<PAGE>
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED APRIL 1, 1994
U.S.$6,722,762,866
General Electric Capital Corporation
Global Medium-Term Notes, Series B
Global Medium-Term Notes, Series C
Due From 9 Months to 60 Years From Date of Issue
-------------------
General Electric Capital Corporation (the "Company") may offer from time to
time its Global Medium-Term Notes which are issuable in one or more series and
may be offered and sold outside the United States, in the United States or both
in and outside the United States simultaneously. The Global Medium-Term Notes,
Series B (the "Series B Notes") and the Global Medium-Term Notes, Series C (the
"Series C Notes" and, together with the Series B Notes, the "Notes") offered by
this Prospectus Supplement are offered outside the United States in an aggregate
principal amount of up to U.S.$6,722,762,866, or the equivalent thereof in other
currencies, including composite currencies such as the European Currency Unit
(the "ECU") (provided that, with respect to Original Issue Discount Notes (as
defined under "Description of Notes--Original Issue Discount Notes"), the
initial offering price of such Notes shall be used in calculating the aggregate
principal amount of Notes offered hereunder). Such aggregate amount is subject
to reduction as a result of the sale in the United States of the Company's
Global Medium-Term Notes, Series A. See"Description of Notes--General" and "Plan
of Distribution" herein. The Notes may be denominated in U.S. dollars or such
other currency or composite currency (each such currency or composite currency a
"Specified Currency") as specified in the applicable pricing supplement to this
Prospectus Supplement (the "Pricing Supplement").
(CONTINUED ON NEXT PAGE)
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT, ANY PRICING
SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PRICE TO AGENTS' PROCEEDS TO
PUBLIC(1) COMMISSIONS(2)(3) COMPANY(2)(4)
<S> <C> <C> <C>
Per Note.............................. 100% .050%-.600% 99.400%-99.950%
Total................................. $6,722,762,866(5)(6) $3,361,381-$40,336,577 $6,719,401,485-$6,682,426,289(5)
<FN>
(1) Unless otherwise indicated in a Pricing Supplement, Notes will be issued at
100% of their principal amount.
(2) The Company will pay a commission to Kidder, Peabody International PLC, CS
First Boston Limited, Merrill Lynch International Limited, Swiss Bank
Corporation, Goldman Sachs International, S.G. Warburg Securities Ltd. and
UBS Limited (collectively, the "European Agents") and, with respect to Notes
denominated or payable in Deutschemarks, to CS First Boston Effectbank
Aktiengesellschaft, Goldman, Sachs & Co. oHG, Merrill Lynch Bank AG, S.G.
Warburg & Co. GmbH, Schweizerische Bankgesellschaft (Deutschland) AG and
Schweizerischer Bankverein (Deutschland) AG (collectively, the "German
Agents" and, together with the European Agents, the "Agents") ranging
(except as otherwise provided in a Pricing Supplement with respect to
Original Issue Discount Notes) from .050% to .600% of the principal amount
of any Note, depending upon its maturity, sold through such Agent. The
Company may also sell Notes to any Agent as principal at a discount for
resale to one or more investors or other purchasers at fixed offering prices
or at varying prices related to prevailing market prices at the time of
resale or otherwise, as determined by such Agent. Unless otherwise indicated
in an applicable Pricing Supplement, any Note sold to an Agent as principal
shall be purchased by such Agent at a price equal to 100% of the principal
amount thereof less a percentage equal to the commission applicable to any
agency sale of a Note of identical maturity. See "Plan of Distribution."
(3) The Company has agreed to indemnify the several Agents against certain
liabilities, including liabilities under the Securities Act of 1933.
(4) Before deducting other expenses payable by the Company, estimated at up to
$3,480,576.
(5) Including the U.S. dollar equivalent with respect to any Notes denominated
in foreign or composite currencies.
(6) This number does not include $17,371,509,252 of the Company's Global
Medium-Term Notes, Series A, B and C previously registered and issued by the
Company.
</TABLE>
------------------------
The Notes are being offered on a continuing basis by the Company through the
Agents, which have agreed to use their best efforts to solicit offers to
purchase the Notes. The Company also may sell Notes to any Agent acting as
principal for resale to investors or other purchasers and has reserved the right
to sell Notes directly to or through additional agents and to investors on its
own behalf. Unless otherwise specified herein or in the applicable Pricing
Supplement, the Notes will not be listed on any securities exchange, and there
can be no assurance that the Notes offered by this Prospectus Supplement will be
sold or that there will be a secondary market for the Notes. The Company
reserves the right to withdraw, cancel or modify the offer made hereby without
notice. The Company may reject any offer, or any Agent, if it receives the
offer, may reject any unreasonable offer, to purchase Notes, in whole or in
part. See "Plan of Distribution." Chase Bank AG has agreed with the Company to
act as German Arranger (the "German Arranger") with respect to issuances of
Notes denominated or payable in Deutschemarks. See "Special Provisions Relating
to Foreign Currency Notes" and "Plan of Distribution" herein.
This Prospectus Supplement and the accompanying Prospectus may also be used
by Kidder, Peabody International PLC ("Kidder"), an affiliate of the Company, in
connection with offers and sales of Notes related to market-making transactions,
by and through Kidder, at negotiated prices related to prevailing market prices
at the time of sale or otherwise. Kidder may act as principal or agent in such
transactions.
KIDDER, PEABODY INTERNATIONAL PLC
CS FIRST BOSTON GOLDMAN SACHS INTERNATIONAL
MERRILL LYNCH INTERNATIONAL S.G. WARBURG SECURITIES LTD.
LIMITED
SWISS BANK CORPORATION UBS LIMITED
THE DATE OF THIS PROSPECTUS SUPPLEMENT IS APRIL 1, 1994.
<PAGE>
Each Note will mature on a day from 9 months to 60 years from its date of
issue. Unless otherwise indicated herein or in the applicable Pricing Supplement
and unless certain events occur involving United States taxation or information
reporting requirements, the Notes may not be redeemed prior to maturity by the
Company and are not subject to repayment prior to maturity at the option of the
holders thereof. Any terms relating to a Specified Currency other than U.S.
dollars will be as set forth in the applicable Pricing Supplement. See "Special
Provisions Relating to Foreign Currency Notes."
The Notes may be issued in fully registered form, in bearer form, or in any
combination of registered and bearer form. Unless otherwise indicated in the
applicable Pricing Supplement, definitive Bearer Notes will be issued in
denominations of 1,000, 10,000 or 100,000 units of the Specified Currency, and
Certificated Notes will be issued in denominations of 100,000 units of the
Specified Currency and any integral multiple of 1,000 units of such Specified
Currency in excess thereof.
The interest rate or interest rate formula, if any, issue price, terms of
redemption or repayment, if any, stated maturity and any other terms not
otherwise provided in this Prospectus Supplement or in the accompanying
Prospectus (the "Prospectus") will be established for each Note by the Company
prior to the date of issuance of such Note and will be indicated in a Pricing
Supplement. Interest rates and interest rate formulae are subject to change by
the Company but no such change will affect any Note already issued or which the
Company has agreed to issue. Unless otherwise indicated in the applicable
Pricing Supplement, each Note will bear interest at a fixed rate or at a
floating rate. The applicable Pricing Supplement will specify whether a Note
bearing interest at a floating rate is a Regular Floating Rate Note, a Floating
Rate/Fixed Rate Note or an Inverse Floating Rate Note and whether its rate of
interest is determined by reference to one or more of the CD Rate, the
Commercial Paper Rate, the Eleventh District Cost of Funds Rate, the Federal
Funds Rate, LIBOR, the Prime Rate or the Treasury Rate (each an "Interest Rate
Basis"), or any other interest rate basis or formula, as adjusted by the Spread
and/or Spread Multiplier, if any, applicable to such Note.
Unless otherwise indicated in the applicable Pricing Supplement, interest on
Fixed Rate Notes is payable each March 15 and September 15 and at stated
maturity or upon any earlier redemption or repayment. Interest on Floating Rate
Notes is payable on the dates indicated herein and in the applicable Pricing
Supplement. See "Description of Notes--Interest and Interest Rates." Original
Issue Discount Notes may provide that holders of such Notes will not receive
periodic payments of interest. See "Description of Notes--Original Issue
Discount Notes."
Notes may also be issued as Indexed Notes, as Dual Currency Notes or as
Amortizing Notes, as described under "Description of Notes."
Any Note purchased on original issuance by or on behalf of a United States
person, subject to certain exceptions, must be a Registered Note. Bearer Notes
purchased on original issuance by any other purchaser initially will be
represented by a temporary global Bearer Note to be deposited with a common
depositary for the Euroclear Operator and Cedel. Interests in each temporary
global Bearer Note will be exchangeable for interests in a permanent global
Bearer Note or for definitive Registered or Bearer Notes in the manner and upon
compliance with the procedures described under "Description of Notes--Forms,
Denominations, Exchange and Transfer." The Bearer Notes are subject to certain
U.S. Federal income tax law requirements. Except as described herein, the Bearer
Notes may not be offered, sold or delivered, directly or indirectly, in the
United States or to U.S. persons.
Payments on the Notes will be increased by the amount of any deduction for
United States withholding taxes to the extent described under "Description of
Notes--Payment of Additional Amounts."
Application has been made to list the Series B Notes on the Luxembourg Stock
Exchange (the "Stock Exchange"). Series C Notes will not be listed on any stock
exchange.
References herein to "U.S. dollars" or "U.S. $" or "$" are to the lawful
currency of the United States of America. References herein to "Japanese yen" or
"Y" are to the lawful currency of Japan. References herein to "Pounds sterling"
or "L" are to the lawful currency of the United Kingdom of Great Britain and
Northern Ireland. References herein to "Deutschemarks" or "DM" are to the lawful
currency of the Federal Republic of Germany. References herein to "Dutch
guilder" or "Dfl." are to the lawful currency of the Netherlands.
------------------------
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT, THE ACCOMPANYING
PROSPECTUS AND ANY PRICING SUPPLEMENT IN CONNECTION WITH THE OFFER CONTAINED IN
THIS PROSPECTUS SUPPLEMENT, THE ACCOMPANYING PROSPECTUS AND ANY PRICING
SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY THE AGENTS.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT, THE ACCOMPANYING PROSPECTUS
AND ANY PRICING SUPPLEMENT NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATES AS OF WHICH INFORMATION IS GIVEN IN THIS
PROSPECTUS SUPPLEMENT AND IN THE ACCOMPANYING PROSPECTUS. THIS PROSPECTUS
SUPPLEMENT, AND THE ACCOMPANYING PROSPECTUS AND ANY PRICING SUPPLEMENT DO NOT
CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER
OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
IN CONNECTION WITH THE ISSUE OF NOTES UNDER THE PROGRAM DESCRIBED HEREIN,
THE AGENT THAT IS SPECIFIED IN THE PRICING SUPPLEMENT IN RELATION TO THE
RELEVANT ISSUE OF NOTES MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR
MAINTAIN THE MARKET PRICE OF THE NOTES OF SUCH ISSUE AT A LEVEL WHICH MIGHT NOT
OTHERWISE PREVAIL. SUCH STABILIZATION, IF COMMENCED, MAY BE DISCONTINUED AT ANY
TIME.
S-2
<PAGE>
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Description of the Company................................................................................ S-4
Capitalization............................................................................................ S-4
Selected Consolidated Earnings and Financial Position Data................................................ S-5
Description of Notes...................................................................................... S-6
Special Provisions Relating to Foreign Currency Notes..................................................... S-28
Foreign Currency Risks.................................................................................... S-31
United States Tax Considerations.......................................................................... S-33
Plan of Distribution...................................................................................... S-35
Legal Opinions............................................................................................ S-38
General Information....................................................................................... S-38
</TABLE>
PROSPECTUS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Available Information..................................................................................... 2
Documents Incorporated by Reference....................................................................... 2
The Company............................................................................................... 3
Use of Proceeds........................................................................................... 3
Plan of Distribution...................................................................................... 3
Description of Notes...................................................................................... 4
Description of Warrants................................................................................... 8
Legal Opinions............................................................................................ 9
Experts................................................................................................... 9
</TABLE>
------------------------
S-3
<PAGE>
DESCRIPTION OF THE COMPANY
See "The Company" in the Prospectus for a description of the Company. The
Directors of the Company are:
<TABLE>
<S> <C>
N.D.T. ANDREWS............. Director, Executive Vice President
J.R. BUNT.................. Director
M.A. CARPENTER............. Director
D.D. DAMMERMAN............. Director
P. FRESCO.................. Director
B.W. HEINEMAN, JR.......... Director
B.J. KLOSTER, JR........... Director, Senior Vice President, General Counsel and
Secretary
HUGH J. MURPHY............. Director
D.J. NAYDEN................ Director, Executive Vice President
J.A. PARKE................. Director, Senior Vice President, Finance
J.M. SAMUELS............... Director
E.D. STEWART............... Director, Executive Vice President
J.F. WELCH, JR............. Director
G.C. WENDT................. Chairman of the Board of Directors, President and Chief
Executive Officer
</TABLE>
All of the directors of the Company are officers of the Company, GE Capital
Services, Inc. ("GE Capital Services") or GE Company. Mr. Carpenter is chairman
of the board, president and chief executive officer of Kidder, Peabody Group
Inc. (a subsidiary of GE Capital Services).
CAPITALIZATION
The following table sets forth the capitalization of the Company and its
consolidated affiliates, consisting of notes payable and equity, at December 31,
1993:
<TABLE>
<CAPTION>
OUTSTANDING AT
(DOLLAR AMOUNTS IN MILLIONS) DECEMBER 31, 1993
-----------------
<S> <C>
Notes Payable:
Notes Payable Within One Year........................................................... $ 52,903
Senior Notes Payable After One Year..................................................... 25,112
Subordinated Notes Payable After One Year............................................... 697
--------
Total Debt........................................................................ 78,712
--------
Equity:
Variable cumulative preferred stock--par value $100, liquidation preference $100,000 per
share (10,500 shares authorized and 8,750 shares outstanding).......................... 1
Common stock, $200 par value (3,866,000 shares authorized and 3,837,825 shares
outstanding)........................................................................... 768
Additional paid-in capital.............................................................. 2,172
Retained earnings....................................................................... 7,008
Other................................................................................... 421
--------
Total Equity...................................................................... 10,370
--------
Total Capitalization...................................................................... $ 89,082
--------
--------
</TABLE>
S-4
<PAGE>
SELECTED CONSOLIDATED EARNINGS AND FINANCIAL POSITION DATA
The following earnings data for each of the years in the three-year period
ended December 31, 1993, and the financial position data as of December 31, 1993
and 1992, have been taken or computed from the audited financial statements of
the Company and its consolidated affiliates included in the Annual Report of the
Company on Form 10-K for the fiscal year ended December 31, 1993. The Annual
Report referred to above is among the documents incorporated by reference in the
Prospectus. The following selected earnings and financial position data should
be read in conjunction with the financial statements of the Company and its
consolidated affiliates contained in such documents.
EARNINGS DATA
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1993 1992 1991
--------- --------- ---------
(DOLLAR AMOUNTS IN MILLIONS)
<S> <C> <C> <C>
Earned income......................................................................... $ 14,444 $ 12,250 $ 11,328
Interest and discount expense......................................................... 3,461 3,665 4,225
Operating and administrative expense.................................................. 4,894 3,941 2,735
Insurance losses and policyholder and annuity benefits................................ 1,259 611 599
Provision for losses on financing receivables......................................... 987 1,056 1,102
Depreciation and amortization of buildings and equipment and equipment on operating
leases.............................................................................. 1,587 1,297 1,187
Minority interest in net earnings of consolidated affiliates.......................... 114 14 (7)
--------- --------- ---------
Earnings before income taxes.......................................................... 2,142 1,666 1,487
Provision for income taxes............................................................ 664 415 362
--------- --------- ---------
Net earnings........................................................................ $ 1,478 $ 1,251 $ 1,125
--------- --------- ---------
--------- --------- ---------
</TABLE>
The consolidated ratio of earnings to fixed charges for the year ended
December 31, 1993 was 1.62. For purposes of computing the consolidated ratio of
earnings to fixed charges, earnings consist of net earnings adjusted for the
provision for income taxes, minority interest, and fixed charges. Fixed charges
consist of interest and discount on all indebtedness and one-third of annual
rentals, which the Company believes is a reasonable approximation of the
interest factor of such rentals.
FINANCIAL POSITION DATA
<TABLE>
<CAPTION>
AT DECEMBER 31,
---------------------
1993 1992
---------- ---------
(DOLLAR AMOUNTS IN
MILLIONS)
<S> <C> <C>
Financing receivables:
Time sales and loans--net of deferred income............................................ $ 40,748 $ 37,070
Investment in financing leases, net of deferred income.................................. 24,930 23,925
---------- ---------
Total financing receivables........................................................... 65,678 60,995
Allowance for losses on financing receivables........................................... (1,730) (1,607)
---------- ---------
Financing receivables--net............................................................ $ 63,948 $ 59,388
---------- ---------
---------- ---------
Percent of allowance for losses on financing receivables to total financing receivables... 2.63% 2.63%
---------- ---------
---------- ---------
Equipment on operating leases--net........................................................ $ 10,650 $ 9,395
---------- ---------
---------- ---------
Total assets.............................................................................. $ 117,939 $ 92,632
---------- ---------
---------- ---------
Capitalization:
Notes payable within one year........................................................... $ 52,903 $ 48,492
Long-term senior debt................................................................... 25,112 21,182
Long-term subordinated debt............................................................. 697 697
Equity (a).............................................................................. $ 10,370 $ 8,892
---------- ---------
---------- ---------
</TABLE>
The consolidated ratios of debt to equity at December 31, 1993 and 1992 were
7.59(a) and 7.91, respectively.
