------------------------
Air Products and Chemicals, Inc. (the "Company"), may offer from time to
time up to $300,000,000 aggregate principal amount or its equivalent in foreign
currencies or currency units of its Medium-Term Notes, Series E, Due from 9
Months to 30 Years from Date of Issue (the "Notes"). Each Note will mature on a
Business Day (as defined herein) from 9 months to 30 years from the date of
issue, as selected by the initial purchaser and agreed to by the Company. The
Notes being offered hereby may be denominated in U.S. dollars or in such foreign
currencies or currency units (the "Specified Currency") as may be designated by
the Company in a pricing supplement (the "Pricing Supplement") to this
Prospectus Supplement at the time of the offering. See "Foreign Currency and
Other Risks."
The Notes may be issued as Fixed Rate Notes, which will bear interest at a
fixed rate (which may be zero in the case of certain Notes issued at a price
representing a discount from the principal amount payable at maturity), or as
Floating Rate Notes, which will bear interest at a rate or rates determined by
reference to a Base Rate, as adjusted by the Spread or Spread Multiplier, if
any, each as set forth in the applicable Pricing Supplement, or as Currency
Indexed Notes, the principal amount of which payable at maturity or upon earlier
redemption or repayment, and/or the interest payable on each interest payment
date and at maturity, is determined by the difference in the rate of exchange
between the Specified Currency and another currency or currency unit on certain
specified dates, or as Commodity Indexed Notes, the principal amount of which
payable at maturity or upon earlier redemption or repayment, and/or the interest
payable on each interest payment date and at maturity, is determined by the
difference in the price of a specified commodity on certain specified dates. See
"Description of Notes."
Each Note will be issued in fully registered form and will be represented by
either a global certificate (a "Book-Entry Note") registered in the name of a
nominee of The Depository Trust Company ("DTC") or another depositary (DTC or
such other depositary as is specified in the applicable Pricing Supplement is
herein referred to as the "Depositary"), or a certificate issued in definitive
form (a "Certificated Note"), as set forth in the applicable Pricing Supplement.
Interests in Book-Entry Notes will be shown on, and transfers thereof will be
effected only through, records maintained by the Depositary and its
participants. See "Description of Notes -- Book-Entry System." The Notes will be
issued in denominations of $100,000 and any larger amount that is an integral
multiple of $1,000, except as otherwise specified in the applicable Pricing
Supplement, or, in the case of Notes denominated in a Specified Currency other
than U.S. dollars, in the denominations described under "Special Provisions
Relating to Multi-Currency Notes -- General."
The interest rate or interest rate formula, issue price, Specified Currency,
stated maturity and redemption and repayment provisions, if any, for each Note,
whether such Note is a Fixed Rate Note or a Floating Rate Note, whether such
Note is a Currency Indexed Note or Commodity Indexed Note and whether such Note
is a Book-Entry Note or a Certificated Note will be established by the Company
at the date of issuance of such Note and will be set forth in the applicable
Pricing Supplement to this Prospectus Supplement. Interest rates and interest
rate formulae are subject to change by the Company, but no such change will
affect the interest rate on, or interest rate formula for, any Note theretofore
issued or which the Company has agreed to sell. See "Description of Notes."
Unless otherwise indicated in the applicable Pricing Supplement, interest on
Fixed Rate Notes will be payable on each June 15 and December 15 and at
maturity. Interest on Floating Rate Notes will be payable on the dates indicated
herein and in the applicable Pricing Supplement. See "Description of
Notes -- Interest Rates."
FOR DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION
WITH AN INVESTMENT IN THE NOTES OFFERED HEREBY, SEE "RISK FACTORS" ON PAGE S-2.
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, ANY PRICING SUPPLEMENT HERETO OR THE
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<S> <C> <C> <C>
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PRICE TO AGENTS' PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) COMPANY(2)(3)
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Per Note........................................ 100% .125% - .750% 99.250% - 99.875%
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$375,000 - $297,750,000 -
Total (4)....................................... $300,000,000 $2,250,000 $299,625,000
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</TABLE>
(1) Unless otherwise indicated in the Pricing Supplement relating thereto, each
Note will be issued at 100% of its principal amount.
(2) The Company will pay a commission to Lehman Brothers, Lehman Brothers Inc.
and Goldman, Sachs & Co. (each an Agent and collectively the "Agents"), in
the form of a discount, ranging from .125% to .750% of the principal amount
of a Note, depending upon its maturity, sold through such Agent. Any Agent,
acting as principal, may also purchase Notes at a discount for resale to one
or more investors or one or more broker-dealers (acting as principal for
purposes of resale) at varying prices related to prevailing market prices at
the time of resale, as determined by such Agent, or, if so agreed, at a
fixed public offering price. Unless otherwise specified in the applicable
Pricing Supplement, any Note sold to an Agent as principal will be purchased
by such Agent at a price equal to 100% of the principal amount thereof less
a percentage equal to the commission applicable to an agency sale of a Note
of identical maturity. The Company has agreed to indemnify each Agent
against certain liabilities, including liabilities under the Securities Act
of 1933, as amended. In the case of Notes sold directly to purchasers by the
Company, no commission will be paid.
(3) Before deducting expenses payable by the Company estimated at $305,000.
(4) Or the equivalent thereof in other currencies or currency units.
------------------------
The Notes are being offered on a continuous basis by the Company through the
Agents, each of which has agreed to use its reasonable best efforts to solicit
purchases of the Notes. The Company may sell Notes to any Agent, as principal,
for resale to one or more investors or to one or more broker-dealers (acting as
principal for purposes of resale) at varying prices related to prevailing market
prices at the time of resale, as determined by such Agent, or, if so agreed, at
a fixed public offering price. The Company reserves the right to sell Notes
directly to purchasers on its own behalf or to use additional agents to solicit
offers to purchase Notes. The Notes will not be listed on any securities
exchange, and there can be no assurance that the Notes will be sold or that
there will be a secondary market for the Notes. The Company reserves the right
to withdraw, cancel or modify the offer made hereby without notice. The Company
or the Agent that solicits any offer to purchase Notes may reject such offer in
whole or in part. See "Plan of Distribution."
------------------------
LEHMAN BROTHERS GOLDMAN, SACHS & CO.
, 1996
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SUPPLEMENT SHALL NOT CONSTITUTE AN OFFER
TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE
OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE
WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE
SECURITIES LAWS OF ANY SUCH STATE.
<PAGE> 3
This Prospectus Supplement contains brief summaries of certain documents
incorporated by reference in the Prospectus. Such summaries are qualified in
their entirety by the detailed information contained in the incorporated
documents.
------------------------
RISK FACTORS
EXCHANGE RATES
An investment in Multi-Currency Notes (as defined below under "Special
Provisions Relating to Multi-Currency Notes -- General") entails significant
risks that are not associated with a similar investment in a security
denominated in U.S. dollars. Similarly, an investment in a Currency Indexed Note
(as defined below under "Description of Notes -- Currency Indexed
Notes -- General") entails significant risks that are not associated with a
similar investment in non-Currency Indexed Notes. Such risks include, without
limitation, the possibility of significant changes in rates of exchange between
the U.S. dollar and the Specified Currency (and, in the case of Currency Indexed
Notes, the rate of exchange between the Specified Currency and the Indexed
Currency for such Currency Indexed Note) and the possibility of the imposition
or modification of foreign exchange controls by either the United States or
foreign governments. Such risks generally depend on economic, financial,
political and military events over which the Company has no control. To the
extent the rate is not fixed by sovereign governments, the exchange rate between
the U.S. dollar and foreign currencies or currency units is at any moment a
result of the supply of and demand for such currencies or currency units, and
changes in the rate result over time from the interaction of many factors, among
which are rates of inflation, interest rate levels, balances of payments and the
extent of governmental surpluses or deficits in the countries of the relevant
currencies. These factors are in turn sensitive to the monetary, fiscal and
trade policies pursued by such governments and those of other countries
important to international trade and finance. In recent years, rates of exchange
between the U.S. dollar and certain foreign currencies have been highly volatile
and such volatility may be expected in the future. Fluctuations in any
particular exchange rate that have occurred in the past are not necessarily
indicative, however, of fluctuations in the rate that may occur during the term
of any Multi-Currency Note or Currency Indexed Note. Depreciation of the
Specified Currency applicable to a Multi-Currency Note against the U.S. dollar
would result in a decrease in the U.S. dollar-equivalent yield of such Note, in
the U.S. dollar-equivalent value of the principal repayable at maturity of such
Note and, generally, in the U.S. dollar-equivalent market value of such Note.
Similarly, depreciation of the Specified Currency with respect to a Currency
Indexed Note against the applicable Indexed Currency would result in the
principal amount payable with respect to such Currency Indexed Note at the
Maturity Date (as defined below under "Description of Notes -- General") thereof
being less than the Face Amount (as defined below under "Special Provisions
Relating to Multi-Currency Notes -- General") of such Currency Indexed Note and
in the interest payable, if any, with respect to such Note reflecting an
interest rate less than the Base Interest Rate (as defined below under "Special
Provisions Relating to Multi-Currency Notes -- General") of such Note, which, in
turn, would decrease the effective yield of such Currency Indexed Note below its
stated interest rate and could also result in a loss to the investor. See
"Description of Notes -- Currency Indexed Notes."
Foreign exchange rates can either be fixed by sovereign governments or
float. Exchange rates of most economically developed nations are permitted to
fluctuate in value relative to the U.S. dollar. National governments, however,
rarely voluntarily allow their currencies to float freely in response to
economic forces. Sovereign governments in fact use a variety of techniques, such
as intervention by a country's central bank or imposition of regulatory controls
or taxes, to affect the exchange rate of their currencies. Exchange rates of
certain governments may from time to time be fixed by the central bank or other
agencies at a rate above or below that which might exist if the exchange rate
were allowed to float in response to changes in supply and demand. Governments
may also issue a new currency to replace an existing currency or alter the
exchange rate or relative exchange characteristics by devaluation or revaluation
of a currency. Thus, a special risk in purchasing Notes that are denominated
S-2
<PAGE> 4
in or indexed to a foreign currency or currency unit is that their U.S. dollar
equivalent yields could be affected by governmental actions which could change
or interfere with theretofore freely determined currency valuation, fluctuations
in response to other market forces and the movement of currencies across
borders. There will be no adjustment or change in the terms of the
Multi-Currency Notes or Currency Indexed Notes in the event that exchange rates
should become fixed, or in the event of any devaluation or revaluation or
imposition of exchange or other regulatory controls or taxes, or in the event of
other developments, affecting the U.S. dollar or any applicable currency or
currency unit.
PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR OWN FINANCIAL AND LEGAL
ADVISORS AS TO THE RISKS ENTAILED BY AN INVESTMENT IN MULTI-CURRENCY NOTES OR
CURRENCY INDEXED NOTES. SUCH NOTES ARE NOT AN APPROPRIATE INVESTMENT FOR
INVESTORS WHO ARE UNSOPHISTICATED WITH RESPECT TO FOREIGN CURRENCY TRANSACTIONS.
Unless otherwise indicated in the applicable Pricing Supplement, Notes
denominated in a Specified Currency other than the U.S. dollar or the ECU (as
defined below under "Description of Notes -- General") will not be sold in, or
to residents of, the country of the Specified Currency in which such Notes are
denominated. The information set forth in the Prospectus, this Prospectus
Supplement and the applicable Pricing Supplement is directed to prospective
purchasers who are United States residents and the Company disclaims any
responsibility to advise prospective purchasers who are residents of countries
other than the United States with respect to any matters that may affect the
purchase, holding or receipt of payments of principal of and interest on Notes.
Such persons should consult their own legal advisors with regard to such
matters.
GOVERNING LAW AND JUDGMENTS
Notes will be governed by and construed in accordance with the laws of the
State of New York. Courts in the United States have not customarily rendered
judgments for money damages denominated in any currency other than the U.S.
dollar. The Judiciary Law of the State of New York provides, however, that a
judgment or decree in an action based upon an obligation denominated in a
currency other than U.S. dollars will be rendered in the foreign currency of the
underlying obligation and converted into U.S. dollars at the rate of exchange
prevailing on the date of the entry of the judgment or decree.
EXCHANGE CONTROLS, ETC.
Governments have imposed from time to time exchange controls and may in the
future impose or revise exchange controls at or prior to a Note's maturity. Even
if there were no exchange controls, it is possible that the Specified Currency
for any particular Multi-Currency Note would not be available at an Interest
Payment Date or at such Note's maturity. In that event, the Company will repay
in U.S. dollars on the basis of the Exchange Rate (as defined below under
"Special Provisions Relating to Multi-Currency Notes -- Payment Currency") on
the second day prior to such payment, or if such Exchange Rate is not then
available, on the basis of the most recently available Exchange Rate. See
"Special Provisions Relating to Multi-Currency Notes -- Payment Currency." No
adjustment or change in the terms of the Multi-Currency Notes or Currency
Indexed Notes in the event of any controls or unavailability will be made.
A Pricing Supplement with respect to the applicable Specified Currency
(which includes information with respect to applicable current foreign exchange
controls, if any) is a part of the Prospectus and this Prospectus Supplement.
The Pricing Supplement relating to each Multi-Currency Note or Currency Indexed
Note will contain information concerning relevant historical exchange rates for
the applicable Specified Currency and/or Indexed Currency, as the case may be, a
description of such currency or currencies and any exchange controls affecting
such currency or currencies. The information concerning exchange rates and
exchange rate controls, if any, is furnished as a matter of information only and
should not be regarded as indicative of the range of or trends in fluctuations
in
S-3
<PAGE> 5
currency exchange rates or an imposition of exchange rate controls that may
occur in the future. The Company disclaims any responsibility to advise
prospective purchasers of changes in such exchange rates or exchange controls
after the date of any such Pricing Supplement.
RISKS OF INDEXED NOTES
AN INVESTMENT IN CURRENCY INDEXED NOTES AND COMMODITY INDEXED NOTES
(COLLECTIVELY, "INDEXED NOTES") INDEXED, AS TO PRINCIPAL OR INTEREST OR BOTH, TO
ONE OR MORE VALUES OF CURRENCIES (INCLUDING EXCHANGE RATES BETWEEN CURRENCIES),
COMMODITIES OR INTEREST RATE OR OTHER INDICES (COLLECTIVELY, "INDICES" OR
"INDEX") ENTAILS SIGNIFICANT RISKS THAT ARE NOT ASSOCIATED WITH SIMILAR
INVESTMENTS IN A CONVENTIONAL FIXED-RATE DEBT SECURITY. IF THE INTEREST RATE OF
SUCH AN INDEXED NOTE IS SO INDEXED, IT MAY RESULT IN AN INTEREST RATE THAT IS
LESS THAN THAT PAYABLE ON A CONVENTIONAL FIXED-RATE DEBT SECURITY ISSUED AT THE
SAME TIME, INCLUDING THE POSSIBILITY THAT NO INTEREST WILL BE PAID, AND, IF THE
PRINCIPAL AMOUNT OF SUCH AN INDEXED NOTE IS SO INDEXED, THE PRINCIPAL AMOUNT
PAYABLE AT MATURITY MAY BE LESS THAN THE ORIGINAL PURCHASE PRICE OF SUCH INDEXED
NOTE IF ALLOWED PURSUANT TO THE TERMS OF SUCH INDEXED NOTE, INCLUDING THE
POSSIBILITY THAT NO PRINCIPAL WILL BE PAID. THE SECONDARY MARKET FOR SUCH
INDEXED NOTES WILL BE AFFECTED BY A NUMBER OF FACTORS, INDEPENDENT OF THE
CREDITWORTHINESS OF THE COMPANY AND THE VALUE OF THE APPLICABLE CURRENCY,
COMMODITY OR INDEX, INCLUDING THE VOLATILITY OF THE APPLICABLE CURRENCY,
COMMODITY OR INDEX, THE TIME REMAINING TO THE MATURITY OF SUCH INDEXED NOTES,
THE AMOUNT OUTSTANDING OF SUCH INDEXED NOTES AND MARKET INTEREST RATES. THE
VALUE OF THE APPLICABLE CURRENCY, COMMODITY OR INDEX DEPENDS ON A NUMBER OF
INTER-RELATED FACTORS, INCLUDING ECONOMIC, FINANCIAL AND POLITICAL EVENTS, OVER
WHICH THE COMPANY HAS NO CONTROL. ADDITIONALLY, IF THE FORMULA USED TO DETERMINE
THE PRINCIPAL AMOUNT OR INTEREST PAYABLE WITH RESPECT TO SUCH INDEXED NOTES
CONTAINS A MULTIPLE OR LEVERAGE FACTOR, THE EFFECT OF ANY CHANGE IN THE
APPLICABLE CURRENCY, COMMODITY OR INDEX WILL BE INCREASED.
THE HISTORICAL EXPERIENCE OF THE RELEVANT CURRENCIES, COMMODITIES OR
INDICES SHOULD NOT BE TAKEN AS AN INDICATION OF FUTURE PERFORMANCE OF SUCH
CURRENCIES, COMMODITIES OR INDICES DURING THE TERM OF ANY INDEXED NOTE. THE
CREDIT RATINGS ASSIGNED TO THE COMPANY'S MEDIUM-TERM NOTE PROGRAM ARE A
REFLECTION OF THE COMPANY'S CREDIT STATUS, AND, IN NO WAY, ARE A REFLECTION OF
THE POTENTIAL IMPACT OF THE FACTORS DISCUSSED ABOVE, OR ANY OTHER FACTORS, ON
THE MARKET VALUE OF INDEXED NOTES. ACCORDINGLY, PROSPECTIVE INVESTORS SHOULD
CONSULT THEIR OWN FINANCIAL AND LEGAL ADVISORS AS TO THE RISKS ENTAILED BY AN
INVESTMENT IN SUCH INDEXED NOTES AND THE SUITABILITY OF SUCH INDEXED NOTES IN
LIGHT OF THEIR PARTICULAR CIRCUMSTANCES.
