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Filed Pursuant to Rule 424B3
Registration No. 33-50909
Registration No. 33-58506
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JANUARY 10, 1995
U.S.$7,377,518,501
GENERAL ELECTRIC CAPITAL CORPORATION
GLOBAL MEDIUM-TERM NOTES, SERIES A
DUE FROM 9 MONTHS TO 60 YEARS FROM DATE OF ISSUE
-------------------
General Electric Capital Corporation (the "Company") may offer from time to
time its Global Medium-Term Notes, Series A, Due from 9 Months to 60 Years From
Date of Issue, which are issuable in one or more series (the "Notes"), in the
United States in an aggregate principal amount of up to U.S.$7,377,518,501, or
the equivalent thereof in other currencies, including composite currencies such
as the European Currency Unit (the "ECU") (provided that, with respect to
Original Issue Discount Notes (as defined under "Description of Notes--Original
Issue Discount Notes"), the initial offering price of such Notes shall be used
in calculating the aggregate principal amount of Notes offered hereunder). The
Notes may be denominated in U.S. dollars or such other currency or composite
currency (each such currency or composite currency a "Specified Currency") as
specified in the applicable pricing supplement to this Prospectus Supplement
(each, a "Pricing Supplement").
(CONTINUED ON NEXT PAGE)
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT,
ANY PRICING SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PRICE TO AGENTS' PROCEEDS TO
PUBLIC(1) COMMISSIONS(2)(3) COMPANY(2)(4)
<S> <C> <C> <C>
Per Note.......................... 100% .050%-.600% 99.400%-99.950%
Total............................. $7,377,518,501(5) $3,688,759-$44,265,111 $7,333,253,390-$7,373,829,742(5)
</TABLE>
(1) Unless otherwise indicated in a Pricing Supplement, Notes will be issued at
100% of their principal amount.
(2) The Company will pay a commission to PaineWebber Incorporated, J.P. Morgan
Securities Inc., Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Inc., CS First Boston Corporation and GECC Capital Markets Group, Inc.
(collectively, the "Domestic Agents") and, with respect to Notes
denominated or payable in Deutschemarks, to CS First Boston Effectenbank
Aktiengesellschaft, J.P. Morgan GmbH, Merrill Lynch Bank AG, S.G. Warburg &
Co. GmbH, Salomon Brothers AG, Schweizerische Bankgesellschaft
(Deutschland) AG and Schweizerischer Bankverein (Deutschland) AG
(collectively, the "German Agents" and, together with the Domestic Agents,
the "Agents") ranging (except as otherwise provided in a Pricing Supplement
with respect to Original Issue Discount Notes) from .050% to .600% of the
principal amount of any Note, depending upon its maturity, sold through
such Agent. The Company may also sell Notes to any Agent as principal at a
discount for resale to one or more investors or other purchasers at fixed
offering prices or at varying prices related to prevailing market prices at
the time of resale or otherwise, as determined by such Agent. Unless
otherwise indicated in an applicable Pricing Supplement, any Note sold to
an Agent as principal shall be purchased by such Agent at a price equal to
100% of the principal amount thereof less a percentage equal to the
commission applicable to any agency sale of a Note of identical maturity.
See "Plan of Distribution."
(3) The Company has agreed to indemnify the several Agents against certain
liabilities, including liabilities under the Securities Act of 1933.
(4) Before deducting other expenses payable by the Company, estimated at up to
$3,450,725.
(5) Including the U.S. dollar equivalent with respect to any Notes denominated
in foreign or composite currencies.
------------------------
The Notes are being offered on a continuing basis by the Company through the
Agents, which have agreed to use their best efforts to solicit offers to
purchase the Notes. The Company also may sell Notes to any Agent acting as
principal for resale to investors or other purchasers and has reserved the right
to sell Notes directly to or through additional agents and to investors on its
own behalf. Unless otherwise specified in the applicable Pricing Supplement, the
Notes will not be listed on any securities exchange, and there can be no
assurance that the Notes offered by this Prospectus Supplement will be sold or
that there will be a secondary market for the Notes. The Company reserves the
right to withdraw, cancel or modify the offer made hereby without notice. The
Company may reject any offer, or any Agent, if it receives the offer, may reject
any unreasonable offer, to purchase Notes, in whole or in part. See "Plan of
Distribution." Chase Bank AG has agreed with the Company to act as German
Arranger (the "German Arranger") with respect to issuances of Notes denominated
or payable in Deutschemarks. Notes denominated or payable in Deutschemarks that
are offered and sold through the German Agents will be offered and sold to
investors in the United States through Domestic Agents or through other U.S.
broker-dealers affiliated with the relevant German Agents. See "Special
Provisions Relating to Foreign Currency Notes" and "Plan of Distribution"
herein.
PAINEWEBBER INCORPORATED
J.P. MORGAN SECURITIES INC.
MERRILL LYNCH & CO.
CS FIRST BOSTON
THE DATE OF THIS PROSPECTUS SUPPLEMENT IS JANUARY 25, 1995.
<PAGE>
Unless otherwise indicated herein or in the applicable Pricing Supplement,
the Notes may not be redeemed prior to maturity by the Company and are not
subject to repayment prior to maturity at the option of the holders thereof. Any
terms relating to a Specified Currency other than U.S. dollars will be as set
forth in the applicable Pricing Supplement. See "Special Provisions Relating to
Foreign Currency Notes."
Each Note will be represented (i) by a global Note deposited with or on
behalf of The Depository Trust Company, as Depositary ("DTC"), and registered in
the name of DTC's nominee (a "Book-Entry Note") or (ii) by a certificate issued
in definitive form (a "Certificated Note"), in each case as set forth in the
applicable Pricing Supplement. Unless otherwise indicated in the applicable
Pricing Supplement, Book-Entry Notes will be issued in denominations of 1,000
units of the Specified Currency, and Certificated Notes will be issued in
denominations of 100,000 units of the Specified Currency and any integral
multiple of 1,000 units of such Specified Currency in excess thereof. Beneficial
interests in Book-Entry Notes will be shown on, and transfers thereof will be
effected only through, records maintained by DTC (with respect to Participant's
interests) and otherwise on and through records maintained by DTC Participants
(as defined in the accompanying Prospectus (the "Prospectus") under "Description
of Notes--Global Notes, Delivery and Form"). Book-Entry Notes will not be
issuable as Certificated Notes except under the circumstances described under
"Description of Notes--Global Notes, Delivery and Form" in the Prospectus.
The interest rate or interest rate formula, if any, issue price, terms of
redemption or repayment, if any, stated maturity and any other terms not
otherwise provided in this Prospectus Supplement or in the Prospectus will be
established for each Note by the Company prior to the date of issuance of such
Note and will be indicated in a Pricing Supplement. Interest rates and interest
rate formulae are subject to change by the Company but no such change will
affect any Note already issued or which the Company has agreed to issue. Unless
otherwise indicated in the applicable Pricing Supplement, each Note will bear
interest at a fixed rate or at a floating rate. The applicable Pricing
Supplement will specify whether a Note bearing interest at a floating rate is a
Regular Floating Rate Note, a Floating Rate/Fixed Rate Note or an Inverse
Floating Rate Note and whether its rate of interest is determined by reference
to one or more of the CD Rate, the Commercial Paper Rate, the Eleventh District
Cost of Funds Rate, the Federal Funds Rate, LIBOR, the Prime Rate or the
Treasury Rate (each an "Interest Rate Basis"), or any other interest rate basis
or formula, as adjusted by the Spread and/or Spread Multiplier, if any,
applicable to such Note.
Unless otherwise indicated in the applicable Pricing Supplement, interest on
Fixed Rate Notes is payable each March 15 and September 15 and at stated
maturity or upon any earlier redemption or repayment. Interest on Floating Rate
Notes is payable on the dates indicated herein and in the applicable Pricing
Supplement. See "Description of Notes--Interest and Interest Rates." Original
Issue Discount Notes may provide that holders of such Notes will not receive
periodic payments of interest. See "Description of Notes--Original Issue
Discount Notes."
Notes may also be issued as Indexed Notes, as Dual Currency Notes or as
Amortizing Notes, as described under "Description of Notes."
References herein to "U.S. dollars" or "U.S. $" or "$" are to the lawful
currency of the United States of America. References herein to "Japanese yen" or
"Y" are to the lawful currency of Japan. References herein to "Pounds sterling"
or "L" are to the lawful currency of the United Kingdom of Great Britain and
Northern Ireland. References herein to "Deutschemarks" or "DM" are to the lawful
currency of the Federal Republic of Germany. References herein to "Dutch
Guilder" or "Dfl." are to the lawful currency of the Netherlands.
IN CONNECTION WITH THE ISSUE OF NOTES UNDER THE PROGRAM DESCRIBED HEREIN,
THE AGENT THAT IS SPECIFIED IN THE PRICING SUPPLEMENT IN RELATION TO THE
RELEVANT ISSUE OF NOTES MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR
MAINTAIN THE MARKET PRICE OF THE NOTES OF SUCH ISSUE AT A LEVEL WHICH MIGHT NOT
OTHERWISE PREVAIL. SUCH STABILIZATION, IF COMMENCED, MAY BE DISCONTINUED AT ANY
TIME.
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DESCRIPTION OF NOTES
GENERAL
The following description of the particular terms of the Notes offered
hereby (referred to in the accompanying Prospectus as the "Debt Securities")
supplements, and to the extent inconsistent therewith replaces, the description
of the general terms and provisions of the Debt Securities set forth in the
Prospectus, to which description reference is hereby made. Unless otherwise
specified in the applicable Pricing Supplement, the Notes will have the terms
described below, except that references to interest payments and
interest-related information do not apply to certain Original Issue Discount
Notes.
The Notes are to be issued under an Amended and Restated Indenture, dated as
of June 1, 1994 between the Company and The Bank of New York (the "Trustee"), as
successor to Mercantile-Safe Deposit and Trust Company (the "Indenture"). The
following summaries of certain provisions of the Indenture do not purport to be
complete, and are subject to, and are qualified in their entirety by reference
to, all the provisions of the Indenture, including the definitions therein of
certain terms.
The Notes will be unsecured and will rank equally with all other unsecured
and unsubordinated obligations of the Company. The Notes will not limit other
indebtedness or securities which may be issued by the Company and will contain
no financial or similar restrictions on the Company, except as described under
"Description of Notes--Certain Covenants of the Company" in the Prospectus.
This Prospectus Supplement and any Pricing Supplement, may be used in
connection with the offer and sale from time to time of Notes in an aggregate
initial public offering price of up to U.S.$7,377,518,501 or the equivalent
thereof in a foreign or composite currency (provided that, with respect to
Original Issue Discount Notes, the initial offering price of such Notes shall be
used in calculating the aggregate principal amount of Notes offered hereunder).
The aggregate principal amount of Notes authorized to be issued hereunder may be
increased by the Company from time to time. The aggregate principal amount of
Notes authorized to be issued under this Prospectus Supplement is subject to
reduction as a result of the sale by the Company of other issues of Debt
Securities and Warrants to purchase Debt Securities from time to time as
described in the accompanying Prospectus. As of January 24, 1995, the Company
had issued an outstanding an aggregate principal amount of $13,185,900,000 of
the Notes. See "Plan of Distribution" herein and in the accompanying Prospectus.
The Pricing Supplement relating to a Note will describe the following terms:
(i) the Specified Currency for such Note and, if other than the Specified
Currency, the currency or composite currency in which payments on such Note will
be made (and, if the Specified Currency or currency or composite currency of
payment is other than U.S. dollars, certain other terms relating to such Note (a
"Foreign Currency Note") and such Specified Currency or such currency or
composite currency of payment); (ii) whether such Note is a Fixed Rate Note or a
Floating Rate Note (including whether such Note is a Regular Floating Rate Note,
a Floating Rate/Fixed Rate Note or an Inverse Floating Rate Note); (iii) the
price at which such Note will be issued (the "Issue Price"); (iv) the date on
which such Note will be issued (the "Original Issue Date"); (v) the date on
which such Note will mature; (vi) if such Note is a Fixed Rate Note, the rate
per annum at which such Note will bear interest, if any; (vii) if such Note is a
Floating Rate Note, the Base Rate, the Initial Interest Rate, the Interest
Payment Dates, the Index Maturity, the Spread and/or Spread Multiplier, if any
(all as defined below) and any other terms relating to the particular method of
calculating the interest rate for such Note; (viii) if such Note is an Indexed
Note, the terms relating to the particular Note; (ix) if such Note is a Dual
Currency Note, the terms relating to the particular Note; (x) if such Note is an
Amortizing Note, the amortization schedule and any other terms relating to the
particular Note; (xi) whether such Note is an Original Issue Discount Note;
(xii) whether such Note may be redeemed at the option of the Company, or repaid
at the option of the holder, prior to its stated maturity as described under
"Optional Redemption" and "Repayment at the Noteholders' Option; Repurchase"
below and, if so, the provisions relating to such redemption or repayment,
including, in the case of any Original Issue Discount Notes, the information
S-3
<PAGE>
necessary to determine the amount due upon redemption or repayment; (xiii) any
relevant tax consequences associated with the terms of the Notes which have not
been described under "United States Tax Considerations" below; and (xiv) any
other terms of such Note not inconsistent with the provisions of the Indenture.
Subject to such additional restrictions as are described under "Special
Provisions Relating to Foreign Currency Notes," each Note will mature on a day
from 9 months to 60 years from the date of issue, as specified in the applicable
Pricing Supplement, as selected by the initial purchaser and agreed to by the
Company. In the event that such maturity date of any Note or any date fixed for
redemption or repayment of any Note (collectively, the "Maturity Date") is not a
Business Day (as defined below), principal and interest payable at maturity or
upon such redemption or repayment will be paid on the next succeeding Business
Day with the same effect as if such Business Day were the Maturity Date. No
interest shall accrue for the period from and after the Maturity Date to such
next succeeding Business Day. Except as may be provided in the applicable
Pricing Supplement and except for Indexed Notes, all Notes will mature at par.
The Notes will be offered on a continuing basis, and each Note will be
issued initially either as a Book-Entry Note or a Certificated Note. Book-Entry
Notes will be issued in denominations of 1,000 units of the Specified Currency,
and Certificated Notes will be issued in denominations of 100,000 units of the
Specified Currency and any integral multiples of 1,000 units of the Specified
Currency in excess thereof, unless otherwise specified in the applicable Pricing
Supplement; provided, however, that Notes issued in Specified Currencies other
than U.S. dollars shall be issued in such denominations as are set forth under
"Special Provisions Relating to Foreign Currency Notes."
Notes will be issued in the form of (i) one or more fully registered global
or master Notes deposited with or on behalf of DTC, as Depositary, and
registered in the name of DTC's nominee or (ii) by a certificate issued in
definitive form, in each case as specified in the applicable Pricing Supplement.
See "Description of Notes--Global Notes, Delivery and Form" in the Prospectus.
Certificated Notes will not be exchangeable for Book-Entry Notes and, except
under the circumstances described in the Prospectus under the caption
"Description of Notes--Global Notes, Delivery and Form", Book-Entry Notes will
not be exchangeable for Certificated Notes and will not otherwise be issuable as
Certificated Notes.
Principal of, premium, if any, and interest, if any, on any Notes payable in
U.S. dollars will be payable in the manner described herein, the transfer of the
Notes will be registrable, and Notes will be exchangeable for Notes bearing
identical terms and provisions at the office of The Chase Manhattan Bank
(National Association), the Company's paying agent (the "Paying Agent", which
term includes any successor paying agent appointed by the Company) and registrar
for the Notes, currently located at 4 Chase MetroTech Center, 3rd Floor,
Brooklyn, NY 11245; provided that payment of interest, other than interest at
maturity or upon redemption or repayment, may be made by check mailed to the
address of the person entitled thereto as it appears on the security register at
the close of business on the Regular Record Date corresponding to the relevant
Interest Payment Date; provided further that Book-Entry Notes will be
exchangeable only in the manner and to the extent set forth under "Description
of Notes--Global Notes, Delivery and Form", in the Prospectus. Notwithstanding
the foregoing, (a) a Depositary, as holder of Book-Entry Notes, shall be
entitled to receive payments of interest by wire transfer of immediately
available funds and (b) a holder of $5,000,000 or more in aggregate principal
amount of Certificated Notes (having identical terms and provisions) shall be
entitled to receive payments of interest, other than interest due at maturity or
upon redemption or repayment, if any, by wire transfer of immediately available
funds into an account maintained by the holder in the United States, if
appropriate wire transfer instructions have been received by the Paying Agent
not less than 10 days prior to the applicable Interest Payment Date.
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<PAGE>
The principal and interest payable in U.S. dollars on a Note at maturity or
upon redemption or repayment will be paid by wire transfer of immediately
available funds against presentation of the Note at the office of The Chase
Manhattan Bank (National Association), 4 Chase MetroTech Center, 3rd Floor,
Brooklyn, NY 11245, unless otherwise provided in the applicable Pricing
Supplement.
If any Note is to be issued as a Foreign Currency Note, the applicable
Pricing Supplement will specify the currency or currencies, which may be
composite currencies such as the ECU, in which the purchase price of such Note
is to be paid by the purchaser, and the currency or currencies, which may be
composite currencies such as the ECU, in which the principal at maturity or
earlier redemption, premium, if any, and interest, if any, with respect to such
Note may be paid, if applicable, along with any other terms relating to the
non-U.S. dollar denomination, including historical exchange rates for such
foreign or composite currency as against the U.S. dollar and any exchange
controls affecting such foreign or composite currency. See "Special Provisions
Relating to Foreign Currency Notes" and "Foreign Currency Risks."
OPTIONAL REDEMPTION
The Pricing Supplement will indicate either that the Notes cannot be
redeemed prior to maturity or will indicate the terms on which the Notes will be
redeemable at the option of the Company; PROVIDED, HOWEVER, that Notes
denominated in currencies other than U.S. dollars may be subject to different
restrictions on redemption as set forth under "Special Provisions Relating to
Foreign Currency Notes--Minimum Denominations, Restrictions on Maturities,
Repayment and Redemption" herein. Notice of redemption shall be provided by
mailing a notice of such redemption to each holder by first class mail, postage
prepaid, at least 30 and not more than 60 calendar days prior to the date fixed
for redemption to the respective address of each holder as that address appears
upon the books of the Company.
REPAYMENT AT THE NOTEHOLDERS' OPTION; REPURCHASE
If applicable, the Pricing Supplement will indicate that the Notes will be
repayable at the option of the holder on a date or dates specified prior to its
stated maturity date (an "Optional Repayment Date") and, unless otherwise
specified in such Pricing Supplement, at a price equal to 100% of the principal
amount thereof, together with accrued interest to, but not including, the date
of repayment; PROVIDED, HOWEVER, that Notes denominated in currencies other than
U.S. dollars may be subject to different restrictions on repayment as set forth
under "Special Provisions Relating to Foreign Currency Notes--Minimum
Denominations, Restrictions on Maturities, Repayment and Redemption" herein. If
no Optional Repayment Date is included with respect to a Note, such Note will
not be repayable at the option of the holder prior to its maturity.
