AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 24, 1995
FILE NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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GENERAL ELECTRIC CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
NEW YORK 13-1500700
(State of incorporation) (I.R.S. Employer Identification Number)
260 LONG RIDGE ROAD
STAMFORD, CONNECTICUT 06927
(203) 357-4000
(Address, including zip code, and telephone number, including are code,
of registrant's principal executive offices)
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BRUCE C. BENNETT
ASSOCIATE GENERAL COUNSEL--TREASURY OPERATIONS AND ASSISTANT SECRETARY
260 LONG RIDGE ROAD
STAMFORD, CONNECTICUT 06927
(203) 357-4000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement as
determined by market conditions.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. /X/
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION
REGISTERED REGISTERED(1) PER UNIT(1) PRICE(1) FEE
<S> <C> <C> <C> <C>
Variable Cumulative
Preferred Stock......... 3,500 shares $100,000 $350,000,000 $120,691
</TABLE>
(1) Estimated solely for the purpose of determining the registration fee.
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PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, THE PROSPECTUS
INCLUDED IN THIS REGISTRATION STATEMENT WILL ALSO BE USED IN CONNECTION WITH THE
ISSUANCE OF THE 1,750 AUTHORIZED AND UNISSUED SHARES OF VARIABLE CUMULATIVE
PREFERRED STOCK REGISTERED PURSUANT TO REGISTRATION STATEMENT NO. 33-37156
PREVIOUSLY FILED BY THE REGISTRANT ON FORM S-3 AND DECLARED EFFECTIVE ON
NOVEMBER 1, 1990.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
SUBJECT TO COMPLETION, DATED APRIL 24, 1995
5,250 SHARES-LIQUIDATION PREFERENCE $100,000 PER SHARE
GENERAL ELECTRIC CAPITAL CORPORATION
VARIABLE CUMULATIVE PREFERRED STOCK, ISSUABLE IN SERIES
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The up to 5,250 Shares (the "Shares") of Variable Cumulative Preferred Stock
(the "Stock"), of General Electric Capital Corporation (the "Company") offered
hereby are in addition to the 8,750 shares of Variable Cumulative Preferred
Stock previously issued by the Company in Series A through N. The Stock is
issuable in series (the "Series") and dividends thereon are cumulative from the
Date of Original issue of each Share of Stock and are payable, when and as
declared by the Company, commencing on the initial Dividend Payment Date for
such Share of Stock, as set forth in the Prospectus Supplement relating to such
Share of Stock, and on each Dividend Payment Date for such Share of Stock
thereafter, subject to certain exceptions. The specific designation, number of
shares and other specific terms of the Series of Stock in respect of which this
Prospectus is being delivered will be set forth in the Prospectus Supplement
relating to such Series.
The initial Dividend Period for each Share of Stock will be a period (not
exceeding 30 years) determined by the Company, during which each Share of Stock
will have a Dividend Rate specified by the Company, as set forth in the
Prospectus Supplement relating to such Share of Stock. Thereafter, the
determination of the duration of each Subsequent Dividend Period with respect to
each Share of Stock and the Dividend Rate for such Subsequent Dividend Period
will be determined by the Auction Method.
Each Subsequent Dividend Period will have a duration (not less than seven
days nor more than 30 years) specified by the Company in a notice to record
holders sent not less than seven days prior to the Auction Date for such
Subsequent Dividend Period. In the absence of any such notice with respect to a
Subsequent Dividend Period, such period will have a duration of 49 days. At any
point in time, all Shares of Stock of a Series will have a single Dividend
Period and will accumulate dividends at a single Dividend Rate. The Dividend
Rate for each Subsequent Dividend Period for Stock will be the rate per annum
determined on the basis of Orders for such Stock placed in an Auction conducted
on the Business Day preceding the commencement of such Subsequent Dividend
Period on the basis specified in the Auction Procedures.
The rate determined by the Auction Procedures for any Subsequent Dividend
Period will not exceed the Maximum Rate, which is calculated by applying a
percentage ranging from 110% to 225% to the Federal Funds Rate, the Effective
Composite Commercial Paper Rate, the Effective LIBOR Rate, the U.S. Treasury
Note Rate or the U.S. Treasury Bond Rate, depending upon the prevailing rating
of the Shares of Stock at such time and the duration of such Subsequent Dividend
Period.
Prospective purchasers should carefully review the Auction Procedures
described in this Prospectus (including its Appendices).
The Shares of Stock of each Series are redeemable at the option of the
Company, as a whole or in part, on the last day of any Dividend Period, at a
redemption price of $100,000 per Share, plus accumulated and unpaid dividends,
and, in the case of Shares of Stock with a Dividend Period of two years or more,
at the times and at the redemption prices (but not less than $100,000 per Share
plus accumulated and unpaid dividends) determined by the Company prior to the
commencement of such Dividend Period.
This Prospectus may not be used to consummate sales of Stock unless
accompanied by a Prospectus Supplement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS, ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
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THE DATE OF THIS PROSPECTUS IS , 1995.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY STATE.
<PAGE>
No dealer, salesperson or other individual has been authorized to give any
information or to make any representations other than those contained or
incorporated by reference in this Prospectus and the accompanying Prospectus
Supplement in connection with the offer contained in this Prospectus and the
accompanying Prospectus Supplement and, if given or made, such information or
representations must not be relied upon as having been authorized by the Company
or by any agent, underwriter or dealer. Neither the delivery of this Prospectus
and the accompanying Prospectus 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 and in the accompanying Prospectus Supplement. This Prospectus
and the accompanying Prospectus Supplement do not constitute an offer or
solicitation by anyone in any state 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.
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AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934 (the "1934 Act") and in accordance therewith files reports
and other information with the Securities and Exchange Commission. Such reports
and other information can be inspected and copied at the public reference
facilities maintained by the Commission, 450 Fifth Street, N.W., Washington,
D.C. 20549, as well as the Regional Offices of the Commission at 500 West
Madison Street, Chicago, Illinois 60661 and 7 World Trade Center, New York, New
York 10048 and copies can be obtained from the Public Reference Section of the
Commission, at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. Reports and other information concerning the Company can also be
inspected at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005, on which certain of the Company's securities are listed.
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DOCUMENTS INCORPORATED BY REFERENCE
There is hereby incorporated in this Prospectus by reference the Company's
Annual Report on Form 10-K for the year ended December 31, 1994, heretofore
filed with the Securities and Exchange Commission pursuant to the 1934 Act, to
which reference is hereby made.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the 1934 Act after the date of this Prospectus and prior to the
termination of the offering of the Stock offered by the accompanying Prospectus
Supplement shall be deemed to be incorporated in this Prospectus by reference
and to be a part hereof from the date of filing of such documents.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has been
delivered, on the written or oral request of such person, a copy of any or all
of the documents referred to above which have been or may be incorporated in
this Prospectus by reference, other than exhibits to such documents, unless such
exhibits are specifically incorporated by reference into such documents.
Requests for such copies should be directed to Bruce C. Bennett, Associate
General Counsel, Treasury Operation and Assistant Secretary, General Electric
Capital Corporation, 260 Long Ridge Road, Stamford, Connecticut 06927, Telephone
No. (203) 357-4000.
2
<PAGE>
SUMMARY
This Summary is qualified in its entirety by the detailed information
appearing elsewhere in this Prospectus and in the Prospectus Supplement
accompanying the Prospectus, including the Appendices hereto. Capitalized terms
used in this Prospectus are defined in the Glossary of Terms set forth in
Appendix A.
THE OFFERING
The Company is offering up to 5,250 Shares of Stock at a purchase price of
$100,000 per Share. The Company has previously issued 8,750 shares of Variable
Cumulative Preferred Stock in fourteen series, constituting Series A through N
and the Shares of Stock will rank equal to such Series A through N as to
dividend and liquidation preference. The Shares of Stock may be issued in one or
more Series. Dividends on all Shares of Stock will be determined pursuant to the
Auction Method. Each Share will have a liquidation preference of $100,000.
Except in certain limited circumstances, purchasers of the Shares of Stock
will not be entitled to receive any certificate representing the Shares of
Stock, and such Shares will be maintained in book entry form by the Stock
Depository (The Depository Trust Company or any successor) for such purchaser's
Agent Member, which will in turn maintain records of such purchaser's beneficial
ownership.
DIVIDENDS AND DIVIDEND PERIODS
Dividends on each Share of Stock offered hereby are cumulative from the Date
of the Original Issue of such Share of Stock and are payable, when and as
declared by the Board of Directors of the Company out of funds legally available
therefor, commencing on the initial Dividend Payment Date for such Share of
Stock, as set forth in the Prospectus Supplement relating to such Share of
Stock, and on each Dividend Payment Date for such Share of Stock thereafter,
subject to certain exceptions.
Payment of Dividends. Dividends on the Shares of Stock will be paid through
the Stock Depository on each Dividend Payment Date in accordance with its normal
procedures for distribution of dividends in same-day funds to Agent Members, who
in turn are expected to distribute such dividend payments to the persons for
whom they are acting as agents.
Subject to declaration as described above, dividends will be payable on each
Share of Stock on the last day of each Dividend Period applicable to such Share
of Stock, regardless of the length of such Dividend Period, and, in addition, in
the case of Dividend Periods of more than 99 days, on the following additional
dates: (a) if such Dividend Period is from 100 to 190 days, on the 91st day; (b)
if such Dividend Period is from 191 to 281 days, on the 91st and 182nd days; (c)
if such Dividend Period is from 282 to 364 days, on the 91st, 182nd and 273rd
days; and (d) if such Dividend Period is from two to 30 years, on January 15,
April 15, July 15 and October 15 of each year; provided, however, that in all
such cases, if such date is not a Business Day, the Dividend Payment Date shall
be the Business Day next succeeding such date.
Dividend Determination Method. Each Dividend Period will be measured in
either days (not more than 364) or in full years (but not less than two nor more
than 30); provided, however, that the minimum Dividend Period for Stock is seven
calendar days. Each Dividend Period will end on a Dividend Payment Date. The
initial Dividend Period for each Share of Stock will be a period specified by
the Company during which such Share of Stock will have a Dividend Rate specified
by the Company, as set forth in the Prospectus Supplement relating to such Share
of Stock. Thereafter, the determination of the duration of each Subsequent
Dividend Period with respect to such Share of Stock and the Dividend Rate for
such Subsequent Dividend Period will be determined by the Auction Method.
3
<PAGE>
Auction Method. Each Subsequent Dividend Period will have a duration
specified by the Company in a notice to record holders sent not less than seven
days prior to the Auction Date for such Subsequent Dividend Period. In the
absence of any such notice with respect to a Subsequent Dividend Period, such
period will have a duration of 49 days. In addition, in the event the Company
has elected a duration of more than 49 days for a Subsequent Dividend Period, it
may withdraw such election by giving notice to record holders by no later than
3:00 p.m., New York City time, on the Business Day immediately preceding the
relevant Auction Date, and in such event such Subsequent Dividend Period will
have a duration of 49 days. Unless a Payment Failure has occurred and is
continuing, the Dividend Rate for the Stock of each Series for each Subsequent
Dividend Period will be the rate per annum that the Trust Company (Bankers Trust
Company or any successor) advises the Company results from an Auction for such
Series. At any point in time, all Shares of Stock of a Series will have a single
Dividend Period and will accumulate dividends at a single Dividend Rate.
Maximum Rate; Payment Failure. Notwithstanding the foregoing, the Dividend
Rate that results from the application of the Auction Procedures for any
Subsequent Dividend Period for any Share of Stock will not be greater than the
Maximum Rate, which is a percentage (determined as set forth below based on the
prevailing rating of such Share of Stock in effect at the close of business on
the Business Day immediately preceding the date of determination and on the
duration of the relevant Dividend Period) of the Applicable Determining Rate for
such Share on the date of determination; provided, however, that during the
continuance of a Payment Failure the applicable percentage will be 200%:
<TABLE><CAPTION>
PERCENTAGE
---------------------------------------------
FOR DIVIDEND PERIODS FOR DIVIDEND PERIODS
PREVAILING RATING OF LESS THAN ONE YEAR OF TWO YEARS OR MORE
- ------------------------------------- --------------------- --------------------
<S> <C> <C>
AA/Aa or above....................... 110% 125%
A/A.................................. 125% 140%
BBB/Baa.............................. 150% 175%
Below BBB/Baa........................ 200% 225%
</TABLE>
The Applicable Determining Rate, with respect to a Dividend Period of seven
days to 89 days, is the Effective Composite Commercial Paper Rate; with respect
to a Dividend Period of 90 days to 364 days, is the Effective LIBOR Rate; with
respect to a Dividend Period of two years to ten years, is the U.S. Treasury
Note Rate; and, with respect to a Dividend Period in excess of ten years, is the
U.S. Treasury Bond Rate.
Notwithstanding the foregoing, in the event that the Company fails to pay
(i) all dividends in respect of any Share of Stock which have accumulated during
any Dividend Period applicable to such Share of Stock by no later than the third
Business Day following the last day of such Dividend Period or (ii) the
redemption price in respect of Shares of Stock called for redemption on the date
when due and, in each such case, if such failure continues unremedied, then the
application of the Auction Procedures will be suspended and dividends will
accumulate on the Shares of Stock of all Series for Dividend Periods commencing
on and after the date such Payment Failure first occurs at 200% of the
Applicable Determining Rate for Dividend Periods of 49 days. In no event will
the Dividend Rate for any Share of Stock be adjusted prior to the end of a
Dividend Period for such Share. If no Payment Failure continues to exist at the
end of a Dividend Period, the application of the Auction Procedures will be
resumed.
AUCTION PROCEDURES
On each Auction Date (the Business Day prior to the beginning of each
Subsequent Dividend Period) for the Stock of a Series, each Existing Holder may
submit Orders in respect of such Subject Stock through a Broker-Dealer to the
Trust Company as follows:
- Hold Order -- indicating its desire to hold without regard to the
Dividend Rate for the next Dividend Period.
4
<PAGE>
- Bid -- indicating its desire to hold if the Dividend Rate for the next
Dividend Period is not less than the rate specified in such Bid.
- Sell Order -- indicating its desire to sell without regard to the
Dividend Rate for the next Dividend Period.
An Existing Holder may submit different types of Orders in an Auction with
respect to different Shares of Subject Stock then held by such Existing Holder;
provided, however, that the total number of Shares of Subject Stock covered by
Hold or Sell Orders does not exceed the number of Shares of Subject Stock held
by such Existing Holder. An Existing Holder that offers to purchase additional
Shares of Subject Stock is, for purposes of such offer, treated as a Potential
Holder as described below. Bids by Existing Holders with rates higher than the
Maximum Rate on the Auction Date will be treated as Sell Orders. A Hold Order
shall be deemed to have been submitted on behalf of an Existing Holder if an
Order is not submitted on behalf of such Existing Holder for any reason,
including the failure of a Broker-Dealer to submit such Order to the Trust
Company, except that a Sell Order will be deemed to have been submitted on
behalf of an Existing Holder if an Order is not submitted on behalf of such
Existing Holder in the case of an Auction for a Dividend Period which differs in
duration by more than seven days from the preceding Dividend Period or an
Auction for a Dividend Period of two years or more.
Potential Holders of Shares of Subject Stock may submit Bids in which they
will offer to purchase Shares of Subject Stock if the Dividend Rate for the next
Dividend Period is not less than the rate specified in such Bid. A Bid by a
Potential Holder specifying a rate higher than the Maximum Rate on the Auction
Date will not be accepted.
If Sufficient Clearing Bids exist (that is, the number of Shares of Subject
Stock subject to Bids by Potential Holders is at least equal to the number of
Shares of Subject Stock subject to Sell Orders by Existing Holders), the
Dividend Rate will be the lowest rate specified in the Submitted Bids, which,
taking into account such rate and all lower rates bid by Existing Holders and
Potential Holders, would result in Existing Holders and Potential Holders owning
all of the Shares of Subject Stock available for purchase in the Auction. If
Sufficient Clearing Bids do not exist, the Dividend Rate will be the Maximum
Rate on the Auction Date for a Dividend Period equal to the lesser of (i) the
length of the Dividend Period selected by the Company and (ii) 49 days, and, in
such event, Existing Holders that have submitted Sell Orders will not be able to
sell in such auction all Shares of Subject Stock subject to such Sell Orders. If
all Existing Holders submit or are deemed to have submitted Hold Orders, the
Dividend Rate will be 58% of the Applicable Determining Rate.
The Auction Procedures include a pro rata allocation of Shares of Subject
Stock for purchase and sale, which may result in an Existing Holder selling, or
a Potential Holder purchasing, a number of Shares of Subject Stock that is fewer
than the number of Shares of Subject Stock specified in its Order.
A Sell Order placed by an Existing Holder shall constitute an irrevocable
offer to sell, and, if the rate specified in a Bid is greater than the rate
determined in the Auction, a Bid placed by an Existing Holder will constitute an
irrevocable offer to sell, the Shares of Subject Stock subject thereto, in each
case at a price per Share equal to $100,000. A Bid placed by a Potential Holder
shall constitute an irrevocable offer to purchase the Shares of Subject Stock
subject thereto at a price per Share equal to $100,000. Settlement of purchases
and sales will be made on the next Business Day (also a Dividend Payment Date)
after the Auction Date through the Stock Depository. Purchasers will make
payment through their Agent Members in same-day funds to the Stock Depository
against delivery to their respective Agent Members. The Stock Depository will
make payment to the sellers' Agent Members in accordance with the Stock
Depository's normal procedures for payment in same-day funds.
If on any Auction Date Stock of two or more Series with Dividend Periods of
the same length will be auctioned, then a single Auction will be held with
respect to all of such Series, and all references to "Subject Stock" in the
Auction Procedures with respect to such Auction will be deemed to be references
to all of such Series, collectively.
5
<PAGE>
Each prospective purchaser of Shares of Stock will be required to sign and
deliver a Master Purchaser's Letter in the form of Appendix D hereto, to a
Broker-Dealer (who will deliver copies thereof to the Trust Company) pursuant to
which each prospective purchaser will agree, among other things, that so long as
no Payment Failure has occurred (i) Shares of Stock may be transferred only
pursuant to a Bid or Sell Order placed in an Auction, or to or through a
Broker-Dealer or to a person that has delivered, or caused to be delivered on
its behalf, a signed copy of a Master Purchaser's Letter to the Trust Company;
provided, however, that in the case of all transfers other than those pursuant
to Auctions, the Existing Holder of the Shares so transferred, its Agent Member
or its Broker-Dealer advises the Trust Company of such transfer and (ii)
ownership of Shares of Stock will be maintained in book entry form by the Stock
Depository for the account of such prospective purchaser's Agent Member, which
in turn will maintain records of such prospective purchaser's beneficial
ownership. An execution copy of the Master Purchaser's Letter is included inside
the back cover of this Prospectus.
EXECUTION OF A MASTER PURCHASER'S LETTER IS NOT A COMMITMENT TO PURCHASE
SHARES IN THE OFFERING MADE BY THE PROSPECTUS SUPPLEMENT ACCOMPANYING THIS
PROSPECTUS OR IN ANY AUCTION, BUT IS A CONDITION PRECEDENT TO PURCHASING SHARES
OF STOCK.
REDEMPTION
The Shares of Stock of each Series are redeemable at the option of the
Company as a whole or in part, on the last day of any Dividend Period at a
redemption price of $100,000 per Share plus accumulated and unpaid dividends
and, in the case of Shares of Stock with a Dividend Period of two years or more,
at the times and at the redemption prices (but not less than $100,000 per Share
plus accumulated and unpaid dividends) determined by the Company prior to the
commencement of such Dividend Period.
LIQUIDATION PREFERENCE
The liquidation preference of the Shares of Stock shall be $100,000 per
Share plus accumulated and unpaid dividends.
VOTING RIGHTS
Except in certain limited circumstances as required by law, the holders of
the Outstanding Shares of Stock will not be entitled to any voting rights.
TAX CONSIDERATIONS
As explained more fully under "Tax Considerations," the Company has received
an opinion of counsel that Shares of Stock will constitute stock of the Company
for Federal income tax purposes, distributions made by the Company with respect
to such Shares will constitute dividends to the extent made from the current or
accumulated earnings and profits of the Company (as calculated for Federal
income tax purposes), and corporate holders of Shares of Stock otherwise
entitled to the Dividends-Received Deduction will be entitled to such deduction
with respect to dividends on Shares of Stock, provided that the minimum holding
period and other applicable requirements are satisfied.
6
<PAGE>
THE COMPANY
General Electric Capital Corporation (herein together with its consolidated
affiliates called the "Company" or "GE Capital" unless the context otherwise
requires) was incorporated in 1943 in the State of New York, under the
provisions of the New York Banking Law relating to investment companies, as
successor to General Electric Contracts Corporation, formed in 1932. Until
November 1987, the name of the Company was General Electric Credit Corporation.
All outstanding common stock of the Company is owned by General Electric Capital
Services, Inc. ("GE Capital Services"), formerly General Electric Financial
Services, Inc., the common stock of which is in turn wholly owned by General
Electric Company ("GE Company"). The business of the Company originally related
principally to financing the distribution and sale of consumer and other
products of GE Company. Currently, however, the type and brand of products
financed and the financial services offered are significantly more diversified.
Very little of the financing provided by GE Capital involves products that are
manufactured by GE Company.
The Company operates in four finance industry segments and in a specialty
insurance industry segment. GE Capital's financing activities include a full
range of leasing, lending, equipment management services and annuities. The
Company's specialty insurance activities include providing private mortgage
insurance, financial guaranty insurance, principally on municipal bonds and
structured finance issues, and creditor insurance covering international
customer loan repayments. The Company is an equity investor in a retail
organization and certain other service and financial services organizations. GE
Capital's operations are subject to a variety of regulations in their respective
jurisdictions.
