<PAGE>
PROSPECTUS SUPPLEMENT
(To Prospectus dated March 25, 1994)
U.S. $100,000,000
CBI INDUSTRIES, INC.
Medium-Term Notes, Series A
With Maturities of Nine Months or More From Date
of Issue
CBI Industries, Inc. (the "Company") may offer from time to
time its Medium-Term Notes, Series A (the "Notes"), having an
aggregate initial offering price not to exceed U.S. $100,000,000
(or the equivalent thereof in foreign currencies or currency
units), subject to reduction under certain circumstances as a
result of the sale of other Securities of the Company under the
Prospectus to which this Prospectus Supplement relates. The Notes
will be offered at varying maturities of nine months or more from
their dates of issue and may be subject to redemption at the
option of the Company or repayment at the option of the Holder
prior to the Stated Maturity (as defined below) thereof as set
forth in a Pricing Supplement to this Prospectus Supplement (a
"Pricing Supplement"). Each Note will be denominated in U.S.
dollars or in other currencies or currency units (the "Specified
Currency") as may be designated by the Company and set forth in
the applicable Pricing Supplement. See "Important Currency
Information" and "Currency Risks."
(Continued on next page)
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS SUPPLEMENT OR ANY SUPPLEMENT HERETO. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Price to Agents' Commission Proceeds to
Public(1) or Discount(2) Company(2)(3)
Per Note 100% .125%-.750% 99.875%-99.250%
Total $100,000,000 $125,000-$750,000 $99,875,000-
$99,250,000
(1) Unless otherwise specified in the Pricing Supplement relating
thereto, each Note will be issued at 100% of the principal amount
thereof.
(2) The Company will pay Lehman Brothers, Lehman Brothers Inc.
(including its affiliate, Lehman Special Securities, Inc.), Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated or
Salomon Brothers Inc (each an "Agent," and collectively, the
"Agents") a commission, in the form of a discount ranging from
.125% to .750%, of the principal amount of any Note, depending on
its Stated Maturity, sold through such Agent, except that the
commission payable by the Company to the Agents with respect to
Notes with maturities of greater than thirty years will be
negotiated at the time the Company issues such Notes. 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. The Company has agreed to reimburse the Agents
for certain expenses, estimated at $75,000. The Company has agreed
to indemnify the Agents against certain liabilities, including
liabilities under the applicable Federal and state securities laws.
(3) Before deducting offering expenses payable by the Company
estimated at $75,000.
The Notes are offered on a continuing basis by the Company
through the Agents, each of which has agreed to use its reasonable
efforts to solicit offers to purchase the Notes. The Company also
may sell Notes to any Agent, acting as principal, for resale to
one or more investors or to one or more broker-dealers (acting as
a 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 has reserved the right to sell Notes directly to
investors on its own behalf, and on such sales no commissions will
be paid. 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 any offer to purchase Notes in
whole or in part. See "Plan of Distribution."
LEHMAN BROTHERS
MERRILL LYNCH & CO.
April 19, 1994
SALOMON BROTHERS INC </PAGE>
<PAGE>
(Continued from previous page)
Unless otherwise specified in the applicable Pricing
Supplement, Notes denominated in U.S. dollars will be issued only
in denominations of $1,000 or any amount in excess thereof which
is an integral multiple of $1,000. If the Notes are to be
denominated in a foreign currency or units of a foreign composite
currency, the authorized denominations and currency exchange rate
information will be set forth in the applicable Pricing Supplement.
The principal amount payable at Maturity (as defined below) and/or
any interest or premium on a Note may be determined by reference
to the relationship between two or more currencies, to the price
of one or more specified securities or commodities, to one or more
securities or commodities exchange indices or other indices or by
other similar methods (an "Indexed Note"), as set forth in the
applicable Pricing Supplement.
Except as otherwise set forth herein, the interest rate on,
or interest rate formula for, each 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. Interest rates and interest
rate formulas are subject to change by the Company, but, except as
otherwise set forth herein, 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.
Unless otherwise indicated in the applicable Pricing Supplement,
each Note will bear interest at a fixed rate (a "Fixed Rate
Note"), which may be zero in the case of certain Notes issued at
a price representing a discount from the principal amount payable
at Stated Maturity, or at rates determined by reference to the
Commercial Paper Rate, Federal Funds Rate, CD Rate, LIBOR, Prime
Rate, Treasury Rate, CMT Rate, 11th District Cost of Funds Rate,
J.J. Kenny Rate (each as defined below) or such other interest
rate formula (a "Floating Rate") as may be designated in an
accompanying Pricing Supplement, as adjusted by the Spread or
Spread Multiplier, if any, applicable to such Notes. See
"Description of Notes." A Fixed or Floating Rate Note may pay a
level or non-level amount in respect of both interest and
principal amortized over the life of the Note (an "Amortizing
Note").
Unless otherwise specified in the applicable Pricing
Supplement, interest on each Fixed Rate Note other than an
Amortizing Note will accrue from its Original Issue Date (as
defined below), or the last date to which interest has been paid
or duly provided for, and will be payable semiannually on each June
15 and December 15 and at Maturity. Unless otherwise specified in
the applicable Pricing Supplement, interest on each Floating Rate
Note other than an Amortizing Note will accrue from its Original
Issue Date, or the last date to which interest has been paid or
duly provided for, at rates determined as set forth therein and in
the applicable Pricing Supplement and will be payable on the dates
set forth therein and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement,
interest on each Amortizing Note will accrue from its Original
Issue Date, or the last date to which interest has been paid or
duly provided for, at a fixed or floating rate, determined as set
forth therein and in the applicable Pricing Supplement, and such
interest and the principal amount of such Amortizing Note will be
payable on the dates set forth therein and in the applicable
Pricing Supplement.
Unless otherwise specified in the applicable Pricing
Supplement, each Note will be registered and will be issued either
in (i) book-entry form and represented by a global certificate (a
"Global Security") registered in the name of a nominee of The
Depository Trust Company, as Depositary (the "Depositary") (each
such Note represented by a Global Security being referred to
herein as a "Book-Entry Note"), or (ii) if specified in the
applicable Pricing Supplement, in certificated form and
represented by certificates issued in definitive form
("Certificated Notes") and registered in the name of each Holder.
Interests in Book-Entry Notes will be shown on, and transfers
thereof will be effected only through, records maintained by the
Depositary (with respect to beneficial interest of participants)
and its participants. Owners of beneficial interests in Book-
Entry Notes will be entitled to physical delivery of Certificated
Notes only under the limited circumstances described herein. See
"Description of Notes-Book-Entry System."
The Specified Currency, any applicable interest rate or
formula, the Issue Price, the Stated Maturity, any Interest
Payment Dates (each as defined below), any redemption and
repayment provisions and any other terms applicable to each Note
will be established at the time of issuance of such Note and set
forth in the applicable Pricing Supplement. See "Description of
Notes."
IN CONNECTION WITH THIS OFFERING, THE AGENTS MAY EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
NOTES OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE
PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY
BE DISCONTINUED AT ANY TIME.
</PAGE>
<PAGE> THE COMPANY
The Company operates through three major business segments.
CBI's Contracting Services segment is organized under Chicago
Bridge & Iron Company as a worldwide construction group that
provides, through separate subsidiaries, a broad range of services
including design, engineering, fabrication and construction of
metal plate structures, project management, general contracting,
and other specialty construction and related services. CBI's
Industrial Gases segment, which is organized under Liquid Carbonic
Industries Corporation, produces, processes and markets, on a
worldwide basis, carbon dioxide and a wide variety of other
industrial and specialty gases and chemicals. CBI's Investments
segment includes petroleum and special product terminal businesses
and certain real estate and financial investments.
The Company is incorporated in Delaware and its principal
executive offices are located at 800 Jorie Boulevard, Oak Brook,
Illinois and its telephone number is (708) 572-7000.
DESCRIPTION OF NOTES
The Notes will be issued under an Indenture, dated as of
March 1, 1994 (the "Indenture"), between the Company and Chemical
Bank, as trustee (the "Trustee"). The following summaries of
certain provisions of the Notes and the Indenture do not purport
to be complete and are subject to, and are qualified in their
entirety by reference to, all the provisions of the Notes and the
Indenture. Capitalized terms set forth below that are not
otherwise defined herein shall have the meanings specified in the
Indenture and/or the Notes. Unless otherwise specified in the
applicable Pricing Supplement, the Notes will have the terms
described below.
General
The Notes constitute a single series of debt securities for
purposes of the Indenture (the "Debt Securities") and are limited
to U.S. $100,000,000 (or the equivalent thereof in foreign
currencies or currency units calculated at issuance of such Notes)
aggregate initial offering price, subject to reduction under
certain circumstances as a result of the sale of other Securities
of the Company under the accompanying Prospectus. In this
Prospectus Supplement, the accompanying Prospectus and any Pricing
Supplement, reference to "U.S. dollars", "U.S. $", "$", "dollars"
or "cents" are to United States currency, unless otherwise
indicated in the applicable Pricing Supplement. The Company may
from time to time sell additional series of Debt Securities,
including additional series of medium-term notes.
The Notes will be offered on a continuing basis and each Note
will mature nine months or more from its date of issue, as
selected by the initial purchaser and agreed to by the Company,
and may be subject to redemption at the option of the Company or
repayment at the option of the Holder prior to Stated Maturity as
set forth below under "Optional Redemption" and "Repayment at the
Noteholders' Option." Each Note will be denominated in U.S.
dollars or in such other Specified Currency as is specified in the
applicable Pricing Supplement. Each Note will be either (i) a
Fixed Rate Note, which may bear interest at a rate of zero in the
case of a Note issued at an Issue Price (as defined below)
representing a discount from the principal amount payable at Stated
Maturity (a "Zero Coupon Note"), or (ii) a Floating Rate Note
which will bear interest at a rate determined by reference to the
interest rate basis or combination of interest rate bases
specified in the applicable Pricing Supplement, which may be
adjusted by a Spread and/or Spread Multiplier (each as defined
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 below under "Book-Entry System,"
Book-Entry Notes will not be exchangeable for Certificated Notes.
Unless otherwise specified in the applicable Pricing Supplement,
Notes will be issuable in U.S. dollars in denominations of $1,000
and integral multiples of $1,000 in excess thereof. The
authorized denominations of any Note denominated in other than U.S.
dollars will be the amount of the Specified
</PAGE>
<PAGE> Currency for such Note equivalent, at the noon buying rate
in The City of New York for cable transfers for such Specified
Currency as certified for customs purposes by the Federal Reserve
Bank of New York (the "Market Exchange Rate") on the first
Business Day (as defined below) in The City of New York and the
country issuing such currency (or, in the case of European Currency
Units ("ECUs"), Brussels) next preceding the date on which the
Company accepts the offer to purchase such Note, to U.S. $1,000,
or such other minimum denomination as may be allowed or required
from time to time by any relevant central bank or equivalent
governmental body, however designated, or by any laws or
regulations applicable to the Notes or to such Specified Currency.
The Notes will be issued in integral multiples of 1,000 units of
any such Specified Currency in excess of their minimum
denominations. If any of the Notes are to be denominated in a
Specified Currency other than U.S. dollars, or if the principal of
and premium, if any, and any interest on any of the Notes not
denominated in U.S. dollars is to be payable at the option of the
Holder or the Company in U.S. dollars, the applicable Pricing
Supplement will provide additional information, including
applicable exchange rate information, pertaining to the terms of
such notes and other matters of interest to the Holders thereof.
As used herein, "Business Day" means, unless otherwise
specified in the applicable Pricing Supplement, any Monday,
Tuesday, Wednesday, Thursday or Friday that in The City of New
York is not a day on which banking institutions are authorized or
required by law, regulation, or executive order to close and, with
respect to Notes as to which LIBOR (as defined below) is an
applicable Base Rate (as defined below), is also a London Business
Day. As used herein, "London Business Day" means any day (a) on
which dealings in deposits in the Specified Currency are
transacted in the London interbank market, (b) if the Indexed
Currency is other than the European Currency Unit, on which
dealings in deposits in such Indexed Currency are transacted in
the London interbank market or (c) if the Indexed Currency is the
ECU, that is not designated as an ECU Non-Settlement Day by the
ECU Banking Association in Paris or otherwise generally regarded
in the ECU interbank market as a day on which payments on ECUs
shall not be made. "Market Day" means with respect to any Note
other than any LIBOR Note (as defined below), any Business Day in
The City of New York and, with respect to any LIBOR Note, any
Business Day in The City of New York which is also a London
Business Day.
"Index Maturity" means, with respect to a Floating Rate Note,
the period to maturity of the instrument or obligation on which
the interest rate formula is based, as specified in the applicable
Pricing Supplement.
"Original Issue Discount Note" means, (i) a Note, including
any Zero Coupon Note, that has a stated redemption price at
Maturity that exceeds its Issue Price (as defined for U.S. Federal
income tax purposes) by at least 0.25% of its principal amount
multiplied by the number of full years from the Original Issue
Date (as defined below) to the Stated Maturity for such Note and
(ii) any other Note designated by the Company as issued with
original issue discount for United States Federal income tax
purposes.
The Pricing Supplement relating to each Note will describe
the following terms, as applicable: (i) the Specified Currency
with respect to such Note (and, if such Specified Currency is
other than U.S. dollars, certain other terms relating to such
Note, including the authorized denomination); (ii) the price
(expressed as a percentage of the aggregate principal amount
thereof) at which such Note will be issued (the "Issue Price");
(iii) the date on which such Note will be issued (the "Original
Issue Date"); (iv) the date on which such Note will mature (the
"Stated Maturity") and whether the Stated Maturity may be extended
by the Company, and if so, the Extension Periods and the Final
Maturity Date (each as defined below); (v) whether such Note is a
Fixed Rate Note or a Floating Rate Note; (vi) whether such Note is
an Amortizing Note, and if so, the basis or formula for the
amortization of principal and the payment dates for periodic
principal payments; (vii) if such Note is a Fixed Rate Note, the
rate per annum at which such Note will bear interest, if any, the
Interest Payment Date or Dates and, if so specified in the
applicable Pricing Supplement, that such rate may be changed by
the Company prior to the Stated Maturity and, if so, the basis or
formula for such change, if any; (viii) if such Note is a Floating
Rate Note, the Base Rate, the Initial Interest Rate, if available,
the Interest Reset Date or Dates, the Calculation Date or Dates,
the Maximum Interest Rate, if any, the Minimum Interest Rate, if
any, the Spread, if any, the Spread Multiplier, if any (all as
defined below), the Interest Payment Date or Dates, the Index
Maturity, and any other terms relating </PAGE>
<PAGE> to the particular method of calculating the interest rate
for such Note and, if so specified in the applicable Pricing
Supplement, that any such Spread and/or Spread Multiplier may be
changed by the Company prior to the Stated Maturity and, if so,
the basis or formula for such change, if any; (ix) whether such
Note is an Original Issue Discount Note, and if so, the yield to
maturity; (x) the regular record date or dates (a "Regular Record
Date") if other than as set forth below with respect to Fixed Rate
Notes and Floating Rate Notes; (xi) whether such Note may be
redeemed at the option of the Company, or repaid at the option of
the Holder, prior to the Stated Maturity and, if so, the
provisions relating to such redemption or repayment; (xii) whether
such Note is an Indexed Note, and if so, the specific terms
thereof; (xiii) certain specified United States Federal income tax
consequences of the purchase, ownership and disposition of such
Note, if applicable; and (xiv) any other term of such Note not
inconsistent with the provisions of the Indenture.
The Notes and the Indenture do not limit the aggregate
principal amount of other indebtedness or securities which may be
issued by the Company. The Notes will be unsecured and will rank
pari passu with all other unsecured and unsubordinated
indebtedness of the Company, provided that such other unsecured
and unsubordinated indebtedness may contain covenants, events of
default and other provisions which are different from or which are
not contained in the Notes.
Payment of Principal and Interest
Payments of interest and principal (and premium, if any) to
Beneficial Owners (as defined below) of Book-Entry Notes are
expected to be made in accordance with the Depositary's and its
participants' procedures in effect from time to time as described
below under "Book-Entry System."
Unless otherwise specified in the applicable Pricing
Supplement, payments of interest and, in the case of Amortizing
Notes, principal, with respect to any Certificated Note (other
than interest and, in the case of Amortizing Notes, principal,
payable at Maturity or upon redemption, if applicable) will be
made by mailing a check to the Holder at the address of such Holder
appearing on the security register for the Notes on the applicable
Regular Record Date. Notwithstanding the foregoing, at the option
of the Company, all payments of interest and, in the case of
Amortizing Notes, principal, on the Notes may be made by wire
transfer of immediately available funds to an account at a bank
located within the United States as designated by each Holder not
less than 15 calendar days prior to the applicable Interest Payment
Date. A Holder of $10 million or more in aggregate principal
amount of Notes of like tenor and terms with the same Interest
Payment Date may demand payment by wire transfer but only if
appropriate payment instructions have been received in writing by
the Paying Agent, not less than 15 calendar days prior to the
applicable Interest Payment Date. In the event that payment is so
made in accordance with instructions of the Holder, such wire
transfer shall be deemed to constitute full and complete payment
of such interest and principal on the Notes. Payment of the
principal of (and premium, if any) and interest due with respect
to any Certificated Note at Maturity will be made in immediately
available funds upon surrender of such Note at the principal office
of the Paying Agent in The City of New York, provided that the
Certificated Note is presented to the Paying Agent in time for the
Paying Agent to make such payments in such funds in accordance
with its normal procedures.
If any Interest Payment Date, other than at Maturity, for any
Floating Rate Note would otherwise be a day that is not a Business
Day, such Interest Payment Date 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 Payment Date shall be the immediately preceding
Business Day. If the Maturity for any Fixed Rate Note or Floating
Rate Note or the Interest Payment Date for any Fixed Rate Note
falls on a day that is not a Business Day, payment of principal,
premium, if any, and interest with respect to such Note will be
paid on the next succeeding Business Day with the same force and
effect as if made on the due date, and no interest shall be
payable on the date of payment for the period from and after the
date of Maturity.
</PAGE>
<PAGE>
Unless otherwise specified in the applicable Pricing
Supplement, payments of interest and principal (and premium, if
any) with respect to any Note to be made in a Specified Currency
other than U.S. dollars will be made by wire transfer to such
account with a bank located in the country issuing the Specified
Currency (or, with respect to Notes denominated in ECUs, Brussels)
or other jurisdiction acceptable to the Company and the Trustee as
shall have been designated at least 15 days prior to the Interest
Payment Date or Maturity, as the case may be, by the Holder of
such Note on the relevant Regular Record Date or at Maturity,
provided that, in the case of payment of principal of (and
premium, if any) and any interest due at Maturity, the Note is
presented to the Paying Agent in time for the Paying Agent to make
such payments in such funds in accordance with its normal
procedures. Such designation shall be made by filing the
appropriate information with the Trustee at its Corporate Trust
Office, and, unless revoked, any such designation made with respect
to any Note by a Holder will remain in effect with respect to any
further payments with respect to such Note payable to such Holder.
If a payment with respect to any such Note cannot be made by wire
transfer because the required designation has not been received by
the Trustee on or before the requisite date or for any other
reason, a notice will be mailed to the Holder at its registered
address requesting a designation pursuant to which such wire
transfer can be made and, upon the Trustees' receipt of such a
designation, such payment will be made within 15 days of such
receipt. 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 such
payments are made.
If so specified in the applicable Pricing Supplement, except
as provided below, payments of interest and principal (and
premium, if any) with respect to any Note denominated in other
than U.S. dollars will be made in U.S. dollars if the Holder of
such Note on the relevant Regular Record Date or at Maturity, as
the case may be, has transmitted a written request for such payment
in U.S. dollars to the Paying Agent at its principal office in The
City of New York, New York on or prior to such Regular Record Date
or the date 15 days prior to Maturity, as the case may be. Such
request may be delivered by mail, by hand or by cable, telex or
any other form of facsimile transmission. Any such request made
with respect to any Note by a Holder will remain in effect with
respect to any further payments of interest and principal (and
premium, if any) with respect to such Note payable to such Holder,
unless such request is revoked by written notice received by the
Paying Agent on or prior to the relevant Regular Record Date or
the date 15 days prior to Maturity, as the case may be (but no
such revocation may be made with respect to payments made on any
such Note if an Event of Default has occurred with respect thereto
or upon the giving of a notice of redemption). Holders of Notes
denominated in other than U.S. dollars whose Notes are registered
in the name of a broker or nominee should contact such broker or
nominee to determine whether and how an election to receive
payments in U.S. dollars may be made.
