AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 2, 1995
REGISTRATION NO. 33-55799
===========================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------
GENERAL MOTORS ACCEPTANCE CORPORATION
A NEW YORK CORPORATION -- I.R.S. EMPLOYER NO. 38-0572512
3044 WEST GRAND BOULEVARD 767 FIFTH AVENUE
DETROIT, MICHIGAN 48202 NEW YORK, NEW YORK 10153
(313-556-5000) (212-418-6120)
AGENT FOR SERVICE
CHRISTOPHER J. RUTKOWSKI, VICE PRESIDENT
GENERAL MOTORS ACCEPTANCE CORPORATION
3044 WEST GRAND BOULEVARD, DETROIT, MICHIGAN 48202 (313-556-1508)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
soon as practicable on or after the effective date of this Registration
Statement.
-----------------
IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING
OFFERED PURSUANT TO DIVIDEND OR INTEREST REINVESTMENT PLANS, CHECK THE
FOLLOWING BOX. / /
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE
OFFERED ON A DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE
SECURITIES ACT OF 1933, OTHER THAN SECURITIES OFFERED ONLY IN CONNECTION
WITH DIVIDEND OR INTEREST REINVESTMENT PLANS, CHECK THE FOLLOWING BOX. /X/
-----------------
CALCULATION OF REGISTRATION FEE
===========================================================================
PROPOSED PROPOSED AMOUNT
TITLE OF EACH CLASS MAXIMUM MAXIMUM OF
OF SECURITIES OFFERING AGGREGATE REGIS-
TO BE AMOUNT TO BE PRICE PER OFFERING TRATION
REGISTERED REGISTERED (1) UNIT PRICE (2) FEE (3)
- ---------------------------------------------------------------------------
Medium-Term Notes, Due from
Nine Months to Thirty Years
from Date of Issue...$9,397,795,600 100% $9,397,795,600 $2,205,956
===========================================================================
(1) The amount of Medium-Term Notes being registered, together with
$602,204,400 remaining Medium-Term Notes registered on December 9, 1993
(Registration No. 33-51381), represents the maximum aggregate principal
amount of Medium-Term Notes which, on February 2, 1995, are expected to be
offered for sale.
(2) Estimated solely for the purpose of determining the amount of the
registration fee.
(3) A registration fee payment of $1,428,820 was paid in conjunction
with the October 6, 1994 registration of $7,144,100,600 based on rates in
effect on that date. An additional fee in the amount of $777,136 to
register an additional $2,253,695,000 is based on rates in effect on
February 2, 1995.
The Prospectus included in this Registration Statement also relates to
the above-mentioned Registration Statement (Registration No. 33-51381) as
permitted by Rule 429.
--------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT<PAGE>
THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE
WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
==========================================================================
/-------------------------------------------------------------------------/
/INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A /
/REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH /
/THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD/
/NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION /
/STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN /
/OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE /
/ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, /
/SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR /
/QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. /
/-------------------------------------------------------------------------/
PROSPECTUS
U.S.$10,000,000,000
GENERAL MOTORS ACCEPTANCE CORPORATION
MEDIUM-TERM NOTES
DUE FROM NINE MONTHS TO THIRTY YEARS FROM DATE OF ISSUE
General Motors Acceptance Corporation (the "Company") may offer from
time to time its Medium-Term Notes Due from Nine Months to Thirty Years from
Date of Issue (the "Notes"). The Notes offered by this Prospectus will be
limited to up to U.S.$10,000,000,000 aggregate initial offering price or the
equivalent thereof in other currencies, including composite currencies such
as the European Currency Unit ("ECU") (the "Specified Currency"). The Notes
will be offered at varying maturities due from nine months to thirty years
from the date of issue (the "Issue Date"), as selected by the purchaser and
agreed to by the Company, and may be subject to redemption at the option of
the Company or repayment at the option of the holder thereof prior to the
maturity date thereof (as further defined herein, the "Maturity Date"). Each
Note will be denominated in U.S. dollars or in the Specified Currency, as set
forth in a Pricing Supplement (the "Pricing Supplement") to this Prospectus.
See "Important Currency Exchange Information" and "Foreign Currency Risks."
The interest rate on each Note will be either a fixed rate established
by the Company at the Issue Date of such Note (a "Fixed Rate Note"), which
may be zero in the case of certain Notes issued at a price representing a
discount from the principal amount payable upon the Maturity Date, or at a
floating rate as set forth therein and specified in the applicable Pricing
Supplement (a "Floating Rate Note"). A Fixed Rate Note may pay a level
amount in respect of both interest and principal amortized over the life of
the Note (an "Amortizing Note"). See "Description of Notes-Fixed Rate Notes"
and "Description of Notes-Floating Rate Notes." The principal amount payable
at the Maturity Date of, or any interest and premium, if any, on, a Note, or
both, may be determined by reference to one or more Specified Currencies (a
"Currency Indexed Note"), or by reference to the price of one or more
specified securities or commodities or to one or more securities or
commodities exchange indices or other indices or by other methods (an
"Indexed Note," such term to include Currency Indexed Notes) as described in
the applicable Pricing Supplement. See "Description of Notes-Currency
Indexed Notes," "Description of Notes-Other Indexed Notes and Certain Terms
Applicable to All Indexed Notes" and "Indexed Notes Risks."
(continued on following 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 OR ANY PRICING SUPPLEMENT
HERETO. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
----------------------
PRICE TO AGENTS' DISCOUNTS AND PROCEEDS TO
PUBLIC (1)(2) COMMISSIONS (2)(3) COMPANY (2)(3)(4)
- --------------------------------------------------------------------------
Per Note 100.00% .05% - .60% 99.95% - 99.40%
- --------------------------------------------------------------------------
Total U.S.$10,000,000,000 U.S. $5,000,000- U.S.$9,995,000,000-
U.S.$60,000,000 U.S.$9,940,000,000
==========================================================================
<PAGE>3
(1) Unless otherwise specified in the applicable Pricing Supplement, Notes
will be issued at 100% of their principal amount.
(2) Or the equivalent thereof in the Specified Currency.
(3) The commission payable to Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Salomon Brothers Inc, CS First Boston
Corporation, Morgan Stanley & Co. Incorporated, Lehman Brothers Inc.
(including its affiliate, Lehman Government Securities Inc.), J.P.
Morgan Securities Inc. and Bear, Stearns & Co. Inc. (collectively, "the
Agents") for each Note sold through such Agent will be computed based
upon the Price to Public of such Note and will depend on such Note's
Maturity Date. The Company also may sell Notes to an Agent, as
principal for its own account for resale to one or more investors and
other purchasers at varying prices related to prevailing market prices
at the time of resale, as determined by such Agent, or if so agreed, at
a fixed public offering price. No commission will be payable on any
Notes sold directly to purchasers by the Company. The Company has
agreed to indemnify each Agent against certain liabilities, including
liabilities under the Securities Act of 1933, as amended. See "Plan of
Distribution."
(4) Before deducting expenses payable by the Company estimated at
$2,500,000.
------------------------
Merrill Lynch & Co. Salomon Brothers Inc
CS First Boston Morgan Stanley & Co.