Services of the Company are offered primarily in the United States of
America, Canada, Europe and the Pacific basin. The Company's principal executive
offices are located at 260 Long Ridge Road, Stamford, Connecticut 06927
(Telephone number (203) 357-4000). At December 31, 1994 the Company employed
approximately 32,000 persons.
CONSOLIDATED RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK
DIVIDENDS
YEAR ENDED DECEMBER 31,
----------------------------------------------------
1990 1991 1992 1993 1994
---- ---- ---- ---- ----
1.29 1.32 1.43 1.60 1.62
For purposes of computing the consolidated ratio of earnings to combined
fixed charges and preferred stock dividends, 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.
Assuming that all 3,500 Shares of Stock covered by this Prospectus along
with the 1,750 shares of Variable Cumulative Preferred Stock previously
authorized but unissued were Outstanding and the Dividend Rate for all such
Shares of Stock was 4.520% per annum, and assuming that the 8,750 shares of
Variable Cumulative Preferred Stock previously offered and sold were Outstanding
and the respective Dividend Rates for each series of such stock were those in
effect on the date of this Prospectus (a weighted average of 4.535%), the ratio
of earnings to fixed charges and preferred stock dividends for 1994 would not be
materially affected.
USE OF PROCEEDS
Except as may be otherwise set forth in any Prospectus Supplement
accompanying this Prospectus, the net proceeds from the sale of 5,250 Shares
will be added to the general funds of the Company and will be available for
financing its operations. Additional equity financing, as well as short-term and
long-
7
<PAGE>
term debt financing, as required, will be undertaken at such times, and through
such means, as the Company deems appropriate.
DESCRIPTION OF THE STOCK
GENERAL
The Board of Directors of the Company has authorized the issuance of the
Shares of Stock, in Series. The Shares of Stock, when issued and sold, will be
fully paid and non-assessable.
As of the date of this Prospectus, the capital stock of the Company as
authorized by its sole common stockholder consists of 3,866,00 shares of Common
Stock of the par value of $200 per share (the "Common Stock") and 14,000 Shares
of Variable Cumulative Preferred Stock, par value $100 per Share, issuable from
time to time in Series. There are presently outstanding 3,837,825 shares of
Common Stock and 8,750 shares of Variable Cumulative Preferred Stock. Each
series of Variable Cumulative Preferred Stock ranks equal with each other series
of Variable Cumulative Preferred Stock, as to dividend and liquidation
preference.
The following is a brief summary of certain provisions contained in the
Company's Organization Certificate. Such summary does not purport to be complete
and is qualified in its entirety by reference to such document, a copy of which
is filed as an exhibit to the Registration Statement of which this Prospectus is
a part.
DIVIDEND RIGHTS
General. Dividends on the Shares of Stock will accumulate from the Date of
Original Issue thereof and will be payable when and as declared by the Board of
Directors, out of funds legally available therefor, on the last day of each
Dividend Period, applicable thereto, regardless of its length, and, in addition,
in the case of Dividend Periods of more than 99 days, on the following
additional dates: (a) if such Dividend Period is from 100 to 190 days, on the
91st day; (b) if such Dividend Period is from 191 to 281 days, on the 91st and
182nd days; (c) if such Dividend Period is from 282 to 364 days, on the 91st,
182nd and 273rd days; and (d) if such Dividend Period is from two to 30 years,
on January 15, April 15, July 15 and October 15 of each year; provided, however,
that in all such cases, if such date is not a Business Day, the Dividend Payment
Date shall be the Business Day next succeeding such date. Each day on which
dividends are payable on Shares of Stock is referred to herein as a "Dividend
Payment Date."
Each dividend will be payable to holders of record as they appear on the
record of stockholders of the Company on the Business Day next preceding the
Dividend Payment Date therefor; provided, however, that if the Dividend Rate
with respect to Shares of Stock is 200% of the Applicable Determining Rate as a
result of the occurrence of a Payment Failure, then that dividend will be paid
to such holders as their names appear on the record of stockholders of the
Company on a date not exceeding 15 days preceding the payment date thereof as
may be fixed by the Board of Directors of the Company or a committee thereof.
Dividends in arrears for any past Dividend Period may be declared and paid at
any time, without reference to any regular Dividend Payment Date.
The Company will pay to the Paying Agent not later than 12:00 noon, New York
City time, on the Business Day next preceding each Dividend Payment Date for
Shares of Stock, an aggregate amount of funds available on the next Business Day
in the City of New York, New York, equal to the dividends to be paid to all
holders of such Shares of Stock on such Dividend Payment Date. All such moneys
will be held in trust for the payment of such dividends by the Paying Agent for
the benefit of the holders.
The amount of dividends accumulated on each Share of Stock for each Dividend
Period of less than one year will be computed by multiplying the Dividend Rate
for such Dividend Period by a fraction the numerator of which is the number of
days in such Dividend Period (calculated by counting the first day thereof but
excluding the last day thereof) and the denominator of which will be 360 and
multiplying
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$100,000 by the rate obtained. During any Dividend Period of one year or longer,
the amount of dividends accumulated on each Share of Stock will be computed on
the basis of a year consisting of twelve 30-day months.
No dividend will be declared or paid on any Shares of Stock of any Series
for any current dividend period if dividends on any other Shares of Stock are
accumulated and unpaid for any prior dividend period or, in case of payment of
dividend arrearages on Stock, unless at the same time the Company also declares
or pays or sets apart for payment, as the case may be, such amounts with respect
to all such dividend arrearages on all Shares of Stock, so that all such shares
share ratably in such payment in accordance with the sums which would be payable
on all such shares if all dividends (including all accumulations, if any) were
declared and paid in full. For purposes hereof, dividend accumulations and
arrearages do not include any dividends which have not yet become payable or for
which there has not occurred a Dividend Payment date, as the case may be.
Each Dividend Period for Shares of Stock shall be measured in either days
(not more than 364) or in full years (but not less than two nor more than 30);
provided, however, that the minimum Dividend Period is seven days. Each Dividend
Period shall end on a Dividend Payment Date. The duration of the Initial
Dividend Period for each Share of Stock will be a period specified by the
Company, during which such Share of Stock will have a Dividend Rate specified by
the Company, as set forth in the Prospectus Supplement relating to such Series.
Thereafter, the determination of the duration of each Subsequent Dividend Period
with respect to such Share of Stock and the Dividend Rate for such Subsequent
Dividend Period will be determined by the Auction Method.
Dividend Periods and Dividend Rates. Each Subsequent Dividend Period will
begin on a Dividend Payment Date and will end 49 days thereafter; provided,
however, that, subject to the limitations set forth above, the Company may
establish the duration of any Subsequent Dividend Period for Shares of Stock of
a Series by a notice sent by the Company to all record holders of Shares of
Stock of such Series, by first-class mail, postage prepaid, to the address of
each such holder appearing in the record of stockholders of the Company, not
less than seven days nor more than 60 days prior to any Auction Date, which
notice will specify the Company's determination of (i) the length of the next
succeeding Dividend Period, (ii) in the case of any Dividend Period in excess of
99 days in duration, any Dividend Payment Date or Dates other than the last day
of such Dividend Period and (iii) in the case of any Dividend Period equal to or
in excess of two years in duration, any dates on which Shares of Stock may be
redeemed and the corresponding redemption prices. In the absence of any such
notice with respect to a Subsequent Dividend Period such period will have a
duration of 49 days. In addition, in the event the Company has elected a
duration of more than 49 days for a Subsequent Dividend Period, it may withdraw
such election by giving notice to record holders by no later than 3:00 p.m., New
York City time, on the Business Day immediately preceding the relevant Auction
Date, and in such event such Subsequent Dividend Period will have a duration of
49 days. Copies of such notices shall be delivered physically, by telecopier or
other written electronic communication, to the Trust Company by the Company at
the same time they are transmitted to the record holders of Shares of Stock. The
Trust Company will thereupon use its reasonable best efforts to provide copies
of such notices to each Broker-Dealer as soon as practicable after receiving
such notice. No defect in the notice or in the mailing thereof shall affect the
validity of the change in the Dividend Period.
In the event that Sufficient Clearing Bids have not been made, so the
Dividend Rate for the next Dividend Period is equal to the Maximum Rate, then
the length of the Subsequent Dividend Period will be the lesser of (i) the
length of such Dividend Period as specified by the Company in a notice sent as
described above, or (ii) 49 days, and the Maximum Rate shall be determined based
upon the length of the Dividend Period determined pursuant to the foregoing
clause (i) or (ii).
Except as provided below, the Dividend Rate on the Shares of Stock of a
Series for each Subsequent Dividend Period will be at the rate per annum that
results from an Auction for such Series of Stock.
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Maximum Rate. Notwithstanding the foregoing, the Dividend Rate that results
from the application of the Auction Procedures for any Subsequent Dividend
Period for any Share of Stock will not be greater than the Maximum Rate which is
a percentage (determined as set forth below based on the prevailing rating of
such Share of Stock in effect at the close of business on the Business Day
immediately preceding the date of determination and on the duration of the
relevant Dividend Period) of the Applicable Determining Rate for such Share on
the date of determination; provided, however, that during the continuance of a
Payment Failure the applicable percentage will be 200%:
PERCENTAGE
---------------------------------------------
FOR DIVIDEND PERIODS FOR DIVIDEND PERIODS
PREVAILING RATING OF LESS THAN ONE YEAR OF TWO YEARS OR MORE
- --------------------------- --------------------- --------------------
AA/Aa or above............. 110% 125%
A/A........................ 125% 140%
BBB/Baa.................... 150% 175%
Below BBB/Baa.............. 200% 225%
The Applicable Determining Rate, with respect to a Dividend Period of seven
days to 89 days, is the Effective Composite Commercial Paper Rate; with respect
to a Dividend Period of 90 days to 364 days, is the Effective LIBOR Rate; with
respect to a Dividend Period of two years to ten years, is the U.S. Treasury
Note Rate; and with respect to a Dividend Period in excess of ten years, is the
U.S. Treasury Bond Rate.
Payment Failure. Notwithstanding the foregoing, in the event that the
Company fails to pay (i) all dividends in respect of any Share of Stock which
have accumulated during any Dividend Period applicable to such Share of Stock by
no later than the third Business Day following the last day of such Dividend
Period or (ii) the redemption price in respect of Shares of Stock called for
redemption on the date when due and, in each such case, if such failure
continues unremedied (either of such events a "Payment Failure"), then the
application of the Auction Procedures will be suspended and dividends will
accumulate on the Shares of Stock of all Series for Dividend Periods commencing
on and after the date such Payment Failure first occurs at 200% of the
Applicable Determining Rate for Dividend Periods of 49 days. In no event will
the Dividend Rate for any Share of Stock be adjusted prior to the end of a
Dividend Period for such Share. If no Payment Failure continues to exist at the
end of a Dividend Period, the application of the Auction Procedures will be
resumed.
REDEMPTION
At the option of the Company, the Shares of any Series may be redeemed
out of legally available funds therefor, as a whole or from time to time in
part, (i) on the last day of any Dividend Period at a redemption price of
$100,000 per Share, plus accumulated and unpaid dividends to the date fixed
for redemption and (ii) in the case of Shares of Stock with a Dividend Period
equal to or more than two years, on any Dividend Payment Date for such Shares
at redemption prices (but not less than $100,000 per Share) determined by the
Company prior to the commencement of such Dividend Period plus accumulated and
unpaid dividends to the date set forth for redemption.
If fewer than all of the Outstanding Shares of a Series are to be redeemed
as set forth above, the number of Shares to be redeemed shall be determined by
the Board of Directors of the Company or a duly authorized committee thereof,
and such Shares shall be redeemed pro rata from the holders of record of such
Shares in proportion to the number of such Shares held by such holders.
Notice of redemption will be provided by mailing a notice to each record
holder of the Shares of Stock to be redeemed not less than 30 but not more than
60 days prior to the date fixed for redemption to the respective address of each
holder as that address appears on the record of stockholders of the Company.
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If dividends are in arrears on any Share of Stock, the Company may not
redeem any Shares of Stock unless all of such Shares are simultaneously
redeemed, and the Company may not purchase or otherwise acquire any Shares of
Stock except pursuant to an offer on the same terms to holders of all Shares of
Stock.
If notice of redemption has been given, from and after the redemption date
for the Shares of a Series of Stock called for redemption (unless the Company
defaults in providing money for the payment of the redemption price of the
Shares so called for redemption), dividends on the Shares so called for
redemption will cease to accumulate and said Shares will no longer be deemed to
be Outstanding, and all rights of the holders thereof as stockholders of the
Company (except the right to receive the redemption price) will cease. After the
date designated for redemption such Shares will not be transferable on the stock
books of the Company. Upon surrender in accordance with that notice of the
Shares so redeemed (properly endorsed or assigned for transfer, if the notice
shall so state), the redemption price set forth above will be paid by the paying
agent.
Shares of Stock which have been redeemed or otherwise acquired by the
Company will be cancelled and if permitted by applicable law may be restored to
the status of authorized but undesignated and unissued Shares of Variable
Cumulative Preferred Stock.
If upon giving effect to any redemption of Shares of Stock the ratio of debt
to equity of the Company is greater than 8 to 1, GE Company, the Company's
indirect parent company, will replace such redeemed Stock with an equal amount
of another form of equity to the extent necessary to reduce the Company's ratio
of debt to equity to 8 to 1.
LIQUIDATION PREFERENCE
Upon the involuntary or voluntary liquidation, dissolution or winding up of
the Company, the holders of Shares of Stock will have preference and priority
over the Common Stock or any other class of stock of the Company ranking on
liquidation junior to the Shares of Stock, for payment out of the assets of the
Company or proceeds thereof, available for distribution to stockholders, whether
from capital or surplus, of $100,000 per Share plus all dividends accumulated
and unpaid thereon. If, in the case of any such liquidation, dissolution or
winding up of the Company the assets of the Company or proceeds thereof shall be
insufficient to make the full liquidation payment of $100,000 per Share plus all
accumulated and unpaid dividends on the Stock, then those assets and proceeds
will be distributed among the holders of the Stock ratably in accordance with
the respective amounts which would be payable on such Stock if all amounts
thereon were paid in full.
VOTING RIGHTS
Holders of Common Stock are entitled to one vote per share on all matters
which arise at any meeting of shareholders of the Company.
The holders of the Stock have no voting rights except as required by law and
except that the Company may not alter any of the preferences, privileges, voting
powers or other restrictions or qualifications of a Series of Stock in a manner
substantially prejudicial to the holders thereof without the consent of the
holders of at least two-thirds of the total number of Shares of such Series.
AUCTION PROCEDURES
GENERAL
The provisions of the Organization Certificate authorizing the issuance of
the Stock of each Series offered hereby provide that the Dividend Rate per annum
for each Dividend Period after the Initial Dividend Period for Stock will be
equal to the rate per annum that the Trust Company advises the Company has
resulted from the Auction for each Series held on the Business Day preceding the
first day
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of such Dividend Period of such Series pursuant to the Auction Procedures, in
which persons determine to hold or offer to purchase or sell Shares of Stock
based on dividend rates bid by them. However, if a Payment Failure has occurred
the application of the Auction Procedures will be suspended and the Dividend
Rate will be determined as provided above.
Trust Company Agreement. The Company has entered into an agreement (as
amended, the "Trust Company Agreement") with Bankers Trust Company (together
with any such successor bank or trust company or other entity entering into a
similar agreement with the Company, the "Trust Company") which provides, among
other things, that the Trust Company will follow the Auction Procedures for the
purposes of determining the Dividend Rate for Stock so long as the Dividend Rate
is to be based on the results of an Auction. Each periodic implementation of
such procedures is herein referred to as an "Auction." Each Series of Stock will
have a separate Auction, except that if on any Auction Date two or more Series
of Stock with Dividend Periods of the same length will be auctioned then a
single Auction will be held with respect to all such Series.
Broker-Dealer Agreements. Each Auction requires the participation of one or
more broker-dealers. The Trust Company will enter into an agreement
(collectively, the "Broker-Dealer Agreements") with one or more broker-dealers
(collectively, the "Broker-Dealers") selected by the Company which provide for
the participation of the Broker-Dealers in Auctions.
Master Purchaser's Letter. Each prospective purchaser of Shares of Stock
will be required to sign and deliver to a Broker-Dealer, as a condition to
purchasing Shares of Stock in any Auction or otherwise, a Master Purchaser's
Letter, an execution copy of which is attached to this Prospectus after Appendix
D (the "Master Purchaser's Letter"). By signing a Master Purchaser's Letter,
such prospective purchaser agrees, among other things, so long as no Payment
Failure has occurred:
(a) to participate in Auctions for Stock on the terms set forth in
Appendix B hereto;
(b) to sell, transfer or otherwise dispose of Shares of Stock only
pursuant to a Bid or a Sell Order (as defined below) in an Auction, or to or
through a Broker-Dealer or to a person that has delivered or caused to be
delivered on its behalf a signed copy of a Master Purchaser's Letter to the
Trust Company; provided, however, that in the case of all transfers other
than those pursuant to Auctions, the Existing Holder (as defined below) of
the Shares so transferred, its Agent Member (as defined below) or its
Broker-Dealer advises the Trust Company of such transfer; and
(c) to have the ownership of the Shares of Stock as to which such
purchaser is the Existing Holder maintained in book entry form by The
Depository Trust Company ("DTC," together with any successor securities
depository selected by the Company, the "Stock Depository") for the account
of its agent member (the "Agent Member") of such Stock Depository, which in
turn will maintain records of such purchaser's beneficial ownership, and to
authorize such Agent Member to disclose to the Trust Company such
information with respect to such purchaser's beneficial ownership as the
Trust Company may request.
One executed copy of a Master Purchaser's Letter must be delivered to a
Broker-Dealer, who will deliver copies thereof to the Trust Company. Execution
of a Master Purchaser's Letter is not a committment to purchase Shares of Stock
in the offering being made by this Prospectus or in any Auction, but is a
condition precedent to purchasing Shares of Stock.
As used herein, "Existing Holder" of Shares of Stock means a person who has
signed a Master Purchaser's Letter and is listed as the beneficial holder of
such Shares of Stock in the records of the Trust Company. The Trust Company may
rely upon, as evidence of the identities of the Existing Holders of Stock, a
list of the initial holders of the Shares of Stock provided by the Company, the
results of Auctions and notices from any Existing Holder, the Agent Member of
such Existing Holder or the Broker-Dealer of such Existing Holder with respect
to such Existing Holder's transfer of Shares to another person. The Trust
Company will be required to register a transfer of Shares of Stock from an
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Existing Holder to another person only if such transfer is made to a person that
has delivered a signed Master Purchaser's Letter to the Trust Company and if (i)
such transfer is pursuant to an Auction or (ii) the Trust Company has been
notified in writing (A) by such Existing Holder, the Agent Member of such
Existing Holder or the Broker-Dealer of such Existing Holder of such transfer or
(B) by the Broker-Dealer of any person that purchased or sold such Shares in an
Auction of the failure of such Shares to be transferred as a result of such
Auction. The Trust Company is not required to accept any such notice for an
Auction unless it is received by the Trust Company by 3:00 p.m., New York City
time, on the Business Day preceding such Auction.
The Trust Company is not required to accept the Master Purchaser's Letter of
any Potential Holder who wishes to submit a Bid for the first time in an Auction
or of any Potential Holder or Existing Holder who wishes to amend its Master
Purchaser's Letter unless it is received by the Trust Company by 3:00 p.m., New
York City time, on the Business Day preceding such Auction.
Stock Depository. DTC will act as Stock Depository for the Agent Members
with respect to Shares of Stock. One certificate for all of the Shares of Stock
of each Series offered hereby will be registered in the name of Cede & Co.
("Cede") as nominee of the Stock Depository. Such certificate will bear a legend
to the effect that such certificate is issued subject to the provisions
restricting transfers of Shares of Stock contained in the Organization
Certificate and the Master Purchaser's Letters. The Company will also issue
stop-transfer instructions to the transfer agent for Stock. As long as the
Dividend Rate is based upon the results of any Auction, Cede will be the holder
of record of all Shares of Stock of each Series, and Existing Holders of Shares
of Stock will not receive certificates representing their ownership interest in
such Shares. Upon the occurrence of a Payment Failure, as set forth under
"General" above, an Existing Holder may obtain a certificate for the Shares of
Stock owned by it. DTC, which is a New York-chartered limited purpose trust
company, performs services for its participants (including the Agent Members),
some of whom (and/or their representatives) own shares of common stock of DTC.
The Stock Depository will maintain lists of its participants and the Shares of
Stock of each Series held by each Agent Member whether as an Existing Holder for
its own account or as a nominee for another Existing Holder.
The following is a brief summary of the procedures to be used in conducting
Auctions. This summary is qualified by reference to the Auction Procedures set
forth in Appendix B to this Prospectus. The settlement procedures to be used
with respect to Auctions are set forth in Appendix C to this Prospectus.
AUCTION DATES
An Auction for Stock of each Series to determine the Dividend Rate for each
Dividend Period for such Series after the Initial Dividend Period will be held
on the first Business Day prior to the first day of such Dividend Period.