The U.S. dollar amount to be received by a Holder of a Note
denominated in other than U.S. dollars who elects to receive
payments in U.S. dollars will be based on the highest indicated
bid quotation for the purchase of U.S. dollars in exchange for the
Specified Currency obtained by the Currency Determination Agent
(as defined below) at approximately 11:00 A.M., New York City
time, on the second Business Day next preceding the applicable
payment date (the "Conversion Date") from the bank composite or
multi-contributor pages of the Quoting Source for three (or two if
three are not available) major banks in The City of New York. The
first three (or two) such banks selected by the Currency
Determination Agent which are offering quotes on the Quoting Source
will be used. If fewer than two such bid quotations are available
at 11:00 A.M., New York City time, on the second Business Day next
preceding the applicable payment date, such payment will be based
on the Market Exchange Rate as of the second Business Day next
preceding the applicable payment date. If the Market Exchange
Rate for such date is not then available, such payment will be
made in the Specified Currency. As used herein, the "Quoting
Source" means Reuters Monitor Foreign Exchange Service, or if the
Currency Determination Agent determines that such service is not
available, Telerate Monitor Foreign Exchange Service, or if the
Currency Determination Agent determines that neither service is
available, such comparable display or other comparable manner of
obtaining quotations as shall be agreed between the Company and the
Currency Determination Agent. All currency exchange costs
associated with any payment in U.S. dollars on any such Note will
be borne by the Holder thereof by </PAGE>
<PAGE>
deductions from such payment. Unless otherwise provided in the
applicable Pricing Supplement, the Company will be the currency
determination agent (the "Currency Determination Agent") with
respect to the Notes.
If payment in respect of a Note is required to be made in any
currency unit (e.g. ECUs) and such currency unit is unavailable,
in the good faith judgment of the Company, due to the imposition
of exchange controls or other circumstances beyond the Company's
control, then all payments in respect of such Note shall be made
in U.S. dollars until such currency unit is again available. The
amount of each payment of U.S. dollars shall be computed on the
basis of the equivalent of the currency unit in U.S. dollars, which
shall be determined by the Currency Determination Agent on the
following basis. The component currencies of the currency unit
for this purpose (the "Component Currencies") shall be the
currency amounts that were components of the currency unit as of
the Conversion Date. The equivalent of the currency unit in U.S.
dollars shall be calculated by aggregating the U.S. dollar
equivalents of the Component Currencies. The U.S. dollar
equivalent of each of the Component Currencies shall be determined
by the Currency Determination Agent on the basis of the Market
Exchange Rate for each such Component Currency that is available
as of the third Business Day prior to the date on which the
relevant payment is due and for each such Component Currency that
is unavailable, if any, as of the Conversion Date for such
Component Currency.
If the official unit of any Component Currency is altered by
way of combination or subdivision, the number of units of that
currency as a Component Currency shall be divided or multiplied in
the same proportion. If two or more Component Currencies are
consolidated into a single currency, the amounts of those
currencies as Component Currencies shall be replaced by an amount
in such single currency equal to the sum of the amounts of the
consolidated Component Currencies expressed in such single
currency. If any Component Currency is divided into two or more
currencies, the amount of the original Component Currency shall be
replaced by the amounts of such two or more currencies, the sum of
which shall be equal to the amount of the original Component
Currency.
All determination referred to above made by the Currency
Determination Agent shall be at its sole discretion and shall, in
the absence of manifest error, be conclusive for all purposes and
binding on Holders of Notes.
If any Interest Payment Date, other than Maturity, for any
Floating Rate Note would otherwise be a day that is not a Market
Day (or, in the case of any Note denominated in other than U.S.
dollars, a Business Day in the country issuing the Specified
Currency (or, in the case of ECUs, Brussels)), such Interest
Payment Date shall be postponed to the next day that is a Market
Day, except that in the case of a LIBOR Note, if such Market Day
is in the next succeeding calendar month, such Interest Payment
Date shall be the immediately preceding Market Day. If the
Maturity for any Fixed Rate Note or Floating Rate Note or the
Interest Payment Date for any Fixed Rate Note falls on a day that
is not a Market Day, payment of principal, premium, if any, and
interest with respect to such Note will be paid on the next
succeeding Market Day with the same force and effect as if made on
the due date, and no interest shall be payable on the date of
payment for the period from and after the due date.
Unless otherwise specified in the applicable Pricing
Supplement, if the principal of any Original Issue Discount Note
is declared to be due and payable immediately as described in this
Prospectus Supplement under "Description of Notes-Events of
Default," the amount of principal due and payable with respect to
such Note shall be the Amortized Face Amount of such Note as of the
date of such declaration. The "Amortized Face Amount" of an
Original Issue Discount Note that does not bear stated interest
shall be an amount equal to the sum of (i) the principal amount of
such Note multiplied by the Issue Price (expressed, for this
purpose, as a percentage of the principal amount of the Note) set
forth in the applicable Pricing Supplement plus (ii) the portion of
the difference between the dollar amount determined pursuant to
the preceding clause (i) and the principal amount of such Note
that has accrued at the yield to maturity set forth in the Pricing
Supplement (computed in accordance with generally accepted
financial practices) to such date of declaration, but in no event
shall the Amortized Face Amount of an Original Issue Discount Note
exceed its principal amount.
</PAGE>
<PAGE>
Interest and Interest Rates
Each Note other than certain Original Issue Discount Notes
will bear interest from its Original Issue Date or from the most
recent Interest Payment Date to which interest on such Note has
been paid or duly provided for at a fixed rate or rates per annum,
or at a rate or rates per annum determined pursuant to a Base Rate
or Rates stated therein and in the applicable Pricing Supplement
that may be adjusted by a Spread and/or Spread Multiplier, until
the principal thereof is paid or made available for payment.
Interest will be payable on each Interest Payment Date and at
Maturity. "Maturity" means the date on which the principal of a
Note becomes due and payable in full in accordance with its terms
and the terms of the Notes and the Indenture, whether at Stated
Maturity (as defined above) or earlier by declaration of
acceleration, call for redemption, repayment or otherwise.
Interest (other than defaulted interest which may be paid on a
special record date, as described above) will be payable to the
Holder at the close of business on the Regular Record Date next
preceding such Interest Payment Date; provided, however, that
interest payable at Maturity will be payable to the person to whom
principal shall be payable. The first payment of interest on any
Note originally issued between a Regular Record Date for such Note
and the succeeding Interest Payment Date will be made on the
Interest Payment Date following the next succeeding Regular Record
Date for such Note to the Holder on such next Regular Record Date.
Interest rates, 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. The Interest Payment Dates and the
Regular Record Dates for each Fixed Rate Note shall be as
described below under "Fixed Rate Notes." The Interest Payment
Dates for each Floating Rate Note shall be as described below
under "Floating Rate Notes" and in the applicable Pricing
Supplement, and the Regular Record Dates for a Floating Rate Note
will be the fifteenth day (whether or not a Business Day) next
preceding each Interest Payment Date.
Fixed Rate Notes
Each Fixed Rate Note will bear interest from its Original
Issue Date at the annual rate or rates stated thereon and in the
applicable Pricing Supplement. Payments of interest on any Fixed
Rate Note with respect to any Interest Payment Date will include
interest accrued from and including the Original Issue Date, or
the next preceding Interest Payment Date, to but excluding the
applicable Interest Payment Date or the date of Maturity. Fixed
Rate Notes may bear one or more annual rates of interest during the
periods or under the circumstances specified therein and in the
applicable Pricing Supplement. Unless otherwise specified in the
applicable Pricing Supplement, interest on the Fixed Rate Note
will be computed on the basis of a 360-day year of twelve 30-day
months.
Unless otherwise specified in an applicable Pricing
Supplement, the Interest Payment Dates for the Fixed Rate Notes
other than Amortizing Notes will be June 15 and December 15 of
each year, and the Regular Record Dates will be May 31 and
November 30 (whether or not a Business Day) of each year. Unless
otherwise specified in the applicable Pricing Supplement, the
Regular Record Date with respect to Fixed Rate Amortizing Notes
will be the 15th day (whether or not a Business Day) next
preceding the Interest Payment Date. Unless otherwise specified
in the applicable Pricing Supplement, payments of principal and
interest on Fixed Rate Amortizing Notes will be made either
quarterly on each March 15, June 15, September 15 and December 15
or semiannually on each June 15 and December 15 as set forth in
the applicable Pricing Supplement, and at Maturity. Payments with
respect to Fixed Rate Amortizing Notes will be applied first to
interest due and payable thereon and then to the reduction of the
unpaid principal amount thereof. A table setting forth repayment
information in respect of each Fixed Rate Amortizing Note will be
provided to the original purchaser thereof and will be available,
upon request, to subsequent Holders.
Floating Rate Notes
Each Floating Rate Note will bear interest at a rate
determined by reference to one or more interest rate bases (each
a "Base Rate"), which may be adjusted by adding to or subtracting
from the Base Rate a fixed percentage per annum
</PAGE>
<PAGE>
(the "Spread") and/or by multiplying the Base Rate by a fixed
interest factor (the "Spread Multiplier"). The applicable Pricing
Supplement will designate one or more of the following Base Rates
as applicable to each Floating Rate Note: (a) the Commercial Paper
Rate (a "Commercial Paper Rate Note"), (b) the Federal Funds Rate
(a "Federal Funds Rate Note"), (c) the CD Rate (a "CD Rate Note"),
(d) LIBOR (a "LIBOR Note"), (e) the Prime Rate (a "Prime Rate
Note"), (f) the Treasury Rate (a "Treasury Rate Note"), (g) the
CMT Rate (a "CMT Rate Note") (h) the 11th District Cost of Funds
Rate (an "11th District Cost of Funds Rate Note"), (i) the J.J.
Kenny Rate (a "J.J. Kenny Rate Note") or (j) such other Base Rate
or interest rate formula as is set forth in such Pricing
Supplement and in such Floating Rate Note.
Each Floating Rate Note will bear interest from its Original
Issue Date 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 or Rates
specified on the face thereof and in the applicable Pricing
Supplement plus or minus the Spread, if any, and/or times the
Spread Multiplier, if any. The Spread and/or Spread Multiplier
for a Floating Rate Note may be subject to adjustment during a
Reset Period under circumstances specified therein 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 specified in the applicable
Pricing Supplement, the Calculation Agent for each Floating Rate
will be the Trustee. All determinations to be made by the
Calculation Agent shall be at its sole discretion and shall, in
the absence of manifest error, be conclusive for all purposes and
binding on the Holders of Notes.
The interest rate on each Floating Rate Note will be reset
daily, weekly, monthly, quarterly, semiannually or annually (such
type or 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, except as provided
below; in the case of Floating Rate Notes that reset monthly, the
third Wednesday of each month (with the exception of monthly reset
11th District Cost of Funds Rate Notes, which will reset on the
first calendar day of the 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 the month of each year
specified on the face thereof and in the applicable Pricing
Supplement; provided, however, that (i) the interest rate in
effect from the date of issue to the first Interest Reset Date will
be the Initial Interest Rate specified on the face of the Floating
Rate Note, and (ii) unless otherwise specified in the applicable
Pricing Supplement, the interest rate in effect for the ten days
immediately prior to the Maturity of a Floating Rate Note will be
that in effect on the tenth day preceding such Maturity. 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 on the Calculation Date (as
defined below) pertaining to the Interest Determination Date
pertaining to the Interest Reset Date for such Reset Period.
Unless otherwise specified in the applicable Pricing Supplement,
the "Interest Determination Date" pertaining to an Interest Reset
Date for (a) a Commercial Paper Rate Note (the "Commercial Paper
Interest Determination Date"), (b) a Federal Funds Rate Note (the
"Federal Funds Interest Determination Date"), (c) a CD Rate Note
(the "CD Interest Determination Date"), (d) a Prime Rate Note (the
"Prime Interest Determination Date"), (e) a CMT Rate Note (the
"CMT Interest Determination Date"), or (f) a J.J. Kenny Rate
</PAGE>
<PAGE>
Note (the "Kenny Rate Interest Determination Date") will be the
second Business Day prior to such Interest Reset Date. Unless
otherwise specified in the applicable Pricing Supplement, the
Interest Determination Date pertaining to an Interest Reset Date
for an 11th District Cost of Funds Rate Note (the "11th District
Interest Determination Date") will be the last business day of the
month immediately preceding such Interest Reset Date on which the
Federal Home Loan Bank of San Francisco (the "FHLB of San
Francisco") publishes the Index (as defined below). Unless
otherwise specified in the applicable Pricing Supplement, the
Interest Determination Date pertaining to an Interest Reset Date
for a LIBOR Note (the "LIBOR Interest Determination Date") will be
the second London Business Day immediately preceding each Interest
Reset Date. Unless otherwise specified in the applicable Pricing
Supplement, the Interest Determination Date pertaining to an
Interest Reset Date for a Treasury Rate Note (the "Treasury
Interest Determination Date") will be the day of the week in which
such Interest Reset Date falls on which Treasury bills would
normally be auctioned. 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 a result of a legal holiday, an auction is so held on the
preceding Friday, such Friday will be the Treasury Interest
Determination Date pertaining to the 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. Unless otherwise specified in the
applicable Pricing Supplement, the "Calculation Date" pertaining to
any Interest Determination Date shall be the earlier of (i) the
tenth calendar day after the Interest Determination Date or, if
such day is not a Business Day, the next succeeding Business Day,
or (ii) the Business Day preceding the applicable Interest Payment
Date or Maturity, as the case may be.
Except as provided below or in the applicable Pricing
Supplement, interest on Floating Rate Notes, including Floating
Rate Amortizing 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, including Floating Rate Amortizing Notes, that reset
quarterly, on the third Wednesday of March, June, September and
December of each year; in the case of Floating Rate Notes,
including Floating Rate Amortizing 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, including
Floating Rate Amortizing 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") and, in each case, at Maturity.
Unless otherwise specified in the applicable Pricing
Supplement, payments with respect to Floating Rate Amortizing
Notes will be applied first to interest due and payable thereon
and then to the reduction of the unpaid principal amount thereof.
A table setting forth repayment information in respect of each
Floating Rate Amortizing Note will be provided to the original
purchaser thereof and will be available, upon request, to
subsequent Holders.
Each payment of interest on a Floating Rate Note will include
interest accrued from and including the Original Issue Date, or
the next preceding Interest Payment Date, to but excluding the
applicable Interest Payment Date or the date of Maturity;
provided, however, that if such Floating Rate Note resets daily or
weekly, interest payable on any Interest Payment Date, other than
interest payable at Maturity of a Note, will include interest
accrued from but excluding the second preceding Regular Record
Date (or, from and including the Original Issue Date if no
interest has been paid with respect to such Note) to and including
the next preceding Regular Record Date; provided further that
interest payable at Maturity will include interest accrued to but
excluding such date of Maturity. Accrued interest from the
Original Issue Date, or from the last date to which interest has
been paid or duly provided for, is calculated by multiplying the
face amount of a Note by an accrued interest factor computed by
adding the interest factor calculated for each day from the
Original Issue Date, or from the last date to which interest has
been paid or duly provided for, to but excluding the date for
which accrued interest is being calculated. Unless otherwise
specified in the applicable Pricing Supplement, the interest
factor for each such day is computed by dividing the interest rate
applicable to such date by 360, in the case of Commercial Paper
Rate Notes, Federal Funds Rate Notes, CD Rate Notes, Prime Rate
Notes, 11th District Cost of Funds Rate Notes and LIBOR Notes,
</PAGE>
<PAGE>
or by the actual number of days in the year, in the case of
Treasury Rate Notes or CMT Rate Notes, or by 365 days in the case
of a J.J. Kenny Rate Note.
All percentages resulting from any calculation on Floating
Rate Notes will be rounded upward, if necessary, to the nearest
one hundred-thousandth of a percentage point with five one-
millionths of one percentage point being rounded upward (e.g.,
9.876545% or .09876545, being rounded to 9.87655% or .0987655,
respectively), and all dollar amounts used in or resulting from
such calculation on Floating Rate Notes will be rounded to the
nearest cent (with one-half cent being rounded upward).
The Calculation Agent will, upon the request of the Holder of
any Floating Rate Note, provide the interest rate then in effect.
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 (the "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 (the "Minimum Interest Rate").
The interest rate on any Note will in no event be higher than the
maximum rate permitted by New York law or other applicable law.
Under present New York law, the maximum rate of interest is 25%
per annum on a simple interest basis. This limit may not apply to
Notes in which $2,500,000 or more has been invested, including
Notes purchased by an Agent or Agents in such aggregate principal
amount or more for resale to investors.
Commercial Paper Rate Notes
Each Commercial Paper Rate Note will bear interest at the
rate (calculated with reference to the Commercial Paper Rate and
the Spread and/or Spread Multiplier, if any) specified in such
Commercial Paper Rate Note and in the applicable Pricing
Supplement.
Unless otherwise indicated in the applicable Pricing
Supplement, "Commercial Paper Rate" means, with respect to any
Commercial Paper Interest Determination Date, the Money Market
Yield (calculated as described below) of the rate on such date for
commercial paper having the Index Maturity designated in the
applicable Pricing Supplement as such rate is published by the
Board of Governors of the Federal Reserve System in "Statistical
Release H.15(519), Selected Interest Rates," or any successor
publication of the Board of Governors ("H.15(519)") under the
heading "Commercial Paper." In the event that such rate is not
published by 9:00 A.M., New York City time, on the Calculation
Date pertaining to such Commercial Paper Interest Determination
Date, then the Commercial Paper Rate shall be the Money Market
Yield of the rate on such Commercial Paper Interest Determination
Date for commercial paper having the Index Maturity designated in
the applicable Pricing Supplement as published by the Federal
Reserve Bank of New York in its daily statistical release
"Composite 3:30 p.m. Quotations for U.S. Government Securities"
("Composite Quotations") under the heading "Commercial Paper." If
by 3:00 P.M., New York City time, on such Calculation Date such
rate is not yet published in Composite Quotations, 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 of the
offered rates as of 11:00 A.M., New York City time, on such
Commercial Paper Interest Determination Date of three leading
dealers of commercial paper in The City of New York selected by
the Calculation Agent for commercial paper having the Index
Maturity designated in the applicable Pricing Supplement placed
for an industrial issuer whose bond rating is "AA," or the
equivalent, from a nationally recognized securities rating agency;
provided, however, that if the dealers selected as aforesaid by
the Calculation Agent are not quoting as mentioned in this
sentence, the Commercial Paper Rate with respect to such
Commercial Paper Interest Determination Date will be the Commercial
Paper Rate in effect on such Commercial Paper Interest
Determination Date.
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<PAGE>
"Money Market Yield" means a yield (expressed as a percentage
rounded to the nearest one hundred-thousandth of a percentage
point) calculated in accordance with the following formula:
Money Market Yield = D X 360 X 100
360 - (D X M)
where "D" refers to the per annum rate for the commercial paper,
quoted on a bank discount basis and the expressed as a decimal;
and "M" refers to the actual number of days in the interest period
for which interest is being calculated.
Federal Funds Rate Notes
Each Federal Funds Rate Note will bear interest at the
interest rate (calculated with reference to the Federal Funds Rate
Note and the Spread and/or Spread Multiplier, if any) specified in
such Federal Funds Rate Note and in the applicable Pricing
Supplement.
Unless otherwise indicated in the applicable Pricing
Supplement, "Federal Funds Rate" means, with respect to any
Federal Funds Interest Determination Date, the rate on such date
for Federal Funds as published in H.15(519) under the heading
"Federal Funds (Effective)" or, if not so published by 9:00 A.M.,
New York City time, on the Calculation Date pertaining to such
Federal Funds Interest Determination Date, the Federal Funds Rate
will be the rate on such Federal Funds Interest Determination Date
as published in Composite Quotations under the heading "Federal
Funds/Effective Rate." If such rate is not published by 3:00
P.M., New York City time, on the Calculation Date pertaining to
such Federal Funds Interest Determination Date, then the Federal
Funds Rate for such Federal Funds Interest Determination Date will
be calculated by the Calculation Agent and will be the arithmetic
mean of the rates as of 9:00 A.M., New York City time, on such
Federal Funds Interest Determination Date for the last transaction
in overnight Federal Funds arranged by three leading brokers of
Federal Funds transactions in The City of New York selected by the
Calculation Agent; provided, however, that if the brokers selected
as aforesaid by the Calculation Agent are not quoting as mentioned
in this sentence, the Federal Funds Rate with respect to such
Federal Funds Interest Determination Date will be the Federal
Funds Rate in effect on such Federal Funds Interest Determination
Date.
CD Rate Notes
Each CD Rate Note will bear interest at the interest rate
(calculated with reference to the CD Rate and the Spread and/or
Spread Multiplier, if any), specified in such CD Rate Note and in
the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing
Supplement, "CD Rate" means, with respect to any CD Interest
Determination Date, the rate on such date for negotiable
certificates of deposit having the Index Maturity designated in
the applicable Pricing Supplement as published in H.15(519) under
the heading "CDs (Secondary Market)" or, if not so published by
9:00 A.M., New York City time, on the Calculation Date pertaining
to such CD Interest Determination Date, the CD Rate will be the
rate on such CD Interest Determination Date for negotiable
certificates of deposit having the Index Maturity designed in the
applicable Pricing Supplement as published in Composite Quotations
under the heading "Certificates of Deposit." If such rate is not
published by 3:00 P.M., New York City time, on the Calculation Date
pertaining to such CD Interest Determination Date, then the CD Rate
for such CD Interest Determination Date will be calculated by the
Calculation Agent and will be the arithmetic mean of the secondary
market offered rates as of 10:00 A.M., New York City time, on such
CD Interest Determination Date of three leading nonbank dealers in
negotiable U.S. dollar certificates of deposit in The City of New
York selected by the Calculation Agent for negotiable certificates
of deposit of major United States money center banks of the
highest credit standing (in the market for negotiable certificates
of deposit) with a remaining
</PAGE>
<PAGE>
maturity closest to the Index Maturity designated in the
applicable Pricing Supplement in a denomination of $5,000,000;
provided, however, that if the dealers selected as aforesaid by
the Calculation Agent are not quoting as mentioned in this
sentence, the CD Rate with respect to such CD Interest
Determination Date will be the CD Rate in effect on such CD
Interest Determination Date.