In order for such a Note to be repaid, and unless provided otherwise in the
applicable Pricing Supplement, the Paying Agent must receive at least 30 but not
more than 60 calendar days prior to the Optional Repayment Date, (i) the Note
with the form entitled "Option to Elect Repayment" on the reverse of the Note
duly completed or (ii) a telegram, facsimile transmission or a letter from a
member of a national securities exchange or a member of the National Association
of Securities Dealers, Inc. (the "NASD") or a commercial bank or trust company
in the United States which must set forth the name of the holder of the Note,
the principal amount of the Note, the principal amount of the Note to be repaid,
the certificate number or a description of the tenor and terms of the Note, a
statement that the option to elect repayment is being exercised thereby and a
guarantee that the Note to be repaid, together with the duly completed form
entitled "Option to Elect Repayment" on the reverse of the Note, will be
received by the Paying Agent not later than the fifth Business Day after the
date of such telegram, facsimile transmission or letter; PROVIDED, HOWEVER, that
such telegram, facsimile transmission or letter from a member of a national
securities exchange or a member of the NASD, or a commercial bank or trust
company in the United States shall only be effective in such case if such Note
and form duly completed are received by a Paying Agent by such fifth Business
Day. Exercise of the repayment option by the holder of a Note will be
irrevocable. The repayment option may be exercised
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by the holder of a Note for less than the entire principal amount of the Note
but, in that event, the principal amount of the Note remaining outstanding after
repayment must be an authorized denomination.
The Company may at any time purchase Notes at any price in the open market
or otherwise. Notes purchased by the Company may, at its discretion, be held,
resold or surrendered to the Registrar for cancellation.
INTEREST AND INTEREST RATES
GENERAL
Unless otherwise specified in the applicable Pricing Supplement, each Note
will bear interest at either (a) a fixed rate (the "Fixed Rate Notes") or (b) a
floating rate determined by reference to an Interest Rate Basis (the "Floating
Rate Notes"), which may be adjusted by a Spread and/or Spread Multiplier (each
as defined below). Any Floating Rate Note may also have either or both of the
following: (i) a maximum interest rate limitation, or ceiling, on the rate at
which interest may accrue during any interest period; and (ii) a minimum
interest rate limitation, or floor, on the rate at which interest may accrue
during any interest period. The applicable Pricing Supplement will designate (a)
a fixed rate per annum, in which case such Notes will be Fixed Rate Notes; or
(b) one or more of the following Interest Rate Bases as applicable to such
Notes, in which case such Notes will be Floating Rate Notes: (i) the CD Rate, in
which case such Notes will be "CD Rate Notes"; (ii) the Commercial Paper Rate,
in which case such Notes will be "Commercial Paper Rate Notes"; (iii) the
Eleventh District Cost of Funds Rate, in which case such Notes will be an
"Eleventh District Cost of Funds Rate Notes"; (iv) the Federal Funds Rate, in
which case such Notes will be "Federal Funds Rate Notes"; (v) LIBOR, in which
case such Notes will be "LIBOR Notes"; (vi) the Prime Rate, in which case such
Notes will be "Prime Rate Notes"; (vii) the Treasury Rate, in which case such
Notes will be "Treasury Rate Notes"; or (viii) such other interest rate basis or
formula as is set forth in such Pricing Supplement.
Each Note will bear interest from its date of issue or from the most recent
date to which interest on such Note has been paid or duly provided for, at the
annual rate, or at a rate determined pursuant to an interest rate formula,
stated therein, until the principal thereof is paid or made available for
payment. Interest will be payable on each Interest Payment Date (except for
certain Original Issue Discount Notes and except for Notes originally issued
between a Regular Record Date and an Interest Payment Date) and at maturity or
on redemption or repayment, if any.
Interest will be payable to the person in whose name a Note is registered at
the close of business on the Regular Record Date next preceding the Interest
Payment Date; PROVIDED, HOWEVER, that (i) if the Company fails to pay such
interest on such Interest Payment Date, such defaulted interest will be paid to
the person in whose name such Note is registered at the close of business on the
record date to be established for the payment of defaulted interest and (ii)
interest payable at maturity, redemption or repayment will be payable to the
person to whom principal shall be payable. The first payment of interest on any
Note originally issued between a Regular Record Date and an Interest Payment
Date will be made on the Interest Payment Date following the next succeeding
Regular Record Date to the registered owner on such next Regular Record Date.
Interest rates and interest rate formulae are subject to change by the Company
from time to time but no such change will affect any Note theretofore issued or
which the Company has agreed to issue. Unless otherwise indicated in the
applicable Pricing Supplement, the Interest Payment Dates and the Regular Record
Dates for Fixed Rate Notes shall be as described below under "Fixed Rate Notes."
The Interest Payment Dates for Floating Rate Notes shall be as indicated in the
applicable Pricing Supplement and in such Note, and, unless otherwise specified
in the applicable Pricing Supplement, each Regular Record Date for a Floating
Rate Note will be the fifteenth calendar day (whether or not a Business Day)
next preceding each Interest Payment Date.
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FIXED RATE NOTES
Each Fixed Rate Note will bear interest at the annual rate specified therein
and in the applicable Pricing Supplement. Unless otherwise specified in the
applicable Pricing Supplement, the Interest Payment Dates for the Fixed Rate
Notes will be on March 15 and September 15 of each year and the Regular Record
Dates will be on the last day of February and August of each year. Unless
otherwise specified in the applicable Pricing Supplement, interest on Fixed Rate
Notes will be computed and paid on the basis of a 360-day year of twelve 30-day
months. In the event that any Interest Payment Date or Maturity Date for any
Fixed Rate Note is not a Business Day (as defined below under "Floating Rate
Notes"), interest on such Fixed Rate Note will be paid on the next succeeding
Business Day and no interest on such payment shall accrue for the period from
and after such Interest Payment Date to such next succeeding Business Day.
FLOATING RATE NOTES
Unless otherwise specified in an applicable Pricing Supplement, Floating
Rate Notes will be issued as described below. Each applicable Pricing Supplement
will specify certain terms with respect to which such Floating Rate Note is
being delivered, including: whether such Floating Rate Note is a Regular
Floating Rate Note, an Inverse Floating Rate Note or a Floating Rate/Fixed Rate
Note (each as defined below); the Interest Rate Basis or Bases, Initial Interest
Rate, Interest Reset Dates, Interest Reset Period, Regular Record Dates,
Interest Payment Dates, Index Maturity, maximum interest rate and minimum
interest rate, if any, and the Spread and/or Spread Multiplier, if any, and if
one or more of the specified Interest Rate Bases is LIBOR, the Index Currency,
as described below.
The interest rate borne by the Floating Rate Notes will be determined as
follows:
(a) Unless such Floating Rate Note is designated as a Floating
Rate/Fixed Rate Note, an Inverse Floating Rate Note or as having an Addendum
attached, such Floating Rate Note will be designated a "Regular Floating
Rate Note" and, except as described below or in an applicable Pricing
Supplement, will bear interest at the rate determined by reference to the
applicable Interest Rate Basis (i) plus or minus the applicable Spread, if
any, and/or (ii) multiplied by the applicable Spread Multiplier, if any.
Commencing on the Initial Interest Reset Date, the rate at which interest on
such Regular Floating Rate Note shall be payable shall be reset as of each
Interest Reset Date; PROVIDED, HOWEVER, that (i) the interest rate in effect
for the period from the Original Issue Date to the Initial Interest Reset
Date will be the Initial Interest Rate, and (ii) unless otherwise specified
in the applicable Pricing Supplement, the interest rate in effect for the
ten calendar days immediately prior to a Maturity Date shall be that in
effect on the tenth calendar day preceding such Maturity Date.
(b) If such Floating Rate Note is designated as a "Floating Rate/Fixed
Rate Note," then, except as described below or in an applicable Pricing
Supplement, such Floating Rate Note will initially bear interest at the rate
determined by reference to the applicable Interest Rate Basis (i) plus or
minus the applicable Spread, if any, and/or (ii) multiplied by the
applicable Spread Multiplier, if any. Commencing on the Initial Interest
Reset Date, the rate at which interest on such Floating Rate/Fixed Rate Note
shall be payable shall be reset as of each Interest Reset Date; PROVIDED,
HOWEVER, that (i) the interest rate in effect for the period from the
Original Issue Date to the Initial Interest Reset Date will be the Initial
Interest Rate; (ii) unless otherwise specified in the applicable Pricing
Supplement, the interest rate in effect for the ten calendar days
immediately prior to the Fixed Rate Commencement Date shall be that in
effect on the tenth calendar day preceding the Fixed Rate Commencement Date;
and (iii) the interest rate in effect commencing on, and including, the
Fixed Rate Commencement Date to the Maturity Date shall be the Fixed
Interest Rate, if such rate is specified in the applicable Pricing
Supplement, or if no such Fixed Interest Rate is so specified and the
Floating Rate/Fixed Rate Note is still outstanding on such day, the interest
rate in effect thereon on the day immediately preceding the Fixed Rate
Commencement Date.
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(c) If such Floating Rate Note is designated as an "Inverse Floating
Rate Note," then, except as described below or in an applicable Pricing
Supplement, such Floating Rate Note will bear interest equal to the Fixed
Interest Rate specified in the related Pricing Supplement minus the rate
determined by reference to the Interest Rate Basis (i) plus or minus the
applicable Spread, if any, and/or (ii) multiplied by the applicable Spread
Multiplier, if any; PROVIDED, HOWEVER, that the interest rate thereon will
not be less than zero. Commencing on the Initial Interest Reset Date, the
rate at which interest on such Inverse Floating Rate Note is payable shall
be reset as of each Interest Reset Date; PROVIDED, HOWEVER, that (i) the
interest rate in effect for the period from the Original Issue Date to the
Initial Interest Reset Date will be the Initial Interest Rate, and (ii)
unless otherwise specified in the applicable Pricing Supplement, the
interest rate in effect for the ten calendar days immediately prior to a
Maturity Date shall be that in effect on the tenth calendar day preceding
such Maturity Date.
Notwithstanding the foregoing, if such Floating Rate Note is designated as
having an Addendum attached as specified on the face thereof, such Floating Rate
Note shall bear interest in accordance with the terms described in such Addendum
and the applicable Pricing Supplement. See "Other Provisions, Addenda" below.
Unless otherwise provided in the applicable Pricing Supplement, each
Interest Rate Basis shall be the rate determined in accordance with the
applicable provisions below. Except as set forth above or in an applicable
Pricing Supplement, the interest rate in effect on each day shall be (a) if such
day is an Interest Reset Date, the interest rate determined on the Interest
Determination Date (as defined below) immediately preceding such Interest Reset
Date or (b) if such day is not an Interest Reset Date, the interest rate
determined on the Interest Determination Date immediately preceding the next
preceding Interest Reset Date.
Interest on Floating Rate Notes will be determined by reference to an
"Interest Rate Basis," which may be one or more of (i) the CD Rate, (ii) the
Commercial Paper Rate, (iii) the Eleventh District Cost of Funds Rate, (iv) the
Federal Funds Rate, (v) LIBOR, (vi) the Prime Rate, (vii) the Treasury Rate, or
(viii) such other Interest Rate Basis or interest rate formula as may be set in
the applicable Pricing Supplement; PROVIDED, HOWEVER, that with respect to a
Floating Rate/Fixed Rate Note, the interest rate commencing on the Fixed Rate
Commencement Date and continuing, unless otherwise specified in the applicable
Pricing Supplement, until the Maturity Date shall be the Fixed Interest Rate, if
such rate is specified in the applicable Pricing Supplement, or if no such Fixed
Interest Rate is so specified, the interest rate in effect thereon on the day
immediately preceding the Fixed Rate Commencement Date. In addition, if so
specified in the applicable Pricing Supplement, a Floating Rate Note may bear
interest calculated based upon the lowest of two or more Interest Rate Bases.
The "Spread" is the number of basis points to be added to or subtracted from
the related Interest Rate Basis or Bases applicable to such Floating Rate Note.
The "Spread Multiplier" is the percentage of the related Interest Rate Basis or
Bases applicable to such Floating Rate Note by which such Interest Rate Basis or
Bases will be multiplied to determine the applicable interest rate on such
Floating Rate Note. The "Index Maturity" is the period to maturity of the
instrument or obligation with respect to which the Interest Rate Basis or Bases
will be calculated. The Spread, Spread Multiplier, Index Maturity and other
variable terms of the Floating Rate Notes are subject to change by the Company
from time to time, but no such change will affect any Floating Rate Note
previously issued or as to which an offer has been accepted by the Company.
Each applicable Pricing Supplement will specify whether the rate of interest
on the related Floating Rate Note will be reset daily, weekly, monthly,
quarterly, semiannually, annually or such other specified period (each, an
"Interest Reset Period") and the dates on which such interest rate will be reset
(each, an "Interest Reset Date"). Unless otherwise specified in the applicable
Pricing Supplement, the Interest Reset Date will be, in the case of Floating
Rate Notes which reset: (i) daily, each Business Day; (ii) weekly, the Wednesday
of each week (with the exception of weekly reset Treasury
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Rate Notes, which will reset the Tuesday of each week except as specified
below); (iii) monthly, the third Wednesday of each month (with the exception of
Eleventh District Cost of Funds Rate Notes, all of which reset monthly, which
will reset on the first calendar day of the month); (iv) quarterly, the third
Wednesday of March, June, September and December of each year; (v) semiannually,
the third Wednesday of the two months specified in the applicable Pricing
Supplement; and (vi) annually, the third Wednesday of the month specified in the
applicable Pricing Supplement; PROVIDED, HOWEVER, that, with respect to Floating
Rate/Fixed Rate Notes, the fixed rate of interest in effect for the period from
the Fixed Rate Commencement Date until the Maturity Date shall be the Fixed
Interest Rate or the interest rate in effect on the day immediately preceding
the Fixed Rate Commencement Date, as specified in the applicable Pricing
Supplement. If any Interest Reset Date for any Floating Rate Note would
otherwise be a day that is not a Business Day, such Interest Reset Date will be
postponed to the next succeeding day that is a Business Day, except that in the
case of a Floating Rate Note as to which LIBOR is an applicable Interest Rate
Basis, in which case if such Business Day falls in the next succeeding calendar
month, such Interest Reset Date will be the immediately preceding Business Day.
As used herein, "Business Day" means, unless otherwise specified in the
applicable Pricing Supplement, any day other than a Saturday or Sunday or any
other day on which banking institutions are generally authorized or obligated by
law or regulation to close in The City of New York or (i) with respect to LIBOR
Notes in London, England, (ii) with respect to Notes denominated in a Specified
Currency other than U.S. dollars, Australian dollars or ECUs, in the principal
financial center of the country of the Specified Currency, (iii) with respect to
Notes denominated in Australian dollars, in Sydney, or (iv) with respect to
Notes denominated in ECUs, a day that is a non-ECU clearing day as determined by
the ECU Banking Association in Paris.
A Floating Rate Note may also have either or both of the following: (i) a
maximum numerical limitation, or ceiling, on the rate at which interest may
accrue during any interest period and (ii) a minimum numerical limitation, or
floor, on the rate at which interest may accrue during any interest period. In
addition to any maximum interest rate that may be applicable to any Floating
Rate Note pursuant to the above provisions, the interest rate on Floating Rate
Notes will in no event be higher than the maximum rate permitted by New York
law, as the same may be modified by United States law of general application.
Each Floating Rate Note will bear interest from the date of issue at the
rates specified therein until the principal thereof is paid or otherwise made
available for payment. Except as provided below or in an applicable Pricing
Supplement, interest will be payable in the case of Floating Rate Notes which
reset: (i) daily, weekly or monthly, on the third Wednesday of each month or on
the third Wednesday of March, June, September and December of each year as
specified in the applicable Pricing Supplement; (ii) quarterly, on the third
Wednesday of March, June, September and December of each year; (iii)
semiannually, on the third Wednesday of the two months of each year specified in
the applicable Pricing Supplement; and (iv) annually, on the third Wednesday of
the month of each year specified in the applicable Pricing Supplement (each, an
"Interest Payment Date") and, in each case, on the Maturity Date. If any
Interest Payment Date for any Floating Rate Note (other than the Maturity Date)
would otherwise be a day that is not a Business Day, such Interest Payment Date
will be the next succeeding day that is a Business Day except that if such Note
is a LIBOR Note and if such Business Day falls in the next succeeding calendar
month, such Interest Payment Date will be the immediately preceding Business
Day. If the Maturity Date of a Floating Rate Note falls on a day that is not a
Business Day, the payment of principal, premium, if any, and interest, if any,
will be made on the next succeeding Business Day, and no interest shall accrue
for the period from and after such Maturity Date.
All percentages resulting from any calculation on Floating Rate Notes will
be to the nearest one hundred-thousandth of a percentage point, with five one
millionths of a percentage point rounded upwards (E.G., 9.876545% (or .09876545)
would be rounded to 9.87655% (or .0987655)), and all dollar amounts used in or
resulting from such calculation will be rounded to the nearest cent (with
one-half cent being rounded upward).
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Unless otherwise specified in the applicable Pricing Supplement, interest
payments on Floating Rate Notes will equal the amount of interest accrued from
and including the next preceding Interest Payment Date in respect of which
interest has been paid (or from and including the date of issue, if no interest
has been paid with respect to such Floating Rate Notes) to but excluding the
related Interest Payment Date; PROVIDED, HOWEVER, that in the case of Floating
Rate Notes on which the interest rate is reset daily or weekly, each interest
payment will include interest accrued from and including the date of issue or
from but excluding the last Regular Record Date to which interest has been paid,
as the case may be, through and including the Regular Record Date next preceding
the applicable Interest Payment Date, unless otherwise specified in the
applicable Pricing Supplement; and PROVIDED, FURTHER, that the interest payments
on Floating Rate Notes made on the Maturity Date will include interest accrued
to but excluding such Maturity Date.
With respect to each Floating Rate Note, accrued interest is calculated by
multiplying its face amount by an accrued interest factor. Such accrued interest
factor is computed by adding the interest factor calculated for each day from
and including the later of (i) the date of issue and (ii) the last day to which
interest has been paid or duly provided for to and including the last date for
which accrued interest is being calculated as described in the immediately
preceding paragraph. Unless otherwise specified in the applicable Pricing
Supplement, the interest factor for each such day will be computed by dividing
the interest rate applicable to such day by 360, in the case of Notes for which
the Interest Rate Basis is the CD Rate, the Commercial Paper Rate, the Eleventh
District Cost of Funds Rate, the Federal Funds Rate, LIBOR or the Prime Rate, or
by the actual number of days in the year in the case of Notes for which the
Interest Rate Basis is the Treasury Rate. The accrued interest factor for Notes
for which the interest rate may be calculated with reference to two or more
Interest Rate Bases will be calculated in each period by selecting one such
Interest Rate Basis for such period in accordance with the provisions of the
applicable Pricing Supplement.
The interest rate applicable to each Interest Reset Period commencing on the
Interest Reset Date with respect to such Interest Reset Period will be the rate
determined on the "Interest Determination Date." Unless otherwise specified in
the applicable Pricing Supplement, the Interest Determination Date with respect
to the CD Rate, the Commercial Paper Rate, the Federal Funds Rate and the Prime
Rate will be the second Business Day preceding each Interest Reset Date for the
related Note; the Interest Determination Date with respect to the Eleventh
District Cost of Funds Rate will be the last working day of the month
immediately preceding each Interest Reset Date on which the Federal Home Loan
Bank of San Francisco (the "FHLB of San Francisco") publishes the Index (as
defined below); and the Interest Determination Date with respect to LIBOR will
be the second London Business Day preceding each Interest Reset Date. With
respect to the Treasury Rate, unless otherwise specified in an applicable
Pricing Supplement, the Interest Determination Date will be the day in the week
in which the related Interest Reset Date falls on which day Treasury Bills (as
defined below) are normally auctioned (Treasury Bills are normally sold at
auction on Monday of each week, unless that day is a legal holiday, in which
case the auction is normally held on the following Tuesday, except that such
auction may be held on the preceding Friday); PROVIDED, HOWEVER, that if an
auction is held on the Friday of the week preceding the related Interest Reset
Date, the related Interest Determination Date will be such preceding Friday; and
PROVIDED, FURTHER, that if an auction falls on any Interest Reset Date, then the
related Interest Reset Date will instead be the first Business Day following
such auction. Unless otherwise specified in the applicable Pricing Supplement,
the Interest Determination Date pertaining to a Floating Rate Note the interest
rate of which is determined with reference to two or more Interest Rate Bases
will be the latest Business Day which is at least two Business Days prior to
each Interest Reset Date for such Floating Rate Note. Each Interest Rate Basis
will be determined and compared on such date, and the applicable interest rate
will take effect on the related Interest Reset Date, as specified in the
applicable Pricing Supplement.