- --------------------------
(a) The Corporation adopted SFAS No. 115, "Accounting for Certain Investments in
Debt and Equity Securities," on December 31, 1993 resulting in the inclusion
of $485 million of net unrealized gains on investment securities in equity
at the end of the year. Excluding such unrealized gains on investment
securities, the Corporation's equity and debt to equity ratio would have
been $9,885 million and 7.96 to 1 at December 31, 1993, respectively.
S-5
<PAGE>
DESCRIPTION OF NOTES
GENERAL
The following description of the particular terms of the Notes offered
hereby (referred to in the accompanying Prospectus as the "Debt Securities")
supplements, and to the extent inconsistent therewith replaces, the description
of the general terms and provisions of the Debt Securities set forth in the
Prospectus, to which description reference is hereby made. Unless otherwise
specified in the applicable Pricing Supplement, the Notes will have the terms
described below, except that references to interest payments and
interest-related information do not apply to certain Original Issue Discount
Notes.
The Notes are to be issued under an Indenture, dated as of September 1, 1982
between the Company and The Chase Manhattan Bank (National Association), as
trustee (as to which Mercantile-Safe Deposit and Trust Company (the "Trustee")
is successor trustee), as supplemented (as so supplemented, the "Indenture").
The following summaries of certain provisions of the Indenture do not purport to
be complete, and are subject to, and are qualified in their entirety by
reference to, all the provisions of the Indenture, including the definitions
therein of certain terms.
The Notes will be unsecured and will rank equally with all other unsecured
and unsubordinated obligations of the Company. The Notes will not limit other
indebtedness or securities which may be issued by the Company and will contain
no financial or similar restrictions on the Company, except as described under
"Description of Notes--Certain Covenants of the Company" in the Prospectus.
This Prospectus Supplement and any Pricing Supplement, may be used in
connection with the offer, sale and listing from time to time of Notes in an
aggregate initial public offering price of up to U.S.$6,722,762,866, or the
equivalent thereof in a foreign or composite currency (provided that, with
respect to Original Issue Discount Notes, the initial offering price of such
Notes shall be used in calculating the aggregate principal amount of Notes
offered hereunder). The aggregate principal amount of Notes authorized to be
issued hereunder may be increased by the Company from time to time. Such
aggregate amount is subject to reduction as a result of the sale of the
Company's Global Medium-Term Notes, Series A and other issues of Debt Securities
and Warrants to purchase Debt Securities offered from time to time as described
in the accompanying Prospectus. As of March 31, 1994, an aggregate principal
amount of $17,371,509,252 of the Company's Global Medium-Term Notes of all
Series have been issued (including $8,455,255,853 aggregate principal amount of
Notes). See "Plan of Distribution."
The Pricing Supplement relating to a Note will describe the following terms:
(i) the Specified Currency for such Note and, if other than the Specified
Currency, the currency or composite currency in which payments on such Note will
be made (and, if the Specified Currency or currency or composite currency of
payment is other than U.S. dollars, certain other terms relating to such Note (a
"Foreign Currency Note") and such Specified Currency or such currency or
composite currency of payment); (ii) whether such Note is a Fixed Rate Note or a
Floating Rate Note (including whether such Note is a Regular Floating Rate Note,
a Floating Rate/Fixed Rate Note or an Inverse Floating Rate Note); (iii) the
price at which such Note will be issued (the "Issue Price"); (iv) the date on
which such Note will be issued (the "Original Issue Date"); (v) the date on
which such Note will mature; (vi) if such Note is a Fixed Rate Note, the rate
per annum at which such Note will bear interest, if any; (vii) if such Note is a
Floating Rate Note, the Base Rate, the Initial Interest Rate, the Interest
Payment Dates, the Index Maturity, the Spread and/or Spread Multiplier, if any
(all as defined below) and any other terms relating to the particular method of
calculating the interest rate for such Note; (viii) if such Note is an Indexed
Note, the terms relating to the particular Note; (ix) if such Note is a Dual
Currency Note, the terms relating to the particular Note; (x) if such Note is an
Amortizing Note, the amortization schedule and any other terms relating to the
particular Note; (xi) whether such Note is an Original Issue Discount Note;
(xii) whether such Note may be redeemed at the option of the Company, or repaid
at the option of the holder, prior to its stated maturity as described under
"Optional Redemption" and "Repayment at the Noteholders' Option; Repurchase"
below and, if so, the provisions relating to such
S-6
<PAGE>
redemption or repayment, including, in the case of any Original Issue Discount
Notes, the information necessary to determine the amount due upon redemption or
repayment; (xiii) any relevant tax consequences associated with the terms of the
Notes which have not been described under "United States Tax Considerations"
below; (xiv) if such Notes are Additional Notes (as defined below), a
description of the original issue date and aggregate principal amount of the
prior issue of Notes having terms (other than original issue date and public
offering price) identical to such Additional Notes and (xv) any other terms of
such Note not inconsistent with the provisions of the Indenture.
Subject to such additional restrictions as are described under "Special
Provisions Relating to Foreign Currency Notes," each Note will mature on a day
from 9 months to 60 years from the date of issue, as specified in the applicable
Pricing Supplement, as selected by the initial purchaser and agreed to by the
Company. In the event that such maturity date of any Note or any date fixed for
redemption or repayment of any Note (collectively, the "Maturity Date") is not a
Business Day (as defined below), principal and interest payable at maturity or
upon such redemption or repayment will be paid on the next succeeding Business
Day with the same effect as if such Business Day were the Maturity Date. No
interest shall accrue for the period from and after the Maturity Date to such
next succeeding Business Day. Except as may be provided in the applicable
Pricing Supplement and except for Indexed Notes, all Notes will mature at par.
If any Note is to be issued as a Foreign Currency Note, the applicable
Pricing Supplement will specify the currency or currencies, which may be
composite currencies such as the ECU, in which the purchase price of such Note
is to be paid by the purchaser, and the currency or currencies, which may be
composite currencies such as the ECU, in which the principal at maturity or
earlier redemption, premium, if any, and interest, if any, with respect to such
Note may be paid, if applicable, along with any other terms relating to the
non-U.S. dollar denomination. See "Special Provisions Relating to Foreign
Currency Notes" and "Foreign Currency Risks."
FORMS, DENOMINATIONS, EXCHANGE AND TRANSFER
Unless otherwise specified in the applicable Pricing Supplement, the Notes
may be issued (i) in fully registered definitive form without coupons
("Registered Notes") or (ii) in definitive bearer form with coupons attached or
in temporary or permanent global bearer form without coupons attached (in each
case, "Bearer Notes") or in any combination of the above such registered or
bearer forms. Except as otherwise provided in the applicable Pricing Supplement,
the Notes will be issued only in denominations of 1,000, 10,000 or 100,000 units
of the Specified Currency, in the case of definitive Bearer Notes, and 100,000
units of the Specified Currency and integral multiples of 1,000 units of the
Specified Currency in excess thereof, in the case of Registered Notes; provided
that Notes denominated in currencies other than the U.S. dollars shall be issued
in such denominations as are set forth under "Special Provisions Relating to
Foreign Currency Notes."
Each Bearer Note (including any global Note) and interest coupon, if any,
will bear a legend substantially to the following effect: "Any United States
person who holds this obligation will be subject to limitations under the United
States income tax laws, including the limitations provided in Sections 165(j)
and 1287(a) of the United States Internal Revenue Code."
Bearer Notes may not be offered or sold, directly or indirectly, in
connection with their original issuance or during the Restricted Period (as
defined below), in the United States (as defined below) or to or for the account
of any United States persons (as defined below), other than to a Qualifying
Foreign Branch (as defined below) or to certain other persons as provided under
United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(1)(iii)(B) and
(C). An offer or sale will be considered to be made to a person within the
United States if the offeror or seller of such Note has an address within the
United States for the offeree or purchaser of such Bearer Note with respect to
the offer or sale. Bearer Notes may not be delivered in the United States.
As used herein, "United States person" means a citizen or resident of the
United States, a corporation, partnership or other entity created or organized
in or under the laws of the United States
S-7
<PAGE>
or any political subdivision thereof, or an estate or trust the income of which
is subject to United States federal income taxation regardless of its source,
"United States" means the United States (including the States and the District
of Columbia), its territories and its possessions and "Qualifying Foreign
Branch" means a branch of a United States financial institution, as defined in
United States Treasury Regulations Section 1.165-12(c)(1)(v), located outside
the United States that is purchasing for its own account or for resale, and that
has agreed, as a condition of purchase, to comply with the requirements of
Section 165(j)(3)(A), (B) or (C) of the United States Internal Revenue Code of
1986, as amended (the "Code"), and the regulations thereunder. An "Ownership
Certificate" is a certificate to the effect that the relevant Bearer Note or
portion thereof is owned by (i) a person that is not a United States person;
(ii) a Qualifying Foreign Branch; (iii) a United States person who acquired the
Bearer Notes through a Qualifying Foreign Branch and who holds the Bearer Notes
through such Qualifying Foreign Branch on the date of certification; or (iv) a
financial institution for purposes of resale during the Restricted Period and
such financial institution (whether or not also described in clause (i), (ii) or
(iii)) certifies that it has not acquired the Bearer Notes for purposes of
resale directly or indirectly to a United States person or to a person within
the United States.
As used herein, "Restricted Period" with respect to each issuance means the
period which begins on the earlier of the date on which the Company receives the
proceeds of the sale of Bearer Notes with respect to such issuance, or the first
date on which the Bearer Notes of such issuance are offered to persons other
than the Agents, and which ends 40 days after the date on which the Company
receives the proceeds of the sale of such Bearer Notes; provided that with
respect to a Bearer Note held as part of an unsold allotment or subscription,
any offer or sale of such Bearer Note by the Company or any Agent shall be
deemed to be during the Restricted Period.
Registered Notes will be exchangeable for Registered Notes in other
authorized denominations, in an equal aggregate principal amount in accordance
with the provisions set forth in the Indenture. Bearer Notes will be
exchangeable for Registered Notes in an equal aggregate principal amount in
accordance with the provisions set forth in the Indenture. Registered Notes will
not be exchangeable for Bearer Notes. Registered Notes may be presented for
registration of transfer or exchange at the offices of the Registrar (as defined
below) or at the offices of any transfer agent designated by the Company for
such purpose. See "Registrar and Transfer Agents." Bearer Notes may be presented
for exchange in the manner set forth below. No service charge will be made for
any registration of transfer or exchange of Notes but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. Bearer Notes and any coupons appertaining
thereto will be transferable by delivery.
Each Bearer Note will be represented initially by a temporary global Bearer
Note, without interest coupons, to be deposited with a common depositary for
Morgan Guaranty Trust Company of New York, Brussels office, as operator of the
Euroclear System (the "Euroclear Operator"), and Cedel S.A. ("Cedel"), for
credit to the account designated by or on behalf of the purchaser thereof. Upon
deposit of each such temporary global Bearer Note, the Euroclear Operator or
Cedel, as the case may be, will credit each subscriber with a principal amount
of Notes equal to the principal amount thereof for which it has subscribed and
paid. The interests of the beneficial owner or owners in a temporary global
Bearer Note will be exchangeable, (i) after the expiration of the Restricted
Period (the "Exchange Date"), for an interest in a permanent global Bearer Note
to be held by a Common Depository for the Euroclear Operator and Cedel, for
credit to the account designated by or on behalf of the beneficial owner
thereof; PROVIDED, HOWEVER, that such exchange will be made only upon receipt of
Ownership Certificates or (ii) if provided for in an applicable Pricing
Supplement, during the Restricted Period, for an interest in a Registered Note.
The beneficial owner of a Note represented by a permanent global Bearer Note
may, upon 30 days' written notice to the Principal Paying Agent (as defined
below), given by the beneficial owner through either the Euroclear Operator or
Cedel, exchange such owner's interest in such permanent global Bearer Note for a
definitive Bearer Note or Notes, with coupons, if any, attached or a definitive
Registered Note or Notes, of any authorized denominations. No individual Bearer
Note will be
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delivered in or to the United States. References herein to "Bearer Notes" shall,
except where otherwise indicated, include interests in a permanent global Bearer
Note as well as definitive Bearer Notes and any appurtenant coupons.
At the option of the holder, and subject to the terms of the Indenture,
definitive Bearer Notes (with all unmatured coupons, and all matured coupons, if
any, in default) will be exchangeable into Registered Notes of any authorized
denominations of like tenor and in an equal aggregate principal amount, in
accordance with the provisions of the Indenture at the office of the Registrar
or at the office of any transfer agent designated by the Company for such
purpose. See "Registrar and Transfer Agents." Definitive Bearer Notes
surrendered in exchange for Registered Notes after the close of business at any
such office on (i) any record date for the payment of interest on a Registered
Note on an Interest Payment Date (a "Regular Record Date") and before the
opening of business at such office on the relevant Interest Payment Date, or
(ii) any record date to be established for the payment of defaulted interest on
a Registered Note (a "Special Record Date") and before the opening of business
at such office on the related proposed date for payment of defaulted interest,
shall be surrendered without the coupon relating to such date for payment of
interest. Definitive Bearer Notes will be exchangeable for definitive Bearer
Notes in other authorized denominations, in an equal aggregate principal amount,
in accordance with the provisions of the Indenture and at the offices of the
Principal Paying Agent in London, England or at the office of any transfer agent
designated by the Company for such purpose. See "Registrar and Transfer Agents."
The Company shall not be required (i) to register the transfer of or
exchange Notes to be redeemed for a period of fifteen calendar days preceding
the first publication of the relevant notice of redemption, or if Registered
Notes are outstanding and there is no publication, the mailing of the relevant
notice of redemption, or (ii) to register the transfer of or exchange any
Registered Note selected for redemption or surrendered for optional repayment,
in whole or in part, except the unredeemed or unpaid portion of any such
Registered Note being redeemed or repaid, as the case may be, in part, or (iii)
to exchange any Bearer Note selected for redemption or surrendered for optional
repayment, except that such Bearer Note may be exchanged for a Registered Note
of like tenor, PROVIDED that such Registered Note shall be simultaneously
surrendered for redemption or repayment, as the case may be.
PAYMENTS AND PAYING AGENTS
Interest, if any, payable on a Bearer Note represented by a temporary global
Bearer Note or any portion thereof in respect of an Interest Payment Date will
be paid in the Specified Currency (unless otherwise provided in the applicable
Pricing Supplement) to each of the Euroclear Operator and Cedel, as the case may
be, with respect to that portion of such temporary global Bearer Note held for
its account upon delivery to the Principal Paying Agent of an Ownership
Certificate signed by the Euroclear Operator or Cedel, as the case may be, dated
no earlier than such Interest Payment Date, which certificate must be based on
Ownership Certificates provided to the Euroclear Operator or Cedel, as the case
may be, by its member organizations. Each of the Euroclear Operator and Cedel,
as the case may be, will in such circumstances credit the interest received by
it in respect of such temporary global Bearer Note or any portion thereof to the
accounts of the beneficial owners thereof.
Each permanent global Bearer Note will provide that principal of and
premium, if any, and interest, if any, on such permanent global Bearer Note, in
respect of an Interest Payment Date, will be paid in the Specified Currency
(unless otherwise provided in the applicable Pricing Supplement) to each of the
Euroclear Operator and Cedel, as the case may be, with respect to that portion
of such permanent global Bearer Note held for its account. Each of the Euroclear
Operator and Cedel will in such circumstances credit such principal and any
interest received by it in respect of such permanent global Bearer Note to the
respective accounts of the beneficial owners of such permanent global Bearer
Note at maturity, redemption or repayment or on such Interest Payment Date, as
the case may be. If a Registered Note is issued in exchange for any portion of a
permanent global Bearer Note after the close of business at the office or agency
where such exchange occurs on (a) any Regular Record
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Date and before the opening of business at such office or agency on the relevant
Interest Payment Date, or (b) any Special Record Date and before the opening of
business at such office or agency on the related proposed date for payment of
defaulted interest, any interest or defaulted interest, as the case may be, will
not be payable on such Interest Payment Date or proposed date for payment, as
the case may be, in respect of such Registered Note, but will be payable on such
Interest Payment Date or proposed date for payment, as the case may be, only to
the Euroclear Operator and Cedel, and the Euroclear Operator and Cedel will in
such circumstances credit any such interest to the account of the beneficial
owner of such portion of such permanent global Bearer Note on such Regular
Record Date or Special Record Date, as the case may be. Payment of principal of,
and premium, if any, and any interest due at maturity, redemption or repayment
(in the event, with respect to payment of interest, that any such maturity date
or redemption or repayment date is other than an Interest Payment Date) in
respect of any permanent global Bearer Note will be made to the Euroclear
Operator and Cedel in immediately available funds.
Payment of principal of and premium, if any, and interest on Bearer Notes at
maturity or upon redemption or repayment will be made in immediately available
funds in the Specified Currency (unless otherwise provided in the applicable
Pricing Supplement), subject to any applicable laws and regulations, only
against presentation and surrender of such Note and any coupons at the offices
of a Paying Agent outside the United States, at the option of the holder, by
check or by wire transfer of immediately available funds to an account
maintained by the payee with a bank located outside the United States if
appropriate wire instructions have been received by a Paying Agent not less than
10 calendar days prior to an applicable payment date. Payment of interest on
Bearer Notes due on any Interest Payment Date will be made only against
presentation and surrender of the coupon relating to such Interest Payment Date.