Incorporated
Lehman Brothers J.P. Morgan Securities Inc.
Bear, Stearns & Co. Inc.
------------------------
February , 1995.
<PAGE>
<PAGE>4
Unless otherwise specified in the applicable Pricing Supplement,
interest on each Fixed Rate Note (other than an Amortizing Note) is payable
semiannually each April 1 and October 1 (a "Semiannual Pay Note") or, if
annually, each October 1 (an "Annual Pay Note"), as selected by the purchaser
and agreed to by the Company, and at Maturity (as defined herein). Interest
on each Floating Rate Note is payable on the dates set forth herein and in
the applicable Pricing Supplement. Amortizing Notes will pay principal and
interest semiannually each April 1 and October 1, or quarterly each January
1, April 1, July 1 and October 1, and, in either case, at Maturity, or
otherwise, as specified in the applicable Pricing Supplement. See
"Description of Notes-Payment of Principal and Interest." Interest rates,
interest rate formulae and other variable terms are subject to change by the
Company, but no change will affect any Note already issued or as to which an
offer to purchase has been accepted by the Company.
The Notes may be issued in whole or in part in the form of a
certificate issued in definitive form (a "Certificated Note") or in the form
of one or more global Notes to be deposited with or on behalf of The
Depository Trust Company ("DTC") or other depositary (DTC or such other
depositary as is specified in the applicable Pricing Supplement is herein
referred to as the "Depositary") and registered in the name of the
Depositary's nominee (a "Book-Entry Note"). The Certificated Notes and the
Book-Entry Notes are hereinafter together referred to as the "Notes."
Beneficial interests in Book-Entry Notes will be shown on, and transfers
thereof will be effected only through, records maintained by the Depositary
and, with respect to the beneficial owners' interests, by the Depositary's
participants. Book-Entry Notes will not be issuable as Certificated Notes
except under the limited circumstances described herein. See "Description of
Notes-Book-Entry Notes."
Unless otherwise specified in the applicable Pricing Supplement, Notes
will be issued only in registered form in minimum denominations of U.S.$5,000
(and any amount in excess thereof that is an integral multiple of U.S.$1,000)
or, in the case of Notes denominated in a Specified Currency other than U.S.
dollars, the authorized denominations set forth in the applicable Pricing
Supplement. See "Description of Notes-General." Unless otherwise specified
in the applicable Pricing Supplement, the Notes may not be redeemed by the
Company or repaid at the option of the holder prior to their Maturity. See
"Description of Notes-Redemption and Repayment." Notes will be transferable
without service charge.
The Specified Currency, any applicable interest rate or formula, the
issue price, the Maturity Date, any interest payment dates, any principal
payment dates, any redemption and/or repayment provisions, whether such Note
is a Fixed Rate Note, a Floating Rate Note, an Amortizing Note or an Indexed
Note, whether such Note will be represented by a global Note and any other
terms applicable to each Note and established at the time of offering, unless
otherwise described herein, will be described in the applicable Pricing
Supplement.
The Notes are being offered on a continuous basis for sale by the
Company through one or more of the Agents listed below and each of the Agents
has agreed to use its reasonable best efforts to solicit offers to purchase
the Notes. In addition, the Notes may be sold by the Company to any Agent as
principal for its own account for resale to one or more investors and other
purchasers at varying prices related to prevailing market prices at the time
of resale, as determined by such Agent, or, if so agreed, at a fixed public
offering price. The Notes may also be sold by the Company directly to
purchasers through its office at the address set forth on Page 39 of the
Prospectus. In addition, the Company may arrange for the Notes to be sold
through other agents, dealers or underwriters. Unless otherwise specified in
an applicable Pricing Supplement, the Notes will not be listed on any
securities exchange, and there can be no assurance that the Notes offered
hereby will be sold or that there will be a secondary market for the Notes.
The Agents have advised the Company that they may from time to time purchase
and sell Notes in the secondary market, but the Agents are not obligated to
do so. No termination date for the offering of the Notes has been
established. The Company reserves the right to withdraw, cancel or modify
the offer made hereby without notice. The Company or the Agent that solicits
any offer may reject such offer in whole or in part. See "Plan of
Distribution."
----------------------
2<PAGE>
<PAGE>5
No dealer, salesman or any other person has been authorized to give any
information or to make any representation not contained or incorporated by
reference in this Prospectus and any Pricing Supplement in connection with
the offer contained in this Prospectus and any Pricing Supplement and, if
given or made, such information or representation must not be relied upon as
having been authorized by the Company or by any Agent. Neither the delivery
of this Prospectus and any Pricing Supplement nor any sale made thereunder
shall, under any circumstances, create any implication that the information
therein is correct at any time subsequent to the date thereof. This
Prospectus and any Pricing Supplement shall not constitute an offer to sell
or a solicitation of an offer to buy any of the Notes offered hereby by
anyone in any jurisdiction in which such offer or solicitation is not
authorized or in which the person making such offer or solicitation is not
qualified to do so or to any person to whom it is unlawful to make such offer
or solicitation.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and in
accordance therewith files reports and other information with the Securities
and Exchange Commission (the "Commission"). Such reports and other
information filed by the Company with the Commission can be inspected, and
copies may be obtained at prescribed rates, at the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, as well
as at the following Regional Offices of the Commission at Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and Seven
World Trade Center, New York, New York 10048. 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.
The Company has filed with the Commission a Registration Statement on
Form S-3 (including all amendments thereto, the "Registration Statement")
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Notes. As permitted by the rules and regulations of the
Commission, this Prospectus does not contain all the information set forth in
the Registration Statement and the exhibits thereto and to which reference is
hereby made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended December
31, 1993 and Quarterly Reports on Form 10-Q for the quarters ended March 31,
1994, June 30, 1994 and September 30, 1994 filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act are incorporated by
reference in this Prospectus.
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date
of this Prospectus and prior to the termination of the offering of the Notes
shall be deemed to be incorporated by reference in this Prospectus and to be
a part thereof from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
3<PAGE>
<PAGE>6
THE COMPANY WILL PROVIDE WITHOUT CHARGE UPON WRITTEN OR ORAL REQUEST, TO EACH
PERSON TO WHOM THIS PROSPECTUS IS DELIVERED, A COPY OF ANY OR ALL OF THE
DOCUMENTS DESCRIBED ABOVE WHICH HAVE BEEN INCORPORATED BY REFERENCE IN THIS
PROSPECTUS, OTHER THAN EXHIBITS TO SUCH DOCUMENTS. SUCH REQUEST SHOULD BE
DIRECTED TO:
G. E. GROSS, COMPTROLLER
GENERAL MOTORS ACCEPTANCE CORPORATION
3044 WEST GRAND BOULEVARD, ANNEX 103
DETROIT, MICHIGAN 48202
(313) 556-1240
PRINCIPAL EXECUTIVE OFFICES
General Motors Acceptance Corporation has its principal office at 767
Fifth Avenue, New York, New York 10153 (Tel. No. 212-418-6120) and
administrative offices at 3044 West Grand Boulevard, Detroit, Michigan 48202
(Tel. No. 313-556-5000).
