Rule 424(b)(3)
File No. 33-61481
Pricing Supplement No. 0160 Dated: June 25, 1997
(To Prospectus dated November 2, 1995 and
Prospectus Supplement dated November 2, 1995)
XEROX CREDIT CORPORATION
Medium-Term Notes, Series E
Due Nine Months or More From Date of Issue
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GENERAL
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Title: 2.875% Principal Protected Cash Exchangeable Equity-
Linked Notes Due July 1, 2002
Principal Amount: $250,000,000, see Attachment for a
description of the amount payable on the Maturity Date or
upon an earlier repayment or redemption.
Issue Price: 100% of Principal Amount (see below under "If
as Principal" if Agent is acting as Principal)
Agent's Discount or Commission: 2.00%
Net proceeds to Company: $245,000,000, 98.00% of Principal
Amount)
Original Issue Date (Settlement Date): July 1, 1997
Maturity Date: July 1, 2002, unless adjusted as
described in the Attachment
Agent: UBS Securities LLC
Agent's capacity: / / As Agent
/X/ As Principal (see below)
If as Principal:
/ / The Note is being offered at varying prices
related to prevailing market prices at the time
of resale.
/X/ The Note is being offered at a fixed initial
public offering price of 100% of Principal
Amount.
Form: /X/ Book Entry / / Certificated
Specified currency: U.S. Dollars
Authorized Denominations: $10,000
Integral Multiples in excess thereof: $10,000
Indexed Notes /X/ Yes / / No, see Attachment
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INTEREST
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/X/ Fixed Rate Note (other than Amortizing or Zero-Coupon
Note):
Fixed Rate of: 2.875% per annum
<PAGE>
Interest on the Note will be calculated on a 30/360 basis and will be
payable semiannually in arrears on each January 1 and July 1,
commencing January 1, 1998, through and including the date of Maturity
(each, an "Interest Payment Date"), and the Regular Record Date in
respect of each Interest Payment Date will be the 15th day (whether or
not a Business Day) of the month preceding the month in which such
Interest Payment Date occurs.
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EARLY REDEMPTION AND/OR REPAYMENT, AND OPTIONAL EXTENSION OF
MATURITY DATE, RESETS AND PAYMENT CURRENCY
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Early redemption at Company's option:
/ / No /X/ Yes, see Attachment
Early repayment at Holder's option:
/ / No /X/ Yes, see Attachment
Option to extend Maturity Date:
/X/ No / / Yes
Option to reset interest rate:
/X/ No / / Yes
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ATTACHMENT
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THE NOTES ARE EXCHANGEABLE SOLELY FOR CASH OR PAYABLE IN CASH AT
MATURITY OR UPON REDEMPTION. THE NOTES DO NOT REPRESENT ANY RIGHT TO
RECEIVE ANY XEROX CORPORATION ("XEROX") COMMON STOCK OR OTHER
SECURITIES. THE PRICE OF XEROX COMMON STOCK SERVES SOLELY AS AN INDEX
USED TO DETERMINE THE EXCHANGE AMOUNT, THE REDEMPTION AMOUNT OR THE
MATURITY AMOUNT APPLICABLE TO THE NOTES.
THE NOTES ARE NOT ISSUED OR GUARANTEED BY XEROX. THE NOTES ARE NOT IN
ANY WAY BACKED BY XEROX, OTHER THAN TO THE EXTENT OF THE SUPPORT
AGREEMENT. XEROX WILL NOT RECEIVE ANY PROCEEDS OF THE NOTES OR ANY
FEES OR ANY OTHER REMUNERATION IN CONNECTION WITH THE ISSUANCE OF, OR
DURING THE LIFE OF, THE NOTES. XEROX HAS AND HAS ASSUMED NO DUTY OR
OBLIGATION OF ANY KIND TO A HOLDER OF A NOTE AS SUCH, OR TO THE
COMPANY OR THEIR AFFILIATES IN CONNECTION WITH THE NOTES. XEROX MAY AT
ANY TIME TAKE ACTION RELATING TO ITS BUSINESS OR OTHER INTERESTS THAT
MAY BE ADVERSE TO HOLDERS OF THE NOTES.
<PAGE>
The 2.875% Principal Protected Cash Exchangeable Equity--Linked
Notes Due July 1, 2002 (the "Notes") of the Company will mature
on the earlier of (i) July 1, 2002 (subject to extension upon the
occurrence of certain Non- Trading Days (as defined below)) and (ii)
the Business Day immediately preceding any Delisting Date (as defined
below), but in no event later than July 8, 2002. The "Delisting Date"
will be the first date on which the Xerox Common Stock (as defined
below to include successor entities ) is not listed on any U.S.
national securities exchange or U.S. national market system subject to
last sale reporting or is permanently suspended from trading on each
such securities exchange and market system on which it is then listed.