No payment with respect to any Bearer Note will be made at any office or agency
of the Company in the United States or by check mailed to any address in the
United States or by wire transfer to an account maintained with a bank located
in the United States except as may be permitted under United States federal tax
laws and regulations then in effect without adverse tax consequences to the
Company. Notwithstanding the foregoing, payments of principal of and premium, if
any, and interest on Bearer Notes denominated and payable in U.S. dollars will
be made at the office of the Company's paying agent in the Borough of Manhattan,
The City of New York, if and only if (i) payment of the full amount thereof in
U.S. dollars at all offices or agencies outside the United States is illegal or
effectively precluded by exchange controls or other similar restrictions and
(ii) such paying agent in the Borough of Manhattan, The City of New York, under
applicable law and regulations, would be able to make such payment.
Payment of principal of and premium, if any, and interest on Registered
Notes at maturity or upon redemption or repayment will be made in immediately
available funds in the Specified Currency (unless otherwise provided in the
applicable Pricing Supplement) against presentation of such Note at the office
of a Paying Agent. Payment of interest on Registered Notes will be made to the
person in whose name such Note is registered at the close of business on the
Regular Record Date next preceding the Interest Payment Date either by check
mailed to the address of the person entitled thereto as such address shall
appear in the security register or by wire transfer to an account selected by
the person entitled thereto if appropriate wire instructions have been received
by the Paying Agent not less than 10 calendar days prior to the applicable
payment date; PROVIDED, HOWEVER, that (i) if the Company fails to pay such
interest on such Interest Payment Date, such defaulted interest will be paid to
the person in whose name such Note is registered at the close of business on the
Special Record Date and (ii) interest payable at maturity, redemption or
repayment will be payable to the person to whom principal shall be payable. The
first payment of interest on any Registered 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 Regular Record Date. Interest rates and interest rate
formulae are subject to change by the Company from time to time but no such
change will affect any Note theretofore issued or which the Company has agreed
to issue. Unless otherwise indicated in the applicable Pricing Supplement, the
Interest Payment Dates and the Regular Record Dates for Fixed Rate Notes shall
be as described below under
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"Fixed Rate Notes." The Interest Payment Dates for Floating Rate Notes shall be
as indicated in the applicable Pricing Supplement and in such Note, and, unless
otherwise specified in the applicable Pricing Supplement, each Regular Record
Date for a Registered Floating Rate Note will be the fifteenth day (whether or
not a Business Day) next preceding each Interest Payment Date.
The Company has initially designated The Chase Manhattan Bank (National
Association) as its paying agent for the Registered Notes in the United States,
and The Chase Manhattan Bank (National Association), London Branch, as its
principal paying agent (the "Principal Paying Agent", which term includes any
successor principal paying agent appointed by the Company) and Chase Manhattan
Bank Luxembourg S.A. and Banque Bruxelles Lambert S.A., as its paying agents for
the Notes outside the United States (each a "Paying Agent", which term includes
the Principal Paying Agent and any additional or successor paying agent
appointed by the Company). So long as the Series B Notes are listed on the Stock
Exchange and such Exchange so requires, the Company shall maintain a Paying
Agent in Luxembourg.
All moneys paid by the Company to the Principal Paying Agent or any Paying
Agent for the payment of any amounts payable on any Notes which remain unclaimed
at the end of three years after such amounts shall have become due and payable
shall be repaid to the Company, and the holders of the Notes shall thereafter
look only to the Company for payment.
REGISTRAR AND TRANSFER AGENTS
The Company has initially designated The Chase Manhattan Bank (National
Association) as registrar and transfer agent for the Registered Notes (the
"Registrar", which term includes any successor Registrar appointed by the
Company), and The Chase Manhattan Bank (National Association), London Branch, as
transfer agent for the Bearer Notes. Any initial designation by the Company of
the Registrar or a transfer agent may be rescinded at any time, except that, so
long as any Notes remain outstanding, the Company will maintain in the The City
of New York, one or more offices or agencies where Registered Notes may be
presented for registration of transfer and exchange. The Company may at any time
designate additional transfer agents with respect to the Notes.
OPTIONAL REDEMPTION
The Pricing Supplement will indicate either that the Notes cannot be
redeemed prior to maturity (other than as provided under "Tax Redemption" below)
or will indicate the terms on which the Notes will be redeemable at the option
of the Company; PROVIDED, HOWEVER, that Notes denominated in currencies other
than U.S. dollars may be subject to different restrictions on redemption as set
forth under "Special Provisions Relating to Foreign Currency Notes--Minimum
Denominations, Restrictions on Maturities, Repayment and Redemption" herein.
Notice of redemption to holders of Bearer Notes shall be published as described
under "Notices" below once in each of three successive calendar weeks, the first
publication to be not less than 30 nor more than 60 calendar days prior to the
date set for redemption. Notice of redemption to holders of Registered Notes
shall be provided as described under "Notices" below at least 30 and not more
than 60 calendar days prior to the date fixed for redemption.
REPAYMENT AT THE NOTEHOLDERS' OPTION; REPURCHASE
If applicable, the Pricing Supplement will indicate that the Notes will be
repayable at the option of the holder on a date or dates specified prior to its
stated maturity date (an "Optional Repayment Date") and, unless otherwise
specified in such Pricing Supplement, at a price equal to 100% of the principal
amount thereof, together with accrued interest to, but not including, the date
of repayment; PROVIDED, HOWEVER, that Notes denominated in currencies other than
U.S. dollars may be subject to different restrictions on repayment as set forth
under "Special Provisions Relating to Foreign Currency Notes--Minimum
Denominations, Restrictions on Maturities, Repayment and Redemption" herein. If
no Optional Repayment Date is included with respect to a Note, such Note will
not be repayable at the option of the holder prior to its maturity.
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In order for such a Note to be repaid, and unless provided otherwise in the
applicable Pricing Supplement, a Paying Agent must receive at least 30 but not
more than 60 calendar days prior to the Optional Repayment Date, (i) the Note
with the form entitled "Option to Elect Repayment" on the reverse of the Note
duly completed or (ii) a telegram, facsimile transmission or a letter from a
member of a national securities exchange or a member of the National Association
of Securities Dealers, Inc. (the "NASD") or a commercial bank or trust company
in the United States or Western Europe which must set forth the name of the
holder of the Note (in the case of a Registered Note only), the principal amount
of the Note, the principal amount of the Note to be repaid, the certificate
number or a description of the tenor and terms of the Note, a statement that the
option to elect repayment is being exercised thereby and a guarantee that the
Note to be repaid, together with the duly completed form entitled "Option to
Elect Repayment" on the reverse of the Note, will be received by the Paying
Agent not later than the fifth Business Day after the date of such telegram,
facsimile transmission or letter; PROVIDED, HOWEVER, that such telegram,
facsimile transmission or letter from a member of a national securities exchange
or a member of the NASD, or a commercial bank or trust company in the United
States or Western Europe shall only be effective in such case if such Note and
form duly completed are received by a Paying Agent by such fifth Business Day.
Exercise of the repayment option by the holder of a Note will be irrevocable.
The repayment option may be exercised by the holder of a Note for less than the
entire principal amount of the Note but, in that event, the principal amount of
the Note remaining outstanding after repayment must be an authorized
denomination.
The Company may at any time purchase Notes at any price in the open market
or otherwise. Notes purchased by the Company may, at its discretion, be held,
resold or surrendered to the Registrar for cancellation.
TAX REDEMPTION
ALL NOTES. All Notes issued on the same date may be redeemed as a whole, at
the option of the Company at any time prior to maturity, upon the giving of a
notice of redemption as described below, at a redemption price (except as
otherwise specified herein or in the applicable Pricing Supplement) equal to
100% of the principal amount thereof, together with accrued interest to the date
fixed for redemption, or, in the case of Original Issue Discount Notes, at 100%
of the portion of the face amount thereof that has accreted to the date of
redemption, if the Company determines that, as a result of any change in or
amendment to the laws (or any regulations or rulings promulgated thereunder) of
the United States or of any political subdivision or taxing authority thereof or
therein affecting taxation, or any change in official position regarding the
application or interpretation of such laws, regulations or rulings, which change
or amendment becomes effective on or after the date of issuance of such Notes
(if sold on an agency basis) or the date on which an Agent acting as principal
agreed to purchase such Notes, the Company has or will become obligated to pay
Additional Amounts with respect to such Notes as described under "Payment of
Additional Amounts." Prior to the giving of any notice of redemption pursuant to
this paragraph, the Company shall deliver to the Trustee (i) a certificate
stating that the Company is entitled to effect such redemption and setting forth
a statement of facts showing that the conditions precedent to the right of the
Company to so redeem have occurred (the date on which such certificate is
delivered to the Trustee is herein called the "Redemption Determination Date"),
and (ii) an opinion of counsel satisfactory to the Company to such effect based
on such statement of facts; provided that no such notice of redemption shall be
given earlier than 90 days prior to the earliest date on which the Company would
be obligated to pay such Additional Amounts if a payment in respect of such
Notes were then due.
Notice of redemption will be given not less than 30 nor more than 60 days
prior to the date fixed for redemption, which date and the applicable redemption
price will be specified in the notice. Such notice will be given in accordance
with "Notices" below.
If any date fixed for redemption is a date prior to the Exchange Date,
definitive Bearer Notes will be issuable on and after such redemption date as if
such redemption date had been the Exchange Date, subject to receipt of Ownership
Certificates described above under "Forms, Denominations, Exchange and
Transfer," delivery of which is a condition to delivery of definitive Bearer
Notes.
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SPECIAL TAX REDEMPTION OF BEARER NOTES. If the Company shall determine that
any payment made outside the United States by the Company or any Paying Agent of
principal or interest due in respect of any Bearer Note or coupon would or would
be likely to, under any present or future laws or regulations of the United
States, be subject to any certification, identification or other information
reporting requirement of any kind, the effect of which requirement is the
disclosure to the Company, any Paying Agent or any governmental authority of the
nationality, residence or identity of a beneficial owner of such Bearer Note or
coupon who is a United States Alien (as defined in "Payment of Additional
Amounts") (other than such a requirement (a) which would not be applicable to a
payment made by the Company or any Paying Agent (i) directly to the beneficial
owner or (ii) to a custodian, nominee or other agent of the beneficial owner, or
(b) which can be satisfied by such custodian, nominee or other agent certifying
to the effect that such beneficial owner is a United States Alien, provided that
in each case referred to in clauses (a)(ii) and (b) payment by such custodian,
nominee or agent to such beneficial owner is not otherwise subject to any such
requirement), the Company shall redeem the Bearer Notes of such series, as a
whole, at a redemption price equal to 100% of the principal amount thereof,
together with accrued interest to the date fixed for redemption, or, in the case
of Original Issue Discount Notes, at 100% of the portion of the face amount
thereof that has accreted to the date of redemption, or, at the election of the
Company if the conditions of the next paragraph are satisfied, pay the
additional amounts specified in such paragraph. The Company shall make such
determination and election as soon as practicable and publish prompt notice
thereof (the "Determination Notice") stating the effective date of such
certification, identification or other information reporting requirements,
whether the Company will redeem the Bearer Notes of such series or has elected
to pay the additional amounts specified in the next paragraph, and (if
applicable) the last date by which the redemption of the Bearer Notes of such
series must take place, as provided in the next sentence. If the Company redeems
the Bearer Notes of such series, such redemption shall take place on such date,
not later than one year after the publication of the Determination Notice, as
the Company shall elect by notice to the Trustee at least 60 days prior to the
date fixed for redemption. Notice of such redemption of the Bearer Notes of such
series will be given to the holders of such Bearer Notes not more than 60 nor
less than 30 days prior to the date fixed for redemption. Such redemption notice
shall include a statement as to the last date by which the Bearer Notes of such
series to be redeemed may be exchanged for Registered Notes. Notwithstanding the
foregoing, the Company shall not so redeem such Bearer Notes if the Company
shall subsequently determine, not less than 30 days prior to the date fixed for
redemption, that subsequent payments would not be subject to any such
requirement, in which case the Company shall publish prompt notice of such
determination and any earlier redemption notice shall be revoked and of no
further effect. The right of the holders of Bearer Notes called for redemption
pursuant to this paragraph to exchange such Bearer Notes for Registered Notes
will terminate at the close of business of the Principal Paying Agent on the
fifteenth day prior to the date fixed for redemption, and no further exchanges
of Bearer Notes for Registered Notes shall be permitted.
If and so long as the certification, identification or other information
reporting requirements referred to above in the preceding paragraph would be
fully satisfied by payment of a backup withholding tax or similar charge, the
Company may elect to pay as additional amounts such amounts as may be necessary
so that every net payment made outside the United States following the effective
date of such requirements by the Company or any Paying Agent of principal or
interest due in respect of any Bearer Note or any coupon of which the beneficial
owner is a United States Alien (as defined below) (but without any requirement
that the nationality, residence or identity of such beneficial owner be
disclosed to the Company, any Paying Agent or any governmental authority, with
respect to the payment of such additional amounts), after deduction or
withholding for or on account of such backup withholding tax or similar charge
(other than a backup withholding tax or similar charge which (i) would not be
applicable in the circumstances referred to in the second parenthetical clause
of the first sentence of the preceding paragraph, or (ii) is imposed as a result
of presentation of such Bearer Note or coupon for payment more than 15 days
after the date on which such payment becomes due and payable or on which payment
thereof is duly provided for, whichever occurs later), will not be less than the
amount provided for in such Bearer Note or coupon to be then due and payable. In
the event the
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Company elects to pay any additional amounts pursuant to this paragraph, the
Company shall have the right to redeem the Bearer Notes of such series as a
whole at any time pursuant to the applicable provisions of the preceding
paragraph and the redemption price of such Bearer Notes shall not be reduced for
applicable withholding taxes. If the Company elects to pay additional amounts
pursuant to this paragraph and the condition specified in the first sentence of
this paragraph should no longer be satisfied, then the Company shall redeem the
Bearer Notes of such series as a whole, pursuant to the applicable provisions of
the preceding paragraph.
PAYMENT OF ADDITIONAL AMOUNTS
The Company will, subject to certain exceptions and limitations set forth
below, pay such additional amounts (the "Additional Amounts") to the holder of
any Note or of any coupon appertaining thereto who is a United States Alien (as
defined below) as may be necessary in order that every net payment of the
principal of and interest on such Note and any other amounts payable on such
Note, after withholding for or on account of any present or future tax,
assessment or governmental charge imposed upon or as a result of such payment by
the United States (or any political subdivision or taxing authority thereof or
therein), will not be less than the amount provided for in such Note or coupon
to be then due and payable. However, the Company will not be required to make
any payment of Additional Amounts to any such holder for or on account of:
(a) any such tax, assessment or other governmental charge which would
not have been so imposed but for (i) the existence of any present or former
connection between such holder (or between a fiduciary, settlor,
beneficiary, member or shareholder of such holder, if such holder is an
estate, a trust, a partnership or a corporation) and the United States,
including, without limitation, such holder (or such fiduciary, settlor,
beneficiary, member or shareholder) being or having been a citizen or
resident thereof or being or having been engaged in a trade or business or
present therein or having, or having had, a permanent establishment therein
or (ii) the presentation by the holder of any such Note or coupon for
payment on a date more than 15 days after the date on which such payment
became due and payable or the date on which payment thereof is duly provided
for, whichever occurs later;
(b) any estate, inheritance, gift, sales, transfer or personal property
tax or any similar tax, assessment or governmental charge;
(c) any tax, assessment or other governmental charge imposed by reason
of such holder's past or present status as a personal holding company or
foreign personal holding company or controlled foreign corporation or
passive foreign investment company with respect to the United States or as a
corporation which accumulates earnings to avoid United States federal income
tax or as a private foundation or other tax-exempt organization;
(d) any tax, assessment or other governmental charge which is payable
otherwise than by withholding from payments on or in respect of any Note;
(e) any tax, assessment or other governmental charge required to be
withheld by any Paying Agent from any payment of principal of, or interest
on, any Note, if such payment can be made without such withholding by any
other Paying Agent in a city in Western Europe;
(f) any tax, assessment or other governmental charge which would not
have been imposed but for the failure to comply with certification,
information or other reporting requirements concerning the nationality,
residence or identity of the holder or beneficial owner of such Note, if
such compliance is required by statute or by regulation of the United States
or of any political subdivision or taxing authority thereof or therein as a
precondition to relief or exemption from such tax, assessment or other
governmental charge;
(g) any tax, assessment or other governmental charge imposed by reason
of such holder's past or present status as the actual or constructive owner
of 10% or more of the total combined voting power of all classes of stock
entitled to vote of the Company or as a direct or indirect subsidiary of the
Company;
(h) any tax, assessment or other governmental charge required to be
withheld on contingent interest described in Section 871(h)(4) of the
Internal Revenue Code of 1986, as amended; or
(i) any combination of items (a), (b), (c), (d), (e), (f), (g) or (h);
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nor shall Additional Amounts be paid with respect to any payment on a Note to a
United States Alien who is a fiduciary or partnership or other than the sole
beneficial owner of such payment to the extent such payment would be required by
the laws of the United States (or any political subdivision thereof) to be
included in the income, for tax purposes, of a beneficiary or settlor with
respect to such fiduciary or a member of such partnership or a beneficial owner
who would not have been entitled to the Additional Amounts had such beneficiary,
settlor, member or beneficial owner been the holder of the Note.
