<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 19, 1995
Registration No. 33-62545
==================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
-----------------
EMERSON ELECTRIC CO.
(Exact name of registrant as specified in its charter)
MISSOURI 43-0259330
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
8000 West Florissant Avenue
P. O. Box 4100
St. Louis, Missouri 63136 314-553-2000
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
-----------------
H. M. SMITH, ESQ.
Assistant Secretary and Assistant General Counsel
Emerson Electric Co.
Station 2431
8000 West Florissant Avenue
P. O. Box 4100
St. Louis, Missouri 63136 314-553-2431
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
Copies to:
I. JACK LERNER, ESQ. FRANCIS J. MORISON, ESQ.
Bryan Cave LLP Davis Polk & Wardwell
211 North Broadway, Suite 3600 450 Lexington Avenue
St. Louis, Missouri 63102 New York, New York 10017
314-259-2000 212-450-4000
-----------------
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration Statement.
-----------------
The registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states
that this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the
Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.
==================================================================
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* INFORMATION CONTAINED IN THIS PRELIMINARY PROSPECTUS SUPPLEMENT IS SUBJECT *
* TO COMPLETION OR AMENDMENT. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS *
* TO BUY BE ACCEPTED PRIOR TO THE TIME THAT A FINAL PROSPECTUS SUPPLEMENT IS *
* DELIVERED. THIS PRELIMINARY PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING *
* PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN *
* OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE *
* IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO *
* REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. *
*******************************************************************************
SUBJECT TO COMPLETION, DATED SEPTEMBER 19, 1995
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED SEPTEMBER --, 1995
$1,000,000,000
EMERSON ELECTRIC CO.
MEDIUM-TERM NOTES
DUE FROM 9 MONTHS TO 40 YEARS FROM DATE OF ISSUE
-------------
Emerson Electric Co. (the "Company") may offer from time to time its
Medium-Term Notes due from 9 months to 40 years from the date of issue
(the "Notes"), as selected by the purchaser and agreed to by the
Company, at an aggregate initial offering price not to exceed
$1,000,000,000 or its equivalent in another currency or composite
currency.
The Notes may be denominated in U.S. dollars or in such foreign
currencies or composite currencies as may be designated by the Company
at the time of offering. The specific currency or composite currency,
interest rate (if any), issue price and maturity date of any Note will
be set forth in the related Pricing Supplement to this Prospectus
Supplement. The Notes may be issued as Indexed Notes, the principal
amount of which, unless otherwise specified in the applicable Pricing
Supplement, payable at Maturity is determined by the fluctuation
between a Denominated Currency and an Indexed Currency or Currencies as
set forth under "Description of Notes-Indexed Notes". Unless otherwise
specified in the applicable Pricing Supplement, Notes denominated in
other than U.S. dollars or ECUs will not be sold in, or to residents
of, the country issuing the Specified Currency. See "Description of
Notes."
Interest on the Fixed Rate Notes will be payable on each February 15
and August 15 and at maturity. Interest on the Floating Rate Notes will
be payable on the dates specified therein and in the applicable Pricing
Supplement. Zero Coupon Notes will not bear interest.
Unless a Redemption Commencement Date is specified in the applicable
Pricing Supplement, the Notes will not be redeemable prior to their
Stated Maturity. If a Redemption Commencement Date is so specified, the
Notes will be redeemable at the option of the Company or the Holder or
both (as specified therein) at any time (or for a limited period) after
such date as described therein.
The Notes offered hereby will be issued in global or definitive form
in a minimum denomination of $100,000 or the approximate equivalent
thereof in the Specified Currency, as specified in the applicable
Pricing Supplement. A global Note representing Book-Entry Notes will be
registered in the name of the nominee of The Depository Trust Company,
which will act as Depositary. Beneficial 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 participants'
interests) and its participants. Except as described under "Description
of Notes-Book-Entry Notes," owners of beneficial interests in a global
Note will not be considered the Holders thereof, will not be entitled
to receive physical delivery of Notes in definitive form, and no global
Notes will be exchangeable except for another global Note of like
denomination and terms to be registered in the name of the Depositary
or its nominee. See "Description of Notes."
-------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT, ANY PRICING SUPPLEMENT
HERETO OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
-------------
<TABLE>
<CAPTION>
PRICE TO AGENTS' PROCEEDS TO
PUBLIC<F1> COMMISSION<F2> COMPANY<F2><F3>
---------- -------------- ---------------
<S> <C> <C> <C>
Per Note........................................ 100% .125%-.875% 99.875%-99.125%
Total........................................... $1,000,000,000 $1,250,000-$8,750,000 $998,750,000-$991,250,000
<FN>
-----
<F1> Notes will be issued at 100% of their principal amount, unless
otherwise specified in the applicable Pricing Supplement.
<F2> The Company will pay the Agents a commission of from .125% to
.875%, depending on maturity of the principal amount of any Notes
sold through them as agents (or sold to such Agents as principal in
circumstances in which no other discount is agreed). The Company
has agreed to indemnify the Agents against certain liabilities,
including liabilities under the Securities Act of 1933.
<F3> Before deducting estimated expenses of $485,000 payable by the
Company.
</TABLE>
-------------
Offers to purchase Notes are being solicited, on a reasonable efforts
basis, from time to time by the Agents on behalf of the Company. Notes
may be sold to the Agents on their own behalf at negotiated discounts.
The Company reserves the right to sell Notes directly on its own
behalf. No commission will be payable on any sales made directly by the
Company. The Company also reserves the right to withdraw, cancel or
modify the offering contemplated hereby without notice. No termination
date for the offering of the Notes has been established. The Company or
the Agents may reject any order as a whole or in part. See
"Supplemental Plan of Distribution."
GOLDMAN, SACHS & CO. J.P. MORGAN SECURITIES INC.
-------------
The date of this Prospectus Supplement is September --, 1995
<PAGE> 3
IN CONNECTION WITH THE DISTRIBUTION OF THE NOTES, THE AGENTS MAY
OVERALLOT OR EFFECT TRANSACTIONS IN THE NOTES WHICH STABILIZE OR
MAINTAIN THE MARKET PRICE OF THE NOTES AT A LEVEL ABOVE THAT WHICH
MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE
EFFECTED IN ANY OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING,
IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
DESCRIPTION OF NOTES
GENERAL
The following description of the particular terms of the Notes
offered hereby (referred to in the Prospectus as the "Offered Debt
Securities") supplements, and to the extent inconsistent therewith
replaces, the description of the general terms and provisions of Debt
Securities set forth in the Prospectus to which description reference
is hereby made.
The Notes constitute a single series for purposes of the Indenture
and are limited in amount as set forth on the cover page hereof. The
foregoing limit, however, may be increased by the Company if in the
future it determines that it may wish to sell additional Notes. For a
description of the rights attaching to different series of Debt
Securities under the Indenture, see "Description of Debt Securities" in
the Prospectus.
Unless previously redeemed, a Note will mature on the date ("Stated
Maturity") from 9 months to 40 years from its date of issue that is
specified on the face thereof and in the applicable Pricing Supplement
or, if such Note is a Floating Rate Note and such specified date is not
a Market Day with respect to such Note, the next succeeding Market Day
(or, in the case of a LIBOR Note, if such next succeeding Market Day
falls in the next calendar month, the next preceding Market Day). As
used here, "Market Day" means (a) with respect to any Note (other than
any LIBOR Note), any Business Day in The City of New York, and (b) with
respect to any LIBOR Note, any such Business Day on which dealings in
deposits in U.S. dollars are transacted in the London interbank market;
and "Business Day" means, as used herein with respect to any particular
location, each Monday, Tuesday, Wednesday, Thursday and Friday which is
not a day on which banking institutions in such locations are
authorized or obligated by law or executive order to close.
Each Note will be denominated in a currency or composite currency
("Specified Currency") as specified on the face thereof and in the
applicable Pricing Supplement, which may include U.S. dollars, Pounds
Sterling, Deutsche Marks, French Francs, Swiss Francs, Australian
dollars, Japanese Yen, European Currency Units (ECUs) or any other
currency or composite set forth in the applicable Pricing Supplement.
Purchasers of the Notes are required to pay for them by delivery of the
requisite amount of the Specified Currency to an Agent, unless other
arrangements have been made. Unless otherwise specified in the
applicable Pricing Supplement, payments on the Notes will be made in
the applicable Specified Currency in the country issuing the Specified
Currency (or, in the case of ECUs, Brussels, Belgium), provided that,
at the election of the Holder thereof and in certain circumstances at
the option of the Company, payments on Notes denominated in other than
U.S. dollars may be made in U.S. dollars. See "Description of Notes-
Payment of Principal and Interest."
The Notes will be issuable in fully registered global or definitive
form, as specified in the applicable Pricing Supplement. For a
description of the respective forms, denominations and transfer and
exchange procedures in respect of any such global Note and the Notes
represented thereby ("Book-Entry Notes"), reference is made to
"Description of Notes-Book-Entry Notes" below and to the applicable
Pricing Supplement. The authorized denominations of any Note
denominated in U.S. dollars will be $100,000 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 Currency for such Note equivalent, at the noon buying rate in
The City of New York for cable transfers for such Specified Currency
(the "Exchange Rate") on the first Business Day in The City of New York
and the country issuing such currency (or, in the case of ECUs,
Brussels, Belgium) next preceding the date on which the Company accepts
the offer to purchase such Note, to U.S. $100,000 (rounded down to an
integral multiple of 10,000 units of such Specified Currency) and any
greater amount that is an integral multiple of 10,000 units of such
Specified Currency.
S-2
<PAGE> 4
Notes will be sold in individual issues of Notes having such interest
rate or interest rate formula, if any, Stated Maturity and date of
original issuance as shall be selected by the initial purchasers and
agreed to by the Company. Unless otherwise indicated in the applicable
Pricing Supplement, each Note, except any Zero Coupon Note or Indexed
Note, will bear interest at a fixed rate or at a rate determined by
reference to the Commercial Paper Rate, the Prime Rate, the London
Inter-Bank Offered Rate ("LIBOR"), the Treasury Rate, the CD Rate or
the Federal Funds Rate, as adjusted by the Spread or Spread Multiplier,
if any, applicable to such Note. See "Description of Notes-Interest
Rate." Zero Coupon Notes ("Zero Coupon Notes") will be issued at a
discount from the principal amount payable at maturity thereof, but
holders of Zero Coupon Notes will not receive periodic payments of
interest thereon.
The Notes may be issued as Original Issue Discount Notes ("OID
Notes"). An Original Issue Discount Note is a Note, including any Zero
Coupon Note, which is issued at a price lower than the principal amount
thereof and which provides that upon redemption or acceleration of the
maturity thereof an amount less than the principal thereof shall become
due and payable. In the event of redemption or acceleration of the
maturity of an Original Issue Discount Note, the amount payable to the
Holder of such Note upon such redemption or acceleration will be
determined in accordance with the terms of the Note, but will be an
amount less than the amount payable at the Stated Maturity of such
Note. In addition, a Note issued at a discount may, for United States
federal income tax purposes, be considered an original issue discount
note, regardless of the amount payable upon redemption or acceleration
of maturity of such Note. See "Description of Notes-Original Issue
Discount Notes" below.
Unless otherwise specified in the applicable Pricing Supplement, the
Notes will not be subject to any sinking fund and, unless a Redemption
Commencement Date (as defined in the applicable Pricing Supplement) is
specified in the applicable Pricing Supplement, will not be redeemable
prior to their Stated Maturity. If a Redemption Commencement Date is so
specified with respect to any Note, the applicable Pricing Supplement
will also specify one or more redemption prices (expressed as a
percentage of the principal amount of such Note) ("Redemption Prices")
and the redemption period or periods ("Redemption Periods") during
which such Redemption Prices shall apply. Unless otherwise specified in
the Pricing Supplement, any such Note shall be redeemable, in whole or
in part, at the option of the Company or the Holder thereof (as
specified in such Pricing Supplement) at any time on or after such
specified Redemption Commencement Date or for a limited period (as
specified in such Pricing Supplement) at the specified Redemption Price
applicable to the Redemption Period during which such Note may be
redeemed, together with interest accrued to the redemption date.
Definitive Notes may be presented for registration of transfer or
exchange at the Corporate Trust Office of Chemical Bank (the "Transfer
Agent") at 270 Park Avenue, New York, New York 10017-2070 in The City
of New York.
INTEREST RATE
Each Note, other than a Zero Coupon Note, will bear interest from its
date of issue or from the most recent Interest Payment Date (or, if
such Note is a Floating Rate Note and the Interest Reset Dates are
weekly, from the day following the most recent Regular Record Date) to
which interest on such Note has been paid or duly provided for at the
fixed rate per annum, or at the rate per annum determined pursuant to
the interest rate formula, stated therein and in the applicable Pricing
Supplement until the principal thereof is paid or made available for
payment. Interest will be payable on each Interest Payment Date and at
Stated Maturity as specified below under "Description of Notes-Payment
of Principal and Interest."