ORDERS BY EXISTING HOLDERS AND POTENTIAL HOLDERS IN AN AUCTION
On or prior to the Submission Deadline (as defined under "Submission of
Orders by Broker-Dealers to Trust Company" below) on each Auction Date for a
Series:
(a) each Existing Holder may submit to a Broker-Dealer by telephone a:
(i) Hold Order--indicating the number of Outstanding Shares of
Subject Stock, if any, held by such Existing Holder which such Existing
Holder desires to continue to hold for the next succeeding Dividend
Period without regard to the rate determined by the Auction Procedures;
(ii) Bid--indicating the number of Outstanding Shares of Subject
Stock, if any, held by such Existing Holder which such Existing Holder
desires to continue to hold for the next
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succeeding Dividend Period if the rate determined by the Auction
Procedures shall not be less than the rate per annum specified by such
Existing Holder; and/or
(iii) Sell Order--indicating the number of Outstanding Shares of
Subject Stock, if any, held by such Existing Holder which such Existing
Holder offers to sell without regard to the rate determined by the
Auction Procedures; and
(b) Broker-Dealers will contact prospective purchasers of Shares of
Subject Stock of such Series (each such prospective purchaser is herein
referred to as a "Potential Holder" and the term Potential Holder includes
an Existing Holder with respect to an offer by such Existing Holder to
purchase additional Shares of Subject Stock of such Series) by telephone or
otherwise to determine whether such Potential Holders desire to submit Bids.
In these Bids, Potential Holders will indicate the number of Shares of
Subject Stock of such Series that they offer to purchase if the rate
determined by the Auction Procedures for such Series for the next Dividend
Period shall not be less than the rates per annum specified in those Bids.
The communication to a Broker-Dealer of the foregoing information is herein
referred to as an "Order" and collectively as "Orders." An Existing Holder or a
Potential Holder placing an Order is herein referred to as a "Bidder" and
collectively as "Bidders."
An Existing Holder may submit different types of Orders in an Auction with
respect to Shares of Subject Stock of a Series held by such Existing Holder;
provided, however, that the total number of Shares of Subject Stock covered by
Hold or Sell Orders does not exceed the number of Shares of Subject Stock of
such Series then held by the Existing Holder. For information concerning the
priority given to different types of Orders place by Existing Holders, see
"Submission of Orders by Broker-Dealers to Trust Company" below.
Any Bid specifying a rate higher than the Maximum Rate will (i) be treated
as a Sell Order if submitted by an Existing Holder and (ii) not be accepted if
submitted by a Potential Holder. The Auction Procedures establish the Maximum
Rate as the maximum rate per annum that can be determined in an Auction. See
"Determination of Sufficient Clearing Bids, Winning Bid Rate and Applicable
Rate" and "Acceptance and Rejection of Submitted Bids and Submitted Sell Orders
and Allocation of Shares in an Auction" below.
Pursuant to the terms of the Master Purchaser's Letter, a Sell Order placed
by an Existing Holder will constitute an irrevocable offer to sell, and if the
rate specified in a Bid is greater than the rate determined in an Auction, a Bid
placed by an Existing Holder will constitute an irrevocable offer to sell the
number of Shares of Subject Stock subject thereto. A Bid made by a Potential
Holder will constitute an irrevocable offer to purchase the number of Shares of
Subject Stock specified in that Bid if the rate specified in the Bid is lower
than or equal to the rate determined in the Auction. The number of Shares of
Subject Stock purchased or sold may be subject to proration procedures. See
"Acceptance and Rejection of Submitted Bids and Submitted Sell Orders and
Allocation of Shares in an Auction" below. Each purchase or sale shall be made
for settlement on the Business Day following the Auction Date at a price per
Share of $100,000. See "Notification of Auction Results; Settlement" below.
If an Order or Orders covering all of the Outstanding Shares of Subject
Stock held by any Existing Holder is or are not submitted for any reason to the
Trust Company prior to the Submission Deadline (as defined below), whether or
not a Broker-Dealer failed to contact such Existing Holder, the Trust Company
will deem a Hold Order to have been submitted on behalf of such Existing Holder
covering the number of Outstanding Shares of Subject Stock held by such Existing
Holder and not subject to Orders submitted to the Trust Company, except that a
Sell Order will be deemed to have been submitted on behalf of an Existing Holder
if an Order is not submitted on behalf of such Existing Holder in the case of an
Auction for a Dividend Period which differs in duration by more than seven days
from the preceding Dividend Period or an Auction for a Dividend Period of two
years or more. The Trust Company may rely upon the terms of any Order submitted
to it by a Broker-Dealer.
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For the purposes of an Auction, Shares for which the Company shall have
given notice of redemption as set forth under "Description of the
Stock--Redemption" will not be considered as Outstanding and will not be
included in such Auction. Neither the Company nor any Affiliate thereof may
submit an Order in an Auction.
SUBMISSION OF ORDERS BY BROKER-DEALERS TO TRUST COMPANY
Prior to 1:00 p.m., New York City time, on each Auction Date, or such other
time on the Auction Date as specified by the Trust Company with the consent of
the Company (the "Submission Deadline"), each Broker-Dealer will submit to the
Trust Company in writing all Orders obtained by it for the Auction to be
conducted on such Auction Date.
If any rate specified in any Bid contains more than three figures to the
right of the decimal point, the Trust Company shall round such rate up to the
next highest one-thousandth (.001 of 1%).
If one or more Orders are submitted to the Trust Company by any Existing
Holder which cover more than the aggregate number of Shares of Subject Stock of
a Series held by that Existing Holder, such Orders will be considered valid in
the following order of priority:
(i) all Hold Orders shall be considered valid, but only up to and
including the aggregate number of Shares of Subject Stock held by that
Existing Holder and if the number of Shares of Subject Stock subject to
those Hold Orders exceeds the number of Shares of Subject Stock held by that
Existing Holder, the number of Shares of Subject Stock subject to each Hold
Order will be reduced pro rata to cover the number of shares of Subject
Stock held by that Existing Holder;
(ii) (A) any Bid will be considered valid up to and including the excess
of the number of Outstanding Shares of Subject Stock held by such Exiting
Holder over the number of Shares of Subject Stock subject to any Hold Order
referred to in clause (i) above;
(B) Subject to subclause (A), if more than one Bid with the same
rate is submitted on behalf of an Existing Holder and the number of Shares
of Subject Stock subject to those Bids is greater than the excess described
in the preceding subclause (A), those Bids will be considered valid up to
the amount of the excess and the number of Shares of Subject Stock subject
to each Bid with the same rate will be reduced pro rata to cover the number
of Shares of Subject Stock equal to such excess;
(C) subject to subclause (A), if more than one Bid with different
rates is submitted on behalf of an Existing Holder, those Bids will be
considered valid in the ascending order of their respective rates up to the
amount of that excess; and
(D) any Shares of Subject Stock subject to Bids not valid under this
clause (ii) will be treated as the subject of a Bid by a Potential Holder;
and
(iii) all Sell Orders will be considered valid but only up to and
including in the aggregate the excess of the number of Outstanding Shares of
Subject Stock held by that Existing Holder over the sum of the Shares of
Subject Stock subject to Hold Orders referred to in clause (i) and valid
Bids by that Existing Holder referred to in clause (ii) above.
If more than one Bid is submitted on behalf of any Potential Holder, each
Bid submitted shall be a separate Bid specifying the rate and number of Shares
of Subject Stock.
DETERMINATION OF SUFFICIENT CLEARING BIDS, WINNING BID RATE AND DIVIDEND RATE
Not earlier than the Submission Deadline, the Trust Company will assemble
all Orders submitted or deemed submitted to it by the Broker-Dealers (each such
Hold Order, Bid or Sell Order as submitted or deemed submitted by a
Broker-Dealer being herein referred to as a "Submitted Hold Order," a
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"Submitted Bid" or a "Submitted Sell Order," as the case may be, or as a
"Submitted Order," and collectively as "Submitted Hold Orders," "Submitted Bids"
or "Submitted Sell Orders," as the case may be, or as "Submitted Orders") and
will determine the excess of the aggregate number of Outstanding Shares of
Subject Stock over the number of Outstanding Shares of Subject Stock subject to
Submitted Hold Orders (each excess being herein referred to as the "Available
Shares") and whether Suffcient Clearing Bids have been made in the Auction.
Sufficient Clearing Bids will have been made if the number of Outstanding
Shares of Subject Stock that are subject to Submitted Bids by Potential Holders
specifying rates not higher than the Maximum Rate equals or exceeeds the number
of Outstanding Shares of Subject Stock that are the subject of Submitted Sell
Orders (including the number of Shares subject to Bids by Existing Holders
specifying rates higher than the Maximum Rate).
If Sufficient Clearing Bids have been made, the Trust Company, taking into
account the rates in all Submitted Bids of Existing Holders and Potential
Holders, will determine the lowest rate specified in the Submitted Bids (the
"Winning Bid Rate") which, when adding the number of Outstanding Shares of
Subject Stock which would continue to be held by Existing Holders (other than
pursuant to Hold Orders) to the number of Outstanding Shares of Subject Stock to
be purchased by Potential Holders, would equal not less than the Available
Shares. If Sufficient Clearing Bids have been made, the Winning Bid Rate will be
the Dividend Rate for the next Dividend Period for all Shares of Subject Stock.
If Sufficient Clearing Bids have not been made (other than because all of
the Outstanding Shares of Subject Stock are subject to Submitted Hold Orders),
the Dividend Rate for the next Dividend Period for all Shares will be equal to
the Maximum Rate. If Sufficient Clearing Bids have not been made, Existing
Holders that have submitted Sell Orders will be unable to sell in the Auction
all Shares subject to those Submitted Sell Orders. See "Acceptance and Rejection
of Submitted Bids and Submitted Sell Orders and Allocation of Shares in an
Auction" below.
If all of the Outstanding Shares of Subject Stock are subject to Submitted
Hold Orders, the Dividend Rate for the next Dividend Period for all such Shares
will be 58% of the Applicable Determining Rate.
ACCEPTANCE AND REJECTION OF SUBMITTED BIDS AND SUBMITTED SELL ORDERS AND
ALLOCATION OF SHARES IN AN AUCTION
Based on the determinations made under "Determination of Sufficient Clearing
Bids, Winning Bid Rate and Dividend Rate" above, and subject to the discretion
of the Trust Company to round as described below, Submitted Bids and Submitted
Sell Orders will be accepted or rejected in the order of priority set forth in
the Auction Procedures with the result that Existing Holders and Potential
Holders of Shares will sell, continue to hold and/or purchase Shares of Subject
Stock as set forth below. Existing Holders that submitted or were deemed to have
submitted Hold Orders will continue to hold the Shares subject to those Hold
Orders.
If Sufficient Clearing Bids have been made:
(a) each Existing Holder that placed a Submitted Bid specifying any rate
higher than the Winning Bid Rate or a Submitted Sell Order will sell the
Shares of Subject Stock subject to that Submitted Bid or Submitted Sell
Order;
(b) each Existing Holder that placed a Submitted Bid specifying a rate
lower than the Winning Bid Rate will continue to hold the Shares of Subject
Stock subject to that Submitted Bid;
(c) each Potential Holder that placed a Submitted Bid specifying a rate
lower than the Winning Bid Rate will purchase the Shares of Subject Stock
subject to that Submitted bid;
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(d) each Existing Holder that placed a Submitted Bid specifying a rate
equal to the Winning Bid Rate will continue to hold the Shares of Subject
Stock subject to that Submitted Bid, unless the number of Shares of Subject
Stock subject to all such Submitted Bids is greater than the excess of the
Available Shares over the number of Shares of Subject Stock accounted for in
clauses (b) and (c) above, in which event each Existing Holder placing such
a Submitted Bid will sell a number of Shares of Subject Stock subject to
that Submitted Bid determined on a pro rata basis based on the number of
Shares of Subject Stock subject to all such Submitted Bids by the Existing
Holders; and
(e) each Potential Holder that placed a Submitted Bid specifying a rate
equal to the Winning Bid Rate will purchase any Available Shares not
accounted for in clause (b), (c) or (d) above on a pro rata basis based on
the number of Shares of Subject Stock subject to all such Submitted Bids.
If Sufficient Clearing Bids have not been made (except where all Outstanding
Shares of Subject Stock are subject to Submitted Hold Orders):
(a) each Existing Holder that placed a Submitted Bid specifying a rate
equal to or lower than the Maximum Rate will continue to hold the Shares of
Subject Stock subject to that Submitted Bid;
(b) each Potential Holder that placed a Submitted Bid specifying a rate
equal to or lower than the Maximum Rate will purchase the Shares of Subject
Stock subject to that Submitted Bid; and
(c) each Existing Holder that placed a Submitted Bid specifying a rate
higher than the Maximum Rate or a Submitted Sell Order will sell a pro rata
portion of the number of Shares of Subject Stock held by that Existing
Holder based on the number of Shares of Subject Stock subject to all the
Submitted Bids and Submitted Sell Orders.
If as a result of the Auction Procedures described above, (i) any Existing
Holder would be entitled or required to sell, or any Potential Holder would be
entitled or required to purchase, a fraction of a Share of Subject Stock, the
Trust Company will round up or down the number of Shares of Subject Stock being
sold and purchased on that Auction Date so that the number of Shares of Subject
Stock sold or purchased by each Existing Holder or Potential Holder will be
whole Shares of Subject Stock and (ii) any Potential Holder would be entitled or
required to purchase less than a whole Share of Subject Stock, the Trust Company
will allocate Shares of Subject Stock to purchase among Potential Holders so
that only whole Shares of Subject Stock are purchased by any Potential Holder,
even if that allocation results in one or more of the Potential Holders not
purchasing Shares of Subject Stock.
NOTIFICATION OF AUCTION RESULTS; SETTLEMENT
The Trust Company will advise each Broker-Dealer that submitted a Bid or
Sell Order on behalf of a Bidder by telephone at approximately 3:00 p.m., New
York City time, on each Auction Date whether such Bid or Sell Order was
accepted, in whole or in part, or rejected and the Dividend Rate for the next
Dividend Period. Each Broker-Dealer that submitted a Bid or Sell Order on behalf
of a Bidder will then advise the Bidder whether such Bid or Sell Order was
accepted, in whole or in part, or rejected; will confirm purchases and sales
with each Bidder purchasing or selling Shares of Subject Stock as a result of
the Auction; and will advise each Bidder purchasing or selling Shares of Subject
Stock subject to that Auction to instruct its Agent Member of the Stock
Depository to pay the purchase price against delivery of such Shares of Subject
Stock or to deliver such Shares of Subject Stock against payment therefor as
appropriate. Each Broker-Dealer that submitted a Hold Order on behalf of an
Existing Holder will also advise such Existing Holder of the Dividend Rate for
the next Dividend Period. The Trust Company will record on the registry of
Existing Holders to be maintained by the Trust Company each transfer of Shares
of Subject Stock subject to that Auction. See "General" above.
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In accordance with the Stock Depository's normal procedures, on the Business
Day after the Auction Date, the transactions described above will be executed
through the Stock Depository and the accounts of the respective Agent Members at
the Stock Depository will be debited and credited and Shares of Subject Stock
delivered as necessary to effect the purchases and sales of Shares of Subject
Stock as determined in the Auction. Purchasers will make payment to the Stock
Depository through their Agent Members in same-day funds against delivery; the
Stock Depository will make payments in accordance with its normal procedures for
payment in same day funds.
If any Existing Holder selling Shares of Subject Stock in an Auction fails
to deliver those Shares of Subject Stock, the Broker-Dealer of any person that
was to have purchased Shares of Subject Stock in such Auction may deliver to
such person a number of whole Shares of Subject Stock that is less than the
number of Shares of Subject Stock that otherwise was to be purchased by such
person. In such event, the number of Shares of Subject Stock to be so delivered
will be determined by such Broker-Dealer. Delivery of such lesser number of
Shares of Subject Stock will constitute delivery.
CONCERNING THE TRUST COMPANY
The Trust Company is acting as agent for the Company in connection with the
Auctions. In the absence of bad faith or negligence on its part, the Trust
Company will not be liable for any action taken, suffered, or omitted or for any
error of judgment made by it in the performance of its duties under the Trust
Company Agreement and will not be liable for any error of judgment made in good
faith unless the Trust Company shall have been negligent in ascertaining the
pertinent facts.
The Trust Company may upon notice to the Company terminate the Trust Company
Agreement on a date no earlier than the first to occur of (i) the first Business
Day after the date occurring 90 days after the giving of such notice or (ii) the
date on which the Company has entered into an agreement containing substantially
the same terms and conditions as the Trust Company Agreement with a successor
Trust Company. If the Trust Company resigns, the Company will use its best
efforts to enter into an agreement in respect of the Stock of each Series with a
successor Trust Company containing substantially the same terms and conditions
as the Trust Company Agreement. The Company may terminate the Trust Company
Agreement at any time, provided that prior to the termination, the Company shall
have entered into an agreement containing substantially the same terms and
conditions with a successor Trust Company.
BROKER-DEALERS
The Trust Company after each Auction will pay a service charge, from funds
provided by the Company, to each Broker-Dealer which initially will be at the
annual rate of 1/4 of 1% of the purchase price of Shares of Subject Stock placed
by such Broker-Dealer at such Auction. For the purposes of the preceding
sentence, Shares of Subject Stock will be considered as placed by a
Broker-Dealer if the Shares were (i) the subject of Hold Orders deemed to have
been made by Existing Holders and were acquired by such Existing Holders through
that Broker-Dealer or (ii) the subject of the following Orders submitted by that
Broker-Dealer: (A) a Submitted Bid of an Existing Holder that was accepted so
that such Existing Holder continues to hold those Shares of Subject Stock as a
result of the Auction, (B) a Submitted Bid of a Potential Holder that was
accepted so that the Potential Holder purchases those Shares of Subject Stock as
a result of the Auction or (C) a valid Hold Order.
The Broker-Dealer Agreements provide that a Broker-Dealer may submit Orders
in Auctions for its own account, unless the Company notifies all Broker-Dealers
that they may no longer do so. However, in that case, Broker-Dealers may
continue to submit Hold Orders and Sell Orders. Any Broker-Dealer submitting an
Order for its own account in any Auction might have an advantage over other
Bidders in that it would have knowledge of other Orders placed through it in
that Auction, but it would not have knowledge of Orders submitted by other
Broker-Dealers. In the Broker-Dealer Agreements, Broker-Dealers agree to handle
customer orders in accordance with their respective duties
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under applicable securities laws and rules. A Broker-Dealer that is an Affiliate
of the Company may not submit for its own account Bids or Hold Orders in
Auctions.
TAX CONSIDERATIONS
The following discussion of certain U.S. Federal income tax consequences to
holders of Shares of Stock is based upon the provisions of the Code, applicable
Treasury regulations thereunder, judicial authority and administrative rulings
and practice now in effect. Future legislative, judicial or administrative
changes or interpretations, which may or may not be retroactive, could modify
such tax consequences. The Company has not requested, and does not intend to
request, any rulings from the Internal Revenue Service (the "IRS") concerning
the Federal income tax consequences of an investment in Shares of Stock. The
summary below does not discuss all aspects of Federal income taxation that may
be relevant to a particular holder in light of the holders' particular
investment circumstances, or to certain types of holders subject to special
treatment under the Federal income tax laws (for example, dealers in securities,
life insurance companies, tax-exempt entities, and foreign persons), and does
not discuss any aspect of state, local or foreign tax laws.
EACH PROSPECTIVE HOLDER IS ADVISED TO CONSULT WITH ITS OWN TAX ADVISOR
REGARDING THE CONSEQUENCES OF ACQUIRING, HOLDING OR DISPOSING OF SHARES OF STOCK
IN LIGHT OF CURRENT TAX LAWS, THE HOLDER'S PARTICULAR INVESTMENT CIRCUMSTANCES,
AND THE APPLICATION OF STATE, LOCAL AND FOREIGN TAX LAWS.
FEDERAL INCOME TAXES
In the opinion of James M. Kalashian, General Tax Counsel of General
Electric Capital Corporation, tax counsel to the Company, (i) the Shares of
Stock will constitute stock of the Company for Federal income tax purposes, (ii)
distributions on Shares of Stock, to the extent paid out of current or
accumulated earnings and profits of the Company (as calculated for Federal
income tax purposes), will constitute dividends for Federal income tax purposes
and (iii) any beneficial owner of Shares of Stock that is a corporation
otherwise entitled to the 70% dividends-received deduction under Section
243(a)(1) of the Code (the "Dividends-Received Deduction") will be entitled to
the Dividends-Received Deduction with respect to distributions on Shares of
Stock that are treated as dividends of the Company for Federal income tax
purposes. Although in Revenue Ruling 90-27 the IRS determined, among other
things, that the use of a dutch auction similar to the Auction Procedures to
reset the dividend rate on the Stock would not result in preferred stock being
characterized as debt rather than stock, it is possible that the IRS might take
the position that the Shares of Stock constitutes debt rather than stock for
Federal income tax purposes. If this position were upheld, distributions by the
Company to the holders of Shares of Stock would constitute interest income, not
eligible for the Dividends-Received Deduction. It should be noted that opinions
of counsel are not binding on the Service or on the courts and it is possible
that the Service might take positions contrary to the opinions of counsel
expressed herein. In order to enable counsel to render its opinions, the Company
has provided counsel with certain representations upon which the opinion relies.