Unless otherwise provided for in the applicable Pricing Supplement, The
Chase Manhattan Bank (National Association) will be the Calculation Agent (the
"Calculation Agent," which term includes any successor calculation agent
appointed by the Company), and for each Interest Reset Date will
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determine the interest rate with respect to any Floating Rate Note as described
below. The Calculation Agent will notify the Trustee of each determination of
the interest rate applicable to any such Floating Rate Note promptly after such
determination is made. The Trustee will, upon the request of the holder of any
Floating Rate Note, provide the interest rate then in effect and, if determined,
the interest rate which will become effective as a result of a determination
made with respect to the most recent Interest Determination Date relating to
such Note. Unless otherwise specified in the applicable Pricing Supplement, the
"Calculation Date," where applicable, pertaining to any Interest Determination
Date will be the earlier of (i) the tenth calendar day after such Interest
Determination Date or, if such day is not a Business Day, the next succeeding
Business Day or (ii) the Business Day preceding the applicable Interest Payment
Date or Maturity Date, as the case may be.
Interest rates with respect to Floating Rate Notes will be determined by the
Calculation Agent as follows:
CD RATE NOTES. CD Rate Notes will bear interest at the interest rate
(calculated with reference to the CD Rate and the Spread and/or Spread
Multiplier, if any) specified in the CD Rate Notes and in the applicable Pricing
Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "CD Rate"
means, with respect to any Interest Determination Date relating to a CD Rate
Note, the rate on such date for negotiable certificates of deposit having the
Index Maturity designated in the applicable Pricing Supplement as published by
the Board of Governors of the Federal Reserve System in "Statistical Release
H.15(519), Selected Interest Rates," or any successor publication ("H.15(519)")
under the heading "CDs (Secondary Market)," or, if not so published by 3:00
p.m., New York City time, on the Calculation Date pertaining to such Interest
Determination Date, the CD Rate will be the rate on such Interest Determination
Date for negotiable certificates of deposit of the Index Maturity designated in
the applicable Pricing Supplement as published by the Federal Reserve Bank of
New York in its daily statistical release "Composite 3:30 p.m. Quotations for
U.S. Government Securities" or any successor publication (the "Composite
Quotations") under the heading "Certificates of Deposit." If such rate is not
yet published in either H.15(519) or the Composite Quotations by 3:00 p.m., New
York City time, on the Calculation Date pertaining to such Interest
Determination Date, the CD Rate on such Interest Determination Date will be
calculated by the Calculation Agent and will be the arithmetic mean of the
secondary market offered rates as of 10:00 a.m., New York City time, on such
Interest Determination Date, for negotiable certificates of deposit of major
United States money market banks with a remaining maturity closest to the Index
Maturity designated in the applicable Pricing Supplement in an amount that is
representative for a single transaction in that market at that time as quoted by
three leading nonbank dealers in negotiable U.S. dollar certificates of deposit
in The City of New York selected by the Calculation Agent; PROVIDED, HOWEVER,
that if the dealers selected as aforesaid by the Calculation Agent are not
quoting as set forth above, the CD Rate with respect to such Interest
Determination Date shall be the CD Rate as in effect on such Interest
Determination Date.
COMMERCIAL PAPER RATE NOTES. Commercial Paper Rate Notes will bear interest
at the interest rate (calculated with reference to the Commercial Paper Rate and
the Spread and/or Spread Multiplier, if any) specified in the Commercial Paper
Rate Notes and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Commercial
Paper Rate" means, with respect to any Interest Determination Date relating to a
Commercial Paper Note, the Money Market Yield (as defined below) of the rate on
that date for commercial paper having the Index Maturity designated in the
applicable Pricing Supplement, as such rate shall be published in H.15(519),
under the heading "Commercial Paper." In the event that such rate is not
published prior to 3:00 p.m., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, then the Commercial Paper Rate
shall be the Money Market Yield of the rate on such Interest Determination Date
for commercial paper of the specified Index Maturity as published in Composite
Quotations under the heading "Commercial Paper" (with an Index Maturity of one
month or three months being deemed to be equivalent to an Index Maturity of 30
days or 90 days, respectively). If by
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3:00 p.m., New York City time, on such Calculation Date such rate is not yet
available in either H.15(519) or Composite Quotations, then the Commercial Paper
Rate on such Interest Determination Date shall be calculated by the Calculation
Agent and shall be the Money Market Yield corresponding to the arithmetic mean
of the offered rates as of approximately 11:00 a.m., New York City time, on such
Interest Determination Date for commercial paper of the specified Index Maturity
placed for an industrial issuer whose bond rating is "AA," or the equivalent,
from a nationally recognized rating agency as quoted by three leading dealers of
commercial paper in The City of New York selected by the Calculation Agent;
PROVIDED, HOWEVER, that if the dealers selected as aforesaid by the Calculation
Agent are not quoting offered rates as set forth above, the Commercial Paper
Rate with respect to such Interest Determination Date shall be the Commercial
Paper Rate in effect on such Interest Determination Date.
"Money Market Yield" shall be a yield (expressed as a percentage) calculated
in accordance with the following formula:
D X 360
Money Market Yield = --------------- X 100
360-(D X M)
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the period for which interest is being calculated.
ELEVENTH DISTRICT COST OF FUNDS RATE NOTES. Eleventh District Cost of Funds
Rate Notes will bear interest at the rates (calculated with reference to the
Eleventh District Cost of Funds Rate and the Spread and/or Spread Multiplier, if
any) specified in such Eleventh District Cost of Funds Rate Notes and in the
applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Eleventh
District Cost of Funds Rate" means, with respect to any Interest Determination
Date relating to an Eleventh District Cost of Funds Rate Note, the rate equal to
the monthly weighted average cost of funds for the calendar month preceding such
Interest Determination Date as set forth under the caption "11th District" on
Telerate Page 7058 (or such other page as is specified in the applicable Pricing
Supplement) as of 11:00 a.m., San Francisco time, on such Interest Determination
Date. If such rate does not appear on Telerate Page 7058 (or such other page as
aforesaid) on any such Interest Determination Date, the Eleventh District Cost
of Funds Rate for such Interest Determination Date shall be the monthly weighted
average cost of funds paid by member institutions of the Eleventh Federal Home
Loan Bank District that was most recently announced (the "Index") by the FHLB of
San Francisco as such cost of funds for the calendar month preceding the date of
such announcement. If the FHLB of San Francisco fails to announce such rate for
the calendar month next preceding such Interest Determination Date, then the
Eleventh District Cost of Funds Rate for such Interest Determination Date will
be the Eleventh District Cost of Funds Rate in effect on such Interest
Determination Date.
FEDERAL FUNDS RATE NOTES. Federal Funds Rate Notes will bear interest at
the interest rate (calculated with reference to the Federal Funds Rate and the
Spread and/or Spread Multiplier, if any) specified in the Federal Funds Rate
Notes and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
"Federal Funds Rate" means, with respect to any Interest Determination Date
relating to a Federal Funds Rate Note, the rate on such date for Federal funds
as published in H.15(519) under the heading "Federal Funds (Effective)" or, if
not so published by 3:00 p.m., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, the Federal Funds Rate will be
the rate on such Interest Determination Date as published in Composite
Quotations under the heading "Federal Funds/Effective Rate." If such rate is not
published in either H.15(519) or the Composite Quotations by 3:00 p.m., New York
City time, on the Calculation Date pertaining to such Interest Determination
Date, the Federal Funds Rate for such Interest Determination Date will be
calculated by the Calculation Agent and will be the arithmetic mean of the rates
for the last transaction in overnight United
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States dollar Federal funds as of 9:00 a.m., New York City time, on such
Interest Determination Date arranged by three leading brokers of Federal funds
transactions in The City of New York selected by the Calculation Agent;
PROVIDED, HOWEVER, that if the brokers selected as aforesaid by the Calculation
Agent are not quoting as set forth above, the Federal Funds Rate with respect to
such Interest Determination Date shall be the Federal Funds Rate in effect on
such Interest Determination Date.
LIBOR NOTES. LIBOR Notes will bear interest at the interest rate
(calculated with reference to LIBOR and the Spread and/or Spread Multiplier, if
any) specified in the LIBOR Notes and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "LIBOR" for
each Interest Reset Date will be determined by the Calculation Agent as follows:
(i) With respect to an Interest Determination Date relating to a LIBOR
Note, LIBOR will be either: (A) if "LIBOR Telerate" is specified in the
applicable Pricing Supplement or if such Pricing Supplement does not specify
a source for LIBOR, the rate for deposits in the London interbank market in
the Index Currency (as defined below) having the Index Maturity designated
in the applicable Pricing Supplement commencing on the second Business Day
immediately following such Interest Determination Date that appears on the
Designated LIBOR Page (as defined below) as of 11:00 a.m., London time, on
such Interest Determination Date, or (B) if "LIBOR Reuters" is specified in
the applicable Pricing Supplement, the arithmetic mean of the offered rates
(unless the specified Designated LIBOR Page by its terms provides only for a
single rate, in which case such single rate shall be used) for deposits in
the London interbank market in the Index Currency having the Index Maturity
designated in the applicable Pricing Supplement and commencing on the second
Business Day immediately following such Interest Determination Date that
appear on the Designated LIBOR Page as of 11:00 a.m., London time, on such
Interest Determination Date, if at least two such offered rates appear
(unless, as aforesaid, only a single rate is required) on such Designated
LIBOR Page. If no rate appears on the Designated LIBOR Page (or, in the case
of clause (i)(B) above, if the Designated LIBOR Page by its terms provides
for more than a single rate but fewer than two offered rates appear on such
Page), LIBOR in respect of such Interest Determination Date will be
determined as if the parties had specified the rate described in clause (ii)
below.
(ii) With respect to an Interest Determination Date relating to a LIBOR
Note to which the last sentence of clause (i) above applies, the Calculation
Agent will request the principal London offices of each of four major
reference banks in the London interbank market, as selected by the
Calculation Agent, to provide the Calculation Agent with its offered
quotation for deposits in the Index Currency for the period of the Index
Maturity designated in the applicable Pricing Supplement commencing on the
second Business Day immediately following such Interest Determination Date
to prime banks in the London interbank market at approximately 11:00 a.m.,
London time, on such Interest Determination Date and in a principal amount
that is representative for a single transaction in such Index Currency in
such market at such time. If at least two such quotations are provided,
LIBOR determined on such Interest Determination Date will be the arithmetic
mean of such quotations. If fewer than two quotations are provided, LIBOR
determined on such Interest Determination Date will be the arithmetic mean
of the rates quoted at approximately 11:00 a.m. (or such other time
specified in the applicable Pricing Supplement), in the applicable Principal
Financial Center (as defined below), on such Interest Determination Date for
loans made on the second Business Day immediately following such Interest
Determination Date in the Index Currency to leading European banks having
the Index Maturity designated in the applicable Pricing Supplement and in a
principal amount that is representative for a single transaction in such
Index Currency in such market at such time by three major banks in such
Principal Financial Center selected by the Calculation Agent; PROVIDED,
HOWEVER, that if the banks so selected by the Calculation Agent are not
quoting as mentioned in this sentence, LIBOR with respect to such Interest
Determination Date will be LIBOR in effect on such Interest Determination
Date.
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"Index Currency" means the currency (including composite currencies)
specified in the applicable Pricing Supplement as the currency with respect to
which LIBOR shall be calculated. If no such currency is specified in the
applicable Pricing Supplement, the Index Currency shall be U.S. dollars.
"Designated LIBOR Page" means the display on Page 3750 (or such other page
as is specified in the applicable Pricing Supplement) of the Dow Jones Telerate
Service for the purpose of displaying the London interbank offered rates of
major banks for the applicable Index Currency (or such other page as may replace
that page on that service for the purpose of displaying such rates), unless
"LIBOR Reuters" is designated in the applicable Pricing Supplement, in which
case the Designated LIBOR Page shall be the display on the Reuters Monitor Money
Rates Service for the purpose of displaying the London interbank offered rates
of major banks for the applicable Index Currency.
Unless provided otherwise in the applicable Pricing Supplement, "Principal
Financial Center" will be the capital city of the country of the specified Index
Currency, except that with respect to U.S. dollars, Deutschemarks, Australian
dollars and ECUs, the Principal Financial Center shall be The City of New York,
Frankfurt, Sydney and Luxembourg, respectively.
PRIME RATE NOTES. Prime Rate Notes will bear interest at the interest rate
(calculated with reference to the Prime Rate and the Spread and/or Spread
Multiplier, if any) specified in the Prime Rate Notes and in the applicable
Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Prime
Rate" means, with respect to any Interest Determination Date relating to a Prime
Rate Note, the arithmetic mean of the prime rates of interest publicly announced
by each of three major banks in The City of New York as its United States dollar
prime rate or base lending rate as in effect for that day. For purposes of
making the foregoing determination, each change in the prime rate or base
lending rate of any bank so announced by such bank will be effective as of the
effective date of the announcement or, if no effective date is specified, as of
the date of the announcement. If fewer than three such quotations are provided,
the Prime Rate will be calculated by the Calculation Agent and will be
determined as the arithmetic mean on the basis of the prime rates or base
lending rates quoted in The City of New York by three substitute banks or trust
companies organized and doing business under the laws of the United States or
any state thereof, each having total equity capital of at least $500 million and
being subject to supervision or examination by a federal or state authority,
selected by the Calculation Agent to quote such rate or rates; PROVIDED,
HOWEVER, that if the banks or trust companies so selected by the Calculation
Agent are not quoting as mentioned in this sentence, the Prime Rate with respect
to such Interest Determination Date will be the Prime Rate in effect on such
Interest Determination Date.
TREASURY RATE NOTES. Treasury Rate Notes will bear interest at the interest
rate (calculated with reference to the Treasury Rate and the Spread and/or
Spread Multiplier, if any) specified in the Treasury Rate Notes and in the
applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
"Treasury Rate" means, with respect to any Interest Determination Date relating
to a Treasury Rate Note, the rate applicable to the most recent auction of
direct obligations of the United States ("Treasury Bills") having the Index
Maturity designated in the applicable Pricing Supplement, as published in
H.15(519) under the heading "Treasury Bills--auction average (investment)" or,
if not so published by 3:00 p.m., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, the auction average rate on such
Interest Determination Date (expressed as a bond equivalent, on the basis of a
year of 365 or 366 days, as applicable, and applied on a daily basis) as
otherwise announced by the United States Department of the Treasury. In the
event that the results of the auction of Treasury Bills having the Index
Maturity designated in the applicable Pricing Supplement are not published or
reported as provided above by 3:00 p.m., New York City time, on such Calculation
Date or if no such auction is held in the five Business Days preceding such
Interest Determination Date, then the Treasury Rate shall be calculated by the
Calculation Agent and shall be a yield to maturity (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) calculated using the arithmetic mean of the secondary
market bid rates, as of approximately
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3:30 p.m., New York City time, on such Interest Determination Date, of three
leading primary United States government securities dealers (which may include
one or more of the Agents) selected by the Calculation Agent for the issue of
Treasury Bills with a remaining maturity closest to the Index Maturity
designated in the applicable Pricing Supplement; PROVIDED, HOWEVER, that if the
dealers selected as aforesaid by the Calculation Agent are not quoting bid rates
as mentioned in this sentence, the Treasury Rate with respect to such Interest
Determination Date will be the Treasury Rate in effect on such Interest
Determination Date.
INDEXED NOTES
GENERAL. Notes also may be issued with the principal amount payable at
maturity or interest to be paid thereon, or both, to be determined with
reference to the price or prices of specified commodities or stocks, the
exchange rate of one or more Specified Currencies (including a composite
currency such as the ECU) relative to one or more other currencies (including a
composite currency such as the ECU), or such other price or exchange rate as may
be specified in such Note ("Indexed Notes"), as set forth in a Pricing
Supplement relating to such Indexed Notes. Holders of such Indexed Notes may
receive a principal amount on the Maturity Date that is greater than or less
than the face amount of the Indexed Notes, or an interest rate that is greater
than or less than the stated interest rate on the Indexed Notes, or both,
depending upon the structure of the Indexed Note and the relative value on the
Maturity Date or at the relevant Interest Payment Date, as the case may be, of
the specified indexed item. Information as to the method for determining the
principal amount payable on the Maturity Date, the manner of determining the
interest rate, certain historical information with respect to the specified
indexed item and tax considerations associated with an investment in Indexed
Notes will be set forth in the applicable Pricing Supplement.
Indexed Notes for which payments of principal, or premium and interest, if
any, are determined by reference to, or based upon an index including,
Deutschemarks will be offered and sold by the Company in compliance with the
then-current rules, regulations and policy statements of the Deutsche
Bundesbank. See "Special Provisions Relating to Foreign Currency Notes--Notes
Denominated in Deutschemarks."
RISK FACTORS. An investment in Indexed Notes entails significant risks that
are not associated with similar investments in a conventional fixed-rate debt
security. If the interest rate of an Indexed Note is indexed, it may result in
an interest rate that is less than that payable on a conventional fixed-rate
debt security issued by the Company at the same time, including the possibility
that no interest will be paid, and, if the principal amount of an Indexed Note
is indexed, the principal amount payable at maturity may be less than the
original purchase price of such Indexed Note, including the possibility that no
principal will be paid (but in no event shall the amount of interest or
principal paid with respect to an Indexed Note be less than zero). The secondary
market for Indexed Notes will be affected by a number of factors, independent of
the creditworthiness of the Company and the value of the applicable currency,
commodity or interest rate index, including, but not limited to, the volatility
of the applicable currency or interest rate index, the time remaining to the
maturity of such Indexed Notes, the amount outstanding of such Indexed Notes and
market interest rates. The value of the applicable currency, commodity or
interest rate index depends on a number of interrelated factors, including
economic, financial and political events, over which the Company has no control.
Additionally, if the formula used to determine the principal amount or interest
payable with respect to such Indexed Notes contains a multiple or leverage
factor, the effect of any change in the applicable currency, commodity or
interest rate index may be increased. The historical experience of the relevant
currencies, commodities or interest rate indices should not be taken as an
indication of future performance of such currencies, commodities or interest
rate indices during the term of any Indexed Note. Accordingly, prospective
investors should consult their own financial and legal advisors as to the risks
entailed by an investment in Indexed Notes and the suitability of Indexed Notes
in light of their particular circumstances. See also "Foreign Currency Risks."
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DUAL CURRENCY NOTES
GENERAL. Dual Currency Notes are Notes as to which the Company has a one
time option, exercisable on any Option Election Date in whole, but not in part,
with respect to all Dual Currency Notes issued on the same day and having the
same terms (a "Tranche"), of making all payments of principal, premium, if any,
and interest after the exercise of such option, whether at maturity or otherwise
(which payments would otherwise be made in the Face Amount Currency of such
Notes specified in the applicable Pricing Supplement), in the Optional Payment
Currency specified in the applicable Pricing Supplement.
The Pricing Supplement for each issuance of Dual Currency Notes will
specify, among other things, the aggregate Face Amount of the Dual Currency
Notes of such issuance, the Face Amount Currency and Optional Payment Currency
of such issuance and the Designated Exchange Rate for such issuance, which will
be a fixed exchange rate used for converting amounts denominated in the Face
Amount Currency into amounts denominated in the Optional Payment Currency.
Information as to the relative value of the Face Amount Currency compared to the
Optional Payment Currency and as to tax considerations associated with an
investment in Dual Currency Notes will also be set forth in the applicable
Pricing Supplement. The Pricing Supplement will also specify the Option Election
Dates and Interest Payment Dates for such issuance of Dual Currency Notes. Each
Option Election Date will be approximately ten calendar days before an Interest
Payment Date or the stated maturity date.