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes offered
hereby supplements the description of the general terms of the Securities (as
such term is used in the accompanying Prospectus) under the heading "Description
of Securities" in the accompanying Prospectus, to which description reference is
hereby made. Capitalized terms not defined herein or in the Prospectus have the
meanings specified in the Indenture and/or the Notes.
S-4
<PAGE> 6
GENERAL
The Notes constitute a single series for purposes of the Indenture and are
limited to an aggregate principal amount of $300,000,000 or its equivalent at
the time of issuance in foreign currencies or currency units. The foregoing
limit may be increased by the Company if in the future it determines that it may
wish to sell additional Notes. The Company may from time to time sell additional
series of Securities, including additional series of medium-term notes. The
aggregate principal amount of unsecured, unsubordinated indebtedness of the
Company and its consolidated subsidiaries at December 31, 1995, was
$1,868,500,000.
The Notes will be offered on a continuous basis, and each Note will mature
(the "Maturity Date") on a Business Day from nine months to thirty years from
its date of issuance, as selected by the initial purchaser and agreed to by the
Company. Each Note will be denominated in United States dollars ("$," "dollars"
or "U.S. dollars") or the Specified Currency, as specified in the applicable
Pricing Supplement. Each Note may bear interest at either (i) a fixed rate
(which may be zero if issued at a price representing a discount from the
principal amount payable at maturity) or (ii) a floating rate determined by
reference to the Commercial Paper Rate (as defined below), LIBOR, the Treasury
Rate (as defined below) or such other interest rate or formula (the "Base Rate")
specified in the applicable Pricing Supplement, which may be adjusted by a
Spread and/or a Spread Multiplier (each as defined below). Each Floating Rate
Note will mature on an Interest Payment Date (as defined below) for such Note.
The Notes may be issued as Currency Indexed Notes, the principal amount of
which payable at maturity or upon earlier redemption or repayment, and/or the
interest payable on each Interest Payment Date and at the Maturity Date, will be
determined by the difference in the rate of exchange between the Specified
Currency and another currency or currency unit set forth in the applicable
Pricing Supplement on certain specified dates, or as Commodity Indexed Notes,
the principal amount of which payable at maturity or upon earlier redemption or
repayment, and/or the interest payable on each Interest Payment Date and at the
Maturity Date, will be determined by the difference in the price of a specified
commodity on certain specified dates. See "Currency Indexed Notes" and
"Commodity Indexed Notes" below.
Each Note will be issued initially as either a Book-Entry Note or a
Certificated Note in fully registered form without coupons. Except as set forth
under "Book-Entry System" below, Book-Entry Notes will not be issuable in
certificated form.
The Notes will be issued in denominations of $100,000 and any larger amount
that is an integral multiple of $1,000 for Notes denominated in U.S. dollars,
except as otherwise specified in the applicable Pricing Supplement, and for
Notes denominated in foreign currencies or currency units, the denominations
described below under "Special Provisions Relating to Multi-Currency Notes." The
Notes will constitute unsecured, unsubordinated indebtedness of the Company and
will rank pari passu with all other unsecured, unsubordinated indebtedness of
the Company.
The Notes will not be subject to any sinking fund and will not be
redeemable at the option of the Company or repayable at the option of the
holders thereof prior to their stated maturity, except as may otherwise be
provided in the applicable Pricing Supplement. The Company may discharge its
indebtedness and its obligations or certain of its obligations under the
Indenture with respect to the Notes as described under "Description of
Securities -- Defeasance of the Indenture and Securities" in the accompanying
Prospectus.
The Pricing Supplement relating to a Note will describe the following terms
as applicable: (1) the Specified Currency of such Note; (2) if other than 100%,
the price (expressed as a percentage of the aggregate principal amount thereof)
at which such Note will be issued; (3) the date on which such Note will be
issued; (4) the Maturity Date; (5) whether such Note may be redeemed or repaid
prior to maturity, and if so, the provisions relating to such redemption or
repayment; (6) whether such Note is a Fixed Rate Note or a Floating Rate Note;
(7) if such Note is a Fixed Rate Note, the rate per annum at
S-5
<PAGE> 7
which such Note will bear interest; (8) if such Note is a Floating Rate Note,
the Base Rate, the Initial Interest Rate, the Interest Payment Dates, the Reset
Period, the Index Maturity, the Maximum Interest Rate and the Minimum Interest
Rate, if any, and the Spread or Spread Multiplier, if any (all as defined
herein), and any other terms relating to the particular method of calculating
the interest rate or rates for such Note; (9) whether such Note is a Currency
Indexed Note or a Commodity Indexed Note; (10) if such Note is a Currency
Indexed Note, the Specified Currency, the Indexed Currency, the Face Amount, the
Base Exchange Rate, the Base Interest Rate, if any, the Determination Agent and
the Reference Dealers (all as defined herein) relating to such Currency Indexed
Note and certain other information relating to Currency Indexed Notes; (11) if
such Note is a Commodity Indexed Note, the methods for determining the principal
amount payable at maturity and/or the interest, if any, payable on each Interest
Payment Date and at maturity and other information relating to Commodity Indexed
Notes; (12) whether such Note will be issued initially as a Book-Entry Note or a
Certificated Note; and (13) any other terms of such Note not inconsistent with
the provisions of the Indenture.
Notes may be issued in the form of Discount Notes (as defined below under
"U.S. Federal Income Tax Considerations -- U.S. Holders -- Original Issue
Discount"), including certain Notes offered at a discount from the principal
amount thereof due at the stated maturity of such Notes. There may or may not be
any periodic payments of interest on Discount Notes. In the event of an
acceleration of the maturity of any Discount Note, the amount payable to the
holder of such Discount Note upon such acceleration will be determined in
accordance with the applicable Pricing Supplement and the terms of such
security, but may be an amount less than the amount payable at the maturity of
the principal of such Discount Note. For federal income tax considerations with
respect to Discount Notes, see "U.S. Federal Income Tax Considerations -- U.S.
Holders -- Original Issue Discount" herein.
The Notes may be presented for registration of transfer or exchange at the
Corporate Trust Office of the Trustee in the Borough of Manhattan, The City of
New York.
References to the "Securities" in the Prospectus include the Notes. For a
further description of the Trustee and the rights attaching to different series
of Securities under the Indenture, including the covenants, modification
provisions and events of default relating to the Notes, see "Description of
Securities" in the Prospectus. Unless otherwise specified in the applicable
Pricing Supplement, each Note will have the terms described herein.
"Business Day" means any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which banking institutions are authorized
or required by law or regulation to close in New York, New York or (i) with
respect to Notes denominated in a Specified Currency other than U.S. dollars,
the principal financial center of the country of the Specified Currency as
specified in the applicable Pricing Supplement, (ii) with respect to Notes
denominated in European Currency Units ("ECUs"), Brussels, Belgium or (iii) with
respect to LIBOR Notes, London, England. "London Banking Day" means any day on
which dealings in deposits in U.S. dollars are transacted in the London
interbank market.
PAYMENT OF PRINCIPAL AND INTEREST
Payments of principal of and interest, if any, on all Notes will be made in
the applicable Specified Currency, provided that holders of certain Notes
denominated in a Specified Currency other than U.S. dollars may elect to have
such payments converted to U.S. dollars. See "Special Provisions Relating to
Multi-Currency Notes -- Payment of Principal and Interest." Unless otherwise
specified in the applicable Pricing Supplement, interest on Certificated Notes
(other than interest paid on the Maturity Date or upon earlier redemption or
repayment) will be paid by mailing a check (from an account at a bank outside of
the United States if such check is payable in a Specified Currency other than
U.S. dollars) to the holders at the address of each holder appearing on the
register for the Notes on the applicable Record Date (as defined below). At the
option of the Company or the holder of Certificated Notes in an aggregate
principal amount exceeding $5.0 million or the equivalent thereof in a Specified
Currency, interest on Certificated Notes (other than interest paid on the
Maturity Date or
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<PAGE> 8
upon earlier redemption or repayment) will be paid by wire transfer to an
account maintained by such holder with a bank located in the United States for
payments in U.S. dollars or the country of the Specified Currency for other
payments (which shall be Belgium in the case of ECUs), provided that any such
holder selecting such option shall have designated such account by written
notice to the Trustee no later than the Record Date preceding the applicable
Interest Payment Date. In the case of a Note issued between a Record Date and
the initial Interest Payment Date relating to such Record Date, interest for the
period ending on such initial Interest Payment Date shall be paid to the person
to whom such Note shall have been originally issued. Payments of principal and
interest on Certificated Notes will be made, if at maturity or upon earlier
redemption, then on the Maturity Date or the date fixed for redemption, as
applicable, upon surrender of the Certificated Notes at the Corporate Trust
Office of the Trustee in The City of New York, and if upon repayment prior to
maturity, then on the applicable date for repayment (the "Repayment Date"),
provided that the holder shall have complied with the requirements for repayment
set forth herein and in the Certificated Notes. See "Repayment" below. All such
payments at maturity or upon any earlier redemption or repayment shall be made
in immediately available funds, provided that the Certificated Notes to be paid
are presented to the Corporate Trust Office of the Trustee in The City of New
York in time for the Trustee to make such payments in such funds in accordance
with its normal procedures. Any such payments made in a Specified Currency other
than U.S. dollars shall be made by wire transfer to an account maintained by the
holder, as designated by the holder by written notice to the Trustee at least 15
calendar days prior to the date fixed for payment, with a bank located in the
country of the Specified Currency (which shall be Belgium in the case of ECUs).
Beneficial owners of Book-Entry Notes will be paid in accordance with the
Depositary's and its participants' procedures in effect from time to time as
described under "Book-Entry System" below.
Any payment of interest or principal required to be made on an Interest
Payment Date, at the Maturity Date, on a date fixed for redemption or on a
Repayment Date which is not a Business Day need not be made on such day, but may
be made, except as provided below with respect to LIBOR Notes (as defined
below), on the next succeeding Business Day with the same force and effect as if
made on the Interest Payment Date, at the Maturity Date, on the date fixed for
redemption or on the Repayment Date, as the case may be, and no additional
interest shall accrue as a result of such delayed payment. The Company will pay
any administrative costs imposed by banks in connection with making payments by
wire transfer, but any tax, assessment or governmental charge imposed upon
payments will be borne by the holders of the Notes in respect of which payments
are made.
INTEREST RATES
Interest rates, Base Rates, Spreads and Spread Multipliers are subject to
change by the Company from time to time, but no such change will affect any Note
theretofore issued or which the Company has agreed to sell. Unless otherwise
indicated in the applicable Pricing Supplement, the Interest Payment Dates and
the Record Dates for each Fixed Rate Note shall be as described below under
"Fixed Rate Notes." The Interest Payment Dates for each Floating Rate Note shall
be as indicated in the applicable Pricing Supplement, and unless otherwise
specified in the applicable Pricing Supplement, the Record Dates for a Floating
Rate Note will be the fifteenth day (whether or not a Business Day) next
preceding each Interest Payment Date.
FIXED RATE NOTES
Each Fixed Rate Note will bear interest from its date of issue at the
annual rate stated on the face thereof and in the applicable Pricing Supplement
until the principal amount thereof is paid on the Maturity Date, or upon earlier
redemption or repayment, if applicable. Unless otherwise indicated in the
applicable Pricing Supplement (and except as provided above in "Payment of
Principal and Interest"), the Interest Payment Dates for Fixed Rate Notes will
be June 15 and December 15 of each year, and the Record Dates will be June 1 and
December 1 of each year. Interest on Fixed Rate Notes will be computed and paid
on the basis of a 360-day year of twelve 30-day months.
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<PAGE> 9
FLOATING RATE NOTES
Each Floating Rate Note will bear interest from its date of issue to the
first Interest Reset Date (as defined below) for such Note at the Initial
Interest Rate (the "Initial Interest Rate") set forth on the face thereof and in
the applicable Pricing Supplement. Thereafter, the interest rate on each
Floating Rate Note for each Reset Period (as defined below) will be equal to the
interest rate calculated by reference to the Base Rate specified on the face
thereof and in the applicable Pricing Supplement plus or minus a fixed
percentage per annum (the "Spread"), if any, or times a fixed factor (the
"Spread Multiplier"), if any, in each case as specified in the applicable
Pricing Supplement, until the principal thereof is paid on the Maturity Date, or
upon earlier redemption or repayment, if applicable. The Base Rate for a
Floating Rate Note will be (a) the Commercial Paper Rate, in which case such
Note shall be a "Commercial Paper Rate Note," (b) LIBOR, in which case such Note
shall be a "LIBOR Note," (c) the Treasury Rate, in which case such Note shall be
a "Treasury Rate Note" or (d) such other Base Rate, in each case as is specified
on the face of the Floating Rate Note and in the applicable Pricing Supplement.
The Company will appoint, and enter into an agreement with, an agent (a
"Calculation Agent") to calculate interest rates on Floating Rate Notes. Unless
otherwise provided in a Pricing Supplement, the Calculation Agent for each
Floating Rate Note will be the Trustee.
The rate of interest on each Floating Rate Note will be reset daily,
weekly, monthly, quarterly, semiannually or annually (such type of period being
the "Reset Period" for such Note, and the first day of each Reset Period being
an "Interest Reset Date"), as specified on the face thereof and in the
applicable Pricing Supplement. Unless otherwise specified in the applicable
Pricing Supplement, the Interest Reset Dates will be: in the case of Floating
Rate Notes that reset daily, each Business Day; in the case of Floating Rate
Notes (other than Treasury Rate Notes) that reset weekly, Wednesday of each
week; in the case of Treasury Rate Notes that reset weekly, Tuesday of each
week; in the case of Floating Rate Notes that reset monthly, the third Wednesday
of each month; in the case of Floating Rate Notes that reset quarterly, the
third Wednesday of each March, June, September and December; in the case of
Floating Rate Notes that reset semiannually, the third Wednesday of each of two
months of each year specified on the face thereof and in the applicable Pricing
Supplement; and, in the case of Floating Rate Notes that reset annually, the
third Wednesday of one month of each year specified on the face thereof and in
the applicable Pricing Supplement; provided, however, that the interest rate in
effect for the ten days immediately prior to the Maturity Date of a Floating
Rate Note, or, with respect to any portion of the principal amount of a Floating
Rate Note to be redeemed or repaid, if applicable, the date of redemption or
Repayment Date, will be that in effect on the tenth day preceding such Maturity
Date or such date of redemption or Repayment Date. If an Interest Reset Date for
a Floating Rate Note would otherwise be a day that is not a Business Day, the
Interest Reset Date for such Floating Rate Note shall be postponed to the next
day that is a Business Day, except that, in the case of a LIBOR Note, if such
Business Day is in the next succeeding calendar month, such Interest Reset Date
shall be the immediately preceding Business Day.
The interest rate for each Reset Period will be the rate determined by the
Calculation Agent by reference to an interest determination date pertaining to
such Reset Period. The interest determination date pertaining to a Reset Period
for a Commercial Paper Rate Note (the "Commercial Paper Interest Determination
Date") will be the Business Day prior to the Interest Reset Date that commences
such Reset Period. The interest determination date pertaining to a Reset Period
for a LIBOR Note (the "LIBOR Interest Determination Date") will be the second
London Banking Day prior to the Interest Reset Date that commences such Reset
Period. The interest determination date pertaining to a Reset Period for a
Treasury Rate Note (the "Treasury Interest Determination Date") will be the day
of the week in which the Interest Reset Date that commences such Reset Period
falls on which Treasury bills would normally be auctioned. Treasury bills are
usually sold at auction on Monday of each week, unless that day is a legal
holiday, in which case the auction is usually held on the following Tuesday,
except that such auction may be held on the preceding Friday. If, as the result
of a legal holiday, an auction is so held on the preceding Friday, such Friday
will be the Treasury
S-8
<PAGE> 10
Interest Determination Date pertaining to the Reset Period commencing in the
next succeeding week. If an auction date shall fall on any Interest Reset Date
for a Treasury Rate Note, then such Interest Reset Date shall instead be the
first Business Day immediately following such auction date.
Except as provided below, interest on Floating Rate Notes will be payable,
in the case of Floating Rate Notes that reset daily, weekly or monthly, on the
third Wednesday of each month as specified on the face thereof and in the
applicable Pricing Supplement; in the case of Floating Rate Notes that reset
quarterly, on the third Wednesday of March, June, September and December of each
year; in the case of Floating Rate Notes that reset semiannually, on the third
Wednesday of each of two months of each year specified on the face thereof and
in the applicable Pricing Supplement; and, in the case of Floating Rate Notes
that reset annually, on the third Wednesday of one month of each year specified
on the face thereof and in the applicable Pricing Supplement (each such day
being an "Interest Payment Date"). If an Interest Payment Date with respect to a
Floating Rate Note would otherwise fall on a day that is not a Business Day,
such Interest Payment Date will be the following day that is a Business Day,
except that, in the case of a LIBOR Note, if such Business Day falls in the next
calendar month, such Interest Payment Date will be the immediately preceding
Business Day.