11th District Cost of Funds Rate Notes
11th District Cost of Funds Rate Notes will bear interest at
the rates (calculated with reference to the 11th District Cost of
Funds Rate and the Spread and/or Spread Multiplier, if any)
specified in the applicable 11th District Cost of Funds Rate Note
and in the Pricing Supplement, if any.
Unless otherwise specified in the applicable Pricing
Supplement, "11th District Cost of Funds Rate" means, with respect
to any 11th District Interest Determination Date, the rate equal
to the monthly weighted average cost of funds for the calendar
month preceding such 11th District Cost of Funds Rate Interest
Determination Date as set forth under the caption "11th District"
on Telerate Page 7058 as of 11:00 A.M., San Francisco time, on
such 11th District Cost of Funds Rate Interest Determination Date.
If such rate does not appear on Telerate Page 7058 on any related
11th District Cost of Funds Rate Interest Determination Date, the
11th District Cost of Funds Rate for such 11th District Cost of
Funds Rate Interest Determination Date shall be the monthly
weighted average cost of funds paid by member institutions of the
Eleventh Federal Home Loan Bank District that was most recently
announced (the "Index") by the FHLB of San Francisco as such cost
of funds for the calendar month preceding the date of such
announcement. If the FHLB of San Francisco fails to announce such
rate for the calendar month next preceding such 11th District Cost
of Funds Rate Interest Determination Date, then the 11th District
Cost of Funds Rate for such 11th District Cost of Funds Rate
Interest Determination Date will be the 11th District Cost of
Funds Rate then in effect on such 11th District Cost of Funds Rate
Interest Determination Date.
Kenny Rate Notes
Kenny Rate Notes will bear interest at the rates (calculated
with reference to the Kenny Rate and the Spread and/or Spread
Multiplier, if any) specified in the applicable Kenny Rate Note
and in the Pricing Supplement.
Unless otherwise indicated in the applicable Pricing
Supplement, "Kenny Rate" means with respect to any Kenny Rate
Interest Determination Date, the high grade weekly index (the
"Weekly Index") on such date made available by Kenny Information
Systems ("Kenny") to the Calculation Agent. The Weekly Index is,
and shall be, based upon 30 day yield evaluations at par of bonds,
the interest on which is exempt from Federal income taxation under
the Internal Revenue Code of 1986, as amended, of not less than
five high grade component issuers selected by Kenny which shall
include, without limitation, issuers of general obligation bonds.
The specific issuers included among the component issuers may be
changed from time to time by Kenny in its discretion. The bonds
on which the Weekly Index is based shall not include any bonds on
which the interest is subject to a minimum tax or similar tax
under the Internal Revenue Code of 1986, as amended, unless all
tax-exempt bonds are subject to such tax. In the event Kenny
ceases to make available such Weekly Index, a successor indexing
agent will be selected by the Calculation Agent, such index to
reflect the prevailing rate for bonds rated in the highest short-
term rating category by Moody's Investors Service, Inc. and
Standard & Poor's Corporation in respect of issuers most closely
resembling the high grade component issuers selected by Kenny for
its Weekly Index, the interest on which is (A) variable on a weekly
basis, (B) exempt from Federal income taxation under the Internal
Revenue Code of 1986, as amended, and (c) not subject to a minimum
tax or similar tax under the Internal Revenue Code of 1986, as
amended, unless all tax-exempt bonds are subject to such tax. If
such successor indexing agent is not available, the rate for any
J.J. Kenny Rate Interest Determination Date shall be 60.4% of the
rate determined if the Treasury Rate option had been originally
selected. </PAGE>
<PAGE>
LIBOR Notes
Each LIBOR Note will bear interest at the interest rate
(calculated with reference to LIBOR and the Spread and/or Spread
Multiplier, if any) specified in such LIBOR Note and in the
applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing
Supplement, "LIBOR" means, with respect to any LIBOR Interest
Determination Date, the rate determined in accordance with the
following provisions:
(i) With respect to any LIBOR Interest Determination
Date, LIBOR will be either: (a) if "LIBOR Reuters" is specified in
the Note and the applicable Pricing Supplement, the arithmetic mean
of the offered rates (unless the specified designated LIBOR Page
(as defined below) by its terms provides only for a single rate, in
which case such single rate shall be used) for deposits in the
Designated LIBOR Currency (as defined below) having the Index
Maturity designated in the Note and the applicable Pricing
Supplement, commencing on the second London Business Day
immediately following the LIBOR Interest Determination Date, which
appear on the Designated LIBOR Page specified in the Note and the
applicable Pricing Supplement as of 11:00 A.M. London time on that
LIBOR Interest Determination Date, if at least two such offered
rates appear (unless, as aforesaid, only a single rate is required)
on such Designated LIBOR Page, or (b) if "LIBOR Telerate" is
specified in the Note and the applicable Pricing Supplement, the
rate for deposits in the Designated LIBOR Currency (as defined
below) having the Index Maturity designated in the Note and the
applicable Pricing Supplement, commencing on the second London
Business Day immediately following such LIBOR Interest
Determination Date, which appears on the Designated LIBOR Page
specified in the Note and the applicable Pricing Supplement as of
11:00 A.M. London time on that LIBOR Interest Determination Date.
Notwithstanding the foregoing, if fewer than two offered rates
appear on the Designated LIBOR Page with respect to LIBOR Reuters
(unless the specified Designated LIBOR Page with respect to LIBOR
Reuters by its terms provides only for a single rate, in which case
such single rate shall be used), or if no rate appears on the
Designated LIBOR Page with respect to LIBOR Telerate, whichever may
be applicable, LIBOR in respect of the related LIBOR Interest
Determination Date will be determined as if the parties had
specified the rate described in clause (ii) below.
(ii) With respect to any LIBOR Interest Determination
Date on which fewer than two offered rates appear on the Designated
LIBOR Page with respect to LIBOR Reuters (unless the Designated
LIBOR Page by its terms provides only for a single rate, in which
case such single rate shall be used), or if no rate appears on the
Designated LIBOR Page with respect to LIBOR Telerate, as the case
may be, the Calculation Agent will request the principal London
office of each of four major banks in the London interbank market
selected by the Calculation Agent to provide the Calculation Agent
with its offered rate quotation for deposits in the Designated
LIBOR Currency (as defined below) for the period of the Index
Maturity designated in the Note and the applicable Pricing
Supplement, commencing on the second London Business Day
immediately following such LIBOR Interest Determination Date, to
prime banks in the London interbank market as of 11:00 A.M., London
time, on such LIBOR Interest Determination Date and in a principal
amount that is representative for a single transaction in such
Designated LIBOR Currency in such market at such time. If at least
two such quotations are provided, LIBOR determined on such LIBOR
Interest Determination Date will be the arithmetic mean of such
quotations. If fewer than two quotations are provided, LIBOR
determined on such LIBOR Interest Determination Date will be the
arithmetic mean of the rates quoted as of 11:00 A.M. in the
applicable Principal Financial Center (as defined below), on such
LIBOR Interest Determination Date by three major banks in such
Principal Financial Center selected by the Calculation Agent for
loans in the Designated LIBOR Currency to leading banks, having the
Index Maturity designated in the Note and the applicable Pricing
Supplement in a principal amount that is representative for a
single transaction in such Designated LIBOR Currency in such market
at such time; provided, however, that if the banks so selected by
the Calculation Agent are not quoting as mentioned in this
sentence, LIBOR determined on such LIBOR Interest Determination
Date will be LIBOR in effect on such LIBOR Interest Determination
Date.
</PAGE>
<PAGE>
"Designated LIBOR Currency" means, as with respect to any
LIBOR Note, the currency (including a composite currency), if any,
designated in the Note and the applicable Pricing Supplement as
the Designated LIBOR Currency. If no such currency is designated
in the Note and the applicable Pricing Supplement, the Designated
LIBOR Currency shall be U.S. dollars.
"Designated LIBOR Page" means either (a) the display on the
Reuters Monitor Money Rates Service for the purpose of displaying
the London interbank rates of major banks for the applicable
Designated LIBOR Currency (if "LIBOR Reuters" is designated in the
Note and the applicable Pricing Supplement), or (b) the display on
the Dow Jones Telerate Service for the purpose of display in the
London interbank rate of major banks for the applicable designated
LIBOR Currency (if "LIBOR Telerate" is designated in the Note and
the applicable Pricing Supplement). If neither LIBOR Reuters nor
LIBOR Telerate is specified in the Note and applicable Pricing
Supplement, LIBOR for the applicable Designated LIBOR Currency
will be determined as if LIBOR Telerate (and, if the U.S. dollars
is the Designated LIBOR Currency, page 3750) had been chosen.
"Principal Financial Center" means, as with respect to any
LIBOR Note, unless otherwise specified in the Note and the
applicable Pricing Supplement, the capital city of the country
that issues as its legal tender the Designated LIBOR Currency of
such Note, except that with respect to U.S. dollars and ECUs, the
Principal Financial Center shall be the City of New York and
Brussels, respectively.
Prime Rate Notes
Each Prime Rate Note will bear interest at the interest rate
(calculated with reference to the Prime Rate and the Spread and/or
Spread Multiplier, if any) specified in such Prime Rate Note and
in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing
Supplement, "Prime Rate" means, with respect to any Prime Interest
Determination Date, the rate set forth in H.15(519) for such date
opposite the caption "Bank Prime Loan," or, if not so published by
9:00 A.M., New York City time, on the Calculation Date pertaining
to such Prime Interest Determination Date, the Prime Rate will be
calculated by the Calculation Agent and will be the arithmetic mean
of the rates of interest publicly announced by each bank named on
the Reuters Screen NYMF Page as such bank's prime rate or base
lending rate as in effect for such Prime Interest Determination
Date as quoted on the Reuters Screen NYMF Page on such Prime
Interest Determination Date, or, if fewer than four such rates
appear on the Reuters Screen NYMF Page for such Prime Interest
Determination Date, the rate shall be the arithmetic mean of the
prime rates quoted on the basis of the actual number of days in
the year divided by 360 as of the close of business on such Prime
Interest Determination Date by at least two of the three major
money center banks in The City of New York selected by the
Calculation Agent from which quotations are requested. If fewer
than two quotations are quoted as aforesaid, the Prime Rate for
such Prime Interest Determination Date shall be calculated by the
Calculation Agent and shall be the arithmetic mean of the prime
rates quoted in The City of New York on such date by the
appropriate number of substitute banks or trust companies organized
and doing business under the laws of the United States, or any
state thereof, having total equity capital of at least U.S. $500
million and being subject to supervision or examination by a
Federal or state authority, selected by the Calculation Agent to
quote such rate or rates; provided, however, that if the Prime
Rate is not published in H.15(519) and the banks or trust companies
selected as aforesaid are not quoting as mentioned in this
sentence, the Prime Rate with respect to such Prime Interest
Determination Date will be the interest rate otherwise in effect
on such Prime Interest Determination Date. "Reuters Screen NYMF
Page" means the display designated as page "NYMF" on the Reuters
Monitor Money Rates Service (or such other page as may replace page
NYMF on that service for the purpose of displaying prime rates or
base lending rates of major United States banks).
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<PAGE>
Treasury Rate Notes
Each Treasury Rate Note will bear interest at the interest
rate (calculated with reference to the Treasury Rate and the
Spread and/or Spread Multiplier, if any) specified in such
Treasury Rate Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing
Supplement, the "Treasury Rate" for each such Interest Reset Date
will be determined as of the Treasury Interest Determination Date
and will be the rate applicable to the most recent auction of
direct obligations of the United States (herein called "Treasury
bills") having the Index Maturity specified on the Book-Entry Note
representing such Treasury Rate Note set forth in H.15(519) under
the heading "Treasury Bills-auction average (Investment)" or, if
not so made available by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such Treasury Interest
Determination Date, the auction average rate (expressed as a bond
equivalent, rounded upwards, if necessary, to the next higher one
hundred-thousandth of a percent on the basis of a year of 365 or
366 days, as applicable, and applied on a daily basis) as
otherwise announced by the United States Department of the
Treasury. In the event that the results of the auction of
Treasury bills having the specified Index Maturity are not made
available by the Federal Reserve or published or reported as
provided above by 3:00 P.M., New York City time, on such
Calculation Date or if no such auction is held in a particular
week, then the Treasury Rate shall be calculated by the
Calculation Agent and shall be a yield to maturity (expressed as a
bond equivalent, rounded upwards, if necessary, to the next higher
one
hundred-thousandth of a percent on the basis of a year of 365 or
366 days, as applicable, and applied on a daily basis) of the
arithmetic mean of the secondary market bid rates, as of
approximately 3:30 P.M., New York City time, on such Treasury
Interest Determination Date, of three leading primary United
States government securities dealers selected by the Calculation
Agent for the issue of Treasury bills with a remaining maturity
closest to the applicable Index Maturity; provided, however, that
if the dealers selected as aforesaid by the Calculation Agent are
not quoting as mentioned above, the Treasury Rate with respect to
such Treasury Interest Determination Date shall be the Treasury
Rate in effect on such date.
CMT Rate Notes
Each CMT Rate Note will bear interest at the interest rate
(calculated with reference to the CMT Rate and the Spread (if any)
and/or Spread Multiplier, if any) specified in such CMT Rate Note
and in the applicable Pricing Supplement.
Unless otherwise indicated in an applicable Pricing
Supplement, "CMT Rate" means, with respect to any CMT Interest
Determination Date, the rate displayed for the Index Maturity
designated in such CMT Rate Note on Telerate Page 7055 for "Daily
Treasury Constant Maturities and Money Markets/Federal Reserve
Board Release H.15 Monday's Approx. 3:45 P.M. EDT," for the
applicable CMT Interest Determination Date (or such other page as
may replace that page on such service for the purpose of
displaying rates or prices comparable to the CMT Rate, as
determined by the Calculation Agent). If such rate is not so
available by 3:00 P.M., New York City time, on the applicable
Calculation Date, then the CMT Rate for such CMT Interest
Determination Date shall be the bond equivalent yield to Maturity
of the arithmetic mean (as calculated by the Calculation Agent) of
the secondary market bid rates, as of 3:00 P.M., New York City
time, on the applicable CMT Interest Determination Date, reported,
according to their written records, by three leading primary United
States government securities dealers in The City of New York
(each, a "Reference Dealer") selected by the Calculation Agent,
for the most recently issued direct noncallable fixed rate
Treasury Notes with an original Maturity approximately equal to
the applicable Index Maturity; provided, however, that if the
Calculation Agent is not able to obtain such quotations from at
least three such Reference Dealers, the CMT Rate will remain the
CMT Rate then in effect on such CMT Interest Determination Date.
</PAGE>
<PAGE>
Indexed Notes
Notes also may be issued with the principal amount payable at
Maturity and/or interest to be paid thereon to be determined with
reference to the price or prices of specified commodities or
stocks, the exchange rate of one or more specified currencies or
currency units such as the ECU, relative to an indexed currency,
or such other price or exchange rate as may be specified in such
Indexed Note, as set forth in the applicable Pricing Supplement.
Holders of such Notes may receive a principal amount at Maturity
that is greater than or less than the face amount of the Notes
depending upon the relative value at Maturity of the specified
indexed item. Information as to the method for determining the
principal amount payable at Maturity, certain historical
information with respect to the specified indexed item and tax
considerations associated with investment in Indexed Notes will be
set forth in the related Pricing Supplement, as applicable.
An investment in 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 indices
entails significant risks that are not associated with similar
investments in a conventional fixed-rate debt security. If the
interest rate of such a 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 a Note is so indexed, the principal amount payable
at Maturity may be less than the original purchase price of such
Note if allowed pursuant to the terms of such Note, including the
possibility that no principal will be paid. The secondary market
for such 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 interest rate index,
including the volatility of the applicable currency, commodity or
interest rate index, the time remaining to the maturity of such
Notes, the amount outstanding of such Notes and market interest
rates. The value of the applicable currency, commodity or
interest rate index depends on a number of interrelated 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 Notes contains a multiple or leverage factor, the effect of
any change in the applicable currency, commodity or interest rate
index may be increased. The historical experience of the
relevant currencies, commodities or interest rate indices should
not be taken as an indication of future performance of such
currencies, commodities or interest rate indices during the term of
any Note. Accordingly, prospective investors should consult their
own financial and legal advisors as to the risks entailed by an
investment in such Notes and the suitability of such Notes in
light of their particular circumstances.
Form, Registration, Transfer and Exchange
Certificated Notes will be exchangeable for other
Certificated Notes of any authorized denominations and of a like
aggregate principal amount and tenor.
Certificated Notes may be presented to the Trustee for
registration of transferor exchange at Chemical Bank, Corporate
Trust Administration, 450 West 33rd Street, 15th Floor, New York,
New York 10001 (the "Corporate Trust Office"). Certificated
Notes may be presented for exchange and transfer in the manner, at
the places and subject to the restrictions set forth in the
Indenture and the Notes. No service charge will be made for
</PAGE>
<PAGE>
any transfer or exchange of Certificated Notes, but the Company
may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
Certificated Notes may be presented for exchange as provided
above, and may be presented for registration of transfer (duly
endorsed or accompanied by a duly executed written instrument of
transfer), at the office of any Note registrar designated by the
Company for such purpose with respect to the Notes, without
service charge and upon payment of any taxes and other governmental
charges as described in the Indenture. Such transfer or exchange
will be effected upon such Note registrar being satisfied with the
documents of title and identity of the person making the request.
The Company may at any time rescind the designation of any Note
registrar except that the Company will be required to maintain a
Note registrar in the City of New York for the Notes.
In the event of any redemption of Notes, the Company will not
be required to (i) register the transfer of or exchange the Notes
during a period of 15 days next preceding the mailing of the
relevant notice of redemption; or (ii) register the transfer or
exchange the Notes, or portion thereof, called for redemption,
except the unredeemed portion of any of the Notes being redeemed in
part.
The Trustee will initially act as Paying Agent (as defined
below) pursuant to the Indenture. The Company may at any time
designate additional Paying Agents or rescind the designation of
any Paying Agent except that the Company will be required to
maintain a Paying Agent in the City of New York.
Events of Default
An Event of Default is defined in the Indenture as being: (a)
default for 30 days in payment of any interest on the Notes; (b)
default in payment of principal or premium, if any, on the Notes
when due either at maturity, upon redemption, by declaration or
otherwise; (c) default in the making or satisfaction of any
sinking fund installment or analogous obligation, if any is
required; (d) default, for 90 days after notice to the Company, in
the performance of any other covenant or warranty contained in the
Notes or in the Indenture; (e) default resulting in acceleration
of maturity in connection with any other series of Debt Securities
under the Indenture or other indebtedness of the Company, the
aggregate principal amount of which exceeds $5,000,000, not
annulled within 30 days after notice to the Company from the
Trustee or to the Company and to the Trustee from the Holders of
at least 25% in principal amount of Debt Securities of such
series; (f) certain events of bankruptcy, insolvency or
reorganization; or (g) any other event of default set forth in any
applicable Pricing Supplement.
If an Event of Default with respect to all or any of the
Notes shall occur, the Holders of at least 25% in principal amount
of the Notes outstanding may declare the principal amount (or, if
the Notes are Original Issue Discount Notes or Indexed Notes, such
portion of the principal amount as may be specified in the terms
of such Notes) of all of the Notes to be, and upon such
declaration such principal (or, in the case of Original Issue
Discount Notes or Indexed Notes, such specified amount) shall
become, immediately due and payable.
The Holders of a majority in principal amount of outstanding
Notes affected thereby, by notice to the Company and the Trustee,
may rescind and annul such declaration and its consequences if (i)
the Company shall have paid to the Trustee a sum sufficient to pay
the aggregate amount of overdue interest on all of the Notes and
the aggregate principal amount of, and premium, if any, on any
Notes which shall have become due and payable otherwise than as a
result of any such declaration of default, together with accrued
interest thereon, and (ii) all Events of Default have been cured
or waived as provided in the Indenture. The Holders of not less
than a majority in principal amount of outstanding Notes affected
thereby, on behalf of the Holders of all of the outstanding Notes,
may waive any past default under the Notes and its consequences.
The Trustee will, within 90 days after the occurrence of a
default in respect of any series of Debt Securities known to it,
give to Holders of Debt Securities of such series notice of such
uncured default (as defined, not </PAGE>
<PAGE>
including any grace period) with respect to the Debt Securities of
such series; but, except in the case of a default in the payment
of principal of, premium, if any, or interest on, or any sinking
fund installment or analogous obligation with respect to, any of
the Debt Securities of such series, the Trustee shall be protected
in withholding such notice if it in good faith determines that the
withholding of such notice is in the interest of such Holders of
Debt Securities of such series.