If the Company elects to make scheduled payments in the Optional Payment
Currency, the amount payable in such Optional Payment Currency shall be
determined using the Designated Exchange Rate specified in the applicable
Pricing Supplement. If such election is made, notice of such election shall be
mailed in accordance with the Indenture within two Business Days of the Option
Election Date and shall state (i) the Interest Payment Date or stated maturity
date and (ii) the Designated Exchange Rate. Any such notice by the Company, once
given, may not be withdrawn.
If the Company elects on any Option Election Date specified in the
applicable Pricing Supplement to pay in the Optional Payment Currency instead of
the Face Amount Currency, payments of interest, premium, if any, and principal
made after such Option Election Date may be worth less, at the then-current
exchange rate, than if the Company had made such payment in the Face Amount
Currency. For further information regarding certain risks inherent in Notes
denominated in currencies other than U.S. dollars, see "Foreign Currency Risks."
Dual Currency Notes for which either the Face Amount Currency or the
Optional Payment Currency is Deutschemarks will be offered and sold by the
Company in compliance with the then-current rules, regulations and policy
statements of the Deutsche Bundesbank. See "Special Provisions Relating to
Foreign Currency Notes--Notes Denominated in Deutschemarks."
RENEWABLE NOTES
The Company may also issue from time to time variable rate renewable Notes
("Renewable Notes") that will bear interest at the interest rate (calculated
with reference to a Base Rate and the Spread and/or Spread Multiplier, if any,
and subject to a minimum interest rate and maximum interest rate, if any)
specified in the Renewable Notes and in the applicable Pricing Supplement.
Renewable Notes will be issued only in book-entry form.
Renewable Notes will mature on an Interest Payment Date as specified in the
applicable Pricing Supplement (the "Initial Maturity Date"), unless the maturity
of all or any portion of the principal amount thereof is extended in accordance
with the procedures described below. On the Interest Payment Dates in each year
specified in the applicable Pricing Supplement (each such Interest Payment Date,
an "Election Date"), the maturity of the Renewable Notes will be extended to the
Interest Payment Date occurring twelve months after such Election Date (or to
such other date as is specified in the applicable Pricing Supplement), unless
the holder thereof elects to terminate the automatic extension of the maturity
of the Renewable Notes or of any portion thereof having a
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<PAGE>
principal amount of $100,000 or any multiple of $1,000 in excess thereof (or to
the equivalent thereof in another Specified Currency) by delivering a notice to
such effect to the Paying Agent not less than nor more than a number of days to
be specified in the applicable Pricing Supplement prior to such Election Date.
Such option may be exercised with respect to less than the entire principal
amount of the Renewable Notes; PROVIDED, HOWEVER, that the principal amount for
which such option is not exercised is at least $100,000 or any larger amount
that is an integral multiple of $1,000 (or the equivalent thereof in another
Specified Currency). Notwithstanding the foregoing, the maturity of the
Renewable Notes may not be extended beyond the Final Maturity Date as specified
in the applicable Pricing Supplement (the "Final Maturity Date"). If the holder
elects to terminate the automatic extension of the maturity of any portion of
the principal amount of the Renewable Notes and such election is not revoked as
described below, such portion will become due and payable on the Interest
Payment Date falling six months (unless another period is specified in the
applicable Pricing Supplement) after the Election Date prior to which the holder
made such election.
An election to terminate the automatic extension of maturity may be revoked
as to any portion of the Renewable Notes having a principal amount of $100,000
or any multiple of $1,000 in excess thereof (or the equivalent thereof in
another Specified Currency) by delivering a notice to such effect to the Paying
Agent on any day following the effective date of the election to terminate the
automatic extension of maturity and prior to the fifteenth calendar day before
the date on which such portion would otherwise mature. Such a revocation may be
made for less than the entire principal amount of the Renewable Notes for which
the automatic extension of maturity has been terminated: PROVIDED, HOWEVER, that
the principal amount of the Renewable Notes for which the automatic extension of
maturity has been terminated and for which such a revocation has not been made
is at least $100,000 or any larger amount that is an integral multiple of $1,000
(or the equivalent thereof in another Specified Currency). Notwithstanding the
foregoing, a revocation may not be made during the period from and including a
Regular Record Date to but excluding the immediately succeeding Interest Payment
Date.
An election to terminate the automatic extension of the maturity of the
Renewable Notes, if not revoked as described above by the holder making the
election or any subsequent holder, will be binding upon such subsequent holder.
Renewable Notes may be redeemed in whole or in part at the option of the
Company on the Interest Payment Dates in each year specified in the applicable
Pricing Supplement, commencing with the Interest Payment Date specified in the
applicable Pricing Supplement, at a redemption price of 100% of the principal
amount of the Renewable Notes to be redeemed, together with accrued and unpaid
interest to the date of redemption. Notwithstanding anything to the contrary in
this Prospectus Supplement, notice of redemption will be provided by mailing a
notice of such redemption to each holder by first class mail, postage prepaid,
at least 30 and not more than 60 calendar days prior to the date fixed for
redemption.
Renewable Notes may also be issued, from time to time, with the Spread
and/or Spread Multiplier to be reset by a remarketing agent in remarketing
procedures (the "Remarketing Procedures") to be specified in such Renewable
Notes and in the applicable Pricing Supplement. A description of the Remarketing
Procedures, the terms of the remarketing agreement between the Company and the
remarketing agent and the terms of any additional agreements with other parties
that may be involved in the Remarketing Procedures will be set forth in the
applicable Pricing Supplement.
EXTENSION OF MATURITY
The Pricing Supplement relating to each Fixed Rate Note (other than an
Amortizing Note) will indicate whether the Company has the option to extend the
maturity of such Fixed Rate Note for one or more periods of one or more whole
years (each an "Extension Period") up to but not beyond the date (the "Final
Maturity Date") set forth in such Pricing Supplement. If the Company has such
option with respect to any such Fixed Rate Note (an "Extendible Note"), the
following procedures will apply, unless modified as set forth in the applicable
Pricing Supplement.
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The Company may exercise such option with respect to an Extendible Note by
notifying the Paying Agent of such exercise at least 45 but not more than 60
calendar days prior to the stated maturity date originally in effect with
respect to such Note (the "Original Maturity Date") or, if the stated maturity
date of such Note has already been extended, prior to the stated maturity date
then in effect (an "Extended Maturity Date"). No later than 38 calendar days
prior to the Original Maturity Date or an Extended Maturity Date, as the case
may be (each, a "Maturity Date"), the Paying Agent will mail to the holder of
such Extendible Note a notice (the "Extension Notice") relating to such
Extension Period, first class mail, postage prepaid, setting forth (a) the
election of the Company to extend the maturity of such Extendible Note; (b) the
new Extended Maturity Date; (c) the interest rate applicable to the Extension
Period; and (d) the provisions, if any, for redemption during the Extension
Period, including the date or dates on which, the period or periods during which
and the price or prices at which such redemption may occur during the Extension
Period. Upon the mailing by the Paying Agent of an Extension Notice to the
holder of an Extendible Note, the maturity of such Note shall be extended
automatically, and, except as modified by the Extension Notice and as described
in the next paragraph, such Note will have the same terms it had prior to the
mailing of such Extension Notice.
Notwithstanding the foregoing, not later than 10:00 a.m., New York City
time, on the twentieth calendar day prior to the Maturity Date then in effect
for an Extendible Note (or, if such day is not a Business Day, not later than
10:00 a.m., New York City time, on the immediately succeeding Business Day), the
Company may, at its option, revoke the interest rate provided for in the
Extension Notice and establish a higher interest rate for the Extension Period
by causing the Paying Agent to send notice of such higher interest rate to the
holder of such Note by first class mail, postage prepaid, or by such other means
as shall be agreed between the Company and the Paying Agent. Such notice shall
be irrevocable. All Extendible Notes with respect to which the Maturity Date is
extended in accordance with an Extension Notice will bear such higher interest
rate for the Extension Period, whether or not tendered for repayment.
If the Company elects to extend the maturity of an Extendible Note, the
holder of such Note will have the option to require the Company to repay such
Note on the Maturity Date then in effect at a price equal to the principal
amount thereof plus any accrued and unpaid interest to such date. In order for
an Extendible Note to be so repaid on such Maturity Date, the holder thereof
must follow the procedures set forth above under "Repayment at the Noteholders'
Option; Repurchase" for optional repayment, except that the period for delivery
of such Note or notification to the Paying Agent shall be at least 25 but not
more than 35 calendar days prior to the Maturity Date then in effect and except
that a holder who has tendered an Extendible Note for repayment pursuant to an
Extension Notice may, by written notice to the Paying Agent, revoke any such
tender for repayment until 3:00 p.m., New York City time, on the twentieth
calendar day prior to the Maturity Date then in effect (or, if such day is not a
Business Day, until 3:00 p.m., New York City time, on the immediately succeeding
Business Day).
AMORTIZING NOTES
Amortizing Notes are Fixed Rate Notes for which payments combining principal
and interest are made in installments over the life of the Note ("Amortizing
Notes"). Unless otherwise specified in the applicable Pricing Supplement,
interest on each Amortizing Note will be computed on the basis of a 360-day year
of twelve 30-day months. Payments with respect to Amortizing Notes will be
applied first to interest due and payable thereon and then to the reduction of
the unpaid principal amount thereof. Further information concerning additional
terms and conditions of any issue of Amortizing Notes will be provided in the
applicable Pricing Supplement. A table setting forth repayment information in
respect of each Amortizing Note will be included in the applicable Pricing
Supplement and set forth on such Notes.
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<PAGE>
ORIGINAL ISSUE DISCOUNT NOTES
Original Issue Discount Notes are Notes issued at a discount from the
principal amount payable at maturity and which are considered to be issued with
original issue discount which must be included in income for United States
federal income tax purposes at a constant rate ("Original Issue Discount
Notes"). See "United States Tax Considerations." Certain additional
considerations relating to Original Issue Discount Notes may be described in the
Pricing Supplement relating thereto.
OTHER PROVISIONS, ADDENDA
Any provisions with respect to Notes, including the determination of an
Interest Rate Basis, the specification of Interest Rates Basis, calculation of
the interest rate applicable to a Floating Rate Note, its Interest Payment Dates
or any other matter relating thereto may be modified by the terms specified
under "Other Provisions" on the face thereof or in an Addendum relating thereto,
if so specified on the face thereof and in the applicable Pricing Supplement.
SPECIAL PROVISIONS RELATING TO FOREIGN CURRENCY NOTES
GENERAL
Unless otherwise specified in the applicable Pricing Supplement, the
following provisions shall apply to Foreign Currency Notes which are in addition
to, and to the extent inconsistent therewith replace, the description of general
terms and provisions of the Notes set forth in the Prospectus.
Foreign Currency Notes may be issued as either Certificated Notes or Book
Entry Notes. Unless otherwise indicated in the applicable Pricing Supplement,
payment of the purchase price of Foreign Currency Notes will be made in
immediately available funds in the Specified Currency, as described below.
PAYMENT CURRENCY
Unless otherwise indicated in the applicable Pricing Supplement, purchasers
are required to pay for Foreign Currency Notes in the Specified Currency, and
payments made by the Company of principal of, premium, if any, and interest, if
any, on a Foreign Currency Note will be made in U.S. dollars unless the holder
of such Foreign Currency Note elects to receive payments in the Specified
Currency. Such U.S. dollar amounts shall be calculated on the basis of the noon
U.S. dollar buying rate in The City of New York for cable transfers of the
Specified Currency as certified for customs purposes by the Federal Reserve Bank
of New York as determined by The Chase Manhattan Bank (National Association)
(the "Exchange Rate Agent," which term includes any successor exchange rate
agent appointed by the Company) on the date of such payment, except as provided
below.
Currently, there are limited facilities in the United States for the
conversion of U.S. dollars into foreign currencies. Therefore, unless otherwise
indicated in the applicable Pricing Supplement, the Exchange Rate Agent is
prepared to arrange for the conversion of U.S. dollars into a Specified Currency
on behalf of any purchaser of a Foreign Currency Note to enable a prospective
purchaser to deliver the Specified Currency in payment for such Foreign Currency
Note. The Exchange Rate Agent must receive a request for any such conversion on
or prior to the third Business Day preceding the date of delivery of the Foreign
Currency Note. All costs of such exchange will be borne by such purchaser.
Unless otherwise indicated in the applicable Pricing Supplement, the
Exchange Rate Agent is prepared to arrange for conversion of any U.S.
dollar-payment to be made by the Company on a Foreign Currency Note from U.S.
dollars into the Specified Currency upon the request of the holder. Such
request, which may apply to one or more payment dates, must be received by the
Exchange Rate Agent at least ten calendar days prior to the applicable payment
date. Once made, such election is irrevocable as to the next succeeding payment
date; if such election applied to more than one payment date, such election may
thereafter be revoked as to all but the next succeeding payment date so long as
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<PAGE>
the Exchange Rate Agent is notified of such revocation in writing at least ten
calendar days prior to the applicable payment date. The costs of any such
conversion will be borne by the holder of a Foreign Currency Note through
deductions from such payments.
Conversion of U.S. dollars into the Specified Currency will be based on the
highest bid quotation in The City of New York received by the Exchange Rate
Agent at approximately 11:00 a.m., New York City time, on the second Business
Day preceding the applicable payment date from three recognized foreign exchange
dealers (one of which may be the Exchange Rate Agent) for the purchase by the
quoting dealer of U.S. dollars for such Specified Currency for settlement on
such payment date in the aggregate amount of U.S. dollars payable to the holders
of Notes and at which the applicable dealer commits to execute a contract. If
such bid quotations are not available, payments to holders will be made in U.S.
dollars.
If provided for in the applicable Prospectus Supplement, conversion of the
non-U.S. dollar Specified Currency into U.S. dollars will be based on the
highest bid quotation in The City of New York received by the Exchange Rate
Agent at approximately 11:00 a.m., New York City time, on the second Business
Day preceding the closing date for such Foreign Currency Note from three
recognized foreign exchange dealers (one of which may be the Exchange Rate
Agent) for the purchase by the quoting dealer of such non-U.S. dollar Specified
Currency for settlement on such date in the aggregate amount of such non-U.S.
dollar Specified Currency payable to the Company at the closing and at which the
applicable dealer commits to execute a contract.
Unless otherwise specified in the applicable Pricing Supplement, the payment
of the principal of and premium and interest, if any, on each Foreign Currency
Note to be made by the Company in U.S dollars will be made in the manner
specified under "Description of Notes--General." Unless otherwise specified in
an applicable Pricing Supplement, the payment of principal of and premium and
interest, if any, by the Company on each Foreign Currency Note to be made in a
Specified Currency other than U.S. dollars will be made as set forth below. The
payment of interest on a Foreign Currency Note (other than any interest payable
to the holder thereof on the Maturity Date) to be made in such Specified
Currency will be paid by bank draft mailed to the person in whose name the
Foreign Currency Note is registered at the close of business on the applicable
Record Date. The principal of and premium and interest, if any, on such Foreign
Currency Note and any interest payable to the holder thereof when the principal
of such Foreign Currency Note is payable will be paid by bank draft upon
surrender of such Note at the office of The Chase Manhattan Bank (National
Association), 4 Chase MetroTech Center, 3rd Floor, Brooklyn, NY 11245, unless
otherwise provided in the applicable Pricing Supplement. Specified Currency
drafts will be drawn on a bank office located outside the United States. If the
Paying Agent receives a written request from a holder of the equivalent of
$1,000,000 or more in aggregate principal amount of the Foreign Currency Notes
not later than the close of business on a Record Date for an interest payment or
the fifteenth calendar day prior to the Maturity Date, the Paying Agent will,
subject to applicable laws and regulations, until it receives notice to the
contrary (but, in the case of payments to be made on the Maturity Date only
after the surrender of the Note or Notes not later than one Business Day prior
to the Maturity Date at the address set forth above), make all Specified
Currency payments to such holder by wire transfer to an account designated in
such written request. Currently, banks in the United States offer non-U.S.
dollar denominated checking or savings account facilities in the United States
only on a limited basis, and there are limited facilities in the United States
for the conversion of foreign currencies into U.S. dollars. Accordingly, unless
otherwise indicated in the applicable Pricing Supplement, wire transfers of
principal of, premium, if any, and interest, if any, on Foreign Currency Notes
to be made in a Specified Currency other than U.S. dollars pursuant to the
immediately preceding sentence will be made to an account at a bank outside the
United States, unless alternative arrangements are made.
If a Specified Currency is not available to the Company for making payments
of principal, premium, if any, or interest, if any, on any Foreign Currency Note
with respect to which such payment is required to be made in such Specified
Currency or a holder has validly elected to receive such payment in the relevant
Specified Currency due to the imposition of exchange controls or other
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<PAGE>
circumstances beyond the control of the Company or is no longer used by the
government of the country issuing, or authority sponsoring, such Specified
Currency or for the settlement of transactions by public institutions in the
international banking community, then the Company will be entitled to satisfy
its obligations to holders of such Foreign Currency Notes by making such
payments in U.S. dollars on the basis of the noon U.S. dollar buying rate in The
City of New York for cable transfers of the Specified Currency as certified for
customs purposes by the Federal Reserve Bank of New York, as determined by the
Exchange Rate Agent on the date of such payment or, if such rate is not
available on such date, as of the most recent practicable date. Any payment made
under such circumstances in U.S. dollars will not constitute an Event of
Default.
All determinations referred to above made by the Company or the Exchange
Rate Agent shall be at its sole discretion and shall, in the absence of manifest
error, be conclusive for all purposes and binding on holders of Notes.
Specific information about the currency or currency units in which a
particular Foreign Currency Note is denominated, including historical exchange
rates and a description of the currency and any exchange controls, will be set
forth in the applicable Pricing Supplement. The information therein concerning
exchange rates is furnished as a matter of information only and should not be
regarded as indicative of the range of or trends in fluctuations in currency
exchange rates that may occur in the future.
MINIMUM DENOMINATIONS, RESTRICTIONS ON MATURITIES, REPAYMENT AND REDEMPTION
GENERAL. Notes denominated in Specified Currencies other than U.S. dollars
shall have such minimum denominations and be subject to such restrictions on
maturities, repayment and redemption as are set forth below or as are set forth
in an applicable Pricing Supplement in the event different restrictions on
maturities, repayment and redemption may be permitted or required from time to
time by any relevant central bank or equivalent governmental body, however
designated, or by such laws or regulations as are applicable to the Notes or the
Specified Currency. Restrictions related to the distribution of Notes
denominated in Specified Currencies other than U.S. dollars are set forth under
"Plan of Distribution" in this Prospectus Supplement. Any other restrictions
applicable to Notes denominated in Specified Currencies other than U.S. dollars
will be set forth in the related Pricing Supplement.
MINIMUM DENOMINATIONS. Any Notes denominated in Japanese yen will be issued
in denomination of not less than Y1,000,000. Any Notes denominated in Pounds
sterling will be issued in denominations of not less than L100,000. Any Notes
denominated in Dutch Guilder will be issued in denominations of not less than
Dfl. 1,000,000. Unless otherwise specified in the applicable Pricing Supplement,
Notes denominated in other currencies will be issued in such denominations as
are set forth under "Descriptions of the Notes -- Denominations, Exchange and
Transfer."
RESTRICTIONS ON MATURITIES, REPAYMENT AND REDEMPTION Any Notes denominated
in Deutschemarks will have maturities of not less than two years from their
original issue date, and may not be subject to redemption at the option of the
Company or repayment at the option of the holder during such two-year period.