Each Note, other than a Zero Coupon Note, will bear interest at
either (a) a fixed rate (a "Fixed Rate Note") or (b) a variable rate
determined by reference to an interest rate formula (a "Floating Rate
Note"), which may be adjusted by adding or subtracting the Spread or
multiplying by the Spread Multiplier (each term as defined below). A
Floating Rate Note may also have either or both of the following: (a) a
maximum numerical interest rate limitation, or ceiling, on the rate of
interest which may accrue during any interest period (a "Maximum
Rate"); and (b) a minimum numerical interest rate limitation, or floor,
on the rate of interest which may accrue during any interest period (a
"Minimum Rate"). The "Spread" is the number of basis points specified
in the applicable Pricing Supplement as being applicable to the
interest rate for such Note, and the "Spread Multiplier" is the
percentage specified in the applicable Pricing Supplement as being
applicable to the
S-3
<PAGE> 5
interest rate for such Note. "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. Unless otherwise provided in the
applicable Pricing Supplement, Chemical Bank will initially be the
calculation agent (the "Calculation Agent") with respect to the
Floating Rate Notes.
The applicable Pricing Supplement relating to a Fixed Rate Note will
designate a fixed rate of interest per annum payable on such Fixed Rate
Note. The applicable Pricing Supplement relating to a Floating Rate
Note will designate an interest rate basis (the "Interest Rate Basis")
for such Floating Rate Note. The Interest Rate Basis for each Floating
Rate Note will be selected from the following rates: (a) the Commercial
Paper Rate, in which case such Note will be a Commercial Paper Rate
Note; (b) the Prime Rate, in which case such Note will be a Prime Rate
Note; (c) LIBOR, in which case such Note will be LIBOR Note; (d) the
Treasury Rate, in which case such Note will be a Treasury Rate Note;
(e) the CD Rate, in which case such Note will be a CD Rate Note; (f)
the Federal Funds Rate, in which case such Note will be a Federal Funds
Rate Note; or (g) such other interest rate formula as is set forth in
such Pricing Supplement. The applicable Pricing Supplement for a
Floating Rate Note will specify the Interest Rate Basis and, if
applicable, the Calculation Agent, the Index Maturity, the Spread or
Spread Multiplier, the Maximum Rate, the Minimum Rate, the initial
interest rate, the Interest Payment Dates, the Regular Record Dates,
the Calculation Date, the Interest Determination Date and the Interest
Reset Date with respect to such Note.
The rate of interest on each Floating Rate Note will be reset daily,
weekly, monthly, quarterly, semi-annually or annually (each an
"Interest Reset Date") as specified in the applicable Pricing
Supplement. Unless otherwise specified in the applicable Pricing
Supplement, the Interest Reset Date will be, in the case of Floating
Rate Notes which reset daily, each Market Day; in the case of Floating
Rate Notes (other than Treasury Rate Notes) which reset weekly, the
Wednesday of each week; in the case of Treasury Rate Notes which reset
weekly, the Tuesday of each week; in the case of Floating Rate Notes
which reset monthly, the third Wednesday of each month; in the case of
Floating Rate Notes which reset quarterly, the third Wednesday of each
March, June, September and December; in the case of Floating Rate Notes
which reset semi-annually, the third Wednesday of two months of each
year as specified in the applicable Pricing Supplement; and in the case
of Floating Rate Notes which reset annually, the third Wednesday of one
month of each year as specified in the applicable Pricing Supplement;
provided, however, that the interest rate in effect from the date of
issue to the first Interest Reset Date with respect to a Floating Rate
Note will be the Initial Interest Rate (as set forth in the applicable
Pricing Supplement). If any Interest Reset Date for any Floating Rate
Note would otherwise be a day that is not a Market Day with respect to
such Floating Rate Note, the Interest Reset Date for such Floating Rate
Note shall be postponed to the next day that is a Market Day with
respect to such Floating Rate Note, except that in the case of a LIBOR
Note, if such next Market Day is in the next succeeding calendar month,
such Interest Reset Date shall be the immediately preceding Market Day.
The Interest Determination Date pertaining to an Interest Reset Date
for a Commercial Paper Rate Note (the "Commercial Paper Interest
Determination Date"), for a Prime Rate Note (the "Prime Rate Interest
Determination Date"), for a LIBOR Note (the "LIBOR Interest
Determination Date"), for a CD Rate Note (the "CD Rate Interest
Determination Date") and for a Federal Funds Rate Note (the "Federal
Funds Rate Interest Determination Date") will be the second Market Day
preceding such Interest Reset Date. 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 U.S. Treasury bills would
normally be auctioned. Treasury bills are usually sold at auction on
the Monday of each week, unless that day is a legal holiday, in which
case the auction is usually held on the following Tuesday, except that
such auction may be held on the preceding Friday. If, as the result of
a legal holiday, an auction is so held on the preceding Friday, such
Friday will be the Treasury Interest Determination Date pertaining to
the Interest Reset Date occurring 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 Market
Day immediately following such auction date.
All percentages resulting from any calculations referred to in this
Prospectus Supplement will be rounded upwards, if necessary, to the
next higher one hundred-thousandth of a percentage point (e.g.,
9.876541% (or
S-4
<PAGE> 6
.09876541) being rounded to 9.87655% (or .0987655)), and all U.S.
dollar amounts used in or resulting from such calculations will be
rounded to the nearest cent (with one-half cent being rounded upwards).
In addition to any maximum interest rate which may be applicable to
any Floating Rate Note pursuant to the above provisions, the interest
rate on the Floating Rate Notes will in no event be higher than the
maximum rate permitted by Missouri law, as the same may be modified by
United States law of general application. Under present Missouri law
there is no maximum rate of interest applicable to loans made to a
corporation.
Upon the request of the Holder of any Floating Rate Note, the
Calculation Agent will provide the interest rate then in effect, and,
if determined, the interest rate which will become effective on the
next Interest Reset Date with respect to such Floating Rate Note. The
Calculation Agent's determination of any interest rate will be final
and binding in the absence of manifest error.
COMMERCIAL PAPER RATE NOTES
Commercial Paper Rate Notes will bear interest at the interest rates
(calculated with reference to the Commercial Paper Rate and the Spread
or Spread Multiplier, if any), and will be payable on the dates
specified on the face of the Commercial Paper Rate Note and/or in the
applicable Pricing Supplement. Unless otherwise indicated in the
applicable Pricing Supplement, the "Calculation Date" pertaining to a
Commercial Paper Interest Determination Date will be the tenth day
after such Commercial Paper Interest Determination Date or, if any such
day is not a Market Day, the next succeeding Market Day.
Unless otherwise indicated in the applicable Pricing Supplement,
"Commercial Paper Rate" means, with respect to any Interest Reset Date,
the Money Market Yield (calculated as described below) of the per annum
rate (quoted on a bank discount basis) for the relevant Commercial
Paper Interest Determination Date for commercial paper having the
specified Index Maturity as published by the Board of Governors of the
Federal Reserve System in "Statistical Release H.15(519), Selected
Interest Rates" or any successor publication of the Board of Governors
of the Federal Reserve System ("H.15(519)") under the heading
"Commercial Paper." In the event that such rate is not published prior
to 9:00 A.M., New York City time, on the relevant Calculation Date,
then the Commercial Paper Rate with respect to such Interest Reset Date
shall be the Money Market Yield of such rate on such Commercial Paper
Interest Determination Date for commercial paper having the specified
Index Maturity 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" or any successor publication published by the
Federal Reserve Bank of New York ("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 either
H.15(519) or Composite Quotations, the Commercial Paper Rate with
respect to such Interest Reset Date shall be calculated by the
Calculation Agent and shall be the Money Market Yield of the arithmetic
mean of the offered per annum rates (quoted on a discount basis), as of
11:00 A.M., New York City time, on such Commercial Paper Interest
Determination Date, of three leading dealers of commercial paper (one
of which may be the Calculation Agent) in The City of New York selected
by the Calculation Agent for commercial paper of the specified Index
Maturity placed for an industrial issuer whose senior unsecured bond
rating is "AAA," or the equivalent, from a nationally recognized rating
agency; provided, however, that if fewer than three dealers selected as
aforesaid by the Calculation Agent are quoting as mentioned in this
sentence, the Commercial Paper Rate with respect to such Interest Reset
Date will be the Commercial Paper Rate in effect on such Commercial
Paper Interest Determination Date.
"Money Market Yield" shall be a yield (expressed as a percentage)
calculated in accordance with the following formula:
360 x D
Money Market Yield = 100 x -------------
360 - (D x M)
where "D" refers to the per annum rate for commercial paper quoted on a
discount basis and expressed as a decimal; and "M" refers to the actual
number of days in the period corresponding to the specified Index
Maturity.
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<PAGE> 7
PRIME RATE NOTES
Prime Rate Notes will bear interest at the interest rates (calculated
with reference to the Prime Rate and the Spread or Spread Multiplier,
if any), and will be payable on the dates, specified on the face of the
Prime Rate Note and in the applicable Pricing Supplement. Unless
otherwise indicated in the applicable Pricing Supplement, the
"Calculation Date" pertaining to a Prime Rate Interest Determination
Date will be the tenth day after such Prime Rate Interest Determination
Date or, if any such day is not a Market Day, the next succeeding
Market Day.
Unless otherwise indicated in the applicable Pricing Supplement,
"Prime Rate" means, with respect to any Interest Reset Date, the rate
set forth for the relevant Prime Rate Interest Determination Date in
H.15(519) under the heading "Bank Prime Loan." In the event that such
rate is not published prior to 9:00 A.M., New York City time, on the
relevant Calculation Date, then the Prime Rate with respect to such
Interest Reset Date will be the arithmetic mean of rates of interest
publicly announced by each bank that appears on the display designated
as page "NYMF" on the Reuter Monitor Money Rates Service (or such other
page as may replace the NYMF page on that service for the purpose of
displaying prime rates or base lending rates of major United States
banks) ("Reuters Screen NYMF Page") as such bank's prime rate or base
lending rate as in effect for such Prime Rate Interest Determination
Date as quoted on the Reuters Screen NYMF Page on such Prime Rate
Interest Determination Date. If fewer than four such rates appear on
the Reuters Screen NYMF Page on such Prime Rate Interest Determination
Date, the Prime Rate with respect to such Interest Reset Date will be
the arithmetic mean of the prime rates or base lending rates (quoted on
the basis of the actual number of days in the year divided by a 360-day
year) as of the close of business on such Prime Rate Interest
Determination Date by three major money center banks (one of which may
be the Calculation Agent) in The City of New York selected by the
Calculation Agent; provided, however, that if fewer than three banks
selected as aforesaid by the Calculation Agent are quoting as mentioned
in this sentence, the Prime Rate with respect to such Interest Reset
Date will be the Prime Rate in effect on such Prime Rate Interest
Determination Date.
LIBOR NOTES
LIBOR Notes will bear interest at the interest rates (calculated with
reference to LIBOR and the Spread or Spread Multiplier, if any), and
will be payable on the dates, specified on the face of the LIBOR Note
and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement,
LIBOR with respect to any Interest Reset Date will be determined by the
Calculation Agent in accordance with the following provisions:
(i) As of the Interest Determination Date, LIBOR will be either:
(a) if "LIBOR Reuters" is specified in 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 Index Currency having the Index Maturity
designated in the applicable Pricing Supplement, commencing on the
second Market Day immediately following such Interest Determination
Date, that appear on the Designated LIBOR Page as of 11:00 A.M.,
London time, on that 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 applicable Pricing Supplement, the rate
for deposits in the Index Currency having the Index Maturity
designated in the applicable Pricing Supplement, commencing on the
second Market Day immediately following such Interest Determination
Date, that appears on the Designated LIBOR Page as of 11:00 A.M.,
London time, on that Interest Determination Date. If fewer than two
offered rates appear (if "LIBOR Reuters" is specified in the
applicable Pricing Supplement) (or no rate appears, if as aforesaid,
only a single rate is required) or no rate appears (if "LIBOR
Telerate" is specified in the applicable Pricing Supplement), LIBOR
in respect of the related Interest Determination Date will be
determined as if the parties had specified the rate described in
clause (ii) below.