RATIO OF EARNINGS TO FIXED CHARGES
NINE MONTHS ENDED
SEPTEMBER 30 YEARS ENDED DECEMBER 31
- ----------------- ------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
- ---- ---- ---- ---- ---- ---- ----
1.34 1.34 1.33 1.35 1.23 1.23 1.19
The ratio of earnings to fixed charges has been computed by dividing
earnings before income taxes and fixed charges by the fixed charges. This
ratio incudes the earnings and fixed charges of the Company and its
consolidated subsidiaries; fixed charges consist of interest, debt discount
and expense and the portion of rentals for real and personal properties in an
amount deemed to be representative of the interest factor.
USE OF PROCEEDS
The net proceeds from the sale of the Notes will be added to the
general funds of the Company and will be available for the purchase of
receivables, the making of loans or the repayment of debt. Such proceeds
initially may be used to reduce short-term borrowings or invested in short-
term securities.
DESCRIPTION OF NOTES
The terms and conditions set forth herein will apply to each Note
unless otherwise specified herein or in the applicable Pricing Supplement and
in such Note.
Unless otherwise indicated in the applicable Pricing Supplement, the
Notes will be denominated in U.S. dollars, and payment of principal of,
premium, if any, and interest, if any, on, the Notes will be made in U.S.
dollars. If any Note is not to be denominated in U.S. dollars, the
applicable Pricing Supplement will specify the currency or currencies,
including composite currencies such as the ECU, in which such Note is to be
denominated (the "Specified Currency") and, if different, the currency or
currencies in which the principal, premium, if any, and interest, if any,
with respect to such Note are to be paid, along with any other terms relating
to the non-U.S. dollar denomination, including exchange rates for the
Specified Currency as against the U.S. dollar at selected times during the
last five years, and any exchange controls or other foreign currency risks
relating to such Specified Currency. See "Foreign Currency Risks."
4<PAGE>
<PAGE>7
GENERAL
The Notes will be limited to U.S.$10,000,000,000 aggregate initial
offering price, or the equivalent thereof in one or more Specified
Currencies. The Notes will be issued under an Indenture dated as of December
1, 1993 between the Company and Citibank, N.A., as Trustee, as supplemented
from time to time (the "Indenture"). The Indenture does not limit the amount
of additional unsecured indebtedness ranking equally and ratably with the
Notes that the Company may incur and the Company may, from time to time,
without the consent of the holders of the Notes, provide for the issuance of
Notes under the Indenture in addition to the U.S.$10,000,000,000 aggregate
initial offering price of the Notes offered hereby. The U.S. dollar
equivalent of Notes denominated in a Specified Currency other than U.S.
dollars will be determined on the Business Day prior to the date of
acceptance by the Company for a purchase of Notes, on the basis of the Market
Exchange Rate (as defined below) for such Specified Currency. The statements
herein concerning the Notes and 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. Whenever particular provisions of the Indenture or defined terms
contained in the Indenture are referred to, such provisions and defined terms
are incorporated herein by reference as a part of the statements made, and
the statements are qualified in their entirety by such reference.
The Notes will constitute unsecured and unsubordinated indebtedness of
the Company and will rank equally and ratably with all other unsecured and
unsubordinated indebtedness of the Company.
Notes will be offered on a continuing basis and will mature on any day
nine months to thirty years from the Issue Date, as selected by the purchaser
and agreed to by the Company. Each Note will bear interest from the Issue
Date (as defined below) at either (a) a fixed rate ("Fixed Rate Notes"),
which may be zero in the case of a Note issued at an Issue Price (as defined
below) representing a substantial discount from the principal amount payable
upon the Maturity Date (a "Zero-Coupon Note") or (b) a floating rate or rates
determined by reference to one or more Base Rates (as defined herein), which
may be adjusted by a Spread and/or Spread Multiplier (each as defined below)
("Floating Rate Notes").
Each Note will be issued in fully registered form without coupons and
will be represented by either a Certificated Note or a Book-Entry Note
registered in the name of a nominee of the Depositary. Except as set forth
herein, Book-Entry Notes will be issuable only in global form. See "Book-
Entry Notes-Delivery and Form" below. No Book-Entry Note shall represent any
Certificated Note and Certificated Notes will not be exchangeable for Book-
Entry Notes, except as described below under "Description of Notes-Book-Entry
Notes-Delivery and Form." All Notes issued on the same day and having the
same terms (including, but not limited to, the same designation, the same
currency, Interest Payment Dates (as defined below), rate of interest,
Maturity Date and redemption or repayment provisions) may be represented by
a single Book-Entry Note. A beneficial interest in a Book-Entry Note will be
shown on, and transfers thereof will be effected only through, records
maintained by the Depositary or its participants. Payments of the principal
of, premium, if any, and interest, if any, on, Notes represented by a Book-
Entry Note will be made by the Company or its paying agent to the Depositary
or its nominee. Unless otherwise specified in the applicable Pricing
Supplement, DTC will be the Depositary. See "Description of Notes-Book-Entry
Notes-Delivery and Form."
Unless otherwise specified in the applicable Pricing Supplement, the
authorized denominations of Notes denominated in U.S. dollars will be
U.S.$5,000 and any amount in excess thereof that is an integral multiple of
U.S.$1,000. The authorized denominations of Notes denominated in a Specified
Currency other than U.S. dollars will be as set forth in the applicable
Pricing Supplement.
The principal amount of the Notes will be payable at Maturity at the
Corporate Trust Office of Citibank, N.A., Corporate Trust Services, 111 Wall
Street, 5th Floor, New York, New York 10043, or at such other place as the
Company may designate.
5<PAGE>
<PAGE>8
Certificated Notes will be transferable by the registered holders
thereof or by their attorneys duly authorized in writing at the office of the
Company at 3044 West Grand Boulevard, Argonaut A - Room 1182H, Detroit,
Michigan 48202, without charge except for any tax or other governmental
charge imposed in connection therewith, and in the manner and subject to the
limitations provided in the Indenture, and upon surrender of the Certificated
Notes. Upon any such transfer, a new Certificated Note or Notes in
authorized denominations for an equal aggregate principal amount having
identical terms will be issued to the transferee in exchange therefor. As
provided in the Indenture, if a Note is surrendered for transfer after the
fifteenth day of the calendar month preceding an Interest Payment Date, the
new Certificated Note or Notes will be dated as of such Interest Payment
Date; provided, however, that if the Certificated Note surrendered is dated
after the fifteenth day of the calendar month preceding such Interest Payment
Date, the new Certificated Note or Notes will be dated as of the same date as
the Certificated Note surrendered.
Unless otherwise specified in the applicable Pricing Supplement, the Notes
may not be redeemed by the Company, or repaid at the option of the holder, or
both, prior to their Maturity Date. Unless otherwise specified in the
applicable Pricing Supplement, the Notes, other than Amortizing Notes, will
not be subject to any sinking fund. See "Description of Notes-Redemption and
Repayment."