The Trustee is entitled, subject to the duty of the Trustee
during default in respect of any series of Debt Securities to act
with the required standard of care, to be indemnified by the
Holders of Debt Securities of such series. Subject to such right
of indemnification, the Holders of a majority in principal amount
of the Debt Securities of any series may direct the time, method,
and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred upon the
Trustee with respect to the Debt Securities of such series.
Original Issue Discount Notes
The Company may from time to time offer Original Issue
Discount Notes. The applicable Pricing Supplement to certain
Original Issue Discount Notes may provide that the Holders of such
Notes will not receive periodic payments of interest. For the
purpose of determining whether Holders of the requisite principal
amount of Notes outstanding under the Indenture have made a demand
or given a notice or waiver or taken any other action, the
outstanding principal amount of Original Issue Discount Notes
shall be deemed to be the amount of the principal that would be
due and payable upon declaration of acceleration of the Stated
Maturity thereof as of the date of such determination.
Notwithstanding anything in this Prospectus to the contrary,
unless otherwise specified in the applicable Pricing Supplement,
if a Note is an Original Issue Discount Note, the amount payable
on such Note in the event of Maturity prior to the Stated Maturity
shall be the Amortized Face Amount of such Note as of such
Maturity.
Interest Rate Reset
If the Company has the option with respect to any Note to
reset the interest rate, in the case of a Fixed Rate Note, or to
reset the Spread and/or Spread Multiplier, in the case of a
Floating Rate Note, the Pricing Supplement relating to such Note
will indicate such option, and, if so, (i) the date or dates on
which such interest rate or such Spread and/or Spread Multiplier,
as the case may be, may be reset (each an "Optional Reset Date")
and (ii) the basis or formula, if any, for such resetting.
The Company may exercise such option with respect to a Note
by notifying the Paying Agent of such exercise at least 45 but not
more than 60 days prior to an Optional Reset Date for such Date
for such Note. Not later than 40 days prior to such Optional
Reset Date, the Paying Agent will mail to the Holder of such Note
a notice (the "Reset Notice"), first class, postage prepaid,
setting forth (i) the election of the Company to reset the
interest rate, in the case of a Fixed Rate Note, or the Spread
and/or Spread Multiplier, in the case of a Floating Rate Note,
(ii) such new interest rate or such new Spread and/or Spread
Multiplier, as the case may be, and (iii) the provisions, if any,
for redemption during the period from such Optional Reset Date to
the next Optional Reset Date or, if there is no such next Optional
Reset Date, to the Stated Maturity Date of such Note (each period
a "Subsequent Interest Period"), including the date or dates on
which or the period or periods during which and the price or
prices at which such redemption may occur during such Subsequent
Interest Period.
Notwithstanding the foregoing, not later than 20 days prior
to an Optional Reset Date for a Note, the Company may, at its
option, revoke the interest rate, in the case of a Fixed Rate
Note, or the Spread and/or Spread Multiplier, in the case of a
Floating Rate Note, in either case provided for in the Reset
Notice and establish a higher interest rate, in the case of a Fixed
Rate Note, or a higher Spread and/or Spread Multiplier, in the case
of a Floating Rate Note, for the Subsequent Interest Period
commencing on such Optional Reset Date by mailing or causing the
</PAGE>
<PAGE>
Paying Agent to mail notice of such higher interest rate or higher
Spread and/or Spread Multiplier, as the case may be, first class,
postage prepaid, to the Holder of such Note. Such notice shall be
irrevocable. All Notes with respect to which the interest rate or
Spread and/or Spread Multiplier is reset on an Optional Reset Date
will bear such higher interest rate, in the case of a Fixed Rate
Note, or higher Spread and/or Spread Multiplier, in the case of a
Floating Rate Note.
If the Company elects to reset the interest rate or the
Spread and/or Spread Multiplier of a Note, the Holder of such Note
will have the option to elect repayment of such Note by the
Company on any Optional Reset Date at a price equal to the
principal amount thereof plus any accrued interest to such
Optional Reset Date. In order for a Note to be so repaid on an
Optional Reset Date on which the interest rate is reset, the
Holder thereof must follow the procedures set forth below under
"Repayment at the Noteholder's Option" for optional repayment,
except that the period for delivery of such Note of notification
to the Paying Agent shall be at least 25 but not more than 35 days
prior to such Optional Reset Date and except that a Holder who has
tendered a Note for repayment pursuant to a Reset Notice may, by
written notice to the Paying Agent, revoke any such tender for
repayment until the close of business on the tenth day prior to
such Optional Reset Date.
Extension of Maturity
An applicable supplement to this Prospectus Supplement or the
Book-Entry Note representing a Note (other than an Amortizing Note
(as defined below)) will indicate whether the Company has the
option to extend the maturity of such Note for one or more periods
up to but not beyond a date set forth in such supplement to this
Prospectus Supplement or the Book-Entry Note representing such
Note. If the Company has such option with respect to any such
Notes, the procedures relating thereto will be as set forth in the
applicable supplement to this Prospectus Supplement or the Book-
Entry Note representing such Note.
Renewable Notes
An applicable supplement to this Prospectus Supplement or the
Book-Entry Note representing a Note (other than an Amortizing
Note) will indicate whether such Note will mature unless the term
of all or any portion of any such Note is renewed in accordance
with the procedures described in such supplement to this
Prospectus Supplement or in the Book-Entry Note representing such
Note.
Combination of Provisions
If so specified in the applicable Pricing Supplement, any
Note may be subject to all of the provisions, or any combination
of the provisions, described above under "Interest Rate Reset,"
"Extension of Maturity" and "Renewable Notes."
Optional Redemption
Unless otherwise indicated in an applicable Pricing
Supplement or on the Book-Entry Note representing such Note, a
Note may not be redeemed by the Company prior to maturity. If so
specified in an applicable Pricing Supplement or on the Book-Entry
Note representing such Note, Notes will be redeemable prior to
maturity at the option of the Company on the terms specified
therein. Unless otherwise indicated in an applicable Pricing
Supplement or on the Book-Entry Note representing such Note,
notice of redemption will be provided by mailing a notice of such
redemption to each holder by first class mail, postage prepaid, at
least 30 days and not more than 60 days prior to the date fixed
for redemption to the respective address of each holder as that
address appears upon the books maintained by the Paying Agent.
</PAGE>
<PAGE>
Repayment at the Noteholder's Option
If so specified in an applicable Pricing Supplement or on the
Book-Entry Note representing such Note, a Note will be repayable
at the option of the holder on a date or dates specified prior to
its maturity date and, unless otherwise specified in such Pricing
Supplement or such Book-Entry Note representing such Note, at a
price equal to 100% of the principal amount thereof, together with
accrued interest to the date of repayment.
Repurchase
The Company may at any time purchase Notes at any price or
prices in the open market or otherwise. Notes so purchased by the
Company may be held or resold or, at the discretion of the
Company, may be surrendered to the Trustee for cancellation. If
an issue of Notes and any applicable Pricing Supplement provide
for mandatory sinking fund payments with respect to such Notes, the
Indenture provides that in lieu of making all or any part of any
mandatory sinking fund payment in cash, the Company may deliver to
the Trustee Notes previously purchased or otherwise acquired by
the Company (to the extent not previously credited).
Amortizing Notes
The Company may from time to time offer Notes for which
payments of principal and interest are made in installments over
the life of the Note ("Amortizing Notes"). Interest on each
Amortizing Note will be computed as set forth in a Pricing
Supplement or in the Book-Entry Note representing such Amortizing
Note. Unless otherwise provided in such Pricing Supplement or in
such Book-Entry Note, payments with respect to Amortizing Notes
will be applied first to interest due and payable thereon and then
to the reduction of the unpaid principal amount thereof. A table
setting forth repayment information with respect to each
Amortizing Note will be provided to the original purchaser of such
Note and will be available upon request to the subsequent holders
thereof.
Other Provisions
Any provisions with respect to the determination of an
interest rate basis, the specifications of interest rate basis,
calculation of the interest rate applicable to, or the principal
payable at Maturity on, any Note, its Interest Payment Dates or
any other matter relating thereto may be modified by the terms as
specified under "Other Provisions" on the face of such Note, or in
an addendum relating thereto if so specified on the face thereof,
and in the applicable Pricing Supplement.
Book-Entry System
The Depositary will act as securities depositary for the
Book-Entry Notes. The Book-Entry Notes will be issued as fully-
registered securities registered in the name of Cede & Co. (the
Depositary's partnership nominee). One fully-registered Global
Security will be issued for each issue of the Notes, each in the
aggregate principal amount of such issue, and will be deposited
with the Depositary. If, however, the aggregate principal amount
of any issue exceeds $150 million, one Global Security will be
issued with respect to each $150 million of principal amount and
an additional Global Security will be issued with respect to any
remaining principal amount of such issue.
The Depositary 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 and Exchange Act of 1934, as amended. The Depositary
holds securities that its participants ("Participants") deposit
with the Depositary. The Depositary also facilitates the
settlement among Participants of securities transactions, such as
transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby
eliminating the need for physical movement of securities
certificates. Direct Participants ("Direct Participants") include
securities brokers and dealers, banks, trust companies, clearing
corporations, and certain other organizations.
</PAGE>
<PAGE>
The Depositary is owned by a number of its Direct Participants and
by the New York Stock Exchange, Inc., the American Stock Exchange,
Inc., and the National Association of Securities Dealers, Inc.
Access to the Depositary's system is also available to others such
as securities brokers and dealers, banks and trust companies that
clear through or maintain a custodial relationship with a Direct
Participant, either directly or indirectly ("Indirect
Participants"). The rules applicable to the Depositary and its
Participants are on file with the Securities and Exchange
Commission.
Purchases of Book-Entry Notes under the Depositary's system
must be made by or through Direct Participants, which will receive
a credit for the Book-Entry Notes on the Depositary's records.
The ownership interest of each actual purchaser of each Book-Entry
Note ("Beneficial Owner") is in turn to be recorded on the Direct
and Indirect Participants' records. Beneficial Owners will not
receive written confirmation from the Depositary of their purchase,
but Beneficial Owners are expected to receive written confirmations
providing details of the transactions, as well as periodic
statements of their holdings, from the Direct or Indirect
Participant through which the Beneficial Owner entered into the
transaction. Transfers of ownership interests in the Book-Entry
Notes are to be accomplished by entries made on the books of
Participants acting on behalf of the Beneficial Owners. Beneficial
Owners will not receive certificates representing their ownership
interests in Book-Entry Notes, except in the event that use of the
book entry system for one or more Book-Entry Notes is
discontinued.
To facilitate subsequent transfers, all Global Securities
deposited by Participants with the Depositary are registered in
the name of the Depositary's partnership nominee, Cede & Co. The
deposit of Global Securities with the Depositary and their
registration in the name of Cede & Co. effect no change in
beneficial ownership. The Depositary has no knowledge of the
actual Beneficial Owners of the Book-Entry Notes; the Depositary's
records reflect only the identity of the Direct Participants to
whose accounts such Book-Entry Notes are credited, which may or
may not be the Beneficial Owners. The Participants will remain
responsible for keeping account of their holdings on behalf of
their customers.
Conveyance of notices and other communications by the
Depositary to Direct Participants, by Direct Participants to
Indirect Participants, and by Direct Participants and Indirect
Participants to Beneficial Owners will be governed by arrangements
among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than
all of a Book-Entry Note is being redeemed, the Depositary's
current practice is to determine by lot the amount of the interest
of each Direct Participant in such issue to be redeemed.
Neither the Depositary nor Cede & Co. will consent or vote
with respect to Book-Entry Notes. Under its usual procedures, the
Depositary will mail an "Omnibus Proxy" to the Company as soon as
possible after the record date. The Omnibus Proxy assigns Cede &
Co.'s consenting or voting rights to those Direct Participants to
whose accounts the Book-Entry Notes are credited on the record
date (identified in a listing attached to the Omnibus Proxy).
Principal and interest payments on the Book-Entry Notes will
be made to the Depositary. The Depositary's practice is to credit
Direct Participants' accounts on the payable date in accordance
with their respective holdings shown on the Depositary's records
unless the Depositary has reason to believe that it will not
receive payment on the payable date. Payments by Participants to
Beneficial Owners will be governed by standing instructions and
customary practices, as in the case with securities held for the
accounts of customers in bearer form or registered "street name,"
and will be the responsibility of such Participant and not of the
Depositary, or the Company, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of
principal and interest to the Depositary is the responsibility of
the Company, disbursement of such payments to Direct Participants
shall be responsibility of the Depositary, and disbursement of
such payments to the Beneficial Owners shall be the responsibility
of Direct and Indirect Participants.
</PAGE>
<PAGE>
A Beneficial Owner shall give notice to elect to have its
Book-Entry Notes purchased or tendered, through its Participant,
to the Paying Agent, and shall effect delivery of such Book-Entry
Notes by causing the Direct Participant to transfer the
Participant's interest in the Book-Entry Notes, on the
Depositary's records, to the Paying Agent. The requirement for
physical delivery of Book-Entry Notes in connection with a demand
for purchase or a mandatory purchase will be deemed satisfied when
the ownership rights in the Book-Entry Notes are transferred by a
Direct Participant on the Depositary's records.
The Depositary may discontinue providing its services as
securities depositary with respect to the Book-Entry Notes at any
time by giving reasonable notice to the Company or the Agents.
Under such circumstances, in the event that a successor securities
depositary is not obtained, Certificated Notes will be printed and
delivered in exchange for the Book-Entry Notes represented by the
Global Securities held by the Depositary.
The Company may decide to discontinue use of the system of
book-entry transfers through the Depositary (or a successor
securities depositary). In that event, Certificated Notes will be
printed and delivered in exchange for the Book-Entry Notes
represented by the Global Securities held by the Depositary.
The information in this section concerning the Depositary and
the Depositary's book-entry system has been obtained from sources
that the Company believes to be reliable, but the Company takes no
responsibility for the accuracy thereof.
Neither the Company, the Trustee, any Paying Agent 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.
IMPORTANT CURRENCY INFORMATION
Purchasers are required to pay for each Note in the Specified
Currency for such Note. Currently, there are limited facilities
in the United States for conversion of U.S. dollars into foreign
currencies and vice versa, and banks generally do not offer non-
U.S. dollar checking or savings account facilities in the United
States. However, if requested by a prospective purchaser of Notes
denominated in a Specified Currency other than U.S. dollars, the
Agent soliciting the offer to purchase will arrange for the
conversion of U.S. dollars into such Specified Currency to enable
the Purchaser to pay for such Notes. Such requests must be made
on or before the fifth Business Day preceding the date of delivery
of the Notes, or by such other date as determined by the Agent
which presents the offer to the Company. Each such conversion
will be made by the relevant Agent on such terms and subject to
such conditions, limitations and charges as such Agent may from
time to time establish in accordance with its regular foreign
exchange practice. All costs of exchange will be borne by the
relevant purchaser of the Notes.
CURRENCY RISKS
Exchange Rates and Exchange Controls
An investment in Notes that are denominated in, or the
payment of which is determined with reference to, a Specified
Currency other than U.S. dollars entails significant risks that
are not associated with a similar investment in a security
denominated in U.S. dollars. Similarly, an investment in an
Indexed Note entails significant risks that are not associated
with an investment in non-Indexed Notes. Such risks include,
without limitation, the possibility of significant changes in
rates of exchange between U.S. dollars and the Specified Currency
(or, in the case of each Indexed Note, the rate of exchange between
the Denominated Currency and the Indexed Currency for such Indexed
Note), including changes resulting from official redenomination
with respect to such Specified Currency (or, in the case of each
Indexed Note, with respect to the Denominated Currency or the
Indexed Currency therefor) and the possibility of the imposition
or modification of foreign exchange controls with respect to the
Specified Currency.
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Such risks generally depend on factors over which the Company has
no control, such as economic and political events and the supply
of and demand for the relevant currencies. In recent years, rates
of exchange between Specified 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 Note.
Depreciation of a foreign currency or units of a foreign composite
currency in which a Note is denominated against the U.S. dollar
would result in a decrease in the effective yield of such Note
below its coupon rate, and in certain circumstances could result in
a loss to the investor on a U.S. dollar basis. Similarly,
depreciation of the Denominated Currency with respect to an
Indexed Note against the applicable Indexed Currency would result
in the principal amount payable with respect to such Indexed Note
at the Stated Maturity being less than the Face Amount of such
Indexed Note which, in turn, would decrease the effective yield of
such Indexed Note below its applicable interest rate and could
also result in a loss to the investor.
The Notes will provide that, in the event of an official
redenomination of a foreign currency (including, without
limitation, an official redenomination of a foreign currency that
is a composite currency) the obligations of the Company with
respect to payments on Notes denominated in such currency shall,
in all cases, be deemed immediately following such redenomination
to provide for the payment of that amount of redenomination
currency representing the amount of such obligations immediately
before such redenomination. The Notes do not provide for any
adjustment to any amount payable under the Notes as a result of
(a) any change in the value of a foreign currency relative to any
other currency due solely to fluctuations in exchange rates or (b)
any redenomination of any component currency of any composite
currency (unless such composite currency is itself officially
redenominated).
Governments have from time to time imposed, and may in the
future impose, exchange controls that could affect exchange rates
as well as the availability of a foreign currency for making
payments with respect to a Note denominated in such currency.
There can be no assurances that exchange controls will not
restrict or prohibit payments of principal or interest in any
currency or currency unit. Even if there are not actual exchange
controls, it is possible that, with respect to any particular
Note, the foreign currency for such Note will not be available to
the Company to make payments of interest and principal then due
because of circumstances beyond the control of the Company. In
that event, the Company will make such payment in the manner set
forth below under "Payment Currency."
THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS DO
NOT, AND THE APPLICABLE PRICING SUPPLEMENT WILL NOT, DESCRIBE ALL
THE RISKS OF AN INVESTMENT IN NOTES DENOMINATED IN, OR THE PAYMENT
OF WHICH IS RELATED TO THE VALUE OF, A CURRENCY (INCLUDING ANY
COMPOSITE CURRENCY) OTHER THAN U.S. DOLLARS, AND THE COMPANY
DISCLAIMS ANY RESPONSIBILITY TO ADVISE PROSPECTIVE PURCHASERS OF
SUCH RISKS AS THEY EXIST AT THE DATE OF THIS PROSPECTUS SUPPLEMENT
OR THE DATE OF THE APPLICABLE PRICING SUPPLEMENT OR AS SUCH RISKS
MAY CHANGE FROM TIME TO TIME. PROSPECTIVE PURCHASERS SHOULD
CONSULT THEIR OWN FINANCIAL AND LEGAL ADVISORS AS TO THE RISKS
ENTAILED IN AN INVESTMENT IN SUCH NOTES. SUCH AN INVESTMENT IS
NOT AN APPROPRIATE INVESTMENT FOR PERSONS WHO ARE UNSOPHISTICATED
WITH RESPECT TO FOREIGN CURRENCY TRANSACTIONS.
The information set forth in this Prospectus Supplement is
directed to prospective purchasers of Notes who are United States
Holders, as that term is defined herein, 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 or holding of, or
receipt of payments of principal, premium or interest in respect
of, Notes. Such persons should consult their own counsel with
regard to such matters. </PAGE>
<PAGE>
The Pricing Supplement relating to Notes denominated in a
Specified Currency other than U.S. dollars or relating to Indexed
Notes will contain information concerning historical exchange
rates for such Specified Currency or Denominated Currency against
the U.S. dollar or other relevant currency (including, in the case
of Indexed Notes, the applicable Indexed Currency), a description
of such currency or currencies and any exchange controls affecting
such currency or currencies. Information concerning exchange rates
is furnished as a matter of information only and should not be
regarded as indicative of the range of or trend in fluctuations in
currency exchange rates that may occur in the future.
Payment Currency
Except as set forth in the applicable Pricing Supplement, if
payment on a Note is required to be made in a Specified Currency
other than U.S. dollars and such currency is unavailable due to
the imposition of exchange controls or other circumstances beyond
the Company's control or is no longer used by the government of
the country issuing such currency or for the settlement of
transactions by public institutions of or within the international
banking community, then any payment with respect to such Note
shall be made in U.S. dollars until such currency is again
available or so used. The amount so payable on any date in such
Specified Currency will be converted into U.S. dollars on the
basis of the Market Exchange Rate on the last date such Specified
Currency was available. See "Description of Notes - Payment of
Principal and Interest."
If the official unit of any component currency is altered by
way of combination or subdivision, the number of units of that
currency as a component shall be divided or multiplied in the same
proportion. If two or more component currencies are consolidated
into a single currency, the amounts of those currencies as
components shall be replaced by an amount in such single currency.
If any component currency is divided into two or more currencies,
the amount of the original component currency as a component shall
be replaced by the amounts of such two or more currencies having
an aggregate value on the date of division equal to the amount of
the former component currency immediately before such division.
Foreign Currency Judgments
The Notes will be governed by and construed in accordance
with the laws of the State of New York applicable to instruments
made to be performed wholly within such jurisdiction. Courts in
the United States customarily have not rendered judgments for
money damages denominated in any currency other than U.S. dollars.
If a Note is denominated in a Specified Currency other than U.S.
dollars, any judgment under New York law will be rendered in the
foreign currency of the underlying obligation and converted into
U.S. dollars at a rate of exchange prevailing on the date of entry
of the judgment or decree.