Unless otherwise indicated in the applicable Pricing Supplement, each
payment of interest on a Floating Rate Note will include interest accrued to but
excluding the applicable Interest Payment Date; provided, however, that if the
interest rate on such Note resets daily or weekly, interest payable on any
Interest Payment Date, other than interest payable on any date on which
principal for such Note is payable, will include interest accrued to and
including the immediately preceding Record Date. Accrued interest from the date
of issue or from the last date to which interest has been paid is calculated by
multiplying the face amount of a Note by an accrued interest factor. This
accrued interest factor is computed by adding the interest factors calculated
for each day from the date of issue, or from the last date to which interest has
been paid, to the date for which accrued interest is being calculated. The
interest factor (expressed as a decimal rounded upward, if necessary, to the
nearest one hundred-thousandth of a percentage point (e.g., 9.876541%, or
.09876541, being rounded to 9.87655%, or .0987655, respectively)) for each such
day is computed by dividing the interest rate (expressed as a decimal rounded
upward, if necessary, to the nearest one hundred-thousandth of a percentage
point) applicable to such date by 360, in the case of Commercial Paper Rate
Notes and LIBOR Notes, or by the actual number of days in the year, in the case
of Treasury Rate Notes.
The Calculation Agent will, upon the request of the holder of any Floating
Rate Note, provide the interest rate then in effect and, if determined, the
interest rate that will become effective on the next Interest Reset Date with
respect to such Note.
Any Floating Rate Note may also have either or both of the following: (i) a
maximum numerical interest rate limitation, or ceiling, on the rate of interest
that may accrue during any Reset Period (a "Maximum Interest Rate") and (ii) a
minimum numerical interest rate limitation, or floor, on the rate of interest
that may accrue during any Reset Period (a "Minimum Interest Rate"). 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,
with certain exceptions, for any loan in an amount less than $250,000 is 16% per
annum on a simple interest basis and for any loan in an amount equal to or
greater than $250,000 but less than $2,500,000 is 25% per annum on a simple
interest basis. These limits do not apply to Notes in which $2,500,000 or more
has been invested.
"Index Maturity" is the particular maturity of the type of instrument or
obligation from which a Base Rate is calculated.
Commercial Paper Rate Notes
Each Commercial Paper Rate Note will bear interest for each Reset Period at
the interest rate (calculated with reference to the Commercial Paper Rate on the
Commercial Paper Interest Determi-
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<PAGE> 11
nation Date for such Reset Period and the Spread or Spread Multiplier, if any)
specified in such Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement,
"Commercial Paper Rate" means, with respect to any Commercial Paper Interest
Determination Date, the Money Market Yield (calculated as described below) of
the rate on that date for commercial paper having the Index Maturity designated
in the applicable Pricing Supplement placed on behalf of industrial issuers
whose corporate bonds are rated "AA," or the equivalent, from a nationally
recognized securities rating agency as such rate is made available by the
Federal Reserve Bank of New York for such date. In the event that such rate is
not made available by the Federal Reserve Bank of New York by 3:00 p.m., New
York City time, on such Commercial Paper Interest Determination Date, then the
Commercial Paper Rate for such Commercial Paper Interest Determination Date
shall be calculated by the Calculation Agent and shall be the Money Market Yield
of the arithmetic mean (each as rounded upward, if necessary, to the nearest one
hundred-thousandth of a percentage point) of the offered rates for such
commercial paper quoted as of 11:00 a.m., New York City time, on such Commercial
Paper Interest Determination Date by three leading dealers of commercial paper
in The City of New York selected, after consultation with the Company, by the
Calculation Agent; provided, however, that if the dealers selected as aforesaid
by the Calculation Agent are not quoting as mentioned in this sentence, the
Commercial Paper Rate with respect to such Commercial Paper Interest
Determination Date will be the Commercial Paper Rate in effect on such
Commercial Paper Interest Determination Date.
"Money Market Yield" shall be a yield (expressed as a percentage rounded
upwards, if necessary, to the nearest one hundred-thousandth of a percentage
point) calculated in accordance with the following formula:
<TABLE>
<C> <C> <S>
D X 360
------------
Money Market Yield = 360 - (D X M) X 100
</TABLE>
where "D" refers to the per annum rate for the commercial paper, quoted on a
bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
LIBOR Notes
Each LIBOR Note will bear interest for each Reset Period at the interest
rate (calculated with reference to LIBOR on the LIBOR Interest Determination
Date for such Reset Period and the Spread or Spread Multiplier, if any)
specified in such Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, LIBOR will
be determined by the Calculation Agent in accordance with the following
provisions:
(i) On each LIBOR Interest Determination Date, LIBOR will be, as
specified in the applicable Pricing Supplement, either: (a) the arithmetic
mean of the offered rates for deposits having the Index Maturity designated
in the applicable Pricing Supplement, commencing on the second London
Business Day immediately following such LIBOR Interest Determination Date,
that appear on the Reuters Screen LIBO Page as of 11:00 a.m., London time,
on such LIBOR Interest Determination Date, if at least two such offered
rates appear on the Reuters Screen LIBO Page ("LIBOR Reuters"), or (b) the
rate for deposits having the Index Maturity designated in the applicable
Pricing Supplement, commencing on the second London Business Day
immediately following such LIBOR Interest Determination Date, that appears
on Telerate Page 3750 as of 11:00 a.m., London time, on such LIBOR Interest
Determination Date ("LIBOR Telerate"). "Reuters Screen LIBO Page" means the
display designated as page "LIBO" on the Reuters Monitor Money Rates
Service (or such other page as may replace page LIBO on that service for
the purpose of displaying London interbank offered rates of major banks).
"Telerate Page 3750" means the display designated as page "3750" on the
Telerate Service (or such other page as may replace the 3750 page on that
service or such other service or services as may be nominated by the
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<PAGE> 12
British Bankers' Association for the purpose of displaying London interbank
offered rates for deposits). If neither LIBOR Reuters nor LIBOR Telerate is
specified in the applicable Pricing Supplement, LIBOR will be determined as
if LIBOR Telerate had been specified. If at least two such offered rates
appear on the Reuters Screen LIBO Page, the rate in respect of such LIBOR
Interest Determination Date will be the arithmetic mean of such offered
rates as determined by the Calculation Agent. If fewer than two offered
rates appear on the Reuters Screen LIBO Page, or if no rate appears on
Telerate Page 3750, as applicable, LIBOR in respect of such LIBOR Interest
Determination Date will be determined as if the parties had specified the
rate described in (ii) below.
(ii) On any LIBOR Interest Determination Date on which fewer than two
offered rates appear on the Reuters Screen LIBO Page, as specified in
(i)(a) above, or on which no rate appears on Telerate Page 3750, as
specified in (i)(b) above, as applicable, LIBOR will be determined on the
basis of the rates at which deposits having the Index Maturity designated
in the applicable Pricing Supplement are offered at approximately 11:00
a.m., London time, on such LIBOR Interest Determination Date by four major
banks in the London interbank market (the "Reference Banks") selected,
after consultation with the Company, by the Calculation Agent to prime
banks in the London interbank market having the Index Maturity designated
in the applicable Pricing Supplement, commencing on the second London
Banking Day immediately following such LIBOR Interest Determination Date
and in a principal amount equal to an amount of not less than $1,000,000
that is representative for a single transaction in such market at such
time. The Calculation Agent will request the principal London office of
each of such Reference Banks to provide a quotation of its rate. If at
least two such quotations are provided, LIBOR in respect of such LIBOR
Interest Determination Date will be the arithmetic mean (rounded upward, if
necessary, to the nearest one hundred-thousandth of a percentage point) of
such quotations. If fewer than two quotations are provided, LIBOR in
respect of such LIBOR Interest Determination Date will be the arithmetic
mean (rounded upward, if necessary, to the nearest one hundred-thousandth
of a percentage point) of the rates quoted at approximately 11:00 a.m., New
York City time, on such LIBOR Interest Determination Date by three major
banks in The City of New York selected, after consultation with the
Company, by the Calculation Agent for loans in U.S. dollars to leading
European banks having the Index Maturity designated in the applicable
Pricing Supplement, commencing on the second London Banking Day immediately
following such LIBOR Interest Determination Date and in a principal amount
equal to an amount of not less than $1,000,000 that is representative for a
single transaction in such market at such time; provided, however, that if
the banks in The City of New York selected as aforesaid by the Calculation
Agent are not quoting as mentioned in this sentence, LIBOR with respect to
such LIBOR Interest Determination Date will be LIBOR in effect on such
LIBOR Interest Determination Date.
Treasury Rate Notes
Each Treasury Rate Note will bear interest for each Reset Period at the
interest rate (calculated with reference to the Treasury Rate on the Treasury
Interest Determination Date for such Reset Period and the Spread or Spread
Multiplier, if any) specified in such Note and in the applicable Pricing
Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Treasury
Rate" means, with respect to any Treasury Interest Determination Date, the
auction average rate (expressed as a bond equivalent, rounded upward, if
necessary, to the nearest one hundred-thousandth of a percentage point, on the
basis of a year of 365 or 366 days, as applicable, and applied on a daily basis)
for the most recent auction of direct obligations of the United States
("Treasury bills") having the Index Maturity designated in the applicable
Pricing Supplement, as made available by the U.S. Department of the Treasury. In
the event that the results of the auction of Treasury bills having the Index
Maturity designated in the applicable Pricing Supplement are not made available
as provided above by 3:00 p.m., New York City time, on such Treasury Interest
Determination Date or no such auction is held in a
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<PAGE> 13
particular week (or on the preceding Friday, if applicable), then the Treasury
Rate shall be calculated by the Calculation Agent and shall be a yield to
maturity (expressed as a bond equivalent, rounded upward, if necessary, to the
nearest one hundred-thousandth of a percentage point, on the basis of a year of
365 or 366 days, as applicable, and applied on a daily basis) of the arithmetic
mean of the secondary market bid rates, as of 3:30 p.m., New York City time, on
such Treasury Interest Determination Date, of three leading primary U.S.
government securities dealers selected, after consultation with the Company, by
the Calculation Agent for the issue of Treasury bills with a remaining maturity
closest to the Index Maturity designated in the applicable Pricing Supplement;
provided, however, that if the dealers selected as aforesaid by the Calculation
Agent are not quoting as mentioned in this sentence, the Treasury Rate with
respect to such Treasury Interest Determination Date will be the Treasury Rate
in effect on such Treasury Interest Determination Date.
CURRENCY INDEXED NOTES
General.
The Company may from time to time offer Notes ("Currency Indexed Notes"),
the principal amount of which payable at the Maturity Date, and/or the interest
payable on each Interest Payment Date and at the Maturity Date, is determined by
the difference in the rate of exchange between the Specified Currency and the
other currency or currency unit specified as the Indexed Currency (the "Indexed
Currency") in the applicable Pricing Supplement on certain specified dates.
Unless otherwise specified in the applicable Pricing Supplement, holders of
Currency Indexed Notes (i) will be entitled to receive a principal amount in
respect of such Currency Indexed Notes exceeding the amount designated as the
face amount in respect of such Currency Indexed Notes in the applicable Pricing
Supplement (the "Face Amount") if, at the Maturity Date, the rate at which the
Specified Currency can be exchanged for the Indexed Currency is greater than the
rate of such exchange designated as the Base Exchange Rate, expressed in units
of the Indexed Currency per one unit of the Specified Currency, in the
applicable Pricing Supplement (the "Base Exchange Rate"), and will be entitled
to receive a principal amount in respect of such Currency Indexed Notes less
than the Face Amount of such Currency Indexed Notes, if, at the Maturity Date,
the rate at which the Specified Currency can be exchanged for the Indexed
Currency is less than such Base Exchange Rate and/or (ii) will be entitled to
receive an amount of interest on each Interest Payment Date and/or at the
Maturity Date at an interest rate greater than the base interest rate of such
Currency Indexed Note as designated in the applicable Pricing Supplement (the
"Base Interest Rate") if, on such Interest Payment Date and/or at the Maturity
Date, as the case may be, the rate at which the Specified Currency can be
exchanged into the Indexed Currency is greater than the Base Exchange Rate, and
will be entitled to receive an amount of interest on each Interest Payment Date
and/or at the Maturity Date at an interest rate less than the Base Interest Rate
if, on such Interest Payment Date and/or at the Maturity Date, as the case may
be, the rate at which the Specified Currency can be exchanged into the Indexed
Currency is less than the Base Exchange Rate, in each case determined as
described below under "Payment of Principal and Interest." Information as to the
relative historical value of the applicable Specified Currency against the
applicable Indexed Currency, any exchange controls applicable to such Specified
Currency or Indexed Currency and the tax consequences to holders will be set
forth in the applicable Pricing Supplement. See "Risk Factors."
Unless otherwise specified in the applicable Pricing Supplement, the term
"Exchange Rate Day" shall mean any day which is a Business Day in The City of
New York and, (i) if the Specified Currency or Indexed Currency is any currency
or currency unit other than the U.S. dollar or the ECU, a Business Day in the
principal financial center of the country of such Specified Currency or Indexed
Currency, or (ii) in the case of an ECU, a day which is not a non-ECU clearing
day as determined by the ECU Banking Association in Paris.
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<PAGE> 14
Payment of Principal and Interest.
Unless otherwise specified in the applicable Pricing Supplement, principal
of a Currency Indexed Note will be payable by the Company in the Specified
Currency at the Maturity Date in an amount equal to the Face Amount of the
Currency Indexed Note, plus or minus an amount determined by the determination
agent specified in the applicable Pricing Supplement (the "Determination Agent")
by reference to the difference between the Base Exchange Rate and the rate at
which the Specified Currency can be exchanged for the Indexed Currency as
determined on the second Exchange Rate Day (the "Determination Date") prior to
the Maturity Date of such Currency Indexed Note by the Determination Agent based
upon the arithmetic mean of the open market spot offer quotations for the
Indexed Currency obtained by the Determination Agent from the Reference Dealers
(as defined below) in The City of New York at 11:00 a.m., New York City time, on
the Determination Date, for an amount of Indexed Currency equal to the Face
Amount of such Currency Indexed Note multiplied by the Base Exchange Rate, for
settlement on the Maturity Date (such rate of exchange, as so determined and
expressed in units of the Indexed Currency per one unit of the Specified
Currency, is hereafter referred to as the "Spot Rate"). If such quotations from
the Reference Dealers are not available on the Determination Date due to
circumstances beyond the control of the Company or the Determination Agent, the
Spot Rate will be determined on the basis of the most recently available
quotations from the Reference Dealers. The principal amount of the Currency
Indexed Notes determined by the Determination Agent to be payable at the
Maturity Date will be payable to the holders thereof in the manner set forth
herein and in the applicable Pricing Supplement. As used herein, the term
"Reference Dealers" shall mean the three banks or firms specified as such in the
applicable Pricing Supplement or, if any of them shall be unwilling or unable to
provide the requested quotations, such other major money center bank or banks in
The City of New York selected by the Company, in consultation with the
Determination Agent, to act as Reference Dealer or Reference Dealers in
replacement therefor. In the absence of manifest error, the determination by the
Determination Agent of the Spot Rate and the principal amount of Currency
Indexed Notes payable at the Maturity Date thereof shall be final and binding on
the Company and the holders of such Currency Indexed Notes.
Unless otherwise specified in the applicable Pricing Supplement, on the
basis of the aforesaid determination by the Determination Agent and the formulae
and limitations set forth below, (i) if the Base Exchange Rate equals the Spot
Rate for any Currency Indexed Note, then the principal amount of such Currency
Indexed Note Payable at the Maturity Date will be equal to the Face Amount of
such Currency Indexed Note; (ii) if the Spot Rate exceeds the Base Exchange Rate
(i.e., the Specified Currency has appreciated against the Indexed Currency
during the term of the Currency Indexed Note), then the principal amount so
payable will be greater than the Face Amount of such Currency Indexed Note up to
an amount equal to twice the Face Amount of such Currency Indexed Note; (iii) if
the Spot Rate is less than the Base Exchange Rate (i.e., the Specified Currency
has depreciated against the Indexed Currency during the term of the Currency
Indexed Note) but is greater than one-half of the Base Exchange Rate, then the
principal amount so payable will be less than the Face Amount of such Currency
Indexed Note; and (iv) if the Spot Rate is less than or equal to one-half of the
Base Exchange Rate, then the Spot Rate will be deemed to be one-half of the Base
Exchange Rate and no principal amount of the Currency Indexed Note will be
payable at the Maturity Date.
Unless otherwise specified in the applicable Pricing Supplement, the
formulae to be used by the Determination Agent to determine the principal amount
of a Currency Indexed Note payable at the Maturity Date will be as follows:
If the Spot Rate exceeds or equals the Base Exchange Rate, the principal
amount of a Currency Indexed Note payable at the Maturity Date shall equal:
<TABLE>
<C> <C> <C> <C> <S>
Spot Rate -- Base Exchange Rate
-------------------------------
Face Amount + ( Face Amount X Spot Rate ).
</TABLE>
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<PAGE> 15
If the Base Exchange Rate exceeds the Spot Rate, the principal amount of a
Currency Indexed Note payable at the Maturity Date (which shall, in no event, be
less than zero) shall equal:
<TABLE>
<C> <C> <C> <C> <S>
Base Exchange Rate -- Spot Rate
-------------------------------
Face Amount - ( Face Amount X Spot Rate ).
</TABLE>
If the formulae set forth above are applicable to a Currency Indexed Note,
the maximum principal amount payable at the Maturity Date in respect of such a
Currency Indexed Note would be an amount equal to twice the Face Amount and the
minimum principal amount payable would be zero.