Unless otherwise specified in the applicable Pricing Supplement, the amount
of any Original Issue Discount Note (as such term is defined in "Description
of Notes - Original Issue Discount Notes") payable in the event of redemption
by the Company, repayment at the option of the holder or acceleration of
Maturity, in lieu of the stated principal amount due at the Maturity Date,
will be the Amortized Face Amount of such Original Issue Discount Note as of
the date of such redemption, repayment or acceleration. For the purposes of
determining whether holders of the requisite amount of Notes outstanding
under the Indenture have made a demand or given a notice or waiver or taken
any other action, the outstanding principal amount of any Original Issue
Discount Note shall be deemed to be the Amortized Face Amount. The
"Amortized Face Amount" of an Original Issue Discount Note shall be the
amount equal to (a) the Issue Price of an Original Issue Discount Note set
forth in the applicable Pricing Supplement plus (b) the portion of the
difference between the Issue Price and the principal amount of such Original
Issue Discount Note that has accrued at the yield to maturity set forth in
the Pricing Supplement (computed in accordance with generally accepted United
States bond yield computation principles) at the date as of which the
Amortized Face Amount is calculated, but in no event shall the Amortized Face
Amount of such Original Issue Discount Note exceed its stated principal
amount. See also "United States Federal Taxation - Tax Consequences to U.S.
Holders-Original Issue Discount Notes."
Unless otherwise specified herein, the Pricing Supplement relating to each
Note or Notes will describe the following terms, as applicable: (1) the
Specified Currency with respect to such Note (and, if such Specified Currency
is other than U.S. dollars, certain other terms relating to such Note); (2)
whether such Note is a Fixed Rate Note, a Floating Rate Note, an Amortizing
Note or a Zero-Coupon Note or other Original Issue Discount Note; (3) whether
such Note is a Currency Indexed Note or other Indexed Note, and if so the
special terms thereof; (4) the price (which may be expressed as a percentage
of the aggregate initial public offering price thereof) at which such Note
will be issued to the public (the "Issue Price"); (5) the date on which such
Note will be issued to the public (the "Issue Date"); (6) the Maturity Date
of such Note; (7) if such Note is a Fixed Rate Note, the rate per annum at
which such Note will bear interest, if any (the "Interest Rate"); (8) if such
Note is a Floating Rate Note, the Base Rate or Rates, the Initial Interest
Rate or formula for determining such, the Interest Reset Period, the Interest
Reset Dates, the Interest Payment Period, the Interest Payment Dates, the
Index Maturity, the Maximum Interest Rate and the Minimum Interest Rate, if
any, and the Spread and/or Spread Multiplier, if any (all as defined herein),
and any other terms relating to the particular method of calculating the
Interest Rate for such Note; (9) if such Note is an Amortizing Note, whether
payments of principal thereof and interest thereon will be made quarterly or
semiannually, and the redemption or repayment information in respect thereof;
6<PAGE>
<PAGE>9
(10) whether the interest rate on such Note may be reset upon the occurrence
of certain events or at the option of the Company; (11) whether such Note may
be redeemed at the option of the Company, or repaid at the option of the
holder, prior to its Maturity Date, and if so, the provisions relating to
such redemption or repayment; (12) whether such Note will be issued initially
as a Book-Entry Note or as a Certificated Note; (13) certain special United
States Federal income tax consequences of the purchase, ownership and
disposition of certain Notes, if any; and (14) any other terms of such Note
not inconsistent with the provisions of the Indenture.
GLOSSARY
Reference is made to the Indenture and the forms of Notes filed as
exhibits to the Registration Statement to which this Prospectus relates for
the full definition of certain of the terms used in this Prospectus, as well
as any capitalized terms used herein for which no definition is provided.
Set forth below are definitions of certain terms used in this Prospectus with
respect to the Notes.
"Business Day" with respect to any Note means, unless otherwise
specified in the applicable Pricing Supplement, any day, other than a
Saturday or Sunday, that meets each of the following applicable requirements:
such day is (a) not a day on which banking institutions are authorized or
required by law or regulation to be closed in The City of New York, (b) if
the Note is denominated in a Specified Currency other than U.S. dollars or
ECU, (x) not a day on which banking institutions are authorized or required
by law or regulation to close in the Principal Financial Center of the
country issuing the Specified Currency and (y) a day on which banking
institutions in such Principal Financial Center are carrying out transactions
in such Specified Currency, (c) if the Note is denominated in ECU, an ECU
clearing day, as determined by the ECU Banking Association in Paris, (d) if
the Note is denominated in a composite currency other than ECU, as specified
in the applicable Pricing Supplement and (e) with respect to London Inter
Bank Offer Rate Notes (LIBOR Notes), is also a London Banking Day. "London
Banking Day" means any day on which dealings in deposits in the Index
Currency are transacted in the London interbank market. "Principal Financial
Center" will generally be the capital city of the country of the Specified
Currency, except that with respect to U.S. dollars and ECUs, the Principal
Financial Center shall be The City of New York and Luxembourg, respectively;
"Interest Payment Date" with respect to any Note means a date (other
than at Maturity) on which, under the terms of such Note, regularly scheduled
interest shall be payable;
"Maturity Date" with respect to any Note means the date on which such
Note will mature, as specified thereon, and "Maturity" means the date on
which the principal of a Note or an instalment of principal becomes due and
payable in full in accordance with its terms and the terms of the Indenture,
whether at its Maturity Date or by declaration of acceleration, call for
redemption at the option of the Company, repayment at the option of the
holder, or otherwise;
"Regular Record Date" with respect to any Interest Payment Date for
Fixed Rate Notes means, unless otherwise specified in the applicable Pricing
Supplement, the date (whether or not a Business Day) which is the fifteenth
day of the calendar month preceding such Interest Payment Date. "Regular
Record Date" with respect to any Interest Payment Date for Notes other than
Fixed Rate Notes means, unless otherwise specified in the Applicable Pricing
Supplement, the date (whether or not a Business Day) 15 calendar days prior
to such Interest Payment Date.
References herein to "U.S. dollars" or "U.S.$" or "$" are to the
currency of the United States of America.
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BOOK-ENTRY NOTES - DELIVERY AND FORM
Upon issue, all Fixed Rate Book-Entry Notes having the same Issue Date,
interest rate, if any, amortization schedule, if any, Maturity Date and other
terms, if any, will be represented by one or more fully registered global
Notes (the "Global Notes") and all Floating Rate Book-Entry Notes having the
same Issue Date, Initial Interest Rate, Base Rate, Interest Period, Interest
Payment Dates, Index Maturity, Spread and/or Spread Multiplier, if any,
Minimum Interest Rate, if any, Maximum Interest Rate, if any, Maturity Date
and other terms, if any, will be represented by one or more Global Notes;
provided, however, that no single Global Note shall exceed U.S.$150,000,000.
Each such Global Note representing Book-Entry Notes will be deposited with,
or on behalf of, the Depositary and registered in the name of the Depositary
or a nominee thereof.
The Depository Trust Company ("DTC") will be the initial Depositary
with respect to the Book-Entry Notes. DTC has advised the Company and the
Agents that it is a limited-purpose trust company organized under the laws of
the State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the Uniform Commercial Code and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Exchange Act. The Depositary was created to hold securities of its
participants and to facilitate the clearance and settlement of securities
transactions among its participants in such securities through electronic
book-entry changes in accounts of the participants, thereby eliminating the
need for physical movement of securities certificates. DTC's participants
include securities brokers and dealers (including the Agents), banks, trust
companies, clearing corporations and certain other organizations, some of
whom (and/or their representatives) own DTC. Access to DTC's book-entry
system is also available to others, such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly. Persons who are not participants
may beneficially own securities held by DTC only through participants. The
rules applicable to DTC and its participants are on file with the Commission.