Accrued interest will be included in the Maturity Amount or
Redemption Amount paid at the Maturity Date, Delisting Date or
Redemption Date; provided, that no accrued interest shall be paid on a
Note if the Maturity Amount or Redemption Amount, as applicable, is
calculated in accordance with clause (B) of the definition thereof. If
the Stated Maturity Date is extended, as provided under "Description
of the Notes-Maturity Amount", the Notes will continue to accrue
interest until the principal amount is paid at maturity and the final
Interest Payment Date will be adjusted accordingly.
On the Maturity Date or the Delisting Date, a holder of a Note that
has not previously given a valid Exchange Notice will be entitled to
receive an amount (the "Maturity Amount") equal to the higher of (A)
the Principal Amount of such Note (together with the accrued interest
thereon, if any) and (B) the product of the Exchange Rate (as defined
herein) and the average Closing Price per share of Xerox Common Stock
for the five Trading Days ending on the second Business Day
immediately prior to the Maturity Date or the Delisting Date, as the
case may be.
The Notes will be effectively repayable at the option of the Holder
thereof, since they may be exchanged, subject to certain limitations,
at any time on or after August 25, 1997, into the cash Exchange Amount
only (determined as provided herein under "Description of the
Notes--Exchange Amount") at the option of the holder on any Exchange
Notice Date (as defined herein) by such holder giving written notice
to the Calculation Agent on behalf of the Company (the "Exchange
Notice") in the manner set forth herein. An Exchange Notice is not
valid if the product of the Exchange Rate for the Note to be exchanged
and the Closing Price of Xerox Common Stock on the Trading Day
immediately prior to the Exchange Notice Date is less than 105% of the
Principal Amount of the Note to be exchanged.
<PAGE>
The Notes may be redeemed, at the option of the Company, as a whole
but not in part, at any time on or after July 1, 1999 at the higher of
(A) the Principal Amount of such Note (together with the accrued
interest thereon, if any) and (B) the product of the Exchange Rate and
the average Closing Price per share of Xerox Common Stock for the five
Trading Days ending on the second Business Day immediately prior to
the Redemption Date.
Notwithstanding anything to the contrary contained in this Pricing
Supplement, in no event will the Exchange Amount payable on an
Exchange Payment Date, the Maturity Amount payable on the Maturity
Date or the Delisting Date or the Redemption Amount payable on the
Redemption Date be less than the Principal Amount of such Note.
RISK FACTORS
The Notes to which this Pricing Supplement relates are "Indexed
Notes" as defined in the Prospectus Supplement and are subject to
various risks, including, but not limited to, the following:
Payment upon Exchange
If an Exchange Notice is given on an Exchange Notice Date at or
after the Daily Deadline (as such capitalized terms are defined below
under "Description of the Notes-Exchange Notice"), the Exchange Amount
will be based upon the Closing Price per share of Xerox Common Stock
on the Trading Day immediately following such Exchange Notice Date.
Such Closing Price could be lower than the Closing Price on the
Exchange Notice Date, as a result of which a holder of a Note will be
entitled to receive on the Exchange Payment Date an amount less than
the value of such Note on such Exchange Notice Date. No Exchange
Notice may be given after the Daily Deadline on the Final Exchange
Notice Date. See "Description of the Notes--Exchange Notice".
An Exchange Notice is not valid if the product of the Exchange Rate
for the Note to be exchanged and the Closing Price of Xerox Common
Stock on the Trading Day immediately prior to the Exchange Notice Date
is less than 105% of the Principal Amount of the Note to be exchanged.
To that extent, a holder of a Note will not be able to receive the
Exchange Amount even though it is in excess of the Principal Amount of
a Note.
<PAGE>
Validity of an Exchange Notice
To be valid an Exchange Notice in the form attached as Appendix I
must be given precisely as required, and must be given through the
facilities of the Depositary by the beneficial owner of the Notes to
be exchanged. Exchange Notices must be given to the Calculation Agent
which will provide copies to the Company and to the Trustee. Exchange
Notices that do not conform to the requirements of the form of
Exchange Notice attached hereto as Appendix I or which are delivered
after the Daily Deadline on the Final Exchange Date (each as defined
below) will not be valid. Accordingly, once the Notes have been called
for redemption, an Exchange Notice may not be given. Any question as
to the validity of an Exchange Notice will be determined by the
Calculation Agent in its sole discretion. See "Description of the
Notes--Exchange Notice". Copies of the Calculation Agency Agreement
are available upon request from the Calculation Agent.
Relationship of Notes and Xerox Common Stock
The Notes are Exchangeable solely for cash and are payable in cash
at maturity or upon redemption and do not represent any right to
receive any Xerox Common Stock or other securities. The price of Xerox
Common Stock serves solely as an index used to determine the Exchange
Amount, the Redemption Amount or the Maturity Amount applicable to the
Notes.