Information Limited to United States Holders
The information set forth in this Prospectus Supplement
(except for certain tax information) is directed to prospective
purchasers of Notes who are United States Holders (as defined
below), 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 or holding of, or receipt of payments of principal,
premium or interest in respect of, Notes. Such persons should
consult their own counsel with regard to such matters.
CERTAIN UNITED STATES FEDERAL
INCOME TAX CONSEQUENCES
The following summary describes certain United States Federal
income tax consequences of the ownership of Notes as of the date
hereof. Except where noted, it deals only with Notes held as
capital assets and does not deal with special situations such as
those of dealers in securities, financial institutions, life
insurance companies or United States Holders whose "functional
currency" is not the U.S. dollar. In addition, this summary does
not address the
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Federal income tax consequences of owning Indexed Notes or Notes
where the Company has the option to reset interest rates, the
Spread or the Spread Multiplier. Such consequences will be
addressed in an applicable Pricing Supplement. Furthermore, the
discussion below is based upon the provisions of the Internal
Revenue Code of 1986, as amended (the "Code") and regulations,
rulings and judicial decisions thereunder as of the date hereof,
and such authorities may be repealed, revoked or modified so as to
result in Federal income tax consequences different from those
discussed below. Persons considering the purchase, ownership or
disposition of Notes should consult their own tax advisors
concerning the Federal income tax consequences in light of their
particular situations as well as any consequences arising under the
laws of any other taxing jurisdiction.
United States Holders
As used herein, a "United States Holder" of a Note means a
holder that is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in
or under the laws of the United States or any political
subdivision thereof, or an estate or trust the income of which is
subject to United States Federal income taxation regardless of its
source. A "Non-United States Holder" is a holder that is not a
United States Holder.
Payments of Interest
Except as set forth below, payments of "qualified stated
interest" on a Note (as defined below) will generally be taxable
to a United States Holder as ordinary income at the time it is
paid or accrued in accordance with the United States Holder's
method of accounting for tax purposes.
Original Issue Discount
A Note may be issued for an amount that is less than its
stated redemption price at maturity (the sum of all payments to be
made on the Note other than "qualified stated interest"). The
difference between the stated redemption price at maturity of the
Note and its "issue price", if such difference is at least 0.25
percent of the stated redemption price at maturity multiplied by
the number of complete years to maturity, will be "original issue
discount" ("OID"). (Notes issued with OID shall be referred to as
"Original Issue Discount Notes.") The "issue price" of each Note
in a particular offering will be the first price at which a
substantial amount of that particular offering is sold.
"Qualified stated interest" is stated interest that is
unconditionally payable in cash or in property (other than debt
instruments of the issuer) at least annually and with respect to a
Fixed Rate Note, at a single fixed rate, or with respect to a
Floating Rate Note, at certain objective or qualified rates or
certain combinations of such rates. Interest is payable at a
single fixed rate only if the rate appropriately takes into
account the length of the interval between payments.
Notes that may be redeemed prior to their Stated Maturity at
the option of the issuer, or that may be prepaid prior to their
Stated Maturity at the option of the holder, shall be treated from
the time of issuance as having a maturity date for Federal income
tax purposes on such redemption or prepayment date if (i) in the
case of redemption at the option of the issuer, such redemption
would result in a lower yield to maturity or (ii) in the case of a
redemption at the option of the holder, such prepayment would
result in a higher yield to maturity. Notice will be given in the
applicable Pricing Supplement when the Company determines that a
particular Note will be deemed to have a maturity date for Federal
income tax purposes prior to its Stated Maturity.
In certain cases, Notes that bear stated interest and are
issued at par may be deemed to bear OID for Federal income tax
purposes, with the result that the inclusion of interest into
income for Federal income tax purposes may vary from the actual
cash payments of interest made on such Notes, generally
accelerating income for cash method taxpayers. A Note may be an
Original Issue Discount Note where (a) a Floating Rate Note
provides 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 more, in the case
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<PAGE>
of a minimum rate, than the expected yield determined without the
maximum or minimum rate as the case may be; (b) a Floating Date
Note provides for significant front-loading or back-loading of
interest; or (c) a Note bears interest at a floating rate in
combination with one or more floating or fixed rates. Notice will
be given in the applicable Pricing Supplement when the Company
determines that a particular Note will be an Original Issue
Discount Note. Unless an applicable Pricing Supplement so
indicates, Floating Rate Notes will not be Original Issue Discount
Notes.
United States Holders of Original Issue Discount Notes with
a maturity upon issuance of more than one year must, in general,
include OID in income in advance of the receipt of some or all of
the related cash payments. The amount of OID includible in income
by the initial United States Holder of an Original Issue Discount
Note is the sum of the "daily portions" of OID with respect to the
Note for each day during the taxable year or portion of the taxable
year in which such United States Holder held such Note ("accrued
OID"). The daily portion is determined by allocating to each day
in an "accrual period" a pro rata portion of the OID allocable to
that accrual period. The "accrual period" for an Original Issue
Discount Note may be of any length and may vary in length over the
term of a Note, provided that each accrual period is no longer than
one year and each scheduled payment of principal or interest occurs
on the first day or the final day of an accrual period. In
general, the computation of OID is simpler if accrual periods
correspond to the intervals between payment dates provided by the
terms of a Note. The Company will specify the accrual period it
intends to use in the applicable Pricing Supplement although the
holder is not bound by the Company's choice of accrual period. The
amount of OID allocable to any accrual period is an amount equal
to the excess, if any, of (a) the product of the Note's adjusted
issue price at the beginning of such accrual period and its yield
to maturity (determined on the basis of compounding at the close
of each accrual period and properly adjusted for the length of the
accrual period) over (b) the sum of any qualified stated interest
allocable to the accrual period. In determining OID allocable to
an accrual period, if an interval between payments of qualified
stated interest contains more than one accrual period the amount
of qualified stated interest payable at the end of the interval is
allocated on a pro rata basis to each accrual period in the
interval and the adjusted issue price must be increased by the
amount of any qualified stated interest that has accrued prior to
the beginning of the accrual period but is not payable until a
later date. OID allocable to a final accrual period is the
difference between the amount payable at maturity (other than a
payment of qualified stated interest) and the adjusted issue price
at the beginning of the final accrual period. If all accrual
periods are of equal length, except for either an initial shorter
accrual period or an initial and a final shorter accrual period,
the amount of OID allocable to the initial accrual period may be
computed under any reasonable method. The "adjusted issue price"
of a Note at the beginning of any accrual period is equal to its
issue price increased by the accrued OID for each prior accrual
period and reduced by any prior payments with respect to such Note
that was not qualified stated interest. Under these rules, a
United States Holder will have to include in income increasingly
greater amounts of OID in successive accrual periods. The Company
is required to report the amount of OID accrued on Notes held of
record by persons other than corporations and other exempt holders.
Short-Term Note
In the case of Notes having a term of one year or less
("Short-Term Notes"), all payments (including all stated interest)
will be included in the stated redemption price at maturity and,
thus, United States Holders will generally be taxable on the
discount in lieu of stated interest. The discount will be equal
to the excess of the stated redemption price at maturity over the
issue price of a Short-Term Note, unless the United States Holder
elects to compute this discount using tax basis instead of issue
price. In general, an individual and certain other cash method
United States Holders of a Short-Term Note are not required to
include accrued discount in their income currently unless they
elect to do so. United States Holders who report income for
Federal income tax purposes on the accrual method and certain other
United States Holders are required to accrue discount on each
Short-Term Note (as ordinary income) on a straight-line basis,
unless an election is made to accrue the discount according to a
constant yield method based on daily compounding. In the case of
a United States Holder who is not required, and does not elect, to
include discount in income currently, any gain realized on the
sale, exchange or retirement of the Short-Term Note will be
ordinary income to the extent of the discount accrued through the
date of sale, exchange or
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retirement. In addition, Noteholders who do not elect to
currently include accrued discount in income may be required to
defer deductions for a portion of the United States Holder's
interest expenses with respect to any indebtedness incurred or
continued to purchase or carry such Notes.
Market Discount
If a United States Holder purchases a Note other than a
Short-Term Note for an amount that is less than its "revised issue
price" (defined as the sum of the issue price of the Note and the
aggregate amount of the OID includible, if any, without regard to
the rules for acquisition premium discussed below, in the gross
income of all previous holders of the Note), the amount of the
difference will be treated as "market discount" for Federal income
tax purposes, unless such difference is less than a specified de
minimis amount. Under the market discount rules, a United States
Holder will be required to treat any principal payment on, or any
gain on the sale, exchange, retirement or other disposition of a
Note as ordinary income to the extent of the market discount which
has not previously been included in income and is treated as
having accrued on such Note at the time of such payment or
disposition. In addition, the United States Holder may be
required to defer, until the maturity of the Note or its earlier
disposition in a taxable transaction, the deduction of all or a
portion of the interest expense on any indebtedness incurred or
continued to purchase or carry such Note.
Any market discount will be considered to accrue ratably
during the period from the date of acquisition to the maturity
date of the Note, unless the United States Holder elects to accrue
on a constant yield method. A United States Holder of a Note may
elect to include market discount in income currently as it accrues
(on either a ratable or constant yield basis), in which case the
rule described above regarding deferral of interest deductions will
not apply. This election to include market discount in income
currently, once made, applies to all market discount obligations
acquired on or after the first taxable year to which the election
applies, and may not be revoked without the consent of the
Internal Revenue Service (the "IRS").
Acquisition Premium; Amortizable Bond Premium
A United States Holder who purchases a Note for an amount
that is greater than its adjusted issue price but equal to or less
than the sum of all amounts payable on the Note after the purchase
date other than payments of qualified stated interest will be
considered to have purchased such Note at an "acquisition
premium." Under the acquisition premium rules the amount of OID
which such holder must include in its gross income with respect to
such Note for any taxable year will be reduced by the portion of
such acquisition premium properly allocable to such year.
A United States Holder who purchases a Note for an amount in
excess of the sum of all amounts payable on the Note after the
purchase date other than qualified stated interest will be
considered to have purchased the Note at a "premium" and will not
be required to include any OID in income. A United States Holder
generally may elect to amortize the premium over the remaining
term of the Note on a constant yield method. The amount amortized
in any year will be treated as a reduction of the United States
Holder's interest income from the Note. Bond premium on a Note
held by a United States Holder that does not make such an election
will decrease the gain or increase the loss otherwise recognized
on disposition of the Note. The election to amortize premium on a
constant yield method once made applies to all debt obligations
held or subsequently acquired by the electing 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.
Election to Treat All Interest as OID
A United States Holder may elect to treat all interest on any
Note as OID and calculate the amount includible in gross income
under the consent yield method described above. For the purposes
of this election, interest includes stated interest, acquisition
discount, OID, de minimis OID, market discount, de minimis market
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discount and unstated interest, as adjusted by any amortizable
bond premium or acquisition premium. If a United States Holder
makes this election for a Note with market discount or amortizable
bond premium, the election is treated as an election under the
market discount or amortizable bond premium provisions, described
above, and the electing United States Holder will be required to
amortize bond premium or include market discount in income
currently for all of the holder's other debt instruments with
market discount or amortizable bond premium. The election is to
be made for a taxable year in which the United States Holders
acquired the Note, and may not be revoked without the consent of
the IRS. United States Holders should consult with their own tax
advisors about this election.
Sale, Exchange and Retirement of Notes
A United States Holder's tax basis in a Note will, in
general, be the United States Holder's cost thereof, increased by
OID, market discount or any discount with respect to a Short-Term
Original Issue Discount Note, previously included in income by the
United States Holder and reduced by any amortized premium and any
cash payments on the Note other than qualified stated interest.
Upon the sale, exchange or retirement of a Note, a United States
Holder will recognize gain or loss equal to the difference between
the amount realized upon the sale, exchange or retirement and the
adjusted tax basis of the Note. Except as described above with
respect to certain Short-Term Original Issue Discount Notes or
with respect to market discount, such gain or loss will be capital
gain or loss and will be long-term capital gain or loss if at the
time of sale, exchange or retirement the Note has been held for
more than one year. Under current law, net capital gains of
individuals are, under certain circumstances, taxed at lower rates
than items of ordinary income. The deductibility of capital
losses is subject to limitations.
Extendible Notes
If so specified in an applicable supplement relating to a
Note, the Company may have the option to extend the maturity of a
Note. See "Description of Notes - Extension of Maturity." The
treatment of a United States Holder of Notes with respect to which
such an option has been exercised who does not elect to have the
Company repay such Notes on the applicable original Stated
Maturity is unclear and will depend, in part, on the terms
established for such Notes by the Company pursuant to the exercise
of such option (the "Revised Terms"). Such holder may be treated
for Federal income tax purposes as having exchanged such Notes
(the "Old Notes") for new Notes with revised Terms (the "New
Notes"). If the holder is treated as having exchanged Old Notes
for New Notes, such exchange may be treated as either a taxable
exchange or a tax-free recapitalization.
If the exercise of the option by the Company is not treated
as an exchange of Old Notes for New Notes, no gain or loss will be
recognized by a United States Holder as a result thereof. If the
exercise of the option is treated as a taxable exchange of Old
Notes for New Notes, a United States Holder would recognize gain
or loss equal to the difference between the issue price of the New
Notes and the holder's tax basis in the Old Notes. If the
exercise of the option is treated as a tax-free recapitalization,
no loss would be recognized by a United States Holder as a result
thereof and gain, if any, would be recognized to the extent of the
fair market value of the excess, if any, of the principal amount
of securities received over the principal amount of securities
surrendered. In this regard, the meaning of the term "principal
amount" is not clear. Such term could be interpreted to mean
"issue price" with respect to securities that are received and
"adjusted issue price" with respect to securities that are
surrendered. Legislation to that effect has been introduced in
the past. It is not possible to determine whether such
legislation will be reintroduced, and if so, enacted and, if
enacted, whether it would apply to recapitalizations occurring
prior to the date of enactment.
Renewable Notes
A Note may be issued wherein the initial maturity of the Note
may be extended beyond its maturity date at the holder's option
for one or more specified periods up to but not beyond the Note's
Final Maturity. See "Description of Notes - Renewable Notes."
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While it is not entirely clear, a Renewable Note should be
considered as having a maturity date that corresponds to its
original Maturity Date. In addition, the holder of the Renewable
Note should be treated as holding a series of call options to
purchase the Renewable Note from the Company at the price and on
the dates that correspond to the procedures that must be followed
in order for the holder to renew the maturity. Such a call option
(i.e., the right to elect maturity renewals) will be presumed to
be exercised if, by utilizing the call date (i.e., the date
subsequent to the original Maturity Date on which a holder could
receive payment for its Note) as the maturity date and the call
price (the principal amount of the Renewable Note) as the stated
redemption price at maturity, the yield on the Note to the holder
will be higher than its yield to the Final Maturity Date. Because
the amount payable to a holder of a Renewable Note will be the
principal amount of such Note, a holder's right to elect maturity
renewals should not be presumed to be exercised unless such Note
was issued at a premium. If an election to renew the maturity of
a Renewable Note was presumed to be exercised and, in fact, is not
exercised, then the Renewable Note should generally be treated as
if it were exchanged for a new Note with an issue price equal to
the call price for the old Note. While not entirely clear, such
event should be treated as a deemed exchange only for purposes of
applying the OID rules, discussed above. Holders of Renewable
Notes are advised to consult with their own tax advisors regarding
the United States Federal income tax consequences of the holding
and disposition of such Notes including the election to renew the
maturity thereof.
Non-United States Holders
Under present United States Federal income and estate tax
law, and subject to the discussion below concerning backup
withholding: (a) no withholding of United States Federal income
tax will be required with respect to the payment by the Company or
any Paying Agent of principal or interest (which for purposes of
this discussion includes OID) on a Note owned by a Non-United
States Holder, provided (i) that the beneficial owner 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 within the meaning of section 871(h)(3) of the Code and the
regulations thereunder, (ii) the beneficial owner is not a
controlled foreign corporation that is related to the Company
through stock ownership, (iii) the beneficial owner is not a bank
whose receipt of interest on a Note is described in section
881(c)(3)(A) of the Code, (iv) in the case of a Registered Note
the beneficial owner satisfies the statement requirement
(described generally below) set forth in section 871(h) and
section 881(c) of the Code and the regulations thereunder, or (v)
such interest is not interest described in section 871(h)(4) of
the Code (which generally is limited to certain types of
contingent interest); (b) no withholding of United States Federal
income tax generally will be required with respect to any gain or
income realized by a Non-United States Holder upon the sale,
exchange or retirement of a Note; and (c) a Note beneficially owned
by an individual who at the time of death is a Non-United States
Holder will not be subject to United States Federal estate tax as
a result of such individual's death, provided that such individual
does not actually or constructively owns 10% or more of the total
combined voting power of all classes of stock of the Company
entitled to vote within the meaning of section 871(h)(3) of the
Code and provided that the interest payments with respect to such
Note would not have been, if received at the time of such
individual's death, effectively connected with the conduct of a
United States trade or business by such individual.
To qualify for the exemption from withholding tax referred to
in (a)(iv) above, the beneficial owner of such Note, or a
financial institution holding the Note on behalf of such owner,
must provide, in accordance with specified procedures, a paying
agent of the Company with a statement to the effect that the
beneficial owner is not a U.S. person. Pursuant to current
temporary Treasury regulations, these requirements will be met if
(1) the beneficial owner provides his name and address, and
certifies, under penalties of perjury, that he is not a U.S.
person, which certification may be made on an IRS Form W-8 (or
successor form) or (2) a financial institution holding the Debt
Security on behalf of the beneficial owner certifies, under
penalties of perjury, that such statement has been received by it
and furnishes a paying agent with a copy thereof. The Company
does not intend to issue any Notes described in (a)(v) above.
</PAGE>
<PAGE>
Payments to Non-United States Holders not meeting the
requirements of clause (a) above and thus subject to withholding
of United States Federal income tax may nevertheless be wholly or
partially exempt from such withholding if the beneficial owner of
the Note provides the Company with a properly executed (1) IRS
Form 1001 (or successor form) claiming a complete or partial
exemption from withholding under the benefit of a tax treaty or (2)
IRS Form 4224 (or successor form) stating that interest paid on
the Note is not subject to withholding tax because it is
effectively connected with the owner's conduct of a trade or
business in the United States.
Backup Withholding and Information Reporting
In general, information reporting requirements will apply to
certain payments of principal, interest, OID and premium paid on
Notes and to the proceeds of sale of a Note made to United States
Holders other than certain exempt recipients (such as
corporations). A 31 percent backup withholding tax will apply to
such payments if the United States Holder fails to provide a
taxpayer identification number or certification of foreign or other
exempt status or fails to report its full dividend and interest
income.
No information reporting or backup withholding will be
required with respect to payments made by the Company or any
paying agent to Non-United States Holders if a statement described
in (a)(iv) under "Non-United States Holders" has been received and
the payor does not have actual knowledge that the beneficial owner
is a United States person.
In addition, backup withholding and information reporting
will not apply if payments of the principal, interest, OID or
premium on a Note is paid or collected by a foreign office of a
custodian, nominee or other foreign agent on behalf of the
beneficial owner of such Note, or if a foreign office of a broker
(as defined in applicable Treasury regulations) pays the proceeds
of the sale of a Note to the owner thereof. If, however, such
nominee, custodian, agent or broker is, for United States Federal
income tax purposes, a U.S. person, a controlled foreign
corporation or a foreign person that derives 50% or more of its
gross income for certain periods from the conduct of a trade or
business in the United States, such payments will not be subject
to backup withholding but will be subject to information
reporting, unless (1) such custodian, nominee, agent or broker has
documentary evidence in its records that the beneficial owner is
not a U.S. person and certain other conditions are met or (2) the
beneficial owner otherwise establishes an exemption. Temporary
Treasury regulations provide that the Treasury is considering
whether backup withholding will apply with respect to such
payments of principal, interest or the proceeds of a sale that are
not subject to backup withholding under the current regulations.
Under proposed Treasury regulations not currently in effect backup
withholding will not apply to such payments absent actual knowledge
that the payee is a United States person.
Payments of principal, interest, OID and premium on a Note
paid to the beneficial owner of a Note by a United States office
of a custodian, nominee or agent, or the payment by the United
States office of a broker of the proceeds of sale of a Note, will
be subject to both backup withholding and information reporting
unless the beneficial owner provides a statement described in
(a)(iv) above and the payor does not have actual knowledge that
the beneficial owner is a U.S. person or otherwise establishes an
exception.
Any amounts withheld under the backup withholding rules will
be allowed as a refund or a credit against such holder's United
States Federal income tax liability provided the required
information is furnished to the IRS.