(ii) With respect to a LIBOR Interest Determination Date on which
fewer than two offered rates for the applicable Index Maturity appear
(if "LIBOR Reuters" is specified in the applicable Pricing
Supplement) (or on which no rate appears, if as aforesaid, only a
single rate is required) or no rate appears
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(if "LIBOR Telerate" is specified in the applicable Pricing
Supplement), LIBOR will be determined on the basis of the rates at
approximately 11:00 A.M., London time, on such LIBOR Interest
Determination Date at which deposits in U.S. dollars having the
specified Index Maturity are offered to prime banks in the London
interbank market by four major banks in the London interbank market
selected by the Calculation Agent commencing on the second Market Day
immediately following such LIBOR Interest Determination Date and in a
principal amount of not less than U.S. $1,000,000 that is
representative for a single transaction in such market at such time
(a "Representative Amount"). The Calculation Agent will request the
principal London office of each of such banks to provide a quotation
of its rate. If at least two such quotations are provided, LIBOR with
respect to such Interest Reset Date will be the arithmetic mean of
such quotations. If fewer than two quotations are provided, LIBOR
with respect to such Interest Reset Date will be the arithmetic mean
of the rates quoted at approximately 11:00 A.M., New York City time,
on such LIBOR Interest Determination Date by three major banks (one
of which may be the Calculation Agent) in The City of New York,
selected by the Calculation Agent, for loans in U.S. dollars to
leading European banks having the specified Index Maturity commencing
on the Interest Reset Date and in a Representative Amount; provided,
however, that if fewer than three banks selected as aforesaid by the
Calculation Agent are quoting as mentioned in this sentence, LIBOR
with respect to such Interest Reset Date will be the LIBOR in effect
on such LIBOR Interest Determination Date.
TREASURY RATE NOTES
Treasury Rate Notes will bear interest at the interest rates
(calculated with reference to the Treasury Rate and the Spread or
Spread Multiplier, if any) and will be payable on the dates specified
on the face of the Treasury Rate Note and in the applicable Pricing
Supplement. Unless otherwise specified in the applicable Pricing
Supplement, the "Calculation Date" with respect to a Treasury Interest
Determination Date will be the tenth day after such Treasury Interest
Determination Date or, if any such day is not a Market Day, the next
succeeding Market Day.
Unless otherwise indicated in the applicable Pricing Supplement,
"Treasury Rate" means, with respect to any Interest Reset Date, the
rate for the auction on the relevant Treasury Interest Determination
Date of direct obligations of the United States ("Treasury bills")
having the specified Index Maturity as published in H.15(519) under the
heading "U.S. Government Securities/Treasury Bills/Auction Average
(Investment)" or, if not so published by 9:00 A.M., New York City time,
on the relevant Calculation Date, the auction average rate (expressed
as a bond equivalent on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) for such auction as otherwise
announced by the United States Department of the Treasury. In the event
that the results of such auction of Treasury bills having the specified
Index Maturity are not 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 during such week, then the Treasury Rate shall be the
rate set forth in H.15(519) for the relevant Treasury Rate Interest
Determination Date for the specified Index Maturity under the heading
"U.S. Government Securities/Treasury Bills/Secondary Market." In the
event such rate is not so published by 3:00 P.M., New York City time,
on the relevant Calculation Date, then the Treasury Rate with respect
to such Interest Reset Date shall be calculated by the Calculation
Agent and shall be a yield to maturity (expressed as a bond equivalent,
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 primary United States
government securities dealers in The City of New York selected by the
Calculation Agent for the issue of Treasury bills with a remaining
maturity closest to the specified Index Maturity; provided, however,
that if fewer than three dealers selected as aforesaid by the
Calculation Agent are quoting as mentioned in this sentence, the
Treasury Rate with respect to such Interest Reset Date will be the
Treasury Rate in effect on such Treasury Interest Determination Date.
CD RATE NOTES
CD Rate Notes will bear interest at the interest rates (calculated
with reference to the CD Rate and the Spread or Spread Multiplier, if
any), and will be payable on the dates, specified on the face of the CD
Rate Note and in the applicable Pricing Supplement. Unless otherwise
indicated in the applicable Pricing Supplement, the "Calculation Date"
pertaining to a CD Interest Determination Date will be the tenth day
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after such CD Interest Determination Date or, if such day is not a
Market Day, the next succeeding Market Day.
Unless otherwise indicated in the applicable Pricing Supplement, "CD
Rate" means, with respect to any Interest Reset Date, the rate for the
relevant CD Interest Determination Date for negotiable certificates of
deposit having the specified Index Maturity as published in H.15(519)
under the heading "CDs (Secondary Market)." In the event that such rate
is not published prior to 9:00 A.M., New York City time, on the
relevant Calculation Date, then the CD Rate with respect to such
Interest Reset Date shall be the rate on such CD Rate Interest
Determination Date for negotiable certificates of deposit having the
specified Index Maturity as published in Composite Quotations under the
heading "Certificates of Deposit." If by 3:00 P.M., New York City time,
on such Calculation Date such rate is not published in either H.15(519)
or Composite Quotations, the CD Rate with respect to such Interest
Reset Date shall be calculated by the Calculation Agent and shall be
the arithmetic mean of the secondary market offered rates, as of 10:00
A.M., New York City time, on such CD Rate Interest Determination Date,
of three leading nonbank dealers of 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
market banks with a remaining maturity closest to the specified Index
Maturity in a denomination of U.S. $5,000,000; provided, however, that
if fewer than three dealers selected as aforesaid by the Calculation
Agent are quoting as mentioned in this sentence, the CD Rate with
respect to such Interest Reset Date will be the CD Rate in effect on
such CD Rate Interest Determination Date.
FEDERAL FUNDS RATE NOTES
Federal Funds Rate Notes will bear interest at the interest rates
(calculated with reference to the Federal Funds Rate and the Spread or
Spread Multiplier, if any), and will be payable on the dates, specified
on the face of the Federal Funds Rate Note and in the applicable
Pricing Supplement. Unless otherwise indicated in the applicable
Pricing Supplement, the "Calculation Date" pertaining to a Federal
Funds Interest Determination Date will be the tenth day after such
Federal Funds Interest Determination Date or, if such day is not a
Market Day, the next succeeding Market Day.
Unless otherwise indicated in the applicable Pricing Supplement,
"Federal Funds Rate" means, with respect to any Interest Reset Date,
the rate on the relevant Federal Funds Interest Determination Date for
Federal Funds as published in H.15(519) under the heading "Federal
Funds (Effective)." In the event that such rate is not published prior
to 9:00 A.M., New York City time, on the relevant Calculation Date,
then the Federal Funds Rate with respect to such Interest Reset Date
will be the rate on such Federal Funds Interest Determination Date as
published in Composite Quotations under the heading "Federal Funds/
Effective Rate." If by 3:00 P.M., New York City time, on such
Calculation Date such rate is not published in either H.15(519) or
Composite Quotations, the Federal Funds with respect to such Interest
Reset Date shall be calculated by the Calculation Agent and shall 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 fewer than three
brokers selected as aforesaid by the Calculation Agent are quoting as
mentioned in this sentence, the Federal Funds Rate with respect to such
Interest Reset Date will be the Federal Funds Rate in effect on such
Federal Funds Interest Determination Date.
INDEXED NOTES
Amounts due on a Note in respect of principal, interest and premium,
if any, and in the case of Original Issue Discount Notes, the Amortized
Face Amount (as defined below), may be determined by reference to (a) a
currency exchange rate or rates, (b) a securities or commodities
exchange index, (c) the value of a particular security or commodity or
(d) any other index or indices (any such Note being herein referred to
as an "Indexed Note"). The Pricing Supplement relating to an Indexed
Note will set forth the method by and terms on which the amount of
principal (whether at or prior to the Maturity Date thereof), interest
and premium, if any, or the Amortized Face Amount will be determined,
the tax consequences to holders of Indexed Notes, a description of
certain risks associated with investments in Indexed Notes and other
information relating to such Indexed Notes.
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PAYMENT OF PRINCIPAL AND INTEREST
Unless otherwise specified in the applicable Pricing Supplement,
payments of principal of (and premium, if any) and interest on all
Notes will be made in the applicable Specified Currency, provided,
however, that payments of principal (and premium, if any) and interest
on Notes denominated in other than U.S. dollars will nevertheless be
made in U.S. dollars (i) at the option of the Holders thereof under the
procedures described in the two following paragraphs and (ii) at the
option of the Company in the case of imposition of exchange controls or
other circumstances beyond the control of the Company as described in
the last paragraph under this heading. If specified in the applicable
Pricing Supplement, the amount of principal on the Notes therein
described will be determined by reference to an index or formula
described in such Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, and
except as provided in the next paragraph, 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 registered
Holder of such Note on the relevant Regular Record Date or at Stated
Maturity, as the case may be, has transmitted a written request for
such payment in U.S. dollars to Chemical Bank ("the Paying Agent") at
its office in The City of 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 in writing (mailed or hand delivered) or by cable or
telex or, if promptly confirmed in writing, by other form of facsimile
transmission. Any such request made with respect to any Note by a
registered 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 on
or prior to the relevant Regular Record Date or the day 15 days prior
to Stated Maturity, as the case may be. 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 payment in
U.S. dollars will be based on the highest bid quotation in The City of
New York received by the Exchange Rate Agent (as defined below) as of
11:00 A.M., New York City time, on the second Business Day next
preceding the applicable payment date from three recognized foreign
exchange dealers (one of which may be the Exchange Rate Agent) for the
purchase by the quoting dealer of the Specified Currency for U.S.
dollars for settlement on such payment date in an amount equal to the
aggregate amount of the Specified Currency payable to all Holders of
Notes electing to receive U.S. dollar payments and at which the
applicable dealer commits to execute a contract. If three such bid
quotations are not available on the second Business Day preceding the
date of payment of principal (and premium, if any) or interest with
respect to any Note, such payment will be made in the Specified
Currency. All currency exchange costs associated with any payment in
U.S. dollars on any such Note will be borne by the Holder thereof by
deductions from such payment. Unless otherwise provided in the
applicable Pricing Supplement, Chemical Bank will be the Exchange Rate
Agent (the "Exchange Rate Agent") with respect to the Notes.
Interest will be payable to the person in whose name a Note is
registered at the close of business on the Regular Record Date next
preceding each Interest Payment Date; provided, however, that interest
payable at Stated 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 and an Interest Payment
Date will be made on the Interest Payment Date following the next
succeeding Regular Record Date to the registered owner on such next
succeeding Regular Record Date. Unless otherwise indicated in the
applicable Pricing Supplement, the "Regular Record Date" with respect
to any Floating Rate Note shall be the date 15 calendar days prior to
each Interest Payment Date, whether or not such date shall be a
Business Day, and the "Regular Record Date" with respect to any Fixed
Rate Note shall be the February 1 and August 1 next preceding the
February 15 and August 15 Interest Payment Dates.
Unless otherwise indicated in the applicable Pricing Supplement and
except as provided below, interest will be payable, in the case of
Floating Rate Notes which reset daily or weekly, on the third Wednesday
of March, June, September and December of each year; in the case of
Floating Rate Notes which reset monthly, on the third Wednesday of each
month or on the third Wednesday of March, June, September and December
of each year (as indicated in the applicable Pricing Supplement); in
the case of Floating Rate Notes which reset quarterly, on the third
Wednesday of March, June, September and December of each year; in the
case of
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Floating Rate Notes which reset semi-annually, on the third Wednesday
of the two months of each year specified in the applicable Pricing
Supplement; and in the case of Floating Rate Notes which reset
annually, on the third Wednesday of the month specified in the
applicable Pricing Supplement (each an "Interest Payment Date"), and in
each case, at Stated Maturity. If an Interest Payment Date with respect
to any Floating Rate Note would otherwise fall on a day that is not a
Market Day with respect to such Note, such Interest Payment Date will
be the next succeeding Market Day (or, in the case of LIBOR Note, if
such day falls in the next calendar month, the next preceding Market
Day). If an Interest Payment Date with respect to any Fixed Rate Note
would otherwise fall on a day that is not a Market Day with respect to
such Note, the payment of interest may be made on the next succeeding
Market Day with the same force and effect as if made on the day such
payment was due.
Payments of interest on any Fixed Rate Note or Floating Rate Note
with respect to any Interest Payment Date will include interest accrued
to but excluding such Interest Payment Date; provided, however, that if
the Interest Reset Dates with respect to any Floating Rate Note are
weekly, interest payable on such Note on any Interest Payment Date,
other than interest payable on the date on which principal on such Note
is payable, will include interest accrued to but excluding the day
following the next preceding Regular Record Date.
With respect to a Floating Rate Note, accrued interest from the date
of issue or from the last date to which interest has been paid is
calculated by multiplying the face amount of such Floating Rate Note by
an accrued interest factor. Such accrued interest factor shall be
computed by adding the interest factor calculated for each day from the
date of issue, or from the last date to which interest has been paid,
to but excluding the date for which accrued interest is being
calculated. The interest factor (expressed as a decimal) for each such
day is computed by dividing the interest rate (expressed as a decimal)
applicable to such date by 360, in the case of Commercial Paper Rate
Notes, Prime Rate Notes, LIBOR Notes, CD Rate Notes or Federal Funds
Rate Notes, or by the actual number of days in the year, in the case of
Treasury Rate Notes. Interest on Fixed Rate Notes will be computed on
the basis of a 360-day year of twelve 30-day months.