Unless otherwise specified in the applicable Pricing Supplement, interest
will be payable by the Company in the Specified Currency based on the Face
Amount of the Currency Indexed Notes, and such interest will be payable at the
rate and times and in the manner set forth herein and in the applicable Pricing
Supplement. In the event that the applicable Pricing Supplement specifies that
interest on the Currency Indexed Notes will be determined by reference to the
Indexed Currency and unless otherwise specified in such Pricing Supplement,
interest will be payable by the Company in the Specified Currency on each
Interest Payment Date and at the Maturity Date at a rate per annum equal to the
Base Interest Rate specified in the applicable Pricing Supplement multiplied by
an Interest Index Factor. The "Interest Index Factor" shall be an amount
determined by the Determination Agent by reference to the following formula:
Interest Spot Rate
--------------------
Base Exchange Rate
where, "Interest Spot Rate" is (i) if at an Interest Payment Date, the rate at
which the Specified Currency can be exchanged for the Indexed Currency as
determined on the second Exchange Rate Day prior to such Interest Payment Date
(the "Interest Determination Date") by the Determination Agent in the manner
specified in the applicable Pricing Supplement, on such Interest Determination
Date, or (ii) if at the Maturity Date, the Spot Rate. The amount of interest
determined by the Determination Agent to be payable on any Interest Payment Date
and at the Maturity Date in respect of the Currency Indexed Notes will be
payable to the holders thereof in the manner set forth herein and in the
applicable Pricing Supplement. In the absence of manifest error, the
determination by the Determination Agent of the Interest Index Factor, the
Interest Spot Rate on each Interest Payment Date, the interest payments payable
and the Spot Rate at the Maturity Date on the Currency Indexed Notes shall be
final and binding on the Company and the holders of such Currency Indexed Notes.
Unless otherwise specified in the applicable Pricing Supplement, on the
basis of the aforesaid determinations by the Determination Agent, (i) if the
Base Exchange Rate equals the Interest Spot Rate on any Interest Determination
Date or the Spot Rate on the Determination Date for any Currency Indexed Note,
then the amount of interest payable in respect of such Currency Indexed Note on
the applicable Interest Payment Date or at the Maturity Date, as the case may
be, would reflect an interest rate equal to the Base Interest Rate of such
Currency Indexed Note; (ii) if the Interest Spot Rate on any Interest
Determination Date or the Spot Rate on the Determination Date exceeds the Base
Exchange Rate (i.e., the Specified Currency has appreciated against the Indexed
Currency during the term of the Currency Indexed Note), then the amount of
interest so payable would reflect an interest rate greater than the Base
Interest Rate of such Currency Indexed Note; and (iii) if the Interest Spot Rate
on any Interest Determination Date or the Spot Rate on the Determination Date is
less than the Base Exchange Rate (i.e., the Specified Currency has depreciated
against the Indexed Currency during the term of the Currency Indexed Note), then
the amount of interest so payable would reflect an interest rate less than the
Base Interest Rate of such Currency Indexed Note.
Unless otherwise specified in the applicable Pricing Supplement, in the
event of any redemption or repayment of a Currency Indexed Note prior to its
Maturity Date, the term "Maturity Date" used above would refer to the redemption
or repayment date of such Currency Indexed Note.
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<PAGE> 16
PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN FINANCIAL AND LEGAL ADVISORS
AS TO THE RISKS ENTAILED BY AN INVESTMENT IN CURRENCY INDEXED NOTES. SUCH
CURRENCY INDEXED NOTES ARE NOT AN APPROPRIATE INVESTMENT FOR INVESTORS WHO ARE
UNSOPHISTICATED WITH RESPECT TO FOREIGN CURRENCY TRANSACTIONS. SEE "RISK
FACTORS."
COMMODITY INDEXED NOTES
The Pricing Supplement relating to a Commodity Indexed Note will set forth
the method by which the amount of interest payable on an Interest Payment Date
and the amount of interest and principal payable at the Maturity Date in respect
of such Commodity Indexed Note will be determined, a description of certain tax
consequences to holders of Commodity Indexed Notes, a description of certain
risks associated with investments in Commodity Indexed Notes and other
information relating to such Commodity Indexed Notes.
REDEMPTION
The Notes will not be subject to redemption through the operation of a
sinking fund, but each Note may be redeemed at the option of the Company at any
time on and after the date, if any, specified at the time of sale and set forth
in the applicable Pricing Supplement and on the face of such Note. A Note will
not be redeemable if no such date is set forth on such Note. On and after such
date, if any, such Note will be redeemable in whole or from time to time in part
on notice mailed not more than 60 nor less than 30 days prior to the date of
redemption at a redemption price set forth in the applicable Pricing Supplement,
together with interest accrued thereon to the date of redemption.
REPAYMENT
The Pricing Supplement relating to each Note will indicate either that such
Note cannot be repaid prior to maturity or that such Note will be repayable at
the option of the holder prior to maturity on the Repayment Date or Repayment
Dates, if any, specified in the applicable Pricing Supplement and on the face of
such Note. A Note will not be repayable if no such Repayment Date is set forth
on such Note. On such Repayment Date or Repayment Dates, if any, such Note will
be repayable in whole or from time to time in part at a price set forth in the
applicable Pricing Supplement, together with interest accrued on such portion to
the date of repayment.
In order for a Note to be repaid, the Company must receive at the Corporate
Trust Office of the Trustee in the Borough of Manhattan, The City of New York,
during the period from and including the first day of the Repayment Option
Period set forth on the face of such Note for such Repayment Date to and
including the close of business on the last day of such Repayment Option Period
(or if such day is not a business day, the next succeeding business day): (i)
the Note with the form entitled "Option to Elect Repayment" on the reverse of
the Note duly completed, or (ii) a telegram, telex, facsimile transmission or
letter from a member of a national securities exchange or the National
Association of Securities Dealers, Inc., or a commercial bank or a trust company
in the United States of America, dated no later than the last day of such
Repayment Option Period (or if such day is not a business day, the next
succeeding business day) setting forth the name of the holder of the Note, the
principal amount of the Note, the portion of the principal amount of the Note to
be repaid, a statement that the option to elect repayment is being exercised
thereby and a guarantee that the Note to be repaid in whole or in part (with the
form entitled "Option to Elect Repayment" on the reverse of the Note duly
completed) will be received at the Corporate Trust Office of the Trustee in the
Borough of Manhattan, The City of New York, not later than five business days
after the date of such telegram, telex, facsimile transmission or letter and
such Note and form duly completed must be received at the Corporate Trust Office
of the Trustee in the Borough of Manhattan, The City of New York, by such fifth
business day. Effective exercise of any repayment option by the holder of any
Note shall be irrevocable. No transfer or exchange of any Note (or, in the event
that any Note is to be repaid in part, such portion of the Note to be repaid)
will be permitted after exercise of a repayment option. A repayment option may
be exercised by the holder of a Note for less than the entire principal amount
of the Note, provided that
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<PAGE> 17
the principal amount which is to be repaid is equal to $1,000 or any integral
multiple thereof for Notes denominated in U.S. dollars or 10,000 units of the
Specified Currency or any integral multiple thereof for Notes denominated in a
Specified Currency other than U.S. dollars. All questions as to the validity,
eligibility (including time of receipt) and acceptance of any Note for repayment
will be determined by the Company, whose determination will be final, binding
and non-appealable. For purposes of this provision, "business day" means any day
other than Saturday and Sunday or a legal holiday or any day on which banking
institutions in New York, New York are authorized or required by law or
regulation to close.
If a Note is represented by a Global Security (as defined below), the
Depositary's nominee will be the holder of such Note and, therefore, will be the
only entity that can exercise a right to repayment. In order to ensure that the
Depositary's nominee will timely exercise a right to repayment with respect to a
particular Note, the beneficial owner of such Note must instruct the broker or
other direct or indirect participant through which it holds an interest in such
Note to notify the Depositary of its desire to exercise a right to repayment.
Different firms have different cut-off times for accepting instructions from
their customers, and, accordingly, each beneficial owner should consult the
broker or other direct or indirect participant through which it holds an
interest in a Note in order to ascertain the cut-off time by which such an
instruction must be given in order for timely notice to be delivered to the
Depositary.
BOOK-ENTRY SYSTEM
Upon issuance, all Book-Entry Notes having the same Specified Currency,
Original Issue Date, Maturity Date, reset, extension, redemption and repayment
provisions, Interest Payment Dates, Record Dates, and, in the case of Fixed Rate
Notes, interest rate, or, in the case of Floating Rate Notes, Base Rate, Initial
Interest Rate, Index Maturity, Reset Period, Interest Payment Dates, Spread or
Spread Multiplier, if any, Maximum Interest Rate, if any, and Minimum Interest
Rate, if any, and in the case of Fixed Rate Notes or Floating Rate Notes that
are also Currency Indexed Notes, Specified Currency, Indexed Currency and Base
Exchange Rate, or that are also Commodity Indexed Notes, the same comparable
terms, will be represented by a single global security (a "Global Security").
Each Global Security representing Book-Entry Notes will be deposited with, or on
behalf of, DTC or such other Depositary as is specified in the applicable
Pricing Supplement, and registered in the name of the Depositary or its nominee.
Book-Entry Notes will not be exchangeable for Certificated Notes at the option
of the holder and, except as set forth below, will not otherwise be issuable in
definitive form. Unless otherwise specified in the applicable Pricing
Supplement, DTC will be the Depositary.
DTC has advised the Company and the Agents as follows: 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 was
created to hold securities of its participants and to facilitate the clearance
and settlement of securities transactions among its participants in such
securities through electronic book-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of securities
certificates. DTC's participants include securities brokers and dealers
(including the Agents), banks, trust companies, clearing corporations and
certain other organizations, some of which (and/or their representatives) own
DTC. Access to DTC's book-entry 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 participant, either directly or
indirectly.
Upon the issuance by the Company of Book-Entry Notes represented by a
Global Security, the Depositary will credit, on its book-entry registration and
transfer system, the respective principal amounts of the Book-Entry Notes
represented by such Global Security to the accounts of institutions that have
accounts with the Depositary ("participants"). The accounts to be credited shall
be
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<PAGE> 18
designated by the agents or underwriters of such Book-Entry Notes or by the
Company if such Book-Entry Notes are offered and sold directly by the Company.
Ownership of beneficial interests in a Global Security will be limited to
participants or persons that hold interests through participants. Ownership of
beneficial interests in Book-Entry Notes represented by a Global Security will
be shown on, and the transfer of that ownership will be effected only through,
records maintained by the Depositary (with respect to interests of participants
in the Depositary), or by participants in the Depositary or persons that may
hold interests through such participants (with respect to persons other than
participants in the Depositary). The laws of some states require that certain
purchasers of securities take physical delivery of such securities in definitive
form. Such limits and such laws may impair the ability to transfer beneficial
interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of the Global Security, the Depositary or its nominee, as the
case may be, will be considered the sole owner or holder of the Book-Entry Notes
represented by such Global Security for all purposes under the Indenture. Except
as provided below, owners of beneficial interests in Book-Entry Notes
represented by a Global Security will not be entitled to have Book-Entry Notes
represented by such Global Security registered in their names, will not receive
or be entitled to receive physical delivery of Book-Entry Notes in definitive
form and will not be considered the owners or holders thereof under the
Indenture. Unless and until it is exchanged in whole or in part for individual
certificates evidencing the Book-Entry Notes represented thereby, a Global
Security may not be transferred except as a whole by the Depositary for such
Global Security to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by the
Depositary or any nominee to a successor Depositary or any nominee of such
successor.
Payments of principal of and interest, if any, on the Book-Entry Notes
represented by a Global Security registered in the name of the Depositary or its
nominee will be made by the Company through the Trustee to the Depositary or its
nominee, as the case may be, as the registered owner of the Global Security.
Neither the Company, the Trustee nor the registrar for the Notes will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a Global Security
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
The Company has been advised that the Depositary, upon receipt of any
payment of principal of or interest on a Global Security, will credit
immediately the accounts of the related participants with payment in amounts
proportionate to their respective holdings in principal amount of beneficial
interest in such Global Security as shown on the records of the Depositary. The
Company expects that payments by participants to owners of beneficial interests
in a Global Security will be governed by standing customer instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name." Such payments will be
the responsibility of such participants.
If the Depositary with respect to any Global Security or Global Securities
is at any time unwilling or unable to continue as Depositary and a successor
Depositary is not appointed by the Company within 90 days, the Company will
issue Certificated Notes in exchange for the Book-Entry Notes represented by
such Global Security or Global Securities. In addition, the Company may at any
time and in its sole discretion determine not to have Global Securities, and, in
such event, will issue Certificated Notes in exchange for the Book-Entry Notes
represented by such Global Securities.
SPECIAL PROVISIONS RELATING TO MULTI-CURRENCY NOTES
GENERAL
Unless otherwise indicated in the applicable Pricing Supplement, if any
Notes are to be denominated in U.S. dollars, payments of principal of and
interest on such Notes will be made in U.S. dollars. If any of the Notes are to
be denominated in a Specified Currency other than U.S. dollars ("Multi-Currency
Notes"), the following provisions shall apply which are in addition to, and to
the
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<PAGE> 19
extent inconsistent therewith replace, the description of the general terms and
provisions of Notes set forth in the accompanying Prospectus and elsewhere in
this Prospectus Supplement.
The authorized denominations of Multi-Currency Notes will be the amounts of
the Specified Currency for such Notes that are equivalent, at the Exchange Rate
(as defined below) for purchases of such Specified Currency on the Business Day
immediately preceding the trade date for such Notes, to $100,000 (rounded down
to an integral multiple of 10,000 units of such Specified Currency), and any
larger amount that is an integral multiple of 10,000 units of such Specified
Currency, except as otherwise specified in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, payment of
the purchase price of Multi-Currency Notes will be made in immediately available
funds.
CURRENCY EXCHANGE
Unless otherwise specified in the applicable Pricing Supplement, purchasers
are required to pay for Multi-Currency Notes in the Specified Currency. At the
present time, there are limited facilities in the United States for conversion
of U.S. dollars into foreign currencies or currency units, and vice versa, and
it is believed that only a limited number of U.S. banks offer foreign currency
checking or savings facilities in the United States. However, if requested by a
purchaser at the time an offer to purchase an applicable Note is made to an
Agent (or by such other day as such Agent may determine), such Agent will
arrange for the conversion of U.S. dollars into the applicable Specified
Currency to enable the purchaser to pay for such Multi-Currency Note. Each such
conversion will be made by the Agents on such terms and subject to such
conditions, limitations and charges as the Agents may from time to time
establish in accordance with their regular foreign exchange practices. All costs
of exchange will be borne by the purchasers of the Multi-Currency Notes.
Specific information about the foreign currency or currency units in which
a particular Multi-Currency Note is denominated, including historical exchange
rates and a description of the currency or currency units and any exchange
controls, will be set forth in the applicable Pricing Supplement.
PAYMENT OF PRINCIPAL AND INTEREST
Principal and interest, if any, on Multi-Currency Notes will be paid by the
Company in the Specified Currency. If so specified in the applicable Pricing
Supplement, at the request of a holder of a Multi-Currency Note, payments of
principal and interest in respect of such Note shall be paid in U.S. dollars.
Under such circumstances, the Company would be required to tender payment in
U.S. dollars at the Exchange Rate, and any costs associated with such conversion
would be borne by such holder through deduction from such payments. In such
case, a holder may elect to receive payments in U.S. dollars by delivering a
written request to the Trustee not later than the Record Date immediately
preceding the applicable payment date. Such election will remain in effect until
notice to the Trustee, but written notice of any such revocation must be
received by the Trustee not later than the Record Date immediately preceding the
next Interest Payment Date or the fifteenth day preceding the Maturity Date, as
the case may be. Upon request, the Trustee will mail a copy of a form of request
to any holder.
OUTSTANDING MULTI-CURRENCY NOTES
For purposes of calculating the principal amount of any Multi-Currency Note
payable in a Specified Currency which is outstanding under the Indenture for
purposes of determining whether the holders of the requisite principal amount of
outstanding Securities have given any request, demand, authorization, direction,
notice, consent or waiver under such Indenture or whether a quorum is present at
a meeting of holders of Securities, the principal amount of such Multi-Currency
Note at any time outstanding shall be deemed to be the U.S. dollar equivalent,
determined as of the date of the original issuance of such Multi-Currency Note,
of the principal amount of such Multi-Currency Note. Unless otherwise indicated
in the applicable Pricing Supplement, whenever the Indenture provides for
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<PAGE> 20
any distribution to holders, any amount in respect of any Multi-Currency Note
shall be treated for any such distribution as that amount of U.S. dollars that
could be obtained for such amount on such reasonable basis of exchange as the
Company may specify.
PAYMENT CURRENCY
If the principal of, or interest on, any Note is payable in a Specified
Currency that is not available to the Company for making payments thereof due to
the imposition of exchange controls or other circumstances beyond the control of
the Company, the Company will be entitled to satisfy its obligations to holders
of the Notes by making such payment in U.S. dollars on the basis of the Exchange
Rate on the second Business Day preceding the Interest Payment Date or the
second Business Day preceding the maturity of an installment of principal, as
the case may be (or, if no rate is quoted for such Specified Currency on such
date, the last date such rate is quoted). Any payment made under such
circumstances in U.S. dollars where the required payment is in a Specified
Currency other than U.S. dollars will not constitute an Event of Default under
the Indenture.