SUPPLEMENTAL PLAN OF DISTRIBUTION
The Notes are offered on a continuing 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 will
pay each Agent a commission of from 0.125% to 0.750% of the
principal amount of each Note, depending upon its Stated Maturity,
sold through such Agent, except that the commission payable by the
Company to the Agents with respect to Notes with maturities of
greater than thirty years will be negotiated at the time the
Company issues such Notes. The Company may
</PAGE>
<PAGE>
appoint additional agents to solicit sales of the Notes, provided
that any such solicitation and sale of the Notes shall be on the
same terms and conditions as the Agents have agreed to. The
Company will have the sole right to accept offers to purchase
Notes and may reject any such offer in whole or in part. Each
Agent will have the right, in its discretion reasonably exercised,
to reject in whole or in part any offer to purchase Notes received
by such Agent. 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. Unless otherwise indicated in the
applicable Pricing Supplement, if any Note is resold by an Agent
to any broker-dealer at a discount, such discount will not be in
excess of the discount or commission received by such Agent from
the Company. In addition, unless otherwise indicated in the
applicable Pricing Supplement, any Note purchased by an Agent as
principal will be purchased at 100% of the principal amount thereof
less a percentage equal to the commission applicable to an agency
sale of a Note having an identical Stated Maturity. After the
initial public offering of the Notes, the public offering price
(in the case of Notes to be resold on a fixed public offering
price basis), the concession and the discount may be changed. The
Company also reserves the right to sell the Notes directly to
investors on its own behalf in those jurisdictions where it is
authorized to do so or as otherwise provided in the applicable
Pricing Supplement. In such circumstances, 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. In the case
of sales made directly by the Company, no commission will be
payable.
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, or to contribute
to payments each Agent may be required to make in respect thereof.
The Company has agreed to reimburse the Agents for certain of the
Agents' expenses, including, but not limited to, the fees and
expenses of counsel to the Agents.
The Company has been advised by each Agent that it may from
time to time purchase and sell Notes in the secondary market, but
that it is not obligated to do so. There can be no assurance that
there will be a secondary market for the Notes or liquidity in the
secondary market if one develops. From time to time, each Agent
may make a market in the Notes.
</PAGE>
<PAGE>PROSPECTUS
$300,000,000
[LOGO]
CBI INDUSTRIES, INC.
Debt Securities, Preferred Stock and Common Stock
CBI Industries, Inc. (the "Company" or "CBI") may from time to time
offer Debt Securities consisting of debentures, notes and/or other
unsecured evidences of indebtedness in one or more series;
preferred stock, par value $1.00 per share, in one or more series
(the "Preferred Stock"); and shares of its common stock, par value
$2.50 per share (the "Common Stock") (collectively, the
"Securities"), at an aggregate offering price not to exceed
$300,000,000 at prices and on terms to be determined at the time
of sale. The Debt Securities, Preferred Stock and Common Stock may
be offered independently or together in any combination for sale
directly to purchasers or to or through dealers, underwriters or
agents to be designated by the Company.
Certain specific terms of the particular Securities in respect of
which this Prospectus is being delivered are set forth in the
accompanying prospectus supplement (the "Prospectus Supplement"),
including, where applicable, the initial public offering price of
the Securities, the listing on any securities exchange, other
special terms, and (i) in the case of Debt Securities, the
specific designation, aggregate principal amount, original issue
discount, if any, authorized denominations, maturity, premium, if
any, rate (which may be fixed or variable), time and method of
calculating payment of interest, if any, the place or places where
principal of, premium, if any, and interest, if any, on such Debt
Securities will be payable, the currency in which principal of,
premium, if any, and interest, if any, on such Debt Securities will
be payable, any terms of redemption at the option of the Company
or the holder, any sinking fund provisions and any terms for
conversion or exchange into other securities of the Company and
(ii) in the case of Preferred Stock, the specific title and stated
value, any dividend, liquidation, redemption, voting and other
rights and any terms for conversion or exchange into other
securities of the Company. If so specified in the applicable
Prospectus Supplement, Securities may be issued in whole or in
part in the form of one or more temporary or permanent global
securities.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Company may sell the Securities to or through underwriters or
dealers, and may also sell Securities directly to other purchasers
or through agents. See "Plan of Distribution." The Prospectus
Supplement sets forth the names of any underwriters, dealers or
agents involved in the sale of the Securities in respect of which
this Prospectus is being delivered and any applicable fee,
commission or discount arrangements with them.
This Prospectus may not be used to consummate sales of Securities
unless accompanied by a Prospectus Supplement.
The date of this Prospectus is March 25, 1994
</PAGE>
<PAGE> AVAILABLE INFORMATION
CBI Industries, Inc., (the "Company") is subject to the
informational requirements of the Securities Exchange Act of 1934
(the "Exchange Act") and, in accordance therewith, files reports,
proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Reports, proxy statements
and other information filed by the Company may be inspected and
copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington,
D.C. 20549; and at its regional offices located at 500 West
Madison Street, Chicago, Illinois 60661 and 7 World Trade Center,
Thirteenth Floor, New York, New York 10048. Such reports, proxy
materials and other information concerning the Company may also be
inspected at the offices of the New York Stock Exchange, Inc., 20
Broad Street, New York, New York 10005. Copies of such materials
may be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549.
This Prospectus does not contain all the information set forth in
the Registration Statement and exhibits thereto which the Company
has filed with the Commission under the Securities Act of 1933 (the
"Securities Act") and to which reference is hereby made.
Statements contained in this Prospectus as to the contents of any
contract or other document referred to are not necessarily
complete, and in each instance reference is made to the copy of
such document filed as an exhibit to the Registration Statement or
otherwise filed with the Commission. Each such statement is
qualified in all respects by such reference. Although the Company
may not be required to send a copy of its latest Annual Report to
Shareholders to holders of Debt Securities, the Company will, upon
request, send to any holder of Securities a copy of its latest
Annual Report to Shareholders, as filed with the Commission, which
contains financial information that has been examined and reported
upon, with an opinion expressed by independent certified public
accountants.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed by the Company with the
Commission (File No. 1-7833) are incorporated in this Prospectus
by reference: (i) Annual Report on Form 10-K for the fiscal year
ended December 31, 1993, together with the reports of independent
public accountants which includes an explanatory paragraph that
describes changes in accounting principles with respect to the
methods of accounting for income taxes and for postretirement
benefits other than pensions, (ii) the description of the Common
Stock as set forth in Item 1 of the Company's Registration
Statement on Form 8-A filed with the Commission on April 20, 1979,
and (iii) the description of preferred stock purchase rights as
set forth in Item 1 of the Company's Amendment No. 1 to
Registration Statement on Form 8-A filed with the Commission on
August 8, 1989.
All documents filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of
this Prospectus and prior to the termination of the offering of
the Securities shall be deemed to be incorporated by reference
herein and to be a part hereof from the date of filing such
documents. Any statement contained herein or in a document
incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein, in a
Prospectus Supplement 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.
</PAGE>
<PAGE>
The Company will provide without charge and upon request to
each person to whom this Prospectus has been delivered a copy of
any or all of the documents incorporated herein by reference
(other than exhibits to such documents unless such exhibits are
specifically incorporated by reference herein). Requests for such
copies should be directed to the Secretary, C.C. Toerber, CBI
Industries, Inc., 800 Jorie Boulevard, Oak Brook, Illinois
60521-2268 (telephone (708) 572-7000). References in this
Prospectus to the "Company" or "CBI" include CBI Industries, Inc.
and its consolidated subsidiaries, unless the context otherwise
indicates.
THE COMPANY
The Company operates through three major business segments.
CBI's Contracting Services segment is organized under Chicago
Bridge & Iron Company as a worldwide construction group that
provides, through separate subsidiaries, a broad range of services
including design, engineering, fabrication and construction of
metal plate structures, project management, general contracting,
and other specialty construction and related services. CBI's
Industrial Gases segment, which is organized under Liquid Carbonic
Industries Corporation, produces, processes and markets, on a
worldwide basis, carbon dioxide and a wide variety of other
industrial and specialty gases and chemicals. CBI's Investments
segment includes petroleum and special product terminal businesses
and certain real estate and financial investments.
The Company is incorporated in Delaware and its principal
executive offices are located at 800 Jorie Boulevard, Oak Brook,
Illinois.
USE OF PROCEEDS
Unless otherwise indicated in an accompanying Prospectus
Supplement, the net proceeds to the Company from the sale of the
Securities offered hereby will be available for general corporate
purposes and may be used for capital expenditures, working
capital, repayment of short and long term indebtedness, and future
acquisitions. Pending such use, the net proceeds may be
temporarily invested.
SELECTED RATIOS
For the purposes of calculating the ratio of earnings to
fixed charges and the ratio of earnings to fixed charges and
preferred stock dividends, earnings consist of earnings before
income taxes and fixed charges to the extent that such charges are
included in the determination of earnings. Fixed charges consist
of interest, including interest on ESOP debt (whether expensed or
capitalized), and one-third of minimum rental payments under
operating leases (estimated by management to be the interest
factor of such rentals).
Years Ended December 31,
1993 1992 1991 1990 1989
Ratio of Earnings to
Fixed Charges (1) 3.68 3.43 3.05 2.18
Ratio of Earnings to Fixed
Charges and Preferred
Stock Dividends (2) 3.68 3.43 3.05 2.18
</PAGE>
<PAGE>
(1) Earnings were inadequate to cover fixed charges by
$13,770,000 for the year ended December 31, 1993.
(2) Earnings were inadequate to cover fixed charges and preferred
stock dividends by $13,770,000 for the year ended December 31,
1993.
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms
and provisions of the Debt Securities to which any Prospectus
Supplement may relate. The particular terms and provisions of any
series of Debt Securities offered by any Prospectus Supplement,
and the extent to which such general terms and provisions
described below may apply thereto, will be described in the
Prospectus Supplement relating to such series of Debt Securities.
Debt Securities may be issued in one or more series under an
indenture (the "Indenture") dated as of March 1, 1994 between the
Company and Chemical Bank, as trustee (the "Trustee"). The
statements under this heading do not purport to be complete and
are subject to the detailed provisions of the Indenture, a copy of
which is filed as an exhibit to the Registration Statement of
which this Prospectus is a part. Wherever particular provisions of
the Indenture or terms defined therein are referred to, such
provisions or definitions are incorporated by reference as a part
of the statements made and the statements are qualified in their
entirety by such reference. A copy of the Indenture is filed as
an exhibit to this registration statement.
General
The Indenture does not limit the aggregate principal amount
of Debt Securities which may be issued thereunder and provides
that Debt Securities of any series may be issued thereunder up to
an aggregate principal amount which may be authorized by the
Company from time to time. (Section 301) Any securities issued
under the Indenture are referred to herein as the "Debt
Securities." The Indenture does not limit the amount of other
debt, secured or unsecured, which may be issued by the Company or
its subsidiaries, subject to limitations on liens described below.
All Debt Securities will be unsecured and rank pari passu with all
other unsecured and unsubordinated indebtedness of the Company
provided that such other unsecured and unsubordinated indebtedness
may contain covenants, events of default and other provisions
which are different from or which are not contained in the Debt
Securities. However, because the Company is a holding company
which conducts substantially all of its operations through
subsidiaries, the right of the Company, and hence the right of
creditors of the Company (including the Holders of Debt
Securities), to participate in any distribution of the assets of
any subsidiary upon its liquidation or reorganization or otherwise
is necessarily subject to the prior claims of creditors of the
subsidiary, except to the extent that claims of the Company itself
as a creditor of the subsidiary may be recognized. There are no
covenants or provisions contained in the Indenture that may afford
the Holders of Debt Securities protection in the event of a highly
leveraged transaction involving the Company. Unless otherwise
provided in the applicable Prospectus Supplement, the Company will
maintain in New York, New York, one or more offices or agencies
where the Debt Securities may be presented for payment and for
transfer or exchange (which initially will be the Trustee's offices
maintained for that purpose in New York, New York), provided that
interest may at the option of the Company be paid by check mailed
to the person entitled thereto. (Sections 301 and 1102)
</PAGE>
<PAGE>
The Debt Securities will be issued in fully registered form,
without coupons unless otherwise specified in the applicable
Prospectus Supplement. The Debt Securities will be exchangeable
for other Debt Securities of the same series of a like aggregate
principal amount in authorized denominations and will be
transferable at any time or from time to time at the Corporate
Trust Office of the Trustee or at any other office or agency of
the Company maintained for that purpose. No service charge will
be made for any transfer or exchange of the Debt Securities or
other Securities issued under the Indenture, but the Company may
(unless otherwise provided in such Debt Securities) require
payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. (Section 305)
Reference is made to the Prospectus Supplement which
accompanies this Prospectus for the following terms and other
information with respect to any Debt Securities in respect of
which this Prospectus is being delivered: (1) the designation,
aggregate principal amount and authorized denominations of such
Debt Securities; (2) the purchase price of such Debt Securities;
(3) the date or dates on which such Debt Securities will mature or
the method of determining such date or dates; (4) the rate or
rates (which may be fixed or variable) at which such Debt
Securities will bear interest, if any, or the method of
calculating such rate or rates, and the date, dates, or the method
of determining such date or dates, from which such interest, if
any, will accrue; (5) the date or dates on which any such interest
will be payable and the record date or dates therefor; (6) whether
such Debt Securities may be issued in temporary or permanent
global form, and, if so, the initial Depositary with respect
thereto; (7) the terms of any mandatory or optional redemption
(including any sinking fund) and any remarketing arrangements
related thereto; (8) the place or places where the principal (and
premium, if any) and interest will be payable; (9) whether such
Debt Securities will be convertible into or exchangeable for
Common Stock or other securities of the Company, and the terms and
conditions of any such conversions or exchanges; (10) the
applicability of any provisions described under "Limitations of
Liens" or "Limitations on Sale and Leaseback Transactions"; (11)
the applicability of any provision described under "Defeasance and
Covenant Defeasance"; (12) the securities exchange, if any, on
which the Debt Securities will be listed; (13) the currency,
currencies or composite currencies for which such Debt Securities
may be purchased and/or in which principal and interest and
premium, if any, will or may be payable; and (14) any other
specified term of such Debt Securities.
One or more series of Debt Securities may be sold as Original
Issue Discount Securities at a substantial discount below their
stated principal amount, bearing no interest or interest at a rate
which at the time of issuance is below market rates. Federal
income tax consequences and special considerations applicable to
any such series will be described in the Prospectus Supplement
relating thereto.
The Indenture provides that the Debt Securities of a single
series may be issued at various times, with different maturity
dates and may bear interest at different times. (Section 301)
If the purchase price of any Debt Securities is payable in
one or more foreign currencies or currency units or if any Debt
Securities are denominated in one or more foreign currencies or
currency units or if the principal of, premium, if any, or
interest, if any, on any Debt Securities is payable in one or more
foreign currencies or currency units, the restrictions, elections,
certain Federal income tax considerations, specific terms and other
information with respect to such issue of Debt Securities and such
foreign currency or currency units will be set forth in the
applicable Prospectus Supplement. </PAGE>
<PAGE>
Certain Definitions
The term "Secured Debt" means indebtedness for money borrowed
and any Funded Debt which is secured by a mortgage, pledge, lien,
security interest or encumbrance on (a) any Principal Property of
the Company or a Restricted Subsidiary or on (b) any shares of
capital stock or indebtedness of any Restricted Subsidiary.
(Section 101)
The term "Funded Debt" means all indebtedness for money
borrowed having a maturity of more than twelve months from the
date of the most recent consolidated balance sheet of the Company
and its Restricted Subsidiaries (excluding indebtedness of
Unrestricted Subsidiaries) or renewable and extendible beyond
twelve months at the option of the borrower and all obligations in
respect of lease rentals which under generally accepted accounting
principles would be shown on a consolidated balance sheet of the
Company as a liability item other than a current liability;
provided, however, that Funded Debt shall not include any of the
foregoing to the extent that such indebtedness or obligations are
not required by generally accepted accounting principles to be
shown on the balance sheet of the Company. (Section 101)
The term "Voting Stock" means outstanding shares of capital
stock having under ordinary circumstances (not dependent on the
happening of a contingency) voting power for the election of
directors. (Section 101)
The term "Subsidiary" means any corporation a majority of the
Voting Stock of which is owned, directly or indirectly, by the
Company or by one or more of its other subsidiaries or by the
Company or one or more of its other Subsidiaries. (Section 101)
The term "Restricted Subsidiary" means (a) any Subsidiary
other than an Unrestricted Subsidiary and (b) any Subsidiary which
was an Unrestricted Subsidiary but which, subsequent to March
1,1994, is designated by the Company (by or pursuant to board
resolution) to be a Restricted Subsidiary, provided, however, that
the Company may not designate any such Subsidiary to be a
Restricted Subsidiary if the Company would thereby breach any
covenant or agreement herein contained (on the assumptions that
any outstanding Secured Debt of such Subsidiary was incurred at
the time of such designation and that any Sale and Leaseback
Transaction (as defined) to which such Subsidiary is then a party
was entered into at the time of such designation). (Section 101)
The term "Unrestricted Subsidiary" means (a) any Subsidiary
acquired or organized after March 1, 1994, provided that such
Subsidiary shall not be a successor, directly or indirectly, to
any Restricted Subsidiary; (b) any Subsidiary whose principal
business or assets are located outside the United States of
America, its territories and possessions, Puerto Rico or Canada;
(c) any Subsidiary the principal business of which consists of
financing or assisting in financing of customer construction
projects or the acquisition or disposition of products of dealers,
distributors or other customers; (d) any Subsidiary engaged in the
insurance business or whose principal business is the ownership,
leasing, purchasing, selling or development of real property; and
(e) any Subsidiary substantially all the assets of which consist of
stock or other securities of a Subsidiary or Subsidiaries referred
to above in this sentence, unless and until any such Subsidiary is
designated to be a Restricted Subsidiary, as referred to above.
(Section 101)
The term "Principal Property" means any manufacturing plant
or other facility of the Company or any Restricted Subsidiary,
whether presently owned or hereafter acquired, which, in the
opinion of
</PAGE>
<PAGE>
the board of directors of the Company, is of material importance
to the business conducted by the Company and its Restricted
Subsidiaries as a whole. (Section 101)
The term "Consolidated Net Tangible Assets" means
Consolidated Tangible Assets less Consolidated Current
Liabilities. (Section 101)
The term "Consolidated Tangible Assets" means the aggregate
of all assets of the Company and its Restricted Subsidiaries
(including the value of all existing Sale and Leaseback
Transactions (as defined) and any assets resulting from the
capitalization of other long-term lease obligations in accordance
with generally accepted accounting principles, but excluding the
value of assets or investment in any Unrestricted Subsidiary or
any non-majority owned Subsidiary) appearing on the most recent
available consolidated balance sheet of the Company and its
Restricted Subsidiaries at their net book values, after deducting
related depreciation, amortization and other valuation reserves and
excluding (a) any capital write-ups resulting from reappraisals of
assets or of other investments after March 1, 1994 (other than a
write-up of any assets constituting part of the assets and
business of another corporation made in connection with the
acquisition, direct or indirect, of the assets and business of
such other corporation), except as permitted in accordance with
generally accepted accounting principles, (b) treasury stock, (c)
patent and trademark rights, good will, unamortized discounts and
expenses and any other intangible items, all in accordance with
generally accepted accounting principles. (Section 101)
The term "Consolidated Current Liabilities" means the
aggregate of the current liabilities of the Company and its
Restricted Subsidiaries (excluding liabilities of Unrestricted
Subsidiaries) appearing on the most recent available consolidated
balance sheet of the Company and its Restricted Subsidiaries, all
in accordance with generally accepted accounting principles. In
no event shall Consolidated Current Liabilities include any
obligation of the Company and its Restricted Subsidiaries issued
under a revolving credit or similar agreement if the obligation
issued under such agreement matures by its terms within 12 months
from the date thereof but by the terms of such agreement such
obligation may be renewed or extended or the amount thereof
reborrowed or refunded at the option of the Company or any
Restricted Subsidiary for a term in excess of 12 months from the
date of determination. (Section 101)
Foreign Currency Denominated or Indexed Debt Securities
Debt Securities denominated or payable in foreign currencies
may entail significant risks. These risks include, without
limitation, the possibility of significant fluctuations in foreign
currency exchange rates. These risks may vary depending upon the
currency or currencies involved. These risks will be more fully
described in the applicable Prospectus Supplement.
Limitation on Liens
The Company will not, and will not permit any Restricted
Subsidiary to, create, assume or guarantee any Secured Debt
without making effective provision for securing the Debt
Securities (and any other indebtedness of or guaranteed by the
Company or such Restricted Subsidiary then entitled thereto)
equally and ratably with such Secured Debt.