Any payments on any Fixed Rate Note due on any day which is not a
Business Day in The City of New York or which is not a Business Day in
The City of St. Louis, Missouri (or in the case of any Note denominated
in other than U.S. dollars, which is not a Business Day in the country
issuing the Specified Currency (or in the case of ECUs, Brussels,
Belgium)), need not be made on such day, but may be made on the next
succeeding Business Day with the same force and effect as if made on
the due date, and no interest shall accrue for the period from and
after such date.
Payment of the principal of (and premium, if any) and any interest
due with respect to any Note at maturity to be made in U.S. dollars
will be made in immediately available funds (by check or by wire
transfer to such account as may have been appropriately designated by
the person entitled thereto) upon surrender of such Note at the
Corporate Trust Office of the Paying Agent in The City of New York,
provided that 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. Payments of interest to be made in U.S. dollars
other than at maturity will be made by check mailed to the address of
the person entitled thereto as it appears in the security register or
by wire transfer to such account as may have been appropriately
designated by such person.
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 Paying Agent as shall have been designated at least
five Business Days prior to the Interest Payment Date or date of Stated
Maturity, as the case may be, by the registered Holder of such Note on
the relevant Regular Record Date or at Stated Maturity, provided that,
in the case of payment of principal of (and premium, if any) and any
interest due at Stated 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 Paying Agent in The
City of New York and, unless revoked, any such designation made with
respect to any Note by a registered 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 account designation has not been
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received by the Paying Agent 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 Paying Agent's receipt of such a designation,
such payment will be made within five Business 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 payment are made.
If the principal of (and premium, if any) or interest on any Notes is
payable in other than U.S. dollars and such Specified Currency is not
available due to the imposition of exchange controls or other
circumstances beyond the control of the Company, the Company will be
entitled to satisfy its obligations to Holders of the Notes by making
such payment by check in U.S dollars on the basis of the noon buying
rate in The City of New York for cable transfers of the Specified
Currency as certified for customs purposes by the Federal Reserve Bank
of New York (the "Exchange Rate"), or if such Exchange Rate is not then
available, the most recently available Exchange Rate. Any payment made
under such circumstances in U.S. dollars where the required payment is
in other than U.S. dollars will not constitute an Event of Default
under the Indenture.
DEFEASANCE
Unless otherwise specified in the applicable Pricing Supplement, the
Fixed Rate Notes will be subject to defeasance and discharge as
described under "Description of Debt Securities-Defeasance" in the
Prospectus.
BOOK-ENTRY NOTES
Upon issuance, all Book-Entry Notes bearing interest (if any) at the
same rate or pursuant to the same formula, having the same date of
issuance, redemption provisions, if any, Specified Currency, Stated
Maturity and other terms will be represented by a single global Note.
Each global Note representing Book-Entry Notes will be deposited with,
or on behalf of, The Depository Trust Company, as Depositary (the
"Depositary"), located in the Borough of Manhattan, The City of New
York, and will be registered in the name of the Depositary or a nominee
of the Depositary. Currently, the Depositary accepts deposits of global
Notes denominated in U.S. dollars only.
Ownership of beneficial interests in a global Note will be limited to
participants and to persons that may hold interests through
institutions that have accounts with the Depositary ("participants").
Ownership of beneficial interests by participants in a global Note will
be shown on, and the transfer of that ownership interest will be
affected only through, records maintained by the Depositary for such
global Note. Ownership of beneficial interests in such global Note by
persons that hold through participants will be shown on, and the
transfer of that ownership interest within such participant will be
effected only through, records maintained by such participants.
Payment of principal of, premium (if any) and interest on Book-Entry
Notes represented by any such global Note will be made to the
Depositary or its nominee, as the case may be, as the sole registered
owner and the sole Holder of the Book-Entry Notes represented thereby
for all purposes under the Indenture. None of the Company, the Paying
Agent or any agent of the Company or the Paying Agent will have any
responsibility or liability for any aspect of the Depositary's records
relating to or payments made on account of beneficial ownership
interests in a global Note representing any Book-Entry Notes or for
maintaining, supervising or reviewing any of the Depositary's records
relating to such beneficial ownership interests.
The Company has been advised by the Depositary that upon receipt of
any payment of principal of or any premium or interest on any such
global Note, the Depositary will immediately credit, on its book-entry
registration and transfer system, the accounts of participants with
payments in amounts proportionate to their respective beneficial
interests in the principal amount of such global Note as shown on the
records of the Depositary. The accounts to be credited shall be
designated by the soliciting Agent or, to the extent that such Notes
are offered and sold directly by the Company, by the Company. Payments
by participants to owners of beneficial interests in a global Note held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for
customer accounts registered in "street name", and will be the sole
responsibility of such participants.
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No global Note described above may be transferred except as a whole
by a nominee of the Depositary to the Depositary or another nominee of
the Depositary, or by the Depositary or any such nominee to a successor
of the Depositary or a nominee of such successor.
A global Note representing Book-Entry Notes is exchangeable for
definitive Notes in registered form, bearing interest (if any) at the
same rate or pursuant to the same formula, having the same date of
issuance, redemption provisions, if any, Specified Currency, Stated
Maturity and other terms and of differing denominations aggregating a
like amount, only if (x) the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary for such global Note or
if at any time the Depositary ceases to be a clearing agency registered
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), (y) the Company in its sole discretion determines that all such
global Notes shall be exchangeable for definitive Notes in registered
form or (z) an Event of Default with respect to the Book-Entry Notes
represented by such global Note has occurred and is continuing. Any
global Note that is exchangeable pursuant to the preceding sentence
shall be exchangeable for definitive Notes in registered form, bearing
interest (if any) at the same rate or pursuant to the same formula,
having the same date of issuance, redemption provisions, if any,
Specified Currency, Stated Maturity and other terms and of differing
denominations aggregating a like amount. Such definitive Notes shall be
registered in the names of the owners of the beneficial interests in
such global Note as provided by the Depositary's relevant participants
(as identified by the Depositary holding such global Note).
Except as provided above, owners of beneficial interests in such a
global Note will not be entitled to receive physical delivery of Notes
in definitive form and will not be considered the Holders thereof for
any purpose under the Indenture, and no global Note representing Book-
Entry Notes shall be exchangeable. Accordingly, each person owning a
beneficial interest in such a global Note 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 under the Indenture. The
laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in definitive
form. Such limits and such laws may impair the ability to transfer
beneficial interests in a global Note.
The Indenture provides that the Depositary may grant proxies and
otherwise authorize participants to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action which
a Holder is entitled to give or take under the Indenture. The Company
understands that under existing industry practices, in the event that
the Company requests any action of Holders or that an owner of a
beneficial interest in such a global Note desires to give or take any
action which a Holder is entitled to give or take under the Indenture,
the Depositary would authorize the participants holding the relevant
beneficial interests to give or take such action, and such participants
would authorize beneficial owners owning through such participants to
give or take such action or would otherwise act upon the instructions
of beneficial owners owning through them.
The Depositary has advised the Company that the Depositary is a
limited-purpose trust company organized under the laws of the State of
New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial
Code, and a "clearing agency" registered under the Exchange Act. The
Depositary was created to hold the securities of its participants and
to facilitate the clearance and settlement of securities transactions
among its participants through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical
movement of securities certificates. The Depositary's participants
include securities brokers and dealers (including the Agents), banks,
trust companies, clearing corporations, and certain other organizations
some of whom (and/or their representatives) own the Depositary. Access
to the Depositary's book-entry system is also available to others, such
as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a participant, either directly
or indirectly.
UNITED STATES TAXATION
The following summary describes the principal United States federal
income tax consequences of ownership and disposition of the Notes to
initial holders purchasing Notes at the "issue price" (as defined
below). This summary is based on the Internal Revenue Code of 1986, as
amended to the date hereof (the "Code"), administrative pronouncements,
judicial decisions and existing and proposed Treasury Regulations,
including regulations concerning the treatment of debt instruments
issued with original issue discount (the
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"OID Regulations"), changes to any of which subsequent to the date of
this Prospectus may affect the tax consequences described herein. This
summary discusses only Notes held as capital assets within the meaning
of Section 1221 of the Code. It does not discuss all of the tax
consequences that may be relevant to a Holder in light of his
particular circumstances or to Holders subject to special rules, such
as certain financial institutions, insurance companies, dealers in
securities or foreign currencies, persons holding Notes as a hedge
against, or which are hedged against, currency risks, or Holders whose
functional currency (as defined in Code Section 985) is not the U.S.
dollar. Persons considering the purchase of Notes should consult their
tax advisors with regard to the application of the United States
federal income tax laws to their particular situations as well as any
tax consequences arising under the laws of any state, local or foreign
taxing jurisdiction.
PAYMENTS OF INTEREST
Interest paid on a Note will generally be taxable to a Holder as
ordinary interest income at the time it accrues or is received in
accordance with the Holder's method of accounting for federal income
tax purposes. Under the OID Regulations, all payments of interest on a
Note that matures one year or less from its date of issuance will be
included in the stated redemption price at maturity of the Notes and
will be taxed in the manner described below under "Original Issue
Discount Notes." Special rules governing the treatment of interest paid
with respect to Original Issue Discount Notes, including certain
Floating Rate Notes and Foreign Currency Notes are described under
"Original Issue Discount Notes" and "Foreign Currency Notes" below.
ORIGINAL ISSUE DISCOUNT NOTES
A Note which is issued for an amount less than its stated redemption
price at maturity will generally be considered to have been issued at
an original issue discount for federal income tax purposes (an
"Original Issue Discount Note"). The "issue price" of a Note will equal
the first price at which a substantial amount of the Notes is sold for
money (not including sales to bond houses, brokers or similar persons
or organizations acting in the capacity of underwriters, placement
agents or wholesalers). The stated redemption price at maturity of a
Note will equal the sum of all payments required under the Note other
than payments of "qualified stated interest." "Qualified stated
interest" is stated interest unconditionally payable as a series of
payments in cash or property (other than debt instruments of the
issuer) at least annually during the entire term of the Note and equal
to the outstanding principal balance of the Note multiplied by a single
fixed rate of interest. In addition, Floating Rate Notes providing for
(i) one or more qualified floating rates of interest, (ii) a single
fixed rate and one or more qualified floating rates, (iii) a single
rate based on one or more qualified floating rules or a single rate
based on the price of actively traded property or an index of the
prices of such property, other than foreign currency (an "objective
rate"), or (iv) a single fixed rate and a single objective rate that is
a qualified inverse floating rate will have qualified stated interest
if interest is unconditionally payable at least annually during the
term of the Note at a single qualified floating rate or a single
objective rate. Special tax considerations (including possible original
issue discount) may arise with respect to Floating Rate Notes providing
for (i) a Spread Multiplier, or (ii) a cap, floor, governor or similar
restriction that is not fixed throughout the term of the Note and is
reasonably expected as of the issue date to cause the yield on the Note
to be significantly less or more than the expected yield determined
without the restriction. Purchasers of Floating Rate Notes with any of
such features should carefully examine the applicable Pricing
Supplement and should consult their tax advisors with respect to such a
feature since the tax consequences will depend, in part, on the
particular terms of the purchased Note. Special rules may apply if a
Floating Rate Note bears interest at an objective rate and it is
reasonably expected that the average value of the rate during the first
half of the Note's term will be either significantly less than or
significantly greater than the average value of the rate during the
final half of the Note's term. Special rules may also apply with
respect to Notes paying interest annually if the period from the Issue
Date to the first Interest Payment Date is longer than one year.
If the difference between a Note's stated redemption price at
maturity and its issue price is less than a de minimis amount, i.e.,
1/4 of 1 percent of the stated redemption price at maturity multiplied
by the number of complete years to maturity, then the Note will not be
considered to have original issue discount. Holders of Notes with a de
minimis amount of original issue discount will generally include such
original issue discount in income, as capital gain, on a pro rata basis
as principal payments are made on the Notes.
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<PAGE> 15
A Holder of Original Issue Discount Notes will be required to include
any qualified stated interest payments in income in accordance with the
Holder's method of accounting for federal income tax purposes. Holders
of Original Issue Discount Notes that mature more than one year from
their date of issuance will be required to include original issue
discount in income for federal income tax purposes as it accrues, in
accordance with a constant yield method based on a compounding of
interest, before the receipt of cash payments attributable to such
income. Under this method, Holders of Original Issue Discount Notes
generally will be required to include in income increasingly greater
amounts of original issue discount in successive accrual periods.