"Exchange Rate" means (a) with respect to U.S. dollars in which payment is
to be made on Multi-Currency Notes denominated in a composite currency unit, the
exchange rate between U.S. dollars and such composite currency unit reported by
the agency or organization, if any, responsible for overseeing such composite
currency unit or by the Council of the European Communities (in the case of ECU,
whose reports are currently based on the rates in effect at 2:30 p.m., Brussels
time, on the relevant exchange markets), as appropriate, on the applicable
Record Date with respect to an Interest Payment Date or the fifteenth day
immediately preceding the maturity of an installment of principal, or on such
other date provided in the Indenture, as the case may be; (b) with respect to
U.S. dollars in which payment is to be made on Multi-Currency Notes denominated
in a foreign currency, the noon U.S. dollar buying rate for that currency for
cable transfers quoted by the Exchange Rate Agent in The City of New York
designated by the Company on the Record Date with respect to an Interest Payment
Date or the fifteenth day immediately preceding the maturity of an installment
of principal, or on such other date provided therefor, as the case may be, as
certified for customs purposes by the Federal Reserve Bank of New York; and (c)
with respect to a Specified Currency other than U.S. dollars in which payment is
to be made on Multi-Currency Notes converted into U.S. dollars pursuant to the
Indenture as described above under "Payment Currency," the noon U.S. dollar
selling rate for that currency for cable transfers quoted by the Exchange Rate
Agent in The City of New York on the second Business Day preceding the
applicable Interest Payment Date or the second Business Day preceding the
maturity of an installment of principal, as the case may be, as certified for
customs purposes by the Federal Reserve Bank of New York. If for any reason such
rates are not available with respect to one or more currencies for which an
Exchange Rate is required, the Company shall use such quotation of the Federal
Reserve Bank of New York as of the most recent available date, or quotations
from one or more commercial banks in The City of New York or in the country of
issue of the currency in question, or such other quotations as the Company, in
each case, shall deem appropriate. If there is more than one market for dealing
in any currency by reason of foreign exchange regulations or otherwise, the
market to be used in respect of such currency shall be the largest market upon
which a nonresident issuer of securities designated in such currency would
purchase such currency in order to make payments in respect of such securities.
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<PAGE> 21
U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of the material U.S. federal income tax
consequences resulting from the beneficial ownership of Notes by certain
persons. This summary does not purport to consider all the possible U.S. federal
tax consequences of the purchase, ownership or disposition of the Notes and is
not intended to reflect the individual tax position of any beneficial owner. It
deals only with Notes denominated in U.S. dollars, Notes denominated in
currencies or composite currencies other than U.S. dollars ("Foreign Currency"),
and Foreign Currency in each case held as capital assets. Moreover, except as
expressly indicated, it addresses initial purchasers and does not address
beneficial owners that may be subject to special tax rules, such as banks,
insurance companies, dealers in securities or currencies, purchasers that hold
Notes (or Foreign Currency) as a hedge against currency risks or as part of a
straddle with other investments or as part of a "synthetic security" or other
integrated investment (including a "conversion transaction") comprised of a Note
and one or more other investments, or purchasers that have a "functional
currency" other than the U.S. dollar. Except to the extent discussed below under
"Non-U.S. Holders," this summary is not applicable to non-United States persons
not subject to U.S. federal income tax on their worldwide income. This summary
is based upon the U.S. federal tax laws and regulations as now in effect and as
currently interpreted and does not take into account possible changes in such
tax laws or such interpretations, any of which may be applied retroactively. It
does not include any description of the tax laws of any state, local or foreign
governments that may be applicable to the Notes or holders thereof, and it does
not discuss the tax treatment of Notes denominated in certain hyperinflationary
currencies or dual currency Notes.
Persons considering the purchase of Notes should consult their own tax
advisors concerning the tax consequences of holding Notes, including the
application of the U.S. federal tax laws discussed below to their particular
situations, as well as the application of state, local and other national tax
laws.
U.S. HOLDERS
Payments of Interest
In general, interest on a Note, whether payable in U.S. dollars or a
Foreign Currency (other than certain payments on a Discount Note, as defined and
described below under "Original Issue Discount"), will be taxable to a
beneficial owner who or which is (i) a citizen or resident of the United States,
(ii) a corporation created or organized under the laws of the United States or
any State thereof (including the District of Columbia) or (iii) a person
otherwise subject to United States federal income taxation on its worldwide
income (a "U.S. Holder") as ordinary income at the time it is received or
accrued, depending on the holder's method of accounting for tax purposes. If an
interest payment is denominated in or determined by reference to a Foreign
Currency, then special rules, described below under "Foreign Currency Notes,"
apply.
Original Issue Discount
The following discussion summarizes the United States federal income tax
consequences to U.S. Holders of Notes issued with original issue discount
("OID") for federal income tax purposes. U.S. Holders of a Note issued with OID
generally will be subject to special tax accounting rules provided in the
Internal Revenue Code of 1986, as amended (the "Code"). On February 2, 1994, the
Treasury Department published final regulations (the "OID Regulations"), which
expand and illustrate the rules provided by the Code. On December 16, 1994, the
Treasury Department proposed new regulations regarding the tax treatment of debt
instruments that provide for one or more contingent payments. The proposed
regulations would also modify the rules relating to variable rate debt
instruments. Subsequent versions of the proposed regulations or corresponding
final regulations may adopt positions that may apply to a Note and that may be
contrary to the positions discussed below. For this reason, purchasers of Notes
issued with OID should carefully examine the Pricing Supplement and consult
their own tax advisers with respect to the current application of the OID rules
to the Notes.
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<PAGE> 22
Special rules apply to OID on a Discount Note that is denominated in
Foreign Currency. See "Foreign Currency Notes -- Foreign Currency Discount
Notes" below.
General. A Note will be treated as issued with OID (a "Discount Note") if
the excess of the Note's "stated redemption price at maturity" over its issue
price is greater than a de minimis amount (set forth in the Code and the OID
Regulations). Under the OID Regulations, the "stated redemption price at
maturity" of a Note is the sum of all payments provided by the Note that are not
payments of "qualified stated interest." A "qualified stated interest" payment
includes any stated interest payment on a Note that is unconditionally payable
in cash or property (other than debt instruments of the Company) at least
annually at a single fixed rate (or at certain floating rates) that
appropriately takes into account the length of the interval between stated
interest payments. Generally, the issue price of a Note (or any Note that is
part of an issue of Notes) will be the first price at which a substantial amount
of Notes that are part of such issue of Notes are sold (other than to
underwriters, placement agents or wholesalers). The applicable Pricing
Supplement will state whether a particular issue of Notes will constitute an
issue of Discount Notes.
In general, if the excess of a Note's stated redemption price at maturity
over its issue price is de minimis, then such excess constitutes "de minimis
OID." Under the OID Regulations, unless a U.S. Holder makes the election
described below under "Election to Treat All Interest as Original Issue
Discount," such a Note will not be treated as issued with OID (in which case the
following paragraphs under "Original Issue Discount" will not apply) and a U.S.
Holder of such a Note will recognize capital gain with respect to such de
minimis OID as stated principal payments on the Note are made. The amount of
such gain with respect to each such payment will equal the product of the total
amount of the Note's de minimis OID and a fraction, the numerator of which is
the amount of the principal payment made and the denominator of which is the
stated principal amount of the Note.
The OID Regulations provide that a Note bearing interest at a floating rate
(a "Floating Rate Note") will bear qualified stated interest if the Floating
Rate Note provides for stated interest at: (1) one or more qualified floating
rates; (2) a single fixed rate and one or more qualified floating rates; (3) a
single objective rate; or (4) a single fixed rate and a single objective rate
that is a qualified inverse floating rate.
For this purpose, a variable interest rate is a qualified floating rate if
variations in the value of the rate can reasonably be expected to measure
contemporaneous variations in the cost of newly borrowed funds in the currency
in which the debt instrument is denominated. A variable rate is not qualified
stated interest if, among other things, the terms of the Note provide for a
maximum interest rate or a minimum interest rate that is reasonably expected as
of the issue date to cause the yield on the debt instrument to be significantly
less, in the case of a maximum rate, or significantly more, in the case of a
minimum rate, than the expected yield determined without the maximum or minimum
rate, as the case may be.
An objective rate is a rate that is determined using a single fixed formula
and that is based on: (1) one or more qualified floating rates; (2) one or more
rates where each rate would be a qualified floating rate for a debt instrument
denominated in a currency other than the currency in which the debt instrument
is denominated; (3) the yield or change in the price of actively traded personal
property; or (4) a combination of the foregoing rates. An objective rate is a
qualified inverse floating rate if the rate is equal to a fixed rate minus a
qualified floating rate, and the variation in the rate can be reasonably
expected to inversely reflect contemporaneous variations in the cost of newly
borrowed funds. A variable rate of interest on a debt instrument is not an
objective rate if it is reasonably expected that the average value of the rate
during the first half of the instrument's term will be either significantly less
than or significantly greater than the average value of the rate during the
final half of the debt instrument's term. Unless specified in the applicable
Pricing Supplement, Floating Rate Notes will not be Discount Notes.
The Code and the OID Regulations require a U.S. Holder of a Discount Note
having a maturity of more than one year from its date of issue to include OID in
gross income, as it accrues economically on
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a constant yield basis, without regard to the holder's method of accounting for
tax purposes and prior to the receipt of cash attributable to such income. In
addition, qualified stated interest is included in income under the U.S.
Holder's regular method of accounting.
The amount of OID includible in gross income by a U.S. Holder of a Discount
Note is the sum of the "daily portions" of OID with respect to the Discount Note
for each day during the taxable year in which the U.S. Holder holds such
Discount Note ("accrued OID"). The daily portion is determined by allocating to
each day in any "accrual period" a pro rata portion of the OID allocable to that
accrual period. Under the OID Regulations, accrual periods with respect to a
Note may be any set of periods (which may be of varying lengths) selected by the
U.S. Holder as long as (i) no accrual period is longer than one year and (ii)
each scheduled payment of interest or principal on the Note occurs on the first
day or final day of an accrual period.
The amount of OID allocable to an accrual period equals the excess of (a)
the product of the Discount Note's adjusted issue price at the beginning of the
accrual period and the Discount Note's yield to maturity (determined on the
basis of compounding at the close of each accrual period and properly adjusted
for the length of the accrual period) over (b) the sum of any payments of
qualified stated interest on the Discount Note allocable to the accrual period.
In the case of a Floating Rate Note, both the yield to maturity and the
qualified stated interest will generally be determined for these purposes as
though the Note will bear interest in all periods at a fixed rate equal to the
value of the rate as of the issue date. In the case of Floating Rate Notes using
an objective rate other than a qualified inverse floating rate, the yield to
maturity and the qualified stated interest will generally be determined as
though the Note will bear interest in all periods at a fixed rate equal to the
rate that reflects the yield that is reasonably expected for the Note.
(Additional rules may apply if interest on a Floating Rate Note is based on more
than one interest index.)
The "adjusted issue price" of a Discount Note at the beginning of the first
accrual period is the issue price. Thereafter, the adjusted issue price at the
beginning of any accrual period is (x) the sum of the issue price of such
Discount Note, the accrued OID for each prior accrual period (determined without
regard to the amortization of any acquisition premium or bond premium, which are
discussed below), and the amount of any qualified stated interest on the Note
that has accrued prior to the beginning of the accrual period but is not payable
until a later date, less (y) any prior payments on the Discount Note that were
not qualified stated interest payments. If a payment (other than a payment of
qualified stated interest) is made on the first day of an accrual period, then
the adjusted issue price at the beginning of such accrual period is reduced by
the amount of the payment. If a portion of the initial purchase price of a Note
is attributable to interest that accrued prior to the Note's issue date, the
first stated interest payment on the Note is to be made within one year of the
Note's issue date and such payment will equal or exceed the amount of
pre-issuance accrued interest, then the issue price will be decreased by the
amount of pre-issuance accrued interest, in which case a portion of the first
stated interest payment will be treated as a return of the excluded pre-issuance
accrued interest and not as an amount payable on the Note.
The OID Regulations contain certain special rules that generally allow any
reasonable method to be used in determining the amount of OID allocable to a
short initial accrual period (if all other accrual periods are of equal length)
and require that the amount of OID allocable to the final accrual period equal
the excess of the amount payable at the maturity of the Discount Note (other
than any payment of qualified stated interest) over the Discount Note's adjusted
issue price as of the beginning of such final accrual period. In addition, if an
interval between payments of qualified stated interest on a Discount Note
contains more than one accrual period, then the amount of qualified stated
interest payable at the end of such interval is allocated pro rata (on the basis
of their relative lengths) between the accrual periods contained in the
interval.
U.S. Holders of Discount Notes generally will have to include in income
increasingly greater amounts of OID over the life of the Notes.
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Acquisition Premium. A U.S. Holder that purchases a Discount Note at its
original issuance for an amount in excess of its issue price but less than its
stated redemption price at maturity (any such excess being "acquisition
premium"), and that does not make the election described below under "Election
To Treat All Interest as Original Issue Discount," reduces the daily portions of
OID by an amount equal to the amount which would be the daily portion for such
day (determined without regard to this paragraph) multiplied by a fraction, the
numerator of which is the excess of the U.S. Holder's purchase price for the
Note over the issue price, and the denominator of which is the excess of the sum
of all amounts payable on the Note after the purchase date, other than payments
of qualified stated interest, over the Note's issue price. Alternatively, a U.S.
Holder may elect to compute OID accruals as described under "Original Issue
Discount -- General" above, treating the U.S. Holder's purchase price as the
issue price.
Optional Redemption or Repurchase. If the Company has an option to redeem
a Discount Note, or the U.S. Holder has an option to cause a Discount Note to be
repurchased, prior to the Discount Note's stated maturity, such option will be
presumed to be exercised if, by utilizing any date on which such Discount Note
may be redeemed or repurchased as the maturity date and the amount payable on
such date in accordance with the terms of such Discount Note (the "redemption
price") as the stated redemption price at maturity, the yield on the Discount
Note would be (i) in the case of an option of the Company, lower than its yield
to stated maturity, or (ii) in the case of an option of the U.S. Holder, higher
than its yield to stated maturity. If such option is not in fact exercised when
presumed to be exercised, the Note would be treated solely for OID purposes as
if it were redeemed or repurchased, and a new Note were issued, on the presumed
exercise date for an amount equal to the Discount Note's adjusted issue price on
that date.
Short-Term Notes. Under the Code, special rules apply with respect to OID
on Notes that mature one year or less from the date of issuance ("Short-Term
Notes"). In general, a cash basis U.S. Holder of a Short-Term Note is not
required to include OID in income as it accrues for United States federal income
tax purposes unless it elects to do so. Accrual basis U.S. Holders and certain
other U.S. Holders, including banks, regulated investment companies, dealers in
securities and cash basis U.S. Holders who so elect, are required to include OID
in income as it accrues on Short-Term Notes on a straight-line basis or, at the
election of the U.S. Holder, under the constant yield method (based on daily
compounding). In the case of U.S. Holders not required and not electing to
include OID in income currently, any gain realized on the sale or retirement of
Short-Term Notes will be ordinary income to the extent of the OID accrued on a
straight-line basis (unless an election is made to accrue the original issue
discount under the constant yield method) through the date of sale or
retirement. U.S. Holders who are not required and do not elect to include OID on
Short-Term Notes in income as it accrues will be required to defer deductions
for interest on borrowings allocable to Short-Term Notes in an amount not
exceeding the deferred income until the deferred income is realized.
Any U.S. Holder of a Short-Term Note can elect to apply the rules in the
preceding paragraph taking into account the amount of "acquisition discount," if
any, with respect to the Note (rather than the OID with respect to such Note).
Acquisition discount is the excess of the stated redemption price at maturity of
the Short-Term Note over the U.S. Holder's purchase price therefor. Acquisition
discount will be treated as accruing on a ratable basis or, at the election of
the U.S. Holder, on a constant-yield basis.
For purposes of determining the amount of OID subject to these rules, the
OID Regulations provide that no interest payments on a Short-Term Note are
qualified stated interest, but instead such interest payments are included in
the Short-Term Note's stated redemption price at maturity. Actual receipt of
stated interest will be taxable to the extent of accrued OID at the time of
receipt.
Notes Purchased at a Premium
Under the Code, a U.S. Holder that purchases a Note for an amount in excess
of its stated redemption price at maturity will not be subject to the OID rules
and may elect to treat such excess as
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"amortizable bond premium," in which case the amount of qualified stated
interest required to be included in the U.S. Holder's income each year with
respect to interest on the Note will be reduced by the amount of amortizable
bond premium allocable (based on the Note's yield to maturity) to such year. Any
election to amortize bond premium is applicable to all bonds (other than bonds
the interest on which is excludible from gross income) held by the U.S. Holder
at the beginning of the first taxable year to which the election applies or
thereafter acquired by the U.S. Holder, and may not be revoked without the
consent of the Internal Revenue Service ("IRS"). A U.S. Holder that does not
elect to amortize bond premium will generally be entitled to treat the premium
as capital loss when the Note matures. See also "Election to Treat All Interest
as Original Issue Discount" below.
Notes Purchased at a Market Discount
A Note, other than a Short-Term Note, will be treated as issued at a market
discount (a "Market Discount Note") if the amount for which a U.S. Holder
purchased the Note is less than the Note's issue price, subject to a de minimis
rule similar to the rule relating to de minimis OID described under "Original
Issue Discount -- General."
In general, any gain recognized on the maturity or disposition of a Market
Discount Note will be treated as ordinary income to the extent that such gain
does not exceed the accrued market discount on such Note. Alternatively, a U.S.
Holder of a Market Discount Note may elect to include market discount in income
currently over the life of the Market Discount Note. Such an election applies to
all debt instruments with market discount acquired by the electing U.S. Holder
on or after the first day of the first taxable year to which the election
applies and may not be revoked without the consent of the IRS.