The market price of the Notes may be affected by a variety of
factors, including, without limitation, possible changes in interest
rates, however, the market price of the Notes is expected to be
affected primarily by changes in the price of Xerox Common Stock. As
indicated under "The Xerox Corporation--Historical Information" below,
the price of Xerox Common Stock has been volatile during certain
recent periods. As the Exchange Amount, Maturity Amount and Redemption
Amount are calculated by reference to the Closing Prices of Xerox
Common Stock, the Exchange Amount, Maturity Amount and Redemption
Amount of the Notes may be adversely affected by volatility in the
price of Xerox Common Stock.
Before and/or after the initial offering of the Notes, the
Company will enter into arrangements related to Xerox Common
Stock with a bank counterparty in order to meet the Company's
obligations under the Notes.
Xerox may also reinstate its Common Stock repurchase
program. To the extent that the Company or Xerox or one or more
of its subsidiaries has a position in arrangements related to
Xerox Common Stock or Xerox reinstitutes its Common Stock
repurchase program, the Company or Xerox or one or more of its
subsidiaries may reduce a portion of these arrangements or Xerox
may repurchase its Common Stock at or about the time that the
Maturity Amount, Redemption Amount or Exchange Amount on the
Notes is being determined. Depending on, among other things,
future market conditions, the aggregate amount and the
composition of such positions and the aggregate amount of any
such repurchases are likely to vary over time. The effect, if
any, on the market price of Xerox Common Stock of such
activities cannot be ascertained at this time.
It is impossible to predict whether the price of Xerox Common Stock
will rise or fall. Trading prices of Xerox Common Stock will be
influenced by Xerox's financial results and prospects and by complex
and interrelated political, economic, financial and other factors that
can affect capital markets generally, the market segment of which
Xerox Common Stock is a part and Xerox itself. See "Xerox Corporation"
below.
<PAGE>
Possible Illiquidity of Notes; Secondary Trading in the
Notes
It is not possible to predict whether a secondary market for the
Notes will develop or how the Notes will trade in any market that does
develop. UBS Securities LLC intends, but is not obligated, to make a
market in the Notes. The spread between bid and asked prices for Notes
in any such market may be different than the spread between bid and
asked prices for Xerox Common Stock.
Dilution
The Closing Prices of Xerox Common Stock used to calculate the
Exchange Amount payable on the Exchange Payment Date, the Maturity
Amount payable on the Delisting Date or the Maturity Date and the
Redemption Amount payable on the Redemption Date are subject to
adjustment for certain events arising from stock splits and
combinations, stock dividends, extraordinary cash dividends and
certain other events that affect Xerox's capital structure. See
"Description of the Notes--Anti-Dilution Adjustments" below. Such
Closing Prices will not be adjusted for other events, such as
offerings of Xerox Common Stock for cash or other consideration or an
issuer tender or exchange offer at a premium to the then current
market price, that may adversely affect the price of Xerox Common
Stock and, therefore, adversely affect the trading price of the Notes.
There can be no assurance that Xerox will not make offerings of Xerox
Common Stock in the future or effect an issuer tender or exchange
offer or take any other action which adversely affects the value of
the Notes but does not result in an anti-dilution adjustment.
DESCRIPTION OF THE NOTES
Calculation Agent
All determinations made by the Calculation Agent shall be at the
sole discretion of the Calculation Agent and, in the absence of
manifest error, shall be conclusive for all purposes and binding on
the Company and the holders of Notes, and the Calculation Agent shall
have no liability therefor. All results of any calculation of the
Maturity Amount, the Redemption Amount or the Exchange Amount will be
rounded, if necessary, to the nearest one-one-hundred- thousandth of a
percent (with five one-millionths of a percentage point being rounded
downward).
<PAGE>
Maturity Amount
The Notes will mature on the Stated Maturity Date, subject to
extension as hereinafter described (such date of maturity as it may be
extended is herein referred to as the "Maturity Date"). In the event
that any of the five successive Business Days ending on the second
Business Day prior to the Stated Maturity Date is not a Trading Day (a
"Non--Trading Day"), the Stated Maturity Date will be extended one
Trading Day for each such Non-Trading Day; provided, however, that in
no event will the Maturity Date be later than July 8, 2002. The Notes
will continue to accrue interest until the Principal Amount of the
Notes is paid at maturity, which, in the event that the maturity of
the Notes is extended as a result of a Non--Trading Day, will be
payable to the holders of Notes on the date of extended maturity;
provided, that no accrued interest shall be paid on a Note if the
Maturity Amount is calculated in accordance with clause (B) of the
definition of Maturity Amount in the next succeeding paragraph. The
Calculation Agent shall notify each holder of a Note through the
facilities of the Depositary of such extension of the Stated Maturity
Date.