Corporate holders of Shares of Stock should be aware that Section 246(c) of
the Code disallows the Dividends-Received Deduction in its entirety if the stock
with respect to which the dividend is paid is not held for at least 46 days (91
days in the event dividends are attributable to a period or periods aggregating
in excess of 366 days) (the "Minimum Holding Period"). A holder may not count
towards the Minimum Holding Period any period in which the holder (i) has an
option to sell, is under a contractual obligation to sell or has made (and not
closed) a short sale of the Shares of Stock or substantially identical stock or
securities, (ii) is the grantor of an option to buy (other than a qualified
covered call) such Shares or substantially identical stock or securities or
(iii) has otherwise diminished its risk of loss by holding one or more other
positions with respect to substantially similar or related
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property. Treasury Regulations provide, generally, that a taxpayer has
diminished its risk of loss on stock by holding positions with respect to
substantially similar or related property if, when the positions are entered
into, changes in the fair market value of the stock and the positions are
expected to vary inversely. In addition, positions that reflect the value of
more than one stock may, in certain circumstances, be considered to be
substantially similar or related property that diminishes the risk of loss with
respect to the stock. Furthermore, Section 246(c) of the Code disallows the
Dividends-Received Deduction for a dividend if the holder of the Shares of Stock
is obligated to make related payments with respect to positions in substantially
similar or related property. This disallowance applies even if the Minimum
Holding Period has been met.
Shares of Stock may have Dividend Periods of less than 46 days Holders of
Shares of Stock who are entitled to receive a dividend prior to meeting the
46-day requirement will not be entitled to the Dividends-Received Deduction
unless they ultimately hold their Shares of Stock for at least 46 days.
Furthermore, the IRS may argue that a holder who has elected to retain its
Shares of Stock upon a change in the Dividend Rate and/or the length of the
Dividend Period with respect to such Shares has constructively exchanged its
Shares of Stock for another class of Shares of Stock. Even if the transaction
were so treated, (i) no gain or loss would be recognized by the holder or the
Company, (ii) the Shares of Stock deemed received in the transaction would have
a basis equal to that of the Shares of Stock deemed surrendered and (iii) the
holder would include the holding period of the Shares deemed surrendered in its
holding period of the Shares of Stock deemed received. Thus, a holder would meet
the Minimum Holding Period with respect to dividends received subsequent to such
an exchange if, upon adding the holding period of the shares deemed surrendered
to the holding period of the Shares of Stock deemed received, the sum of such
holding periods were greater than 45 days. It is possible, however, that the
holding period of the Shares of Stock deemed received in the exchange would not
be added to the holding period of the shares deemed surrendered, which might
result in a holding period of less than 46 days for the shares deemed
surrendered by holders prior to satisfying the Minimum Holding Period. Although
there is no authority regarding the application of the holding period provisions
in this situation, counsel is of the opinion that Section 246(c) of the Code is
likely to be construed so as to permit continuation of the holding period for
purposes of the Dividend-Received Deduction with respect to dividends paid on
shares deemed surrendered in such an exchange. This possibility would not affect
the treatment of dividends for periods after the exchange, if the aggregate
holding period, including the holding period of the Shares deemed surrendered in
the exchange, satisfied the 46-day requirement. Prospective investors who intend
to purchase Shares with a Dividend Period of less 46 days should consult their
own tax advisors as to whether the dividend related to a Dividend Period that is
shorter than the Minimum Holding Period will ultimately qualify for the
Dividends-Received Deduction where such investor holds such Shares, in total,
for at least 46 days.
Section 246A of the Code provides for the reduction or elimination of the
Dividends-Received Deduction where a corporation has indebtedness "directly
attributable to investment" in portfolio stock, such as Shares of Stock.
In addition, corporate holders should be aware that dividend income that is
not subject to regular corporate taxation as a consequence of the
Dividends-Received Deduction may give rise to alternative minimum tax liability.
Under Section 1059 of the Code, a corporate holder that disposes of Shares
of Stock may be required to reduce its tax basis in such Stock (but not below
zero) by the "nontaxed portion" of any "extraordinary dividend" it receives from
the Company with respect to such Stock, if it has not held the underlying Stock
for more than two years (or without regard to holding period in the case of
preferred stock structured to avoid application of Section 1059) before the
dividend announcement date (i.e., the date on which the Company declares,
announces, or agrees to either the amount or the payment of the dividend,
whichever is earliest). Extraordinary dividends are determined by reference to
tax basis (as adjusted for prior distributions) or, if the taxpayer elects, by
reference to the fair market value of the
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Shares of Stock as of the day before the ex-dividend date (provided the taxpayer
can establish the fair market value to the satisfaction of the IRS). A dividend
payment generally will be extraordinary if it equals or exceeds 5% of tax basis
(as adjusted) or fair market value, as the case may be. Dividends paid that have
ex-dividend dates within 85 consecutive days are treated as one distribution, as
are dividends paid that have ex-dividend dates within 365 consecutive days if
the aggregate dividends exceed 20% of tax basis (as adjusted) or fair market
value, as the case may be.
The "nontaxed portion" of the dividend generally is equal to the
Dividends-Received Deduction. The reduction in basis will increase any gain (or
reduce the amount of any loss) realized by the holder on a sale, redemption or
other disposition of Shares of Stock. In addition, if the reduction would exceed
tax basis (as adjusted) but for the limitation that basis cannot be reduced
below zero, the amount of such excess will be taxable at the time of the
disposition as gain from the sale or exchange of Shares of Stock. The basis
reduction is only for purposes of determining gain or loss on disposition of the
Shares of Stock, and whether subsequent distributions are extraordinary.
To the extent that distributions are made by the Company to the holders of
Shares of Stock that do not constitute dividends for Federal income tax purposes
because they exceed current and accumulated earnings and profits of the Company,
such distributions will be treated for Federal income tax purposes as a return
of capital, which will first reduce the holder's basis in the Shares of Stock by
the amount of such excess and then, to the extent such distributions are in
excess of the holder's basis, result in short-or long-term capital gain
(provided the Shares of Stock are held by the holder as a capital asset).
STATE AND LOCAL INCOME TAXES
The holders of Shares of Stock may be liable for state and local income
taxes with respect to dividends paid on Shares of Stock. As many states and
localities may not allow, in whole or in part, a Dividends-Received Deduction to
corporations, each prospective purchaser of Shares of Stock is advised to
consult its own tax advisor in regard to state and local taxes.
UNDERWRITING
From time to time, the Company may receive, and may solicit, offers from
underwriters to purchase all or a part of any Series of Stock, to be reoffered
to the public through underwriting syndicates led by one or more managing
underwriters or through one or more underwriters acting alone or otherwise. The
managing underwriter or underwriters, if any, with respect to the offer and sale
of any Series of Stock to which the Prospectus Supplement accompanying this
Prospectus relates are set forth in such Prospectus Supplement and the members
of the underwriting syndicate, if any, are named in such Prospectus Supplement.
The Company will execute an underwriting agreement (the "Underwriting
Agreement") with any such underwriters at the time of sale to them and the names
of the underwriters and the terms of the transaction will be set forth in the
Prospectus Supplement, which will be used by the underwriters to make resales of
any Series of Stock in respect of which this Prospectus is delivered to the
public. Such Prospectus Supplement also will state the discounts and
commissions, if any, to be allowed or paid to the underwriters by the Company,
and describe all other items, if any, constituting underwriting compensation,
the discounts and commissions to be allowed or paid to dealers, if any, and the
exchanges, if any, on which application will be made to list any Series of
Stock.
The relevant Underwriting Agreement will provide that the obligations of the
underwriters are subject to certain conditions precedent, and the Company will
agree, under the Underwriting Agreement, to indemnify the underwriters against
certain civil liabilities, including liabilities under the Securities Act of
1933.
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LEGAL OPINIONS
Except as may be otherwise specified in the Prospectus Supplement
accompanying this Prospectus, the legality of the Stock 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 Bruce C. Bennett, Associate
General Counsel, Treasury Operation and Assistant Secretary of the Company; and
for any underwriters by Davis Polk & Wardwell, 450 Lexington Avenue, New York,
New York 10017. Messrs. Kloster and Bennett and James M. Kalashian (who is
referred to under "Tax Considerations"), together with members of their
families, own, have options to purchase and have other interests in shares of
common stock of GE Company.
EXPERTS
The financial statements and schedules of General Electric Capital
Corporation and consolidated affiliates as of December 31, 1994 and 1993 and for
each of the years in the three-year period ended December 31, 1994, appearing in
the Company's Annual Report on Form 10-K for the year ended December 31, 1994,
incorporated by reference herein, have been incorporated herein by reference in
reliance upon the report of KPMG Peat Marwick LLP, independent certified public
accountants, incorporated by reference herein and upon the authority of said
firm as experts in accounting and auditing. The report of KPMG Peat Marwick LLP
covering the December 31, 1994 financial statements refers to a change in 1993
in the method of accounting for investments in certain securities.
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APPENDIX A
GLOSSARY OF TERMS
"Affiliate" shall mean any Person known to the Trust Company to be
controlled by, in control of or under common control with the Company.
"Agent Member" shall mean the member of the Stock Depository that will act
on behalf of a Bidder and is identified as such in such Bidder's Master
Purchaser's Letter.
"Applicable Determining Rate" shall mean with respect to a Dividend Period
of seven days to 89 days, the Effective Composite Commercial Paper Rate; with
respect to a Dividend Period of 90 days to 364 days, the Effective LIBOR Rate;
with respect to a Dividend Period of two years to 10 years, the U.S. Treasury
Note Rate; and with respect to a Dividend Period in excess of 10 years, the U.S.
Treasury Bond Rate.
"Auction" shall mean the periodic implementation of the Auction Procedures.
"Auction Date" shall mean the Business Day immediately preceding the first
day of a Dividend Period for Stock.
"Auction Method" shall mean a method of determining Dividend Periods and
Dividend Rates for the Shares of Stock of a Series pursuant to the Auction
Procedures, as described in this Prospectus.
"Auction Procedures" shall mean the procedures for conducting Auctions set
forth in Appendix B to this Prospectus.
"Available Shares" shall have the meaning specified in paragraph (a) of
Section 3 of the Auction Procedures.
"Bid" and "Bids" shall have the respective meanings specified in paragraph
(a) of Section 1 of the Auction Procedures.
"Bidder" and "Bidders" shall have the respective meanings specified in
paragraph (a) of Section 1 of the Auction Procedures.
"Broker-Dealer" shall mean any broker-dealer, or other entity permitted by
law to perform the function required of a Broker-Dealer in the Auction
Procedures, that is a member of, or a participant in, the Stock Depository, and
that has been selected by the Company and has entered into a Broker-Dealer
Agreement with the Trust Company that remains effective.
"Broker-Dealer Agreement" shall mean an agreement between the Trust Company
and Broker-Dealer pursuant to which such Broker-Dearler agrees to follow the
Auction Procedures.
"Business Day" shall mean a day on which the New York Stock Exchange, Inc.,
is open for trading and which is neither a Saturday, Sunday nor other day on
which banks in the City of New York, New York, are authorized by law to close.
"Cede" shall mean Cede & Co.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Common Stock" shall mean the shares of Common Stock, par value of $200 per
share, of the Company.
"Company" shall mean General Electric Capital Corporation, a New York
corporation.
"Date of Original Issue" shall mean, as to any Share of Stock, the date on
which the Company initially issues such Share.
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"Dividend Payment Date" shall mean, with respect to each Share of Stock, the
last day of each Dividend Period applicable thereto, regardless of its length,
and, in addition, in the case of Dividend Periods of more than 99 days, on the
following additional dates: (a) if such Dividend Period is from 100 to 190 days,
on the 91st day; (b) if such Dividend Period is from 191 to 281 days, on the
91st and 182nd days; (c) if such Dividend Period is from 282 to 364 days, on the
91st, 182nd and 273rd days; and (d) if such Dividend Period is from two to 30
years, on January 15, April 15, July 15 and October 15 of each year; provided,
however, that in all such cases, if such date is not a Business Day, the
Dividend Payment Date will be the Business Day next succeeding such date.
"Dividend Period" and "Dividend Periods" shall mean, as to each Share of
Stock, each period with respect to which dividends on such Share accumulate and
are payable, each such dividend period to be determined pursuant to the Auction
Method.
"Dividend Rate" and "Dividend Rates" shall mean, as to each Share of Stock,
each rate at which dividends accumulate and are payable on such Share, such
dividend rate to be determined pursuant to the Auction Method.
"Dividends-Received Deduction" shall mean the deduction that a corporation
is entitled to under Section 243(a)(1) of the Code with respect to distributions
made on Shares of Stock that are treated as dividends for Federal income tax
purposes provided that the minimum holding period in Section 246 of the Code and
other requirements applicable to the particular holder are met.
"DTC" shall mean The Depository Trust Company.
"Effective Composite Commercial Paper Rate" shall mean, on any date, (i) the
Money Market Yield of the rate on commercial paper placed on behalf of issuers
whose corporate bonds are rated "AA" by Standard & Poor's or "Aa" by Moody's or
the equivalent of such rating by another nationally recognized rating agency,
for a maturity that equals the duration of the relevant Dividend Period as such
rate is made available on a discount basis or otherwise by the Federal Reserve
Bank of New York on such date, or (ii) in the event that the Federal Reserve
Bank of New York does not make available such a rate by 2:00 p.m., New York City
time, on such date, the Money Market Yield of the arithmetic mean of the rates
on commercial paper of such maturity placed on behalf of such issuers, as quoted
on a discount basis or otherwise by Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Goldman Sachs & Co., and Lehman Commercial Paper Incorporated, or,
in lieu of any thereof, their respective affiliates or successors that are
commercial paper dealers (the "Commercial Paper Dealers"), to the Trust Company
or Tender Agent, as the case may be, for the close of business on the Business
Day immediately preceding such date. In the event that the Federal Reserve Bank
of New York does not make available such a rate and if any Commercial Paper
Dealer does not quote a rate required to determine the Effective Composite
Commercial Paper Rate, the Effective Composite Commercial Paper Rate shall be
determined on the basis of the quotation or quotations furnished by the
remaining Commercial Paper Dealer or Commercial Paper Dealers and any Substitute
Commercial Paper Dealer or Substitute Commercial Paper Dealers selected by the
Company to provide such rate or rates not being supplied by any Commercial Paper
Dealer or Commercial Paper Dealers, as the case may be, or, if the Company does
not select any such Substitute Commercial Paper Dealer or Substitute Commercial
Paper Dealers, by the remaining Commercial Paper Dealer or Commercial Paper
Dealers. "Substitute Commercial Paper Dealers" shall mean The First Boston
Corporation or Morgan Stanley & Co. Incorporated or, in lieu of either thereof,
their respective affiliates or successors that are commercial paper dealers. In
the event that no quoted rates are available for a maturity that equals the
duration of the relevant Dividend Period, then the rate will be the higher of
the quoted rates for the maturity immediately shorter or immediately longer than
the duration of the relevant Dividend Period.
"Effective LIBOR Rate" shall mean, on any date, the offered rates for
deposits in dollars for a period of the same duration as the relevant Dividend
Period, which appear on the Reuters Screen LIBO Page as of 11:00 a.m., London
time, on such date. If at least two such offered rates appear on the Reuters
Screen LIBO Page, the Effective LIBOR Rate in respect of such date will be the
arithmetic
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mean of such offered rates. If fewer than two offered rates appear, the
Effective LIBOR Rate in respect of such date will be determined on the basis of
the rates quoted to the Trust Company at which deposits in dollars are offered
by the Reference Banks at approximately 11:00 a.m., London time, on the day that
is the Business Day preceding such date to prime banks in the London interbank
market for a period of the same duration as the relevant Dividend Period. The
Company will request the principal London office of each of the Reference Banks
to provide a quotation of such rate to the Trust Company. If at least two such
quotations are provided, the Effective LIBOR Rate in respect of such date will
be the arithmetic mean of the quotations. If fewer than two quotations are
provided as requested, the Effective LIBOR Rate in respect of such date will be
the arithmetic mean of the rates quoted to the Trust Company by major banks in
New York City, selected by the Company, at approximately 11:00 a.m., New York
City time, on such date for loans in dollars to leading European banks for a
period of the same duration as the relevant Dividend Period. "Reference Banks"
means four major banks in the London interbank market, selected by the Company.
In the event that no quoted rates are available for a maturity that equals the
duration of the relevant Dividend Period, then the rate will be the higher of
the quoted rates for the maturity immediately shorter or immediately longer than
the duration of the relevant Dividend Period.
"Existing Holder" shall mean, when used with respect to Shares of Stock, a
Person who has signed a Master Purchaser's Letter and is listed as the
beneficial owner of such Shares of such Series of Stock in the records of the
Trust Company.
"Federal Funds Rate" shall mean, on any date (i) the overnight Federal funds
rate as such rate is made available by the Federal Reserve Bank of New York or
(ii) in the event that the Federal Reserve Bank of New York does not make
available such a rate by 2:00 p.m., New York City time, on any day, then the
arithmetic mean of the rates for the last transaction in overnight Federal funds
arranged by each of the three leading brokers of Federal funds transactions in
New York City as selected by the Company prior to 9:00 a.m., New York City time,
on that day.
"GE Capital Services" shall mean General Electric Capital Services, Inc., a
Delaware corporation.
"GE Company" shall mean General Electric Company, a New York corporation.
"Hold Order" and "Hold Orders" shall have the respective meanings specified
in paragraph (a) of Section 1 of the Auction Procedures.
"Initial Dividend Period" shall mean, for each Share, the initial Dividend
Period applicable to such Shares.
"IRS" shall mean the Internal Revenue Service.
"Master Purchaser's Letter" shall mean a letter addressed to the Company,
the Trust Company and an Agent Member in which a Person agrees that if such
Person should offer to purchase, purchase, offer to sell and/or sell Shares of a
Series of Stock, such Person will be bound by the Auction Procedures.
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"Maximum Rate" shall mean, on any date, with respect to any Share of Stock,
the percentage (determined as set forth below based on the prevailing rating of
such Share of Stock in effect at the close of business on the Business Day
immediately preceding such date and on the duration of the relevant Dividend
Period) of the Applicable Determining Rate for such Share on such date;
provided, however, that during the continuance of a Payment Failure the
applicable percentage shall be 200%:
<TABLE><CAPTION>
FOR DIVIDEND PERIODS FOR DIVIDEND PERIODS
PREVAILING RATING OF LESS THAN ONE YEAR OF TWO YEARS OF MORE
- ------------------------------------- --------------------- --------------------
<S> <C> <C>
AA/Aa or above....................... 110% 125%
A/A.................................. 125% 140%
BBB/Baa.............................. 150% 175%
Below BBB/Baa........................ 200% 225%
</TABLE>
For purposes of this definition, the "prevailing rating" of each Series of the
Stock shall be (i) AA/Aa or above, if the Shares of Stock have a rating of AA-
or better by Standard & Poor's and Aa3 or better by Moody's or the equivalent of
both of such ratings by a substitute rating agency or agencies selected as
provided below, (ii) if not AA/Aa or above, then A/A if the Shares of each
Series of the Stock have a rating of A- or better by Standard & Poor's and A3 or
better and by Moody's or the equivalent of both of such ratings by a substitute
rating agency or agencies selected as provided below, (iii) if not AA/Aa or
above or A/A, then BBB/Baa if the Shares of each Series of the Stock have a
rating BBB- or better by Standard & Poor's and Baa3 or better by Moody's or the
equivalent of both of such ratings by a substitute rating agency or agencies
selected as provided below, and (iv) if not AA/Aa or above, A/A or BBB/Baa, then
below BBB/Baa. The Company will take all reasonable action necessary to enable
Standard & Poor's and Moody's to provide a rating for each Series of the Stock.
If either Standard & Poor's or Moody's fails to make such a rating available,
the Company will select one or two nationally recognized securities rating
agencies to act as a substitute rating agency or agencies, as the case may be.
"Money Market Yield" shall mean, with respect to any rate that is quoted on
a bank discount basis, a yield (expressed as a percentage) calculated in
accordance with the following formula:
D x 360
Money Market Yield = --------------- x 100
360 - (D x M)
where "D" refers to the per annum rate, quoted on a bank discount basis and
expressed as a decimal; and "M" refers to the number of days for which such
discount rate is quoted.
"Moody's" shall mean Moody's Investor Services, Inc. and its successors.
"1986 Act" shall mean the Tax Reform Act of 1986, as amended.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended.
"Order" and "Orders" shall have the respective meanings specified in
paragraph (a) of Section 2 of the Auction Procedures.
"Organization Certificate" shall mean the Organization Certificate of the
Company, as amended and restated to the date hereof.
"Outstanding" shall mean, as of any date, Shares of a Series of Stock
theretofore issued by the Company except (i) any Shares of such Series of Stock
theretofore cancelled or delivered for cancellation or redeemed by the Company
or as to which a notice of redemption shall have been given by the Company, (ii)
any Shares of such Series of Stock as to which the Company or any Affiliate
thereof shall be an owner (except that any Shares acquired by an Affiliate that
is a Broker-Dealer and that acquired such Shares in the normal course of its
business shall be deemed to be Outstanding), or (iii) any Shares of such Series
of Stock represented by any certificate in lieu of which a new certificate has
been executed and delivered by the Company.
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"Paying Agent" shall mean a bank or trust company duly appointed as such
Paying Agent.
"Payment Failure" shall mean that the Company shall fail to pay: (i) all
dividends in respect of any Share of Stock which have accumulated during any
Dividend Period applicable to such Share by no later than the third Business Day
following the last day of such Dividend Period or (ii) the redemption price in
respect of Shares of Stock called for redemption on the date when due if, in
each such case, such failure shall continue unremedied.
"Person" shall mean and include an individual, a partnership, a corporation,
a trust, an unincorporated association, a joint venture or other entity or a
government or any agency or political subdivision thereof.
"Potential Holder" shall mean any Person, including any Existing Holder, (i)
who shall have executed a Master Purchaser's Letter and (ii) who may be
interested in acquiring Shares of Stock of such Series (or, in the case of an
Existing Holder, additional Shares of Stock of such Series).