Any Notes denominated in Pounds sterling will have maturities of more than one
year and not more than five years from and including the original issue date,
and may not be subject to redemption at the option of the Company or repayment
at the option of the holders during the first year following their original
issue date, except as permitted by applicable law. Any Notes denominated in
Japanese yen will have maturities of one year or more from their original issue
date, and may not be subject to redemption at the option of the Company or
repayment at the option of the holders during the first year following their
original issue date. In addition, any Notes denominated in Dutch Guilder will
have maturities of not less than two years.
OTHER RESTRICTIONS APPLICABLE TO FOREIGN CURRENCY NOTES. Payments in
Japanese yen to a non-resident of Japan may be made only by transfer to a
non-resident account maintained by the payee with, or a check drawn upon, an
authorized foreign exchange bank.
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<PAGE>
NOTES DENOMINATED IN ECU
VALUATION OF THE ECU. Subject to the provisions under "Payment in a
Component Currency" below, the value of the ECU, in which the Notes may be
denominated or may be payable, is equal to the value of the ECU used in the
European Monetary System and which is at the date hereof valued on the basis of
specified amounts of the currencies of member countries of the European
Community ("EC") as shown below.
Pursuant to Council Regulation (EEC) No. 3180/78 of December 18, 1978, as
amended by Council Regulation (EEC) No. 1971/89 of June 19, 1989, the ECU is at
the date hereof defined as the sum of the following amounts of the following
components:
<TABLE>
<C> <S> <C> <C>
0.6242 German mark 0.130 Luxembourg franc
0.08784 Pound sterling 0.1976 Danish krone
1.332 French francs 0.008552 Irish pound
151.8 Italian lire 1.440 Greek drachmas
0.2198 Dutch guilder 6.885 Spanish pesetas
3.301 Belgian francs 1.393 Portuguese escudos
</TABLE>
Such amounts and/or components may be changed by the EC, in which event the
basis of valuation of the ECU will change accordingly.
PAYMENT IN A COMPONENT CURRENCY. With respect to each due date for the
payment of principal of, premium, if any, or interest on, the Notes, if, on or
prior to such due date, the ECU is not used in the European Monetary System or
if, on or prior to such due date, banks in all member countries of the EC shall
have ceased to provide ECU accounts, in either case the Company or its agent
shall (in the case of an agent, without liability on its part but after
consultation with the Company and having regard to the availability to the
Company of the relevant currency) choose a substitute currency (the "Chosen
Currency"), which shall be a component currency of the ECU or U.S. dollars, in
which all payments to be calculated by reference to or made in ECU due on or
after such due date with respect to the Notes shall be made. Notice of the
Chosen Currency so selected shall be mailed to registered holders of Notes. The
amount of each payment calculated with reference to or made in such Chosen
Currency shall be computed on the basis of the equivalent of the ECU in that
currency, determined as described below, as of the fourth business day in
Luxembourg prior to the date on which such payment is due.
On or about the first business day in Luxembourg following the day on which
the ECU is not used in the European Monetary System or on which banks in all
member countries of the EC shall have ceased to provide ECU accounts, the
Company or its agent shall (in the case of an agent, without liability on its
part but after consultation with the Company and having regard to the
availability to the Company of the relevant currency) choose a Chosen Currency
in which all payments to be calculated by reference to or made in ECU with
respect to Notes having a due date prior thereto but not yet presented for
payment are to be made. The amount of each payment calculated with reference to
or made in such Chosen Currency shall be computed on the basis of the equivalent
of the ECU in that currency, determined as described below, as of such first
business day.
The equivalent of the ECU in the relevant Chosen Currency as of any date
(the "Day of Valuation") shall be determined by the Exchange Rate Agent on the
following basis. The amounts and components composing the ECU for this purpose
(the "Components") shall be the amounts and components which composed the ECU
(i) as of the last date on which the ECU was used in the European Monetary
System (or, if after such last date the ECU was used for the settlement of
transactions by public institutions of or within the EC, as of the most recent
date when the ECU was so used) or (ii) where the selection of a Chosen Currency
shall have been required only because banks in all member countries of the EC
shall have ceased to provide ECU accounts, as of the Day of Valuation. The
equivalent of the ECU in the Chosen Currency shall be calculated by, first,
aggregating the U.S. dollar equivalents of the Components; and then, in the case
of a Chosen Currency other than
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U.S. dollars, using the rate used for determining the U.S. dollar equivalent of
the Components in the Chosen Currency as set forth below, calculating the
equivalent in the Chosen Currency of such aggregate amount in U.S. dollars.
The U.S. dollar equivalent of each of the Components shall be determined by
the Exchange Rate Agent on the basis of the middle spot delivery quotations
prevailing at 2:30 p.m., Luxembourg time, on the Day of Valuation, as obtained
by the Exchange Rate Agent from one or more major banks, as selected by the
Company or its agent, in the country of issue of the component currency in
question.
If for any reason no direct quotations are available for a Component as of a
Day of Valuation from any of the banks selected for this purpose, in computing
the U.S. dollar equivalent of such Component, the Exchange Rate Agent shall
(except as provided below) use the most recent direct quotations for such
Component obtained by it or on its behalf, provided that such quotations were
prevailing in the country of issue not more than two Business Days before such
Day of Valuation. If such most recent quotations were so prevailing more than
two Business Days in the country of issue before such Day of Valuation, the
Exchange Rate Agent shall determine the U.S. dollar equivalent of such Component
on the basis of cross rates derived from the middle spot delivery quotations for
such component currency and for the U.S. dollar prevailing at 2:30 p.m.
Luxembourg time on such Day of Valuation, as obtained by, or on behalf of, the
Exchange Rate Agent from one or more major banks, as selected by the Company or
its agents, in a country other than the country of issue of such component
currency. Notwithstanding the foregoing, the Exchange Rate Agent shall determine
the U.S. dollar equivalent of such Component on the basis of such cross rates if
the Company or such agent judges that the equivalent so calculated is more
representative than the U.S. dollar equivalent calculated as provided in the
first sentence of this paragraph. Unless otherwise specified by the Company or
its agent, if there is more than one market for dealing in any component
currency by reason of foreign exchange regulations or for any other reason, the
market to be referred to in respect of such currency shall be that upon which a
non-resident issuer of notes denominated in such currency would purchase such
currency in order to make payments in respect of such notes.
If the official unit of any component currency is altered by way of
combination or subdivision, the number of units of that currency as a Component
shall be divided or multiplied in the same proportion. If two or more component
currencies are consolidated into a single currency, the amounts of those
currencies as Components shall be replaced by an amount in such single currency
equal to the sum of the amounts of the consolidated component currencies
expressed in such single currency. If any component currency is divided into two
or more currencies, the amount of that currency as a Component shall be replaced
by amounts of such two or more currencies, each of which shall be equal to the
amount of the former component currency divided by the number of units of
currency into which that currency was divided.
All determinations made by the Company or its agent shall be at its sole
discretion and shall, in the absence of manifest error, be conclusive for all
purposes and binding on the Company and all holders of Notes.
FOREIGN CURRENCY RISKS
THIS PROSPECTUS SUPPLEMENT, THE PROSPECTUS AND ANY PRICING SUPPLEMENT DO NOT
DESCRIBE ALL THE RISKS OF AN INVESTMENT IN FOREIGN CURRENCY NOTES OR INDEXED
NOTES THE PAYMENT OF WHICH IS TO BE MADE IN OR RELATED TO THE VALUE OF A FOREIGN
CURRENCY OR A COMPOSITE CURRENCY AND THE COMPANY DISCLAIMS ANY RESPONSIBILITY TO
ADVISE PROSPECTIVE PURCHASERS OF SUCH RISKS AS THEY EXIST AT THE DATE OF THIS
PROSPECTUS SUPPLEMENT OR AS SUCH RISKS MAY CHANGE FROM TIME TO TIME. PROSPECTIVE
INVESTORS SHOULD CONSULT THEIR OWN FINANCIAL AND LEGAL ADVISORS AS TO THE RISKS
ENTAILED BY AN INVESTMENT IN SUCH NOTES. SUCH NOTES ARE NOT AN APPROPRIATE
INVESTMENT FOR INVESTORS WHO ARE UNSOPHISTICATED WITH RESPECT TO FOREIGN
CURRENCY, CURRENCY UNIT OR INDEXED TRANSACTIONS.
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The information set forth in this Prospectus Supplement with respect to
foreign currency risks is directed to prospective purchasers who are United
States residents, and the Company disclaims any responsibility to advise
prospective purchasers of Foreign Currency Notes who are residents of countries
other than the United States with respect to any matters that may affect the
purchase, holding or receipt of payments of principal of, premium, if any, and
interest on the Notes. Such persons should consult their own counsel with regard
to such matters.
EXCHANGE RATES AND EXCHANGE CONTROLS
An investment in Notes that are denominated in, or the payment of which is
to be or may be made in or related to the value of, a Specified Currency other
than U.S. dollars entails significant risks that are not associated with a
similar investment in a security denominated in U.S. dollars. Such risks include
the possibility of significant changes in rates of exchange between the U.S.
dollar and the various foreign currencies (or composite currencies) after the
issuance of such Note and the possibility of the imposition or modification of
foreign exchange controls by either the U.S. or foreign governments. Such risks
generally depend on economic and political events over which the Company has no
control. In recent years, rates of exchange between U.S. dollars and certain
foreign currencies have been highly volatile and such volatility may be expected
to continue in the future. Fluctuations in any particular exchange rate that
have occurred in the past are not necessarily indicative, however, of
fluctuations in such rate that may occur during the term of any Note.
Depreciation of the Specified Currency of a Note against the U.S. dollar would
result in a decrease in the effective yield of such Note below its coupon rate
and, in certain circumstances, could result in a loss to the investor on a U.S.
dollar basis. In addition, depending on the specific terms of a currency linked
Indexed Note, changes in exchange rates relating to any of the currencies
involved may result in a decrease in the effective yield of such currency linked
Indexed Note and, in certain circumstances, could result in a loss of all or a
substantial portion of the principal of a currency linked Indexed Note to the
investor.
Foreign exchange rates can either be fixed by sovereign governments or
float. Exchange rates of most economically developed nations are permitted to
fluctuate in value relative to the U.S. dollar. National governments, however,
rarely voluntarily allow their currencies to float freely in response to
economic forces. Governments in fact use a variety of techniques, such as
intervention by a country's central bank or imposition of regulatory controls or
taxes, to affect the exchange rate of their currencies. Governments may also
issue a new currency to replace an existing currency or alter the exchange rate
or relative exchange characteristics by devaluation or revaluation of a
currency. Thus, a special risk in purchasing Foreign Currency Notes or currency
linked Indexed Notes is that their U.S. dollar-equivalent yields could be
affected by governmental actions, which could change or interfere with
theretofore freely determined currency valuation, fluctuations in response to
other market forces, and the movement of currencies across borders. There will
be no adjustment or change in the terms of such Notes in the event that exchange
rates should become fixed, or in the event of any devaluation or revaluation or
imposition of exchange or other regulatory controls or taxes, or in the event of
other developments affecting the U.S. dollar or any applicable Specified
Currency.
Governments have imposed from time to time, and may in the future impose,
exchange controls which could affect exchange rates as well as the availability
of a specified foreign currency at the time of payment of principal of, and
premium, if any, or interest, if any, on a Note. Even if there are no actual
exchange controls, it is possible that the Specified Currency for any particular
Note not denominated in U.S. dollars would not be available at such Note's
maturity. In that event, the Company would make required payments in U.S.
dollars on the basis of the market exchange rate on the date of such payment, or
if such rate of exchange is not then available, on the basis of the market
exchange rate as of the most recent practicable date. See "Special Provisions
Relating to Foreign Currency Notes--Payment Currency."
GOVERNING LAW AND JUDGMENTS
The Indenture and Notes will be governed by and construed in accordance with
the laws of the State of New York. If an action based on Foreign Currency Notes
were commenced in a New York
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court, such court would render or enter a judgment or decree in the Specified
Currency. Such judgment would then be converted into U.S. dollars at the rate of
exchange prevailing on the date of entry of the judgment or decree. In the event
an action based on Foreign Currency Notes were commenced in a court in the
United States outside New York, it is likely that the judgment currency would be
U.S. dollars, but the method of determining the applicable exchange rate may
differ.
UNITED STATES TAX CONSIDERATIONS
The following is a summary of the principal United States federal income tax
consequences of ownership and disposition of the Notes to initial U.S. Holders
(as defined below). The summary is based upon the advice of James M. Kalashian,
General Tax Counsel of General Electric Capital Corporation, tax counsel to the
Company. This summary is based on the Internal Revenue Code of 1986, as amended
to the date hereof (the "Code"), administrative pronouncements, judicial
decisions and existing and proposed Treasury regulations, changes to any of
which subsequent to the date of this Prospectus Supplement may affect the tax
consequences described herein. This summary discusses only Notes held as capital
assets and it does not discuss all of the tax consequences that may be relevant
to a holder in light of his particular circumstances or to holders subject to
special rules, such as certain financial institutions, insurance companies,
dealers in securities or foreign currencies, persons holding Notes as a hedge
against currency risks or as a position in a "straddle" for tax purposes, or
holders whose functional currency is not the U.S. dollar. Persons considering
the purchase of Notes should consult their tax advisors with regard to the
application of the United States federal income tax laws to their particular
situations as well as any tax consequences arising under the law of any other
taxing jurisdiction.
As used herein, the term "U.S. Holder" means a beneficial owner of a Note
that is for United States federal income tax purposes: (i) a citizen or resident
of the United States, (ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States or of any political
subdivision thereof, (iii) an estate or trust the income of which is subject to
United States federal income taxation regardless of its source or (iv) any other
person whose income or gain in respect of a Note is effectively connected with
the conduct of a United States trade or business; and the term "non-U.S. Holder"
means a holder of a Note that is not a U.S. Holder.
PAYMENTS OF INTEREST
Payments of interest on a Note generally will be taxable to a U.S. Holder as
ordinary interest income at the time such payments are accrued or are received
in accordance with the U.S. Holder's method of accounting for tax purposes.
SALE, EXCHANGE AND RETIREMENT OF NOTES
Upon the sale, exchange or retirement of a Note, a U.S. Holder will
recognize taxable gain or loss equal to the difference between the amount
realized on the sale, exchange or retirement (not including any amount
attributable to accrued but unpaid interest) and such U.S. Holder's adjusted tax
basis in the Note. A U.S. Holder's adjusted tax basis in a Note will equal the
cost of the Note to such U.S. Holder, increased by the amounts of any original
issue discount and market discount previously included in income by the U.S.
Holder with respect to such Note and reduced by any amortized premium and any
principal payments received by the U.S. Holder and, in the case of an Original
Issue Discount Note (as defined below), by the amounts of any payments that do
not constitute qualified stated interest (as defined below).
Subject to the discussion regarding "Foreign Currency Notes" below, gain or
loss realized on the sale, exchange or retirement of a Note will be capital gain
or loss (except to the extent of any accrued market discount or, in the case of
a Short-Term Note (as defined below), to the extent of any original issue
discount not previously included in the U.S. Holder's taxable income), and will
be long-term capital gain or loss if at the time of sale, exchange or retirement
the Note has been held for more than one year.
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ORIGINAL ISSUE DISCOUNT NOTES
The following summary is a general discussion of the United States federal
income tax consequences to U.S. Holders of the purchase, ownership and
disposition of Notes issued with original issue discount ("Original Issue
Discount Notes"). The following summary is based upon final Treasury regulations
(the "OID Regulations") issued by the Internal Revenue Service ("IRS") on
January 27, 1994 under the original issue discount provisions of the Code.
For United States federal income tax purposes, original issue discount is
the excess of the stated redemption price at maturity of a Note over its issue
price, if such excess equals or exceeds a DE MINIMIS amount (generally 1/4 of 1%
of the Note's stated redemption price at maturity multiplied by the number of
complete years to its maturity from its issue date or, in the case of a Note
providing for a payment of any amount other than qualified stated interest (as
defined below) prior to maturity, multiplied by the weighted average maturity of
such Note.) The issue price of each Note in an issue of Notes equals the first
price at which a substantial amount of such Notes has been sold (ignoring sales
to bond houses, brokers, or similar persons or organizations acting in the
capacity of underwriters, placement agents or wholesalers). The stated
redemption price at maturity of a Note is the sum of all payments provided by
the Note other than "qualified stated interest" payments. The term "qualified
stated interest" generally means stated interest that is unconditionally payable
in cash or property (other than debt instruments of the issuer) at least
annually at a single fixed rate (or, as described below, certain floating
rates). If, however, a Note bears interest for one or more accrual periods at a
rate below the rate applicable for the remaining term of such Note (e.g., Notes
with teaser rates or interest holidays) and neither the resulting foregone
interest on such Note nor any discount created by the Note's stated principal
amount being in excess of its issue price equals or exceed the DE MINIMIS amount
described above, then the stated interest on the Note will be treated as
qualified stated interest.
Payments of qualified stated interest on a Note are taxable to a U.S. Holder
as ordinary interest income at the time such payments are accrued or are
received (in accordance with the U.S. Holder's regular method of tax
accounting). A U.S. Holder of an Original Issue Discount Note must include
original issue discount in income as ordinary interest for United States federal
income tax purposes as it accrues under a constant yield method in advance of
receipt of the cash payments attributable to such income, regardless of such
U.S. Holder's regular method of tax accounting. In general, the amount of
original issue discount included in income by the initial U.S. Holder of an
Original Issue Discount Note is the sum of the daily portions of original issue
discount with respect to such Original Issue Discount Note for each day during
the taxable year (or portion of the taxable year) in which such U.S. Holder held
such Original Issue Discount Note. The "daily portion" of original issue
discount on any Original Issue Discount Note is determined by allocating to each
day in any accrual period a ratable portion of the original issue discount
allocable to that accrual period. An "accrual period" may be of any length and
the accrual period may vary in length over the term of the Original Issue
Discount Note, provided that each accrual period is no longer than one year and
each scheduled payment of principal or interest occurs either on the final day
of an accrual period or on the first day of an accrual period. The amount of
original issue discount allocable to each accrual period is generally equal to
the difference between (i) the product of the Original Issue Discount Note's
adjusted issue price at the beginning of such accrual period and its yield to
maturity (determined on the basis of compounding at the close of each accrual
period and appropriately adjusted to take into account the length of the
particular accrual period) and (ii) the amount of any qualified stated interest
payments allocable to such accrual period. The "adjusted issue price" of an
Original Issue Discount Note at the beginning of any accrual period is the sum
of the issue price of the Original Issue Discount Note plus the amount of
original issue discount allocable to all prior accrual periods minus the amount
of any prior payments on the Original Issue Discount Note that were not
qualified stated interest payments. Under these rules, U.S. Holders generally
will have to include in income increasingly greater amounts of original issue
discount in successive accrual periods.
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A U.S. Holder who purchases an Original Issue Discount Note for an amount
that is greater than its adjusted issue price as of the purchase date and less
than or equal to the sum of all amounts payable on the Original Issue Discount
Note after the purchase date other than payments of qualified stated interest
will be considered to have purchased the Discount Note at an "acquisition
premium." Under the acquisition premium rules, the amount of original issue
discount which such U.S. Holder must include in its gross income with respect to
such Original Issue Discount Note for any taxable year (or portion thereof in
which the U.S. Holder holds the Discount Note) will be reduced (but not below
zero) by the portion of the acquisition premium properly allocable to the
period.
Under the OID Regulations, Floating Rate Notes are subject to special rules
whereby a Floating Rate Note will qualify as a "variable rate debt instrument"
if (a) its issue price does not exceed the total noncontingent principal
payments due under the Floating Rate Note by more than a specified DE MINIMIS
amount and (b) it provides for stated interest, paid or compounded at least
annually, at current values of (i) one or more qualified floating rates, (ii) a
single fixed rate and one or more qualified floating rates, (iii) a single
objective rate, or (iv) a single fixed rate and a single objective rate that is
a qualified inverse floating rate.