The term "United States Alien" means any person who, for United States
federal income tax purposes, is a foreign corporation, a non-resident alien
individual, a non-resident alien fiduciary of a foreign estate or trust, or a
foreign partnership, one or more of the members of which is a foreign
corporation, a non-resident alien individual or a non-resident alien fiduciary
of a foreign estate or trust.
INTEREST AND INTEREST RATES
GENERAL
Unless otherwise specified in the applicable Pricing Supplement, each Note
will bear interest at either (a) a fixed rate (the "Fixed Rate Notes") or (b) a
floating rate determined by reference to an Interest Rate Basis (the "Floating
Rate Notes"), which may be adjusted by a Spread and/or Spread Multiplier (each
as defined below). Any Floating Rate Note may also have either or both of the
following: (i) a maximum interest rate limitation, or ceiling, on the rate at
which interest may accrue during any interest period; and (ii) a minimum
interest rate limitation, or floor, on the rate at which interest may accrue
during any interest period. The applicable Pricing Supplement will designate (a)
a fixed rate per annum, in which case such Notes will be Fixed Rate Notes; or
(b) one or more of the following Interest Rate Bases as applicable to such
Notes, in which case such Notes will be Floating Rate Notes: (i) the CD Rate, in
which case such Notes will be "CD Rate Notes"; (ii) the Commercial Paper Rate,
in which case Notes will be "Commercial Paper Rate Notes"; (iii) the Eleventh
District Cost of Funds Rate, in which case such Notes will be "Eleventh District
Cost of Funds Rate Notes"; (iv) the Federal Funds Rate, in which case such Notes
will be "Federal Funds Rate Notes"; (v) LIBOR, in which case such Notes will be
"LIBOR Notes"; (vi) the Prime Rate, in which case such Notes will be "Prime Rate
Notes"; (vii) the Treasury Rate, in which case such Notes will be "Treasury Rate
Notes"; or (viii) such other interest rate basis or formula as is set forth in
such Pricing Supplement.
Each Note will bear interest from its date of issue or from the most recent
date to which interest on such Note has been paid or duly provided for, at the
annual rate, or at a rate determined pursuant to an interest rate formula,
stated therein, until the principal thereof is paid or made available for
payment. Interest will be payable on each Interest Payment Date (except for
certain Original Issue Discount Notes and except for Notes originally issued
between a Regular Record Date and an Interest Payment Date) and at maturity or
on redemption or repayment, if any.
Interest will be payable on a Registered Note to the person in whose name
such Note is registered at the close of business on the Regular Record Date next
preceding the Interest Payment Date; PROVIDED, HOWEVER, that (i) if the Company
fails to pay such interest on such Interest Payment Date, such defaulted
interest will be paid to the person in whose name such Registered Note is
registered at the close of business on the record date to be established for the
payment of defaulted interest and (ii) interest payable at maturity, redemption
or repayment will be payable to the person to whom principal shall be payable.
The first payment of interest on any Registered 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 Regular Record Date. Interest rates and interest rate
formulae are subject to change by the Company from time to time but no such
change will affect any Note theretofore issued or which the Company has agreed
to issue. Unless otherwise indicated in the applicable Pricing Supplement, the
Interest Payment Dates and any Regular Record Dates for Fixed Rate Notes shall
be as described below under "Fixed Rate Notes." The Interest Payment Dates for
Floating Rate Notes shall be as indicated in the
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<PAGE>
applicable Pricing Supplement and in such Note, and, unless otherwise specified
in the applicable Pricing Supplement, any Regular Record Date for a Floating
Rate Note will be the fifteenth calendar day (whether or not a Business Day)
next preceding each Interest Payment Date.
FIXED RATE NOTES
Each Fixed Rate Note will bear interest at the annual rate specified therein
and in the applicable Pricing Supplement. Unless otherwise specified in the
applicable Pricing Supplement, the Interest Payment Dates for the Fixed Rate
Notes will be on March 15 and September 15 of each year and the Regular Record
Dates for Fixed Rate Notes in registered form will be on the last day of
February and August of each year. Unless otherwise specified in the applicable
Pricing Supplement, interest on Fixed Rate Notes will be computed and paid on
the basis of a 360-day year of twelve 30-day months. In the event that any
Interest Payment Date or Maturity Date for any Fixed Rate Note is not a Business
Day (as defined below under "Floating Rate Notes"), interest on such Fixed Rate
Note will be paid on the next succeeding Business Day and no interest on such
payment shall accrue for the period from and after such Interest Payment Date to
such next succeeding Business Day.
FLOATING RATE NOTES
Unless otherwise specified in an applicable Pricing Supplement, Floating
Rate Notes will be issued as described below. Each applicable Pricing Supplement
will specify certain terms with respect to which such Floating Rate Note is
being delivered, including: whether such Floating Rate Note is a Regular
Floating Rate Note, an Inverse Floating Rate Note or a Floating Rate/Fixed Rate
Note (each as defined below); the Interest Rate Basis or Bases, Initial Interest
Rate, Interest Reset Dates, Interest Reset Period, Regular Record Dates (if
any), Interest Payment Dates, Index Maturity, maximum interest rate and minimum
interest rate, if any, and the Spread and/or Spread Multiplier, if any, and if
one or more of the specified Interest Rate Bases is LIBOR, the Index Currency,
as described below.
The interest rate borne by the Floating Rate Notes will be determined as
follows:
(a) Unless such Floating Rate Note is designated as a Floating
Rate/Fixed Rate Note, an Inverse Floating Rate Note or as having an Addendum
attached, such Floating Rate Note will be designated a "Regular Floating
Rate Note" and, except as described below or in an applicable Pricing
Supplement, will bear interest at the rate determined by reference to the
applicable Interest Rate Basis (i) plus or minus the applicable Spread, if
any, and/or (ii) multiplied by the applicable Spread Multiplier, if any.
Commencing on the Initial Interest Reset Date, the rate at which interest on
such Regular Floating Rate Note shall be payable shall be reset as of each
Interest Reset Date; PROVIDED, HOWEVER, that (i) the interest rate in effect
for the period from the Original Issue Date to the Initial Interest Reset
Date will be the Initial Interest Rate, and (ii) unless otherwise specified
in the applicable Pricing Supplement, the interest rate in effect for the
ten calendar days immediately prior to a Maturity Date shall be that in
effect on the tenth calendar day preceding such Maturity Date.
(b) If such Floating Rate Note is designated as a "Floating Rate/Fixed
Rate Note," then, except as described below or in an applicable Pricing
Supplement, such Floating Rate Note will initially bear interest at the rate
determined by reference to the applicable Interest Rate Basis (i) plus or
minus the applicable Spread, if any, and/or (ii) multiplied by the
applicable Spread Multiplier, if any. Commencing on the Initial Interest
Reset Date, the rate at which interest on such Floating Rate/Fixed Rate Note
shall be payable shall be reset as of each Interest Reset Date; PROVIDED,
HOWEVER, that (i) the interest rate in effect for the period from the
Original Issue Date to the Initial Interest Reset Date will be the Initial
Interest Rate; (ii) unless otherwise specified in the applicable Pricing
Supplement, the interest rate in effect for the ten calendar days
immediately prior to the Fixed Rate Commencement Date shall be that in
effect on the tenth calendar day preceding the Fixed Rate Commencement Date;
and (iii) the interest rate in effect commencing on, and including, the
Fixed Rate Commencement Date to the Maturity Date shall be the Fixed
Interest Rate, if such rate is specified in the applicable Pricing
Supplement, or if no such Fixed
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<PAGE>
Interest Rate is so specified and the Floating Rate/Fixed Rate Note is still
outstanding on such day, the interest rate in effect thereon on the day
immediately preceding the Fixed Rate Commencement Date.
(c) If such Floating Rate Note is designated as an "Inverse Floating
Rate Note," then, except as described below or in an applicable Pricing
Supplement, such Floating Rate Note will bear interest equal to the Fixed
Interest Rate specified in the related Pricing Supplement minus the rate
determined by reference to the Interest Rate Basis (i) plus or minus the
applicable Spread, if any, and/or (ii) multiplied by the applicable Spread
Multiplier, if any; PROVIDED, HOWEVER, that the interest rate thereon will
not be less than zero. Commencing on the Initial Interest Reset Date, the
rate at which interest on such Inverse Floating Rate Note is payable shall
be reset as of each Interest Reset Date; PROVIDED, HOWEVER, that (i) the
interest rate in effect for the period from the Original Issue Date to the
Initial Interest Reset Date will be the Initial Interest Rate, and (ii)
unless otherwise specified in the applicable Pricing Supplement, the
interest rate in effect for the ten calendar days immediately prior to a
Maturity Date shall be that in effect on the tenth calendar day preceding
such Maturity Date.
Notwithstanding the foregoing, if such Floating Rate Note is designated as
having an Addendum attached as specified on the face thereof, such Floating Rate
Note shall bear interest in accordance with the terms described in such Addendum
and the applicable Pricing Supplement. See "Other Provisions, Addenda" below.
Unless otherwise provided in the applicable Pricing Supplement, each
Interest Rate Basis shall be the rate determined in accordance with the
applicable provisions below. Except as set forth above or in an applicable
Pricing Supplement, the interest rate in effect on each day shall be (a) if such
day is an Interest Reset Date, the interest rate determined on the Interest
Determination Date (as defined below) immediately preceding such Interest Reset
Date or (b) if such day is not an Interest Reset Date, the interest rate
determined on the Interest Determination Date immediately preceding the next
preceding Interest Reset Date.
Interest on Floating Rate Notes will be determined by reference to an
"Interest Rate Basis," which may be one or more of (i) the CD Rate, (ii) the
Commercial Paper Rate, (iii) the Eleventh District Cost of Funds Rate, (iv) the
Federal Funds Rate, (v) LIBOR, (vi) the Prime Rate, (vii) the Treasury Rate, or
(viii) such other Interest Rate Basis or interest rate formula as may be set in
the applicable Pricing Supplement; PROVIDED, HOWEVER, that with respect to a
Floating Rate/Fixed Rate Note, the interest rate commencing on the Fixed Rate
Commencement Date and continuing, unless otherwise specified in the applicable
Pricing Supplement, until the Maturity Date shall be the Fixed Interest Rate, if
such rate is specified in the applicable Pricing Supplement, or if no such Fixed
Interest Rate is so specified, the interest rate in effect thereon on the day
immediately preceding the Fixed Rate Commencement Date. In addition, if so
specified in the applicable Pricing Supplement, a Floating Rate Note may bear
interest calculated based upon the lowest of two or more Interest Rate Bases.
The "Spread" is the number of basis points to be added to or subtracted from
the related Interest Rate Basis or Bases applicable to such Floating Rate Note.
The "Spread Multiplier" is the percentage of the related Interest Rate Basis or
Bases applicable to such Floating Rate Note by which such Interest Rate Basis or
Bases will be multiplied to determine the applicable interest rate on such
Floating Rate Note. The "Index Maturity" is the period to maturity of the
instrument or obligation with respect to which the Interest Rate Basis or Bases
will be calculated. The Spread, Spread Multiplier, Index Maturity and other
variable terms of the Floating Rate Notes are subject to change by the Company
from time to time, but no such change will affect any Floating Rate Note
previously issued or as to which an offer has been accepted by the Company.
Each applicable Pricing Supplement will specify whether the rate of interest
on the related Floating Rate Note will be reset daily, weekly, monthly,
quarterly, semiannually, annually or such other specified period (each, an
"Interest Reset Period") and the dates on which such interest rate will
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<PAGE>
be reset (each, an "Interest Reset Date"). Unless otherwise specified in the
applicable Pricing Supplement, the Interest Reset Date will be, in the case of
Floating Rate Notes which reset: (i) daily, each Business Day; (ii) weekly, the
Wednesday of each week (with the exception of weekly reset Treasury Rate Notes,
which will reset the Tuesday of each week except as specified below); (iii)
monthly, the third Wednesday of each month (with the exception of Eleventh
District Cost of Funds Rate Notes, all of which reset monthly, which will reset
on the first calendar day of the month); (iv) quarterly, the third Wednesday of
March, June, September and December of each year; (v) semiannually, the third
Wednesday of the two months specified in the applicable Pricing Supplement; and
(vi) annually, the third Wednesday of the month specified in the applicable
Pricing Supplement; PROVIDED, HOWEVER, that, with respect to Floating Rate/Fixed
Rate Notes, the fixed rate of interest in effect for the period from the Fixed
Rate Commencement Date until the Maturity Date shall be the Fixed Interest Rate
or the interest rate in effect on the day immediately preceding the Fixed Rate
Commencement Date, as specified in the applicable Pricing Supplement. If any
Interest Reset Date for any Floating Rate Note would otherwise be a day that is
not a Business Day, such Interest Reset Date will be postponed to the next
succeeding day that is a Business Day, except that in the case of a Floating
Rate Note as to which LIBOR is an applicable Interest Rate Basis, in which case
if such Business Day falls in the next succeeding calendar month, such Interest
Reset Date will be the immediately preceding Business Day. As used herein,
"Business Day" means, unless otherwise specified in the applicable Pricing
Supplement, any day other than a Saturday or Sunday or any other day on which
banking institutions are generally authorized or obligated by law or regulation
to close in The City of New York or in London, England or (i) with respect to
Notes denominated in a Specified Currency other than U.S. dollars, Australian
dollars or ECUs, in the principal financial center of the country of the
Specified Currency, (ii) with respect to Notes denominated in Australian
dollars, in Sydney or (iii) with respect to Notes denominated in ECUs, a day
that is a non-ECU clearing day as determined by the ECU Banking Association in
Paris.
A Floating Rate Note may also have either or both of the following: (i) a
maximum numerical limitation, or ceiling, on the rate at which interest may
accrue during any interest period and (ii) a minimum numerical limitation, or
floor, on the rate at which interest may accrue during any interest period. In
addition to any maximum interest rate that may be applicable to any Floating
Rate Note pursuant to the above provisions, the interest rate on Floating Rate
Notes will in no event be higher than the maximum rate permitted by New York
law, as the same may be modified by United States law of general application.
Each Floating Rate Note will bear interest from the date of issue at the
rates specified therein until the principal thereof is paid or otherwise made
available for payment. Except as provided below or in an applicable Pricing
Supplement, interest will be payable in the case of Floating Rate Notes which
reset: (i) daily, weekly or monthly, on the third Wednesday of each month or on
the third Wednesday of March, June, September and December of each year as
specified in the applicable Pricing Supplement; (ii) quarterly, on the third
Wednesday of March, June, September and December of each year; (iii)
semiannually, on the third Wednesday of the two months of each year specified in
the applicable Pricing Supplement; and (iv) annually, on the third Wednesday of
the month of each year specified in the applicable Pricing Supplement (each, an
"Interest Payment Date") and, in each case, on the Maturity Date. If any
Interest Payment Date for any Floating Rate Note (other than the Maturity Date)
would otherwise be a day that is not a Business Day, such Interest Payment Date
will be the next succeeding day that is a Business Day except that if such Note
is a LIBOR Note and if such Business Day falls in the next succeeding calendar
month, such Interest Payment Date will be the immediately preceding Business
Day. If the Maturity Date of a Floating Rate Note falls on a day that is not a
Business Day, the payment of principal, premium, if any, and interest, if any,
will be made on the next succeeding Business Day, and no interest shall accrue
for the period from and after such Maturity Date.
All percentages resulting from any calculation on Floating Rate Notes will
be to the nearest one hundred-thousandth of a percentage point, with five one
millionths of a percentage point rounded
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<PAGE>
upwards (E.G., 9.876545% (or .09876545) would be rounded to 9.87655% (or
.0987655)), and all dollar amounts used in or resulting from such calculation
will be rounded to the nearest cent (with one-half cent being rounded upward).
Unless otherwise specified in the applicable Pricing Supplement, interest
payments on Floating Rate Notes will equal the amount of interest accrued from
and including the next preceding Interest Payment Date in respect of which
interest has been paid (or from and including the date of issue, if no interest
has been paid with respect to such Floating Rate Notes) to but excluding the
related Interest Payment Date; PROVIDED, HOWEVER, that in the case of Floating
Rate Notes on which the interest rate is reset daily or weekly, each interest
payment will include interest accrued from and including the date of issue or
from but excluding the last Regular Record Date, in the case of Registered
Notes, or the fifteenth calendar day preceding the next preceding Interest
Payment Date, in the case of Bearer Notes (whether or not such fifteenth
calendar day is a Business Day), to which interest has been paid, as the case
may be, through and including the Regular Record Date next preceding the
applicable Interest Payment Date, in the case of Registered Notes, or the
fifteenth calendar day preceding such Interest Payment Date, in the case of
Bearer Notes (whether or not such fifteenth calendar day is a Business Day),
unless otherwise specified in the applicable Pricing Supplement; and PROVIDED,
FURTHER, that the interest payments on Floating Rate Notes made on the Maturity
Date will include interest accrued to but excluding such Maturity Date.
With respect to each Floating Rate Note, accrued interest is calculated by
multiplying its face amount by an accrued interest factor. Such accrued interest
factor is computed by adding the interest factor calculated for each day from
and including the later of (i) the date of issue and (ii) the last day to which
interest has been paid or duly provided for, to and including the last date for
which accrued interest is being calculated as described in the immediately
preceding paragraph. Unless otherwise specified in the applicable Pricing
Supplement, the interest factor for each such day will be computed by dividing
the interest rate applicable to such day by 360, in the case of Notes for which
the Interest Rate Basis is the CD Rate, the Commercial Paper Rate, the Eleventh
District Cost of Funds Rate, the Federal Funds Rate, LIBOR or the Prime Rate, or
by the actual number of days in the year in the case of Notes for which the
Interest Rate Basis is the Treasury Rate. The accrued interest factor for Notes
for which the interest rate may be calculated with reference to two or more
Interest Rate Bases will be calculated in each period by selecting one such
Interest Rate Basis for such period in accordance with the provisions of the
applicable Pricing Supplement.