"Sell Order" and "Sell Orders" shall have the respective meanings specified
in paragraph (a) of Section 1 of the Auction Procedures.
"Series" shall mean a series of Stock.
"Shares" shall mean the shares of Stock.
"Standard & Poor's" shall mean Standard & Poor's Corporation and its
successors.
"Stock" shall mean the Variable Cumulative Preferred Stock of the Company.
"Stock Depository" shall mean The Depository Trust Company and its
successors or any other securities depository selected by the Company which
agrees to follow the procedures required to be followed by such securities
depository in connection with Shares of Stock.
"Subject Stock" shall mean, with respect to any Auction Date, the Shares of
Stock subject to Auction on such date.
"Submission Deadline" shall mean 1:00 p.m., New York City time, on any
Auction Date or such other time on any Auction Date by which Broker-Dealers are
required to submit Orders to the Trust Company as specified by the Trust Company
from time to time.
"Submitted Bid" and "Submitted Bids" shall have the respective meanings
specified in paragraph (a) of Section 3 of the Auction Procedures.
"Submitted Hold Order" and "Submitted Hold Orders" shall have the respective
meanings specified in paragraph (a) of Section 3 of the Auction Procedures.
"Submitted Order" and "Submitted Orders" shall have the respective meanings
specified in paragraph (a) of Section 3 of the Auction Procedures.
"Submitted Sell Order" and "Submitted Sell Orders" shall have the respective
meanings specified in paragraph (a) of Section 3 of the Auction Procedures.
"Subsequent Dividend Period" and "Subsequent Dividend Periods" shall mean,
for each Share of Stock, each Dividend Period applicable thereto other than the
Initial Dividend Period applicable thereto.
"Sufficient Clearing Bids" shall have the meaning specified in paragraph (a)
of Section 3 of the Auction Procedures.
"Trust Company" shall mean a bank or trust company duly appointed as such.
"Underwriting Agreement" shall mean the underwriting agreement among the
Company and the underwriters of the Shares of Stock.
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<PAGE>
"U.S. Treasury Bond Rate" shall mean on any date (i) the yield as calculated
by reference to the bid price quotation of the actively traded, current coupon
Treasury Bond with a remaining maturity most nearly comparable to 30 years from
such date, as such bid price quotation is published on the Business Day
immediately preceding such date by the Federal Reserve Bank of New York in its
Composite 3:30 P.M. Quotations for U.S. Government Securities report for such
Business Day, or (ii) if such yield as so calculated is not available, the
Alternate Treasury Bond Rate on such date. "Alternate Treasury Bond Rate" on any
date means the yield as calculated by reference to the arithmetic average of the
bid price quotations of the actively traded, current coupon Treasury Bond with a
remaining maturity most nearly comparable to 30 years from such date, as
determined by bid price quotations as of any time on the Business Day
immediately preceding such date, obtained by the Trust Company from at least
three recognized primary U.S. Government securities dealers selected by the
Company.
"U.S. Treasury Note Rate" shall mean, on any date, (i) the yield as
calculated by reference to the bid price quotation of the actively traded,
current coupon Treasury Note with a maturity most nearly comparable to the
length of the related Dividend Period, as such bid price quotation is published
on the Business Day immediately preceding such date by the Federal Reserve Bank
of New York in its Composite 3:30 P.M. Quotations for U.S. Government Securities
report for such Business Day, or (ii) if such yield as so calculated is not
available, the Alternate Treasury Note Rate on such date. "Alternate Treasury
Note Rate" on any date means the yield as calculated by reference to the
arithmetic average of the bid price quotations of the actively traded, current
coupon Treasury Note with a maturity most nearly comparable to the length of the
related Dividend Period, as determined by bid price quotations as of any time on
the Business Day immediately preceding such date, obtained by the Trust Company
from at least three recognized primary U.S. Government securities dealers
selected by the Company.
"Winning Bid Rate" shall have the meaning specified in paragraph (a) of
Section 3 of the Auction Procedures.
A-6
<PAGE>
APPENDIX B
AUCTION PROCEDURES
The following Procedures will be set forth in the Organization Certificate
relating to the Subject Stock of each Series. The terms not defined below (and
referred to as defined in the Organization Certificate) are defined in Appendix
A to this Prospectus.
1. Orders by Existing Holders and Potential Holders in an Auction.
(a) On or prior to the Submission Deadline on each Auction Date:
(i) each Existing Holder may submit to a Broker-Dealer information as
to:
(A) the number of Outstanding Shares of Subject Stock, if any, held
by such Existing Holder which such Existing Holder desires to continue to
hold for the next succeeding Dividend Period without regard to the rate
determined by the Auction Procedures for the next succeeding Dividend
Period;
(B) the number of Outstanding Shares of Subject Stock, if any, that
such Existing Holder desires to continue to hold for the next succeeding
Dividend Period if the rate determined by the Auction Procedures shall
not be less than the rate per annum specified by such Existing Holder;
and/or
(C) the number of Outstanding Shares of Subject Stock, if any, held
by such Existing Holder which such Existing Holder offers to sell without
regard to the rate determined by the Auction Procedures for the next
succeeding Dividend Period; and
(ii) one or more Broker-Dealers shall in good faith for the purpose of
conducting a competitive Auction in a commercially reasonable manner,
contact Potential Holders, including Persons that are not Existing Holders,
by telephone or otherwise to determine the number of Shares of Subject
Stock, if any, which each such Potential Holder offers to purchase, provided
that the rate determined by the Auction Procedures for the next succeeding
Dividend Period shall not be less than the rate per annum specified by such
Potential Holder.
For the purposes hereof, the communication to a Broker-Dealer of information
referred to in clause (i)(A), (i)(B), (i)(C) or (ii) of this paragraph (a) is
hereinafter referred to as an "Order" and collectively as "Orders" and each
Existing Holder and each Potential Holder placing an Order is hereafter referred
to as a "Bidder" and collectively as "Bidders"; and Order containing the
information referred to in clause (i)(A) of this paragraph (a) is hereafter
referred to as a "Hold Order" and collectively as "Hold Orders"; an Order
containing the information referred to in clause (i)(B) or (ii) of this
paragraph (a) is hereinafter referred to as a "Bid" and collectively as "Bids";
and an Order containing the information referred to in clause (i)(C) of this
paragraph (a) is hereafter referred to as a "Sell Order" and collectively as
"Sell Orders."
(b) (i) A Bid by an Existing Holder shall constitute an irrevocable offer to
sell:
(A) the number of Outstanding Shares of Subject Stock specified in such
Bid if the rate determined by the Auction Procedures on such Auction Date
shall be less than the rate specified therein; or
(B) such number or a lesser number of Outstanding Shares of Subject
Stock to be determined as set forth in subparagraph (a)(iv) of Section 4
hereof if the rate determined by the Auction Procedures on such Auction Date
shall be equal to the rate specified therein; or
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(C) a lesser number of Outstanding Shares of Subject Stock to be
determined as set forth in subparagraph (b)(iii) of Section 4 hereof if the
rate specified therein shall be higher than the Maximum Rate and Sufficient
Clearing Bids do not exist.
(ii) A Sell Order by an Existing Holder shall constitute an irrevocable
offer to sell:
(A) the number of Outstanding Shares of Subject Stock specified in such
Sell order,
or
(B) such number or a lesser number of Outstanding Shares of Subject
Stock as set forth in subparagraph (b)(iii) of Section 4 hereof if
Sufficient Clearing Bids do not exist.
(iii) A Bid by a Potential Holder shall constitute an irrevocable offer to
purchase:
(A) the number of Outstanding Shares of Subject Stock specified in such
Bid if the rate determined by the Auction Procedures on such Auction Date
shall be higher than the rate specified therein; or
(B) such number or a lesser number of Outstanding Shares of Subject
Stock as set forth in subparagraph (a)(v) of Section 4 hereof if the rate
determined by the Auction Procedures on such Auction Date shall be equal to
the rate specified therein.
2. Submission of Orders by Broker-Dealers to Trust Company.
(a) Each Broker-Dealer shall submit in writing to the Trust Company prior to
the Submission Deadline on each Auction Date all Orders obtained by such
Broker-Dealer and specify with respect to each Order:
(i) the name of the Bidder placing such Order;
(ii) the aggregate number of Shares of Subject Stock that are the
subject of such Order;
(iii) to the extent that such Bidder is an Existing Holder:
(A) the number of Shares of Subject Stock, if any, subject to any
Hold Order;
(B) the number of Shares of Subject Stock, if any, subject to any Bid
and the rate specified in such Bid; and
(C) the number of Shares of Subject Stock, if any, subject to any
Sell Order; and
(iv) to the extent such Bidder is a Potential Holder, the rate specified
in such Potential Holder's Bid.
(b) If any rate specified in any Bid contains more than three figures to the
right of the decimal point, the Trust Company shall round such rate up to the
next highest one thousandth (.001 of 1%).
(c) If an Order or Orders covering all of the Outstanding Shares of Subject
Stock held by any Existing Holder is or are not submitted for any reason to the
Trust Company prior to the Submission Deadline, the Trust Company shall deem a
Hold Order to have been submitted on behalf of such Existing Holder covering the
number of Outstanding Shares of Subject Stock held by such Existing Holder and
not subject to Orders submitted to the Trust Company, except that a Sell Order
will be deemed to have been submitted on behalf of an Existing Holder if an
Order is not submitted on behalf of such Existing Holder in the case of an
Auction for a Dividend Period which differs in duration by more than seven days
from the preceding Dividend Period or an Auction for a Dividend Period of two
years or more.
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<PAGE>
(d) If one or more Orders covering in the aggregate more than the number of
Outstanding Shares of Subject Stock held by any Existing Holder are submitted to
the Trust Company, such Orders shall be considered valid as follows and in the
following order of priority:
(i) all Hold Orders shall be considered valid, but only up to and
including in the aggregate the number of Shares of Subject Stock held by
such Existing Holder, and, if the number of Shares of Subject Stock subject
to such Hold Orders exceeds the number of Shares of Subject Stock held by
such Existing Holder, the number of Shares of Subject Stock subject to each
such Hold Order shall be reduced pro rata to cover the number of Shares of
Subject Stock held by such Existing Holder;
(ii) (A) any Bid shall be considered valid up to and including the
excess of the number of Outstanding Shares of Subject Stock held by such
Existing Holder over the number of Shares of Subject Stock subject to any
Hold Order referred to in subparagraph (i) above,
(B) subject to clause (A), if more than one Bid with the same rate is
submitted on behalf of such Existing Holder and the number of Shares of
Subject Stock subject to such Bids is greater than such excess, such Bids
shall be considered valid up to the amount of such excess, and the number of
Shares of Subject Stock subject to each Bid with the same rate shall be
reduced pro rata to cover the number of Shares of Subject Stock equal to
such excess,
(C) subject to clause (A), if more than one Bid with different rates is
submitted on behalf of such Existing Holder, such Bids shall be considered
valid in the ascending order of their respective rates up to the amount of
such excess, and
(D) in any such event the number, if any, of such Shares of Subject
Stock subject to Bids not valid under this subparagraph (ii) shall be
treated as the subject of a Bid by a Potential Holder; and
(iii) all Sell Orders shall be considered valid but only up to and
including in the aggregate the excess of the number of Outstanding Shares of
Subject Stock held by such Existing Holder over the sum of the Shares of
Subject Stock subject to Hold Orders referred to in subparagraph (i) and
valid Bids by Existing Holders referred to in subparagraph (ii) above.
(e) If more than one bid is submitted on behalf of any Potential Holder,
each Bid submitted shall be a separate Bid with the rate therein specified.
3. Determination of Sufficient Clearing Bids, Winning Bid Rate and Dividend
Rate.
(a) Not earlier than the Submission Deadline on each Auction Date, the Trust
Company shall assemble all Orders submitted or deemed submitted to it by
Broker-Dealers (each such Order as submitted or deemed submitted by a
Broker-Dealer being hereinafter referred to individually as a "Submitted Hold
Order," a "Submitted Bid" or a "Submitted Sell Order," as the case may be, or as
a "Submitted Order" and collectively as "Submitted Hold Orders," "Submitted
Bids" or "Submitted Sell Orders," as the case may be, or as "Submitted Orders")
and shall determine:
(i) the excess of the total number of Outstanding Shares of Subject
Stock over the number of Outstanding Shares of Subject Stock that are the
subject of Submitted Hold Orders (such excess being hereinafter referred to
as the "Available Shares");
(ii) from the Submitted Orders whether the number of Outstanding Shares
of Subject Stock that are the subject of Submitted Bids by Potential Holders
specifying one or more rates equal to or lower than the Maximum Rate exceeds
or is equal to the sum of:
(A) the number of Outstanding Shares of Subject Stock that are the
subject of Submitted Bids by Existing Holders specifying one or more
rates higher than the Maximum Rate, and
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<PAGE>
(B) the number of Outstanding Shares of Subject Stock that are
subject to Submitted Sell Orders
(in the event of such excess or such equality other than because
the number of Shares of Subject Stock in clauses (A) and (B) above is
zero because all of the Outstanding Shares of Subject Stock are the
subject of Submitted Hold Orders, such Submitted Bids in clause (ii)
above being hereinafter referred to collectively as "Sufficient
Clearing Bids"); and
(iii) if Sufficient Clearing Bids exist, the lowest rate specified in
the Submitted Bids (the "Winning Bid Rate") which if:
(A) (i) each Submitted Bid from Existing Holders specifying such
lowest rate and (ii) all other Submitted Bids from Existing Holders
specifying lower rates were accepted, thus entitling such Existing
Holders to continue to hold the Shares of Subject Stock that are the
subject of such Submitted Bids, and
(B) (i) each Submitted Bid from Potential Holders specifying such
lowest rate and (ii) all other Submitted Bids from Potential Holders
specifying lower rates were accepted, thus entitling the Potential
Holders to purchase the Shares of Subject Stock that are the subject of
those Submitted Bids,
would result in such Existing Holders described in clause (A) continuing to
hold an aggregate number of Outstanding Shares of Subject Stock which, when
added to the number of Outstanding Shares of Subject Stock to be purchased
by such Potential Holders described in clause (B) would equal not less than
the Available Shares.
(b) Promptly after the Trust Company has made the determinations pursuant to
paragraph (a) of this Section 3, the Trust Company shall advise the Company of
the Applicable Determining Rate and the Maximum Rate and, based on such
determinations, the Dividend Rate for the next succeeding Dividend Period as
follows:
(i) if Sufficient Clearing Bids exist, that the Dividend Rate for the
next succeeding Dividend Period shall be equal to the Winning Bid Rate so
determined;
(ii) if Sufficient Clearing Bids do not exist (other than because all of
the Outstanding Shares of Subject Stock of a Series are the subject of
Submitted Hold Orders), that the Dividend Rate for the next succeeding
Dividend Period shall be the Maximum Rate; or
(iii) if all of the Outstanding Shares of Subject Stock are the subject
of Submitted Hold Orders, that the Dividend Rate for the next succeeding
Dividend Period shall be equal to 58% of the Applicable Determining Rate.
4. Acceptance and Rejection of Submitted Bids and Submitted Sell Orders and
Allocation of Shares in an Auction. Based on the determinations made pursuant to
paragraph (a) of Section 3 hereof the Submitted Bids and Submitted Sell Orders
shall be accepted or rejected and the Trust Company shall take such other action
as set forth below:
(a) if Sufficient Clearing Bids have been made, subject to the
provisions of paragraphs (c) and (d) of this Section 4, Submitted Bids and
Submitted Sell Orders shall be accepted or rejected as follows in the
following order of priority and all other Submitted Bids shall be rejected:
(i) the Submitted Sell Orders of Existing Holders shall be accepted
and the Submitted Bids of each of the Existing Holders specifying any
rate that is higher than the Winning Bid Rate shall be rejected, thus
requiring each such Existing Holder to sell the Shares of Subject Stock
that are the subject of such Submitted Bids;
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<PAGE>
(ii) the Submitted Bids of each of the Existing Holders specifying
any rate that is lower than the Winning Bid Rate shall be accepted, thus
entitling each such Existing Holder to continue to hold the Shares of
Subject Stock that are the subject of such Submitted Bids;
(iii) the Submitted Bids of each of the Potential Holders specifying
any rate that is lower than the Winning Bid Rate shall be accepted;
(iv) the Submitted Bids of each of the Existing Holders specifying a
rate that is equal to the Winning Bid Rate shall be accepted, thus
entitling each such Existing Holder to continue to hold the Shares of
Subject Stock that are the subject of such Submitted Bids, unless the
number of Outstanding Shares of Subject Stock subject to all such
Submitted Bids shall be greater than the number of Shares ("Remaining
Shares") equal to the excess of the Available Shares over the number of
Shares of Subject Stock subject to Submitted Bids described in
subparagraphs (ii) and (iii) of this paragraph (a), in which event the
Submitted Bids of each such Existing Holder shall be rejected, and each
such Existing Holder shall be required to sell Shares of Subject Stock,
but only in an amount equal to the difference between (A) the number of
Outstanding Shares of Subject Stock then held by such Existing Holder
subject to such Submitted Bids and (B) the number of Shares of Subject
Stock obtained by multiplying the number of Remaining Shares by a
fraction the numerator of which shall be the number of Outstanding Shares
of Subject Stock held by such Existing Holder subject to such Submitted
Bids and the denominator of which shall be the sum of the number of
Outstanding Shares of Subject Stock subject to such Submitted Bids made
by all such Existing Holders that specified a rate equal to the Winning
Bid Rate; and
(v) the Submitted Bids of each of the Potential Holders specifying a
rate that is equal to the Winning Bid Rate shall be accepted but only in
an amount equal to the number of Shares of Subject Stock obtained by
multiplying the difference between the Available Shares and the number of
Shares of Subject Stock subject to Submitted Bids described in
subparagraphs (ii), (iii) and (iv) of this paragraph (a) by a fraction
the numerator of which shall be the number of Outstanding Shares of
Subject Stock subject to such Submitted Bids and the denominator of which
shall be the sum of the number of Outstanding Shares of Subject Stock
subject to such Submitted Bids made by all such Potential Holders that
specified a rate equal to the Winning Bid Rate.
(b) If Sufficient Clearing Bids have not been made (other than because
all of the Outstanding Shares of Subject Stock are subject to Submitted Hold
Orders), subject to the provisions of paragraphs (c) and (d) of this Section
4, Submitted Orders shall be accepted or rejected as follows in the
following order of priority and all other Submitted Bids shall be rejected:
(i) the Submitted Bids of each Existing Holder specifying any rate
that is equal to or lower than the Maximum Rate shall be accepted, thus
entitling such Existing Holder to continue to hold the Shares of Subject
Stock that are the subject of such Submitted Bids;
(ii) the Submitted Bids of each Potential Holder specifying any rate
that is equal to or lower than the Maximum Rate shall be accepted; and
(iii) the Submitted Bids of each Existing Holder specifying any rate
that is higher than the Maximum Rate shall be rejected and the Submitted
Sell Orders of each Existing Holder shall be accepted, in both cases only
in an amount equal to the difference between (A) the number of
Outstanding Shares of Subject Stock then held by such Existing Holder
subject to such Submitted Bids or Submitted Sell Orders and (B) the
number of Shares of Subject Stock obtained by multiplying the difference
between the Available Shares and the aggregate number of Shares of
Subject Stock subject to Submitted Bids described in subparagraphs (i)
and (ii) of this paragraph (b) by a fraction the numerator of which shall
be the number of
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Outstanding Shares of Subject Stock held by such Existing Holder subject
to such Submitted Bids or Submitted Sell Orders and the denominator of
which shall be the number of Outstanding Shares of Subject Stock subject
to all such Submitted Bids and Submitted Sell Orders.
(c) If as a result of the procedures described in paragraph (a) or (b)
of this Section 4, any Existing Holder would be entitled or required to
sell, or any Potential Holder would be entitled or required to purchase, a
fraction of a Share of Subject Stock on any Auction Date, the Trust Company
shall, in such manner as, in its sole discretion, it shall determine, round
up or down the number of Shares of Subject Stock to be purchased or sold by
any Existing Holder or Potential Holder on such Auction Date so that the
number of Shares of Subject Stock purchased or sold by each Existing Holder
or Potential Holder on such Auction Date shall be whole Shares of Subject
Stock.
(d) If, as a result of the procedures described in paragraph (a) of this
Section 4, any Potential Holder would be entitled or required to purchase
less than a whole Share of Subject Stock on any Auction Date, the Trust
Company shall, in such manner as, in its sole discretion, it shall
determine, allocate Shares of Subject Stock for purchase among Potential
Holders so that only whole Shares of Subject Stock are purchased on such
Auction Date by any Potential Holder, even if such allocation results in one
or more of such Potential Holders not purchasing Shares of Subject Stock on
such Auction Date.
5. Miscellaneous.
(a) The Board of Directors of the Company or a duly authorized committee
thereof may interpret the provisions hereof to resolve any inconsistency or
ambiguity which may arise or be revealed in connection with the Auction
Procedures provided for herein.
(b) So long as the Dividend Rate is based on the results of an Auction, an
Existing Holder (i) may sell, transfer or otherwise dispose of Shares of Subject
Stock only pursuant to a Bid or Sell Order in accordance with the Procedures
described herein or to or through a Broker-Dealer or to a Person that has
delivered a signed copy of a Master Purchaser's Letter to the Trust Company,
provided that in the case of all transfers other than pursuant to Auctions such
Existing Holder, its Agent Member or its Broker-Dealer advises the Trust Company
of such transfer, and (ii) shall have the ownership of the Shares of Stock of
the Series held by it maintained in book entry form by the Stock Depository in
the account of its Agent Member, which in turn will maintain records of such
Existing Holder's beneficial ownership.