Upon the issuance by the Company of Book-Entry Notes represented by a
Global Note, the Depositary will credit, on its book-entry registration and
transfer system, the respective principal amounts of the Book-Entry Notes
represented by such Global Note to the accounts of participants. The
accounts to be credited shall be designated by the Agents of such Book-Entry
Notes, or the Company, if such Book-Entry Notes are offered and sold directly
by the Company, as the case may be. Ownership of beneficial interests in a
Global Note will be limited to participants or persons that hold interests
through participants. Ownership of beneficial interests in Book-Entry Notes
represented by a Global Note or Notes will be shown on, and the transfer of
that ownership will be effected only through, records maintained by the
Depositary (with respect to interests of participants in the Depositary), or
by participants in the Depositary or persons that may hold interests through
such participants (with respect to persons other than participants in the
Depositary). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form.
Such limits and such laws may impair the ability to transfer beneficial
interests in a Global Note.
So long as the Depositary for a Global Note, or its nominee, is the
registered owner of the Global Note, the Depositary or its nominee, as the
case may be, will be considered the sole owner or holder of the Book-Entry
Notes represented by such Global Note for all purposes under the Indenture.
Except as provided below, owners of beneficial interests in Book-Entry Notes
represented by a Global Note or Notes will not be entitled to have Book-Entry
Notes represented by such Global Note registered in their names, will not
receive or be entitled to receive physical delivery of Book-Entry Notes in
definitive form and will not be considered the owners or holders thereof
under the Indenture.
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Accordingly, each person owning a beneficial interest in a Global Note
must rely on the procedures of the Depositary and, if such person is not a
participant, on the procedures of the participant through which such person
owns its interest, to exercise any rights of a holder under the Indenture or
a Global Note. The Company understands that under existing policy of the
Depositary and industry practices, in the event that the Company requests any
action of holders or that an owner of a beneficial interest in such a Global
Note desires to give any notice or take any action which a holder is entitled
to give or take under the Indenture or a Global Note, the Depositary would
authorize the participants holding the relevant beneficial interests to give
such notice or take such action. Any beneficial owner that is not a
participant must rely on the contractual arrangements it has directly, or
indirectly through its financial intermediary, with a participant to give
such notice or take such action.
Payments of principal of, premium, if any, and interest, if any, on,
the Book-Entry Notes represented by a Global Note registered in the name of
the Depositary or its nominee will be made by the Company through the Trustee
to the Depositary or its nominee, as the case may be, as the registered owner
of a Global Note. None of the Company, the Trustee, any Paying Agent or any
other agent of the Company will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests of a Global Note or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests. The
Company expects that the Depositary, upon receipt of any payment of
principal, premium, if any, or interest, if any, in respect of a Global Note,
will immediately credit the accounts of the related participants with payment
in amounts proportionate to their respective holdings in principal amount of
beneficial interest in such Global Note as shown on the records of the
Depositary. The Company also expects that payments by participants to owners
of beneficial interests in a Global Note will be governed by standing
customer 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 such participants.
If the Depositary is at any time unwilling or unable to continue as
depository or ceases to be a clearing agency registered under the Exchange
Act and a successor depository registered as a clearing agency under the
Exchange Act is not appointed by the Company within 90 days, the Company will
issue Certificated Notes in exchange for all the Global Notes. In addition,
the Company may at any time determine not to have the Book-Entry Notes
represented by the Global Note and, in such event, will issue Certificated
Notes in exchange for all the Global Notes. In either instance, an owner of
a beneficial interest in a Global Note will be entitled to have Certificated
Notes equal in principal amount to such beneficial interest registered in its
name and will be entitled to physical delivery of such Certificated Notes.
Such Certificated Notes shall be registered in such name or names as the
Depositary shall instruct the Trustee. It is expected that such instructions
may be based upon directions received by the Depositary from participants
with respect to beneficial interests in such Global Notes. Certificated
Notes so issued will be issued in denominations of U.S.$5,000 or more (in
multiples of U.S.$1,000) and will be issued in registered form only, without
coupons. No service charge will be made for any transfer or exchange of such
Certificated Notes, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection
therewith. (Section 2.07 of the Indenture.)
PAYMENT CURRENCY
Unless otherwise specified in the applicable Pricing Supplement, and
except as otherwise described herein with respect to Currency Indexed Notes,
principal, and premium, if any, and interest, if any, will be paid by the
Company in U.S. dollars in the manner described in the following paragraphs,
even if a Note is denominated in a Specified Currency other than U.S.
dollars; provided, however, that the holder of such Note may (unless the
Pricing Supplement and the Note so indicate otherwise) elect to receive all
such payments in such Specified Currency (subject to certain conditions
described at "Foreign Currency Risks-Payment Currency") by delivery of a
written request to the Company's paying agent (the "Paying Agent") in The
City of New York. Any such election must be received by the Paying Agent on
9<PAGE>
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or prior to the applicable Regular Record Date or at least 15 calendar days
prior to Maturity, as the case may be, and no such election or change of
election may be made with respect to payments on any Note with respect to
which (i) an Event of Default has occurred, (ii) the Company has exercised
any of its discharge or defeasance options or (iii) the Company has given a
notice of redemption. Such election shall remain in effect unless and until
changed by written notice to the Paying Agent, but the Paying Agent must
receive written notice of any such change on or prior to the applicable
Regular Record Date or at least 15 calendar days prior to Maturity, as the
case may be. Until the Notes are paid or payment thereof is provided for,
the Company will, at all times, maintain a Paying Agent in The City of New
York capable of performing the duties described herein to be performed by the
Paying Agent. The Company has initially appointed Citibank, N.A., New York,
New York as Paying Agent under the Indenture. The Company will notify the
holders of the Notes in accordance with the Indenture of any change in the
Paying Agent or its address. Except as may otherwise be provided in a
Pricing Supplement with respect to Foreign Currency Notes, all currency
exchange costs will be borne by the Company unless any holder of a Note has
made the election referred to in the proviso in the first sentence in this
paragraph. In the case of such election, each electing holder of a Note
shall bear the currency exchange costs related to such Note, if any, by
deductions from the payments otherwise due such holder.