The above restrictions do not apply to debt secured by (i)
certain purchase money mortgages created to secure payment for the
acquisition or completion of construction and commencement of
</PAGE>
<PAGE>
operation of any property including, but not limited to, any
indebtedness incurred by the Company or a Restricted Subsidiary
prior to, at the time of, or within 365 days after the later of
the acquisition, the completion of construction (including any
improvements on an existing property) or the commencement of
commercial operation of such property, which indebtedness is
incurred for the purpose of financing all or any part of the
purchase price of such property or construction or improvements on
such property, (ii) mortgages, pledges, liens, security interests
or encumbrances (collectively referred to herein as "liens") on
property existing at the time of acquisition thereof, whether or
not assumed by the Company or a Restricted Subsidiary, (iii) liens
on property or shares of capital stock or indebtedness of any
corporation existing at the time such corporation becomes a
Restricted Subsidiary, (iv) 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 or firm as an
entirety or substantially as an entirety to the Company or a
Restricted Subsidiary, provided that no such lien shall extend to
any other Principal Property of the Company or such Restricted
Subsidiary prior to such acquisition or to other Principal
Property thereafter acquired other than additions to such acquired
property or other Principal Property which, together with such
acquired property, is part of a single construction or development
program, (v) liens on property of the Company or a Restricted
Subsidiary in favor of the United States of America or any state
thereof, or in favor of any other country, or any department,
agency, instrumentality or political subdivision thereof, to
secure certain payments pursuant to any contract or statute
(including, without limitation, liens to secure indebtedness of
the pollution control or industrial revenue type) or to secure
indebtedness incurred for the purpose of financing all or any part
of the purchase price for the cost of constructing or improving
the property subject to such liens, (vi) liens on any property or
assets of any Restricted Subsidiary to secure indebtedness owing
by it to the Company or to another Restricted Subsidiary, or (vii)
any extension, renewal or replacement (or successive extensions,
renewals or replacements), in whole or in part, of any lien
referred to in the foregoing clauses (i) to (vi) inclusive,
provided that the principal amount of Secured Debt secured thereby
does not exceed the principal amount of Secured Debt so secured at
the time of such extension, renewal or replacement, and that such
extension, renewal or replacement shall be limited to the property
which secured the lien so extended, renewed or replaced and
additions or improvements to such property. This covenant also
does not apply to production payments or overriding royalty
payments with respect to the sale or other transfer of crude oil,
natural gas or other hydrocarbons. (Section 1104)
Limitation on Sale and Leaseback Transactions
Sale and Leaseback Transactions (which are defined to
include, among other things, certain leases of more than three
years) by the Company or any Restricted Subsidiary of any
Principal Property, completion of construction of which and
commencement of full operation of which have occurred more than 365
days prior to such sale or transfer, will be prohibited unless
either (a) the Company or such Restricted Subsidiary would be
entitled to incur Secured Debt equal in amount to the amount
realized or to be realized upon such sale or transfer secured by
a lien on the property to be leased without equally and ratably
securing the Debt Securities, or (b) an amount equal to the "value"
(as defined) of the Principal Property so leased is applied
(subject to credits for certain voluntary retirements of Debt
Securities) to the retirement, within 120 days of the effective
date of such arrangement, of indebtedness for borrowed money
incurred or assumed by the Company or a Restricted Subsidiary which
is recorded as Funded Debt as shown on the most recent
consolidated balance sheet of the Company and which in
</PAGE>
<PAGE>
the case of such indebtedness of the Company, is not subordinate
and junior in right of payment to the prior payment of the Debt
Securities. (Sections 101 and 1105)
Exempted Indebtedness
Notwithstanding the limitations on liens and Sale and
Leaseback Transactions described above, the Company and any one or
more Restricted Subsidiaries may, without securing the Debt
Securities, issue, assume or guarantee Secured Debt which would
otherwise be subject to the foregoing restrictions, provided that,
after giving effect thereto, the aggregate amount of such
Secured Debt then outstanding (not including Secured Debt
permitted under the foregoing exceptions) and the aggregate value
of Sale and Leaseback Transactions (other than such transactions
in connection with which indebtedness has been, or will be,
retired in accordance with clause (b) of the preceding paragraph)
at such time does not exceed 10% of Consolidated Net Tangible
Assets. (Section 1104)
Consolidation or Merger
The Company, without the consent of the Holders of any of the
Debt Securities under the Indenture, may consolidate with or merge
into, or transfer or lease its assets substantially as an entirety
to, any Person which is a corporation, partnership or trust
organized and validly existing under the laws of any domestic
jurisdiction, or may permit any such Person to consolidate with or
merge into the Company or convey, transfer or lease its properties
and assets substantially as an entirety to the Company, provided
that any successor Person assumes the Company's obligations on the
Debt Securities and under the Indenture, that after giving effect
to the transaction (treating any indebtedness which becomes an
obligation of the Company or any Subsidiary as a result of such
transaction as having been incurred by the Company or such
Subsidiary at the time of such transaction) no Event of Default,
and no event which, after notice or lapse of time, would become an
Event of Default, shall have occurred and be continuing, and that
certain other conditions are met. (Sections 901 and 1104)
Events of Default; Notice
Any one of the following events will constitute an Event of
Default under the Indenture with respect to Debt Securities of any
series (unless such event is specifically inapplicable to a
particular series as described in the Prospectus Supplement
relating thereto): (i) default for 30 days in the payment of
interest on any Debt Securities of such series, (ii) default in the
payment of any principal of or premium, if any, on any Debt
Securities of such series, (iii) default in the making or
satisfaction of any sinking fund installment or analogous
obligation, if any is required, on the Debt Securities of such
series, (iv) default, for 90 days after notice to the Company, in
the performance of any other covenant in the Indenture in respect
of the Debt Securities of such series, (v) default resulting in
acceleration of maturity in connection with any other series of
Debt Securities under the Indenture or other indebtedness of the
Company, the aggregate principal amount of which exceeds
$5,000,000, not annulled within 30 days after notice to the Company
from the Trustee or to the Company and to the Trustee from the
Holders of at least 25% in principal amount of Debt Securities of
such series, and (vi) certain events of bankruptcy, insolvency or
reorganization. (Section 601) </PAGE>
<PAGE>
The Indenture provides that if an Event of Default with
respect to any series of Debt Securities shall happen and be
continuing, the Trustee or the Holders of 25% in principal amount
of Debt Securities of such series may declare the principal of all
Debt Securities of such series to be due and payable. (Section
602)
The Indenture provides that the Trustee will, within 90 days
after the occurrence of a default in respect of any series of Debt
Securities known to it, give to Holders of Debt Securities of such
series notice of such uncured default (as defined, not including
any grace period) with respect to the Debt Securities of such
series; but, except in the case of a default in the payment of
principal of, premium, if any, or interest on, or any sinking fund
installment or analogous obligation with respect to, any of the
Debt Securities of such series, the Trustee shall be protected in
withholding such notice if it in good faith determines that the
withholding of such notice is in the interest of such Holders of
Debt Securities of such series. (Section 702)
The Indenture contains a provision entitling the Trustee,
subject to the duty of the Trustee during default in respect of
any series of Debt Securities to act with the required standard of
care, to be indemnified by the Holders of Debt Securities of such
series. (Sections 702 and 703) Subject to such right of
indemnification, the Indenture provides that the Holders of a
majority in principal amount of the Debt Securities of any series
may direct the time, method, and place of conducting any
proceeding for any remedy available to the Trustee or exercising
any trust or power conferred upon the Trustee with respect to the
Debt Securities of such series. (Section 612)
The Company will be required to furnish to the Trustee
annually a statement as to the fulfillment by the Company of all
of its obligations under the Indenture. (Section 1106)
Modification and Waiver
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the Holders of not less than a
majority in aggregate principal amount of the Debt Securities of
each series affected (all such Holders voting as a single class)
(which Holders, in the case of a Global Security, shall be the
Depositary appointed by the Company (herein referred to as the
"Depositary") as the Holder of the Global Security (as defined
below) which represents the Debt Securities), to execute
supplemental indentures adding any provisions to or changing in
any manner or eliminating any of the provisions of the Indenture
or modifying in any manner the rights of the Holders of Debt
Securities of such series, provided that no such supplemental
indenture shall, among other things, (i) change the fixed maturity
of any Debt Securities or reduce the principal amount thereof,
reduce the redemption premium thereon or reduce the rate or extend
the time of payment of interest thereon, without the consent of
the Holder of each Security so affected, or (ii) reduce the
aforesaid percentage of the Debt Securities of any series, the
consent of the Holders of which is required for any supplemental
indenture or for any waiver of default under the Indenture with
respect to the Debt Securities of such series, without the consent
of the Holders of all the Debt Securities of each series so
affected. (Section 1002)
The Holders of a majority in aggregate principal amount of
the Debt Securities of any series may on behalf of all the Holders
of the Debt Securities of such series waive compliance with
certain covenants with respect to the Debt Securities of such
series (Section 1107) or waive any past default with respect to
the Debt Securities of such series except a default (i) in the
payment of the principal of, premium, if
</PAGE>
<PAGE>
any, or interest on any Debt Securities or in the payment of any
sinking fund installment or analogous obligation, if any is
required, or (ii) a default in respect of a covenant or provision
of the Indenture which cannot be modified or amended without the
consent of the Holder of each Debt Security of such series
affected. (Section 613)
Global Securities
The provisions set forth below in this section headed "Global
Securities" will apply to the Debt Securities of any series if the
Prospectus Supplement relating to such series so indicates.
The Debt Securities of such series will be represented by one
or more global securities (collectively, a "Global Security")
registered in the name of a depositary (the "Depositary") or a
nominee of the Depositary identified in the Prospectus Supplement
relating to such series. Except as set forth below, a Global
Security may be transferred, in whole and not in part, only to the
Depositary or another nominee of the Depositary.
Upon the issuance of a Global Security, the Depositary will
credit, on its book-entry registration and transfer system, the
respective principal amounts of the Debt Securities represented by
such Global Security to the accounts of institutions that have
accounts with the Depositary or its nominee ("Participants"). The
accounts to be credited will be designated by the underwriters,
dealers or agents. Ownership of beneficial interests in a Global
Security will be limited to Participants or persons that may hold
interests through Participants. Ownership of interests in such
Global Security will be shown on, and the transfer of those
ownership interests will be effected only through, records
maintained by the Depositary (with respect to Participants'
interests) and such Participants (with respect to the owners of
beneficial interests in such Global Security). The laws of some
jurisdictions may require that certain purchasers of securities
take physical delivery of such securities in definitive form.
Such limits and laws may impair the ability to transfer beneficial
interests in a Global Security.
So long as the Depositary, or its nominee, is the registered
holder and owner of such Global Security, the Depositary or such
nominee, as the case may be, will be considered the sole owner and
holder of the related Debt Securities for all purposes of such
Debt Securities and for all purposes under the Indenture. Except
as set forth below or as otherwise provided in the applicable
Prospectus Supplement, owners of beneficial interests in a Global
Security will not be entitled to have the Debt Securities
represented by such Global Security registered in their names,
will not receive or be entitled to receive physical delivery of
Debt Securities in definitive form and will not be considered to
be the owners or holders of any Debt Securities under the
Indenture or such Global Security. (Section 305)
Accordingly, each person owning a beneficial interest in a
Global Security must rely on the procedures of the Depositary and,
if such person is not a Participant, on the procedures of the
Participant through which such person owns its interest, to
exercise any rights of a holder of Debt Securities under the
Indenture or such Global Security. The Company understands that
under existing industry practice, in the event the Company requests
any action of holders of Debt Securities or an owner of beneficial
interest in a Global Security desires to take any action that the
Depositary, as holder of such Global Security is entitled to take,
the Depositary would authorize the Participants to take such
action, and that the Participants would authorize beneficial
owners owning through such Participants to take such action or
would otherwise act upon the instructions of beneficial owners
owning through them. </PAGE>
<PAGE>
Payment of principal of and premium, if any, and interest, if
any, on Debt Securities represented by a Global Security will be
made to the Depositary or its nominee, as the case may be, as the
registered owner and holder of such Global Security.
The Company expects that the Depositary, upon receipt of any
payment of principal, premium, if any, or interest, if any, in
respect of a Global Security, will credit immediately
Participants' accounts with payments in amounts proportionate to
their respective beneficial interests in the principal amount of
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 held through such
Participants will be governed by standing 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" and will be the responsibility of such Participants. Neither
the Company not the Trustee nor any agent of the Company or the
Trustee 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 for any Debt
Securities or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests or for any
other aspect of the relationship between the Depositary and its
Participants or the relationship between such Participants and the
owners of beneficial interests in such Global Security owning
through such Participants.
Unless and until it is exchanged in whole or in part for Debt
Securities in definitive form, a Global Security may not be
transferred except as a whole by the Depositary to a nominee of
such Depositary or by a nominee of such Depositary to such
Depositary or another nominee of such Depositary.
Unless otherwise provided in the applicable Prospectus
Supplement, Debt Securities represented by a Global Security will
be exchangeable for Debt Securities in definitive form of like
tenor as such Global Security in denominations of $1,000 and in
any greater amount that is an integral multiple thereof if (i) the
Depositary notifies the Company that it is unwilling or unable to
continued as Depositary for such Global Security or if at any time
the Depositary ceases to be a clearing agency registered under the
Exchange Act; (ii) the Company in its discretion at any time
determines not to have all of the Debt securities represented by
a Global Security and notifies the Trustee thereof; or (iii) an
Event of Default has occurred and is continuing with respect to
the Debt Securities. (Section 305) Any Debt Security that is
exchangeable pursuant to the preceding sentence is exchangeable for
Debt Securities issuable in authorized denominations and
registered in such names as the Depositary shall direct. Subject
to the foregoing, a Global Security is not exchangeable, except
for a Global Security or Global Securities of the same aggregate
denominations to be registered in the name of the Depositary or its
nominee.
Defeasance
The Indenture provides that, if such provision is made
applicable to the Debt Securities of any series pursuant to the
provisions of the Indenture, the Company may elect (i) to defease
and be discharged from any and all obligations in respect of such
Debt Securities except for certain obligations to register the
transfer or exchange of such Debt Securities, to replace temporary,
destroyed, stolen, lost or mutilated Debt Securities, to maintain
paying agencies and to hold monies for payment in trust
("Defeasance") or (ii) (A) to omit to comply with certain
restrictive covenants in Sections 1104 and 1105 (the covenants
described above under "Limitation of Liens" and "Limitation on
Sale and Leaseback Transactions") and
</PAGE>
<PAGE>
(B) to deem the occurrence of any event referred to in clauses
(iv) with respect to Sections 1104 and 1105, (v) and (vi) under
"Events of Default" above not to be or result in an Event of
Default if, in each case with respect to the Debt Securities of
any series as provided in Section 1302 on or after the date the
conditions set forth in Section 1303 are satisfied ("Covenant
Defeasance"); in either case upon the deposit with the Trustee (or
other qualifying trustee), in trust, of money and/or U.S.
Government Obligations, which through the payment of interest and
principal in respect thereof in accordance with their terms will
provide money in an amount sufficient to pay the principal of and
any premium and interest on the Debt Securities of such series on
the respective stated maturities and any mandatory sinking fund
payments or analogous payments on the days payable, in accordance
with the terms of the Indenture and the Debt Securities of such
series. The Prospectus Supplement relating to a series may
further describe the provisions, if any, permitting such
Defeasance or Covenant Defeasance with respect to the Debt
Securities of a particular series. (Article Thirteen)
In the event the Company omits to comply with certain
covenants of the Indenture with respect to the Debt Securities of
any series as described above, and the Debt Securities of such
series are declared due and payable because of the occurrence of
an Event of Default, the amount of money and U.S. Government
Obligations on deposit with the Trustee will be sufficient to pay
amounts due on the Debt Securities of such series at the time of
their Maturity but may not be sufficient to pay amounts due on the
Debt Securities of such series at the time of the acceleration
resulting from such Event of Default. The Company shall, however,
remain liable for such payments.
Such defeasance could be treated as a redemption of the Debt
Securities of that series prior to maturity in exchange for the
property deposited in trust. In such event, each holder would
generally recognize, at the time of defeasance, gain or loss
measured by the difference between the amount of any cash and the
fair market value of any property deemed received and the holder's
tax basis in the Debt Securities deemed surrendered. Thereafter,
each holder would generally be subject to tax liability in respect
of interest income and would recognize any gain or loss upon any
disposition, including redemption, of the assets held in trust.
Although tax might be owed, the holder of a defeased Debt Security
would not receive cash (except for current payments of interest on
the Debt Securities) until the maturity or earlier redemption of
the Debt Securities. Such tax treatment could affect the purchase
price that a holder would receive upon the sale of the Debt
Securities.
Concerning the Trustee
Chemical Bank is the Trustee under the Indenture. The
Trustee has from time to time made loans to the Company (including
a current participation under the Company's three-year extendible
revolving credit facility) and has performed other services for
the Company in the normal course of its business and may provide
such other services in the future. The Trustee may resign with
respect to any series of the Debt Securities at any time, in which
event the Company will be obligated to appoint a successor
trustee. If the Trustee ceases to be eligible to continue as
Trustee with respect to a series of Debt Securities or becomes
incapable of acting as Trustee or becomes insolvent, the Company
may remove such Trustee, or any Holder of the Debt Securities of
such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent
jurisdiction for the removal of such Trustee and the appointment
of a successor trustee with respect to such series. Any
resignation or removal of the Trustee with respect to a series of
Debt Securities and appointment of a successor trustee for such
</PAGE>
<PAGE>
Trust does not become effective until acceptance of the
appointment by the successor trustee. (Section 710) Pursuant to
such resignation and successor trustee provisions, it is possible
that a different trustee could be appointed to act as a successor
trustee with respect to each series of Debt Securities. All
references in this Prospectus to the Trustee should be read to take
into account the possibility that each series of Debt Securities
could have different successor trustees in the event of such a
resignation or removal.
DESCRIPTION OF CAPITAL STOCK
The Company may issue, separately or together with or upon
the conversion of or exchange for other Securities, Common Stock
and Preferred Stock, all as set forth in the accompanying
Prospectus Supplement relating to the Common Stock or Preferred
Stock in respect of which this Prospectus is being delivered. The
following summaries do not purport to be complete and are subject
to, and are qualified in their entirety by reference to, the
following documents: (i) the Company's Certificate of
Incorporation, as amended (the "Certificate"), (ii) the Company's
bylaws, as amended (the "Bylaws"), and (iii) an Amendment and
Restatement dated as of August 8, 1989 of a Rights Agreement dated
as of March 4, 1986 between the Company and First Chicago Trust
Company of New York, as Rights Agent (the "Rights Agreement"). A
copy of each of the Certificate, the Bylaws and Rights Agreement
is filed as an exhibit to the Registration Statement.
The Company's authorized capital stock consists of
120,000,000 shares of common stock, par value $2.50 per share, and
20,000,000 shares of preferred stock, par value $1.00 per share,
of which 800,000 shares have been designated as Series A Junior
Participating Preferred Stock (the "Series A Preferred Stock") and
3,945,000 have been designated as Convertible Voting Preferred
Stock, Series C (the "Series C Preferred Stock").
At the close of business on March 1, 1994, there were
37,786,859 shares of Common Stock outstanding, including
approximately 1,812,186 shares held by LaSalle National Trust,
N.A. in its capacity as trustee (the "ESOP Trustee") of the CBI
Salaried Employee Stock Ownership Plan (1987) (the "ESOP"), but not
including (i) employee options to purchase an aggregate of
1,114,850 shares of Common Stock (of which options to purchase an
aggregate of 894,550 shares of Common Stock were currently
exercisable); (ii) 55,000 shares of Common Stock reserved under
the CBI Restricted Stock Plan 1989; and (iii) 521,833 shares of
Common Stock reserved for the CBI Employee Stock Purchase and
Savings Plan (1992).
Common Stock
All outstanding shares of Common Stock are, and any shares of
Common Stock sold hereunder will be, fully paid and nonassessable.
Each holder of Common Stock is entitled to one vote per share held
of record on all matters submitted to the stockholders for action.
A vote by the holders of a majority of shares present at a meeting
at which a quorum is present is necessary to take action, except
for certain extraordinary corporate actions which require the vote
of two-thirds of all outstanding shares entitled to vote thereon
(or a majority of such outstanding shares if the extraordinary
action is recommended by the Board of Directors). In addition,
pursuant to a "fair price" provision in the Company's Certificate
of Incorporation, certain business combinations involving the
Company and any holder of more than 10% of the outstanding voting
stock must be approved by the holders of 80% of the outstanding
voting stock, unless approved by a majority of continuing
directors or certain minimum price </PAGE>
<PAGE>
and procedural requirements are met. Any action required or
permitted to be taken by stockholders may be taken only at a
stockholders' meeting and not by written consent.
There are no cumulative voting rights in the election of
directors to the Company's Board of Directors, which is divided
into three classes, with members of each class serving a three-
year term. Under the Company's By-Laws, written notice of any
stockholder nomination of an individual for election as director
must be received by the Secretary of the Company not less than 60
days prior to the first anniversary of the last meeting of
stockholders called for the election of directors, and such notice
must set forth certain specified information concerning the
nominee.
Subject to the preferences applicable to any series of
Preferred Stock described herein, holders of Common Stock are
entitled to dividends when and as declared by the Board of
Directors from funds legally available therefor and are entitled,
in the event of liquidation, to share ratably in all assets
remaining after the payment of liabilities. The Common Stock is
neither redeemable nor convertible, and the holders thereof have
no pre-emptive or subscription rights to purchase any securities
of the Company.
The Company is the transfer agent for the Common Stock.
Preferred Stock
Under the Certificate of Incorporation, the Board of
Directors is authorized, without further action of the
stockholders, to provide for the issuance, and to fix the number,
of shares of Preferred Stock, in one or more additional series,
with such voting powers and with such designations, preferences,
and relative, participating, optional or other special rights and
qualifications, limitations or restrictions thereof as shall be set
forth in resolutions providing for the issue thereof adopted by
the Board of Directors or a duly authorized committee thereof.