Under the OID Regulations, a Note that matures one year or less from
its date of issuance will be treated as a "short-term Original Issue
Discount Note." In general, a cash method Holder of a short-term
Original Issue Discount Note is not required to accrue original issue
discount for United States federal income tax purposes unless it elects
to do so. Holders who make such an election, Holders who report income
for federal income tax purposes on the accrual method and certain other
Holders, including banks and dealers in securities, are required to
include original issue discount in income on such short-term Original
Issue Discount Notes as it accrues on a straight-line basis, unless an
election is made to accrue the original issue discount according to a
constant yield method based on daily compounding. In the case of a
Holder who is not required and who does not elect to include original
issue discount in income currently, any gain realized on the sale,
exchange or retirement of the short-term Original Issue Discount Note
will be ordinary income to the extent of the original issue discount
accrued on a straight-line basis (or, if elected, according to a
constant yield method based on daily compounding) through the date of
sale, exchange or retirement. In addition, such Holders will be
required to defer deductions for any interest paid on indebtedness
incurred to purchase or carry short-term Original Issue Discount Notes
in an amount not exceeding the deferred interest income, until such
deferred interest income is recognized.
Under the OID Regulations, a Holder may make an election (the
"Constant Yield Election") to include in gross income all interest that
accrues on a Note (including stated interest, acquisition discount,
original issue discount, de minimis original issue discount, market
discount, de minimis market discount, and unstated interest, as
adjusted by any amortizable bond premium or acquisition premium) in
accordance with a constant yield method based on the compounding of
interest.
Certain of the Original Issue Discount Notes may be redeemed prior to
maturity. Original Issue Discount Notes containing such a feature may
be subject to rules that differ from the general rules discussed above.
Purchasers of Original Issue Discount Notes with such a feature should
carefully examine the applicable Pricing Supplement and should consult
their tax advisors with respect to such a feature since the tax
consequences with respect to original issue discount will depend, in
part, on the particular terms and the particular features of the
purchased Note.
The OID Regulations contain aggregation rules stating that in certain
circumstances if more than one type of Note is issued as part of the
same issuance of securities to a single Holder, some or all of such
Notes may be treated together as a single debt instrument with a single
issue price, maturity date, yield to maturity and stated redemption
price at maturity for purposes of calculating and accruing any original
issue discount. Unless otherwise provided in the related Pricing
Supplement, the Company does not expect to treat any of the Notes as
being subject to the aggregation rules for purposes of computing
original issue discount.
SALE, EXCHANGE OR RETIREMENT OF THE NOTES
Upon the sale, exchange or retirement of a Note, a Holder will
recognize taxable gain or loss equal to the difference between the
amount realized on the sale, exchange or retirement and such Holder's
adjusted tax basis in the Note. For these purposes, the amount realized
does not include any amount attributable to accrued interest on the
Note. Amounts attributable to accrued interest are treated as interest
as described under "Payments of Interest" above. A Holder's adjusted
tax basis in a Note will equal the cost of the Note to such Holder,
increased by the amounts of any original issue discount previously
included in income by the Holder with respect to such Note and reduced
by any amortized premium and any principal payments received by the
Holder and, in the case of an Original Issue Discount Note, by the
amounts of any other payments that do not constitute qualified stated
interest (as defined above).
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Subject to the discussion under "Foreign Currency Notes" below, gain
or loss realized on the sale, exchange or retirement of a Note will be
capital gain or loss (except in the case of a short-term Original Issue
Discount Note, to the extent of any accrued original issue discount not
previously included in the Holder's taxable income), 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. See "Original
Issue Discount Notes" above. The excess of net long-term capital gains
over net short-term capital losses is taxed at a lower rate than
ordinary income for certain non-corporate taxpayers. The distinction
between capital gain or loss and ordinary income or loss is also
relevant for purposes of, among other things, limitations on the
deductibility of capital losses.
If a Holder purchases a Note for an amount that is greater than the
amount payable at maturity, such Holder will be considered to have
purchased such Note with "amortizable bond premium" equal in amount to
such excess, and may elect (in accordance with applicable Code
provisions) to amortize such premium, using a constant yield method,
over the remaining term of the Note (where such Note is not optionally
redeemable prior to its maturity date). If such Note may be optionally
redeemed prior to maturity after the Holder has acquired it, the amount
of amortizable bond premium is determined with reference to the amount
payable on maturity or, if it results in a smaller premium attributable
to the period of earlier redemption date, with reference to the amount
payable on the earlier redemption date. A Holder who elects to amortize
bond premium must reduce his tax basis in the Note by the amount of the
premium amortized in any year. An election to amortize bond premium
applies to all taxable debt obligations then owned and thereafter
acquired by the taxpayer and may be revoked only with the consent of
the Internal Revenue Service.
If a Holder makes a Constant Yield Election for a Note with
amortizable bond premium such election will result in a deemed election
to amortize bond premium for all of the Holder's debt instruments with
amortizable bond premium and may be revoked only with the permission of
the Internal Revenue Service with respect to debt instruments acquired
after revocation.
FOREIGN CURRENCY NOTES
The following summary relates to Notes that are denominated in a
currency or currency unit other than the U.S. dollar ("Foreign Currency
Notes").
A Holder who uses the cash method of accounting and who receives a
payment of interest in a foreign currency with respect to a Foreign
Currency Note (or, in the case of a Foreign Currency Note which is an
Original Issue Discount Note, to the extent any qualified stated
interest is received) will be required to include in income the U.S.
dollar value of the foreign currency payment (determined on the date
such payment is received) regardless of whether the payment is in fact
converted to U.S. dollars at that time, and such U.S. dollar value will
be the Holder's tax basis in the foreign currency. A cash method Holder
who receives such a payment in U.S. dollars pursuant to an option
available under such Note will be required to include the amount of
such payment in income upon receipt.
To the extent the above paragraph is not applicable, a Holder will be
required to include in income the U.S. dollar value of the amount of
interest income (including original issue discount, but reduced by
amortizable bond premium to the extent applicable) that has accrued and
is otherwise required to be taken into account with respect to a
Foreign Currency Note during an accrual period. The U.S. dollar value
of such accrued income will be determined by translating such income at
the average rate of exchange for the accrual period or, with respect to
an accrual period that spans two taxable years, at the average rate for
the partial period within the taxable year. Such Holder will recognize
ordinary income or loss with respect to accrued interest income on the
date such income is actually received. The amount of ordinary income or
loss recognized will equal the difference between the U.S. dollar value
of the foreign currency payment received (determined on the date such
payment is received) in respect of such accrual period (or, where a
Holder receives U.S. dollars, the amount of such payment in respect of
such accrual period) and the U.S. dollar value of interest income that
has accrued during such accrual period (as determined above). A Holder
may elect to translate interest income (including original issue
discount) into U.S. dollars at the spot rate on the last day of the
interest accrual period (or, in the case of a partial accrual period,
the spot rate on the last day of the taxable year) or, if the date of
receipt is within five business days of the last day of the interest
accrual period, the spot rate on the date of receipt. A Holder that
makes such an election must apply it consistently to all debt
S-15
<PAGE> 17
instruments from year to year and cannot change the election without
the consent of the Internal Revenue Service.
Any loss realized on the sale, exchange or retirement of a Foreign
Currency Note with amortizable bond premium by a Holder who has not
elected to amortize such premium under Section 171 of the Code will be
a capital loss to the extent of such bond premium. If such an election
is made, amortizable bond premium taken into account on a current basis
shall reduce interest income in units of the relevant foreign currency.
Exchange gain or loss is realized on such amortized bond premium with
respect to any period by treating the bond premium amortized in such
period as a return of principal.
A Holder's tax basis in a Foreign Currency Note, and the amount of
any subsequent adjustment to such Holder's tax basis, will be the U.S.
dollar value of the foreign currency amount paid for such Foreign
Currency Note, or of the foreign currency amount of the adjustment,
determined on the date of such purchase or adjustment. A Holder who
purchases a Foreign Currency Note with previously owned foreign
currency will recognize ordinary income or loss in an amount equal to
the difference, if any, between such Holder's tax basis in the foreign
currency and the U.S. dollar fair market value of the Foreign Currency
Note on the date of purchase.
Gain or loss realized upon the sale, exchange or retirement of a
Foreign Currency Note that is attributable to fluctuations in currency
exchange rates will be ordinary income or loss which will not be
treated as interest income or expense. Gain or loss attributable to
fluctuations in exchange rates will equal the difference between (i)
the U.S. dollar value of the foreign currency principal amount of such
Note, and any payment with respect to accrued interest, determined on
the date such payment is received or such Note is disposed of, and (ii)
the U.S. dollar value of the foreign currency principal amount of such
Note, determined on the date such Holder acquired such Note, and the
U.S. dollar value of the accrued interest received, determined by
translating such interest at the average exchange rate for the accrual
period. Such foreign currency gain or loss will be recognized only to
the extent of the total gain or loss realized by a Holder on the sale,
exchange or retirement of the Foreign Currency Note. The source of such
foreign currency gain or loss will be determined by reference to the
residence of the Holder or the "qualified business unit" of the Holder
on whose books the Note is properly reflected. Any gain or loss
realized by such a Holder in excess of such foreign currency gain or
loss will be capital gain or loss (except in the case of a short-term
Original Issue Discount Note, to the extent of any accrued original
issue discount not previously included in the Holder's income).
A Holder will have a tax basis in any foreign currency received on
the sale, exchange or retirement of a Foreign Currency Note equal to
the U.S. dollar value of such foreign currency, determined at the time
of such sale, exchange or retirement. Regulations issued under Section
988 of the Code provide a special rule for purchases and sales of
publicly traded Foreign Currency Notes by a cash method taxpayer under
which units of foreign currency paid or received are translated into
U.S. dollars at the spot rate on the settlement date of the purchase or
sale. Accordingly, no exchange gain or loss will result from currency
fluctuations between the trade date and the settlement of such a
purchase or sale. An accrual method taxpayer may elect the same
treatment required of cash-method taxpayers with respect to the
purchase and sale of publicly traded Foreign Currency Notes provided
the election is applied consistently. Such election cannot be changed
without the consent of the Internal Revenue Service. Any gain or loss
realized by a Holder on a sale or other disposition of foreign currency
(including its exchange for U.S. dollars or its use to purchase Foreign
Currency Notes) will be ordinary income or loss.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Certain non-corporate Holders may be subject to backup withholding at
a rate of 31% on payments of principal, premium and interest (including
the accrual of original issue discount, if any) on, and the proceeds of
disposition of, a Note. Backup withholding will apply only if the
Holder (i) fails to furnish its Taxpayer Identification Number ("TIN")
which, for an individual, would be his Social Security number, (ii)
furnishes an incorrect TIN, (iii) is notified by the Internal Revenue
Service that it has failed to properly report payments of interest and
dividends or (iv) under certain circumstances, fails to certify, under
penalty of perjury, that it has furnished a correct TIN and has not
been notified by the Internal Revenue Service that it is subject to
backup withholding for failure to report interest and dividend
payments. Holders should consult their tax advisors
S-16
<PAGE> 18
regarding their qualification for exemption from backup withholding and
the procedure for obtaining such an exemption if applicable.
The amount of any backup withholding from a payment to a Holder will
be allowed as a credit against such Holder's United States federal
income tax liability and may entitle such Holder to a refund, provided
that the required information is furnished to the Internal Revenue
Service.
FOREIGN CURRENCY RISKS
GENERAL
Exchange Rates and Exchange Controls. An investment in Notes that are
denominated in, or the payment of which is related to the value of, a
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. Such risks include, without limitation, the possibility of
significant changes in rates of exchange between the U.S. dollar and
the various foreign currencies (or composite currencies) and the
possibility of the imposition or modification of foreign exchange
controls by either the U.S. or foreign governments. Such risks
generally depend on economic and political events over which the
Company has no control. In recent years, rates of exchange between the
U.S. dollar and certain foreign currencies have been highly volatile
and such volatility may be expected to continue 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. Depending on the
specific terms of a currency linked Note, changes in exchange rates may
result in the decrease in its effective yield, and in certain
circumstances could result in a loss to the investor.
Governments have imposed from time to time and may in the future
impose exchange controls which could affect exchange rates as well as
the availability of a specified foreign currency at the time of payment
of principal of, (premium, if any) or interest on a note. Even if there
are no actual exchange controls, it is possible that the Specified
Currency for any particular Note would not be available at such Note's
maturity. In that event, the Company will repay in U.S. dollars on the
basis of the most recently available Exchange Rate. See "Description of
Notes-Payment of Principal and Interest."
THIS PROSPECTUS SUPPLEMENT AND THE ATTACHED PROSPECTUS AND PRICING
SUPPLEMENT DO NOT DESCRIBE ALL THE RISKS OF AN INVESTMENT IN THE NOTES
DENOMINATED IN, OR THE PAYMENT OF WHICH IS RELATED TO THE VALUE OF, A
CURRENCY (OR A 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 AS SUCH RISKS MAY CHANGE FROM TIME TO TIME. PROSPECTIVE INVESTORS
SHOULD CONSULT THEIR OWN FINANCIAL AND LEGAL ADVISORS AS TO THE RISKS
ENTAILED BY AN INVESTMENT IN SUCH NOTES. SUCH NOTES ARE NOT AN
APPROPRIATE INVESTMENT FOR INVESTORS WHO ARE UNSOPHISTICATED WITH
RESPECT TO FOREIGN CURRENCY TRANSACTIONS.