Unless otherwise specified in the applicable Pricing Supplement, in the
case of a Note denominated in a Specified Currency other than U.S dollars,
the amount of U.S. dollar payments in respect of such Note will be determined
by the Company or an agent for the Company as specified in the applicable
Pricing Supplement (the "Exchange Rate Agent"), based on the indicative
quotation in The City of New York selected by such Exchange Rate Agent at
approximately 11:00 A.M., New York City time, on the second Business Day
preceding the applicable payment date that yields the largest number of U.S.
dollars upon conversion of the Specified Currency. Unless otherwise
specified in the applicable Pricing Supplement, such selection shall be made
from among the quotations appearing on the bank composite or
multi-contributor pages of the Reuters Monitor Foreign Exchange Service, or
if not available, the Telerate Monitor Foreign Exchange Service. If such
quotations are unavailable from either such foreign exchange service, such
election shall (unless otherwise specified in the applicable Pricing
Supplement) be made from the quotations received by the Exchange Rate Agent
from three recognized foreign exchange dealers in The City of New York
selected by the Exchange Rate Agent and approved by the Company (one of which
may be the Exchange Rate Agent) (the "Exchange Rate") for the purchase by the
quoting dealer, for settlement on such payment date, of the Specified
Currency for U.S. dollars. If no such bid quotations are available, payments
will be made in the Specified Currency unless such Specified Currency is
unavailable due to the imposition of exchange controls or to other
circumstances beyond the Company's control or is no longer used by the
government of the country issuing such Specified Currency or for the
settlement of transactions by public institutions of or within the
international banking community, in which case the Company will be entitled
to make payments in U.S. dollars on the basis of the noon buying rate in The
City of New York for cable transfers in the Specified Currency as certified
for customs purposes by the Federal Reserve Bank of New York (the "Market
Exchange Rate") for such Specified Currency on the second Business Day prior
to such payment date, or on such other basis as shall be specified in the
applicable Pricing Supplement. In the event such Market Exchange Rate is not
then available, the Company will be entitled to make payments in U.S. dollars
(i) if such Specified Currency is not a composite currency, on the basis of
the most recently available Market Exchange Rate for such Specified Currency
or (ii) if such Specified Currency is a composite currency, including without
limitation, ECU, in an amount determined by the Exchange Rate Agent to be the
sum of the results obtained by multiplying the number of units of each
component currency of such composite currency, as of the most recent date on
which such composite currency was used, by the Market Exchange Rate for such
component currency on the second Business Day prior to such payment date (or
if such Market Exchange Rate is not then available, by the most recently
available Market Exchange Rate for such component currency, or as otherwise
specified in the applicable Pricing Supplement). Any payment made under such
circumstances in U.S. dollars where the required payment is in a Specified
Currency other than U.S. dollars will not constitute an Event of Default.
10<PAGE>
<PAGE>13
Unless otherwise specified in the applicable Pricing Supplement, if a
holder of a Note denominated in a foreign currency other than ECU shall have
elected to receive payments of principal of, and premium, if any, and
interest, if any, on such Note in such foreign currency as described above,
and such foreign currency is unavailable as of the due date for any such
payments because of the imposition of exchange controls or other
circumstances beyond the Company's control, or is no longer used by the
government of the country issuing such foreign currency or for the settlement
of transactions by public institutions of or within the international banking
community, then all payments due on that due date with respect to such Note
shall be made in U.S. dollars until such foreign currency is available or is
so used. The amount so payable on any date in such foreign currency shall be
converted into U.S. dollars at a rate determined by the Exchange Rate Agent
on the basis of the most recently available Market Exchange Rate or as
otherwise specified in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, if a
holder of a Note denominated in ECU shall have elected to receive payments of
principal of and premium, if any, and interest, if any, on such Note in ECU
as described above, and ECU are unavailable as of the due date for any such
payments because of the imposition of exchange controls or other
circumstances beyond the Company's control, or is no longer used in the
European Monetary System, then all payments due on that due date with respect
to such Note shall be made in U.S. dollars until the ECU is available or is
so used. The amount so payable on any date in ECU shall be converted into
U.S. dollars at a rate determined by the Exchange Rate Agent as of the second
Business Day prior to the date on which such payment is due on the following
basis: The component currencies of the ECU for this purpose shall be the
currency amounts that were components of the ECU as of the last date on which
ECU were used in the European Monetary System. The equivalent of ECU in U.S.
dollars shall be calculated by aggregating the U.S. dollar equivalents of
such component currencies. The U.S. dollar equivalent of each of such
component currencies shall be determined by the Exchange Rate Agent on the
basis of the most recently available Market Exchange Rate for each such
component currency, or as otherwise indicated in the applicable Pricing
Supplement.
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 the amounts of such two or more
currencies having an aggregate value on the date of division equal to the
amount of the former component currency immediately before such division.
All determinations referred to above made by the Exchange Rate Agent
shall be at its sole discretion (except to the extent expressly provided
herein that any determination made by an Exchange Rate Agent that is not the
Company is subject to approval by the Company) and, in the absence of
manifest error, shall be conclusive for all purposes and binding on holders
of the Notes.
Each Note will provide that, in the event of an official redenomination
of a Specified Currency (including, without limitation, an official
redenomination of a Specified Currency that is a composite currency) the
obligations of the Company with respect to payments on Notes denominated in
such Specified Currency shall, in all cases, be deemed immediately following
such redenomination to provide for the payment of that amount of
redenominated currency representing the amount of such obligations
immediately before such redenomination. Except to the extent Currency
Indexed Notes provide for the adjustment of the principal amount payable at
maturity thereof pursuant to application of the formulae described under
"Description of Notes-Currency Indexed Notes-Payment of Principal and
Interest," or any other formulae provided for in the applicable Pricing
Supplement, Notes will not provide for any adjustment to any amount payable
11<PAGE>
<PAGE>13
under the Notes as a result of (a) any change in the value of a Specified
Currency relative to any other currency due solely to fluctuations in
exchange rates or (b) any redenomination of any component currency of any
composite currency (unless such composite currency is itself officially
redenominated).
Currently, there are limited facilities in the United States for
conversion of U.S. dollars into foreign currencies, and vice versa. In
addition, banks do not generally offer non-U.S. dollar denominated checking
or savings account facilities in the United States. Accordingly, payments on
Notes made in a Specified Currency other than U.S. dollars will be made from
an account with a bank located outside the United States, unless otherwise
specified in the applicable Pricing Supplement.
INTEREST AND PRINCIPAL PAYMENTS
Unless otherwise specified in the applicable Pricing Supplement,
interest on the Notes and principal of Amortizing Notes (in each case other
than interest or, in the case of Amortizing Notes, principal paid at
Maturity), will be paid by mailing a check (unless otherwise specified in the
applicable Pricing Supplement, from an account at a bank located outside the
United States if such check is payable in a currency other than U.S. dollars)
to the holder at the address of such holder appearing on the security
register of the Company on the applicable Regular Record Date; provided,
however, that, unless otherwise specified in the applicable Pricing
Supplement, in the case of a Note issued between a Regular Record Date and
the Interest Payment Date relating to such Regular Record Date, interest
(and, in the case of an Amortizing Note, principal) on such Note for the
period beginning on the Issue Date and ending on such Interest Payment Date
shall be paid on the Interest Payment Date following the succeeding Regular
Record Date to the registered holder on such succeeding Regular Record Date.