Reference is made to the Prospectus Supplement which
accompanies this Prospectus for the following terms and other
information with respect to any series of Preferred Stock in
respect of which this Prospectus is being delivered: (1) the
specific title and stated value and the number of shares offered;
(2) the price at which such offered shares shall be issued; (3)
dividend rate (or method of calculation thereof); (4) dates on
which dividends shall be payable; (5) whether such dividends shall
be cumulative and if cumulative, the date from which dividends
shall commence to cumulate; (6) liquidation preferences; (7) the
terms of any mandatory or optional redemption (including any
sinking fund) provisions and the terms and conditions of any such
redemption; (8) whether such Preferred Stock will be convertible
into or exchangeable for Common Stock or other securities of the
Company, and the terms and conditions of any such conversions or
exchanges; (9) voting rights; (10) the securities exchange, if
any, on which the Preferred Stock will be listed; and (11) any
other preferences, privileges, limitations and restrictions with
respect to such series of Preferred Stock.
No holder of Preferred Stock, solely by virtue of such
holdings, has or will have any pre-emptive right to subscribe for
or purchase any shares of any class or series of stock which is
now or may hereafter be authorized or issued. All of the
outstanding shares of Preferred Stock of the Company are, and
shares sold hereby will be, fully paid and non-assessable.
</PAGE>
<PAGE>
Unless otherwise specified in the applicable Prospectus
Supplement, upon any liquidation, dissolution or winding up of the
Company whether voluntary or involuntary, the holders of any
series of Preferred Stock in respect of which this Prospectus is
being delivered will have preference and priority over the Common
Stock and any other class or series of stock of the Company
ranking on liquidation junior to such series of Preferred Stock,
for payment out of the assets of the Company or proceeds thereof,
whether from capital or surplus, in the amount set forth in the
applicable Prospectus Supplement. After such payment, the holders
of such series of Preferred Stock will be entitled to no other
payments unless otherwise provided in the applicable Prospectus
Supplement. If, in the case of any such liquidation, dissolution
or winding up of the Company, the assets of the Company or
proceeds thereof shall be insufficient to make the full
liquidation payment in respect of such series of Preferred Stock
and liquidating payments on any other series of Preferred Stock
ranking as to liquidation on a parity with such series, then those
assets and proceeds will be distributed among the holders of such
series of Preferred Stock and any such other series of Preferred
Stock ratably in accordance with the respective amounts which
would be payable on such shares of such series of Preferred Stock
and such other series of Preferred Stock if all amounts thereon
were paid in full. A sale of all or substantially all of the
Company's assets or a consolidation or merger of the Company with
one or more corporations shall not be deemed to be a liquidation,
dissolution or winding up of the Company unless otherwise provided
in the applicable Prospectus Supplement.
The Preferred Stock may be issued in the form of global
Preferred Stock Certificates, registered in the name of a
depositary or its nominee. If global Preferred Stock Certificates
are issued, holders will not be entitled to receive definitive
certificates representing shares of Preferred Stock. In such
instance, a holder's ownership of Preferred Stock will be recorded
on or through the records of the brokerage firm or other entity
that maintains such holder's account. In turn, the total number
of shares of Preferred Stock held by an individual brokerage firm
for its clients will be maintained on the records of the
depositary in the name of such brokerage firm or its agent.
Transfer of ownership of any shares of Preferred Stock represented
by a global Preferred Stock Certificate will be effected only
through the selling holder's brokerage firm.
Unless otherwise specified in the applicable Prospectus
Supplement, the series of Preferred Stock in respect of which this
Prospectus is being delivered will rank as to dividends and upon
liquidation on a parity with the Series C Preferred Stock and
senior to the Series A Junior Participating Preferred Stock.
Series A Preferred Stock Purchase Rights and Series A Preferred
Stock
On March 4, 1986, the Board of Directors of the Company
declared a dividend distribution of one preferred stock purchase
right ("Right"), for each share of Common Stock outstanding on
March 18, 1986 and for each share of Common Stock issued
thereafter until the Distribution Date (as defined below) and, in
certain circumstances, for shares issued after such date. Each
Right entitles the registered holder to purchase from the Company
one one-hundredth (1/100) of a share of Series A Preferred Stock
at a Purchase Price of $50.00 (the "Purchase Price"). The terms
and conditions of the rights are contained in an Amendment and
Restatement dated as of August 8, 1989 of a Rights Agreement dated
as of March 4, 1986 between the Company and First Chicago Trust
Company of New York, as Rights Agent (the "Rights Agreement").
</PAGE>
<PAGE>
As discussed below, until the occurrence of certain events,
initially the Rights will not be exercisable, certificates for the
Rights will not be issued, and the Rights will automatically trade
with the Common Stock.
Until the close of business on the Distribution Date, which
will occur on the earlier of (i) the tenth day following the date
of a public announcement that a person or group of affiliated or
associated persons ("Acquiring Person") has acquired, or obtained
the right to acquire, beneficial ownership of 20% or more of the
outstanding Common Stock (the "Stock Acquisition Date") or (ii) the
tenth business day (or such later date as may be determined by the
Board of Directors prior to any person becoming an Acquiring
Person) after the commencement of a tender or exchange offer by a
Person (as defined in the Rights Agreement) which could result in
the ownership by such Person of 20% or more of the outstanding
Common Stock, the Rights will be represented by and transferred
only with the Common Stock. Until the Distribution Date, new
certificates issued for Common Stock will contain a legend
incorporating the Rights Agreement by reference, and the surrender
for transfer of any of the Common Stock certificates will also
constitute the transfer of the Rights associated with the Common
Stock represented by those certificates. As soon as practicable
following the Distribution Date, separate Rights Certificates will
be mailed to holders of record of Common Stock at the close of
business on the Distribution Date, and thereafter the Rights
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire at the close of business on March 18, 1996,
unless redeemed or exchanged earlier as described below.
Currently, there are no shares of Series A Preferred Stock
issued or outstanding. The Series A Preferred Stock will be
nonredeemable and, unless otherwise provided in connection with
the creation of a subsequent series of Preferred Stock,
subordinate to all other series of the Preferred Stock. Each
share of Series A Preferred Stock will be entitled to receive,
when, as and if declared, a quarterly dividend in an amount equal
to the greater of $10.00 per share or 100 times the quarterly cash
dividend declared on the Common Stock. In addition, the Series A
Preferred Stock is entitled to 100 times any non-cash dividends
(other than dividends payable in Common Stock) declared on the
Common Stock, in like kind. In the event of liquidation, the
holders of Series A Preferred Stock will be entitled to receive a
liquidation payment in an amount equal to the greater of $50.00
per share or 100 times the liquidation payment made per share of
Common Stock. Each share of Series A Preferred Stock will have
100 votes, voting together with the Common Stock and not as a
separate class (except during a dividend default period (occurring
when dividends equal to six quarterly dividends are in arrears),
during which there will be a right to elect two directors voting
as a class), unless otherwise required by law or by the Company's
Certificate of Incorporation. In the event of any merger,
consolidation or other transaction in which shares of Common Stock
are exchanged or changed, each share of Series A Preferred Stock
will be entitled to receive 100 times the amount received per
share of Common Stock. The rights of the Series A Preferred Stock
as to dividends, voting rights and liquidation are protected by
antidilution provisions.
If (i) any Person becomes an Acquiring Person other than
pursuant to a tender or exchange offer for all outstanding shares
of Common Stock that the Board of Directors, taking into account
the long-term value of the Company and all other factors that the
Board considers relevant, determines to be at a price and on terms
that are fair to the holders of Common Stock (a "Permitted Tender
Offer"), or (ii) during
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such time as there is an Acquiring Person, there shall be a
reclassification of securities, recapitalization, reorganization
or other transaction involving the Company which increases the
proportionate equity share of the Acquiring Person, then in either
such event each holder of a Right, other than the Acquiring
Person, upon exercise of the Right and payment of the Purchase
Price, will have the right to receive, in lieu of Series A
Preferred Stock, a number of shares of Common Stock ("Adjustment
Shares") having a value, based upon the market price during the
period immediately preceding such event, equal to twice the
Purchase Price. To the extent that insufficient shares of Common
Stock are available for the exercise in full of the Rights,
holders of Rights will receive upon exercise shares of Common
Stock to the extent available and then cash, property or other
securities of the Company (which may be accompanied by a reduction
in the Purchase Price), in proportions determined by the Company,
so that the aggregate value received is equal to the value of the
Adjustment Shares. The Board of Directors may, at its option up
to the time an Acquiring Person beneficially owns 50% or more of
the outstanding Common Stock, exchange all or part of the then
outstanding and exercisable Rights for Common Stock, at an
exchange rate of one share of Common Stock per Right, subject to
adjustment. Rights are not exercisable following the acquisition
of shares of Common Stock by an Acquiring Person as referred to in
clause (i) of this paragraph until the expiration of the period
during which the Rights may be redeemed as described below.
Notwithstanding the foregoing, after an event described in clause
(i) or (ii) of this paragraph, Rights that are (or, under certain
circumstances, Rights that were) beneficially owned by the
Acquiring Person will be null and void.
If, after any Person becomes an Acquiring Person, unless the
Rights are redeemed earlier, (i) the Company is a party to a
merger or other business combination in which any shares of the
Common Stock are changed into or exchanged for other securities or
assets or (ii) more than 50% of the assets or earning power of the
Company and its subsidiaries (taken as a whole) are sold or
transferred in one or more transactions, proper provision shall be
made so that each holder of record of a Right will from and after
that time have the right to receive, upon exercise of the Right
and payment of the Purchase Price, that number of shares of common
stock of the principal third party to the transaction which is
equal to the Purchase Price divided by one-half of the average
market price of a share of such party's common stock during the
period immediately preceding such transaction.
At any time until twenty days following the Stock Acquisition
Date, the Board of Directors may cause the Company to redeem the
Rights in whole, but not in part, at a price of $.05 per Right,
subject to adjustment ("the Redemption Price"). Upon the action
of the Board of Directors authorizing redemption of the Rights,
the right to exercise the Rights will terminate, and the holders of
Rights will only be entitled to receive the Redemption Price.
The terms of the Rights may be amended by the Board of
Directors, but (following the Distribution Date) no amendment may
adversely affect the interests of the holders of Rights. Until a
Right is exercised, the holder, as such, will have no rights as a
stockholder of the Company, including without limitation, the
right to vote or to receive dividends.
Series C Preferred Stock
All outstanding shares of the Series C Preferred Stock are
held by the ESOP Trustee. The Series C Preferred Stock has a
liquidation preference over the Common Stock and the Series A
Preferred Stock of $32.40 per share (plus accrued and unpaid
dividends), pays cumulative dividends semi-annually in the amount
of $2.27 per share per annum and is convertible, either at the
option of the holder or
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automatically in the event such Series C Preferred Stock is no
longer held by the ESOP Trustee, into one and one-half shares of
Common Stock per share of Series C Preferred Stock, subject to
antidilution adjustment under certain circumstances. Holders of
the Series C Preferred Stock are entitled to vote on all matters
upon which holders of the Common Stock are entitled to vote, based
on the number of shares of Common Stock into which the Series C
Preferred Stock could be converted on the record date.
Participants in the ESOP confidentially direct the ESOP Trustee as
to how any Stock allocated to their accounts shall be voted. The
ESOP Trustee exercises its discretion to vote shares, both
allocated and unallocated, for which no directions are received.
In the event of a tender offer for any Common Stock or Series C
Preferred Stock ("Stock") held by the ESOP, each participant is to
instruct the ESOP Trustee regarding Stock allocated to his
account. Stock which has not been allocated will be dealt with by
the ESOP Trustee in proportion to the directions received (or not
received) for the allocated Stock. In the event of a business
combination, as defined, the ESOP terminates and the ESOP assets
are used first to repay a loan obligation of the ESOP and then
allocated pro rata among the participants.
If at any time dividends payable on any of the Preferred
Stock entitled to receive cumulative preferred dividends are in
arrears and unpaid in an amount equal to the amount of dividends
payable thereon for six quarterly dividend periods, the number of
members of the Board of Directors shall increase by two and the
holders of the Preferred Stock, voting separately as a class,
shall have the exclusive right to elect such two directors. In
addition, the vote of a majority of the outstanding shares of
Series C Preferred Stock, voting separately as a series, is
required before certain rights of the Series C Preferred Stock may
be adversely affected. The Series C Preferred Stock may be
redeemed by the Company, in whole or in part, at the Company's
option, commencing May 1, 1990, at a price equal initially to 105%
of the purchase price, or $34.02 per share, declining by 1% each
year until May 1, 1995, at and after which date the redemption
price will be equal to the purchase price of $32.40 per share,
plus in each case, an amount equal to all dividends accrued and
unpaid on such share to the date fixed for redemption.
Delaware Law and Certain Charter and Bylaw Provisions
The Company is subject to the provisions of Section 203 of
the General Corporation Law of the State of Delaware. In general,
the statute prohibits a publicly-held Delaware corporation from
engaging in a "business combination" with an "interested
stockholder" for a period of three years after the date that the
person became an interested stockholder unless (with certain
exceptions) the business combination or the transaction in which
the person became an interested stockholder is approved in a
prescribed manner. Generally, a "business combination" includes
a merger, asset or stock sale or other transaction resulting in a
financial benefit to an interested
stockholder. Generally, an "interested stockholder" is a person
who, together with affiliates and associates, owns (or within
three years prior, did own) 15% or more of the corporation's
voting stock.
The Certificate of Incorporation, as amended, and the Bylaws,
as amended, also include provisions which could be utilized to
make more difficult, and possibly discourage, attempts to acquire
control of the company. These provisions include, without
limitations, a "classified board" (election of approximately one-
third of the directors at each annual meeting), the authorized but
unissued shares of Preferred Stock, "fair price" provisions
relating to certain proposed business combinations between the
Company and an "Interested Stockholder" (i.e., the beneficial
owner of 10% or more of the company
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voting stock). Any action required or permitted to be taken by
stockholders may be taken only at a stockholders' meeting and not
by written consent. Written notice of any stockholder nomination
of an individual for election as director must be received by the
Secretary of the Company not less than 60 days prior to the first
anniversary of the last meeting of stockholders called for the
election of directors, and such notice must set forth certain
specified information concerning the nominee.
PLAN OF DISTRIBUTION
General
The Company may sell the Securities (i) through underwriters
or dealers; (ii) directly to one or more other purchasers; (iii)
through agents; (iv) to both investors and/or dealers through a
specific bidding or auction process or otherwise; or (v) through
a combination of such methods of sale. The Prospectus Supplement
with respect to the Securities will set forth the terms of the
offering of such Securities, including the name or names of any
underwriters, dealers or agents, the purchase price of such
Securities and the proceeds to the Company from such sale, any
underwriting discounts and other items constituting underwriters'
compensation, any initial public offering price and any discounts,
commissions or concessions allowed or reallowed or paid to
dealers, and any bidding or auction process. Any initial offering
price and any discounts, concessions or commissions allowed or
reallowed or paid to dealers may be changed from time to time.
If underwriters are used in an offering, the Securities will
be acquired by the underwriters for their own account. The
Securities may be offered to the public either through
underwriting syndicates represented by one or more managing
underwriters or directly by one or more of such firms. The
specific managing underwriter or underwriters, if any, will be set
forth in the Prospectus Supplement relating to the Securities
together with the members of the underwriting syndicate, if any.
Unless otherwise set forth in the Prospectus Supplement, the
obligations of the underwriters to purchase the Securities will be
subject to certain conditions precedent and the underwriters will
be obligated to purchase all such Securities if any are purchased.
The Securities may be sold directly by the Company or through
agents designated by the Company from time to time. The
Prospectus Supplement will set forth the name of any agent
involved in the offer or sale of the Securities in respect of
which the Prospectus Supplement is delivered and any commissions
payable by the Company to such agent. Unless otherwise indicated
in the Prospectus Supplement, any such agent is acting on a best
efforts basis for the period of its appointment.
The Securities may be sold from time to time in one or more
transactions, at a fixed price, at varying prices determined at
the time of sale, at market prices prevailing at the time of sale,
at prices related to such prevailing market prices or at
negotiated prices. The Company may also offer and sell the
Securities in exchange for one or more of its outstanding issues of
debt securities or preferred stock.
Any underwriters, dealers, or agents participating in the
distribution of the Securities may be deemed to be underwriters
and any discounts or commissions received by them on the sale or
resale of the Securities may be deemed to be underwriting
discounts and commissions under the Securities Act of 1933, as
amended (the "Securities Act"). Underwriters, dealers or agents
may be entitled, under agreements entered into with the Company,
to indemnification by the Company, against certain liabilities,
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<PAGE>
including liabilities under the Securities Act, and to
contribution with respect to payments which the underwriters,
dealers or agents may be required to make in respect thereof.
Underwriters, dealers and agents may engage in transactions with
or perform services for the Company in the ordinary course of
business.
The Securities, other than the Common Stock, will be a new
issue or issues of securities with no established trading market.
The Common Stock is listed, and the Company may apply for the
listing of any Preferred Stock, on the New York Stock Exchange.
No assurance can be given that the underwriters, dealers or
agents, if any, involved in the sale of the Securities will make a
market in such Securities. Whether or not any of the Securities
are listed on a national securities exchange or the underwriters,
dealers or agents, if any, involved in the sale of the Securities
make a market in such Securities, no assurance can be given as to
the liquidity of the trading market for such Securities.
If so indicated in the Prospectus Supplement, the Company
will authorize underwriters or other persons acting as the
Company's agents to solicit offers by certain institutions to
purchase Securities from the Company pursuant to contracts
providing for payment and delivery on a future date. Institutions
with which such contracts may be made include commercial and
savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions and others, but
in all cases will be subject to the approval of the Company. The
obligations of any purchaser under any such contract will be
subject to the condition that the purchase of the Securities shall
not at the time of delivery be prohibited under the laws of the
jurisdiction to which such purchaser is subject. The underwriters
and such agents will not have any responsibility in respect of the
validity or performance of such contracts.
Offers to purchase Securities may be solicited directly by
the Company and sales thereof may be made by the Company directly
to institutional investors or others who may be deemed to be
underwriters within the meaning of the Securities Act with respect
to any resale thereof. The terms of any such sales will be
described in the Prospectus Supplement relating thereto. Except
as set forth in the applicable Prospectus Supplement, no director,
officer or employee of the Company or its subsidiaries will
solicit or receive a commission in connection with direct sales by
the Company of the Securities, although such persons may respond
to inquiries by potential purchasers and perform ministerial and
clerical work in connection with any such direct sales.
EXPERTS
The Annual Report on Form 10-K for the fiscal year ended
December 31, 1993 of the Company incorporated by reference in this
prospectus and elsewhere in the registration statement has been
audited by Arthur Andersen & Co., independent public accounts, as
indicated in their reports with respect thereto, and is included
herein in reliance upon the authority of said firm as experts in
accounting and auditing in giving said reports. Reference is made
to said reports, which call attention to 1992 changes in accounting
principles with respect to the methods of accounting for income
taxes and for
postretirement benefits other than pensions.
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<PAGE>
VALIDITY OF SECURITIES
The validity of the Securities offered hereby will be passed
upon for the Company by Charles O. Ziemer, Esq., General Counsel
of the Company, and will be passed upon for any underwriter,
dealer or agent by Mayer, Brown & Platt, Chicago, Illinois. As
of March 1, 1994, Mr. Ziemer beneficially owned 25,421 shares of
Common Stock. The opinions of Mr. Ziemer and Mayer, Brown & Platt
with respect to certain series of Securities may be subject to
certain conditions and assumptions, as indicated in the Prospectus
Supplement describing such series. Mayer, Brown & Platt is
currently representing the Company in certain legal matters.
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No dealer, salesman or other person has been
authorized to give any information or to make any
representation not contained in this Prospectus
Supplement or the accompanying Prospectus and, if
U.S. $100,000,000
given or made, such information or representation
must not be relied upon as having been authorized
by the Issuer, by the Agents or by any other person.
This Prospectus Supplement and the accompanying
Prospectus do not constitute an offer to sell or
a solicitation of any offer to buy any of the CBI INDUSTRIES,
INC.
securities offered hereby to any person or by
anyone in any state in which such offer or
solicitation may not lawfully be made. Neither
the delivery of this Prospectus Supplement or
any Prospectus nor any sale made hereunder or
thereunder shall, under any circumstances,
create any implication that there had been no
change in the affairs of the Issuer since the
date hereof. Medium-Term Notes,
Series A
TABLE OF CONTENTS With Maturities of Nine
Page Months or More from
Prospectus Supplement Date of Issue
The Company..............................S-4
Description of Notes.....................S-4
Important Currency Information..........S-24
Currency Risks..........................S-25
Certain United States Federal
Income Tax Consequences...............S-27
Supplemental Plan of Distribution.......S-33
Prospectus PROSPECTUS
DATED MARCH 25, 1994
Available Information......................2 AND
Documents Incorporated by Reference........2 PROSPECTUS SUPPLEMENT
The Company................................3 DATED APRIL 19, 1994
Use of Proceeds............................3
Selected Ratios............................3
Description of Debt Securities.............4
Description of Capital Stock .............14
Plan of Distribution......................20
Experts...................................21
Validity of Securities....................21 Lehman Brothers
Merrill Lynch & Co.
Salomon Brothers Inc
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