Market discount accrues on a straight-line basis unless the U.S. Holder
elects to accrue such discount on a constant yield to maturity basis. Such an
election is applicable only to the Market Discount Note with respect to which it
is made and is irrevocable. A U.S. Holder of a Market Discount Note that does
not elect to include market discount in income currently generally will be
required to defer deductions for interest on borrowings allocable to such Note
in an amount not exceeding the accrued market discount on such Note until the
maturity or disposition of such Note.
The market discount rules do not apply to a Short-Term Note.
Election To Treat All Interest as Original Issue Discount
Any U.S. Holder may elect to include in gross income all interest that
accrues on a Note using the constant yield method described above under the
heading "Original Issue Discount -- General," with the modifications described
below. For purposes of this election, interest includes stated interest, OID, de
minimis OID, market discount acquisition discount, de minimis market discount
and unstated interest, as adjusted by any amortizable bond premium or
acquisition premium.
In applying the constant yield method to a Note with respect to which this
election has been made, the issue price of the Note will equal the electing U.S.
Holder's adjusted basis in the Note immediately after its acquisition, the issue
date of the Note will be the date of its acquisition by the electing U.S.
Holder, and no payments on the Note will be treated as payments of qualified
stated interest. This election is generally applicable only to the Note with
respect to which it is made and may not be revoked without the consent of the
IRS. If this election is made with respect to a Note with amortizable bond
premium, the electing U.S. Holder will be deemed to have elected to apply
amortizable bond premium against interest with respect to all debt instruments
with amortizable bond premium (other than debt instruments the interest on which
is excludible from gross income) held by such electing U.S. Holder as of the
beginning of the taxable year in which the election is made or any debt
instruments acquired thereafter. The deemed election with respect to amortizable
bond premium may not be revoked without the consent of the IRS.
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If the election described above to apply the constant yield method to all
interest on a Note is made with respect to a Market Discount Note, as defined
above, then the electing U.S. Holder will be treated as having made the election
discussed above under "Notes Purchased at a Market Discount" to include market
discount in income currently over the life of all debt instruments held or
thereafter acquired by such U.S. Holder.
Purchase, Sale and Retirement of the Notes
General. A U.S. Holder's tax basis in a Note generally will equal its U.S.
dollar cost (which, in the case of a Note purchased with a Foreign Currency,
will be the U.S. dollar value of the purchase price on the date of purchase),
(i) increased by the amount of any OID or market discount (or acquisition
discount, in the case of a Short Term Note) included in the U.S. Holder's income
with respect to the Note and the amount, if any, of income attributable to de
minimis OID included in the U.S. Holder's income with respect to the Note, and
(ii) reduced by the amount of any payments that are not qualified stated
interest payments, and the amount of any amortizable bond premium applied to
reduce interest on the Note. A U.S. Holder generally will recognize gain or loss
on the sale or retirement of a Note equal to the difference between the amount
realized on the sale or retirement and the U.S. Holder's tax basis in the Note.
The amount realized on a sale or retirement for an amount in Foreign Currency
will be the U.S. dollar value of such amount on the date of sale or retirement.
Except to the extent described above under "Original Issue Discount -- Short
Term Notes" or "Notes Purchased at a Market Discount" or below under "Foreign
Currency Notes -- Exchange Gain or Loss," and except to the extent attributable
to accrued but unpaid interest, gain or loss recognized on the sale or
retirement of a Note will be capital gain or loss and will be long-term capital
gain or loss if the Note was held for more than one year.
Foreign Currency Notes
Interest Payments. If an interest payment is denominated in or determined
by reference to a Foreign Currency, the amount of income recognized by a cash
basis U.S. Holder will be the U.S. dollar value of the interest payment, based
on the exchange rate in effect on the date of receipt, regardless of whether the
payment is in fact converted into U.S. dollars. Accrual basis U.S. Holders may
determine the amount of income recognized with respect to such interest payment
in accordance with either of two methods. Under the first method, the amount of
income recognized will be based on the average exchange rate in effect during
the interest accrual period (or, with respect to an accrual period that spans
two taxable years, the partial period within the taxable year). Upon receipt of
an interest payment (including a payment attributable to accrued but unpaid
interest upon the sale or retirement of a Note) determined by reference to a
Foreign Currency, an accrual basis U.S. Holder will recognize ordinary income or
loss measured by the difference between such average exchange rate and the
exchange rate in effect on the date of receipt, regardless of whether the
payment is in fact converted into U.S. dollars. Under the second method, an
accrual basis U.S. Holder may elect to translate interest income into U.S.
dollars at the spot exchange rate in effect on the last day of the accrual
period or, in the case of an accrual period that spans two taxable years, at the
exchange rate in effect on the last day of the partial period within the taxable
year. Additionally, if a payment of interest is actually received within 5
business days of the last day of the accrual period or taxable year, an accrual
basis U.S. Holder applying the second method may instead translate such accrued
interest into U.S. dollars at the spot exchange rate in effect on the day of
actual receipt (in which case no exchange gain or loss will result). Any
election to apply the second method will apply to all debt instruments held by
the U.S. Holder at the beginning of the first taxable year to which the election
applies or thereafter acquired by the U.S. Holder and may not be revoked without
the consent of the IRS.
Exchange of Amounts in Other than U.S. Dollars. Foreign Currency received
as interest on a Note or on the sale or retirement of a Note will have a tax
basis equal to its U.S. dollar value at the time such interest is received or at
the time of such sale or retirement, as the case may be. Foreign Currency that
is purchased will generally have a tax basis equal to the U.S. dollar value of
the Foreign Currency on
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the date of purchase. Any gain or loss recognized on a sale or other disposition
of a Foreign Currency (including its use to purchase Notes or upon exchange for
U.S. dollars) will be ordinary income or loss.
Foreign Currency Discount Notes. OID for any accrual period on a Discount
Note that is denominated in a Foreign Currency will be determined in the Foreign
Currency and then translated into U.S. dollars in the same manner as stated
interest accrued by an accrual basis U.S. Holder. Upon receipt of an amount
attributable to original issue discount (whether in connection with a payment of
interest or the sale or retirement of a Note), a U.S. Holder may recognize
ordinary income or loss.
Amortizable Bond Premium. In the case of a Note that is denominated in a
Foreign Currency, bond premium will be computed in units of Foreign Currency,
and amortizable bond premium will reduce interest income in units of the Foreign
Currency. At the time amortized bond premium offsets interest income, a U.S.
Holder may realize ordinary income or loss, measured by the difference between
exchange rates at that time and at the time of the acquisition of the Notes.
Market Discount. Market discount is determined in units of the Foreign
Currency. Accrued market discount that is required to be taken into account on
the maturity or upon disposition of a Note is translated into U.S. dollars at
the exchange rate on the maturity or the disposition date, as the case may be
(and no part is treated as exchange gain or loss). Accrued market discount
currently includible in income by an electing U.S. Holder is translated into
U.S. dollars at the average exchange rate for the accrual period (or the partial
accrual period during which the U.S. Holder held the Note), and exchange gain or
loss is determined on maturity or disposition of the Note (as the case may be)
in the manner described above under "Foreign Currency Notes -- Interest
Payments" with respect to the computation of exchange gain or loss on the
receipt of accrued interest by an accrual method holder.
Exchange Gain or Loss. Gain or loss recognized by a U.S. Holder on the
sale or retirement of a Note that is attributable to changes in exchange rates
will be treated as ordinary income or loss. However, exchange gain or loss is
taken into account only to the extent of total gain or loss realized on the
transaction.
Indexed Notes
The applicable Pricing Supplement will contain a discussion of any special
United States federal income tax rules with respect to Currency Indexed Notes,
Commodity Indexed Notes or other indexed Notes.
NON-U.S. HOLDERS
Subject to the discussion of backup withholding below, payments of
principal (and premium, if any) and interest (including OID) by the Company or
any agent of the Company (acting in its capacity as such) to any holder of a
Note that is not a U.S. Holder (a "Non-U.S. Holder") will not be subject to U.S.
federal withholding tax, provided, in the case of interest (including OID), that
(i) the Non-U.S. Holder does not actually or constructively own 10% or more of
the total combined voting power of all classes of stock of the Company entitled
to vote, (ii) the Non-U.S. Holder is not a controlled foreign corporation for
U.S. tax purposes that is related to the Company (directly or indirectly)
through stock ownership and (iii) either (A) the Non-U.S. Holder certifies to
the Company or its agent under penalties of perjury that it is not a United
States person and provides its name and address or (B) a securities clearing
organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business (a "financial
institution") and holds the Note certifies to the Company or its agent under
penalties of perjury that such statement has been received from the Non-U.S.
Holder by it or by another financial institution and furnishes the payor with a
copy thereof. A Non-U.S. Holder of a Note providing for payments of contingent
interest within the meaning of Section 871(h) of the Code, will not, however, be
exempt from U.S. federal withholding tax with respect to payments of such
contingent interest. The applicable Pricing Supplement will contain a
description of U.S. federal withholding tax consequences to Non-U.S. Holders of
a purchase of a Note providing for payments of such contingent interest.
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If a Non-U.S. Holder is engaged in a trade or business in the United States
and interest (including OID) on the Note is effectively connected with the
conduct of such trade or business, the Non-U.S. Holder, although exempt from the
withholding tax discussed in the preceding paragraph (provided that such holder
furnishes a properly executed IRS Form 4224 on or before any payment date to
claim such exemption), may be subject to U.S. federal income tax on such
interest (or OID) in the same manner as if it were a U.S. Holder. In addition,
if the Non-U.S. Holder is a foreign corporation, it may be subject to a branch
profits tax equal to 30% of its effectively connected earnings and profits for
the taxable year, subject to certain adjustments. For purposes of the branch
profits tax, interest (including OID) on a Note will be included in the earnings
and profits of such holder if such interest (or OID) is effectively connected
with the conduct by such holder of a trade or business in the United States. In
lieu of the certificate described in the preceding paragraph, such a holder must
provide the payor with a properly executed IRS Form 4224 to claim an exemption
from U.S. federal withholding tax.
Any capital gain, market discount or exchange gain realized on the sale,
exchange, retirement or other disposition of a Note by a Non-U.S. Holder will
not be subject to U.S. federal income or withholding taxes if (i) such gain is
not effectively connected with a U.S. trade or business of the Non-U.S. Holder
and (ii) in the case of an individual, such Non-U.S. Holder (A) is not present
in the United States for 183 days or more in the taxable year of the sale,
exchange, retirement or other disposition or (B) does not have a tax home (as
defined in Section 911(d)(3) of the Code) in the United States in the taxable
year of the sale, exchange, retirement or other disposition and the gain is not
attributable to an office or other fixed place of business maintained by such
individual in the United States.
Notes held by an individual who is neither a citizen nor a resident of the
United States for U.S. federal tax purposes at the time of such individual's
death will not be subject to U.S. federal estate tax, provided that the income
from such Notes was not or would not have been effectively connected with a U.S.
trade or business of such individual and that such individual qualified for the
exemption from U.S. federal withholding tax (without regard to the certification
requirements) described above.
PURCHASERS OF NOTES THAT ARE NON-U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX
ADVISORS WITH RESPECT TO THE POSSIBLE APPLICABILITY OF UNITED STATES WITHHOLDING
AND OTHER TAXES UPON INCOME REALIZED IN RESPECT OF THE NOTES.
INFORMATION REPORTING AND BACKUP WITHHOLDING
For each calendar year in which the Notes are outstanding, the Company is
required to provide the IRS with certain information, including the holder's
name, address and taxpayer identification number (either the holder's Social
Security number or its employer identification number, as the case may be), the
aggregate amount of principal and interest paid (including OID, if any) to that
holder during the calendar year and the amount of tax withheld, if any. This
obligation, however, does not apply with respect to certain U.S. Holders,
including corporations, tax-exempt organizations, qualified pension and profit
sharing trusts and individual retirement accounts.
In the event that a U.S. Holder subject to the reporting requirements
described above fails to supply its correct taxpayer identification number in
the manner required by applicable law or underreports its tax liability, the
Company, its agents or paying agents or a broker may be required to "backup"
withhold a tax equal to 31% of each payment of interest (including OID) and
principal (and premium, if any) on the Notes. This backup withholding is not an
additional tax and may be credited against the U.S. Holder's U.S. federal income
tax liability, provided that the required information is furnished to the IRS.
Under current Treasury Regulations, backup withholding and information
reporting will not apply to payments made by the Company or any agent thereof
(in its capacity as such) to a Non-U.S. Holder of a Note if such holder has
provided the required certification that it is not a United States person as set
forth in clause (iii) in the first paragraph under "Non-U.S. Holders" above, or
has otherwise established an exemption (provided that neither the Company nor
its agent has actual knowledge that the holder is a United States person or that
the conditions of any exemption are not in fact satisfied).
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Payment of the proceeds from the sale of a Note to or through a foreign
office of a broker will not be subject to information reporting or backup
withholding, except that if the broker is a United States person, a controlled
foreign corporation for United States tax purposes or a foreign person 50
percent or more of whose gross income from all sources for the three-year period
ending with the close of its taxable year preceding the payment was effectively
connected with a U.S. trade or business, information reporting may apply to such
payments. Payment of the proceeds from a sale of a Note to or through the U.S.
office of a broker is subject to information reporting and backup withholding
unless the holder or beneficial owner certifies as to its taxpayer
identification number or otherwise establishes an exemption from information
reporting and backup withholding.
PLAN OF DISTRIBUTION
The Notes are being offered on a continuing basis by the Company through
each of Lehman Brothers, Lehman Brothers Inc. and Goldman, Sachs & Co., as an
agent (each an "Agent" and collectively the "Agents"), each of which has agreed
to use its reasonable best efforts to solicit offers to purchase the Notes. The
Company will pay each Agent a commission, in the form of a discount, ranging
from .125% to .750% of the principal amount of each Note, depending upon the
time until its Maturity Date, sold through such Agent. The Company may use
additional agents to solicit offers to purchase Notes as the Company may
designate from time to time on terms substantially identical to those set forth
above. Such other agents, if any, will be named in the applicable Pricing
Supplement. The Company also may sell Notes to any Agent, acting as principal,
at a discount to be agreed upon at the time of sale, for resale to one or more
investors or to one or more broker-dealers (acting as principal for purposes of
resale) at varying prices related to prevailing market prices at the time of
resale, as determined by such Agent, or, if so agreed, at a fixed public
offering price. The Notes may also be sold by the Company directly to
purchasers. No commission will be payable to the Agents on Notes sold directly
to purchasers by the Company.
The Company will have the sole right to accept offers to purchase Notes and
may reject any proposed purchase of Notes in whole or in part whether placed
directly with the Company or through an Agent. Each Agent will have the right,
in its discretion reasonably exercised, to reject any offer to purchase Notes
received by it in whole or in part.
Payment of the purchase price of the Notes will be required to be made in
funds immediately available in The City of New York.
The Agents may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended (the "Act"). The Company has agreed to
indemnify each Agent against certain liabilities, including liabilities under
the Act. The Company has agreed to reimburse the Agents for certain expenses,
including fees and disbursements of counsel to the Agents. The Agents may sell
to or through dealers who may resell to investors. The Agents may pay all or
part of their commission to such dealers. Such dealers may be deemed to be
"underwriters" within the meaning of the Act.
No Note will have an established trading market when issued. The Notes will
not be listed on any securities exchange. The Company has been advised by each
of the Agents that it may from time to time purchase and sell Notes in the
secondary market, but that it is not obligated to do so. No assurance can be
given that there will be a secondary market for the Notes.
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<PAGE> 30
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED APRIL 1, 1996
PROSPECTUS
AIR PRODUCTS AND CHEMICALS, INC.
DEBT SECURITIES
Air Products and Chemicals, Inc. (the "Company"), directly, through agents
designated from time to time, or through dealers or underwriters also to be
designated, may sell from time to time after the date of this Prospectus up to
$300,000,000 aggregate principal amount or the equivalent thereof in other
currencies or currency units of its debt securities (the "Securities"), in one
or more series, on terms to be determined at the time of sale. The specific
designation, aggregate principal amount, authorized denominations, currency,
maturity, interest rate or method for its calculation, if any, interest payment
dates, purchase price, any terms for redemption, repayment or defeasance or
other specific terms, any listing on a securities exchange, sinking fund
provisions, if any, and the agents, dealers or underwriters, if any, in
connection with the sale of the Securities in respect of which this Prospectus
is being delivered are set forth in the accompanying Prospectus Supplement
("Prospectus Supplement"), and Pricing Supplement ("Pricing Supplement"), if
any, together with the terms of offering of the Securities. The Company reserves
the sole right to accept and, together with its agents from time to time, to
reject in whole or in part any proposed purchase of Securities to be made
directly or through agents.
------------------
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.
------------------
If an agent of the Company or a dealer or underwriter is involved in the
sale of the Securities in respect of which this Prospectus is being delivered,
the agent's commission, dealer's purchase price or underwriter's discount is set
forth in, or may be calculated from, the Prospectus Supplement and the net
proceeds to the Company from such sale will be the purchase price of such
Securities less such commission in the case of an agent, the purchase price of
such Securities in the case of a dealer or the public offering price less such
discount in the case of an underwriter, and less, in each case, the other
attributable issuance and distribution expenses. The aggregate proceeds to the
Company from all the Securities will be the purchase price of Securities sold
less the aggregate of agents' commissions and underwriters' discounts and other
expenses of issuance and distribution. See "Plan of Distribution" for possible
indemnification arrangements for the agents, dealers and underwriters.