Currently, there are limited facilities in the United States for
conversion of U.S. dollars into foreign currencies, and vice versa. In
addition, most banks do not currently offer non-U.S. dollar denominated
checking or savings account facilities in the United States.
Accordingly, payments on Notes made in a Specified Currency other than
U.S. dollars will be made from an account with a bank located in the
country issuing the Specified Currency (or, with respect to Notes
denominated in ECUs, Brussels, Belgium). See "Description of Notes-
Payment of Principal and Interest."
Unless otherwise specified in the applicable Pricing Supplement,
Notes denominated in other than U.S. dollar or ECUs will not be sold
in, or to residents of, the country issuing the Specified Currency in
which particular Notes are denominated. The information set forth in
this Prospectus Supplement is directed to prospective purchasers who
are United States residents, and the Company disclaims any
responsibility to advise prospective purchasers who are residents of
countries other than the United States with respect to any matters that
may affect the purchase, holding or receipt of payments of principal of
and interest on the Notes. Such persons should consult their own
financial and legal advisors with regard to such matters.
GOVERNING LAW AND JUDGMENTS
The Notes will be governed by and construed in accordance with the
laws of the State of New York. If an action based on the Notes were
commenced in a court in the United States, it is likely that such court
would
S-17
<PAGE> 19
grant judgment relating to the Notes only in U.S. dollars. It is not
clear, however, whether, in granting such judgment, the rate of
conversion into U.S. dollars would be determined with reference to the
date of default, the date judgment is rendered or some other date.
EXCHANGE RATE AND CONTROLS FOR SPECIFIED CURRENCIES
With respect to any Note denominated in, or the payment of which is
related to, the value of a foreign currency, the applicable Pricing
Supplement shall include information with respect to applicable current
exchange controls, if any, and historic exchange rate information on
such currency. The information therein will constitute a part of this
Prospectus Supplement and is furnished as a matter of information only
and should not be regarded as indicative of the range of or trends in
fluctuations in currency exchange rates that may occur in the future.
SUPPLEMENTAL PLAN OF DISTRIBUTION
Subject to the terms and conditions set forth in the Distribution
Agreement, dated April 17, 1991, as amended (the "Distribution
Agreement"), the Notes are being offered on a continuing basis by the
Company through Goldman, Sachs & Co. or J.P. Morgan Securities Inc.
(the "Agents"), who have agreed to use reasonable efforts to solicit
purchases of the Notes. The Company will have the sole right to accept
offers to purchase Notes and may reject any proposed purchase of Notes
as a whole or in part. The Agents shall have the right, in their
discretion reasonably exercised, to reject any offer to purchase Notes,
as a whole or in part. The Company will pay the Agents a commission of
from .125% to .875% of the principal amount of Notes, depending upon
maturity, for sales made through them as Agents.
The Company may also sell Notes to the Agents as principals for their
own accounts at a discount to be agreed upon at the time of sale, or
the purchasing Agents may receive from the Company a commission or
discount equivalent to that set forth on the cover page hereof in the
case of any such principal transaction in which no other discount is
agreed. Such Notes may be resold at prevailing market prices, or at
prices related thereto, at the time of such resale, as determined by
the Agents. The Company reserves the right to sell Notes directly on
its own behalf. No commission will be payable on any Notes sold
directly by the Company. In addition, the Company may appoint
additional agents for the purpose of soliciting offers to purchase
Notes.
The Agents, as agents or principals, may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933 (the
"Act"). The Company has agreed to indemnify the Agents against certain
liabilities, including liabilities under the Act. The Company has
agreed to reimburse the Agents for certain expenses.
Goldman, Sachs & Co. and J.P. Morgan Securities Inc. have each in the
past performed various investment banking services for the Company and
may perform such services in the future.
Notes may also be sold at the price to the public set forth herein to
dealers who may resell to investors. Such dealers may be deemed to be
"underwriters" within the meaning of the Act.
The Notes are a new issue of securities with no established trading
market and will not be listed on any securities exchange. No assurance
can be given as to the existence or liquidity of the secondary market
for the Notes.
VALIDITY OF NOTES
The legality of the Notes will be passed upon for the Company by H.
M. Smith, Esq., Assistant Secretary and Assistant General Counsel of
the Company, and for the Agents by Davis Polk & Wardwell, 450 Lexington
Avenue, New York, New York 10017. Mr. Smith beneficially owns 1,347
shares of Common Stock of the Company and has options to purchase 7,902
shares. Davis Polk & Wardwell will rely on the opinion of Mr. Smith
with respect to all matters of Missouri law. Davis Polk & Wardwell acts
as counsel to the Company from time to time with respect to various
matters.
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*******************************************************************************
* INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A *
* REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE *
* SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR *
* MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT *
* BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR *
* THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE *
* SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE *
* UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS *
* OF ANY SUCH STATE. *
*******************************************************************************
SUBJECT TO COMPLETION, DATED SEPTEMBER 19, 1995
EMERSON ELECTRIC CO.
DEBT SECURITIES
-----------------
Emerson Electric Co. (the "Company") may offer and sell from time to
time its debt securities consisting of debentures, notes and/or other
unsecured evidences of indebtedness (the "Debt Securities") in one or
more series in an aggregate principal amount not to exceed
$1,000,000,000 (or, if the principal of the Debt Securities is payable
in a foreign or composite currency, the equivalent thereof at the time
of offering). The Debt Securities may be offered as separate series on
terms to be determined at the time of sale. The specific designation,
aggregate principal amount, denominations, maturity, premium, if any,
rate (which may be fixed or variable) and time of payment of any
interest, terms for any redemption at the option of the Company or the
holder, terms for any sinking fund payments, the initial public
offering price and the other terms in connection with the offering and
sale of the Debt Securities in respect of which this Prospectus is
being delivered will be set forth in an accompanying Prospectus
Supplement (the "Prospectus Supplement") and Pricing Supplement, if
any.
The Company may sell Debt Securities to or through underwriters or
dealers, and also may sell Debt Securities directly to other purchasers
or through agents. See "Plan of Distribution". The names of, and the
principal amounts, if any, to be purchased by underwriters or sold
through agents and the compensation of such underwriters or agents will
be set forth in an accompanying Prospectus Supplement.
-----------------
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 COM-
MISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------------
The date of this Prospectus is September --, 1995.
<PAGE> 21
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE
IN THIS PROSPECTUS AND THE PROSPECTUS SUPPLEMENT IN CONNECTION WITH THE
OFFERING MADE HEREBY, AND IF GIVEN OR MADE SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY
THE COMPANY OR BY ANY PERSON. NEITHER THIS PROSPECTUS NOR ANY
PROSPECTUS SUPPLEMENT CONSTITUTES AN OFFER TO SELL OR THE SOLICITATION
OF ANY OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED
IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT OR AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY JURISDICTION
TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION
IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY
PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION
CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE
DATE OF SUCH INFORMATION.
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission
(the "Commission") a Registration Statement under the Securities Act of
1933, as amended, with respect to the Debt Securities. This Prospectus
does not contain all the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the
rules and regulations of the Commission. Copies of the Registration
Statement, with exhibits, are on file at the offices of the Commission
and may be obtained upon request from the Commission upon payment of
the prescribed fees.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "1934 Act") and in accordance
therewith files reports, proxy statements and other information with
the Commission.
Such reports, proxy statements and other information filed by the
Company can be inspected and copied at the public reference facilities
maintained by the Commission at its principal offices at 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the Commission's regional
offices located at 500 West Madison Street, 14th Floor, Chicago,
Illinois 60601 and Seven World Trade Center, Suite 1300, New York, New
York 10048. Copies of such material can be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. In addition, copies of such
material and other information about the Company are available for
inspection at the New York Stock Exchange, 20 Broad Street, New York,
New York and the Chicago Stock Exchange, 440 South LaSalle Street,
Chicago, Illinois.
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed by the Company under the 1934 Act are
incorporated by reference herein:
1. Annual Report on Form 10-K for the fiscal year ended September
30, 1994.
2. Quarterly Reports on Form 10-Q for the quarterly periods ended
December 31, 1994, March 31, 1995 and June 30, 1995.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the 1934 Act subsequent to the date of this Prospectus
and prior to the termination of the offering of the Debt Securities
shall be deemed to be incorporated by reference herein and to be a part
hereof from the date of filing of such document. Any statement
contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for
purposes of this Prospectus to the extent that a statement contained
herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes
such statement. Any such statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
The Company hereby undertakes to provide without charge to each
person to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any and all of the documents referred
to above which have been or may be incorporated by reference herein,
other than exhibits thereto (unless such exhibits are specifically
incorporated by reference in such documents). Requests for such
information should be directed to H. M. Smith, Assistant Secretary and
Assistant General Counsel, Emerson Electric Co., Station 2431, 8000
West Florissant Avenue, P. O. Box 4100, St. Louis, Missouri 63136,
telephone (314) 553-2431.
2
<PAGE> 22
THE COMPANY
The Company was founded in 1890 and has evolved into a diversified
manufacturing company with more than 40 separate operating divisions.
The Company is engaged principally in the design, manufacture and sale
of a broad range of electrical and electronic products and systems. The
principal executive offices of the Company are located at 8000 West
Florissant Avenue, P. O. Box 4100, St. Louis, Missouri 63136, and its
telephone number is (314) 553-2000.
USE OF PROCEEDS
Unless otherwise specified in a Prospectus Supplement, the Company
intends to add the net proceeds from the sale of the Debt Securities to
its general funds, to be used for general corporate purposes, including
working capital, capital expenditures, and the repayment of short-term
borrowings. Prior to such application, the net proceeds may be invested
in short-term investments.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed
charges of the Company for the periods indicated. For purposes of
computation of the ratio of earnings to fixed charges, earnings consist
of income before income taxes and cumulative effects of changes in
accounting principles plus the amount of fixed charges. Fixed charges
consist of interest expense and that portion of rental expense deemed
to represent interest.
<TABLE>
<CAPTION>
FISCAL YEAR
ENDED RATIO OF EARNINGS
SEPTEMBER 30 TO FIXED CHARGES
------------ -----------------
<S> <C>
1990................................................................................. 7.0x
1991................................................................................. 7.1x
1992................................................................................. 8.6x
1993................................................................................. 7.5x
1994................................................................................. 11.0x
<CAPTION>
NINE MONTHS
ENDED
JUNE 30
-----------
<S> <C>
1995................................................................................. 10.0x
</TABLE>
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets
forth certain general terms and provisions of the Debt Securities to
which any Prospectus Supplement may relate. The particular terms of the
Debt Securities offered by any Prospectus Supplement (the "Offered Debt
Securities") and the extent, if any, to which such general provisions
may not apply to the Debt Securities so offered will be described in
the Prospectus Supplement relating to such Offered Debt Securities.
The Debt Securities are to be issued under an Indenture (the
"Indenture") between the Company and The Boatmen's National Bank of St.
Louis, as Trustee (the "Trustee"), a copy of which is filed as an
exhibit to the Registration Statement. The following summary of certain
provisions of the Debt Securities and the Indenture does not purport to
be complete and is subject to, and is qualified in its entirety by
reference to, all the provisions of the Indenture, including the
definitions therein of certain terms. Whenever particular provisions or
defined terms in the Indenture are referred to herein, such provisions
or defined terms are incorporated by reference. Section references used
herein are references to the Indenture.
GENERAL
The Debt Securities will be unsecured obligations of the Company.
The Indenture does not limit the amount of Debt Securities that may
be issued thereunder or otherwise and provides that Debt Securities may
be issued thereunder from time to time in one or more series.