(c) Neither the Company nor any Affiliate thereof may submit an Order in any
Auction, except as set forth in the next sentence. Any Broker-Dealer that is an
affiliate of the Company may submit Orders in Auctions but only if such Orders
are not for its own account, except that if such affiliated Broker-Dealer holds
shares of Stock for its own account, it must submit a Sell Order in the next
Auction with respect to such Shares.
(d) The Trust Company shall reject any Submitted Order of the Company or an
Affiliate, except for Sell Orders of affiliated Broker-Dealers permitted under
paragraph (c) of this Section 5.
(e) From and during the continuance of a payment failure Shares of each
Series may be registered for transfer or exchange and new certificates issued
upon surrender of the older certificates in form deemed by the Trust Company (or
any other transfer agent or registrar appointed by the Company) properly
endorsed for transfer with all necessary endorsers' signatures guaranteed in
such manner and form as the Trust Company (or such other transfer agent or
registrar) may require by a guarantor reasonably believed by the Trust Company
(or such other transfer agent or registrar) to be responsible, accompanied by
such assurances as the Trust Company (or such other transfer agent or registrar)
shall
B-6
<PAGE>
deem necessary or appropriate to evidence the genuineness and effectiveness of
each necessary endorsement and satisfactory evidence of compliance with all
applicable law relating to the collection of taxes or funds necessary for the
payment of such taxes.
(f) Unless preferential dividends on the Stock are in arrears, the Company
shall have the right from time to time (if and to the extent at the time
permitted under applicable law) to purchase on the open market or at private
sale, or otherwise acquire, Outstanding Shares of Stock of any Series at a price
not exceeding the price at which such Stock might at the time be redeemed at the
option of the Company, plus an amount equal to accumulated and unpaid
preferential dividends to the date of acquisition.
B-7
<PAGE>
APPENDIX C
AUCTION SETTLEMENT PROCEDURES
Capitalized terms used herein shall have the respective meanings specified
in Appendix A to this Prospectus.
(a) On each Auction Date, the Trust Company shall notify by telephone the
Broker-Dealer that participated in the Auction held on such Auction Date and
submitted an Order on behalf of any Existing Holder or Potential Holder of:
(i) the Dividend Rate fixed for the next succeeding Dividend Period;
(ii) whether Sufficient Clearing Bids existed for the determination of
the Winning Bid Rate;
(iii) if such Broker-Dealer submitted a Bid or a Sell Order on behalf of
an Existing Holder, whether such Bid or Sell Order was accepted or rejected
and the number of Shares, if any, then Outstanding to be sold by such
Existing Holder;
(iv) if such Broker-Dealer submitted a Bid on behalf of a Potential
Holder, whether such Bid was accepted or rejected and the number of Shares,
if any, to be purchased by such Potential Holder;
(v) if the aggregate number of Shares to be sold by all Existing Holders
on whose behalf such Broker-Dealer submitted Bids or Sell Orders is
different than the aggregate number of Shares to be purchased by all
Potential Holders on whose behalf such Broker-Dealer submitted a Bid, the
name or names of one or more other Broker-Dealers (and the Agent Member, if
any, of each such other Broker-Dealer) and the number of Shares to be (x)
purchased from one or more Existing Holders on whose behalf such other
Broker-Dealers submitted Bids or Sell Orders or (y) sold to one or more
Potential Holders on whose behalf such other Broker-Dealer submitted Bids;
and
(vi) the Auction Date of the next succeeding Auction.
(b) On each Auction Date, each Broker-Dealer that submitted an Order on
behalf of any Existing Holder or Potential Holder shall:
(i) advise each Existing Holder and Potential Holder on whose behalf
such Broker-Dealer submitted a Bid or Sell Order whether such Bid or Sell
Order was accepted or rejected;
(ii) instruct each Potential Holder on whose behalf such Broker-Dealer
submitted a Bid that was accepted, in whole or in part, to instruct such
Bidder's Agent Member to pay to such Broker-Dealer (or its Agent Member)
through the Stock Depository the amount necessary to purchase the number of
Shares to be purchased pursuant to such Bid against receipt of such Shares
and advise such Potential Holder of the Dividend Rate for the next
succeeding Dividend Period;
(iii) instruct each Existing Holder on whose behalf such Broker-Dealer
submitted a Bid or a Sell Order that was accepted, in whole or in part, to
instruct such Bidder's Agent Member to deliver to such Broker-Dealer (or its
Agent Member) through the Stock Depository the number of Shares to be sold
pursuant to such Bid or Sell Order against payment therefor and advise any
such Existing Holder that will continue to hold Shares of the Dividend Rate
for the next succeeding Dividend Period;
(iv) advise each Existing Holder on whose behalf such Broker-Dealer
submitted a Hold Order of the Dividend Rate for the next succeeding Dividend
Period;
(v) advise each Existing Holder on whose behalf such Broker-Dealer
submitted an Order of the Auction Date of the next succeeding Auction; and
C-1
<PAGE>
(vi) advise each Potential Holder on whose behalf such Broker-Dealer
submitted a Bid that was accepted, in whole or in part, of the Auction Date
of the next succeeding Auction.
(c) On the basis of the information provided to it pursuant to paragraph (a)
above, each Broker-Dealer that submitted a Bid or Sell Order shall, in such
manner and at such time or times as it in its sole discretion may determine,
allocate any funds received by it pursuant to subparagraph (b)(ii) above, and
any Shares received by it pursuant to subparagraph (b)(iii) above, among the
Potential Holders, if any, on whose behalf such Broker-Dealer submitted Bids
that were rejected or Sell Orders, and any Broker-Dealers identified to it by
the Trust Company pursuant to subparagraphb](a)(v) above.
(d) On the Business Day after the Auction Date, the Stock Depository shall
execute the transactions described above, debiting and crediting the amounts of
the respective Agent Members as necessary to effect the purchase and sales of
Shares as determined in the Auction.
C-2
<PAGE>
APPENDIX D
TO BE SUBMITTED TO YOUR BROKER-DEALER WHO WILL THEN DELIVER COPIES
ON YOUR BEHALF TO THE RESPECTIVE TRUST COMPANY
MASTER PURCHASER'S LETTER
RELATING TO SECURITIES INVOLVING RATE SETTINGS
THROUGH AUCTIONS
THE COMPANY
THE TRUST COMPANY
A BROKER-DEALER
AN AGENT MEMBER
OTHER PERSONS
Dear Sirs:
1. This letter is designed to apply to publicly or privately offered debt or
equity securities ("Securities") of any issuer ("Company") which are described
in any final prospectus or other offering materials relating to such Securities
as the same may be amended or supplemented (collectively, with respect to the
particular Securities concerned, the "Prospectus") and which involve periodic
rate settings through auctions ("Auctions"). This letter shall be for the
benefit of any Company and of any Trust Company, auction agent, paying agent
(collectively, "Trust Company"), broker-dealer, agent member, securities
depository or other interested person in connection with any Securities and
related Auctions (it being understood that such persons may be required to
execute specified agreements and nothing herein shall alter such requirements).
The terminology used herein is intended to be general in its application and not
to exclude any Securities in respect of which (in the Prospectus or otherwise)
alternative terminology is used.
2. We may from time to time offer to purchase, purchase, offer to sell
and/or sell Securities of any Company as described in the Prospectus relating
thereto. We agree that this letter shall apply to all such purchases, sales and
offers and to Securities owned by us. We understand that the dividend interest
rate on Securities may be based from time to time on the results of Auctions as
set forth in the Prospectus.
3. We agree that any bid or sell order placed by us in an Auction shall
constitute an irrevocable offer (except as otherwise described in the
Prospectus) by us to purchase or sell the Securities subject to such bid or sell
order, or such lesser amount of Securities as we shall be required to sell or
purchase as a result of such Auction, at the applicable price, all as set forth
in the Prospectus, and that if we fail to place a bid or sell order with respect
to Securities owned by us with a broker-dealer on any Auction date, or a
broker-dealer to which we communicate a bid or sell order fails to submit such
bid or sell order to the Trust Company concerned, we shall be deemed to have
placed a hold order with respect to such Securities as described in the
Prospectus. We authorize any broker-dealer that submits a bid or sell order as
our agent in Auctions to execute contracts for the sale of Securities covered by
such bid or sell order. We recognize that the payment by such broker-dealer for
Securities purchased on our behalf shall not relieve us of any liability to such
broker-dealer for payment for such Securities.
4. We agree that, during the applicable period as described in the
Prospectus, dispositions of Securities can be made only in the denominations set
forth in the Prospectus and we will sell, transfer or otherwise dispose of any
Securities held by us from time to time only pursuant to a bid or sell order
placed in an Auction, to or through a broker-dealer or, when permitted in the
Prospectus, to a person that has signed and delivered to the applicable Trust
Company a letter substantially in the form of this
D-1
<PAGE>
letter (or other applicable purchaser's letter), provided that in the case of
all transfers other than pursuant to Auctions we or our broker-dealer or our
agent member shall advise such Trust Company of such transfer. We understand
that a restrictive legend will be placed on certificates representing the
Securities and stop-transfer instructions will be issued to the transfer agent
and/or registrar, all as set forth in the Prospectus.
5. We agree that, during the applicable period as described in the
Prospectus, ownership of Securities shall be represented by one or more global
certificates registered in the name of the applicable securities depository or
its nominee, that we will not be entitled to receive any certificate
representing the Securities and that our ownership of any Securities will be
maintained in book entry form by the securities depository for the account of
our agent member, which in turn will maintain records of our beneficial
ownership. We authorize and instruct our agent member to disclose to the
applicable Trust Company such information concerning our beneficial ownership of
Securities as such Trust Company shall request.
6. We acknowledge that partial deliveries of Securities purchased in
Auctions may be made to us and such deliveries shall constitute good delivery as
set forth in the Prospectus.
7. This letter is not a commitment by us to purchase any Securities.
8. This letter supersedes any prior-dated version of this master purchaser's
letter, and supplements any prior- or post-dated purchaser's letter specific to
particular Securities, and this letter may only be revoked by a signed writing
delivered to the original recipients hereof.
9. The descriptions of Auction procedures set forth in each applicable
Prospectus are incorporated by reference herein and in case of any conflict
between this letter, any purchaser's letter specific to particular Securities
and any such description, such description shall control.
10. Any xerographic or other copy of this letter shall be deemed of equal
effect as a signed original.
11. Our agent member of the Depository Trust Company currently is
.
12. Our personnel authorized to place orders with broker-dealers for the
purpose set forth in the Prospectus in Auctions currently is/are ,
telephone number ( ) - .
13. Our taxpayer identification number is .
14. In the case of each offer to purchase, purchase, offer to sell or sale
by us of Securities not registered under the Securities Act of 1933, as amended
(the "Act"), we represent and agree as follows:
A. We understand and expressly acknowledge that the Securities have not
been and will not be registered under the Act and, accordingly, that the
Securities may not be reoffered, resold or otherwise pledged, hypothecated
or transferred unless an applicable exemption from the registration
requirements of the Act is available.
B. We hereby confirm that any purchase of Securities made by us will be
for our own account, or for the account of one or more parties for which we
are acting as trustee or agent with complete investment discretion and with
authority to bind such parties, and not with a view to any public resale or
distribution thereof. We and each other party for which we are acting which
will acquire Securities will be "accredited investors" within the meaning of
Regulation D under the Act with respect to the Securities to be purchased by
us or such party, as the case may be, will have previously invested in
similar types of instruments and will be able and prepared to bear the
economic risk of investing in and holding such Securities.
D-2
<PAGE>
C. We acknowledge that prior to purchasing any Securities we shall have
received a Prospectus (or private placement memorandum) with respect thereto
and acknowledge that we will have had access to such financial and other
information, and have been afforded the opportunity to ask such questions of
representatives of the Company and receive answers thereto, as we deem
necessary in connection with our decision to purchase Securities.
D. We recognize that the Company and broker-dealers will rely upon the
truth and accuracy of the foregoing investment representations and
agreements, and we agree that each of our purchases of Securities now or in
the future shall be deemed to constitute our concurrence in all of the
foregoing which shall be binding on us and each party for which we are
acting as set forth in Subparagraph B above.
Dated: ................................... (Name of Purchaser)
Mailing Address of Purchaser By .................................
.......................................... Printed Name: ......................
.......................................... Title: .............................
..........................................
D-3
<PAGE>
EXECUTION COPY
TO BE SUBMITTED TO YOUR BROKER-DEALER WHO WILL THEN DELIVER COPIES
ON YOUR BEHALF TO THE RESPECTIVE TRUST COMPANY
MASTER PURCHASER'S LETTER
RELATING TO SECURITIES INVOLVING RATE SETTINGS
THROUGH AUCTIONS
THE COMPANY
THE TRUST COMPANY
A BROKER-DEALER
AN AGENT MEMBER
OTHER PERSONS
Dear Sirs:
1. This letter is designed to apply to publicly or privately offered debt or
equity securities ("Securities") of any issuer ("Company") which are described
in any final prospectus or other offering materials relating to such Securities
as the same may be amended or supplemented (collectively, with respect to the
particular Securities concerned, the "Prospectus") and which involve periodic
rate settings through auctions ("Auctions"). This letter shall be for the
benefit of any Company and of any Trust Company, auction agent, paying agent
(collectively, "Trust Company"), broker-dealer, agent member, securities
depository or other interested person in connection with any Securities and
related Auctions (it being understood that such persons may be required to
execute specified agreements and nothing herein shall alter such requirements).
The terminology used herein is intended to be general in its application and not
to exclude any Securities in respect of which (in the Prospectus or otherwise)
alternative terminology is used.
2. We may from time to time offer to purchase, purchase, offer to sell
and/or sell Securities of any Company as described in the Prospectus relating
thereto. We agree that this letter shall apply to all such purchases, sales and
offers and to Securities owned by us. We understand that the dividend interest
rate on Securities may be based from time to time on the results of Auctions as
set forth in the Prospectus.
3. We agree that any bid or sell order placed by us in an Auction shall
constitute an irrevocable offer (except as otherwise described in the
Prospectus) by us to purchase or sell the Securities subject to such bid or sell
order, or such lesser amount of Securities as we shall be required to sell or
purchase as a result of such Auction, at the applicable price, all as set forth
in the Prospectus, and that if we fail to place a bid or sell order with respect
to Securities owned by us with a broker-dealer on any Auction date, or a
broker-dealer to which we communicate a bid or sell order fails to submit such
bid or sell order to the Trust Company concerned, we shall be deemed to have
placed a hold order with respect to such Securities as described in the
Prospectus. We authorize any broker-dealer that submits a bid or sell order as
our agent in Auctions to execute contracts for the sale of Securities covered by
such bid or sell order. We recognize that the payment by such broker-dealer for
Securities purchased on our behalf shall not relieve us of any liability to such
broker-dealer for payment for such Securities.
4. We agree that, during the applicable period as described in the
Prospectus, dispositions of Securities can be made only in the denominations set
forth in the Prospectus and we will sell, transfer or otherwise dispose of any
Securities held by us from time to time only pursuant to a bid or sell order
placed in an Auction, to or through a broker-dealer or, when permitted in the
Prospectus, to a person that has signed and delivered to the applicable Trust
Company a letter substantially in the form of this letter (or other applicable
purchaser's letter), provided that in the case of all transfers other than
pursuant to Auctions we or our broker-dealer or our agent member shall advise
such Trust Company of such transfer. We understand that a restrictive legend
will be placed on certificates representing the
1
<PAGE>
Securities and stop-transfer instructions will be issued to the transfer agent
and/or registrar, all as set forth in the Prospectus.
5. We agree that, during the applicable period as described in the
Prospectus, ownership of Securities shall be represented by one or more global
certificates registered in the name of the applicable securities depository or
its nominee, that we will not be entitled to receive any certificate
representing the Securities and that our ownership of any Securities will be
maintained in book entry form by the securities depository for the account of
our agent member, which in turn will maintain records of our beneficial
ownership. We authorize and instruct our agent member to disclose to the
applicable Trust Company such information concerning our beneficial ownership of
Securities as such Trust Company shall request.
6. We acknowledge that partial deliveries of Securities purchased in
Auctions may be made to us and such deliveries shall constitute good delivery as
set forth in the Prospectus.
7. This letter is not a commitment by us to purchase any Securities.
8. This letter supersedes any prior-dated version of this master purchaser's
letter, and supplements any prior- or post-dated purchaser's letter specific to
particular Securities, and this letter may only be revoked by a signed writing
delivered to the original recipients hereof.
9. The descriptions of Auction procedures set forth in each applicable
Prospectus are incorporated by reference herein and in case of any conflict
between this letter, any purchaser's letter specific to particular Securities
and any such description, such description shall control.
10. Any xerographic or other copy of this letter shall be deemed of equal
effect as a signed original.
11. Our agent member of the Depository Trust Company currently is
.
12. Our personnel authorized to place orders with broker-dealers for the
purpose set forth in the Prospectus in Auctions currently is/are ,
telephone number ( ) - .
13. Our taxpayer identification number is .
14. In the case of each offer to purchase, purchase, offer to sell or sale
by us of Securities not registered under the Securities Act of 1933, as amended
(the "Act"), we represent and agree as follows:
A. We understand and expressly acknowledge that the Securities have not
been and will not be registered under the Act and, accordingly, that the
Securities may not be reoffered, resold or otherwise pledged, hypothecated
or transferred unless an applicable exemption from the registration
requirements of the Act is available.
B. We hereby confirm that any purchase of Securities made by us will be
for our own account, or for the account of one or more parties for which we
are acting as trustee or agent with complete investment discretion and with
authority to bind such parties, and not with a view to any public resale or
distribution thereof. We and each other party for which we are acting which
will acquire Securities will be "accredited investors" within the meaning of
Regulation D under the Act with respect to the Securities to be purchased by
us or such party, as the case may be, will have previously invested in
similar types of instruments and will be able and prepared to bear the
economic risk of investing in and holding such Securities.
C. We acknowledge that prior to purchasing any Securities we shall have
received a Prospectus (or private placement memorandum) with respect thereto
and acknowledge that we will have had access to such financial and other
information, and have been afforded the opportunity to ask such questions of
representatives of the Company and receive answers thereto, as we deem
necessary in connection with our decision to purchase Securities.
D. We recognize that the Company and broker-dealers will rely upon the
truth and accuracy of the foregoing investment representations and
agreements, and we agree that each of our
2
<PAGE>
purchases of Securities now or in the future shall be deemed to constitute
our concurrence in all of the foregoing which shall be binding on us and
each party for which we are acting as set forth in Subparagraph B above.
Dated: ................................... (Name of Purchaser)
Mailing Address of Purchaser By .................................
.......................................... Printed Name: ......................
.......................................... Title: .............................
..........................................
3
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the issuance and distribution of the
securities being registered, other than underwriting compensation, are:
Filing Fee for Registration Statement............................ $120,691
Accounting Fees and Expenses..................................... 25,000
Trust Company's Fees and Expenses (including counsel fees)....... 105,000
Blue Sky filing and counsel fees................................. 45,000
Rating Agency fees............................................... 75,000
Printing Fees.................................................... 25,000
Miscellaneous.................................................... 10,000
--------
Total.................................................... $405,691
--------
--------
- ------------
* Estimated, and subject to future contingencies.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Sections 7018-7022 of the New York Banking Law the Company may or
shall, subject to various exceptions and limitations, indemnify its directors or
officers as follows:
a. If a director or officer is made or threatened to be a party to an
action by or in the right of the Company to procure a judgment in its favor,
by reason of the fact that he is or was a director of officer of the company
or is or was serving at the request of the Company as a director or officer
of some other enterprise (including, without limitation, an employee benefit
plan), the Company may indemnify him against amounts paid in settlement and
reasonable expenses, including attorney's fees, incurred in the defense or
settlement of such action or an appeal therein, if such director or officer
acted, in good faith, for a purpose which he reasonably believed to be in
(or, in the case of service for any other enterprise, not opposed to) the
best interests of the Company, except that no indemnification is available
under such statutory provisions in respect of a threatened action or a
pending action which is settled or otherwise disposed of, or any claim or
issue or matter as to which such person is found liable to the Company,
unless in each such case a court determines that such person is fairly and
reasonably entitled to indemnity for such amount as the court deems proper.
b. With respect to any action or proceeding other than one by or in the
right of the Company to procure a judgement in its favor, if a director or
officer is made or threatened to be made a party by reason of the fact that
he was a director or officer of the Company, or served some other enterprise
(including, without limitation, an employee benefit plan) at the request of
the Company, the Company may indemnify him against judgments, fines, amounts
paid in settlement and reasonable expenses, including attorney's fees
incurred as a result of such action or proceeding, or an appeal therein, if
he acted in good faith for a purpose which he reasonably believed to be in
(or, in the case of service for any other enterprise, not opposed to) the
best interests of the Company and, in criminal actions or proceedings, in
addition, had no reasonable cause to believe that his conduct was unlawful.
c. A director or officer who has been wholly successful, on the merits
or otherwise, in the defense of a civil or criminal action or proceeding of
the character described in paragraphs a or b above, shall be entitled to
indemnification as authorized in such paragraphs.
The foregoing statement is subject to the detailed provisions of Sections
7018-7022 of the New York Banking Law.