April , 1996
<PAGE> 31
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 and in accordance therewith files reports, proxy statements
and other information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other information, including
the documents incorporated herein by reference, can be inspected and copied at
the office of the Commission at Room 1024 (Public Reference Room), 450 Fifth
Street, N.W., Washington, D.C. 20549, as well as at the Regional Offices of the
Commission at Northwestern Atrium Center, 500 West Madison Street (Suite 1400),
Chicago, Illinois 60661 and 7 World Trade Center, 13th Floor, New York, New York
10048. Copies of such material can be obtained by mail from the Public Reference
Room of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. In addition, such reports, proxy statements and other
information concerning the Company can be inspected at the offices of the New
York Stock Exchange, Inc., 20 Broad Street, New York, New York, and the Pacific
Stock Exchange, 115 Sansome Street, San Francisco, California.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference in this Prospectus the
following document:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1995, filed pursuant to Section 13 of the Securities Exchange Act
of 1934;
(b) The Company's Current Report on Form 8-K filed January 24, 1996
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934; and
(c) The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended December 31, 1995, filed pursuant to Section 13 of the Securities Exchange
Act of 1934.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 subsequent to the date of this
Prospectus and prior to the termination of the offering of the Securities shall
be deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
Any person receiving a copy of this Prospectus may obtain without charge,
upon written or oral request, a copy of any of the documents incorporated by
reference herein, except for the exhibits to such documents. Requests should be
directed to the Corporate Secretary's Office, Air Products and Chemicals, Inc.,
7201 Hamilton Boulevard, Allentown, Pennsylvania 18195-1501, telephone: (610)
481-4911.
THE COMPANY
The Company, through internal development and by acquisitions, has
established an internationally recognized industrial gas and related industrial
process equipment business, and developed strong positions as a producer of
certain chemicals. In addition, the Company has developed an environmental and
energy business principally through various partnerships.
The industrial gases business segment recovers and distributes industrial
gases such as oxygen, nitrogen, argon and hydrogen and a variety of medical and
specialty gases. The chemicals business segment produces and markets specialty
chemicals and chemical intermediates. The environmental and energy business is
principally composed of partnerships in waste-to-energy, power generation and
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<PAGE> 32
flue-gas treatment. The equipment and services business segment supplies
cryogenic and other process equipment and related engineering services.
The Company was incorporated in 1961 under Delaware law and is the
successor to a Michigan corporation organized in 1940. Its principal executive
offices are located at 7201 Hamilton Boulevard, Allentown, Pennsylvania
18195-1501, telephone (610) 481-4911. Except as otherwise indicated by the
context, the term "Company" as used herein means Air Products and Chemicals,
Inc. and its consolidated subsidiaries.
RATIOS OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
(UNAUDITED)
(UNAUDITED) THREE MONTHS
YEAR ENDED SEPTEMBER 30, ENDED DECEMBER 31,
- ---------------------------------------- ------------------
1991 1992 1993 1994 1995 1995
- ---- ---- ---- ---- ---- ------------------
<S> <C> <C> <C> <C> <C>
3.2 3.9 3.2 3.4 4.1 3.5
</TABLE>
For the purpose of determining the unaudited ratios of earnings to fixed
charges, earnings represent income (before extraordinary item and cumulative
effect of accounting changes) before income taxes, fixed charges (less interest
capitalized), amortization of capitalized interest and undistributed earnings of
less-than-fifty-percent owned affiliates. Fixed charges consist of interest on
all indebtedness (including capital lease obligations), capitalized interest,
amortization of debt discount premium and expense and the portion of rent
charges under operating leases considered to be representative of the interest
factor.
USE OF PROCEEDS
Net proceeds to the Company are expected to be $297,750,000 - $299,625,000
(prior to deducting expenses payable by the Company estimated at $305,000). The
Company currently intends to apply the net proceeds from the sale of the
Securities to its general funds to be used for general corporate purposes. Such
corporate purposes may include the refunding of maturing debt, including
commercial paper and long-term debt obligations (as described in Note 4 of the
Company's 1995 Consolidated Financial Statements, as incorporated into the
Company's Form 10-K for the fiscal year ended September 30, 1995), the
repurchase of shares of the Company's Common Stock and acquisitions, including
the acquisition of the remaining outstanding shares of a Spanish industrial gas
company, Sociedad Espanola de Carburos Metalicos, S.A., which are tendered under
a tender offer expected to be made in September 1996. Pending such application,
all or a portion of the net proceeds may be invested in short-term money market
instruments. The precise amount and timing of the use of the proceeds will
depend upon future requirements and the availability of other funds to the
Company.
DESCRIPTION OF SECURITIES
The Securities offered hereby will be issuable in one or more series under
an Indenture dated as of January 10, 1995 (the "Indenture"), entered into
between the Company and First Union National Bank (formerly, First Fidelity
Bank, National Association), as Trustee (the "Trustee"). The following
statements are subject to the detailed provisions of the Indenture, a copy of
which is filed as an exhibit to the Registration Statement. Wherever references
are made to particular provisions of the Indenture, such provisions are
incorporated by reference as a part of the statements made and such statements
are qualified in their entirety by such reference. Certain defined terms are
capitalized. Section references in italics are to the Indenture.
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<PAGE> 33
GENERAL
The Indenture provides that the aggregate principal amount of Securities
which may be issued under the Indenture is unlimited. Reference is made to the
Prospectus Supplement and the applicable Pricing Supplement for the following
terms of the Securities in respect of which this Prospectus is being delivered:
(1) the designation, aggregate principal amount and authorized denominations of
such Securities; (2) the percentage of their principal amount at which such
Securities will be issued; (3) the currency or currency unit of payment; (4) the
date on which such Securities will mature; (5) the rate or rates per annum, if
any, at which such Securities will bear interest or the method for calculating
such rate; (6) the times at which such interest, if any, will be payable; (7)
provisions for a sinking fund, if any; (8) whether such Securities are to be
issued in book-entry form, and, if so, the identity of the depositary and
information with respect to book-entry procedures; and (9) any redemption,
repayment or defeasance terms or other specific terms. Principal and interest,
if any, will be payable, and the Securities offered hereby will be transferable
or exchangeable, as provided therein.
The Securities will be unsecured and will rank on a parity with all other
unsecured and unsubordinated indebtedness of the Company.
One or more series of the Securities may be issued as discounted Securities
(bearing no interest or interest at a rate which at the time of issuance is
below market rates) to be sold at a substantial discount below their stated
principal amount. Federal income tax consequences and other special
considerations applicable to any such series of discounted Securities will be
described in the Prospectus Supplement and/or the applicable Pricing Supplement
relating thereto.
Special federal income tax and other considerations relating to Securities
denominated in foreign currencies or units of two or more foreign currencies
will be described in the applicable Prospectus Supplement and/or the applicable
Pricing Supplement.
The Securities offered hereby will be issued only in fully registered form
without coupons. No service charge will be made for any transfer or exchange of
the Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith. (Section
2.8)
CERTAIN COVENANTS OF THE COMPANY
Limitations on Liens -- Subject to the exceptions set forth below under
"Exempted Indebtedness," the Company covenants that it will not create or
assume, nor will it permit any Restricted Subsidiary (as hereinafter defined) to
create or assume, any mortgage, security interest, pledge or lien (collectively
referred to herein as "lien") of or upon any Principal Property (as hereinafter
defined), or any underlying real estate of such property, or shares of capital
stock or indebtedness of any Restricted Subsidiary, whether owned at the date of
the Indenture or thereafter acquired, without equally and ratably securing the
outstanding Securities. This restriction will not apply to certain permitted
liens, including the following: (1) liens on any Principal Property which are
created or assumed contemporaneously with, or within 120 days after (or in the
case of any such Principal Property which is being financed on the basis of
long-term contracts or similar financing arrangements for which a firm
commitment is made by one or more banks, insurance companies or other lenders or
investors (not including the Company or any Restricted Subsidiary), then within
360 days after), the completion of the acquisition, construction or improvement
of such Principal Property to secure or provide for the payment of any part of
the purchase price of such property or the cost of such construction or
improvement, or liens on any Principal Property existing at the time of
acquisition thereof; (2) liens on property or shares of capital stock or
indebtedness of a corporation existing at the time such corporation is merged
into or consolidated with the Company or a Restricted Subsidiary or at the time
of a sale, lease or other disposition of the properties of a corporation
substantially as an entirety to the Company or a Restricted Subsidiary; (3)
liens on property or shares of capital stock or indebtedness of a corporation
existing at the time such corporation becomes a Restricted Subsidiary; (4) liens
to secure indebtedness of a Restricted Subsidiary to the Company or to another
Restricted Subsidiary, but only
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<PAGE> 34
so long as such indebtedness is held by the Company or a Restricted Subsidiary;
(5) liens in favor of the United States of America or any State thereof, or any
department, agency or political subdivision of the United States of America or
any State thereof, to secure certain payments pursuant to any contract or
statute, including liens to secure indebtedness of the pollution control or
industrial revenue bond type, or to secure indebtedness incurred for the purpose
of financing all or any part of the purchase price or cost of constructing or
improving property subject to such liens; (6) liens in favor of any customer
arising in respect of certain payments made by or on behalf of such customer for
goods produced for or services rendered to such customer in the ordinary course
of business not exceeding the amount of such payments; (7) liens to extend,
renew or replace in whole or in part any lien referred to in the foregoing
clauses (1) to (6), or in this clause (7), or any lien created prior to and
existing on the date of the Indenture, provided that the principal amount of
indebtedness secured thereby shall not exceed the principal amount of
indebtedness so secured at the time of such extension, renewal or replacement,
and that such extension, renewal or replacement shall be limited to all or a
part of the property subject to the lien so extended, renewed or replaced (plus
improvements on such property); and (8) certain statutory liens, liens for taxes
and certain other liens. (Section 3.6)
Limitations on Sale and Lease-Back Transactions -- Subject to the
exceptions set forth below under "Exempted Indebtedness," sale and lease-back
transactions by the Company or any Restricted Subsidiary of any Principal
Property which has been owned and operated by the Company or a Restricted
Subsidiary for more than 120 days are prohibited unless (1) the property
involved is property which could be the subject of a lien without equally and
ratably securing the Securities; (2) an amount equal to the Attributable Debt
(as hereinafter defined) of any such sale and lease-back transaction is applied
to the acquisition of another Principal Property of equal or greater fair market
value or to retirement of indebtedness for borrowed money (including the
Securities) which by its terms matures on or is renewable at the option of the
obligor to a date more than twelve months after the creation of such
indebtedness; or (3) the lease involved is for a term (including renewals) of
not more than three years. (Section 3.7)
Exempted Indebtedness -- The Company or a Restricted Subsidiary may create
or assume liens and enter into sale and lease-back transactions, notwithstanding
the limitations outlined above, provided that at the time thereof and after
giving effect thereto the aggregate amount of indebtedness secured by all such
liens and Attributable Debt of all such sale and lease-back transactions
outstanding shall not exceed 5% of Consolidated Net Tangible Assets (as
hereinafter defined). (Section 3.8)
Limitations on Mergers, Consolidations and Sales of Assets -- If, upon any
consolidation or merger of the Company with or into any other corporation, or
upon any sale, conveyance or lease of substantially all its properties, any
Principal Property would thereupon become subject to any lien, the Company,
prior to such event, will secure the Securities equally and ratably with any
other obligations of the Company then entitled thereto by a direct lien on all
such Principal Property prior to all other liens other than any theretofore
existing thereon. (Section 3.9)
Certain Definitions -- The term "Subsidiary" means any corporation of which
at least a majority of all outstanding voting stock is at the time owned by the
Company or by one or more Subsidiaries of the Company. The term "Restricted
Subsidiary" means any Subsidiary (a) substantially all of the property of which
is located, or substantially all of the business of which is carried on, within
the United States and (b) which owns or leases a Principal Property. The term
"Principal Property" means any manufacturing plant, research facility or
warehouse owned or leased by the Company or any Subsidiary which is located
within the United States and has a net book value exceeding the greater of
$5,000,000 and 1% of shareholders' equity of the Company and its consolidated
Subsidiaries, excluding any property which the Board of Directors by resolution
declares is not of material importance to the total business of the Company and
its Subsidiaries as an entirety. The term "Attributable Debt" means the present
value (discounted as provided in the Indenture) of the obligation of a lessee
for required rental payments for the remaining term of any lease. The term
"Consolidated Net Tangible Assets" means at any time the total of all assets
appearing on the most recent consolidated balance sheet of the Company and its
consolidated Subsidiaries, prepared in accordance with generally accepted
accounting principles, at their net book values (after deducting related
depreciation, depletion, amortization
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<PAGE> 35
and all other valuation reserves which, in accordance with such principles, are
set aside in connection with the business conducted), but excluding goodwill,
trademarks, patents, unamortized debt discount and all other like segregated
intangible assets, and amounts on the asset side of such balance sheet for
capital stock of the Company, all as determined in accordance with such
principles, less Consolidated Current Liabilities. The term "Consolidated
Current Liabilities" means the aggregate of the current liabilities of the
Company and its consolidated Subsidiaries appearing on the consolidated balance
sheet of the Company and its consolidated Subsidiaries, all as determined in
accordance with generally accepted accounting principles. (Section 1.1)
EVENTS OF DEFAULT, WAIVER AND NOTICE
As to any series of Securities, an Event of Default is defined in the
Indenture as being any one of the following events and such events as may be
established with respect to the Securities of such series in any applicable
Pricing Supplement: (a) default for 30 days in the payment of any interest on
the Securities of such series; (b) default in the payment of principal and
premium, if any, on the Securities of such series when due either at maturity,
upon redemption, by declaration or otherwise; (c) default in the payment of any
sinking fund installment on the Securities of such series; (d) default by the
Company in the performance of any other of the covenants or agreements in the
Indenture (other than those set forth exclusively in the terms of any series of
Securities) which shall not have been remedied for a period of 90 days after
appropriate notice, as specified in the Indenture; or (e) certain events of
bankruptcy, insolvency and reorganization of the Company. (Section 5.1) No Event
of Default with respect to any particular series of Securities necessarily
constitutes an Event of Default with respect to any other series of Securities.
The Indenture provides that the Trustee may withhold notice to the holders of
Securities of any series of any default (except in payment of principal of or
interest on such Securities or in the making of any sinking fund payment with
respect to such Securities) if the Trustee considers it in the interest of the
holders of Securities of such series to do so. (Section 5.11)
The Indenture provides that: (1) if an Event of Default described in clause
(a), (b) or (c) above or established with respect to the Securities of any
series shall have occurred and be continuing, either the Trustee or the holders
of 25% in aggregate principal amount of the Securities of such series then
outstanding may declare the principal (or, in the case of discounted Securities,
the amount specified in the terms thereof) of all such Securities to be due and
payable immediately and (2) if an Event of Default described in clause (d) or
(e) above shall have occurred and be continuing, either the Trustee or the
holders of not less than 25% in aggregate principal amount of all Securities
then outstanding may declare the principal (or, in the case of discounted
Securities, the amount specified in the terms thereof) of all Securities to be
due and payable immediately, but upon certain conditions such declarations may
be annulled and past defaults (except for defaults in the payment of principal
of, or premium or interest, if any, on, such Securities) may be waived by the
holders of a majority in aggregate principal amount of the Securities of such
series (or of all series as the case may be) then outstanding. (Section 5.1 and
Section 5.10)
The holders of a majority in aggregate principal amount of the Securities
of each series affected (with each series voting as a separate class) and then
outstanding shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee under the
Indenture, subject to certain limitations specified in the Indenture, provided
that the holders of Securities shall have offered to the Trustee reasonable
indemnity against costs, expenses and liabilities. (Section 5.9 and Section
6.2(d)) The Indenture requires the annual filing by the Company with the Trustee
of a certificate as to the absence of certain defaults under the Indenture.
(Section 3.5)
Other than the restrictions on liens and sale and lease-back transactions
described above, the Indenture and the Securities do not contain any covenants
or other provisions designed to afford holders of the Securities protection in
the event of a highly leveraged transaction involving the Company or any
Subsidiary, including without limitation any takeover, recapitalization or other
restructuring that may result in a sudden and significant decline in credit
rating.
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<PAGE> 36
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than 66 2/3% in aggregate principal
amount of the Securities of all series affected by such modification at the time
outstanding (voting as one class), to modify the Indenture or any supplemental
indenture or the rights of the holders of the Securities, provided that no such
modification shall (i) extend the final maturity of any Security, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon, or reduce any amount payable upon redemption thereof, or
reduce the amount of the principal of a discounted Security due and payable upon
acceleration of the maturity thereof or provable in bankruptcy, or impair or
affect the right of a holder to institute suit for the payment thereof or the
right of repayment, if any, at the option of the holder thereof, without the
consent of the holder of each Security so affected, or (ii) reduce the aforesaid
percentage of Securities of any series, the consent of the holders of which is
required for any such modification, without the consent of the holder of each
Security so affected. (Section 8.2)
GLOBAL SECURITIES
The Securities of a series may be issued in the form of a global security
which is deposited with and registered in the name of the depositary (or a
nominee of the depositary) specified in the accompanying Prospectus Supplement.
So long as the depositary for a global security, or its nominee, is the
registered owner of the global security, the depositary or its nominee, as the
case may be, will be considered the sole owner or holder of the Securities
represented by such global security for all purposes under the Indenture. Except
as provided in the Indenture, owners of beneficial interests in Securities
represented by a global security will not (a) be entitled to have such
Securities registered in their names, (b) receive or be entitled to receive
physical delivery of certificates representing such Securities in definitive
form, (c) be considered the owners or holders thereof under the Indenture and
(d) have any rights under the Indenture with respect to such global security
(Section 2.14). The Company, in its sole discretion, may at any time determine
that any series of Securities issued or issuable in the form of a global
security shall no longer be represented by such global security and such global
security shall be exchanged for securities in definitive form pursuant to the
Indenture. (Section 2.14)
Upon the issuance of a global security, the depositary will credit, on its
book-entry registration and transfer system, the respective principal amounts of
such global security to the accounts of participants in the depositary.