The interest rate applicable to each Interest Reset Period commencing on the
Interest Reset Date with respect to such Interest Reset Period will be the rate
determined on the "Interest Determination Date." Unless otherwise specified in
the applicable Pricing Supplement, the Interest Determination Date with respect
to the CD Rate, the Commercial Paper Rate, the Federal Funds Rate and the Prime
Rate will be the second Business Day preceding each Interest Reset Date for the
related Note; the Interest Determination Date with respect to the Eleventh
District Cost of Funds Rate will be the last working day of the month
immediately preceding each Interest Reset Date on which the Federal Home Loan
Bank of San Francisco (the "FHLB of San Francisco") publishes the Index (as
defined below); and the Interest Determination Date with respect to LIBOR will
be the second London Business Day preceding each Interest Reset Date. With
respect to the Treasury Rate, unless otherwise specified in an applicable
Pricing Supplement, the Interest Determination Date will be the day in the week
in which the related Interest Reset Date falls on which day Treasury Bills (as
defined below) are normally auctioned (Treasury Bills are normally sold at
auction on Monday of each week, unless that day is a legal holiday, in which
case the auction is normally held on the following Tuesday, except that such
auction may be held on the preceding Friday); PROVIDED, HOWEVER, that if an
auction is held on the Friday of the week preceding the related Interest Reset
Date, the related Interest Determination Date will be such preceding Friday; and
PROVIDED, FURTHER, that if an auction falls on any Interest Reset Date, then the
related Interest Reset Date will instead be the first Business Day following
such auction. Unless otherwise specified in the applicable Pricing Supplement,
the Interest Determination Date pertaining to a Floating Rate Note the interest
rate of which is determined with reference to two or
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<PAGE>
more Interest Rate Bases will be the latest Business Day which is at least two
Business Days prior to each Interest Reset Date for such Floating Rate Note.
Each Interest Rate Basis will be determined and compared on such date, and the
applicable interest rate will take effect on the related Interest Reset Date, as
specified in the applicable Pricing Supplement.
Unless otherwise provided for in the applicable Pricing Supplement, The
Chase Manhattan Bank (National Association) will be the Calculation Agent (the
"Calculation Agent," which term includes any successor calculation agent
appointed by the Company), and for each Interest Reset Date will determine the
interest rate with respect to any Floating Rate Note as described below. The
Calculation Agent will notify the Trustee of each determination of the interest
rate applicable to any such Floating Rate Note promptly after such determination
is made. The Calculation Agent will also notify the Stock Exchange (in the case
of Series B Notes) and the Paying Agents, including any Paying Agent located in
Luxembourg, of such determination. Such information shall be made available to
the holders of Notes by the Paying Agents. The Trustee will, upon the request of
the holder of any Floating Rate Note, provide the interest rate then in effect
and, if determined, the interest rate which will become effective as a result of
a determination made with respect to the most recent Interest Determination Date
relating to such Note. Unless otherwise specified in the applicable Pricing
Supplement, the "Calculation Date," where applicable, pertaining to any Interest
Determination Date will be the earlier of (i) the tenth calendar day after such
Interest Determination Date or, if such day is not a Business Day, the next
succeeding Business Day or (ii) the Business Day preceding the applicable
Interest Payment Date or Maturity Date, as the case may be.
Interest rates with respect to Floating Rate Notes will be determined by the
Calculation Agent as follows:
CD RATE NOTES. CD Rate Notes will bear interest at the interest rate
(calculated with reference to the CD Rate and the Spread and/or Spread
Multiplier, if any) specified in the CD Rate Notes and in the applicable Pricing
Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "CD Rate"
means, with respect to any Interest Determination Date relating to a CD Rate
Note, the rate on such date for negotiable certificates of deposit having the
Index Maturity designated in the applicable Pricing Supplement 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 ("H.15(519)")
under the heading "CDs (Secondary Market)," or, if not so published by 3:00
p.m., New York City time, on the Calculation Date pertaining to such Interest
Determination Date, the CD Rate will be the rate on such Interest Determination
Date for negotiable certificates of deposit of the Index Maturity designated in
the applicable Pricing Supplement as published by the Federal Reserve Bank of
New York in its daily statistical release "Composite 3:30 p.m. Quotations for
U.S. Government Securities" or any successor publication (the "Composite
Quotations") under the heading "Certificates of Deposit." If such rate is not
yet published in either H.15(519) or the Composite Quotations by 3:00 p.m., New
York City time, on the Calculation Date pertaining to such Interest
Determination Date, the CD Rate on such Interest Determination Date will be
calculated by the Calculation Agent and will be the arithmetic mean of the
secondary market offered rates as of 10:00 a.m., New York City time, on such
Interest Determination Date, for negotiable certificates of deposit of major
United States money market banks with a remaining maturity closest to the Index
Maturity designated in the applicable Pricing Supplement in an amount that is
representative for a single transaction in that market at that time as quoted by
three leading nonbank dealers in negotiable U.S. dollar certificates of deposit
in The City of New York selected by the Calculation Agent; PROVIDED, HOWEVER,
that if the dealers selected as aforesaid by the Calculation Agent are not
quoting as set forth above, the CD Rate with respect to such Interest
Determination Date shall be the CD Rate as in effect on such Interest
Determination Date.
COMMERCIAL PAPER RATE NOTES. Commercial Paper Rate Notes will bear interest
at the interest rate (calculated with reference to the Commercial Paper Rate and
the Spread and/or Spread Multiplier, if any) specified in the Commercial Paper
Rate Notes and in the applicable Pricing Supplement.
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Unless otherwise specified in the applicable Pricing Supplement, "Commercial
Paper Rate" means, with respect to any Interest Determination Date relating to a
Commercial Paper Note, the Money Market Yield (as defined below) of the rate on
that date for commercial paper having the Index Maturity designated in the
applicable Pricing Supplement, as such rate shall be published in H.15(519),
under the heading "Commercial Paper." In the event that such rate is not
published prior to 3:00 p.m., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, then the Commercial Paper Rate
shall be the Money Market Yield of the rate on such Interest Determination Date
for commercial paper of the specified Index Maturity as published in Composite
Quotations under the heading "Commercial Paper" (with an Index Maturity of one
month or three months being deemed to be equivalent to an Index Maturity of 30
days or 90 days, respectively). If by 3:00 p.m., New York City time, on such
Calculation Date such rate is not yet available in either H.15(519) or Composite
Quotations, then the Commercial Paper Rate on such Interest Determination Date
shall be calculated by the Calculation Agent and shall be the Money Market Yield
corresponding to the arithmetic mean of the offered rates as of approximately
11:00 a.m., New York City time, on such Interest Determination Date for
commercial paper of the specified Index Maturity placed for an industrial issuer
whose bond rating is "AA," or the equivalent, from a nationally recognized
rating agency as quoted by three leading dealers of commercial paper in The City
of New York selected by the Calculation Agent; PROVIDED, HOWEVER, that if the
dealers selected as aforesaid by the Calculation Agent are not quoting offered
rates as set forth above, the Commercial Paper Rate with respect to such
Interest Determination Date shall be the Commercial Paper Rate in effect on such
Interest Determination Date.
"Money Market Yield" shall be a yield (expressed as a percentage) calculated
in accordance with the following formula:
<TABLE>
<C> <S> <C>
D X 360
Money Market Yield = ------------------- X 100
360-(D X M)
</TABLE>
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the period for which interest is being calculated.
ELEVENTH DISTRICT COST OF FUNDS RATE NOTES. Eleventh District Cost of Funds
Rate Notes will bear interest at the rates (calculated with reference to the
Eleventh District Cost of Funds Rate and the Spread and/or Spread Multiplier, if
any) specified in such Eleventh District Cost of Funds Rate Notes and in the
applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Eleventh
District Cost of Funds Rate" means, with respect to any Interest Determination
Date relating to an Eleventh District Cost of Funds Rate Note, the rate equal to
the monthly weighted average cost of funds for the calendar month preceding such
Interest Determination Date as set forth under the caption "11th District" on
Telerate Page 7058 (or such other page as is specified in the applicable Pricing
Supplement) as of 11:00 a.m., San Francisco time, on such Interest Determination
Date. If such rate does not appear on Telerate Page 7058 (or such other page as
aforesaid) on any such Interest Determination Date, the Eleventh District Cost
of Funds Rate for such Interest Determination Date shall be the monthly weighted
average cost of funds paid by member institutions of the Eleventh Federal Home
Loan Bank District that was most recently announced (the "Index") by the FHLB of
San Francisco as such cost of funds for the calendar month preceding the date of
such announcement. If the FHLB of San Francisco fails to announce such rate for
the calendar month next preceding such Interest Determination Date, then the
Eleventh District Cost of Funds Rate for such Interest Determination Date will
be the Eleventh District Cost of Funds Rate in effect on such Interest
Determination Date.
FEDERAL FUNDS RATE NOTES. Federal Funds Rate Notes will bear interest at
the interest rate (calculated with reference to the Federal Funds Rate and the
Spread and/or Spread Multiplier, if any) specified in the Federal Funds Rate
Notes and in the applicable Pricing Supplement.
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Unless otherwise specified in the applicable Pricing Supplement, the
"Federal Funds Rate" means, with respect to any Interest Determination Date
relating to a Federal Funds Rate Note, the rate on such date for Federal funds
as published in H.15(519) under the heading "Federal Funds (Effective)" or, if
not so published by 3:00 p.m., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, the Federal Funds Rate will be
the rate on such Interest Determination Date as published in Composite
Quotations under the heading "Federal Funds/Effective Rate." If such rate is not
published in either H.15(519) or the Composite Quotations by 3:00 p.m., New York
City time, on the Calculation Date pertaining to such Interest Determination
Date, the Federal Funds Rate for such Interest Determination Date will be
calculated by the Calculation Agent and will be the arithmetic mean of the rates
for the last transaction in overnight United States dollar Federal funds as of
9:00 a.m., New York City time, on such Interest Determination Date arranged by
three leading brokers of Federal funds transactions in The City of New York
selected by the Calculation Agent; PROVIDED, HOWEVER, that if the brokers
selected as aforesaid by the Calculation Agent are not quoting as set forth
above, the Federal Funds Rate with respect to such Interest Determination Date
shall be the Federal Funds Rate in effect on such Interest Determination Date.
LIBOR NOTES. LIBOR Notes will bear interest at the interest rate
(calculated with reference to LIBOR and the Spread and/or Spread Multiplier, if
any) specified in the LIBOR Notes and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "LIBOR" for
each Interest Reset Date will be determined by the Calculation Agent as follows:
(i) With respect to an Interest Determination Date relating to a LIBOR
Note, LIBOR will be either: (A) if "LIBOR Telerate" is specified in the
applicable Pricing Supplement or if such Pricing Supplement does not specify
a source for LIBOR, the rate for deposits in the London interbank market in
the Index Currency (as defined below) having the Index Maturity designated
in the applicable Pricing Supplement commencing on the second Business Day
immediately following such Interest Determination Date that appears on the
Designated LIBOR Page (as defined below) as of 11:00 a.m., London time, on
such Interest Determination Date, or (B) 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 London interbank market in the Index Currency
having the Index Maturity designated in the applicable Pricing Supplement
and commencing on the second Business Day immediately following such
Interest Determination Date that appear on the Designated LIBOR Page as of
11:00 a.m., London time, on such 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. If no rate appears on the
Designated LIBOR Page (or, in the case of clause (i)(B) above, if the
Designated LIBOR Page by its terms provides for more than a single rate but
fewer than two offered rates appear on such page), as applicable, LIBOR in
respect of such Interest Determination Date will be determined as if the
parties had specified the rate described in clause (ii) below.
(ii) With respect to an Interest Determination Date relating to a LIBOR
Note to which the last sentence of clause (i) above applies, the Calculation
Agent will request the principal London offices of each of four major
reference banks in the London interbank market, as selected by the
Calculation Agent, to provide the Calculation Agent with its offered
quotation for deposits in the Index Currency for the period of the Index
Maturity designated in the applicable Pricing Supplement commencing on the
second Business Day immediately following such Interest Determination Date
to prime banks in the London interbank market at approximately 11:00 a.m.,
London time, on such Interest Determination Date and in a principal amount
that is representative for a single transaction in such Index Currency in
such market at such time. If at least two such quotations are provided,
LIBOR determined on such Interest Determination Date will be the arithmetic
mean of such quotations. If fewer than two quotations are provided, LIBOR
determined on such Interest Determination Date will be the arithmetic mean
of the rates quoted at
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approximately 11:00 a.m. (or such other time specified in the applicable
Pricing Supplement), in the applicable Principal Financial Center (as
defined below), on such Interest Determination Date for loans made on the
second Business Day immediately following such Interest Determination Date
in the Index Currency to leading European banks having the Index Maturity
designated in the applicable Pricing Supplement and in a principal amount
that is representative for a single transaction in such Index Currency in
such market at such time by three major banks in such Principal Financial
Center selected by the Calculation Agent; PROVIDED, HOWEVER, that if the
banks so selected by the Calculation Agent are not quoting as mentioned in
this sentence, LIBOR with respect to such Interest Determination Date will
be LIBOR in effect on such Interest Determination Date.
"Index Currency" means the currency (including composite currencies)
specified in the applicable Pricing Supplement as the currency with respect to
which LIBOR shall be calculated. If no such currency is specified in the
applicable Pricing Supplement, the Index Currency shall be U.S. dollars.
"Designated LIBOR Page" means the display on Page 3750 (or such other page
as is specified in the applicable Pricing Supplement) of the Dow Jones Telerate
Service for the purpose of displaying the London interbank offered rates of
major banks for the applicable Index Currency (or such other page as may replace
that page on that service for the purpose of displaying such rates), unless
"LIBOR Reuters" is designated in the applicable Pricing Supplement, in which
case the Designated LIBOR Page shall be the display on the Reuters Monitor Money
Rates Service for the purpose of displaying the London interbank offered rates
of major banks for the applicable Index Currency.
Unless provided otherwise in the applicable Pricing Supplement, "Principal
Financial Center" will be the capital city of the country of the specified Index
Currency, except that with respect to U.S. dollars, Deutschemarks, Australian
dollars and ECUs, the Principal Financial Center shall be The City of New York,
Frankfurt, Sydney and Luxembourg, respectively.
PRIME RATE NOTES. Prime Rate Notes will bear interest at the interest rate
(calculated with reference to the Prime Rate and the Spread and/or Spread
Multiplier, if any) specified in the Prime Rate Notes and in the applicable
Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Prime
Rate" means, with respect to any Interest Determination Date relating to a Prime
Rate Note, the arithmetic mean of the prime rates of interest publicly announced
by each of three major banks in The City of New York as its United States dollar
prime rate or base lending rate as in effect for that day. For purposes of
making the foregoing determination, each change in the prime rate or base
lending rate of any bank so announced by such bank will be effective as of the
effective date of the announcement or, if no effective date is specified, as of
the date of the announcement. If fewer than three such quotations are provided,
the Prime Rate will be calculated by the Calculation Agent and will be
determined as the arithmetic mean on the basis of the prime rates or base
lending rates quoted in The City of New York by three substitute banks or trust
companies organized and doing business under the laws of the United States or
any state thereof, each having total equity capital of at least $500 million and
being subject to supervision or examination by a federal or state authority,
selected by the Calculation Agent to quote such rate or rates; PROVIDED,
HOWEVER, that if the banks or trust companies so selected by the Calculation
Agent are not quoting as mentioned in this sentence, the Prime Rate with respect
to such Interest Determination Date will be the Prime Rate in effect on such
Interest Determination Date.
TREASURY RATE NOTES. Treasury Rate Notes will bear interest at the interest
rate (calculated with reference to the Treasury Rate and the Spread and/or
Spread Multiplier, if any) specified in the Treasury Rate Notes and in the
applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
"Treasury Rate" means, with respect to any Interest Determination Date relating
to a Treasury Rate Note, the rate applicable to the most recent auction of
direct obligations of the United States ("Treasury Bills") having the Index
Maturity designated in the applicable Pricing Supplement, as published in
H.15(519) under the heading "Treasury Bills--auction average (investment)" or,
if not so published by 3:00 p.m., New
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York City time, on the Calculation Date pertaining to such Interest
Determination Date, the auction average rate on such Interest Determination Date
(expressed as a bond equivalent, on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) as otherwise announced by the United
States Department of the Treasury. In the event that the results of the auction
of Treasury Bills having the Index Maturity designated in the applicable Pricing
Supplement 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 in the
five Business Days preceding such Interest Determination Date, then the Treasury
Rate 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) calculated using the
arithmetic mean of the secondary market bid rates, as of approximately 3:30
p.m., New York City time, on such Interest Determination Date, of three leading
primary United States government securities dealers (which may include one or
more of the Agents) selected by the Calculation Agent for the issue of Treasury
Bills with a remaining maturity closest to the Index Maturity designated in the
applicable Pricing Supplement; PROVIDED, HOWEVER, that if the dealers selected
as aforesaid by the Calculation Agent are not quoting bid rates as mentioned in
this sentence, the Treasury Rate with respect to such Interest Determination
Date will be the Treasury Rate in effect on such Interest Determination Date.