3
<PAGE> 23
Reference is made to the Prospectus Supplement relating to the
particular series of Offered Debt Securities offered thereby for the
following terms of the Offered Debt Securities: (i) the title of the
Offered Debt Securities; (ii) any limit on the aggregate principal
amount of the Offered Debt Securities; (iii) the price (expressed as a
percentage of the aggregate principal amount thereof) at which the
Offered Debt Securities will be issued; (iv) the date or dates on which
the Offered Debt Securities will mature; (v) the rate or rates (which
may be fixed or variable) per annum at which the Offered Debt
Securities will bear interest, if any; (vi) the date from which such
interest, if any, on the Offered Debt Securities will accrue, the dates
on which such interest, if any, will be payable, the date on which
payment of such interest, if any, will commence and the regular record
dates for such interest payment dates, if any; (vii) the dates, if any,
on which and the price or prices at which the Offered Debt Securities
will, pursuant to any mandatory sinking fund provisions, or may,
pursuant to any optional sinking fund provisions, be redeemed by the
Company, and the other detailed terms and provisions of any such
sinking fund; (viii) the date, if any, after which and the price or
prices at which the Offered Debt Securities may, pursuant to any
redemption provisions, be redeemed, and the other detailed terms and
provisions of such redemption; (ix) the application, if any, of any
defeasance provisions and other detailed terms and provisions relating
to such defeasance; (x) if other than the principal amount thereof, the
amount of Offered Debt Securities which shall be payable upon
declaration of acceleration of the maturity thereof; (xi) any
additional restrictive covenants or other material terms relating to
the Offered Debt Securities; (xii) any additional Events of Default (as
specified in the Indenture) provided with respect to the Offered Debt
Securities; (xiii) if other than U.S. dollars, the currency (including
composite currencies) in which payment of principal of (and premium, if
any) and/or interest, if any, on the Offered Debt Securities shall be
payable; and (xiv) if the amount of payments of principal of (and
premium, if any) and/or interest, if any, on the Offered Debt
Securities may be determined with reference to an index based on a
currency (including composite currencies) other than the stated
currency of the Offered Debt Securities, the manner in which such
amounts shall be determined.
Principal, premium, if any, and interest, if any, will be payable,
and the Debt Securities will be transferable, at the principal
executive offices of the Company in St. Louis, at the office or agency
of the Company maintained for such purposes, which is The Boatmen's
National Bank of St. Louis, Corporate Trust Department, 510 Locust
Street, St. Louis, Missouri 63101, or at such other places as the
Company may designate. Unless other arrangements are made, interest
will be paid by checks mailed to the Holders at their registered
addresses. (Sections 3.1 and 3.2)
Unless otherwise indicated in the Prospectus Supplement relating
thereto, the Debt Securities will be issued only in fully registered
form, without coupons, in denominations of $1,000 or any multiple
thereof. No service charge will be made for any registration of
transfer or exchange of the Offered Debt Securities, but the Company
may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. (Section 2.8)
Debt Securities may be issued under the Indenture as Original Issue
Discount Securities to be offered and sold at a substantial discount
below their stated principal amount. Federal income tax consequences
and other special considerations applicable to any such Original Issue
Discount Securities will be described in the Prospectus Supplement
relating thereto. "Original Issue Discount Security" means any security
which provides for the declaration of acceleration of the maturity of
an amount less than the principal amount thereof upon the occurrence of
an Event of Default and the continuation thereof. (Section 5.1)
Debt Securities may be issued, from time to time, with the principal
amount payable at maturity or the amount of interest payable on an
interest payment date, to be determined by reference to one or more
currency exchange rates, commodity prices, equity indices or other
factors. Holders of such Debt Securities may receive a principal amount
at maturity or a payment of interest on an interest payment date with a
value that is greater than or less than the face amount of such Debt
Security or the amount of interest otherwise payable on such interest
payment date, as the case may be, depending upon the value at maturity
or on such interest payment date of the applicable currency, commodity,
equity index or other factor. Information as to the methods for
determining the principal amount payable at maturity or the amount of
interest payable on an interest payment date, as the case may be, the
currencies, commodities, equity indices or other factors to which the
principal amount payable at maturity or interest is linked and certain
additional tax considerations, if any, will be set forth in the
applicable Prospectus Supplement.
4
<PAGE> 24
CERTAIN RESTRICTIONS
Unless otherwise specified in a future supplemental indenture
relating to an individual issue of Debt Securities, the covenants
contained in the Indenture and the Debt Securities would not afford
holders of the Debt Securities protection in the event of a highly
leveraged or other transaction involving the Company that may adversely
affect Holders. If a future supplemental indenture contains covenants to
afford certain holders of the Debt Securities protection in the event of
a highly leveraged or similar transaction, the Prospectus Supplement
relating to such issue of Debt Securities (or an applicable pricing
supplement) will provide a brief description of such protective
covenants.
Limitations on Liens. The Indenture contains covenants providing
that, so long as any of the Debt Securities remains outstanding, the
Company will not, nor will it permit any Restricted Subsidiary (as
defined below) to issue, assume or guarantee any debt for money
borrowed ("Debt") if such Debt is secured by a mortgage (as defined in
the Indenture) upon any manufacturing plant or manufacturing facility
owned by the Company or any Restricted Subsidiary which is located
within the continental United States and, in the opinion of the Board
of Directors, is of material importance to the total business conducted
by the Company and its Restricted Subsidiaries taken as a whole (a
"Principal Property") or upon any shares of stock or indebtedness of
any Restricted Subsidiary (whether such Principal Property, shares of
stock or indebtedness were owned on the date of the Indenture or
thereafter acquired) without in any such case effectively and
concurrently providing that the Debt Securities will be secured equally
and ratably with such Debt, except that the foregoing restriction will
not apply to any Debt secured by: (i) mortgages on property, shares of
stock or indebtedness of any corporation existing at the time such
corporation becomes a Restricted Subsidiary; (ii) mortgages on property
existing at the time of acquisition thereof and certain purchase money
mortgages; (iii) mortgages securing Debt owing by any Restricted
Subsidiary to the Company or another Restricted Subsidiary; (iv)
mortgages existing at the date of the Indenture; (v) mortgages on
property 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 as an entirety or substantially as an entirety to the
Company or a Restricted Subsidiary; (vi) mortgages on property of the
Company or a Restricted Subsidiary in favor of the United States, any
State thereof or any other country (or any political subdivision
thereof) to secure payments pursuant to any contract or statute or to
secure any indebtedness incurred for the purpose of financing all or
any part of the purchase price or the cost of construction of the
property subject to such mortgages; or (vii) any extension, renewal or
replacement (or successive extensions, renewals, or replacements), in
whole or in part, of any mortgage referred to in the foregoing
exceptions (i) through (vi).
A Restricted Subsidiary is defined as a direct or indirect subsidiary
of the Company substantially all of the property of which is located
within the continental United States and which owns any Principal
Property (except a subsidiary principally engaged in leasing or in
financing installment receivables or overseas operations).
Notwithstanding the above, the Indenture provides that the Company
and 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 (i) through (vii)) does not exceed 10% of the
consolidated net tangible assets of the Company and its consolidated
subsidiaries as shown on the consolidated financial statements of the
Company for its most recent fiscal quarter. (Section 3.6)
Limitation on Sale and Leaseback Transactions. The Indenture contains
covenants prohibiting transactions involving the sale and leaseback
with any person (other than a Restricted Subsidiary or the Company) by
the Company or any Restricted Subsidiary of any Principal Property
(whether owned on the date of the Indenture or thereafter acquired),
except for temporary leases with a term of not more than three years,
unless (a) the Company or such Restricted Subsidiary would be entitled
to issue, assume or guarantee Debt secured by the property involved at
least equal in amount to the Attributable Debt in respect of such
transaction without equally and ratably securing the Debt Securities,
provided that such Attributable Debt shall thereupon be deemed to be
Debt subject to the provisions of the limitation on liens in the
Indenture (Section
5
<PAGE> 25
3.6), or (b) the Company applies an amount in cash equal to such
Attributable Debt within 90 days of the effective date of any such
transaction to the retirement (other than any mandatory retirement or
payment at maturity) of long-term Debt of the Company or a Restricted
Subsidiary. Attributable Debt is defined as the present value
(discounted as provided in the Indenture using an interest rate which
is the weighted average yield to maturity of the Debt Securities
outstanding at the time of such transaction) of the obligation of a
lessee for net rental payments during the remaining term of any lease
entered into in connection with such transaction. (Section 3.7)
Restrictions on Consolidation, Merger or Sale. The Indenture provides
that the Company will not consolidate or merge or sell or convey all or
substantially all its assets unless (a) the surviving corporation (if
other than the Company) is a domestic corporation and shall assume the
obligations of the Company on the Debt Securities and under the
Indenture and (b) immediately after giving effect to such transactions,
no default shall have happened. (Section 9.1)
DEFEASANCE
The Indenture provides, if such provision is made applicable to the
Debt Securities of any series pursuant to Section 2.3 of the Indenture,
that the Company may elect either (a) to defease and be discharged from
any and all obligations with respect to such Debt Securities (except
for the obligations to register the transfer or exchange of such Debt
Securities, to replace temporary or mutilated, destroyed, lost or
stolen Debt Securities, to maintain an office or agency in respect of
the Debt Securities and to hold moneys for payment in trust)
("defeasance") or (b) to be released from its obligations with respect
to such Debt Securities under Sections 3.6 and 3.7 of the Indenture
(being the restrictions described under "Certain Restrictions-
Limitations on Liens" and "Certain Restrictions-Limitation on Sale and
Leaseback Transactions," respectively) ("covenant defeasance"), upon
the deposit with the Trustee (or other qualifying trustee), in trust
for such purpose, of money and/or U.S. Government Obligations which
through the payment of principal and interest in accordance with their
terms will provide money in an amount sufficient to pay the principal
of (and premium, if any) and interest, if any, on such Debt Securities,
and any mandatory sinking fund or analogous payments thereon, not later
than one day before the scheduled due dates therefor. Such a trust may
only be established if, among other things, the Company has delivered
to the Trustee an opinion of counsel (as specified in the Indenture) to
the effect that the Holders of such Debt Securities will not recognize
income, gain or loss for Federal income tax purposes as a result of
such defeasance or covenant defeasance and will be subject to Federal
income tax on the same amounts, in the same manner and at the same
times as would have been the case if such defeasance or covenant
defeasance had not occurred. Such opinion, in the case of defeasance
under clause (a) above, must refer to and be based upon a ruling of the
Internal Revenue Service or a change in applicable Federal income tax
law occurring after the date of the Indenture. The Prospectus
Supplement may further describe the provisions, if any, permitting such
defeasance or covenant defeasance with respect to the Debt Securities
of a particular series. (Sections 13.1, 13.2, 13.3 and 13.4)
EVENTS OF DEFAULT, NOTICE AND WAIVER
The Indenture provides that, if certain Events of Default specified
therein in respect of any series of Debt Securities shall have happened
and be continuing, either the Trustee or the Holders of 25% in
principal amount of the outstanding Debt Securities of such series may
declare the principal, and accrued interest, if any, of all securities
of such series to be due and payable. If other specified Events of
Default shall have happened and be continuing, either the Trustee or
the Holders of 25% in principal amount of the outstanding Debt
Securities of all series may declare the principal, and accrued
interest, if any, of all the outstanding Debt Securities to be due and
payable. (Section 5.1)
Events of Default in respect of any series are defined in the
Indenture as being: default for 30 days in payment of any interest
installment when due; default in payment of principal of or premium, if
any, on, or any sinking fund installment or analogous obligation with
respect to, Debt Securities of such series when due; unless stayed by
litigation, default for 90 days after notice to the Company by the
Trustee or by the Holders of 25% in principal amount of the outstanding
Debt Securities of such series in performance of any covenant in the
Indenture in respect of such series; and certain events of bankruptcy,
insolvency and reorganization. (Section 5.1)
6
<PAGE> 26
The Indenture provides that the Trustee will, within 90 days after
the occurrence of a default in respect of any series of Debt
Securities, give to the Holders of such series notice of all uncured
and unwaived defaults known to it; provided that, except in the case of
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 will
be protected in withholding such notice if it in good faith determines
that the withholding of such notice is in the interest of the Holders
of such series. The term "default" for the purpose of this provision
means the happening of any of the Events of Default specified above,
except that any grace period or notice requirement is eliminated.
(Section 5.11)
The Indenture contains provisions entitling the Trustee, subject to
the duty of the Trustee during an Event of Default in respect of any
series of Debt Securities to act with the required standard of care, to
be indemnified by the Holders of the Debt Securities of such series,
before proceeding to exercise any right or power under the Indenture at
the request of Holders of such series. (Article Six)
If any Event of Default has occurred, the Indenture provides that the
Holders of a majority in principal amount of the outstanding Debt
Securities of any series may direct the time, method and place of
conducting proceedings for remedies available to the Trustee, or
exercising any trust or power conferred on the Trustee, in respect of
such series. (Section 5.9)
The Indenture includes a covenant that the Company will file annually
with the Trustee a certificate as to compliance with conditions and
covenants (without regard to any grace period or notice requirement).