On the Maturity Date, the holder of a Note that has not previously
given an Exchange Notice as discussed below under "Exchange Notice"
will be entitled to receive a principal amount (the "Maturity Amount")
equal to the higher of (A) the Principal Amount of such Note (together
with the accrued interest thereon, if any) and (B) the product of the
Exchange Rate and the average Closing Price per share of Xerox Common
Stock for the five Trading Days ending on the second Business Day
immediately prior to the Maturity Date (the "Averaging Period").
Notwithstanding anything to the contrary contained in this Pricing
Supplement, in no event will the Maturity Amount payable on the
Maturity Date with respect to a Note be less than the Principal Amount
of such Note.
Delisting of Xerox Common Stock
If not previously repaid, the Notes will mature on the Business Day
immediately preceding any Delisting Date. The amount to which the
holder of a Note will be entitled if a Delisting Date occurs shall be
calculated as described under "Description of the Notes--Maturity
Amount", above, with the Delisting Date substituted for the Maturity
Date. Notice of any Delisting Date will be given through the
facilities of the Depositary by the Calculation Agent. Any questions
relating to the occurrence of a Delisting Date will be resolved by the
Calculation Agent in its sole discretion.
<PAGE>
Interest
Interest will accrue on the Principal Amount of the Notes at the
rate per annum specified above from and including the Original Issue
Date to but excluding the Maturity Date, Delisting Date or Redemption
Date, as the case may be; provided, however, that, if any Note is
exchanged into the Exchange Amount, no interest shall be deemed to
have accrued on such Note from the Interest Payment Date immediately
preceding the Exchange Payment Date to the Exchange Payment Date, and
provided, further, that if the Maturity Amount or Redemption Amount is
calculated in accordance with clause (B) of the definition thereof, no
interest shall be deemed to have accrued and no interest shall be paid
on such Note from the Interest Payment Date immediately preceding the
Maturity Date, Delisting Date or Redemption Date, as applicable, to
such date. Interest on the Notes will be payable semiannually on
January 1 and July 1 in each year and on the Maturity Date, Delisting
Date or Redemption Date, commencing on January 1, 1998, or if any such
day is not a Business Day, the next succeeding Business Day (each, an
"Interest Payment Date").
Exchange Notice
Notes may be exchanged into the Exchange Amount (calculated in the
manner set forth below) at the option of the holder thereof as
follows: On any Trading Day (each such Trading Day being an "Exchange
Notice Date") on or prior to the Trading Day prior to the first day of
an Averaging Period and prior to the date on which the Notes have been
called for redemption (the "Final Exchange Notice Date"), the holder
of a Note (if it is a DTC participant, or the DTC participant on whose
books such Note is carried if the holder is not a DTC participant) may
give notice to the Calculation Agent, who will provide copies to the
Company and the Trustee, in writing (by hand c/o UBS Securities LLC,
299 Park Avenue, New York, New York or by facsimile at (212) 223-2815,
in each case c/o Gale Herzing) in the form attached hereto as Appendix
I that such holder elects to exchange such Note or a specified portion
thereof for the Exchange Amount. Notes may only be exchanged in a
minimum amount of $10,000 and integral multiples of $10,000 in excess
thereof. Such Exchange Notice will not be valid if the amount which is
the product of the Exchange Rate for the Note or the portion thereof
to be exchanged and the Closing Price of Xerox Common Stock on the
Trading Day immediately prior to the Exchange Notice Date is less than
105% of the Principal Amount of the Note or portion thereof to be
exchanged. No Exchange Notice will be accepted after the Daily
Deadline on the Final Exchange Notice Date.
<PAGE>
Accordingly, once the Notes have been called for redemption, an
Exchange Notice may not be given. The Calculation Agent will provide
any holder of a Note, through the facilities of the Depositary, with
information about the current delivery requirements for Exchange
Notices upon request. If the delivery instructions for an Exchange
Notice shall be changed, the Calculation Agent will notify each holder
of a Note, through the facilities of the Depositary, of such revised
delivery instructions. Exchange Notices must be given by facsimile or
by hand delivery to the precise facsimile number or individuals
specified by the Calculation Agent and should be confirmed by
telephone. Once given, an Exchange Notice may not be withdrawn or
revoked without the consent of the Calculation Agent. Any question as
to the validity of an Exchange Notice or as to whether such notice has
been properly and timely given will be resolved by the Calculation
Agent in its sole discretion. Copies of the Calculation Agency
Agreement are available upon request from the Calculation Agent.