Ownership of beneficial interests in a global security will be shown on, and the
transfer of that ownership will be effected only through, records maintained by
the depositary (with respect to interests of participants in the depositary), or
by participants in the depositary or persons that may hold interests through
such participants (with respect to persons other than participants in the
depositary). Ownership of beneficial interests in a global security will be
limited to participants or persons that hold interests through participants.
CONCERNING THE TRUSTEE
First Union National Bank (formerly, First Fidelity Bank, National
Association), the Trustee under the Indenture, also performs certain cash
management services for the Company in the normal course of business.
DEFEASANCE OF THE INDENTURE AND SECURITIES
The Company at any time may satisfy its obligations with respect to
payments of principal of, premium, if any, and interest, if any, on, any
Security or Securities of any series by depositing in trust with the Trustee (a)
money (in such currency in which such securities are payable) or (b), in the
case of Securities denominated in U.S. dollars, U.S. Government Obligations (as
defined in the Indenture) or, in the case of Securities denominated in a foreign
currency, Foreign Government Securities (as defined in the Indenture) or a
combination of (a) and (b) sufficient to make such payments when due.
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<PAGE> 37
If such deposit is sufficient to make all payments of (1) interest, if any, on
such Securities prior to and on their redemption or maturity, as the case may
be, and (2) principal of, and premium, if any, on such Securities when due upon
redemption or at maturity, as the case may be, all the obligations of the
Company with respect to such Securities and the Indenture insofar as it relates
to such Securities will be discharged and terminated (except as to the Company's
obligations to compensate, reimburse and indemnify the Trustee pursuant to the
Indenture). In the event of any such defeasance, holders of such Securities
would be able to look only to such trust fund for payment of principal and
premium, if any, and interest, if any, on Securities of such series until
maturity or redemption. (Article Ten)
For federal income tax purposes, there is a substantial risk that any
deposit of cash and/or U.S. Government Obligations or Foreign Government
Securities with respect to which the Company shall have elected to satisfy and
fully discharge its obligations with respect to any series of Securities could
be treated as a taxable exchange of such Securities for interests in the trust
(or, alternatively, for an instrument representing indebtedness of the trust).
In that event, a holder could be required to recognize taxable gain or loss at
the time of such defeasance as if the Securities had been sold for an amount
equal to the sum of the amount of money and the fair market value of the U.S.
Government Obligations or Foreign Government Securities held in the defeasance
trust (or, alternatively, the value of the instrument). Thereafter, a holder
might be required to include in income the holder's share of the income, gain
and loss of the trust (or, alternatively, the trust might be considered a
separate taxable entity with respect to such items and with respect to the debt
instrument, in which case a holder might also be taxable on original issue
discount as well as interest on the instrument). Purchasers of the Securities
should consult their own advisors with respect to the more detailed tax
consequences to them of such deposit and discharge, including the applicability
and effect of tax laws other than federal income tax law.
PLAN OF DISTRIBUTION
The Company may sell the Securities in any of four ways: (i) directly to
purchasers; (ii) through agents; (iii) through underwriters; or (iv) through
dealers.
Offers to purchase Securities may be solicited directly by the Company or
by agents designated by the Company from time to time. Any such agent, who may
be deemed to be an underwriter as that term is defined in the Securities Act of
1933, involved in the offer or sale of the Securities in respect of which this
Prospectus is delivered will be named, and any commissions payable by the
Company to such agent will be set forth, in the Prospectus Supplement. Unless
otherwise indicated in the Prospectus Supplement, any such agent will be acting
on a best efforts basis for the period of its appointment. Agents may be
customers of, engage in transactions with or perform services for the Company in
the ordinary course of business.
If an underwriter or underwriters are utilized in the sale, the Company
will enter into an underwriting, purchase or agency agreement with such
underwriters at the time of sale to them and the names of the underwriters and
the terms of the transaction will be set forth in the Prospectus Supplement,
which will be used by the underwriters to make resales of the Securities in
respect of which this Prospectus is delivered to the public.
If a dealer is utilized in the sale of the Securities in respect of which
this Prospectus is delivered, the Company will sell such Securities to such
dealer, as principal. The dealer may then resell such Securities to the public
at varying prices to be determined by such dealer at the time of resale.
Agents, underwriters and dealers may be entitled under the relevant
agreements to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act of 1933.
If so indicated in the Prospectus Supplement, the Company will authorize
agents or underwriters to solicit offers by certain institutions to purchase
Securities from the Company at the public offering price set forth in the
Prospectus Supplement pursuant to Delayed Delivery Contracts ("Contracts")
providing for payment and delivery on the date stated in the Prospectus
Supplement. Each Contract
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<PAGE> 38
will be for an amount not less than, and unless the Company otherwise agrees the
aggregate principal amount of Securities sold pursuant to Contracts shall be not
more than, the respective amounts stated in the Prospectus Supplement.
Institutions with which Contracts, when authorized, may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions and other institutions but
shall in all cases be subject to the approval of the Company. Contracts will not
be subject to any conditions except that the purchase by an institution of the
Securities covered by its Contract shall not at the time of delivery be
prohibited under the laws of any jurisdiction in the United States to which such
institution is subject. A commission indicated in the Prospectus Supplement will
be paid to underwriters or agents soliciting purchases of Securities pursuant to
Contracts accepted by the Company.
The place and time of delivery for the Securities in respect of which this
Prospectus is delivered will be set forth in the Prospectus Supplement.
LEGAL OPINIONS
The legality of the Securities in respect of which this Prospectus is being
delivered will be passed on for the Company by James H. Agger, Esq., Vice
President, General Counsel and Secretary of the Company, or Robert F. Gerkens,
Esq., Assistant General Counsel of the Company, and for the underwriters, if
any, by Cravath, Swaine & Moore, Worldwide Plaza, 825 Eighth Avenue, New York,
New York 10019. The tax disclosure set forth under "U.S. Federal Income Tax
Considerations" on pages S-20 through S-28 of the Prospectus Supplement has been
passed on for the Company by Cornelius P. Powell, Esq., Vice President -- Taxes
of the Company. Messrs. Agger, Gerkens and Powell, in their capacities
indicated, are paid salaries by the Company, they are participants in various
employee benefit plans offered to employees of the Company generally and each
owns shares of common stock of the Company and participates in the Company's
long-term incentive program, which entitles executives to stock options and
deferred stock units. Cravath, Swaine & Moore from time to time acts as special
counsel for the Company.
EXPERTS
The financial statements and schedule for the year ended 30 September 1995
incorporated by reference in this Prospectus and elsewhere in the Registration
Statement, have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
incorporated herein by reference in reliance upon the authority of said firm as
experts in accounting and auditing in giving said reports.
9
<PAGE> 39
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESMAN, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT, THE ACCOMPANYING PROSPECTUS OR ANY PRICING SUPPLEMENT IN
CONNECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS SUPPLEMENT, THE
ACCOMPANYING PROSPECTUS OR ANY PRICING SUPPLEMENT, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR BY ANY AGENT, DEALER OR UNDERWRITER. NEITHER THIS PROSPECTUS
SUPPLEMENT, NOR THE ACCOMPANYING PROSPECTUS NOR ANY PRICING SUPPLEMENT SHALL
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY STATE TO ANY PERSON TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION IN SUCH STATE. THE DELIVERY OF THIS PROSPECTUS
SUPPLEMENT, THE ACCOMPANYING PROSPECTUS OR ANY PRICING SUPPLEMENT AT ANY TIME
DOES NOT IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT
TO THE DATE HEREOF.
------------------------
TABLE OF CONTENTS
Prospectus Supplement
<TABLE>
PAGE
<S> <C>
Risk Factors................................ S-2
Description of Notes........................ S-4
Special Provisions Relating to
Multi-Currency Notes...................... S-17
U.S. Federal Income Tax Considerations...... S-20
Plan of Distribution........................ S-28
Prospectus
Available Information....................... 2
Incorporation of Certain Documents by
Reference................................. 2
The Company................................. 2
Ratios of Earnings to Fixed Charges......... 3
Use of Proceeds............................. 3
Description of Securities................... 3
Plan of Distribution........................ 8
Legal Opinions.............................. 9
Experts..................................... 9
</TABLE>
$300,000,000
[AIR PRODUCTS LOGO]
MEDIUM-TERM NOTES,
SERIES E
DUE FROM 9 MONTHS TO 30 YEARS
FROM DATE OF ISSUE
------------------------------------------------------
PROSPECTUS
, 1996
AND
PROSPECTUS SUPPLEMENT
, 1996
------------------------------------------------------
LEHMAN BROTHERS
GOLDMAN, SACHS & CO.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 40
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
Registration Fee.................................................. $103,449
Printing Fees..................................................... 30,000*
Legal Fees........................................................ 40,000*
Accountants' Fees................................................. 25,000*
Rating Agency Fees................................................ 50,000*
Fees and Expenses of Trustee...................................... 30,000*
Blue Sky Fees and Expenses........................................ 5,000*
Miscellaneous..................................................... 21,551*
--------
Total................................................... $305,000*
========
</TABLE>
- ---------------
* Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware Corporation Law gives corporations the power to
indemnify officers and directors under certain circumstances.
Article Ninth of the Company's Restated Certificate of Incorporation
contains provisions which provide for indemnification of certain persons
(including officers and directors). The Restated Certificate of Incorporation is
filed as an exhibit to the Company's Annual Report on Form 10-K for the fiscal
year ended September 30, 1987.
The Company maintains insurance that generally insures the officers and
directors of the Company and its subsidiaries (as defined in said policy)
against liabilities incurred in such capacities, and insures the Company with
respect to amounts to which officers and directors become entitled as
indemnification payments from the Company, subject to certain specified
exclusions and deductible and maximum amounts. The Company also maintains a
policy of insurance that insures, among others, certain officers and directors
of the Company and certain of its subsidiaries against liabilities incurred for
Breach of Fiduciary Duty (as defined in said policy) with respect to their
performance of their duties and responsibilities in connection with certain
pension and retirement plans of the Company and certain of its subsidiaries,
subject to certain specified exclusions and deductible and maximum amounts.
ITEM 16. EXHIBITS.
The following Exhibits are filed as part of this Registration Statement:
<TABLE>
<S> <C>
Exhibit 1 -- Form of Agency Agreement for Medium-Term Notes, Series E.*
Exhibit 4(a) -- Indenture dated as of January 10, 1995, between the Company and
First Union National Bank (formerly, First Fidelity Bank, National
Association), as Trustee, relating to the Securities (filed as
Exhibit 4(a) to the Company's Registration Statement No. 33-57357).
(b) -- Form of Fixed Rate Medium-Term Note, Series E.*
(c) -- Form of Floating Rate Medium-Term Note, Series E.*
(d) -- Form of Fixed Rate Currency Indexed Medium-Term Note, Series E.*
(e) -- Form of S&P 500 Linked Medium-Term Note, Series E.*
Exhibit 5 -- Opinion of Company counsel as to legality of the Securities to be
issued.*
Exhibit 12 -- Computation of Ratios of Earnings to Fixed Charges (filed as
Exhibit (a)(12) to the Company's Quarterly Report on Form 10-Q for
the quarter ended December 31, 1995, and incorporated herein by
reference).
Exhibit 23(a) -- Consent of Arthur Andersen LLP. (See page II-6).
(b) -- Consent of Company counsel.
Exhibit 24 -- Power of Attorney.*
</TABLE>
II-1
<PAGE> 41
<TABLE>
<S> <C>
Exhibit 25 -- Form T-1 Statement of Eligibility and Qualification under the
Trust Indenture Act of 1939 of First Union National Bank, as
Trustee.*
</TABLE>
- ---------------
* Previously filed as an Exhibit to the Registration Statement.
ITEM 17. UNDERTAKINGS.
THE UNDERSIGNED REGISTRANT HEREBY UNDERTAKES:
(1) To file, during any period in which offers or sales are being made of
the securities registered hereby, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or any
material change to such information in this registration statement;
provided, however, that the undertakings set forth in paragraphs (i) and (ii)
above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed with or furnished to the Commission by the registrant pursuant to section
13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in this registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned registrant hereby further undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions set forth or described in Item 15 of this
registration statement, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-2
<PAGE> 42
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of a registration statement in reliance upon Rule 430A and contained in the
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act of 1933 shall be deemed to be part
of the registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE> 43
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Allentown and Commonwealth of
Pennsylvania on the 1st day of April, 1996.
AIR PRODUCTS AND CHEMICALS, INC.
(Issuer)
By /s/ A. H. KAPLAN
----------------------------------
(A. H. Kaplan, Vice
President -- Finance)
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed below by the following
persons in the capacities indicated on April 1, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- -----------------------------------------------
<C> <S> <C>
/s/ HAROLD A. WAGNER Director and Chairman of
-------------------- the Board (Principal
(Harold A. Wagner) Executive Officer)
</TABLE>
<TABLE>
<C> <S> <C>
/s/ A. H. KAPLAN Vice President -- Finance
--------------------- (Principal Financial Officer)
(A. H. Kaplan)
/s/ PAUL E. HUCK Corporate Controller
--------------------- (Principal Accounting Officer)
(Paul E. Huck)
* Director
---------------------
(Dexter F. Baker)
* Director
---------------------
(Tom H. Barrett)
* Director
---------------------
(L. Paul Bremer, III)
* Director
---------------------
(Robert Cizik)
* Director
---------------------
(Ruth M. Davis)
* Director
---------------------
(Terry R. Lautenbach)
</TABLE>
II-4
<PAGE> 44
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------- -----------------------------
<S> <C>
* Director
-------------------------
(Rudolphus F. N. Lubbers)
* Director
-------------------------
(Judith Rodin)
* Director
-------------------------
(Takeo Shiina)
* Director
-------------------------
(Lawrason D. Thomas)
</TABLE>
* Arnold H. Kaplan, Vice President -- Finance, by signing his name hereto, does
sign this document on behalf of the above-noted individuals pursuant to a
power of attorney duly executed by such individuals, which power of attorney
was filed with the Securities and Exchange Commission as Exhibit 24 hereto.
/s/ ARNOLD H. KAPLAN
-----------------------------------
(Arnold H. Kaplan, Attorney-in-Fact)
II-5
<PAGE> 45
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To: Air Products and Chemicals, Inc.:
As independent public accountants, we hereby consent to the incorporation
by reference in this Amendment No. 1 to the Registration Statement No. 333-00589
of our reports dated 2 November 1995 included and incorporated by reference in
Air Products and Chemicals, Inc.'s Form 10-K for the year ended 30 September
1995 and to all references to our Firm included in this Registration Statement.
ARTHUR ANDERSEN LLP
Philadelphia, Pennsylvania
1 April 1996
II-6
<PAGE> 46
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
------------------------
EXHIBITS
filed with
FORM S-3
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
------------------------
AIR PRODUCTS AND CHEMICALS, INC.
(Exact name of registrant as specified in its charter)
- --------------------------------------------------------------------------------
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<PAGE> 47
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
--------------- ------------------------------------------------------------ ------------
<S> <C> <C>
Exhibit 1 -- Form of Agency Agreement for Medium-Term Notes, Series
E.*
Exhibit 4(a) -- Indenture dated as of January 10, 1995, between the
Company and First Union National Bank (formerly, First
Fidelity Bank, National Association), as Trustee, relating
to the Securities (Filed as Exhibit 4(a) to the Company's
Registration Statement No. 33-57357).
(b) -- Form of Fixed Rate Medium-Term Note, Series E.*
(c) -- Form of Floating Rate Medium-Term Note, Series E.*
(d) -- Form of Fixed Rate Currency Indexed Medium-Term Note,
Series E.*
(e) -- Form of S&P 500 Linked Medium-Term Note, Series E.*
Exhibit 5 -- Opinion of Company counsel as to legality of the
Securities to be issued.*
Exhibit 12 -- Computation of Ratios of Earnings to Fixed Charges (filed
as Exhibit (a)(12) to the Company's Quarterly Report on Form
10-Q for the quarter ended December 31, 1995, and
incorporated herein by reference).
Exhibit 23(a) -- Consent of Arthur Andersen LLP. (See page II-6).
(b) -- Consent of Company counsel.
Exhibit 24 -- Power of Attorney.*
Exhibit 25 -- Form T-1 Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939 of First Union National Bank
as Trustee.*
</TABLE>
- ---------------
* Previously filed as an Exhibit to the Registration Statement.
<PAGE> 1
Exhibit 23(b)
April 1, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549-1004
RE: Air Products and Chemicals, Inc. - Amendment No. 1 to Registration
Statement for $300,000,000 Principal Amount of
Medium-Term Notes, Series E
Registration No. 333-00589
Ladies and Gentlemen:
We refer to the above-referenced Amendment No. 1 to the Registration
Statement No. 333-00589 of Air Products and Chemicals, Inc. (the "Company"),
filed pursuant to the Securities Act of 1933 (the "Registration Statement"), in
connection with the proposed issuance and sale of the Company of up to
$300,000,000 aggregate principal amount of its Debt Securities and the
prospectus included in the Registration Statement which refers to us under the
caption "Legal Opinions."
The undersigned hereby consent to the reference to us in such prospectus
under the caption "Legal Opinions."
Very truly yours,
/s/ James H. Agger
James H. Agger
Vice President, General Counsel
and Secretary
/s/ Robert F. Gerkens
Robert F. Gerkens
Assistant General Counsel
/s/ Cornelius P. Powell
Cornelius P. Powell
Vice President--Taxes