INDEXED NOTES
GENERAL. Notes also may be issued with the principal amount payable at
maturity or interest to be paid thereon, or both, to be determined with
reference to the price or prices of specified commodities or stocks, the
exchange rate of one or more Specified Currencies (including a composite
currency such as the ECU) relative to one or more other currencies (including a
composite currency such as the ECU), or such other price or exchange rate as may
be specified in such Note ("Indexed Notes"), as set forth in a Pricing
Supplement relating to such Indexed Notes. Holders of such Indexed Notes may
receive a principal amount on the Maturity Date that is greater than or less
than the face amount of the Indexed Notes, or an interest rate that is greater
than or less than the stated interest rate on the Indexed Notes, or both,
depending upon the structure of the Indexed Note and the relative value on the
Maturity Date or at the relevant Interest Payment Date, as the case may be, of
the specified indexed item. Information as to the method for determining the
principal amount payable on the Maturity Date, the manner of determining the
interest rate, certain historical information with respect to the specified
indexed item and tax considerations associated with an investment in Indexed
Notes will be set forth in the applicable Pricing Supplement.
Indexed Notes for which payments of principal, or premium and interest, if
any, are determined by reference to, or based upon an index including,
Deutschemarks will be offered and sold by the Company in compliance with the
then-current rules, regulations and policy statements of the Deutsche
Bundesbank. See "Special Provisions Relating to Foreign Currency Notes--Notes
Denominated in Deutschemarks."
RISK FACTORS. An investment in Indexed Notes entails significant risks that
are not associated with similar investments in a conventional fixed-rate debt
security. If the interest rate of an Indexed Note is indexed, it may result in
an interest rate that is less than that payable on a conventional fixed-rate
debt security issued by the Company at the same time, including the possibility
that no interest will be paid, and, if the principal amount of an Indexed Note
is indexed, the principal amount payable at maturity may be less than the
original purchase price of such Indexed Note, including the possibility that no
principal will be paid (but in no event shall the amount of interest or
principal paid with respect to an Indexed Note be less than zero). The secondary
market for Indexed Notes will be affected by a number of factors, independent of
the creditworthiness of the Company and the value of the applicable currency,
commodity or interest rate index, including, but not limited to, the volatility
of the applicable currency or interest rate index, the time remaining to the
maturity of such Indexed Notes, the amount outstanding of such Indexed Notes and
market interest rates. The value of the applicable currency, commodity or
interest rate index depends on a number of interrelated factors, including
economic, financial and political events, over which the Company has no control.
Additionally, if the formula used to determine the principal amount or interest
payable with respect to such
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Indexed Notes contains a multiple or leverage factor, the effect of any change
in the applicable currency, commodity or interest rate index may be increased.
The historical experience of the relevant currencies, commodities or interest
rate indices should not be taken as an indication of future performance of such
currencies, commodities or interest rate indices during the term of any Indexed
Note. Accordingly, prospective investors should consult their own financial and
legal advisors as to the risks entailed by an investment in Indexed Notes and
the suitability of Indexed Notes in light of their particular circumstances. See
also "Foreign Currency Risks."
DUAL CURRENCY NOTES
GENERAL. Dual Currency Notes are Notes as to which the Company has a one
time option, exercisable on any Option Election Date in whole, but not in part,
with respect to all Dual Currency Notes issued on the same day and having the
same terms (a "Tranche"), of making all payments of principal, premium, if any,
and interest after the exercise of such option, whether at maturity or otherwise
(which payments would otherwise be made in the Face Amount Currency of such
Notes specified in the applicable Pricing Supplement), in the Optional Payment
Currency specified in the applicable Pricing Supplement.
The Pricing Supplement for each issuance of Dual Currency Notes will
specify, among other things, the aggregate Face Amount of the Dual Currency
Notes of such issuance, the Face Amount Currency and Optional Payment Currency
of such issuance and the Designated Exchange Rate for such issuance, which will
be a fixed exchange rate used for converting amounts denominated in the Face
Amount Currency into amounts denominated in the Optional Payment Currency.
Information as to the relative value of the Face Amount Currency compared to the
Optional Payment Currency and as to tax considerations associated with an
investment in Dual Currency Notes will also be set forth in the applicable
Pricing Supplement. The Pricing Supplement will also specify the Option Election
Dates and Interest Payment Dates for such issuance of Dual Currency Notes. Each
Option Election Date will be approximately ten calendar days before an Interest
Payment Date or the stated maturity date.
If the Company elects to make scheduled payments in the Optional Payment
Currency, the amount payable in such Optional Payment Currency shall be
determined using the Designated Exchange Rate specified in the applicable
Pricing Supplement. If such election is made, notice of such election shall be
given to holders of Registered Notes by mail and shall be given to holders of
Bearer Notes by publication, in each case as set forth below under "Notices,"
within two Business Days of the Option Election Date and shall state (i) the
Interest Payment Date or stated maturity date and (ii) the Designated Exchange
Rate. Any such notice by the Company, once given, may not be withdrawn.
If the Company elects on any Option Election Date specified in the
applicable Pricing Supplement to pay in the Optional Payment Currency instead of
the Face Amount Currency, payments of interest, premium, if any, and principal
made after such Option Election Date may be worth less, at the then-current
exchange rate, than if the Company had made such payment in the Face Amount
Currency. For further information regarding certain risks inherent in Notes
denominated in currencies other than U.S. dollars, see "Foreign Currency Risks."
Dual Currency Notes for which either the Face Amount Currency or the
Optional Payment Currency is Deutschemarks will be offered and sold by the
Company in compliance with the then-current rules, regulations and policy
statements of the Deutsche Bundesbank. See "Special Provisions Relating to
Foreign Currency Notes--Notes Denominated in Deutschemarks."
EXTENSION OF MATURITY
The Pricing Supplement relating to each Fixed Rate Note (other than an
Amortizing Note) will indicate whether the Company has the option to extend the
maturity of such Fixed Rate Note for one or more periods of one or more whole
years (each an "Extension Period") up to but not beyond the
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<PAGE>
date (the "Final Maturity Date") set forth in such Pricing Supplement. If the
Company has such option with respect to any such Fixed Rate Note (an "Extendible
Note"), the following procedures will apply, unless modified as set forth in the
applicable Pricing Supplement.
The Company may exercise such option with respect to an Extendible Note by
notifying the Principal Paying Agent of such exercise at least 45 but not more
than 60 calendar days prior to the stated maturity date originally in effect
with respect to such Note (the "Original Maturity Date") or, if the stated
maturity date of such Note has already been extended, prior to the stated
maturity date then in effect (an "Extended Maturity Date"). No later than 38
calendar days prior to the Original Maturity Date or an Extended Maturity Date,
as the case may be (each, a "Maturity Date"), the Principal Paying Agent will
mail to the holders of such Extendible Notes holding in registered form a notice
(the "Extension Notice") relating to such Extension Period as described in
"Notices" below and will notify holders of such Extendible Notes holding in
bearer form of such Extension Period by publishing such notice as described
under "Notices" below, in each case setting forth (a) the election of the
Company to extend the maturity of such Extendible Note; (b) the new Extended
Maturity Date; (c) the interest rate applicable to the Extension Period; and (d)
the provisions, if any, for redemption during the Extension Period, including
the date or dates on which, the period or periods during which and the price or
prices at which such redemption may occur during the Extension Period. Upon such
mailing and publication by the Principal Paying Agent of an Extension Notice,
the maturity of such Extendible Notes shall be extended automatically, and,
except as modified by the Extension Notice and as described in the next
paragraph, such Extendible Notes will have the same terms they had prior to the
delivery of such Extension Notice.
Notwithstanding the foregoing, not later than 10:00 a.m., New York City
time, on the twentieth calendar day prior to the Maturity Date then in effect
for an Extendible Note (or, if such day is not a Business Day, not later than
10:00 a.m., New York City time, on the immediately succeeding Business Day), the
Company may, at is option, revoke the interest rate provided for in the
Extension Notice and establish a higher interest rate for the Extension Period
by causing the Principal Paying Agent to send and publish notice of such higher
interest rate to the holders of such Extendible Notes as described above or by
such other means as shall be agreed between the Company and the Principal Paying
Agent. Such notice shall be irrevocable. All Extendible Notes with respect to
which the Maturity Date is extended in accordance with an Extension Notice will
bear such higher interest rate for the Extension Period, whether or not tendered
for repayment.
If the Company elects to extend the maturity of an Extendible Note, the
holder of such Note will have the option to require the Company to repay such
Note on the Maturity Date then in effect at a price equal to the principal
amount thereof plus any accrued and unpaid interest to such date. In order for
an Extendible Note to be so repaid on such Maturity Date, the holder thereof
must follow the procedures set forth above under "Repayment at the Noteholders'
Option; Repurchase" for optional repayment, except that the period for delivery
of such Note or notification to a Paying Agent shall be at least 25 but not more
than 35 calendar days prior to the Maturity Date then in effect and except that
a holder who has tendered an Extendible Note for repayment pursuant to an
Extension Notice may, by written notice to the same Paying Agent, revoke any
such tender for repayment until 3:00 p.m., local time, on the twentieth calendar
day prior to the Maturity Date then in effect (or, if such day is not a Business
Day, until 3:00 p.m., local time, on the immediately succeeding Business Day).
AMORTIZING NOTES
Amortizing Notes are Fixed Rate Notes for which payments combining principal
and interest are made in installments over the life of the Note ("Amortizing
Notes"). Unless otherwise specified in the applicable Pricing Supplement,
interest on each Amortizing Note will be computed on the basis of a 360-day year
of twelve 30-day months. Payments with respect to Amortizing Notes will be
applied first to interest due and payable thereon and then to the reduction of
the unpaid principal amount thereof. Further information concerning additional
terms and conditions of any issue of Amortizing Notes will
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<PAGE>
be provided in the applicable Pricing Supplement. A table setting forth
repayment information in respect of each Amortizing Note will be included in the
applicable Pricing Supplement and set forth on such Notes.
ORIGINAL ISSUE DISCOUNT NOTES
Original Issue Discount Notes are Notes issued at a discount from the
principal amount payable at maturity and which are considered to be issued with
original issue discount which must be included in income for United States
federal income tax purposes at a constant rate ("Original Issue Discount
Notes"). See "United States Tax Considerations." Certain additional
considerations relating to Original Issue Discount Notes may be described in the
Pricing Supplement relating thereto.
ADDITIONAL NOTES
The Company may issue Notes from time to time having terms identical to a
prior issue of Notes but for the original issue date and the public offering
price ("Additional Notes"). Any such Additional Notes will be issued in the form
of a temporary Global Note which will be exchangeable for definitive Notes on or
after the Exchange Date specified in the applicable Pricing Supplement.
Additional Notes may be issued prior to or after the Exchange Date relating to
such prior issue of Notes. In the event Additional Notes are issued prior to the
Exchange Date for the prior issue, the Exchange Date relating to such prior
issue will be moved to a date not earlier than 40 calendar days after the
original issue date of the related Additional Notes. Once any Additional Notes
have been issued in definitive form on or after the Exchange Date, such
Additional Notes will be considered fungible with such earlier Notes. The
Pricing Supplement relating to any Additional Notes will set forth matters
related to the issuance, exchange and transfer of Additional Notes, including
identifying the prior issue of Notes, their original issue date and aggregate
principal amount.
OTHER PROVISIONS, ADDENDA
Any provisions with respect to Notes, including the determination of an
Interest Rate Basis, the specification of Interest Rates Basis, calculation of
the interest rate applicable to a Floating Rate Note, its Interest Payment Dates
or any other matter relating thereto may be modified by the terms specified
under "Other Provisions" on the face thereof or in an Addendum relating thereto,
if so specified on the face thereof and in the applicable Pricing Supplement.
REPLACEMENT OF NOTES AND COUPONS
Any Notes or coupons that become mutilated, destroyed, lost or stolen or are
apparently destroyed, lost or stolen will be replaced by the Company at the
expense of the holder upon delivery of the Notes or coupons or satisfactory
evidence of the destruction, loss or theft thereof to the Company and a Paying
Agent or, in the case of Registered Notes, the Principal Paying Agent or the
Registrar. In each case, an indemnity satisfactory to the Company and the
Principal Paying Agent or, in the case of Registered Notes, the Principal Paying
Agent or the Registrar may be required at the expense of the holder of such Note
or coupon before a replacement Note or coupon will be issued.
NOTICES
Notices to holders of the Notes will be given by publication in an
Authorized Newspaper in the English language of general circulation in the
Borough of Manhattan, The City of New York, London and, so long as the Series B
Notes are listed on the Luxembourg Stock Exchange, in an Authorized Newspaper in
Luxembourg or, if publication in either London or Luxembourg is not practical,
elsewhere in Western Europe. Such publication is expected to be made in THE WALL
STREET JOURNAL, the FINANCIAL TIMES and the LUXEMBURGER WORT. Such notices will
be deemed to have been given on the date of such publication or if published in
such newspapers on different dates, on the date of the first such publication.
Notices to holders of Registered Notes will also be given by mailing such
notices to each holder by first class mail, postage prepaid, at the respective
address of each holder as that address appears upon the books of the Company.
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<PAGE>
SPECIAL PROVISIONS RELATING TO FOREIGN CURRENCY NOTES
GENERAL
Unless otherwise specified in the applicable Pricing Supplement, the
following provisions shall apply to Foreign Currency Notes which are in addition
to, and to the extent inconsistent therewith replace, the description of general
terms and provisions of the Notes set forth elsewhere in this Prospectus.
PAYMENTS ON FOREIGN CURRENCY NOTES
Purchasers are required to pay for the Notes in the currency specified in
the applicable Pricing Supplement. Currently, there are limited facilities in
various countries for conversion of home currencies into foreign currencies, and
vice versa. In addition, many banks do not offer foreign currency denominated
checking or savings account facilities.
Payment of principal, premium, if any, and interest, if any, on each Note
will be made in immediately available funds in the Specified Currency (see
"Description of the Notes -- General" in this Prospectus Supplement) unless
otherwise specified in the applicable Pricing Supplement. Except as set forth
below or in the applicable Pricing Supplement, if payment on a Note is required
to be made in a currency other than U.S. dollars and such currency is
unavailable on any payment date due to the imposition of exchange controls or
other circumstances beyond the Company's control, or is no longer used by the
government of the country issuing such currency or for the settlement of
transactions by public institutions in that country or within the international
banking community, then all payments due on that due date, and all subsequent
due dates until such currency is again available or so used as determined by the
Company, with respect to such Note shall be made in U.S. dollars. The amount so
payable on any date in such foreign currency shall be converted into U.S.
dollars at a rate determined by the Exchange Rate Agent (as hereinafter defined)
on the basis of the most recently available Market Exchange Rate or as otherwise
indicated in an applicable Pricing Supplement. The initial Exchange Rate Agent
will be the Chase Manhattan Bank (National Association). Any payment required to
be made on Notes denominated in a Specified Currency other than U.S. dollars
which is instead made in U.S. dollars under the circumstances described above
will not constitute a default of any obligation under the Indenture under which
such Notes shall have been issued.
Unless otherwise specified in the applicable Pricing Supplement, a holder of
the equivalent of U.S.$1,000,000 or more aggregate principal amount of a
definitive Registered Note denominated in a Specified Currency other than U.S.
dollars may elect subsequent to the issuance thereof that future payments be
converted, or not be converted, as the case may be, to U.S. dollars by
transmitting a written request for such payments to the Paying Agent on or prior
to the Regular Record Date or at least 16 days prior to maturity or earlier
redemption or repayment, as the case may be. Such request shall include
appropriate payment instructions and shall be in writing (mail or hand
delivered) or by cable, telex or facsimile transmission. A holder may elect to
receive all future payments of principal, premium, if any, and interest in
either the Specified Currency or in U.S. dollars, as specified in the written
request, and need not file a separate election for each payment. Such election
will remain in effect until revoked by a subsequent election made in the manner
and at the times prescribed in this paragraph. Owners of beneficial interests in
Global Book-Entry Notes or holders of definitive Bearer Notes should contact
their broker or nominee to determine whether and how an election to receive
payment in either U.S. dollars or the specified currency may be made.
The "Market Exchange Rate" with respect to any currency other than U.S.
dollars means, for any day, the noon dollar buying rate in The City of New York
on such day for cable transfers of such currency as published by the Federal
Reserve Bank of New York, or, if such rate is not published for such day, the
equivalent rate as determined by the Exchange Rate Agent.
All determinations made by the Exchange Rate Agent shall be at its sole
discretion and, in the absence of manifest error, shall be conclusive for all
purposes and binding on holders of the Notes and the Exchange Rate Agent shall
have no liability therefor.
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Specific information about the currency or currency units in which a
particular Foreign Currency Note is denominated will be set forth in the
applicable Pricing Supplement. Any information therein concerning exchange rates
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.
MINIMUM DENOMINATIONS, RESTRICTIONS ON MATURITIES, REPAYMENT AND REDEMPTION
GENERAL. Notes denominated in Specified Currencies other than U.S. dollars
shall have such minimum denominations and be subject to such restrictions on
maturities, repayment and redemption as are set forth below or as are set forth
in an applicable Pricing Supplement in the event different restrictions on
maturities, repayment and redemption may be permitted or required from time to
time by any relevant central bank or equivalent governmental body, however
designated, or by such laws or regulations as are applicable to the Notes or the
Specified Currency. Restrictions related to the distribution of Notes
denominated in Specified Currencies other than U.S. dollars are set forth under
"Plan of Distribution" in this Prospectus Supplement. Any other restrictions
applicable to Notes denominated in Specified Currencies other than U.S. dollars
will be set forth in the related Pricing Supplement.