A "qualified floating rate" is any variable rate where variations in the
value of such rate can reasonably be expected to measure contemporaneous
variations in the cost of newly borrowed funds in the currency in which the
Floating Rate Note is denominated. Although a multiple of a qualified floating
rate will generally not itself constitute a qualified floating rate, a variable
rate equal to the product of a qualified floating rate and a fixed multiple that
is greater than zero but not more than 1.35 will constitute a qualified floating
rate. A variable rate equal to the product of a qualified floating rate and a
fixed multiple that is greater than zero but not more than 1.35, increased or
decreased by a fixed rate, will also constitute a qualified floating rate. In
addition, under the OID Regulations, two or more qualified floating rates that
can reasonably be expected to have approximately the same values throughout the
term of the Floating Rate Note (E.G., two or more qualified floating rates with
values within 25 basis points of each other as determined on the Floating Rate
Note's issue date) will be treated as a single qualified floating rate.
Notwithstanding the foregoing, a variable rate that would otherwise constitute a
qualified floating rate but which is subject to one or more restrictions such as
a maximum numerical limitation (I.E., a cap) or a minimum numerical limitation
(I.E., a floor) may, under certain circumstances, fail to be treated as a
qualified floating rate under the OID Regulations unless such cap or floor is
fixed throughout the term of the Note. An "objective rate" is a rate that is not
itself a qualified floating rate but which is determined using a single fixed
formula and which is based upon (i) one or more qualified floating rates, (ii)
one or more rates where each rate would be a qualified floating rate for a debt
instrument denominated in a currency other than the currency in which the
Floating Rate Note is denominated, (iii) either the yield or changes in the
price of one or more items of actively traded personal property (other than
stock or debt of the issuer or a related party) or (iv) a combination of
objective rates. The OID Regulations also provide that other variable interest
rates may be treated as objective rates if so designated by the IRS in the
future. Despite the foregoing, a variable rate of interest on a Floating Rate
Note will not constitute an objective rate if it is reasonably expected that the
average value of such rate during the first half of the Floating Rate Note's
term will be either significantly less than or significantly greater than the
average value of the rate during the final half of the Floating Rate Note's
term. A "qualified inverse floating rate" is any objective rate where such rate
is equal to a fixed rate minus a qualified floating rate, as long as variations
in the rate can reasonably be expected to inversely reflect contemporaneous
variations in the cost of newly borrowed funds. The OID Regulations also provide
that if a Floating Rate Note provides for stated interest at a fixed rate for an
initial period of less than one year followed by a variable rate that is either
a qualified floating rate or an objective rate and if the variable rate on the
Floating Rate Note's issue date is intended to approximate the fixed rate (E.G.,
the value of the variable rate on the issue date does not differ from the value
of the fixed rate by more than 25 basis points), then the fixed rate and the
variable rate together will constitute either a single qualified floating rate
or objective rate, as the case may be.
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If a Floating Rate Note that provides for stated interest at either a single
qualified floating rate or a single objective rate throughout the term thereof
qualifies as a "variable rate debt instrument" under the OID Regulations, then
any stated interest on such Note which is unconditionally payable in cash or
property (other than debt instruments of the issuer) at least annually will
constitute qualified stated interest and will be taxed accordingly. Thus, a
Floating Rate Note that provides for stated interest at either a single
qualified floating rate or a single objective rate throughout the term thereof
and that qualifies as a "variable rate debt instrument" under the OID
Regulations will generally not be treated as having been issued with original
issue discount unless the Floating Rate Note is issued at a "true" discount
(I.E., at a price below the Note's stated principal amount) in excess of a
specified DE MINIMIS amount. Original issue discount on such a Floating Rate
Note arising from "true" discount is allocated to an accrual period using the
constant yield method described above by assuming that the variable rate is a
fixed rate equal to (i) in the case of a qualified floating rate or qualified
inverse floating rate, the value as of the issue date, of the qualified floating
rate or qualified inverse floating rate, or (ii) in the case of an objective
rate (other than a qualified inverse floating rate), a fixed rate that reflects
the yield that is reasonably expected for the Floating Rate Note.
In general, any other Floating Rate Note that qualifies as a "variable rate
debt instrument" will be converted into an "equivalent" fixed rate debt
instrument for purposes of determining the amount and accrual of original issue
discount and qualified stated interest on the Floating Rate Note. The OID
Regulations generally require that such a Floating Rate Note be converted into
an "equivalent" fixed rate debt instrument by substituting any qualified
floating rate or qualified inverse floating rate provided for under the terms of
the Floating Rate Note with a fixed rate equal to the value of the qualified
floating rate or qualified inverse floating rate, as the case may be, as of the
Floating Rate Note's issue date. Any objective rate (other than a qualified
inverse floating rate) provided for under the terms of the Floating Rate Note is
converted into a fixed rate that reflects the yield that is reasonably expected
for the Floating Rate Note. In the case of a Floating Rate Note that qualifies
as a "variable rate debt instrument" and provides for stated interest at a fixed
rate in addition to either one or more qualified floating rates or a qualified
inverse floating rate, the fixed rate is initially converted into a qualified
floating rate (or a qualified inverse floating rate, if the Floating Rate Note
provides for a qualified inverse floating rate). Under such circumstances, the
qualified floating rate or qualified inverse floating rate that replaces the
fixed rate must be such that the fair market value of the Floating Rate Note as
of the Floating Rate Note's issue date is approximately the same as the fair
market value of an otherwise identical debt instrument that provides for either
the qualified floating rate or qualified inverse floating rate rather than the
fixed rate. Subsequent to converting the fixed rate into either a qualified
floating rate or a qualified inverse floating rate, the Floating Rate Note is
then converted into an "equivalent" fixed rate debt instrument in the manner
described above.
Once the Floating Rate Note is converted into an "equivalent" fixed rate
debt instrument pursuant to the foregoing rules, the amount of original issue
discount and qualified stated interest, if any, are determined for the
"equivalent" fixed rate debt instrument by applying the general original issue
discount rules to the "equivalent" fixed rate debt instrument and a U.S. Holder
of the Floating Rate Note will account for such original issue discount and
qualified stated interest as if the U.S. Holder held the "equivalent" fixed rate
debt instrument. Each accrual period appropriate adjustments will be made to the
amount of qualified stated interest or original issue discount assumed to have
been accrued or paid with respect to the "equivalent" fixed rate debt instrument
in the event that such amounts differ from the actual amount of interest accrued
or paid on the Floating Rate Note during the accrual period.
U.S. Holders should be aware that on December 15, 1994, the IRS released
proposed amendments to the OID Regulations which would broaden the definition of
an objective rate and would further clarify certain other provisions contained
in the OID Regulations. If ultimately adopted, these amendments to the OID
Regulations generally would be effective for debt instruments issued 60 days or
more after the date on which such proposed amendments are finalized.
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If a Floating Rate Note does not qualify as a "variable rate debt
instrument" under the OID Regulations, then the Floating Rate Note would be
treated as a contingent payment debt obligation. The timing and character of
income recognition on contingent payment debt obligations are uncertain under
current law. It is possible that a U.S. Holder may be required to include
amounts in income prior to, or amounts significantly greater than, the economic
accrual of income depending on the particular terms of the contingent payment
debt obligation. The proposed amendments to the OID Regulations issued on
December 15, 1994, address, among other items, the accrual of original issue
discount, and the timing and character of gain realized on the sale, exchange or
retirement of, debt instruments providing for contingent payments. Such
regulations would apply to contingent payments debt instruments issued on or
after 60 days after the date the final regulations are published. Potential
purchasers of contingent payment debt obligations should carefully examine the
applicable Pricing Supplement and should consult their own tax advisors
concerning the United States federal income tax consequences of the ownership
and the disposition of such contingent payment debt obligations.
Certain of the Notes (i) may be redeemable at the option of the Company
prior to their stated maturity (a "call option") and/or (ii) may be repayable at
the option of the holder prior to their stated maturity (a "put option"). Notes
containing such features may be subject to rules that differ from the general
rules discussed above. Investors intending to purchase Notes with such features
should consult their own tax advisors, since the original issue discount
consequences will depend, in part, on the particular terms and features of the
purchased Notes.
U.S. Holders may generally, upon election, include in income all interest
(including stated interest, acquisition discount, original issue discount, DE
MINIMIS original issue discount, market discount, DE MINIMIS market discount,
and unstated interest, as adjusted by any amortizable bond premium or
acquisition premium) that accrues on a debt instrument by using the constant
yield method applicable to original issue discount, subject to certain
limitations and exceptions.
SHORT-TERM NOTES
Notes that have a fixed maturity of one year or less ("Short-Term Notes")
will be treated as issued with original issue discount. Original issue discount
includes both stated and unstated interest on a Short-Term Note. In general, a
cash method U.S. Holder of a Short-Term Note is not required to accrue original
issue discount unless the holder elects to do so. If such an election is not
made, any gain recognized by the U.S. Holder on the sale, exchange or maturity
of the Short-Term Note will be ordinary income to the extent of the original
issue discount accrued on a straight-line basis, or upon election, under the
constant yield method (based on daily compounding) through the date of sale or
maturity, and a portion of the deductions otherwise allowable to the holder for
any interest on borrowings allocable to the Short-Term Note will be deferred
until a corresponding amount of income is realized. U.S. Holders who report
income for federal income tax purposes under the accrual method, and certain
other holders including banks and dealers in securities, are required to accrue
original issue discount on a Short-Term Note on a straight-line basis unless an
election is made to accrue the original issue discount under a constant yield
method (based on daily compounding).
PREMIUM AND MARKET DISCOUNT
If a U.S. Holder purchases a Note for an amount that is greater than the
amount payable at maturity, such holder will be considered to have purchased the
Note with "amortizable bond premium" equal in amount to such excess. A holder
may elect to amortize such premium using a constant yield method over the
remaining term of the Note and may offset interest otherwise required to be
included in respect of the Note during any taxable year by the amortized amount
of such excess for the taxable year. However, if the Note may be optionally
redeemed after the U.S. Holder acquires it at a price in excess of the amount
payable at maturity, special rules would apply which could result in a deferral
of the amortization of some bond premium until later in the term of the Note. A
U.S. Holder who elects to amortize bond premium must reduce his tax basis in the
Note by the amount of the
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premium amortized in any year. An election to amortize bond premium applies to
all taxable debt obligations then owned and thereafter acquired by the taxpayer
and may be revoked only with the consent of the IRS.
If a U.S. Holder purchases a Note, other than a Short-Term Note, for an
amount that is less than its issue price or, in the case of an Original Issue
Discount Note, its adjusted issue price as of the purchase date, the amount of
the difference will be treated as "market discount," unless such difference is
less than a specified DE MINIMIS amount (generally 1/4 of 1% of the Note's
stated redemption price at maturity multiplied by the number of complete years
to maturity from the date the holder purchased such Notes).
Under the market discount rules, a U.S. Holder will be required to treat any
partial principal payment (or, in the case of an Original Issue Discount Note,
any payment that does not constitute qualified stated interest) on, or any gain
realized on the sale, exchange, retirement or other disposition of, a Note as
ordinary income to the extent of the lesser of (i) the amount of such payment or
realized gain or (ii) the market discount which has not previously been included
in income and is treated as having accrued on such Note at the time of such
payment or disposition. Market discount will be considered to accrue ratably
during the period from the date of acquisition to the maturity date of the Note,
unless the U.S. Holder elects to accrue market discount on the basis of
semiannual compounding. In addition, if such Note is disposed of in a nontaxable
transaction (other than a nonrecognition transaction described in Code section
1276(c)), accrued market discount will be includible as ordinary income to the
U.S. Holder as if such U.S. Holder had sold the Note at its then fair market
value. Market discount will be considered to accrue ratably during the period
from the date of acquisition to the maturity date of the Note, unless the U.S.
Holder elects to accrue market discount on the basis of a constant interest
rate.
A U.S. Holder will be required to defer the deduction for all or a portion
of the interest paid or accrued on any indebtedness incurred or maintained to
purchase or carry a Note with market discount until the maturity of the Note or
its earlier disposition (including a nonrecognition transaction other than a
transaction described in Code section 1276(c)). A U.S. Holder may elect to
include market discount in income currently as it accrues (on either a ratable
or constant interest rate basis), in which case the rules described above
regarding the treatment as ordinary income of gain upon the disposition of the
Note and upon the receipt of certain cash payments and regarding the deferral of
interest deductions will not apply. Generally, such currently included market
discount is treated as interest for federal income tax purposes.
Under the OID Regulations, a U.S. Holder may elect to include in gross
income its entire return on a Note (i.e., the excess of all remaining payments
to be received on the Note over the amount paid for the Note by such U.S.
Holder) in accordance with a constant yield method based on the compounding of
interest. Such an election for a Note with amortizable bond premium (or market
discount) will result in a deemed election to amortize bond premium (or market
discount) for all of the U.S. Holder's debt instruments with amortizable bond
premium (or market discount) and may be revoked only with the permission of the
IRS with respect to debt instruments acquired after revocation.
FOREIGN CURRENCY NOTES
The following summary relates to Notes with respect to which all payments
are denominated in, or determined with reference to, a single currency or
currency unit other than the U.S. dollar.
PAYMENTS OF INTEREST ON FOREIGN CURRENCY NOTES
CASH METHOD. A U.S. Holder who uses the cash method of accounting for United
States federal income tax purposes and who receives a payment of interest with
respect to a Foreign Currency Note (other than original issue discount or market
discount) will be required to include in income the U.S. dollar value of the
foreign currency payment (determined on the date such payment is received)
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regardless of whether the payment in fact is converted to U.S. dollars at that
time. To the extent foreign currency is received, the U.S. dollar value will be
the U.S. Holder's tax basis in the foreign currency.
ACCRUAL METHOD. A U.S. Holder who uses the accrual method of accounting for
federal income tax purposes, or who otherwise is required to accrue interest
prior to receipt, will be required to include in income the U.S. dollar value of
the amount of interest income (including original issue discount or market
discount and reduced by amortizable bond premium or acquisition premium to the
extent applicable) that has accrued and is otherwise required to be taken into
account with respect to a Foreign Currency Note during an accrual period. The
U.S. dollar value of such accrued income will be determined by translating such
income at the average rate of exchange for the accrual period or, with respect
to an accrual period that spans two taxable years, at the average rate for the
partial period within the taxable year. A U.S. Holder may also elect to
translate accrued interest income using the rate of exchange of the last day of
the accrual period or, with respect to an accrual period that spans two taxable
years, using the rate of exchange on the last day of the taxable year. If the
last day of an accrual period is within five business days of the date of
receipt of the accrued interest, a U.S. Holder may translate such interest using
the rate of exchange on the date of receipt. The above election will apply to
all other debt obligations held by the U.S. Holder and may not be changed
without the consent of the IRS. U.S. Holders should consult their own tax
advisors before making the above election. A U.S. Holder will recognize exchange
gain or loss (which will be treated as ordinary income or loss) with respect to
accrued interest income on the date such income is received. The amount of
ordinary income or loss recognized will equal the difference, if any, between
the U.S. dollar value of the foreign currency payment received (determined on
the date such payment is received) in respect of such accrual period and the
U.S. dollar value of interest income that has accrued during such accrual period
(as determined above).
ORIGINAL ISSUE DISCOUNT ON FOREIGN CURRENCY NOTES
In the case of an Original Issue Discount Note or Short-Term Note, (i)
original issue discount is determined in units of the foreign currency, (ii)
accrued original issue discount is translated into U.S. dollars as described in
"Payments of Interest on a Foreign Currency Note--Accrual Method" above and
(iii) the amount of foreign currency gain or loss on the accrued original issue
discount is determined by comparing the amount of income received attributable
to the discount (either upon payment, maturity or an earlier disposition), as
translated into U.S. dollars at the rate of exchange on the date of such
receipt, with the amount of original issue discount accrued, as translated
above.
PREMIUM AND MARKET DISCOUNT ON FOREIGN CURRENCY NOTES
In the case of a Foreign Currency Note with market discount, (i) market
discount is determined in units of the foreign currency, (ii) accrued market
discount taken into account upon the receipt of any partial principal payment or
upon the sale, exchange, retirement or other disposition of the Foreign Currency
Note (other than accrued market discount required to be taken into account
currently) is translated into U.S. dollars at the exchange rate on such
disposition date (and no part of such accrued market discount is treated as
exchange gain or loss) and (iii) accrued market discount currently includible in
income by a U.S. Holder for any accrual period is translated into U.S. dollars
on the basis of the average exchange rate in effect during such accrual period,
and the exchange gain or loss is determined upon the receipt of any partial
principal payment or upon the sale, exchange, retirement or other disposition of
the Foreign Currency Note in the manner described in "Payments of Interest On a
Foreign Currency Note--Accrual Method" above with respect to computation of
exchange gain or loss on accrued interest.
With respect to a Foreign Currency Note issued with amortizable bond
premium, such premium is determined in the relevant foreign currency and reduces
interest income in units of the foreign currency. Although not entirely clear, a
U.S. Holder should recognize exchange gain or loss equal to the
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difference between the U.S. dollar value of the bond premium amortized with
respect to a period, determined on the date the interest attributable to such
period is received, and the U.S. dollar value of the bond premium determined on
the date of the acquisition of the Foreign Currency Note.
PURCHASE, SALE AND RETIREMENT OF FOREIGN CURRENCY NOTES
A U.S. Holder who purchases a Foreign Currency Note with previously owned
foreign currency will recognize ordinary income or loss in an amount equal to
the difference, if any, between such U.S. Holder's tax basis in the foreign
currency and the U.S. dollar fair market value of the foreign currency used to
purchase the Foreign Currency Note, determined on the date of purchase.
Upon the sale, exchange or retirement of a Foreign Currency Note, a U.S.
Holder will recognize taxable gain or loss equal to the difference between the
amount realized on the sale, exchange or retirement and such holder's adjusted
tax basis in the Foreign Currency Note. Such gain or loss generally will be
capital gain or loss (except with respect to Short-Term Notes, and except to the
extent of any foreign currency exchange gain or loss and any accrued market
discount not previously included in the holder's income), and will be long-term
capital gain or loss if at the time of sale, exchange or retirement the Foreign
Currency Note has been held by such U.S. Holder for more than one year. To the
extent the amount realized represents accrued but unpaid interest, however, such
amounts must be taken into account as interest income, with exchange gain or
loss computed as described in "Payments of Interest on Foreign Currency Notes"
above. If a U.S. Holder receives foreign currency on such a sale, exchange or
retirement, the amount realized will be based on the U.S. dollar value of the
foreign currency on (i) the date of the receipt of the foreign currency in the
case of a cash basis U.S. Holder and (ii) the date of disposition in the case of
an accrual basis U.S. Holder. In the case of a Note that is denominated in a
foreign currency and is traded on an established securities market, a cash basis
U.S. Holder (or, upon election, an accrual basis U.S. Holder) will determine the
U.S. dollar value of the amount realized by translating the foreign currency
payment at the spot rate of exchange on the settlement date of the sale. An
accrual basis taxpayer making such an election must apply it consistently and
cannot change such election without consent of the IRS. A U.S. Holder's adjusted
tax basis in a Foreign Currency Note will equal the cost of the Foreign Currency
Note to such holder, increased by the amounts of any market discount or original
issue discount previously included in income by the holder with respect to such
Foreign Currency Note and reduced by any amortized acquisition or other premium
and any principal payments received by the holder. A U.S. Holder's tax basis in
a Foreign Currency Note, and the amount of any subsequent adjustments to such
holder's tax basis, will be the U.S. dollar value of the foreign currency amount
paid for such Foreign Currency Note, or of the foreign currency amount of the
adjustment, determined on the date of such purchase or adjustment.