Notwithstanding the foregoing, a holder of U.S.$10,000,000 or more in
aggregate principal amount of Notes of like tenor and term (or a holder of
the equivalent thereof in a Specified Currency other than U.S. dollars) shall
be entitled to receive such interest (and, in the case of Amortizing Notes,
principal payments) in immediately available funds, but only if complete and
appropriate instructions have been received in writing by the Paying Agent on
or prior to the applicable Regular Record Date. Owners of beneficial
interests in a Book-Entry Note will be paid in accordance with the
Depositary's and the participant's procedures in effect from time to time as
described under "Description of Notes-Book-Entry Notes." Simultaneously with
the election by any holder of a Note to receive payments in a Specified
Currency other than U.S. dollars (as provided above), such holder may, if so
entitled as described above, elect to receive such payments in immediately
available funds by providing complete and appropriate instructions to the
Paying Agent, and all payments in respect of principal of, and premium, if
any, and interest, if any, on such Note will be made in immediately available
funds to an account maintained by the payee with a bank located outside the
United States, or as otherwise provided in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, payments of
principal, and premium, if any, and interest, if any, at Maturity will be
made in immediately available funds (unless otherwise specified in the
applicable Pricing Supplement, payable to an account maintained by the payee
with a bank located outside the United States if payable in a Specified
Currency other than U.S. dollars) upon surrender of the Note at the office of
the Paying Agent, provided that the Note is presented to the Paying Agent in
time for the Paying Agent to make such payments in such funds in accordance
with its normal procedures. See "Important Currency Exchange Information."
Unless otherwise specified in the applicable Pricing Supplement, principal
and, premium, if any, and interest, if any, payable at Maturity of a Book-
Entry Note will be paid by the Paying Agent by wire transfer in immediately
available funds to an account specified by the Depositary. Unless otherwise
specified in the applicable Pricing Supplement, payments of interest on a
Book-Entry Note, and principal of Amortizing Notes in global form (in each
case, other than at Maturity) will be made in same-day funds in accordance
with existing arrangements between the Paying Agent and the Depositary. The
Company will pay any administrative costs imposed by banks in connection with
making payments in immediately available funds, but any tax, assessment or
governmental charge imposed upon payments, including, without limitation, any
withholding tax, will be borne by the holders of the Notes in respect of
which such payments are made.
12<PAGE>
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Certain Notes, including Original Issue Discount Notes, may be
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,
prior to the receipt of the cash attributable to that income. See "Tax
Consequences to U.S. Holders-Original Issue Discount Notes." Unless
otherwise specified in the applicable Pricing Supplement, if the principal of
any Original Issue Discount Note is declared to be due and payable
immediately as described under "Description of Debt Securities-Events of
Default," the amount of principal due and payable with respect to such Note
shall be limited to the aggregate principal amount of such Note multiplied by
the sum of its Issue Price (expressed as a percentage of the aggregate
principal amount) plus the original issue discount amortized from the Issue
Date to the date of declaration which amortization shall be calculated using
the "interest method" (computed in accordance with generally accepted
accounting principles in effect on the date of declaration). Special
considerations applicable to any such Notes will be set forth in the
applicable Pricing Supplement.
The Interest Payment Dates for Fixed Rate Notes shall be as described
below under "Fixed Rate Notes," and the Interest Payment Dates for Floating
Rate Notes shall be as indicated in the applicable Pricing Supplement.
FIXED RATE NOTES
Each Fixed Rate Note will bear interest from its Issue Date at the rate
per annum set forth thereon and in the applicable Pricing Supplement until
the principal amount thereof is paid, or made available for payment, in full,
except as described below under "Description of Notes-Subsequent Interest
Periods" and "Description of Notes-Extension of Maturity." Unless otherwise
specified in the applicable Pricing Supplement, interest on each Fixed Rate
Note (other than a Zero-Coupon Note or an Amortizing Note) will be payable,
as selected by the purchaser, either semiannually each April 1 and October 1,
or annually each October 1, and at Maturity. Unless otherwise specified in
the applicable Pricing Supplement, principal of and interest on each
Amortizing Note will be payable, as selected by the purchaser, either
quarterly each January 1, April 1, July 1 and October 1, or semiannually each
April 1 and October 1, as set forth in the applicable Pricing Supplement,
and, in either case, at Maturity. 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. A table setting forth
repayment information in respect of each Amortizing Note will be set forth in
the applicable Pricing Supplement. Each payment of interest on a Fixed Rate
Note shall include accrued interest from and including the Issue Date or from
and including the last day in respect of which interest has been paid (or
duly provided for), as the case may be, to, but excluding, the Interest
Payment Date or date of Maturity, as the case may be.
Any payment of principal, and premium, if any, or interest required to
be made on a Fixed Rate Note on a day which is not a Business Day need not be
made on such day, but may be made on the next succeeding Business Day with
the same force and effect as if made on such day, and no additional interest
shall accrue as a result of such delayed payment. Unless otherwise specified
in the applicable Pricing Supplement, any interest on Fixed Rate Notes will
be computed on the basis of a 360-day year of twelve 30-day months. The
interest rates the Company will agree to pay on newly-issued Fixed Rate Notes
are subject to change without notice by the Company from time to time, but no
such change will affect any Fixed Rate Notes already issued or as to which an
offer to purchase has been accepted by the Company.
FLOATING RATE NOTES
Except for the period from the Issue Date to the first Interest Reset
Date (as defined below) set forth in the applicable Pricing Supplement, each
Floating Rate Note will bear interest at a rate determined by reference to
either (i) an interest rate base (the "Base Rate"), which may be adjusted by
a Spread and/or a Spread Multiplier (each as defined below) or (ii) an
interest rate which may be either the higher or lower of two or more Base
Rates, as adjusted by the corresponding Spread and/or a Spread Multiplier for
13<PAGE>
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such related Base Rate (as will be specified in the applicable Pricing
Supplement). The "Spread" is the number of basis points (one basis point
equals one hundredth of a percentage point) to be added to or subtracted from
the related Base Rate applicable to the interest rate for such Floating Rate
Note, and the "Spread Multiplier" is the percentage of the related Base Rate
applicable to such Base Rate Note by which said Base Rate is to be multiplied
to determine the applicable interest rate on such Floating Rate Note. Each
Floating Rate Note and the applicable Pricing Supplement will specify the
Index Maturity and the Spread and/or Spread Multiplier, if any, applicable to
each such Floating Rate Note. The "Index Maturity" for any Floating Rate
Note is the period of maturity of the instrument or obligation from which the
Base Rate is calculated and will be specified in the applicable Pricing
Supplement. 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 Note already issued or as to
which an offer to purchase has been accepted by the Company.
The applicable Pricing Supplement will designate one of the following
Base Rates as applicable to a Floating Rate Note: (a) the Certificate of
Deposit Rate (a "CD Rate Note"), (b) the Commercial Paper Rate (a "Commercial
Paper Rate Note"), (c) the Federal Funds Rate (a "Federal Funds Rate Note"),
(d) LIBOR (a "LIBOR Note"), (e) the Prime Rate (a "Prime Rate Note"), (f) the
Treasury Rate (a "Treasury Rate Note") or (g) such other Base Rate or
interest rate formula as is set forth in such Pricing Supplement and in such
Floating Rate Note.