MINIMUM DENOMINATIONS. Any Notes denominated in Japanese yen will be issued
in denomination of not less than Y1,000,000. Any Notes denominated in Pounds
sterling will be issued in denominations of not less than L100,000. Any Notes
denominated in Dutch Guilder will be issued in denominations of not less than
Dfl.1,000,000. Unless otherwise specified in the applicable Pricing Supplement,
Notes denominated in other currencies will be issued in such denominations as
are set forth under "Description of the Notes -- Denominations, Exchange and
Transfer."
RESTRICTIONS ON MATURITIES, REPAYMENT AND REDEMPTION. Any Notes denominated
in Deutschemarks will have maturities of not less than two years from their
original issue date, and may not be subject to redemption at the option of the
Company or repayment at the option of the holder during such two-year period.
Any Notes denominated in Pounds sterling will have maturities of more than one
year and not more than five years from and including the original issue date,
and may not be subject to redemption at the option of the Company or repayment
at the option of the holders during the first year following their original
issue date, except as permitted by applicable law. Any Notes denominated in
Japanese yen will have maturities of one year or more from their original issue
date, and may not be subject to redemption at the option of the Company or
repayment at the option of the holders during the first year following their
original issue date. In addition, any Notes denominated in Dutch Guilder will
have maturities of not less than two years.
OTHER RESTRICTIONS APPLICABLE TO FOREIGN CURRENCY NOTES. Payments in
Japanese yen to a non-resident of Japan may be made only by transfer to a
non-resident account maintained by the payee with, or by a check drawn upon, an
authorized foreign exchange bank.
NOTES DENOMINATED IN ECU
VALUATION OF THE ECU. Subject to the provisions under "Payment in a
Component Currency" below, the value of the ECU, in which the Notes may be
denominated or may be payable, is equal to the value of the ECU used in the
European Monetary System and which is at the date hereof valued on the basis of
specified amounts of the currencies of member countries of the European
Community ("EC") as shown below.
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Pursuant to Council Regulation (EEC) No. 3180/78 of December 18, 1978, as
amended by Council Regulation (EEC) No. 1971/89 of June 19, 1989, the ECU is at
the date hereof defined as the sum of the following amounts of the following
components:
<TABLE>
<C> <S> <C> <C>
0.6242 German mark 0.130 Luxembourg franc
0.08784 Pound sterling 0.1976 Danish krone
1.332 French francs 0.008552 Irish pound
151.8 Italian lire 1.440 Greek drachmas
0.2198 Dutch guilder 6.885 Spanish pesetas
3.301 Belgian francs 1.393 Portuguese escudos
</TABLE>
Such amounts and/or components may be changed by the EC, in which event the
basis of valuation of the ECU will change accordingly.
PAYMENT IN A COMPONENT CURRENCY. With respect to each due date for the
payment of principal of, premium, if any, or interest on, the Notes, if, on or
prior to such due date, the ECU is not used in the European Monetary System or
if, on or prior to such due date, banks in all member countries of the EC shall
have ceased to provide ECU accounts, in either case the Company or its agent
shall (in the case of an agent, without liability on its part but after
consultation with the Company and having regard to the availability to the
Company of the relevant currency) choose a substitute currency (the "Chosen
Currency"), which shall be a component currency of the ECU or U.S. dollars, in
which all payments to be calculated by reference to or made in ECU due on or
after such due date with respect to the Notes shall be made. Notice of the
Chosen Currency so selected shall be given to holders of Registered Notes by
mail, and shall be given to holders of Bearer Notes by publication, in each case
as set forth in "Description of Notes -- Notices." The amount of each payment
calculated with reference to or made in such Chosen Currency shall be computed
on the basis of the equivalent of the ECU in that currency, determined as
described below, as of the fourth business day in Luxembourg prior to the date
on which such payment is due.
On or about the first business day in Luxembourg following the day on which
the ECU is not used in the European Monetary System or on which banks in all
member countries of the EC shall have ceased to provide ECU accounts, the
Company or its agent shall (in the case of an agent, without liability on its
part but after consultation with the Company and having regard to the
availability to the Company of the relevant currency) choose a Chosen Currency
in which all payments to be calculated by reference to or made in ECU with
respect to Notes having a due date prior thereto but not yet presented for
payment are to be made. The amount of each payment calculated with reference to
or made in such Chosen Currency shall be computed on the basis of the equivalent
of the ECU in that currency, determined as described below, as of such first
business day.
The equivalent of the ECU in the relevant Chosen Currency as of any date
(the "Day of Valuation") shall be determined by the Exchange Rate Agent on the
following basis. The amounts and components composing the ECU for this purpose
(the "Components") shall be the amounts and components which composed the ECU
(i) as of the last date on which the ECU was used in the European Monetary
System (or, if after such last date the ECU was used for the settlement of
transactions by public institutions of or within the EC, as of the most recent
date when the ECU was so used) or (ii) where the selection of a Chosen Currency
shall have been required only because banks in all member countries of the EC
shall have ceased to provide ECU accounts, as of the Day of Valuation. The
equivalent of the ECU in the Chosen Currency shall be calculated by, first,
aggregating the U.S. dollar equivalents of the Components; and then, in the case
of a Chosen Currency other than U.S. dollars, using the rate used for
determining the U.S. dollar equivalent of the Components in the Chosen Currency
as set forth below, calculating the equivalent in the Chosen Currency of such
aggregate amount in U.S. dollars.
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The U.S. dollar equivalent of each of the Components shall be determined by
the Exchange Rate Agent on the basis of the middle spot delivery quotations
prevailing at 2:30 p.m., Luxembourg time, on the Day of Valuation, as obtained
by the Exchange Rate Agent from one or more major banks, as selected by the
Company or its agent, in the country of issue of the component currency in
question.
If for any reason no direct quotations are available for a Component as of a
Day of Valuation from any of the banks selected for this purpose, in computing
the U.S. dollar equivalent of such Component, the Exchange Rate Agent shall
(except as provided below) use the most recent direct quotations for such
Component obtained by it or on its behalf, provided that such quotations were
prevailing in the country of issue not more than two Business Days before such
Day of Valuation. If such most recent quotations were so prevailing more than
two Business Days in the country of issue before such Day of Valuation, the
Exchange Rate Agent shall determine the U.S. dollar equivalent of such Component
on the basis of cross rates derived from the middle spot delivery quotations for
such component currency and for the U.S. dollar prevailing at 2:30 p.m.
Luxembourg time on such Day of Valuation, as obtained by, or on behalf of, the
Exchange Rate Agent from one or more major banks, as selected by the Company or
its agents, in a country other than the country of issue of such component
currency. Notwithstanding the foregoing, the Exchange Rate Agent shall determine
the U.S. dollar equivalent of such Component on the basis of such cross rates if
the Company or such agent judges that the equivalent so calculated is more
representative than the U.S. dollar equivalent calculated as provided in the
first sentence of this paragraph. Unless otherwise specified by the Company or
its agent, if there is more than one market for dealing in any component
currency by reason of foreign exchange regulations or for any other reason, the
market to be referred to in respect of such currency shall be that upon which a
non-resident issuer of notes denominated in such currency would purchase such
currency in order to make payments in respect of such notes.
If the official unit of any component currency is altered by way of
combination or subdivision, the number of units of that currency as a Component
shall be divided or multiplied in the same proportion. If two or more component
currencies are consolidated into a single currency, the amounts of those
currencies as Components shall be replaced by an amount in such single currency
equal to the sum of the amounts of the consolidated component currencies
expressed in such single currency. If any component currency is divided into two
or more currencies, the amount of that currency as a Component shall be replaced
by amounts of such two or more currencies, each of which shall be equal to the
amount of the former component currency divided by the number of units of
currency into which that currency was divided.
All determinations made by the Company or its agent shall be at its sole
discretion and shall, in the absence of manifest error, be conclusive for all
purposes and binding on the Company and all holders of Notes.
FOREIGN CURRENCY RISKS
THIS PROSPECTUS SUPPLEMENT, THE PROSPECTUS AND ANY PRICING SUPPLEMENT DO NOT
DESCRIBE ALL THE RISKS OF AN INVESTMENT IN FOREIGN CURRENCY NOTES OR INDEXED
NOTES THE PAYMENT OF WHICH IS TO BE MADE IN OR RELATED TO THE VALUE OF A FOREIGN
CURRENCY OR A COMPOSITE CURRENCY 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, CURRENCY UNIT OR INDEXED TRANSACTIONS.
The information set forth in this Prospectus Supplement with respect to
foreign currency risks is general in nature. The Company disclaims any
responsibility to advise prospective purchasers of
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Foreign Currency Notes with respect to any matters that may affect the purchase,
holding or receipt of payments of principal of, premium, if any, and interest on
such Notes. Such persons should consult their own counsel with regard to such
matters.
EXCHANGE RATES AND EXCHANGE CONTROLS
An investment in Notes that are denominated in, or the payment of which is
to be or may be made in or related to the value of, a Specified Currency other
than U.S. dollars entails significant risks that are not associated with a
similar investment in a security denominated in U.S. dollars. Such risks include
the possibility of significant changes in rates of exchange between the U.S.
dollar and the various foreign currencies (or composite currencies) after the
issuance of such Note 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 U.S. dollars 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 such rate that may occur during the term of any Note.
Depreciation of the Specified Currency of a Note against the U.S. dollar would
result in a decrease in the effective yield of such Note below its coupon rate
and, in certain circumstances, could result in a loss to the investor on a U.S.
dollar basis. In addition, depending on the specific terms of a currency linked
Indexed Note, changes in exchange rates relating to any of the currencies
involved may result in a decrease in the effective yield of such currency linked
Indexed Note and, in certain circumstances, could result in a loss of all or a
substantial portion of the principal of a currency linked Indexed Note to the
investor.
Foreign exchange rates can either be fixed by sovereign governments or
float. Exchange rates of most economically developed nations are permitted to
fluctuate in value relative to the U.S. dollar. National governments, however,
rarely voluntarily allow their currencies to float freely in response to
economic forces. Governments in fact use a variety of techniques, such as
intervention by a country's central bank or imposition of regulatory controls or
taxes, to affect the exchange rate of their currencies. Governments may also
issue a new currency to replace an existing currency or alter the exchange rate
or relative exchange characteristics by devaluation or revaluation of a
currency. Thus, a special risk in purchasing Foreign Currency Notes or currency
linked Indexed Notes is that their U.S. dollar-equivalent yields could be
affected by governmental actions, which could change or interfere with
theretofore freely determined currency valuation, fluctuations in response to
other market forces, and the movement of currencies across borders. There will
be no adjustment or change in the terms of such Notes in the event that exchange
rates should become fixed, or in the event of any devaluation or revaluation or
imposition of exchange or other regulatory controls or taxes, or in the event of
other developments affecting the U.S. dollar or any applicable Specified
Currency.
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, and
premium, if any, or interest, if any, on a Note. Even if there are no actual
exchange controls, it is possible that the Specified Currency for any particular
Note not denominated in U.S. dollars would not be available at such Note's
maturity. In that event, the Company would make required payments in U.S.
dollars on the basis of the market exchange rate on the date of such payment, or
if such rate of exchange is not then available, on the basis of the market
exchange rate as of the most recent practicable date. See "Special Provisions
Relating to Foreign Currency Notes--Payment Currency."
GOVERNING LAW AND JUDGMENTS
The Indenture and Notes will be governed by and construed in accordance with
the laws of the State of New York. If an action based on Foreign Currency Notes
were commenced in a New York court, such court would render or enter a judgment
or decree in the Specified Currency. Such judgment would then be converted into
U.S. dollars at the rate of exchange prevailing on the date of
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entry of the judgment or decree. In the event an action based on Foreign
Currency Notes were commenced in a court in the United States outside New York,
it is likely that the judgment currency would be U.S. dollars, but the method of
determining the applicable exchange rate may differ.
UNITED STATES TAX CONSIDERATIONS
The following is a summary of the principal United States federal income and
estate tax consequences of the initial purchase, ownership and disposition of
the Notes and is based upon the Internal Revenue Code of 1986 (the "Code"), as
amended to the date hereof, regulations, rulings and decisions in effect on the
date hereof, changes to any of which subsequent to the date of this Prospectus
Supplement may affect the tax consequences described herein. The summary is
based upon the advice of James M. Kalashian, General Tax Counsel of General
Electric Capital Corporation, tax counsel to the Company, which advice is based
upon certain of the facts set forth in this Prospectus Supplement and other
documents related to the issuance of the Notes and upon compliance with the
provisions thereof and the representations and agreements therein. This summary
discusses only Notes that are beneficially owned by United States Alien Holders
(as defined below) and held as capital assets; it does not discuss all of the
tax consequences that may be relevant to a holder in light of its 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 currency risks or as a position in a
"straddle" for tax purposes, or holders whose functional currency is not the
U.S. dollar. The United States federal income tax consequences to a U.S. Holder
(as defined below) in connection with the purchase of any Registered Notes by or
on behalf of a United States persons will be set forth in the applicable Pricing
Supplement. Persons considering the purchase of Notes should consult their own
tax advisors in order to determine the United States, as well as any state,
local or foreign tax consequences to them of the purchase, ownership and
disposition of the Notes.
As used herein, a "U.S. Holder" means a beneficial owner of a Note that is
for United States federal income tax purposes (i) a citizen or resident of the
United States, (ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States or of any political
subdivision thereof, or (iii) an estate or trust the income of which is subject
to United States federal income taxation regardless of its source; a "United
States Alien Holder" means a beneficial owner of a Note that is, for United
States federal income tax purposes, a foreign corporation, a nonresident alien
individual, a nonresident alien fiduciary of a foreign estate or trust, or a
foreign partnership one or more of the members of which is, as to the United
States, a foreign corporation, a nonresident alien individual or a nonresident
fiduciary of a foreign estate or trust; and the "United States" means the United
States of America (including the states and the District of Columbia), its
territories, its possessions and other areas subject to its jurisdiction.
PRINCIPAL AND INTEREST
Payments of principal and interest (including premium or original issue
discount ("Discount")), made by the Company or any of its paying agents on a
Note to any United States Alien Holder will not be subject to United States
federal income or withholding tax, provided that in the case of interest or
Discount, (i) the holder does not actually or constructively own 10% or more of
the total combined voting power of all classes of stock of the Company entitled
to vote, (ii) the holder is not a controlled foreign corporation that is related
to the Company through stock ownership, (iii) the holder is not a bank receiving
interest described in section 881(c)(3) of the Code and (iv) if the Note is a
Registered Note, either (a) the beneficial owner of the Registered Note
certifies to the Company or its agent, under penalties of perjury on U.S.
Internal Revenue Service Form W-8 or substantially similar form in the year in
which a payment occurs, or in either of the two preceding calendar years, that
it is not a United States person and provides its name and address in the
required manner or (b) a securities clearing organization, bank or other
financial institution that holds customers' securities in the ordinary course of
its trade or business (a "financial institution") and holds the Registered Note
on behalf of the beneficial owner certifies to the Company or its agent, under
penalties of perjury, that
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such a certification from the beneficial owner has been received by it or by a
financial institution between it and the beneficial owner and furnishes the
payor with a copy of the Form W-8 or substantially similar form in the manner
required.
Recently enacted legislation provides that United States federal withholding
tax will apply to contingent interest if the amount of such interest is
determined with reference to the profitability of the Company. Unless otherwise
provided in the applicable Pricing Supplement, the Company does not expect any
interest on the Notes to be subject to this provision.
A United States Alien Holder will not be subject to United States federal
income or withholding tax on gain realized on the sale, exchange or retirement
of the Note, unless (i) such Holder is an individual who is present in the
United States for 183 days or more in the taxable year of disposition, and
either (a) such individual has a "tax home" (as defined in Code section
911(d)(3)) in the United States (unless such gain is attributable to a fixed
place of business in a foreign country maintained by such individual and has
been subject to foreign tax of at least 10%) or (b) the gain is attributable to
an office or other fixed place of business maintained by such individual in the
United States or (ii) such gain is effectively connected with the conduct by
such Holder of a trade or business in the United States.
A Note or Coupon held by an individual, who at the time of death is not a
citizen or resident of the United States, will not be subject to United States
federal estate tax as a result of such individual's death provided that the
individual does not actually or constructively own 10% or more of the total
combined voting power of all classes of stock of the Company entitled to vote,
and, at the time of such individual's death, payments with respect to such Note
would not have been effectively connected to the conduct by such individual of a
trade or business in the United States.