Gain or loss realized upon the sale, exchange or retirement of a Foreign
Currency Note that is attributable to fluctuations in currency exchange rates
will be ordinary income or loss which will not be treated as interest income or
expense. Gain or loss attributable to fluctuations in exchange rates will equal
the difference between the U.S. dollar value of the foreign currency principal
amount of the Foreign Currency Note, determined on the date such payment is
received or the Foreign Currency Note is disposed of, and the U.S. dollar value
of the foreign currency principal amount of the Foreign Currency Note,
determined on the date the U.S. Holder acquired the Note. Such foreign currency
gain or loss will be recognized only to the extent of the total gain or loss
realized by the U.S. Holder on the sale, exchange or retirement of the Foreign
Currency Note.
A U.S. Holder will have a tax basis in any foreign currency received as
interest or on the sale, exchange or retirement of a Foreign Currency Note equal
to the U.S. dollar value of such foreign currency, determined at the time such
interest is received or at the time of the sale, exchange or retirement. Any
gain or loss realized by a U.S. Holder on a sale or other disposition of foreign
currency (including its exchange for U.S. dollars or its use to purchase Foreign
Currency Notes) will be ordinary income or loss.
S-32
<PAGE>
CERTAIN OTHER NOTES
The United States federal income tax consequences to a holder of the
ownership and disposition of Indexed Notes, Dual Currency Notes, Amortizing
Notes, Renewable Notes, and Extendible Notes may vary depending upon the exact
terms of the Notes and such consequences are not described herein. Prospective
purchasers of such Notes should refer to the discussion relating to taxation in
the applicable Pricing Supplement for additional information.
BACKUP WITHHOLDING
Backup withholding of United States federal income tax at a rate of 31% may
apply to payments made in respect of the Notes to registered owners who are not
"exempt recipients" and who fail to provide certain identifying information
(such as the registered owner's taxpayer identification number) in the required
manner. Generally, corporations and certain other entities are exempt
recipients, whereas individuals are not exempt recipients. Payments made in
respect of the Notes to a U.S. Holder must be reported to the IRS, unless the
U.S. Holder is an exempt recipient.
In addition, upon the sale of a Note to (or through) a broker, the broker
must withhold 31% of the entire purchase price, unless either (i) the broker
determines that the seller is a corporation or other exempt recipient or (ii)
the seller provides, in the required manner, certain identifying information.
Such a sale must also be reported by the broker to the IRS, unless the broker
determines that the seller is an exempt recipient.
Any amounts withheld under the backup withholding rules from a payment to a
beneficial owner would be allowed as a refund or a credit against such
beneficial owner's United States Federal income tax provided the required
information is furnished to the IRS.
NON-U.S. HOLDERS
A non-U.S. Holder will not be subject to United States federal income taxes
(including backup withholding) on payments of principal, premium (if any) or
interest (including original issue discount, if any) on a Note, provided that
such non-U.S. Holder is not a direct or indirect 10% or greater shareholder of
the Company, a controlled foreign corporation related to the Company or a bank
receiving interest described in section 881(c)(3)(A) of the Code. To qualify for
the exemption from taxation, the last United States payor in the chain of
payment prior to payment to a non-U.S. Holder (the "Withholding Agent") has
received in the year in which a payment of interest or principal occurs, or in
either of the two preceding calendar years, a statement that (i) is signed by
the beneficial owner of the Note under penalties of perjury, (ii) certifies that
such owner is not a U.S. Holder and (iii) provides the name and address of the
beneficial owner. The statement may be made on an IRS Form W-8 or a
substantially similar form, and the beneficial owner must inform the Withholding
Agent of any change in the information on the statement within 30 days of such
change. If a Note is held through a securities clearing organization or certain
other financial institutions, the organization or institution may provide a
signed statement to the Withholding Agent. However, in such case, the signed
statement must be accompanied by a copy of the IRS Form W-8 or the substitute
form provided by the beneficial owner to the organization or institution. The
Treasury Department is considering implementation of further certification
requirements aimed at determining whether the issuer of a debt obligation is
related to holders thereof.
United States federal withholding tax will apply to contingent interest if
the amount of such interest is determined with reference to the profitability of
the Company. Unless otherwise provided in the applicable Pricing Supplement, the
Company does not expect any interest on the Notes to be subject to this
provision.
Generally, a non-U.S. Holder will not be subject to United States federal
income taxes on (including backup withholding) or information reporting on
payments on the sale, exchange or other disposition of a Note, provided that the
Holder certifies its non-U.S. Holder status as described above, or, in
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certain circumstances through other documentary evidence and certain other
conditions are met. Certain other exceptions may be applicable, and a non-U.S.
Holder should consult its tax advisor in this regard.
The Notes will not be subject to United States federal estate tax unless the
individual non-U.S. Holder is a direct or indirect 10% or greater shareholder of
the Company or, at the time of such individual's death, payments in respect of
the Notes would have been effectively connected with the conduct by such
individual of a trade or business in the United States.
PLAN OF DISTRIBUTION
GENERAL
Under the terms of the Amended and Restated U.S. Distribution Agreement
dated as of August 31, 1993, as amended (the "U.S. Distribution Agreement"), the
Notes are being offered on a continuing basis by the Company through the Agents,
each of which has agreed to use its best efforts to solicit purchases of the
Notes. Except as otherwise agreed by the Company and an Agent with respect to a
particular Note, the Company will pay each Agent a commission ranging from .050%
to .600% of the principal amount of each Note, depending on its maturity, sold
through such Agent. The Company will have the sole right to accept offers to
purchase Notes and may reject any such offer, in whole or in part. Each Agent
shall have the right, in its discretion reasonably exercised, without notice to
the Company, to reject any offer to purchase Notes received by it, in whole or
in part.
The Company also may sell Notes to any Agent, acting as principal, at a
discount or concession to be agreed upon at the time of sale, for resale to one
or more investors or other purchasers at a fixed offering price or at varying
prices related to prevailing market prices at the time of such resale or
otherwise, as determined by such Agent and specified in the applicable Pricing
Supplement. The Agents may offer the Notes they have purchased as principal to
other dealers. The Agents may sell Notes to any dealer at a discount and, unless
otherwise specified in the applicable Pricing Supplement, such discount allowed
to any dealer will not be in excess of the discount to be received by such Agent
from the Company. Unless otherwise indicated in the applicable Pricing
Supplement, any Note sold to an Agent as principal will be purchased by such
Agent at a price equal to 100% of the principal amount thereof less a percentage
equal to the commission applicable to any agency sale of a Note of identical
maturity, and may be resold by the Agent to investors and other purchasers from
time to time in one or more transactions, including negotiated transactions as
described above. After the initial public offering of Notes to be resold to
investors and other purchasers, the public offering price, concession and
discount may be changed.
The Notes may also be sold by the Company directly to investors (other than
broker-dealers) in those jurisdictions in which the Company is permitted to do
so. No commission will be paid on Notes sold directly by the Company.
The Company may also sell Notes from time to time through one or more
additional agents, acting either as agent or principal, on substantially the
same terms as those applicable to sales to or through the Agents. Any such
additional agent shall, with respect to such Notes, be deemed to be included in
all references to an "Agent" or the "Agents" hereunder.
The Company reserves the right to withdraw, cancel or modify the offer made
hereby without notice.
Each purchaser of a Note will arrange for payment as instructed by the
applicable Agent. The Agents are required to deliver the proceeds of the Notes
to the Company in immediately available funds, to a bank designated by the
Company in accordance with the terms of the U.S. Distribution Agreement, on the
date of settlement.
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The Agents may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended (the "Act"). The Company has agreed to
indemnify the Agents against and contribute toward certain liabilities,
including liabilities under the Act. The Company has agreed to reimburse the
Agents for certain expenses.
PaineWebber Incorporated, J. P. Morgan Securities Inc., Merrill Lynch,
Pierce, Fenner & Smith Inc., The First Boston Corporation and GECC Capital
Markets Group, Inc. ("GECC Capital Markets") each engage in transactions with
and perform services for the Company in the ordinary course of business. In the
ordinary course of their respective businesses, affiliates of J.P. Morgan
Securities Inc. have engaged, and may in the future engage, in commercial
banking and investment banking transactions with the Company and affiliates of
the Company.
General Electric Capital Services, Inc., formerly known as General Electric
Financial Services, Inc., which owns all of the outstanding stock of the
Company, owns 100% of the common stock of Kidder, Peabody Group Inc. which in
turn owns 100% of the common stock of Kidder Peabody & Co. Incorporated
("Kidder"). Kidder in turn owns approximately 22% of the issued and outstanding
common stock of Paine Webber Group Inc. ("Paine Webber") and Convertible
Preferred Stock and Redeemable Preferred Stock of Paine Webber. Paine Webber in
turn owns 100% of the common stock of PaineWebber Incorporated. In addition, the
Company owns 100% of the common stock of GECC Capital Markets. As a result, any
offering of Notes will be made in compliance with the applicable provisions of
Schedule E to the By-Laws of the NASD, which Schedule applies to offerings of
securities of issuers affiliated with NASD members participating in the
offering. In accordance therewith, no Domestic Agent will confirm sales to
accounts over which it exercises discretionary authority.
Each of the Agents may from time to time purchase and sell Notes in the
secondary market, but is not obligated to do so, and there can be no assurance
that there will be a secondary market for the Notes or liquidity in the
secondary market if one develops. From time to time, each of the Agents may make
a market in the Notes.
DISTRIBUTION OF YEN-DENOMINATED NOTES
The Notes have not been, and will not be, registered under the Securities
and Exchange Law of Japan. The Company and Agents will agree not to offer or
sell any Note directly or indirectly in Japan or to residents of Japan or for
the benefit of any Japanese person (which term as used herein means any person
resident in Japan, including any corporation or other entity organized under the
laws of Japan) or to others for reoffering or resale directly or indirectly in
Japan or to any Japanese person during the period of 90 days from the Original
Issue Date of such Note, or 180 days from the Original Issue Date of any Dual
Currency Note and that thereafter it will not do so except in circumstances that
result in compliance with any applicable laws, regulations and ministerial
guidelines of Japan taken as a whole. Without limiting the generality of the
foregoing, Notes denominated in Japanese yen will not be sold without the
approval of the Japanese Ministry of Finance, except for single currency Notes
repayable at their non-variable principal or redemption amount and bearing
interest at a fixed rate or by reference to Yen LIBOR (plus or minus a Spread),
and Indexed Notes such as Nikkei-linked and DAX-linked issues, in each case
which are already permitted by the Japanese Minister of Finance.
DISTRIBUTION OF DEUTSCHEMARK-DENOMINATED NOTES
Issuance of Notes denominated or payable in Deutschemarks will either be
sold by the Company through one or more of the German Agents (as defined below)
acting as Agent on behalf of the Company or in underwritten transactions lead
managed by one or more of the German Agents. Any issuance of Notes denominated
or payable in Deutschemarks with respect to which payments of principal,
interest or premium, if any, or any combination of the foregoing, are calculated
with reference to (i) the relationship between two or more currencies, (ii) one
or more specified securities or commodities, (iii) one or more securities or
commodities exchange indices or (iv) other indices or by other similar methods
or formulae will be offered and sold by the Company in compliance with the
then-current rules, regulations and policy statements of the Deutsche
Bundesbank. The following Agents are "German Agents" for purposes of Notes
denominated or payable in Deutschemarks: CS
S-35
<PAGE>
First Boston Effectenbank Aktiengesellschaft, J.P. Morgan GmbH, Merrill Lynch
Bank AG, S.G. Warburg & Co. GmbH, Schweizerische Bankgesellschaft (Deutschland)
AG and Schweizerischer Bankverein (Deutschland) AG. Chase Bank AG has agreed
with the Company to act as German Arranger with respect to Notes denominated or
payable in Deutschemarks.
LEGAL OPINIONS
The legality of the Notes will be passed upon for the Company by Burton J.
Kloster, Jr., a director and Senior Vice President, General Counsel and
Secretary of the Company or by Bruce C. Bennett, Associate General Counsel,
Treasury Operations and Assistant Secretary of the Company. Certain matters
relating to the offering of the Notes will be passed upon for the Agents by
Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017. Messrs.
Kloster, Bennett and James M. Kalashian (who is referred to under "United States
Tax Considerations"), together with members of their families, each owns, has
options to purchase and has other interests in shares of common stock of General
Electric Company.
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PROSPECTUS
GENERAL ELECTRIC CAPITAL CORPORATION
DEBT SECURITIES
WARRANTS TO PURCHASE DEBT SECURITIES
General Electric Capital Corporation (the "Company") may offer from time to
time its senior, unsecured debt securities ("Debt Securities") and its warrants
("Warrants") to purchase any of the Debt Securities (the Debt Securities and the
Warrants being herein collectively called the "Securities"). The Debt Securities
are hereinafter in this Prospectus referred to as the "Notes," although any
series of Debt Securities to which the accompanying Prospectus Supplement
relates may bear a different title. The term "Prospectus Supplement" as used
herein includes any Pricing Supplement that accompanies any Prospectus
Supplement that accompanies this Prospectus.
The Securities will be offered on terms determined at the time of sale. The
accompanying Prospectus Supplement sets forth specifically
(a) with regard to the Notes in respect of which this Prospectus is being
delivered:
- the title of the Notes,
- the aggregate principal amount offered,
- the currency, currencies or currency units in which payments on the
Notes are payable,
- the rate or method of calculation, and the dates of payment, of
interest, if any,
- the date or dates from which such interest shall accrue,
- the method of determining holders to whom any such interest shall be
payable,
- the authorized denominations, if other than as provided herein,
- the maturity,
- the offering price or terms,
- the terms of any sinking fund, purchase fund or mandatory redemption,
and of any redemption or repayment at the option of the Company or the
holder,
- the Trustee acting under the Indenture pursuant to which the Notes are
to be issued,
- the underwriter or underwriters or agent or agents, if any, for the
Notes, their compensation or the basis of determining the same and the
net proceeds to the Company, and
- the exchanges, if any, on which the Notes may be listed; and
(b) with regard to the Warrants, if any, in respect of which this
Prospectus is being delivered:
- the offering price or terms,
- a description of the Notes for which each Warrant is exercisable,
- the aggregate number, exercise price, exercise period and expiration
date of the Warrants,
- the currency or currencies in which the exercise price is payable,
- the terms of any mandatory or optional call provisions,
- the price or prices, if any, at which the Warrants may be redeemed at
the option of the holder or will be redeemed upon expiration,
- the Warrant Agent acting under the Warrant Agreement pursuant to which
the Warrants are to be issued, and
- the exchanges, if any, on which the Warrants may be listed.
The Securities will be sold either through underwriters or dealers, through
agents designated from time to time, or directly by the Company.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
January 10, 1995
<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.
------------------
AVAILABLE INFORMATION
The Company is subject to the informational 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.
------------------
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, 1993 and the
Company's Quarterly Reports on Form 10-Q for the quarters ended April 2, 1994,
July 2, 1994 and October 1, 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 Securities 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 Operations and Assistant Secretary, General Electric
Capital Corporation, 260 Long Ridge Road, Stamford, Connecticut 06927, Telephone
No. (203) 357-4000.
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2
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THE COMPANY
General Electric Capital Corporation 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., which is in turn wholly
owned by General Electric Company ("GE Company"). The business of the Company
(which term, as used hereinafter under the above caption "The Company," means
the Company and its consolidated affiliates) 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 the Company involves products that are manufactured by
GE Company.
The Company operates in four finance industry segments and in a specialty
insurance industry segment. The Company's financing activities include a full
range of leasing, loan, equipment management services and annuities. The
Company's specialty insurance activities include providing private mortgage
insurance, financial (primarily municipal) guarantee insurance, creditor
insurance, reinsurance and, for financing customers, credit life and property
and casualty insurance. The Company is an equity investor in a retail
organization and certain other financial services organizations. The Company's
operations are subject to a variety of regulations in their respective
jurisdictions.
Services of the Company are offered primarily in the United States, Canada
and Europe. Computerized accounting and service centers, including those located
in Connecticut, Ohio, Georgia and England, provide financing offices and other
service locations with data processing, accounting, collection, reporting and
other administrative support. The Company's principal executive offices are
located at 260 Long Ridge Road, Stamford, Connecticut 06927 (telephone number
(203) 357-4000). At December 31, 1993, the Company employed approximately 27,000
persons.
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- ----------------------------------------------------- NINE MONTHS ENDED
1989 1990 1991 1992 1993 OCTOBER 1, 1994
- --------- --------- --------- --------- --------- ---------------------
<S> <C> <C> <C> <C> <C>
1.30 1.31 1.34 1.44 1.62 1.65
</TABLE>
For purposes of computing the consolidated ratio of earnings to fixed
charges, earnings consist of net earnings adjusted for the provision for income
taxes, minority interest and fixed charges. Fixed charges consist of interest
and discount on all indebtedness and one-third of annual rentals, which the
Company believes is a reasonable approximation of the interest factor of such
rentals.
USE OF PROCEEDS
Except as may be otherwise set forth in the Prospectus Supplement
accompanying this Prospectus, the net proceeds from the sale of the Securities
to which such Prospectus Supplement relates will be added to the general funds
of the Company and will be available for financing its operations. Additional
short- and long-term financing, as required, will be undertaken at such times,
and through such means, as may be appropriate.
PLAN OF DISTRIBUTION
The Company may sell any issue of the Securities in any one or more of the
following ways: (i) through one or more underwriters or dealers; (ii) directly
to one or more purchasers; or (iii) through one or more agents.
3
<PAGE>
From time to time, the Company may receive, and may solicit, offers from
underwriters to purchase all or a part of the Securities, 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 the
Securities 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 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 the Securities in respect of which
this Prospectus is delivered to the public. Such Prospectus Supplement also
states the discounts and commissions, if any, to be allowed or paid to the
underwriters by the Company, and describes all other items, if any, constituting
underwriting compensation and the discounts and commissions to be allowed or
paid to dealers, if any. If underwriters or dealers are used in the sale, the
Securities will be acquired by the underwriters or dealers for their own account
and may be resold from time to time in one or more transactions, including
negotiated transactions, at a fixed public offering price or at varying prices
determined by the underwriter or dealer at the time of sale. 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.
Any agent involved in the offer or sale of the Securities in respect of
which this Prospectus is delivered will be named, and any commissions payable by
the Company to such agent will be set forth, in the Prospectus Supplement
accompanying this Prospectus. Unless otherwise indicated in the Prospectus
Supplement, any such agent will be acting on a best efforts basis for the period
of its appointment. Agents and dealers may be entitled under agreements entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act of 1933.
If so indicated in the Prospectus Supplement accompanying this Prospectus,
the Company will authorize agents, underwriters or dealers to solicit offers by
certain institutions to purchase Securities from the Company at the offering
price set forth in the Prospectus Supplement pursuant to delayed delivery
contracts providing for payment and delivery on a specified date in the future.
The Company anticipates that delayed delivery contracts would be used to
facilitate the marketing of the Securities by accommodating institutions that
wish to invest in the Securities but will not have funds available for the
purchase until some date following the anticipated closing date.
GE Capital Services, which owns all of the outstanding common stock of the
Company, owns 100% of the common stock of Kidder, Peabody Group Inc. which in
turn owns 100% of the common stock of Kidder, Peabody & Co. Incorporated
("Kidder"). Kidder in turn owns approximately 22% of the issued and outstanding
common stock of PaineWebber Group Inc. ("PaineWebber") and Convertible Preferred
Stock and Redeemable Preferred Stock of PaineWebber. As a result, any offering
of Securities is required to be made in compliance with the applicable
provisions of Schedule E to the By-Laws of the National Association of
Securities Dealers, Inc. ("NASD"), which Schedule applies to offerings of
securities of issuers affiliated with NASD members. In accordance therewith, no
underwriter or dealer may confirm sales of Securities to accounts over which
they exercise discretionary authority.