Exchange Amount
The amount that the holder of a Note will be entitled to receive
upon exchange (the "Exchange Amount") will be determined as follows:
(1) if the Exchange Notice is received before 12:00 noon New York City
time (the "Daily Deadline") on any Exchange Notice Date, the Exchange
Amount will be equal to the product of the Exchange Rate and the
Closing Price per share of Xerox Common Stock on such Exchange Notice
Date; and (2) if the Exchange Notice is received at or after the Daily
Deadline on any Exchange Notice Date, the Exchange Amount will be
equal to the product of the Exchange Rate and the Closing Price per
share of Xerox Common Stock on the Trading Day immediately following
such Exchange Notice Date. An Exchange Notice may not be given after
the Daily Deadline on the Final Exchange Notice Date.
On the third Business Day following the last Business Day of the
applicable Averaging Period (the "Exchange Payment Date"), the holder
of a Note will be entitled to receive the Exchange Amount solely in
cash. If a valid Exchange Notice has not been received before the
Daily Deadline on the Final Exchange Notice Date, the holder will be
entitled to receive the Maturity Amount on the Maturity Date.
Notwithstanding anything to the contrary contained in this Pricing
Supplement, in no event will the Exchange Amount payable on the
Exchange Payment Date with respect to a Note be less than the
Principal Amount of such Note.
<PAGE>
Redemption by the Company
The Notes are redeemable, at the option of the Company, as a whole
but not in part, at any time on or after July 1, 1999 at the
Redemption Amount, which shall equal the higher of (A) the Principal
Amount of such Note (together with the accrued interest thereon, if
any) and (B) the sum of (x) the product of the Exchange Rate and the
average Closing Price per share of Xerox Common Stock for the five
Trading Days ending on the second Business Day immediately prior to
the Redemption Date, plus (y) an amount equal to the dividends
(regular or extraordinary) that would have been received by a holder
of the shares of Xerox Common Stock underlying a Note, who held such
Xerox Common Stock on any record date occurring during the period
commencing on the day that the Notes are called for redemption and
ending on the second Business Day immediately prior to the Redemption
Date (the "Redemption Amount").
In the event that the Company exercises its option to redeem the
Notes, the Company will give written notice to the holders of the
Notes not less than 15 days nor more than 30 days prior to the
Redemption Date. All notices of redemption will be made in the name,
and at the expense, of the Company. Once the Notes have been called
for redemption, an Exchange Notice may not be given.
Notwithstanding anything to the contrary contained in this Pricing
Supplement, in no event will the Redemption Amount payable on the
Redemption Date with respect to a Note be less than the Principal
Amount of such Note.
Anti-Dilution Adjustments
The Closing Price of Xerox Common Stock on any of the Trading Days
used to calculate the Maturity Amount, Redemption Amount or Exchange
Amount shall be subject to adjustment by the Calculation Agent as
described below to the extent that any of the events requiring such
adjustment occurs during the period commencing on the date of this
Pricing Supplement and ending on such Trading Day. All determinations
made by the Calculation Agent shall be at the sole discretion of the
Calculation Agent and, in the absence of manifest error, shall be
conclusive for all purposes and binding on the Company and the holders
of Notes, and the Calculation Agent shall have no liability therefor.
Xerox Common Stock Dividends and Extraordinary Dividends and
Distributions
<PAGE>
In the event that a dividend or other distribution is declared (i)
on any class of Xerox capital stock, payable in shares of Xerox Common
Stock, (ii) on Xerox Common Stock payable in cash in an amount greater
than 10% of the Closing Price of Xerox Common Stock on the date fixed
for the determination of the shareholders of Xerox entitled to receive
such cash dividend (an "Extraordinary Cash Dividend"), or (iii) on
Xerox Common Stock of evidences of indebtedness or assets (including
securities, but excluding any dividend or distribution covered by
clause (i) or any Xerox Spin-Off described under "--Dissolution of
Xerox; Mergers, Consolidations or Sales of Assets; Spin-Offs" below)
(an "Extraordinary Distribution"), any Closing Price of Xerox Common
Stock used to calculate the Exchange Amount, the Redemption Amount or
the Maturity Amount on any Trading Day that follows the date (the
"Xerox Record Date") fixed for the determination of the shareholders
of Xerox entitled to receive such dividend or other distribution shall
be increased by multiplying such Closing Price by a fraction of which
the numerator shall be the number of shares of Xerox Common Stock
outstanding on the Xerox Record Date plus the number of shares
constituting such distribution or, in the case of any Extraordinary
Cash Dividend or an Extraordinary Distribution, plus the number of
shares of Xerox Common Stock that could be purchased with the amount
of such Extraordinary Cash Dividend or the fair market value (as
determined by the Calculation Agent whose determination shall be
conclusive and binding) of the evidences of indebtedness or assets
constituting such Extraordinary Distribution at the Closing Price on
the Trading Day immediately subsequent to such Xerox Record Date, and
the denominator shall be the number of shares of Xerox Common Stock
outstanding on the Xerox Record Date.