The indemnification and advancement of expenses granted pursuant to the New
York Banking Law, as summarized in the foregoing paragraph, are not exclusive of
any other rights to indemnification
II-1
<PAGE>
or advancement of expenses to which a director or officer may be entitled,
provided that no indemnification may be made if a judgment adverse to the
director or officer establishes that his acts were committed in bad faith or
were the result of active and deliberate dishonesty and were material to the
cause so adjudicated, or that he personally gained a financial profit or other
advantage to which he was not legally entitled. The By-Laws of the Company
provide that directors and officers of the Company shall be indemnified to the
fullest extent permitted by law in connection with any actual or threatened
action or proceeding (including civil, criminal, administrative or investigative
proceedings) arising out of their service to the Company or to another
organization at the Company's request. Persons who are not directors or offices
of the Company may be similarly indemnified in respect of such service to the
extent authorized at any time by the Board of Directors.
Reference is made to the Underwriting Agrement filed as Exhibit 1 hereto for
a description of the indemnification arrangements in connection with an
underwritten offering of the Securities registered hereby.
The directors of the Company are insured under officers and directors
liability insurance policies purchased by GE Company. The directors, officers
and employees of the Company are also insured against fiduciary liabilities
under the Employee Retirement Income Security Act of 1974.
ITEM 16. EXHIBITS.
<TABLE><CAPTION>
EXHIBIT INCORPORATED BY REFERENCE TO FILINGS
NUMBER INDICATED DESCRIPTION
- ------- ----------------------------------------- -----------------------------------------
<S> <C> <C>
1 Form of Underwriting Agreement.
4(a) --Exhibit 3(i) to the Company's Annual Restated Organization Certificate filed
Report on Form 10-K for the fiscal year by the Superintendent of Banks of the
ended December 31, 1993 State of New York on November 28, 1988,
as last amended on December 6, 1990.
4(b) Certificate of Amendment authorizing
3,500 additional shares of Variable
Cumulative Preferred Stock filed by the
Superintendent of Banks of the State of
New York on April 21, 1995.
4(c) Form of Certificate of Amendment
speicifying certain terms of each Series.
5 Opinion and consent of Bruce C. Bennett,
Associate General Counsel, Treasury
Operation and Assistant Secretary of the
Company.
8 Opinion and consent of James M.
Kalashain, tax counsel to the Company.
12 Computation of Ratio of Earnings to
Combined Fixed Charges and Preferred
Stock Dividends.
23 Consent of KPMG Peat Marwick, LLP
(Consents of Bruce C. Bennett and James
M. Kalashian are included in their
respective opinions referred to in
Exhibits 5 and 8 above).
24 Power of Attorney.
99(a) --Exhibit 28(a) to the Company's Trust Company Agreement.
Registration Statement on Form S-3 (No.
33-24667)
99(b) --Exhibit 28(b) to the Company's Amendment to Trust Company Agreement.
Registration Statement on Form S-3 (No.
33-37156)
</TABLE>
II-2
<PAGE>
<TABLE><CAPTION>
EXHIBIT INCORPORATED BY REFERENCE TO FILINGS
NUMBER INDICATED DESCRIPTION
- ------- ----------------------------------------- -----------------------------------------
<S> <C> <C>
99(c) --Exhibit 28(c) to the Company's Amendment No. 2 to Trust Company
Registration Statement on Form S-3 (No. Agreement.
33-37156)
99(d) Form of Amendment No. 3 to Trust Company
Agreement.
99(e) --Exhibit 28(d) to the Company's Form of Broker-Dealer Agreement.
Registration Statement on Form S-3 (No.
33-37156)
99(f) --Exhibit 28(e) to the Company's Form of Letter to the Depository Trust
Registration Statement on Form S-3 Company.
(No. 33-37156)
99(g) Letter of Senior Vice President, Finance
of General Electric Company to General
Electrical Capital Corporation, dated
April 20, 1995 with respect to replacing
redeemed variable cumulative preferred
stock with another form of equity in
certain circumstances.
</TABLE>
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes: (1) To file, during any period
in which offers or sales are being made, a post-effective amendment to this
registration statement (i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933; (ii) to reflect in the prospectus any
facts or events arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set forth in
the registration statement; and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement; provided, however, that clauses (i) and (ii) do not apply if the
registration statement is on Form S-3 or Form S-8 and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement; (2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof; (3) To remove from registration by means
of a post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering; (4) That, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant,
General Electric Capital Corporation, certifies that it has reasonable grounds
to believe that it meets all of the requirements for filing on Form S-3 and has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Stamford, State of
Connecticut, on the 24th day of April, 1995.
GENERAL ELECTRIC CAPITAL CORPORATION
By /s/ JAMES A. PARKE
...................................
(James A. Parke
Senior Vice President, Finance)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
<TABLE><CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------------- ----------------------------------- -----------------------
<S> <C> <C>
* GARY C. WENDT Chairman of the Board and Chief
................................................... Executive Officer (Principal
(Gary C. Wendt) Executive Officer)
* DENIS J. NAYDEN President, Chief Operating Officer
................................................... and Director
(Denis J. Nayden)
/s/ JAMES A. PARKE Senior Vice President, Finance and
................................................... Director (Principal Financial
(James A. Parke) Officer)
* JEFFREY S. WERNER Senior Vice President-- Corporate
................................................... Treasury and Global Funding
(Jeffrey S. Werner) Operation
* N.D.T. ANDREWS Director April 24, 1995
...................................................
(N.D.T. Andrews
* JAMES R. BUNT Director
...................................................
(James R. Bunt)
* DENNIS D. DAMMERMAN Director
...................................................
(Dennis D. Dammerman)
* PAOLO FRESCO Director
...................................................
(Paolo Fresco)
* DALE F. FREY Director
...................................................
(Dale F. Frey)
* BENJAMIN W. HEINEMAN, JR. Director
...................................................
(Benjamin W. Heineman, Jr.)
</TABLE>
II-4
<PAGE>
<TABLE><CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------------- ----------------------------------- -----------------------
<S> <C> <C>
* BURTON J. KLOSTER, JR. Director
...................................................
(Burton J. Kloster, Jr.)
* HUGH J. MURPHY Director
...................................................
(Hugh J. Murphy)
* MICHAEL A. NEAL Director
...................................................
(Michael A. Neal)
* JOHN M. SAMUELS Director April 24, 1995
...................................................
(John M. Samuels)
* EDWARD D. STEWART Director
...................................................
(Edward D. Stewart)
* JOHN F. WELCH, JR. Director
...................................................
(John F. Welch,Jr.)
* JOAN AMBLE Controller (Principal
................................................... Accounting Officer)
(Joan Amble)
By /s/ JAMES A. PARKE Attorney-in-fact
................................................
(James A. Parke)
</TABLE>
II-5
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement
on Form S-3, of our report dated February 10, 1995 relating to the financial
statements and schedules of the Company and consolidated affiliates as of
December 31, 1994 and 1993 and for each of the years in the three-year period
ended December 31, 1994 appearing in the Company's Annual Report on Form 10-K
for the year ended December 31, 1994. Our report refers to a change in 1993 in
the method of accounting for investments in certain securities.
We further consent to the reference to our firm under Experts in the
Prospectus.
KPMG PEAT MARWICK LLP
Stamford, Connecticut
April 20, 1995
-------------------
CONSENT OF COUNSEL
The consents of Bruce C. Bennett, Associate General Counsel, Treasury
Operation and Assistant Secretary of the Company, and of James M. Kalashian, tax
counsel to the Company, to the reference to such counsel under Legal Opinions
and Tax Considerations, respectively, in the Prospectus, and to the use of their
respective opinions as Exhibits to the Registration Statement, is included in
said opinions.
II-6
EXHIBIT 1
---------
FORM OF UNDERWRITING AGREEMENT
New York, New York
To the Representative(s) named in
Schedule I hereto of the Underwriters
named in Schedule II hereto
Dear Sirs:
General Electric Capital Corporation, a New York
corporation (hereinafter referred to as the Company),
proposes to issue its Variable Cumulative Preferred Stock,
par value $100 per share, described in Schedule I hereto
(hereinafter referred to as the Securities) and the Company
has filed with the Securities and Exchange Commission
(hereinafter referred to as the Commission), and there has
become effective, a registration statement (the file number
of which is set forth in Schedule I hereto), including a
prospectus, relating to the Securities. The registration
statement as amended to the date of this Agreement is
hereinafter referred to as the Registration Statement, and
the prospectus as amended to the date of this Agreement
(other than as amended by prospectus supplements relating to
securities other than the Securities) and as amended by a
prospectus supplement relating to the Securities to be filed
pursuant to Rule 424 under the Securities Act of 1933, as
amended (the "Act"), is hereinafter referred to as the
Prospectus (including in each case documents incorporated by
reference).
I.
The Company hereby agrees to sell to the several
Underwriters named in Schedule II hereto, and the
Underwriters, upon the basis of the representations and
warranties herein contained, but subject to the conditions
hereinafter stated, agree to purchase from the Company,
severally and not jointly, the principal amounts of
Securities set forth opposite their names in Schedule II
hereto, at the purchase price set forth in Schedule I
hereto, plus accrued dividends, if any, from the date set
forth in Schedule I hereto to the date of payment and
delivery.
<PAGE>
II.
The Company is advised by you that the
Underwriters propose to make a public offering of their
respective portions of the Securities as soon after this
Agreement is entered into as in your judgment is advisable.
The terms of the public offering of the Underwriters'
Securities are as specified in Schedule I hereto.
III.
Payment for the Securities shall be made to the
Company in U.S. dollars in same day funds by transfer to an
account designated by the Company to the Underwriters, on
the date and at the time specified in Schedule I hereto,
upon delivery to you for the respective accounts of the
several Underwriters of the Securities registered in the
name of CEDE & Co., as nominee of The Depository Trust
Company. The time and date of such payment and delivery are
herein referred to as the Closing Date.
IV.
The several obligations of the Underwriters
hereunder are subject to the following conditions:
(a) No stop order suspending the effectiveness of
the Registration Statement shall be in effect, and no
proceedings for such purpose shall be pending before or
threatened by the Commission, and there shall have been no
material adverse change in the condition of the Company and
its subsidiaries, taken as a whole, from that set forth in
the Registration Statement and the Prospectus; and you shall
have received on the Closing Date a certificate, dated the
Closing Date and signed by an executive officer of the
Company, to the foregoing effect. The officer making such
certificate may rely upon the best of his knowledge as to
proceedings pending or threatened.
(b) You shall have received on and as of the
Closing Date an opinion of either Burton J. Kloster, Jr.,
Senior Vice President, General Counsel and Secretary of the
Company, or Bruce C. Bennett, Associate General Counsel -
Treasury Operations and Assistant Secretary, dated the
Closing Date, to the effect that (i) the Company has been
duly incorporated and is validly existing under the laws of
the State of New York; (ii) the Company is duly qualified to
transact business and is in good standing in the
jurisdictions in which the conduct of its business or the
ownership of its property requires such qualification; (iii)
2
<PAGE>
the Securities have been duly authorized and, when issued
and delivered to and paid for by the Underwriters, will be
duly issued, fully paid and nonassessable shares of the
Company; (iv) this Agreement has been duly authorized,
executed and delivered by the Company and is a valid and
binding agreement of the Company, except as rights to
indemnity hereunder may be limited under applicable law; (v)
neither the execution and delivery of this Agreement nor the
issuance and sale of the Securities by the Company as
provided herein will contravene the Organization Certificate
or by-laws of the Company or result in any violation of any
of the terms or provisions of any law or regulation or of
any indenture, mortgage or other agreement or instrument
known to such counsel by which the Company or any of its
subsidiaries is bound; (vi) the statements contained in the
Prospectus under the captions "Description of the Stock" and
"Auction Procedures" fairly present the matters referred to
therein; (vii) each document incorporated by reference in
the Prospectus which was filed pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act")
(except for the financial statements included therein, as to
which such counsel need not express any opinion) complied
when so filed as to form in all material respects with the
Exchange Act and the applicable rules and regulations
thereunder; (viii) the Registration Statement and the
Prospectus and any supplements and amendments thereto
(except for the financial statements and except for
supplements relating only to securities other than the
Securities, as to which such counsel need express no
opinion) comply as to form in all material respects with the
Act and the rules and regulations of the Commission
thereunder; (ix) such counsel believes that (except for the
financial statements included therein, as to which counsel
need not express any belief) each part of the Registration
Statement at the time such part became effective did not
contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and
the Prospectus as of the date of the prospectus supplement
relating to the Securities did not, and the Prospectus (as
amended or supplemented) does not, contain any untrue
statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made,
not misleading.
(c) You shall have received on and as of the
Closing Date an opinion of James M. Kalashian, tax counsel
of the Company, concerning certain tax matters with respect
to the Securities.
3
<PAGE>
(d) You shall have received on and as of the
Closing Date an opinion of Davis Polk & Wardwell, counsel
for the Underwriters, dated the Closing Date, covering the
matters in (i), (iii), (iv), (vi), (viii) and (ix) of
paragraph (b) above.
In rendering the opinion referred to in paragraph (b) above,
such counsel may state that with respect to (viii) and (ix)
of paragraph (b) above, such counsel's opinion and belief is
based upon his participation in the preparation of the
Registration Statement and the Prospectus and any amendments
and supplements thereto (including documents incorporated by
reference) and review and discussion of the contents
thereof, but is without independent check or verification
except as stated therein. In rendering the opinions
referred to in (d) above, such counsel may state that with
respect to (viii) and (ix) of paragraph (b) above, such
counsel's opinion and belief is based upon their
participation in the preparation of the Registration
Statement and the Prospectus and any amendments and
supplements thereto (other than documents incorporated by
reference) and upon their review and discussion of the
contents thereof (including documents incorporated by
reference), but is without independent check or verification
except as stated therein.
(e) You shall have received on the Closing Date,
a letter dated the Closing Date in form and substance
satisfactory to you, from KPMG Peat Marwick LLP, independent
public accountants, containing statements and information of
the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial
statements and certain financial information contained in or
incorporated by reference into the Registration Statement
and the Prospectus.
V.
In further consideration of the agreements of the
Underwriters herein contained, the Company covenants as
follows:
(a) To furnish to each of you without charge two
copies of the Registration Statement (including exhibits and
documents incorporated by reference), and to each other
Underwriter a copy of the Registration Statement (without
exhibits but including documents incorporated by reference),
and, during the period mentioned in paragraph (c) below, as
many copies of the Prospectus and any amendments or
supplements thereto prepared pursuant to paragraph (c) below
as you may reasonably request. The terms "supplement" and
4
<PAGE>
"amendment" or "amend" as used in this Agreement include all
documents subsequently filed by the Company pursuant to the
Exchange Act which are deemed to be incorporated by
reference in the Prospectus from the date of filing such
documents in accordance with Form S-3.
(b) To prepare and file (or mail for filing) with
the Commission pursuant to Rule 424 under the Act, as
promptly as practicable after the execution of this
Agreement, a prospectus supplement setting forth such
information as is necessary so that the Prospectus, when
delivered to a purchaser of the Securities, will comply with
law and, before amending the Registration Statement or
supplementing the Prospectus with respect to the Securities,
to furnish you a copy of each such proposed amendment or
supplement.
(c) If, during such period after the first date
of the public offering of the Securities as in the opinion
of your counsel a prospectus is required by law to be
delivered in connection with sales by an Underwriter or
dealer, any event shall occur as a result of which it is
necessary to amend or supplement the Prospectus in order to
make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if it is necessary to amend or
supplement the Prospectus to comply with law, forthwith to
prepare and furnish, at its own expense, to the Underwriters
and to the dealers (whose names and addresses you shall
furnish to the Company) to which Securities may have been
sold by you on behalf of the Underwriters and to any other
dealers upon request, either amendments or supplements to
the Prospectus so that the statements in the Prospectus as
so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus will
comply with law.
(d) To endeavor to qualify the Securities for
offer and sale under the securities or Blue Sky laws of such
jurisdictions as you shall reasonably request and to pay all
expenses (including fees and disbursements of counsel) in
connection with such qualification and in connection with
the determination of the eligibility of the Securities for
investment under the laws of such jurisdictions as you may
designate; provided that the Company shall not be required
to qualify to do business in any jurisdiction where it is
not now qualified or to take any action which would subject
it to general or unlimited service of process in any
jurisdiction where it is not now subject.
5
<PAGE>
(e) To make generally available to its security
holders as soon as practicable an earnings statement (which
need not be audited) covering a twelve-month period
beginning after the date of this Agreement which shall
satisfy the provisions of Section 11(a) of the Act.
VI.
The Company represents and warrants to each
Underwriter that (i) each document filed by the Company
pursuant to the Exchange Act which is incorporated by
reference in the Prospectus complied when so filed in all
material respects with the Exchange Act and the rules and
regulations thereunder, and each document, if any, hereafter
filed and so incorporated by reference in the Prospectus
will comply when so filed with the Exchange Act and the
rules and regulations thereunder; (ii) the Registration
Statement and the Prospectus comply, and the Registration
Statement and the Prospectus (and any Amendments and
supplements thereto, other than supplements relating only to
securities other than the Securities) will on the Closing
Date comply, in all material respects with the Act and the
applicable rules and regulations of the Commission
thereunder; (iii) each preliminary prospectus, if any, filed
pursuant to Rule 424 under the Act complied when so filed in
all material respects with the Act and the applicable rules
and regulations thereunder; and (iv) each part of the
Registration Statement at the time such part became
effective did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, and the Prospectus as of the date of the
prospectus supplement relating to the Securities did not,
and the Prospectus (as amended or supplemented, other than
as to supplements relating only to securities other than the
Securities) on the Closing Date will not, contain any untrue
statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not
misleading; except that these representations and warranties
do not apply to statements or omissions in the Registration
Statement or the Prospectus based upon information furnished
to the Company in writing by any Underwriter expressly for
use therein.
The Company agrees to indemnify and hold harmless
each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Act, or
Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities caused by any untrue
statement or alleged untrue statement of a material fact
6
<PAGE>
contained in the Registration Statement, any preliminary
prospectus or the Prospectus (if used within the period set
forth in paragraph (c) of Article V hereof and as amended or
supplemented if the Company shall have furnished any
amendments or supplements thereto), or caused by any
omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue
statement or omission based upon information furnished in
writing to the Company by any Underwriter expressly for use
therein.
Each Underwriter agrees, severally and not
jointly, to indemnify and hold harmless the Company, its
directors, its officers who sign the Registration Statement
and any person controlling the Company to the same extent as
the foregoing indemnity from the Company to each
Underwriter, but only with reference to information relating
to such Underwriter furnished in writing by such Underwriter
expressly for use in the Registration Statement, the
Prospectus or any preliminary prospectus.
In case any proceeding (including any governmental
investigation) shall be instituted involving any person in
respect of which indemnity may be sought pursuant to either
of the two preceding paragraphs, such person (the
"indemnified party") shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying
party") in writing and the indemnifying party, upon request
of the indemnified party, shall retain counsel reasonably
satisfactory to the indemnified party to represent the
indemnified party, and any others the indemnifying party may
designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified
party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any proceeding
(including any impleaded parties) include both the
indemnifying party and the indemnified party and
representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests
between them. It is understood that the indemnifying party
shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm
(in addition to local counsel) for all such indemnified
7
<PAGE>
parties and that all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be
designated in writing by you in the case of parties
indemnified pursuant to the second preceding paragraph and
by the Company in the case of parties indemnified pursuant
to the first preceding paragraph. The indemnifying party
shall not be liable for any settlement of any proceeding
effected without its written consent but if settled with
such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by
reason of such settlement or judgment.
If the indemnification provided for in this
Article VI is unavailable to an indemnified party under the
second or third paragraphs hereof in respect of any losses,
claims, damages or liabilities referred to therein, then
each indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such
losses, claims, damages or liabilities (i) if the
indemnifying party is the Company, in such proportion as is
appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other
from the offering of the Underwriters' Securities, (ii) if
the indemnifying party is an Underwriter, in such proportion
as is appropriate to reflect the relative fault of such
Underwriter on the one hand and the Company on the other
hand in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, or
(iii) if the allocation provided by clause (i) or clause
(ii) above, as the case may be, is not permitted by
applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause
(i) above or the relative fault referred to in clause (ii)
above, as the case may be, but also such relative fault (in
cases covered by clause (i)) or such relative benefits (in
cases covered by clause (ii)) as well as any other relevant
equitable considerations. The relative benefits received by
the Company on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total
underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the Prospectus.
The relative fault of the Company on the one hand and of the
Underwriters on the other shall be determined by reference
to, among other things, whether the untrue statement of a
material fact or the omission to state a material fact
relates to information supplied by the Company or by the
Underwriters and the parties' relative intent, knowledge,
8
<PAGE>
access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Underwriters agree that it
would not be just and equitable if contribution pursuant to
this Article VI were determined by pro rata allocation (even
if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not
take account of the equitable considerations provided for,
in the respective cases, in clause (i), (ii) and (iii) of
the immediately preceding paragraph. The amount paid or
payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this
Article VI, no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price
at which the Securities underwritten by such Underwriter and
distributed to the public were offered to the public exceeds
the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations
to contribute pursuant to this Article VI are several, in
proportion to the respective amounts of Securities purchased
by each of such Underwriters, and not joint.
The indemnity and contribution agreements
contained in this Article VI and the representations and
warranties of the Company in this Agreement shall remain
operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made
by or on behalf of any Underwriter or any person controlling
any Underwriter or by or on behalf of the Company, its
directors or officers or any person controlling the Company
and (iii) acceptance of and payment for the Securities.
VII.