For further information with respect to the terms of the offering of
Securities in respect of which this Prospectus is being delivered, see the
Prospectus Supplement accompanying this Prospectus.
DESCRIPTION OF NOTES
GENERAL
The Notes are to be issued under one or more separate Indentures (each an
"Indenture"), in each case between the Company and a banking institution
organized under the laws of the United States or one of the states thereof (each
a "Trustee"). None of the Indentures limits the amount of Notes or other
unsecured, senior debt which may be issued thereunder or limits the amount of
other debt, secured or unsecured, which may be issued by the Company.
4
<PAGE>
The statements under this heading are subject to the detailed provisions of
each Indenture, a copy of each of which is filed as an exhibit to the
Registration Statement. Wherever particular provisions of the Indentures or
terms defined therein are referred to, such provisions or definitions are
incorporated by reference as a part of the statements made and the statements
are qualified in their entirety by such reference.
Reference is made to the Prospectus Supplement accompanying this Prospectus
for the terms specified by the Company pursuant to the Indenture of, and other
information with respect to, the Notes being offered thereby, including: (1) the
designation, the aggregate principal amount and, if other than as provided
herein, the authorized denominations of such Notes; (2) the percentage of their
principal amount at which such Notes will be issued; (3) the date or dates on
which such Notes will mature; (4) the currency, currencies or currency units in
which the payments on such Notes will be payable; (5) the rate or rates at which
such Notes will bear interest, if any, or the method of determination of such
rate or rates; (6) the date or dates from which such interest, if any, shall
accrue, the dates on which such interest, if any, will be payable and the method
of determining holders to whom any such interest shall be payable; (7) the
prices, if any, at which, and the dates at or after which, such Notes must or
may be repaid, repurchased or redeemed; (8) the exchanges, if any, on which the
Notes may be listed; and (9) the Trustee under the Indenture pursuant to which
the Notes are to be issued. (Sections 2.02 and 2.02A.) Interest, if any, is to
be payable to the persons, and in the manner, specified in the Prospectus
Supplement accompanying this Prospectus and, unless otherwise specified in such
Prospectus Supplement, will be computed on the basis of a 360-day year
consisting of twelve 30-day months. (Section 2.10.)
The Notes will be unsecured and will rank PARI PASSU (equally and ratably)
with all other unsecured and unsubordinated indebtedness of the Company.
Some of the Notes may be issued as discounted Notes to be sold at a
substantial discount below their stated principal amount. Federal income tax
consequences and other special considerations applicable to any such discounted
Notes will be described in the Prospectus Supplement with respect to any such
Notes.
The Indentures do not contain any provisions (other than as described below
under "Certain Covenants of the Company") that limit the ability of the Company
to incur indebtedness or that afford holders of Securities protection in the
event GE Company, as sole indirect stockholder of the Company, causes the
Company to engage in a highly leveraged transaction, reorganization,
restructuring, merger or similar transaction.
GLOBAL NOTES, DELIVERY AND FORM
Except as otherwise set forth in the Prospectus Supplement accompanying this
Prospectus, the Notes will be issued in the form of one or more fully registered
Global Notes that will be deposited with, or on behalf of, The Depository Trust
Company, New York, New York (the "Depository") and registered in the name of the
Depository's nominee. The Depository currently limits the maximum denomination
of any single Global Note to $150,000,000. For purposes of this Prospectus,
"Global Note" refers to the Global Note or Global Notes representing an entire
issue of Notes.
Except as set forth below, a Global Note may be transferred, in whole and
not in part, only to another nominee of the Depository or to a successor of the
Depository or its nominee.
The Depository has advised as follows: it is a limited-purpose trust company
which was created to hold securities for its participating organizations (the
"Participants") and to facilitate the clearance and settlement of securities
transactions in such securities between Participants through electronic
book-entry charges in accounts of its Participants. Participants include
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations. Access to the Depository's system is also
available to others such as banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a Participant, either
directly or indirectly ("indirect participants"). Persons who are not
Participants may beneficially own securities held by the Depository only through
Participants or indirect participants.
5
<PAGE>
The Depository advises that pursuant to procedures established by it (i)
upon issuance of a Global Note by the Company in connection with the sale
thereof to an underwriter or underwriters, the Depository will credit the
accounts of Participants designated by such underwriter or underwriters with the
principal amount of the Notes purchased by such underwriter or underwriters, and
(ii) ownership of beneficial interests in a Global Note will be shown on, and
the transfer of that ownership will be effected only through, records maintained
by the Depository (with respect to Participants), by the Participants (with
respect to indirect participants and certain beneficial owners) and by the
indirect participants (with respect to all other beneficial owners). The laws of
some states require that certain persons take physical delivery in definitive
form of securities which they own. Consequently, the ability to transfer
beneficial interests in a Global Note is limited to such extent.
So long as a nominee of the Depository is the registered owner of a Global
Note, such nominee for all purposes will be considered the sole owner or holder
of such Notes under the Indenture. Except as provided below, owners of
beneficial interests in a Global Note will not be entitled to have Notes
registered in their names, will not receive or be entitled to receive physical
delivery of Notes in definitive form, and will not be considered the owners or
holders thereof under the Indenture.
Neither the Company, the Trustee, any paying agent nor any registrar of the
Notes will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests in a
Global Note, or for maintaining, supervising or reviewing any records relating
to such beneficial ownership interests.
Payments of principal and interest, if any, on the Notes registered in the
name of the Depository's nominee will be made by or on behalf of the Company in
immediately available funds to the Depository's nominee as the registered owner
of the Global Note. Under the terms of the Indenture, the Company and the
Trustee will treat the persons in whose names the Notes are registered as the
owners of such Notes for the purpose of receiving payment of principal and
interest, if any, on such Notes and for all other purposes whatsoever.
Therefore, neither the Company, the Trustee nor any paying agent has any direct
responsibility or liability for the payment of principal or interest, if any, on
the Notes to owners of beneficial interests in a Global Note. The Depository has
advised the Company and the Trustee that its current practice is, upon receipt
of any payment of principal or interest, to immediately credit the accounts of
the Participants with such payment in amounts proportionate to their respective
holdings in principal amount of beneficial interests in a Global Note as shown
in the records of the Depository. The Depository's current practice is to credit
such accounts, as to interest, in next-day funds and, as to principal, in
same-day funds. Payments by Participants and indirect participants to owners of
beneficial interests in a Global Note will be governed by standing instructions
and customary practices, as is now the case with securities held for the
accounts of customers in bearer form or registered in "street name," and will be
the responsibility of the Participants or indirect participants.
If the Depository is at any time unwilling or unable to continue as
depository and a successor depository is not appointed by the Company within 90
days, the Company will issue Notes in definitive form in exchange for a Global
Note. In addition, the Company may at any time determine not to have the Notes
represented by a Global Note and, in such event, will issue Notes in definitive
form in exchange for a Global Note. In either instance, an owner of a beneficial
interest in a Global Note will be entitled to have Notes equal in principal
amount to such beneficial interest registered in its name and will be entitled
to physical delivery of such Notes in definitive form. Notes so issued in
definitive form will be issued in denominations of $1,000 and integral multiples
thereof and will be issued in registered form only, without coupons, and the
Company will maintain in the Borough of Manhattan, The City of New York, one or
more offices or agencies where such Notes may be presented for payment and may
be transferred or exchanged. No service charge will be made for any transfer or
exchange of such Notes, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
SAME-DAY SETTLEMENT IN RESPECT OF GLOBAL NOTES
Secondary trading in definitive long-term notes and debentures of corporate
issuers is generally settled in clearing-house or next-day funds. In contrast,
Global Notes held by the Depository will trade in the
6
<PAGE>
Depository's Same-Day Funds Settlement System until maturity, and secondary
market trading activity in the Notes will therefore be required by the
Depository to settle in immediately available funds. No assurance can be given
as to the effect, if any, of settlement in immediately available funds on
trading activity in the Notes.
CERTAIN COVENANTS OF THE COMPANY
The Company covenants that neither it nor any Finance Subsidiary will
subject any of its property or assets to any lien unless the Notes are secured
equally and ratably with other indebtedness thereby secured. There are excepted
from this covenant liens created to secure obligations for the purchase price of
real estate, equipment or other physical property and certain liens existing at
the time any such property is acquired; liens, existing at the time of
acquisition, on acquired receivables or other nonphysical property if the gross
amount of such receivables and the fair market value of such other property, in
the aggregate, do not exceed 5% of net receivables of the Company and its
Finance Subsidiaries taken on a consolidated basis; liens created to secure the
borrowing of money by a Finance Subsidiary from the Company or another Finance
Subsidiary; and certain other liens not related to the borrowing of money.
(Section 4.03.)
As used in the preceding paragraph, the term "Finance Subsidiary" means any
Subsidiary (as defined below) engaged within the United States in the business
of purchasing notes, accounts receivable (whether or not payable in
installments), conditional sale contracts or other paper originating in sales at
wholesale or retail, or of leasing new or used products or of making installment
loans, and the term "Subsidiary" means any corporation of which the Company
directly or indirectly owns or controls at the time at least a majority of the
outstanding stock having under ordinary circumstances (not dependent upon the
happening of a contingency) voting power to elect a majority of the board of
directors of such corporation. (Section 1.01.)
If upon any consolidation or merger of the Company with any other
corporation, or upon any sale, conveyance or lease of substantially all its
assets, any of the property of the Company or of any Subsidiary owned
immediately prior thereto would thereupon become subject to any mortgage,
pledge, lien or encumbrance, the Company prior to or simultaneously with such
event will secure the Notes equally and ratably with any other obligations of
the Company then entitled thereto, by a direct lien on such property prior to
all liens other than any theretofore existing thereon. (Section 11.02.)
MODIFICATION OF THE INDENTURES
Each Indenture permits the Company and the Trustee thereunder, with the
consent of the holders of not less than 66 2/3% in aggregate principal amount of
the Notes of each series affected outstanding, to add any provisions to or
change in any manner or eliminate any of the provisions of such Indenture or
modify in any manner the rights of the holders of Notes of each such series,
PROVIDED that no such addition or modification shall (i) among other things,
extend the fixed maturity of any Notes or reduce the principal amount thereof
(including in the case of a discounted Note the amount payable upon acceleration
of the maturity thereof), reduce the redemption premium thereon or reduce the
rate or extend the time of payment of interest, if any, thereon, or (ii) reduce
the aforesaid percentage of principal amount of such Notes of any series, the
consent of the holders of which is required for any addition or modification,
without in each case the consent of the holder of each such Note so affected.
(Section 10.02.)
EVENTS OF DEFAULT
An Event of Default with respect to any series of Notes is defined in each
Indenture as being: (a) default in any payment of principal or premium, if any,
on any Note of such series; (b) default for 30 days in payment of any interest
on any Note of such series; (c) default in the making or satisfaction of any
sinking fund payment or analogous obligation on the Notes of such series; (d)
default for 60 days after written notice to the Company in performance of any
other covenant in respect of the Notes of such series contained in such
Indenture; (e) a default, as defined, with respect to any other series of Notes
outstanding under the relevant Indenture or as defined in any other indenture or
instrument evidencing or under which the Company has outstanding any
indebtedness for borrowed money, as a result of which such other series or such
other indebtedness of the Company shall have been accelerated and such
acceleration shall not have been annulled within 10 days after written notice
thereof (PROVIDED, that the resulting Event of Default with
7
<PAGE>
respect to such series of Notes may be remedied, cured or waived by the
remedying, curing or waiving of such other default under such other series or
such other indebtedness); or (f) certain events in bankruptcy, insolvency or
reorganization. (Section 6.01.) Each Indenture requires the Company to deliver
to the Trustee annually a written statement as to the presence or absence of
certain defaults under the terms thereof. (Section 4.06.) No Event of Default
with respect to a particular series of Notes under any Indenture necessarily
constitutes an Event of Default with respect to any other series of Notes issued
thereunder. Each Indenture provides that the Trustee may withhold notice to the
holders of any series of Notes issued thereunder of any default (except in the
payment of principal, premium, if any, or interest, if any, on any of the Notes
of such series or in the making of any sinking fund instalment or analogous
obligation with respect to such series) if the Trustee considers it in the
interest of such Noteholders to do so. (Section 6.08.)
Each Indenture provides that during the continuance of an Event of Default
with respect to any series of Notes, either the Trustee thereunder or the
holders of 25% in aggregate principal amount of the outstanding Notes of such
series may declare the principal, or in the case of discounted Notes, such
portion thereof as may be described in the Prospectus Supplement accompanying
this Prospectus, of all such Notes to be due and payable immediately, but under
certain conditions such declaration may be annulled by the holders of a majority
in principal amount of such Notes then outstanding. Each Indenture provides that
past defaults with respect to a particular series of Notes (except, unless
theretofore cured, a default in payment of principal of, premium, if any, or
interest, if any, on any of the Notes of such series, or the payment of any
sinking fund instalment or analogous obligation on the Notes of such series) may
be waived on behalf of the holders of all Notes of such series by the holders of
a majority in principal amount of such Notes then outstanding. (Sections 6.01
and 6.07.)
Subject to the provisions of each Indenture relating to the duties of the
Trustee thereunder in case an Event of Default with respect to any series of
Notes shall occur and be continuing, such Trustee shall be under no obligation
to exercise any of its rights or powers under such Indenture at the request,
order or direction of any holders of Notes of any series issued thereunder
unless such holders shall have offered to the Trustee reasonable indemnity.
(Sections 7.01 and 7.02.) Subject to such indemnification provision, each
Indenture provides that the holders of a majority in principal amount of the
Notes of any series issued thereunder at the time outstanding shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee thereunder, or exercising any trust or power
conferred on such Trustee with respect to the Notes of such series, provided
that such Trustee may decline to follow any such direction if it has not been
offered reasonable indemnity therefor or if it determines that the proceedings
so directed would be illegal or involve it in any personal liability. (Section
6.07.)
CONCERNING THE TRUSTEE
The Bank of New York, as successor to Mercantile-Safe Deposit and Trust
Company, acts as trustee under (i) an Amended and Restated Indenture with the
Company dated as of June 1, 1994, as amended and supplemented, (ii) an Amended
and Restated Indenture with the Company dated as of June 15, 1994, as amended
and supplemented, and (iii) an Indenture with the Company dated as of October 1,
1991. A number of series of senior, unsecured notes of the Company are presently
outstanding under each of such indentures, and any of the Notes may be issued
under either of the indentures referred to in clauses (i) and (ii) above.
Any material business and other relationships (including additional
trusteeships), other than the present and prospective trusteeships referred to
in the foregoing paragraph, between, on the one hand, the Company, GE Company
and other affiliates of GE Company and, on the other hand, each Trustee under
any Indenture pursuant to which any of the Notes to which the Prospectus
Supplement accompanying this Prospectus relates are to be issued, are described
in such Prospectus Supplement.
DESCRIPTION OF WARRANTS
GENERAL
The following statements with respect to the Warrants are summaries of the
detailed provisions of one or more separate Warrant Agreements (each a "Warrant
Agreement") between the Company and a banking
8
<PAGE>
institution organized under the laws of the United States or one of the states
thereof (each a "Warrant Agent"), a form of which is filed as an exhibit to the
Registration Statement. Wherever particular provisions of the Warrant Agreement
or terms defined therein are referred to, such provisions or definitions are
incorporated by reference as a part of the statements made, and the statements
are qualified in their entirety by such reference.
The Warrants will be evidenced by Warrant Certificates (the "Warrant
Certificates") and, except as otherwise specified in the Prospectus Supplement
accompanying this Prospectus, may be traded separately from any Notes with which
they may be issued. Warrant Certificates may be exchanged for new Warrant
Certificates of different denominations at the office of the Warrant Agent. The
holder of a Warrant does not have any of the rights of a Noteholder in respect
of, and is not entitled to any payments on, any Note issuable (but not yet
issued) upon exercise of the Warrants.
The Warrants may be issued in one or more series, and reference is made to
the Prospectus Supplement accompanying this Prospectus relating to the
particular series of Warrants, if any, offered thereby for the terms of, and
other information with respect to, such Warrants, including: (1) the title and
the aggregate number of Warrants; (2) the Notes for which each Warrant is
exercisable; (3) the date or dates on which such Warrants will expire; (4) the
price or prices at which such Warrants are exercisable; (5) the currency or
currencies in which such Warrants are exercisable; (6) the periods during which
and places at which such Warrants are exercisable; (7) the terms of any
mandatory or optional call provisions; (8) the price or prices, if any, at which
the Warrants may be redeemed at the option of the holder or will be redeemed
upon expiration; (9) the identity of the Warrant Agent; and (10) the exchanges,
if any, on which such Warrants may be listed.
EXERCISE OF WARRANTS
Warrants may be exercised by payment to the Warrant Agent of the exercise
price, in each case in such currency or currencies as are specified in the
Warrant, and communicating the identity of the Warrantholder and the number of
Warrants to be exercised. Upon receipt of payment and the Warrant Certificate
properly completed and duly executed, at the office of the Warrant Agent, the
Warrant Agent will, as soon as practicable, forward Notes in authorized
denominations. If less than all of the Warrants evidenced by the Warrant
Certificate are exercised, a new Warrant Certificate will be issued for the
remaining amount of Warrants.
LEGAL OPINIONS
Except as may be otherwise specified in the Prospectus Supplement
accompanying this Prospectus, the legality of the Securities will be passed upon
for the Company by one of 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 Operations and Assistant Secretary of the
Company, and for the underwriters, agents or dealers by Davis Polk & Wardwell,
450 Lexington Avenue, New York, New York 10017. Messrs. Kloster and Bennett,
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, 1993 and 1992 and for
each of the years in the three-year period ended December 31, 1993, appearing in
the Company's Annual Report on Form 10-K for the year ended December 31, 1993,
incorporated by reference herein, have been incorporated herein 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, 1993, financial statements refers to a change in the method of
accounting for certain investments in securities.
9
<PAGE>
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NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT, THE ACCOMPANYING
PROSPECTUS AND ANY PRICING SUPPLEMENT IN CONNECTION WITH THE OFFER CONTAINED IN
THE PROSPECTUS SUPPLEMENT, THE ACCOMPANYING PROSPECTUS AND ANY PRICING
SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY THE AGENTS.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT, THE ACCOMPANYING PROSPECTUS
AND ANY PRICING SUPPLEMENT NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATES AS OF WHICH INFORMATION IS GIVEN IN THIS
PROSPECTUS SUPPLEMENT AND IN THE ACCOMPANYING PROSPECTUS. THIS PROSPECTUS
SUPPLEMENT, THE ACCOMPANYING PROSPECTUS AND ANY PRICING 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.
-------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
PROSPECTUS SUPPLEMENT
Description of Notes.......................... S-3
Special Provisions Relating to Foreign
Currency Notes............................... S-19
Foreign Currency Risks........................ S-23
United States Tax Considerations.............. S-25
Plan of Distribution.......................... S-34
Legal Opinions................................ S-36
PROSPECTUS
Available Information......................... 2
Documents Incorporated by Reference . 2
The Company................................... 3
Use of Proceeds............................... 3
Plan of Distribution.......................... 3
Description of Notes.......................... 4
Description of Warrants....................... 8
Legal Opinions................................ 9
Experts....................................... 9
</TABLE>
U.S.$7,377,518,501
GENERAL ELECTRIC
CAPITAL CORPORATION
GLOBAL MEDIUM-TERM NOTES,
SERIES A, DUE FROM 9 MONTHS TO
60 YEARS FROM DATE OF ISSUE
---------------------------
PROSPECTUS SUPPLEMENT
---------------------------
PAINEWEBBER INCORPORATED
J.P. MORGAN SECURITIES INC.
MERRILL LYNCH & CO.
CS FIRST BOSTON
JANUARY 25, 1995
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