Subdivisions and Combinations of Xerox Common Stock
In the event that the outstanding shares of Xerox Common Stock are
subdivided into a greater number of shares, the Closing Price of Xerox
Common Stock used to calculate the Exchange Amount, the Redemption
Amount or the Maturity Amount on any Trading Day that follows the date
on which such subdivision becomes effective will be proportionately
increased, and, conversely, in the event that the outstanding shares
of Xerox Common Stock are combined into a smaller number of shares,
such Closing Price of Xerox Common Stock will be proportionately
reduced.
Reclassifications of Xerox Common Stock
In the event that Xerox Common Stock is changed into the same or
a different number of shares of any class or
<PAGE>
classes of stock, whether by capital reorganization, reclassification
or otherwise (except to the extent otherwise provided under "--Xerox
Common Stock Dividends and Extraordinary Dividends and Distributions"
and "--Subdivisions and Combinations of Xerox Common Stock" above or
pursuant to a Reorganization Event described under "--Dissolution of
Xerox; Mergers, Consolidations or Sales of Assets; Spin-offs" below),
the Maturity Amount, Redemption Amount or Exchange Amount will be
calculated by using the aggregate Closing Prices of the shares of
stock into which a share of Xerox Common Stock was changed on any
Trading Day that follows the effectiveness of such change.
As a result of the foregoing provisions, in the case of a
reorganization or reclassification of Xerox Common Stock, the Closing
Prices of one or more securities in addition to or in substitution for
Xerox Common Stock may be used to calculate the Maturity Amount,
Redemption Amount or Exchange Amount. For example, if Xerox Common
Stock was reclassified into one share of Xerox Class A Common Stock
and one share of Xerox Class B Common Stock, the Maturity Amount,
Redemption Amount or Exchange Amount would be calculated by reference
to the Closing Prices of Xerox Class A Common Stock and Xerox Class B
Common Stock.
Dissolution of Xerox; Mergers, Consolidations or Sales of
Assets; Spin-offs.
In the event of any (i) consolidation or merger of Xerox, with or
into another entity (other than a consolidation or merger that does
not result in a reclassification, conversion, exchange or cancelation
of outstanding Xerox Common Stock), (ii) sale, transfer, lease or
conveyance of all or substantially all of the assets of Xerox, (iii)
liquidation, dissolution or winding up of Xerox, or (iv) any
declaration of a distribution on Xerox Common Stock of the common
stock of any subsidiary of Xerox (a "Xerox Spin-Off") (any of the
events described in (i), (ii), (iii) or (iv), a "Reorganization
Event"), for purposes of determining the Maturity Amount, Redemption
Amount or Exchange Amount, the Closing Price of Xerox Common Stock on
any Trading Day subsequent to, in the case of a Reorganization Event
other than a Xerox Spin-Off, the effective time of such Reorganization
Event or, in the case of a Xerox Spin-Off, the record date fixed for
the determination of the shareholders of Xerox entitled to receive the
securities distributed in such Xerox Spin-Off (the "Spin-Off Record
Date") will be deemed to be the amount equal to (1) the value of the
cash and other property (including securities) received by a holder of
a share of Xerox Common Stock (assuming such holder of Xerox common
<PAGE>
Stock failed to exercise any rights of election and received per share
the kind and amount received by a plurality of non-electing shares) in
any such Reorganization Event (plus, in the case of a Xerox Spin-off,
the value of a share of Xerox Common Stock), and (2) to the extent
that such holder obtains securities in any Reorganization Event, the
value of the cash and other property received by the holder of such
securities in any subsequent Reorganization Event. For purposes of
determining any such Closing Prices, the value of (i) any cash and
other property (other than securities) received in any such
Reorganization Event will be an amount equal to the value of such cash
and other property at the effective time of such Reorganization Event
(as determined by the Calculation Agent whose determination shall be
conclusive and binding), and (ii) any property consisting of
securities received in any such Reorganization Event will be an amount
equal to the Closing Prices of such securities on any Trading Day
following, in the case of a Reorganization Event other than a Xerox
Spin-Off, the effective time of such Reorganization Event or, in the
case of a Xerox Spin- Off, the Spin-Off Record Date.
As a result of the foregoing provisions, in the case of certain
Reorganization Events, the Closing Prices of the securities of a
successor entity to Xerox or the Closing Prices of the securities of
another issuer, including, for example, in the case of a Xerox
Spin-Off, the Closing Prices of the distributed security, may
determine the Maturity Amount, Redemption Amount or the Exchange
Amount. For example, in the case of a stock for stock merger in which
Xerox does not survive, the Maturity Amount payable on the Maturity
Date or the Delisting Date, the Redemption Amount payable on the
Redemption Date or the Exchange Amount would be calculated by
reference of the Closing Prices of a successor entity to Xerox on the
relevant Trading Days.