Unless otherwise provided in Schedule I hereto,
this Agreement shall be subject to termination in the
discretion of a majority in interest of the Underwriters at
any time prior to the Closing Date, by notice given to the
Company, if (i) trading in securities generally on the New
York Stock Exchange shall have been suspended or materially
9
<PAGE>
limited; (ii), a general moratorium on commercial banking
activities in the State of New York or the United States
shall have been declared by Federal authorities; or (iii)
there shall have occurred any material outbreak, or material
escalation, of hostilities or other national or
international calamity or crisis, of such magnitude and
severity in its effect on the financial markets of the
United States, in the reasonable judgment of a majority in
interest of the Underwriters, as to prevent or materially
impair the marketing, or enforcement of contracts for sale,
of the Securities.
VIII.
If this Agreement shall be terminated by the
Underwriters, or any of them, because of any failure or
refusal on the part of the Company to comply with the terms
or to fulfill any of the conditions of this Agreement, or if
for any reason the Company shall be unable to perform its
obligations under this Agreement, the Company will reimburse
the Underwriters or such Underwriters as have so terminated
this Agreement with respect to themselves, severally, for
all out-of-pocket expenses (including the fees and
disbursements of their counsel) reasonably incurred by such
Underwriters in connection with the Securities.
This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the
same effect as if the signatures thereto and hereto were
upon the same instrument.
This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
Very truly yours,
GENERAL ELECTRIC CAPITAL CORPORATION
By
----------------------------------
Vice President and Treasurer
Accepted, as of the date set
forth in Schedule I hereto.
10
<PAGE>
By:
-------------------------
Title:
Acting severally on behalf of
such Representative(s) and the
several Underwriters named in
Schedule II hereto.
11
<PAGE>
SCHEDULE I
Underwriting Agreement dated , 199_
---------------
Registration Statement No.
----------------
Representative(s) and address(es):
-------------------------------------
-------------------------------------
-------------------------------------
New York, New York 10___
Title of Securities: Variable Cumulative Preferred Stock,
Series
-------
Number of Shares: ____ Shares
Certain Terms of the Securities:
As set forth under "Description of the Stock", "Auction
Procedures" in the Prospectus and on the cover page and
under "Description of the Preferred Shares" in the
Prospectus Supplement of even date herewith.
Certain Terms of the Underwriting:
Purchase Price: $_____ per share (___% of the
liquidation preference)
Public Offering Price: $_____ per share (___% of the
liquidation preference)
Dealer Concession: $_____ per share (___% of the
liquidation preference)
Reallowance Concession: $_____ per share (___% of the
liquidation preference)
The Underwriters' Securities are to be offered to the
public at the Public Offering Price specified below,
and to dealers at prices which represent concessions
not in excess of the Dealer Concession set forth.
Payment (if other than by wire transfer in immediately
available funds): N/A
Closing: Davis, Polk & Wardwell, 450 Lexington Avenue,
New York, New York 10017, at 10:00a.m., New
York City time, on May __, 1995.
12
<PAGE>
The foregoing terms set forth on this Schedule I are hereby
confirmed:
GENERAL ELECTRIC CAPITAL CORPORATION
By
-------------------------------
Name: Jeffrey S. Werner
Title: Senior Vice President, Corporate
Treasury and Global Funding Operation
[ ]
--------------------------------
acting severally on behalf of such
Representative(s) and the several
Underwriters named in Schedule II
hereto.
By
--------------------------------
Name:
Title:
13
<PAGE>
SCHEDULE II
Number of Shares
Underwriter to be Purchased
----------- ----------------
Total $
----------------
14
Exhibit 4(b)
CERTIFICATE OF AMENDMENT
OF THE
ORGANIZATION CERTIFICATE OF
GENERAL ELECTRIC CAPITAL CORPORATION
UNDER SECTION 8005 OF THE BANKING LAW
We, the undersigned, Gary C. Wendt and Burton J. Kloster, Jr., being
respectively the Chairman and Chief Executive Officer and the Secretary of
General Electric Capital Corporation, do hereby certify and set forth:
1. The name of this corporation is General Electric Capital
Corporation. The name under which the corporation was formed was
General Electric Credit Corporation.
2. The Organization Certificate of General Electric Capital
Corporation was filed by the Superintendent of Banks of the State of
New York on the 6th day of October, 1943, and in the office of the
Clerk of New York County on the 21st day of October, 1943. A Restated
Organization Certificate was filed by the Superintendent of Banks of
the State of New York on the 28th day of November, 1988 (hereinafter
the "Restated Organization Certificate"), and Certificates of
Amendment of the Organization Certificate were filed by the
Superintendent of Banks of the State of New York on the 21st day of
December, 1988, the 22nd day of December, 1989, the 28th day of
September, 1990, the 18th day of October, 1990, the 14th day of
November, 1990 and the 6th day of December, 1990 (hereinafter
collectively referred to as the "Certificates of Amendment"). The
Restated Organization Certificate as amended by the Certificates of
Amendment is hereinafter referred to as the "Organization
Certificate".
3. Paragraph Third of the Organization Certificate, which
article relates to the capital stock of this corporation, is amended
so as to (a) increase the number of authorized shares of Variable
Cumulative Preferred Stock from 10,500 shares to 14,000 shares and (b)
increase the maximum aggregate redemption price of all shares of all
series of Variable Cumulative Preferred Stock from $1,550,000,000 to
$1,900,000,000, by substituting in Paragraph Third in both places at
which the words "Ten Thousand Five Hundred (10,500)" appear, the words
"Fourteen Thousand (14,000)" and by substituting in Part A of Section
Eight of Subparagraph (c) of Paragraph Third the words "One Billion
Nine Hundred Million Dollars ($1,900,000,000)" in place of the words
"One Billion Five Hundred Fifty Million Dollars ($1,550,000,000)".
4. The foregoing amendments of Paragraph Third of the
Organization Certificate were authorized by a resolution of the Board
of
<PAGE>
2
Directors adopted at a meeting duly called and held on the 20th day of
April, 1995 and by consent of the sole common stockholder of the
corporation.
IN WITNESS WHEREOF, this Certificate has been signed this 20th day of
April, 1995.
/s/ Gary C. Wendt
--------------------------------------
Gary C. Wendt
Chairman and Chief Executive Officer
/s/ Burton J. Kloster, Jr.
--------------------------------------
Burton J. Kloster, Jr.
Secretary
<PAGE>
STATE OF CONNECTICUT )
) S.S.:
COUNTY OF FAIRFIELD )
Gary C. Wendt and Burton J. Kloster, Jr., each being duly sworn,
respectively deposes and says: that the said Gary C. Wendt is the Chairman
and Chief Executive Officer and that the said Burton J. Kloster, Jr., is the
Secretary of General Electric Capital Corporation, the corporation executing
the foregoing instrument; that each of them has read the same and that the
statements contained therein are true and they have been authorized to
execute and file the foregoing Certificate of Amendment by resolution of the
Board of Directors adopted at a meeting duly called and held on the 20th
day of April, 1995.
/s/ Gary C. Wendt
--------------------------------------
Gary C. Wendt
Chairman and Chief Executive Officer
/s/ Burton J. Kloster, Jr.
--------------------------------------
Burton J. Kloster, Jr.
Secretary
Subscribed and sworn to
before me this 20th
day of April, 1995
/s/ Notary Public
- --------------------
Notary Public
EXHIBIT 4(c)
[FORM OF CERTIFICATE OF AMENDMENT]
CERTIFICATE OF AMENDMENT
OF THE
ORGANIZATION CERTIFICATE
OF
GENERAL ELECTRIC CAPITAL CORPORATION
UNDER SECTION 8005 OF THE BANKING LAW
We, the undersigned, _______________ and Burton J.
Kloster, Jr., being respectively ________________________ and the
Secretary of General Electric Capital Corporation, do hereby
certify and set forth:
1. The name of this corporation is General Electric
Capital Corporation. The name under which the corporation was
formed was General Electric Credit Corporation.
2. The Organization Certificate of General Electric
Capital Corporation was filed by the Superintendent of Banks of
he State of New York on the 6th day of October, 1943, and in the
office of the Clerk of New York County on the 21st day of
October, 1943. A Restated Organization Certificate was filed by
the Superintendent of Banks of the State of New York on the 28th
day of November, 1988 (hereinafter the "Restated Organization
Certificate"). Certificates of Amendment of the Organization
Certificate were filed by the Superintendent of Banks of the
State of New York on the 21st day of December, 1988, the 22nd day
of December, 1989, the 28th day of September, 1990, the 18th day
of October, 1990, the 14th day of November, 1990, the 6th day of
December, 1990 and the 21st day of April, 1995 (hereinafter the
"Certificates of Amendment"). The Restated Organization
Certificate as amended by such Certificates of Amendment is
hereinafter referred to as the "Organization Certificate."
3. Paragraph Third of the Organization Certificate,
which Paragraph relates to the amount of capital stock of this
corporation, is amended so as to add the following provisions
authorizing a series and stating the numbers, designations and
certain relative rights, preferences and limitations of such
series, as fixed by a resolution of a committee of the Board of
Directors of the corporation to which the Board of Directors has
duly delegated such authority, at the end of subparagraph (c)
thereof, following section __________________, as follows:
"SECTION ________________: Variable Cumulative
Preferred Stock, Series __
<PAGE>
A. Designation.
-----------
There is hereby created a series of the Variable
Cumulative Preferred Stock, to consist of ____________ shares and
to be designated the "Variable Cumulative Preferred Stock, Series
___" (hereinafter the "Series __" Shares).
B. Dividends.
---------
The initial dividend rate for the Series __ Shares
shall be ___% per annum. The initial Dividend Period shall end
for the Series __ Shares on _____________ __, 199_.
C. Certain Redemption Prices.
-------------------------
Notwithstanding the provisions of clause (ii) of
paragraph A of SECTION EIGHT of subparagraph (c) of Paragraph
Third, in the case of any Series __ Shares with a Dividend Period
equal to or more than two (2) years, any redemption price
determined by the corporation prior to the commencement of such
Dividend Period shall not be less than One Hundred Thousand
Dollars ($100,000) per share, plus accumulated and unpaid
dividends to the date fixed for redemption.
D. Auction Method.
--------------
Notwithstanding any provisions to the contrary
contained in Paragraph Third of the Organization Certificate, the
Auction Method shall be the sole method for determining Dividend
Periods and Dividends Rates for the Series __ Shares;
accordingly, the following amendments to Paragraph Third are
hereby made with respect to the Series __ Shares:
SECTION ONE: (i) the definitions of "Auction
Stock", "Auction Stock Depository", "Available Auction
Stock", and "Subject Auction Stock" are amended to "Stock",
"Auction Depository", "Available Stock" and "Subject Stock",
respectively; (ii) the definitions of "Converted Remarketed
Stock", "Remarketed Stock", "Remarketing Agent",
"Remarketing Depository", "Remarketing Method" and
"Remarketing Procedures" are deleted; and (iii) the
definition of "Dividend Determination Method" or "Method" is
amended and restated to read in its entirety, "'Dividend
Determination Method' or 'Method' shall mean the Auction
Method". Each reference to any of the terms set forth in
(i) or (iii) above as used throughout Paragraph Third of the
Organization Certificate shall be a reference to such terms
as so amended or restated, respectively, and each reference
to a term set forth in (ii) above shall be deleted.
SECTION THREE: the words "either all" and "or all"
appearing in the seventh line thereof are deleted.
<PAGE>
SECTION FOUR: (i) the word "either" in the 16th
line of paragraph B is deleted together with the remaining
text of paragraph B from the sentence beginning with the
words "Subject to" in the seventeenth line thereof; (ii)
paragraph E is deleted in its entirety; (iii) the word "or"
appearing in the third line of paragraph F is deleted; and
(iv) the words "and the" appearing in the third and
sixteenth line are deleted.
SECTION SIX: the section is deleted in its
entirety.
SECTION SEVEN: (i) the words "or the" appearing in
the fourth line of paragraph A are deleted; (ii) the
remaining text of the first sentence of paragraph F
following the word "Depository" in the sixth line thereof is
deleted; and (iii) the remaining text of the second sentence
of paragraph F following the word "Depository" in the
twelfth line thereof is deleted.
4. The foregoing amendment of Paragraph Third of the
Organization Certificate was authorized by a resolution of the
Board of Directors adopted at a meeting duly called and held on
the ___ day of _____________, 199_, such resolution having been
adopted pursuant to authority granted to the Board of Directors
or a committee of the Board of Directors in the Organization
Certificate referred to in paragraph 2 which was authorized by
resolutions of the Board of Directors and by consent of the sole
common stockholder of the corporation.
IN WITNESS WHEREOF, this Certificate has been signed
this ____ day of __________, 199_.
_________________________________
[Name]
[Title]
_________________________________
Burton J. Kloster, Jr.
Secretary
<PAGE>
STATE OF CONNECTICUT )
: ss.:
COUNTY OF FAIRFIELD )
______________________ and Burton J. Kloster, Jr., each being
duly sworn, respectively deposes and says: that the said
_______________ is the __________________________ and that the
said Burton J. Kloster, Jr. is the Secretary of General Electric
Capital Corporation, the corporation executing the foregoing
instrument; that each of them has read the same and that the
statements contained therein are true and they have been
authorized to execute and file the foregoing Certificate of
Amendment by resolution of a duly authorized committee of the
Board of Directors adopted at a meeting duly called and held on
the ___ day of __________, 199_.
_____________________________
[Name]
[Title]
_____________________________
Burton J. Kloster, Jr.
Secretary
Subscribed and sworn to
before me this ___ day of
______________, 199_
___________________________
Notary Public
EXHIBIT 5
April 21, 1995
General Electric Capital Corporation
260 Long Ridge Road
Stamford, CT 06927
Ladies and Gentlemen:
I have examined the Registration Statement on Form S-3 (the
"Registration Statement") being filed by General Electric Capital
Corporation (the "Company") with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, for the
registration of 3,500 shares of Variable Cumulative Preferred
Stock, par value $100 per share, with a liquidation preference of
$100,000 per share (the "Shares"), to be issued in series, and to
be offered and sold through underwriters pursuant to one or more
Underwriting Agreements substantially in the form of Exhibit 1 to
the Registration Statement (each, an "Underwriting Agreement").
In my opinion, the Shares have been duly authorized by
appropriate corporate action, and following (a) further action by
the Board of Directors or a duly authorized committee thereof,
establishing the designation of, and certain other particular
terms of, the Shares of any series and approving the Certificate
of Amendment relating to such series, (b) the due filing of such
Certificate of Amendment by the Superintendent of Banks of the
State of New York, and (c) the issuance, delivery and payment for
the Shares of such series in the manner contemplated in the
related Underwriting Agreement, the Shares of such series will be
validly issued, fully paid and nonassessable.
I hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the reference to myself under
the caption "Legal Opinions" in the Registration Statement.
Very truly yours,
/s/ Bruce C. Bennett
Bruce C. Bennett
EXHIBIT 8
April 21, 1995
General Electric Capital Corporation
260 Long Ridge Road
Stamford, CT 06902
Dear Sirs:
You have requested my opinion regarding certain tax matters
relating to the issuance by General Electric Capital Corporation
(the "Company") of 3,500 shares of its Variable Cumulative
Preferred Stock (the "Stock") in connection with the filing of a
Registration Statement on Form S-3 relating to the Stock with the
Securities and Exchange Commission (the "Registration
Statement").
I hereby (i) confirm my opinion under the caption "Tax
Considerations" or any similar caption referring to United States
taxation and (ii) consent to any reference to me under the
caption "Legal Opinions" in the Prospectus included in the
Registration Statement and the filing of this opinion as an
exhibit to the Registration Statement.
/s/ James M. Kalashian
-----------------------------
James M. Kalashian
General Electric Capital Corporation
General Tax Counsel
EXHIBIT 12
GENERAL ELECTRIC CAPITAL CORPORATION
AND CONSOLIDATED AFFILIATES
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK
DIVIDENDS
<TABLE><CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------------
1994 1993 1992 1991 1990
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
(Dollar amounts in millions)
Net earnings...................................... $1,918 $1,478 $1,251 $1,125 $1,021
Provision for income taxes........................ 896 664 415 362 350
Minority interest................................. 109 114 14 (7) 4
------ ------ ------ ------ ------
Earnings before income taxes and minority
interest........................................ 2,923 2,256 1,680 1,480 1,375
------ ------ ------ ------ ------
Fixed charges:
Interest........................................ 4,464 3,503 3,713 4,280 4,334
One-third of rentals............................ 153 138 90 34 33
------ ------ ------ ------ ------
Total fixed charges............................... 4,617 3,641 3,803 4,314 4,367
------ ------ ------ ------ ------
Less interest capitalized, net of amortization.... 9 4 6 7 19
------ ------ ------ ------ ------
Earnings before income taxes and minority interest
plus fixed charges.............................. $7,531 $5,893 $5,477 $5,787 $5,723
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Preferred stock dividend requirements............. $ 30 $ 22 $ 26 $ 41 $ 42
Ratio of earnings before provision for income
taxes to net earnings........................... 1.47 1.45 1.34 1.32 1.35
------ ------ ------ ------ ------
Preferred stock dividend factor on pre-tax
basis........................................... 44 32 35 54 57
Fixed charges..................................... 4,617 3,641 3,803 4,314 4,367
------ ------ ------ ------ ------
Total fixed charges and preferred stock dividend
requirements.................................... $4,661 $3,673 $3,838 $4,368 $4,424
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Ratio of earnings to combined fixed charges and
preferred stock dividends....................... 1.62 1.60 1.43 1.32 1.29
------ ------ ------ ------ ------
------ ------ ------ ------ ------
</TABLE>
EXHIBIT 99(d)
[FORM OF AMENDMENT NO. 3 TO TRUST COMPANY AGREEMENT]
This Amendment No. 3 dated as of April 21, 1995 (this
"Amendment"), to the Trust Company Agreement (the "Trust Company
Agreement") dated July 1, 1988, as amended, between GENERAL
ELECTRIC CAPITAL CORPORATION, a New York corporation (the
"Company") and BANKERS TRUST COMPANY, a New York banking
corporation, acting through its Corporate Trust and Agency group
(in its capacity as the trust company, the "Trust Company").
W I T N E S S E T H
WHEREAS, the Company and the Trust Company are parties
to the Trust Company Agreement and capitalized terms used herein
and not otherwise defined shall have the meanings specified in
the Trust Company Agreement; and
WHEREAS, the Organization Certificate of the Company
has been amended to increase the number of authorized shares of
its Variable Cumulative Preferred Stock ("Preferred Stock") from
10,500 shares to 14,000 shares; and
WHEREAS, the Company may from time to time in the
future amend its Organization Certificate in order to increase
the number of authorized shares of its Preferred Stock; and
WHEREAS, the parties hereto desire to amend the Trust
Company Agreement to reflect the aforesaid increase in the
authorized shares of Preferred Stock of the Company and any and
all subsequent increases from time to time in the authorized
shares of Preferred Stock of the Company;
NOW, THEREFORE, the parties hereto agree as follows:
1. The first sentence of the second paragraph of the
Trust Company Agreement is hereby amended and restated in its
entirety to read as follows:
The Company proposes to issue from time to time,
in one or more series, its Variable Cumulative
Preferred Stock, $100 par value (the "Stock"), in
such amount as may be authorized pursuant to its
Organization Certificate, as amended from time to
time by one or more Certificates of Amendment (as
defined below) as well as additional Certificates
of Amendment with respect to each series of Stock,
setting forth additional terms of such series.
2. Section 1.2 of the Trust Company Agreement is
hereby amended by amending and restating the definition of
"Certificate of Amendment" as follows:
<PAGE>
'Certificate of Amendment' shall mean any
certificate of amendment of the Organization
Certificate of the Company under Section 8005
of the Banking Law of the State of New York
filed from time to time by the Superintendent
of Banks of the State of New York.
3. Whenever the Trust Company Agreement is referred
to therein or in any of the instruments, agreements or other
documents or papers executed or delivered in connection
therewith, it hereby shall be deemed to mean the Trust Company
Agreement as modified by this Amendment.
4. This Amendment shall be governed by and construed
in accordance with the laws of the State of New York.
5. IN WITNESS THEREOF, the parties hereto have caused
this Amendment to be executed and delivered by their respective
duly authorized officers with the intent that it be effective as
of the date first above written.
GENERAL ELECTRIC CAPITAL
CORPORATION
By___________________________
Title:
BANKERS TRUST COMPANY,
as Trust Company
By___________________________
Title:
Exhibit 99(g)
April 20, 1995
Mr. G. C. Wendt
Chairman and Chief Executive Officer
General Electric Capital Corporation
260 Long Ridge Road
Stamford, CT 06927
Dear Gary:
We understand that General Electric Capital Corporation ("GE Capital")
has raised and expects to continue to raise equity capital needed in its
business through the issuance from time to time of one or more series of its
14,000 authorized shares of Variable Cumulative Preferred Stock.
We further understand that the right of GE Capital, under the terms of
such stock, to retire the same by redemption may raise concerns with regard
to the maintenance by GE Capital of an adequate equity level, particularly
in circumstances where the debt-to-equity ratio of GE Capital would after
such a redemption exceed 8 to 1.
In order to alleviate possible concerns stemming from GE Capital's
right to redeem such preferred stock, General Electric Company agrees as
follows:
If upon giving effect to any redemption of GE Capital's Variable
Cumulative Preferred Stock the ratio of debt to equity of GE
Capital is greater than 8 to 1, General Electric Company will
replace such redeemed preferred stock with an equal amount of
another form of equity to the extent necessary to reduce the GE
Capital debt to equity ratio to 8 to 1.
This letter supersedes L.A. Bossidy's letter to you dated October 2,
1990 with respect to the initial 10,500 shares of Variable Cumulative
Preferred Stock.
Very truly yours,
/s/ Dennis D. Dammerman
-----------------------
Dennis D. Dammerman