If a United States Alien Holder is engaged in a trade or business in the
United States and interest, Discount, premium (if any) and gain on the Note are
effectively connected with the conduct of such trade or business, the United
States Alien Holder, although exempt from the withholding tax discussed in the
preceding paragraphs, will generally be subject to United States federal income
tax on such interest, Discount, premium and gain in the same manner as if it
were a U.S. Holder. In lieu of a Form W-8 or similar form described above, such
a Holder will be required to provide the Company or its agent a properly
executed U.S. Internal Revenue Service Form 4224 in order to claim exemption
from withholding tax. In addition, if such a holder is a foreign corporation, it
may be subject to a branch profits tax equal to 30% of its effectively connected
earnings and profits for the taxable year, subject to adjustments. For this
purpose, interest, Discount, premium (if any) and gain on a Note will be
included in the effectively connected earnings and profits if such interest and
Discount, premium and gain is effectively connected with the conduct by such
United States Alien Holder of a trade or business in the United States.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Under current regulations, information reporting and backup withholding
(currently 31%) will not apply to payments of principal, premium or interest
made outside the United States by the Company or a paying agent on a Bearer Note
or to payments made on a Registered Note, if the certification described in (iv)
above is received with respect to a Registered Note, provided in each case that
the Company or such paying agent, as the case may be, does not have actual
knowledge that the payee is a U.S. person. In addition, if payment is collected
outside the United States by a foreign office of a custodian, nominee or other
agent acting on behalf of a beneficial owner of a Bearer Note, such custodian,
nominee or other agent will not be required to apply backup withholding to
payments made to such beneficial owner. However, if such custodian, nominee or
other agent is a U.S. person, a controlled foreign corporation for United States
federal income tax purposes, or a foreign person 50% or more of whose gross
income is from a United States trade or business for a specified three-year
period, such custodian, nominee or other agent may be subject to certain
information reporting requirements with respect to such payment unless it has in
its records documentary evidence that the beneficial owner is not a U.S. person
and certain conditions are met or the beneficial owner otherwise establishes an
exemption.
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Under current regulations, payment of the proceeds of the sale, exchange or
retirement of a Note to or through a foreign office of a broker generally will
not be subject to backup withholding. However, if such broker is a U.S. person,
a controlled foreign corporation for United States federal income tax purposes,
or a foreign person 50% or more of whose gross income is from a United States
trade or business for a specified three-year period, information reporting will
apply unless such broker has in its records documentary evidence that the
beneficial owner is not a U.S. person and certain conditions are met or the
beneficial owner otherwise establishes an exemption. Payments of the proceeds of
a sale to or through the United States office of a broker will be subject to
information reporting and backup withholding unless the holder or beneficial
owner certifies to its non-United States status or otherwise establishes an
exemption.
The foregoing is a general discussion of the information reporting and
backup withholding rules and may not be applicable to the position of any
particular holder or beneficial owner of a Note or Coupon. In addition, the
circumstances under which backup withholding and information reporting will be
required are currently under review by the United States Treasury Department,
and thus the rules discussed above may change with respect to payments on the
Notes or Coupons or proceeds from the sale or exchange of the Notes or Coupons.
United States Alien Holders of Notes should consult their own tax advisors
regarding the application of information reporting and backup withholding in
their particular situations, the availability of an exemption therefrom, and the
procedure for obtaining such an exemption, if available. Any amounts withheld
from a payment to a United States Alien Holder under the backup withholding
rules 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 United States Internal Revenue Service.
PLAN OF DISTRIBUTION
GENERAL
Under the terms of the Amended and Restated Euro Distribution Agreement
dated as of August 31, 1993, as amended (the "Euro Distribution Agreement"), the
Notes are being offered on a continuing basis by the Company through the Agents,
each of which has agreed to use its best efforts to solicit purchases of the
Notes. Except as otherwise agreed by the Company and an Agent with respect to a
particular Note, the Company will pay each Agent a commission ranging from .050%
to .600% of the principal amount of each Note, depending on its maturity, sold
through such Agent. The Company will have the sole right to accept offers to
purchase Notes and may reject any such offer, in whole or in part. Each Agent
shall have the right, in its discretion reasonably exercised, without notice to
the Company, to reject any offer to purchase Notes received by it, in whole or
in part.
The Company also may sell Notes to any Agent, acting as principal, at a
discount or concession to be agreed upon at the time of sale, for resale to one
or more investors or other purchasers at a fixed offering price or at varying
prices related to prevailing market prices at the time of such resale or
otherwise, as determined by such Agent and specified in the applicable Pricing
Supplement. The Agents may offer the Notes they have purchased as principal to
other dealers. The Agents may sell Notes to any dealer at a discount and, unless
otherwise specified in the applicable Pricing Supplement, such discount allowed
to any dealer will not be in excess of the discount to be received by such Agent
from the Company. Unless otherwise indicated in the applicable Pricing
Supplement, any Note sold to an Agent as principal will be purchased by such
Agent at a price equal to 100% of the principal amount thereof less a percentage
equal to the commission applicable to any agency sale of a Note of identical
maturity, and may be resold by the Agent to investors and other purchasers from
time to time in one or more transactions, including negotiated transactions as
described above. After the initial public offering of Notes to be resold to
investors and other purchasers, the public offering price, concession and
discount may be changed.
The Notes may also be sold by the Company directly to investors (other than
broker-dealers) in those jurisdictions in which the Company is permitted to do
so. No commission will be paid on Notes sold directly by the Company.
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The Company may also sell Notes from time to time through one or more
additional agents, acting either as agent or principal, on substantially the
same terms as those applicable to the Agents. Any such additional agent shall,
with respect to any such Notes, be deemed to be included in all references to an
"Agent" or the "Agents" hereunder.
The Company reserves the right to withdraw, cancel or modify the offer made
hereby without notice.
Each purchaser of a Note will arrange for payment as instructed by the
applicable Agent. The Agents are required to deliver the proceeds of the Notes
to the Company in immediately available funds, to a bank designated by the
Company in accordance with the terms of the Euro Distribution Agreement, on the
date of settlement.
In compliance with United States federal income tax laws and regulations,
the Company and the Agents have agreed that in connection with the original
issuance of, or during the Restricted Period with respect to, any Bearer Note,
(a) they will not offer to sell or sell, as principal or agent, directly or
indirectly, such Bearer Note (i) inside the United States or (ii) to or for the
account of any United States person unless such United States person is a
Qualifying Foreign Branch or other person described in United States Treasury
Regulations Section 1.163-5(c)(2)(i)(D)(1)(iii)(B) and (C) and (b) they will not
deliver any Bearer Note inside the United States.
An offer or sale will be considered to be made to a person in the United
States if the offeror or seller of such Note has an address within the United
States for the offeree or purchaser of such Note with respect to the offer or
sale.
Each Agent has represented and agreed that it will have in effect, in
connection with the offer and sale of the Bearer Notes during the Restricted
Period, procedures reasonably designed to ensure that its employees or agents
who are directly engaged in selling the Bearer Notes are aware that the Bearer
Notes cannot be offered or sold during the Restricted Period to a United States
person or a person within the United States.
The Notes may not be offered or sold, directly or indirectly, in the United
Kingdom, by means of this Prospectus Supplement, the accompanying Prospectus or
any other document, other than to persons whose ordinary business it is to buy
or sell shares or debentures, whether as principal or agent (except in
circumstances which do not constitute an offer to the public within the meaning
of the Companies Act 1985 of the United Kingdom). All applicable provisions of
the Financial Services Act 1986 of the United Kingdom must be complied with with
respect to anything done by the Agents in relation to the Notes in, from or
otherwise involving the United Kingdom. Furthermore, each underwriter, dealer,
agent and remarketing firm participating in the distribution of the Notes has
agreed or will agree that it will only issue or pass on in the United Kingdom
any document received by it in connection with the issue of the Notes to a
person who is of a kind described in Article 9(3) of the Financial Services Act
1986 (Investment Advertisements) (Exemptions) Order 1988 or is a person to whom
the document may otherwise lawfully be issued or passed on.
The Agents may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended (the "Act"). The Company has agreed to
indemnify the Agents against and contribute toward certain liabilities,
including liabilities under the Act. The Company has agreed to reimburse the
Agents for certain expenses.
Kidder, Peabody & Co. Incorporated ("Kidder"), and each of the other
European Agents engage in transactions with and perform services for the Company
in the ordinary course of business.
General Electric Capital Services, Inc., formerly known as General Electric
Financial Services, Inc. ("GE Capital Services"), which owns all of the
outstanding common stock of the Company, owns all of the common stock of Kidder,
Peabody Group Inc. which in turn owns 100% of Kidder.
This Prospectus Supplement and the accompanying Prospectus may also be used
by Kidder in connection with offers and sales of Notes related to market-making
transactions, by and through Kidder, at negotiated prices related to prevailing
market prices at the time of sale or otherwise. Kidder may act as principal or
agent in such transactions.
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Each of the Agents may from time to time purchase and sell Notes in the
secondary market, but is not obligated to do so, and there can be no assurance
that there will be a secondary market for the Notes or liquidity in the
secondary market if one develops. From time to time, each of the Agents may make
a market in the Notes.
DISTRIBUTION OF YEN-DENOMINATED NOTES
The Notes have not been, and will not be, registered under the Securities
and Exchange Law of Japan. The Company and the Agents will agree not to offer or
sell any Note directly or indirectly in Japan or to residents of Japan or for
the benefit of any Japanese person (which term as used herein means any person
resident in Japan, including any corporation or other entity organized under the
laws of Japan) or to others for reoffering or resale directly or indirectly in
Japan or to any Japanese person during the period of 90 days from the Original
Issue Date of such Note, or 180 days from the Original Issue Date of any Dual
Currency Note and that thereafter it will not do so except in circumstances that
result in compliance with any applicable laws, regulations and ministerial
guidelines of Japan taken as a whole. Without limiting the generality of the
foregoing, Notes denominated in Japanese yen will not be sold without approval
of the Japanese Ministry of Finance, except for single currency Notes repayable
at their non-variable principal or redemption amount and bearing interest at a
fixed rate or by reference to Yen LIBOR (plus or minus a Spread), and Indexed
Notes such as Nikkei-linked and DAX-linked issues, in each case which are
already permitted by the Japanese Ministry of Finance.
DISTRIBUTION OF DEUTSCHEMARK-DENOMINATED NOTES
Issuance of Notes denominated or payable in Deutschemarks will either be
sold by the Company through one or more of the German Agents (as defined below)
acting as Agent on behalf of the Company or in underwritten transactions lead
managed by one or more of the German Agents. Any issuance of Notes denominated
or payable in Deutschemarks with respect to which payments of principal,
interest or premium, if any, or any combination of the foregoing, are calculated
with reference to (i) the relationship between two or more currencies, (ii) one
or more specified securities or commodities, (iii) one or more securities or
commodities exchange indices or (iv) other indices or by other similar methods
or formulae will be offered and sold by the Company in compliance with the
then-current rules, regulations and policy statements of the Deutsche
Bundesbank. The following Agents are "German Agents" for purposes of Notes
denominated or payable in Deutschemarks: CS First Boston Effectbank
Aktiegesellschaft, Goldman, Sachs & Co. oHG, Merrill Lynch Bank AG, S.G. Warburg
& Co. GmbH, Schweizerische Bankgesellschaft (Deutschland) AG and Schweizerischer
Bankverein (Deutschland) AG. Chase Bank AG has agreed with the Company to act as
German Arranger with respect to Notes denominated or payable in Deutschemarks.
DISTRIBUTION OF DUTCH GUILDER-DENOMINATED NOTES
Distribution of Notes denominated in Dutch Guilders will be arranged through
a Dutch dealer which is a registered credit institution meeting the requirements
of the Dutch Central Bank (DE NEDERLANDSCHE BANK) from time to time.
GLOBAL MEDIUM-TERM NOTES, SERIES A
In addition to offering Notes through the Agents as described herein, Debt
Securities which are medium-term notes (Global Medium-Term Notes, Series A) and
may have terms substantially similar to the terms of the Notes offered hereby
(but constituting a separate series of Debt Securities for purposes of the
Indenture), are being, and may in the future continue to be, offered,
concurrently with the offering of the Notes, on a continuing basis outside the
United States by the Company pursuant to a distribution agreement (the "U.S.
Distribution Agreement") with Kidder, Peabody & Co. Incorporated, J.P. Morgan
Securities Inc., Merrill Lynch & Co., Merrill, Lynch, Pierce, Fenner & Smith
Incorporated and CS First Boston Corporation (the "Domestic Agents"), as agents
for the Company, the terms of which are substantially similar to the terms of
the Euro Distribution Agreement, except for certain selling restrictions
specified in the Euro Distribution Agreement. Any Global Medium-Term Notes sold
pursuant to such U.S. Distribution Agreement, or sold by the Company to any of
the
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Domestic Agents for resale as contemplated by such U.S. Distribution Agreement,
will reduce the remaining principal amount of Notes which may be offered by this
Prospectus Supplement, any Pricing Supplement hereto, and the Prospectus.
LEGAL OPINIONS
The legality of the Notes will be passed upon for the Company by Burton J.
Kloster, Jr., a director and Senior Vice President, General Counsel and
Secretary of the Company or by Bruce C. Bennett, Associate General Counsel,
Treasury Operations and Assistant Secretary of the Company. Certain matters
relating to the offering of the Notes will be passed upon for the Agents by
Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017. Messrs.
Kloster, Bennett and James M. Kalashian (who is referred to under "United States
Tax Considerations"), together with members of their families, each owns, has
options to purchase and has other interests in shares of common stock of General
Electric Company.
GENERAL INFORMATION
LISTING
The Series B Notes issued prior to the date of this Prospectus Supplement
have been listed on the Luxembourg Stock Exchange, and application has been made
to list subsequently-issued Series B Notes on the Luxembourg Stock Exchange. The
Organization Certificate and By-Laws of the Company have been, and prior to
listing a legal notice relating to the issuance of the Series B Notes will be,
deposited with the GREFFIER EN CHEF DU TRIBUNAL D'ARRONDISSEMENT DE ET A
LUXEMBOURG, where such documents may be examined or copies obtained.
INFORMATION FOR HOLDERS OF NOTES
So long as any of the Series B Notes remain outstanding, copies of the
Indenture, the Euro Distribution Agreement and the Registration Statement of
which this Prospectus Supplement is a part, and a copy of the Organization
Certificate and By-Laws of the Company will be available for inspection at the
main office of the paying agent in Luxembourg. In addition, copies of the
documents incorporated by reference in this Prospectus Supplement and copies of
the annual and quarterly reports hereafter filed by the Company with the United
States Securities and Exchange Commission and copies of the Pricing Supplements
may be obtained at such office.
AUDITORS
The independent certified public accountants of the Company are KPMG Peat
Marwick.
AUTHORIZATIONS
The issuance of the Notes was authorized by resolutions adopted by the Board
of Directors of the Company on November 21, 1989, October 18, 1990, September 9,
1991, February 25, 1992, March 19, February 17, 1993, March 24, 1993, July 27,
1993, October 27, 1993 and March 23, 1994.
STAMP TAXES
Purchasers of Notes may be required to pay stamp taxes and other charges in
accordance with the laws and practices of the country of purchase in addition to
the issue price.
LITIGATION AND MATERIAL CHANGE
The Company is not a party to any material legal proceeding. There has been
no material adverse change in the financial position of the Company and its
consolidated affiliates considered as a whole since December 31, 1993.
PRINCIPAL OFFICE IN THE STATE OF NEW YORK
The Company's principal office in the State of New York, its jurisdiction of
incorporation, is located at 570 Lexington Avenue, New York, New York 10022.
CLEARANCE
The Notes, when issued, will be accepted for clearance through the Euroclear
Operator and through Cedel.
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DOCUMENTS INCORPORATED BY REFERENCE
The Company will provide without charge to each person to whom this
Prospectus Supplement is delivered, on the written or oral request of such
person, a copy (without exhibits) of any or all of the documents incorporated by
reference in the Prospectus. See "Documents Incorporated by Reference" in the
Prospectus. Such requests should be directed to Kidder, Peabody International
PLC, 20 Finsbury Street, London EC2Y 9AY, England, Attention: Syndicate
Department, or to Kredietbank S.A. Luxembourgeoise, 43, Boulevard Royal, L-2955
Luxembourg, Attention: Listing Department.
UNDERTAKINGS BY THE COMPANY
The Company has given an undertaking in connection with the listing of the
Series B Notes on the Luxembourg Stock Exchange to the effect that, so long as
any Series B Notes remain outstanding and listed on such Exchange, in the event
of any material adverse change in the business or financial position of the
Company that is not reflected in the Prospectus as then amended or supplemented,
the Company will prepare an amendment or supplement to the Prospectus or publish
a new document for use with any subsequent offering and listing by the Company
of Series B Notes.
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PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY
260 Long Ridge Road
Stamford, Connecticut 06927
U.S.A.
TRUSTEE REGISTRAR
Mercantile-Safe Deposit and The Chase Manhattan Bank
Trust Company (National Association)
2 Hopkins Plaza 4 Chase MetroTech Center
Baltimore, Maryland 21201 3rd Floor
U.S.A. Brooklyn, New York 11245
U.S.A.
PRINCIPAL PAYING AGENT
The Chase Manhattan Bank
(National Association)
London Branch
Woolgate House, Coleman Street
London EC2P 2HD
England
OTHER PAYING AGENTS
Chase Manhattan Banque Bruxelles Lambert S.A.
Bank Luxembourg S.A. 24 Avenue Marnix
5, Rue Plaetis B-1050 Brussels
L-2338 Luxembourg Belgium
LEGAL ADVISOR TO THE COMPANY LEGAL ADVISORS TO THE AGENTS
Bruce C. Bennett Davis Polk & Wardwell
Associate General Counsel--Treasury Operations 450 Lexington Avenue
General Electric Capital Corporation New York, New York 10017
260 Long Ridge Road U.S.A.
Stamford, Connecticut 06927
U.S.A.
LISTING AGENT AUDITORS
Kredietbank S.A. Luxembourgeoise KPMG Peat Marwick
43, Boulevard Royal 3001 Summer Street
L-2955 Luxembourg Stamford, Connecticut 06905
U.S.A.
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