If any action would require adjustment of the Closing Price
pursuant to more than one of the foregoing provisions, only one
adjustment shall be made and such adjustment shall be the amount of
adjustment that has the highest absolute value to the holder of a
Note. No adjustment in the Closing Price shall be required unless such
adjustment would require an increase or decrease of at least 1% of the
Closing Price, but any adjustment that would otherwise be required to
be made shall be carried forward and taken into account in any
subsequent adjustment.
The Calculation Agent will promptly notify each Noteholder of any
event requiring an adjustment and of the method of calculation to be
used to make any dilution adjustment as described above.
<PAGE>
Definitions
"Business Day" means any day that is not a Saturday, a Sunday or
a day on which the New York Stock Exchange, Inc. ("NYSE") (or, if
different, the principal securities exchange or national market system
on which Xerox Common Stock is then listed) or banking institutions or
trust companies in The City of New York are authorized or obligated by
law or executive order to close.
"Calculation Agent" means UBS Securities LLC.
"Closing Price" means, with respect to any security on any date,
the closing sale price or last reported sale price for the security on
the principal national securities exchange on which such security is
listed for trading on such date or, in the event such security is not
listed on any national securities exchange, on the National Market
System of the NASD on any such date or, in the event such security is
not quoted through the National Market System of the NASD on any such
date, on such other U.S. national market system that is the primary
market for the trading of such security, subject to adjustment as
described under "Anti-Dilution Adjustments".
"Delisting Date" means the first date on which the Xerox Common
Stock is not listed on any U.S. national securities exchange or U.S.
national market system subject to last sale reporting or is
permanently suspended from trading (within the meaning of the Exchange
Act, and the rules and regulations thereunder) on each such securities
exchange and market system on which it is then listed, other than as a
result of a Reorganization Event. The Company will promptly notify
each Noteholder (if it is a DTC participant, or the DTC participant on
whose books such Note is carried if the holder is not a DTC
participant) of the occurrence of a Delisting Date.
"Exchange Rate" means, with respect to any Note, 103.89610 shares
of Xerox Common Stock per $10,000 Principal Amount.
"Trading Day" means, with respect to any security, a Business Day
on which the security (A) is not suspended from trading on any U.S.
national securities exchange or U.S. national market system during the
last half hour of scheduled trading on such Business Day and (B) has
traded at least once during the last half hour of scheduled trading on
such Business Day on the U.S. national securities exchange or U.S.
national market system that is the primary market for the trading of
such security.
<PAGE>
"Xerox" means Xerox Corporation, a New York corporation, and any
successor entity thereof.
"Xerox Common Stock" means the common stock, par value $1.00 per
share of Xerox.
XEROX CORPORATION
Available Information
Xerox is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other
information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other information
filed by Xerox can be inspected and copied at the public reference
facilities of the Commission at 450 Fifth Street N.W. (Room 1024),
Judiciary Plaza, Washington, D.C. 20549, as well as at the Regional
Offices of the Commission located at Northwestern Atrium Center, 500
West Madison Street (Suite 1400), Chicago, Illinois 60661; and Seven
World Trade Center (13th Floor), 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. The Commission maintains a Web site that contains
reports, proxy statements and other information regarding registrants
that file electronically with the Commission at http://www.sec.gov.
Such reports, proxy statements and other information concerning Xerox
also may be inspected at the offices of the New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005, and the Chicago Stock
Exchange, One Financial Plaza, 120 South LaSalle Street, Chicago,
Illinois 60603.
Incorporation of Certain Documents by Reference
There are incorporated herein by reference the following documents
filed with the Commission (File No. 1-4471) by Xerox pursuant to the
Exchange Act:
(1) Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, as amended June 13, 1997 and June 19, 1997;
(2) Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 1997, as amended June 13, 1997; and
(3) Current Reports on Form 8-K dated January 22, 1997, April 7,
1997, May 19, 1997 and June 6, 1997.
<PAGE>
All documents filed by Xerox pursuant to Section 13(a), 13(c),
14 (other than the information required by paragraphs (k) and (l) of
ss.229.402 of Regulation S-K) or 15(d) of the Exchange Act subsequent
to the date of this Pricing Supplement and prior to the termination of
the offerings of the Notes offered hereby shall be deemed to be
incorporated by reference into this Pricing Supplement. 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 Pricing Supplement to the extent that a statement
contained herein or in any 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 Pricing Supplement.
Xerox will provide without charge to each person to whom this
Pricing Supplement is delivered, including any beneficial owner, upon
written or oral request of such person, a copy of any or all of the
foregoing documents incorporated herein by reference (other than
exhibits to such documents, unless such exhibits are specifically
incorporated by reference in such documents). Requests should be
directed to The Customer Service Unit of State Street Bank and Trust
Company, Two International Place, Boston, Massachusetts 02110,
telephone: (617) 664-5750.