(Section 3.5)
In certain cases, the Holders of a majority in principal amount of
the outstanding Debt Securities of a series, on behalf of the Holders
of all Debt Securities of such series, or the Holders of a majority of
all outstanding Debt Securities voting as a single class, on behalf of
the Holders of all outstanding Debt Securities, may waive any past
default or Event of Default, or compliance with certain provisions of
the Indenture, except among other things a default not theretofore
cured in payment of the principal of, premium, if any, or interest, if
any, on, or any sinking fund installment or analogous obligation with
respect to, any of the Debt Securities of such series. (Sections 5.1
and 5.10)
MODIFICATION OR AMENDMENT OF THE INDENTURE
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of 66 2/3% in principal amount
of the outstanding Debt Securities of the affected series, to execute
supplemental indentures adding any provisions to or changing or
eliminating any of the provisions of the Indenture or modifying the
rights of the Holders of Debt Securities of such series, except that no
such supplemental indenture may, without the consent of the Holders of
all of the affected Debt Securities, among other things change the
maturity of any Debt Securities, or reduce the principal amount
thereof, or any premium thereon or reduce the rate or extend the time
of payment of interest thereon, or reduce any amount payable on
redemption thereof or reduce the amount of the principal of an Original
Issue Discount Security that would be due and payable upon an
acceleration of the maturity thereof or the amount thereof provable in
bankruptcy, or impair or affect the right of any Holder of Debt
Securities to institute suit for the payment thereof or, if the Debt
Securities provide therefor, any right of repayment at the option of
the Holder, or reduce the aforesaid percentage of Debt Securities, the
consent of the Holders of which is required for any such supplemental
indenture. (Section 8.2)
REGARDING THE TRUSTEE
The Company currently has and anticipates that it will maintain lines
of credit, and have other customary banking relationships, with The
Boatmen's National Bank of St. Louis, the Trustee.
PLAN OF DISTRIBUTION
The Company may sell Debt Securities to or through underwriters or
dealers, and also may sell Debt Securities directly to other purchasers
or through agents. Such firms may also act as agents in the sale of
Debt Securities. Only underwriters named in the Prospectus Supplement
are deemed to be underwriters in connection with the Debt Securities
offered thereby.
7
<PAGE> 27
The distribution of the Debt Securities may be effected from time to
time in one or more transactions at a fixed price or prices, which may
be changed, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices.
In connection with the sale of Debt Securities, underwriters may
receive compensation from the Company or from purchasers of Debt
Securities for whom they may act as agents in the form of discounts,
concessions or commissions. Underwriters, dealers and agents that
participate in the distribution of Debt Securities may be deemed to be
underwriters and any discounts or commissions received by them and any
profit on the resale of Debt Securities by them may be deemed to be
underwriting discounts and commissions under the Act. Any such
underwriter or agent will be identified, and any such compensation will
be described, in the Prospectus Supplement.
Under agreements which may be entered into by the Company,
underwriters, dealers and agents who participate in the distribution of
Debt Securities may be entitled to indemnification by the Company
against certain liabilities, including liabilities under the Act, or to
contribution with respect to payments which the underwriters, dealers
or agents may be required to make in respect thereof.
If so indicated in the Prospectus Supplement, the Company will
authorize dealers or other persons acting as the Company's agents to
solicit offers by certain institutions to purchase Debt 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.
EXPERTS
The consolidated financial statements and schedule of Emerson
Electric Co. and subsidiaries as of September 30, 1994 and 1993, and
for each of the years in the three-year period ended September 30, 1994
incorporated by reference herein, have been incorporated herein in
reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated elsewhere herein, and upon
the authority of said firm as experts in accounting and auditing.
8
<PAGE> 28
========================================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE
IN THIS PROSPECTUS SUPPLEMENT, ANY PRICING SUPPLEMENT OR THE PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT, ANY
PRICING SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO
SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN
THE SECURITIES DESCRIBED IN THIS PROSPECTUS SUPPLEMENT AND ANY PRICING
SUPPLEMENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN ANY SUCH JURISDICTION.
NEITHER THIS PROSPECTUS SUPPLEMENT, ANY PRICING SUPPLEMENT AND THE
PROSPECTUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE AN IMPLICATION THAT THE INFORMATION CONTAINED
HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF
SUCH INFORMATION.
----------
<TABLE>
TABLE OF CONTENTS
<CAPTION>
PROSPECTUS SUPPLEMENT
PAGE
----
<S> <C>
Description of Notes............................................. S- 2
United States Taxation........................................... S-12
Foreign Currency Risks........................................... S-17
Supplemental Plan of Distribution................................ S-18
Validity of Notes................................................ S-18
<CAPTION>
PROSPECTUS
PAGE
----
<S> <C>
Available Information............................................ 2
Incorporation of Documents by Reference.......................... 2
The Company...................................................... 3
Use of Proceeds.................................................. 3
Ratio of Earnings to Fixed Charges............................... 3
Description of Debt Securities................................... 3
Plan of Distribution............................................. 7
Experts.......................................................... 8
</TABLE>
========================================================================
========================================================================
$1,000,000,000
[Emerson Logo]
EMERSON ELECTRIC CO.
MEDIUM-TERM NOTES
----------
PROSPECTUS SUPPLEMENT
SEPTEMBER --, 1995
----------
GOLDMAN, SACHS & CO.
J.P. MORGAN SECURITIES INC.
========================================================================
<PAGE> 29
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
The expenses payable in connection with the distribution of the
securities being offering hereby are estimated as follows:
<S> <C>
SEC filing fee.............................................................................. $229,978
Printing and engraving expenses............................................................. 15,000
Accounting fees and expenses................................................................ 5,000
Legal fees and expenses..................................................................... 70,000
Blue Sky filing fees and expenses........................................................... 5,000
Trustee's fees and expenses................................................................. 5,000
Rating agency fees.......................................................................... 150,000
Miscellaneous............................................................................... 5,022
--------
Total..................................................................................... $485,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 351.355(1) of the Revised Statutes of Missouri provides that
a corporation may indemnify a director, officer, employee or agent of
the corporation in any action, suit or proceeding other than an action
by or in the right of the corporation, against expenses (including
attorneys' fees), judgments, fines and settlement amounts actually and
reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action, had no reasonable
cause to believe his conduct was unlawful. Section 351.355(2) provides
that the corporation may indemnify any such person in any action or
suit by or in the right of the corporation against expenses (including
attorneys' fees) and settlement amounts actually and reasonably
incurred by him in connection with the defense or settlement of the
action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
corporation, except that he may not be indemnified in respect of any
matter in which he has been adjudged liable for negligence or
misconduct, unless authorized by the court. Section 351.355(3) provides
that a corporation shall indemnify any such person against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the action, suit or proceeding if he has been
successful in defense of such action, suit or proceeding and if such
action, suit or proceeding is one for which the corporation may
indemnify him under Section 351.355(1) or (2). Section 351.355(7)
provides that a corporation shall have the power to give any further
indemnity to any such person, in addition to the indemnity otherwise
authorized under Section 351.355, provided such further indemnity is
either (i) authorized, directed or provided for in the articles of
incorporation of the corporation or any duly adopted amendment thereof
or (ii) is authorized, directed or provided for in any bylaw or
agreement of the corporation which has been adopted by a vote of the
shareholders of the corporation, provided that no such indemnity shall
indemnify any person from or on account of such person's conduct which
was finally adjudged to have been knowingly fraudulent, deliberately
dishonest or willful misconduct.
At the Annual Meeting of Stockholders held on February 10, 1987, the
stockholders adopted indemnification agreements with the directors of
the Company and amendments of the bylaws of the Company which
incorporate indemnity provisions permitted by Section 351.355(7)
described above. The agreements and amended bylaws provide that the
Company will indemnify its directors and officers against all expenses
(including attorneys' fees), judgments, fines and settlement amounts,
paid or incurred in any action or proceeding, including any action by
or on behalf of the Company, on account of their service as a director
or officer of the Company, any subsidiary of the Company or any other
company or enterprise when they are serving in such capacities at the
request of the Company, excepting only cases where (i) the conduct of
such person is adjudged to be knowingly fraudulent, deliberately
dishonest or willful misconduct, (ii) a final court adjudication shall
determine that such indemnification is not lawful, (iii) judgment is
rendered against such
II-1
<PAGE> 30
person for an accounting of profits made from a purchase or sale of
securities of the Company in violation of Section 16(b) of the
Securities Exchange Act of 1934 or of any similar statutory law or (iv)
any remuneration paid to such person is adjudicated to have been paid
in violation of law. Such person shall be indemnified only to the
extent that the aggregate of losses to be indemnified exceeds the
amount of such losses for which the director or officer is insured
pursuant to any directors or officers liability insurance policy
maintained by the Company.
The directors and officers of the Company are insured under a policy
of directors' and officers' liability insurance.
Reference is made to the form of Underwriting Agreement filed or
incorporated by reference as Exhibit 1.1 and form of Distribution
Agreement filed or incorporated by reference as Exhibit 1.2 with
respect to indemnification of the Company, its directors and certain
officers by the Underwriter or by an agent, as the case may be.
ITEM 16. EXHIBITS.
Reference is made to the Exhibit Index.
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933:
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20
percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in the post-
effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by the registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in the registration statement shall be
II-2
<PAGE> 31
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE> 32
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the County of St. Louis,
State of Missouri, on September 19, 1995.
EMERSON ELECTRIC CO.
By: <F*> W. J. GALVIN
..............................................
W. J. Galvin
Senior Vice President-Finance, Chief Financial
Officer and Chief Accounting Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by or on behalf of the
following persons in the capacities indicated on September 19, 1995.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
<F*> C. F. KNIGHT Chairman of the Board and Chief Executive Officer and
----------------------------------------------------------- Director
C. F. Knight
<F*> W. J. GALVIN Senior Vice President-Finance, Chief Financial Officer and
----------------------------------------------------------- Chief Accounting Officer
W. J. Galvin
<F*> L. L. BROWNING, JR. Director
-----------------------------------------------------------
L. L. Browning, Jr.
<F*> A. A. BUSCH, III Director
-----------------------------------------------------------
A. A. Busch, III
<F*> D. C. FARRELL Director
-----------------------------------------------------------
D. C. Farrell
<F*> J. A. FRATES Director
-----------------------------------------------------------
J. A. Frates
<F*> R. B. HORTON Director
-----------------------------------------------------------
R. B. Horton
<F*> V. R. LOUCKS, JR. Director
-----------------------------------------------------------
V. R. Loucks, Jr.
<F*> R. B. LOYND Director
-----------------------------------------------------------
R. B. Loynd
<F*> R. L. RIDGWAY Director
-----------------------------------------------------------
R. L. Ridgway
II-4
<PAGE> 33
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
<F*> R. W. STALEY Vice Chairman and Director
-----------------------------------------------------------
R. W. Staley
<F*> A. E. SUTER Senior Vice Chairman and Chief Operating Officer
----------------------------------------------------------- and Director
A. E. Suter
<F*> W. M. VAN CLEVE Director
-----------------------------------------------------------
W. M. Van Cleve
<F*> E. E. WHITACRE, JR. Director
-----------------------------------------------------------
E. E. Whitacre, Jr.
<F*> E. F. WILLIAMS, JR. Director
-----------------------------------------------------------
E. F. Williams, Jr.
<FN>
<F*> By /s/ H. M. Smith
---------------------------------------------------
H. M. Smith
Attorney-in-Fact
</TABLE>
II-5
<PAGE> 34
<TABLE>
EXHIBIT INDEX
<CAPTION>
EXHIBIT
NUMBER PAGE DESCRIPTION
------- ---- -----------
<C> <S> <C>
<F*>1.1 Form of Underwriting Agreement
<F*>1.2 Form of Distribution Agreement
<F+>4.1 Indenture dated as of April 17, 1991 between the Company and The Boatmen's
National Bank of St. Louis, as Trustee
<F**>4.2 Forms of Debt Securities (U.S. Dollar Denominated Issues)
<F***>4.3 Form of Debt Security (Foreign Currency Denominated Issue)
<F****>4.4 Form of Debt Securities (Medium Term Note Series)
<F+>5 Opinion of H. M. Smith, Esq.
<F+>12 Computation of ratio of earnings to fixed charges
<F+>23.1 Consent of H. M. Smith, Esq. (included in Exhibit 5)
23.2 Consent of KPMG Peat Marwick LLP
<F+>24 Power of Attorney (contained on signature page)
<F+>25 Statement of Eligibility and Qualification of Trustee on Form T-1
<FN>
-----
<F*>Exhibit of same number to Post-Effective Amendment No. 1 to
Registration No. 33-11895 is incorporated by reference herein.
<F**>Exhibit of same number to Registration No. 2-93298 is incorporated
by reference herein.
<F***>Exhibit of same number to Registration No. 33-11895 is incorporated
by reference herein.
<F****>Exhibit Number 4.2 to Post-Effective Amendment No. 1 to
Registration No. 33-11895 is incorporated by reference herein.
<F+>Previously filed.
</TABLE>
II-6
<PAGE> 1
EXHIBIT 23.2
------------
INDEPENDENT AUDITORS' CONSENT
-----------------------------
The Board of Directors
Emerson Electric Co.:
We consent to the use of our reports incorporated herein by
reference and to the reference to our firm under the heading
"Experts" in the prospectus. Our report on the consolidated
financial statements of Emerson Electric Co. as of September 30,
1994 and for the year then ended refers to a change in its method
of accounting for post-retirement benefits other than pensions.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
St. Louis, Missouri
September 19, 1995