Recent Developments
On February 28, 1995, Xerox paid 620 million pounds sterling (or
$972 million) to increase its financial interest in Rank Xerox to 80
percent from 67 percent. On June 13, 1997, Xerox and Rank Group
entered into an agreement pursuant to which Xerox has agreed to
acquire Rank Group's remaining 20 percent financial interest in Rank
Xerox for 940 million pounds sterling (or approximately $1.5 billion)
in cash, of which 500 million pounds sterling (or approximately $811
million) will be payable at closing. The remaining 440 million pounds
sterling (or approximately $714 million) will be payable in two equal
installments. The first installment will be payable on or about the
first anniversary of the closing, and the second instalment will be
payable on or about the second anniversary of the closing. In addition
to the foregoing purchase price, Xerox has agreed to pay an additional
amount of up to 60 million pounds sterling (or approximately $97
million) in the year 2000 based upon achievement of significant Rank
Xerox earnings growth targets by the year 1999. It is anticipated that
the transaction will close on or about June 30, 1997, subject to
approval by Rank Group shareholders and customary
<PAGE>
closing conditions. Upon completion of the acquisition, Rank Xerox
will be renamed "Xerox Limited".
Historical Information
Xerox Common Stock is traded on the NYSE under the symbol "XRX".
The following table sets forth the quarterly high and low closing
prices for Xerox Common Stock for the four calendar quarters in 1995
and 1996 and for the first quarter of 1997 and the second quarter of
1997 through June 25, 1997, and the closing price at June 25, 1997,
adjusted for stock dividends and stock splits, all as reported by the
NYSE. The historical prices of the Xerox Common Stock should not be
taken as an indication of future performance. No assurance can be
given that the prices of Xerox Common Stock will remain at a level
which will result in the Exchange Amount, the Redemption Amount or the
Maturity Amount exceeding the Principal Amount. See "Risk
Factors--Payment upon Exchange".
High Low
($) ($)
1995
Quarter ended March 31............................. 40.17 32.17
Quarter ended June 30.............................. 41.96 36.58
Quarter ended September 30......................... 44.92 36.46
Quarter ended December 31.......................... 48.21 42.00
1996
Quarter ended March 31............................. 47.33 39.79
Quarter ended June 30.............................. 54.75 42.08
Quarter ended September 30......................... 58.25 46.25
Quarter ended December 31.......................... 57.13 44.63
1997
Quarter ended March 31............................. 63.25 51.50
Quarter ended June 30 77.00 55.25
(through June 25)................................
Closing price on June 25, 1997..................... 77.00
Historically, Xerox has from time to time paid cash dividends on
Xerox Common Stock. The Company makes no representation as to the
amount of dividends, if any, that Xerox may pay in the future. In any
event, holders of the Notes will not be entitled to receive any
dividends that may be payable by Xerox with respect to its Common
Stock.
<PAGE>
Certain Federal Income Tax Considerations
For a discussion of the Federal income tax consequences of
ownership of the Notes, please see the discussion under "United States
Taxation" in the Prospectus Supplement dated November 2, 1995. Holders
who exercise their exchange rights on the Notes will be treated as if
they had sold their Notes for the cash received, as described under
"United States Taxation--United States Persons--Purchase, Sale and
Retirement of Notes." In addition, certain proposed regulations to be
effective in 1998 may change procedures for exemption from backup
withholding.
Relationship with UBS
In the ordinary course of its business, UBS Securities LLC and
its affiliates have engaged, and may in the future engage, in
investment banking and commercial banking transactions with the
Company and its affiliates and provide other financial services to the
Company and its affiliates.
<PAGE>
Appendix I
EXCHANGE NOTICE
The undersigned registered holder of 2.875% Principal Protected
Cash Exchangeable Equity-Linked Notes due July 1, 2002 of Xerox
Credit Corporation (the "Notes") hereby gives notice to UBS Securities
LLC, as Calculation Agent of such holder's intention to exchange the
Principal Amount of Notes (or portion thereof) set forth below for the
cash Exchange Amount thereof.
This Exchange Notice is given subject to the provisions of the
Pricing Supplement dated June 23, 1997. Once given, this Exchange
Notice may not be withdrawn or revoked without the consent of the
Calculation Agent.
Name of Registered Holder: _____________________________________
(Name of DTC participant or name of the DTC
participant on whose books such Note is
carried if the holder is not a DTC
participant)
Principal Amount to be Exchanged:_______________________________
Date of Exchange Notice:________________________________________
By:______________________________________
Authorized Signature
All Exchange Notices shall be by given as follows:
By hand: c/o UBS Securities LLC
299 Park Avenue
New York, New York
Attention: Gale Herzing
Doreen Marino-Pelkonen
or by facsimile at: (212) 223-2815
Attention: Gale Herzing
Doreen Marino-Pelkonen