As specified in the applicable Pricing Supplement, 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 ("Maximum Interest Rate") and/or (ii) a minimum numerical
limitation, or floor, on the rate at which interest may accrue during any
Interest Period ("Minimum Interest Rate"). 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 a Floating Rate Note will in no
event be higher than the maximum rate permitted by applicable law (including,
without limitation, New York law, which is stated to govern the Notes and the
Indenture), as the same may be modified by United States law of general
application. Under present New York law, the maximum rate of interest, with
certain exceptions, for any loan in an amount less than U.S.$250,000 is 16%
and for any loan in the amount of U.S.$250,000 or more but less than
U.S.$2,500,000 is 25% per annum on a simple interest basis. These limits do
not apply to loans of U.S.$2,500,000 or more.
Each Floating Rate Note and the applicable Pricing Supplement will
specify whether the rate of interest on such Floating Rate Note will be reset
daily, weekly, monthly, quarterly, semiannually or annually (each an
"Interest Reset Period") and the date on which such interest rate will 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 that reset daily, each Business Day; in the case of
Floating Rate Notes (other than Treasury Rate Notes) that reset weekly, the
Wednesday of each week; in the case of Treasury Rate Notes that reset weekly,
the Tuesday of each week (except as provided below); in the case of Floating
Rate Notes that reset monthly, the third Wednesday of each month; in the case
of Floating Rate Notes that reset quarterly, the third Wednesday of January,
April, July and October; in the case of Floating Rate Notes that reset
semiannually, the third Wednesday of the two months of each year specified in
the applicable Pricing Supplement; and in the case of Floating Rate Notes
that reset annually, the third Wednesday of the month specified in the
applicable Pricing Supplement; provided, however, that (a) the interest rate
in effect from the Issue Date to the first Interest Reset Date will be the
Initial Interest Rate (as defined below) and (b) unless otherwise specified
in the applicable Pricing Supplement, the interest rate in effect for the 10
days immediately prior to Maturity will be that in effect on the tenth day
preceding such Maturity. 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 shall be postponed to the next succeeding Business Day, except that, in
the case of a LIBOR Note, if such Business Day would fall in the next
14<PAGE>
<PAGE>16
succeeding calendar month, such Interest Reset Date shall be the immediately
preceding Business Day. The interest rate or the formula for establishing
the interest rate in effect with respect to a Floating Rate Note from the
Issue Date to the first Interest Reset Date (the "Initial Interest Rate")
will be specified in the applicable Pricing Supplement.
Except as provided below, and unless otherwise specified in the
applicable Pricing Supplement, interest on Floating Rate Notes will be
payable, in the case of Floating Rate Notes with a daily, weekly or monthly
Interest Reset Date, on the third Wednesday of each month or on the third
Wednesday of January, April, July and October, as specified in the applicable
Pricing Supplement; in the case of Floating Rate Notes with a quarterly
Interest Reset Date, on the third Wednesday of January, April, July and
October; in the case of Floating Rate Notes with a semiannual Interest Reset
Date, on the third Wednesday of the two months of each year specified in the
applicable Pricing Supplement; and in the case of Floating Rate Notes with an
annual Interest Reset Date, on the third Wednesday of the month specified in
the applicable Pricing Supplement, and in each case at Maturity. Subject to
the next succeeding sentence, unless otherwise specified in the applicable
Pricing Supplement, if an Interest Payment Date (other than at Maturity) with
respect to any Floating Rate Note would fall on a day that is not a Business
Day, such Interest Payment Date shall be postponed to the next succeeding
Business Day, except that, in the case of LIBOR Notes, if such Business Day
would fall in the next succeeding calendar month, such Interest Payment Date
will be the immediately preceding Business Day. Any payment of principal,
and premium, if any, and interest required to be made on a Floating Rate Note
on a Maturity Date that is not a Business Day will be made on the next
succeeding Business Day, with the same force and effect as if made on any
such Maturity Date and no additional interest shall accrue as a result of any
such delayed payment.
Unless otherwise specified in the applicable Pricing Supplement, the
interest payable on each Interest Payment Date or at Maturity for Floating
Rate Notes (except Floating Rate Notes on which interest is reset daily or
weekly) will be the amount of interest accrued from and including the Issue
Date or from and including the last Interest Payment Date to which interest
has been paid to, but excluding, such Interest Payment Date or date of
Maturity, as the case may be (an "Interest Period"); provided, however, that
in the case of a Floating Rate Note on which interest is reset daily or
weekly, unless otherwise specified in the applicable Pricing Supplement,
interest payable on each Interest Payment Date will be the amount of interest
accrued from and including the Issue Date or from and excluding the last date
to which interest has been paid, as the case may be, to, and including, the
Regular Record Date immediately preceding such Interest Payment Date, except
that at Maturity the interest payable will include interest accrued to, but
excluding, the date of Maturity.
Unless otherwise specified in the applicable Pricing Supplement, with
respect to a Floating Rate Note, accrued interest will be calculated by
multiplying the principal amount of such Floating Rate Note by an accrued
interest factor. Unless otherwise specified in the applicable Pricing
Supplement, such accrued interest factor will be computed by adding the
interest factors calculated for each day in the Interest Period for which
accrued interest is being calculated. Unless otherwise specified in the
applicable Pricing Supplement, the interest factor for each such day is
computed by dividing the interest rate applicable on such day by 360, in the
cases of CD Rate Notes, Commercial Paper Rate Notes, Federal Funds Rate
Notes, Prime Rate Notes and LIBOR Notes, or by the actual number of days in
the year, in the case of Treasury Rate Notes. The interest rate applicable
to any day that is an Interest Reset Date is the interest rate as determined,
in accordance with the procedures hereinafter set forth, with respect to the
Interest Determination Date (as defined below) pertaining to such Interest
Reset Date. The interest rate applicable to any other day is the interest
rate in effect on the immediately preceding Interest Reset Date (or, if none,
the Initial Interest Rate).
15<PAGE>
<PAGE>17
Unless otherwise specified in the applicable Pricing Supplement, all
percentages resulting from any calculation of the rate of interest on a
Floating Rate Note will be rounded, if necessary, to the nearest one
hundred-thousandth of a percent (.0000001), with five one-millionths of a
percentage point rounded upward (e.g., 9.876545% (or .09876545) would be
rounded to 9.87655% (or .0987655)), and all U.S. dollars amounts used in or
resulting from such calculation on Floating Rate Notes will be rounded to the
nearest cent or, in the case of Notes denominated other than in U.S. dollars,
the nearest unit (with one-half cent or unit being rounded upwards).
Unless otherwise specified in the applicable Pricing Supplement, the
"Interest Determination Date" pertaining to an Interest Reset Date for CD
Rate Notes, Commercial Paper Rate Notes, Prime Rate Notes and Federal Funds
Rate Notes will be the second Business Day preceding such Interest Reset
Date; the Interest Determination Date pertaining to an Interest Reset Date
for a LIBOR Note will be the second London Banking Day preceding such
Interest Reset Date; and the Interest Determination Date pertaining to an
Interest Reset Date for a Treasury Rate Note will be the day of the week in
which such Interest Reset Date falls on which direct obligations of the
United States ("Treasury Bills") of the applicable Index Maturity (as
specified on the face of such Treasury Rate Note) are 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. If,
as the result of a legal holiday, an auction is so held on the preceding
Friday, such Friday will be the Interest Determination Date pertaining to the
Interest Reset Date occurring in the next succeeding week. If an auction
falls on a day that is an Interest Reset Date, such Interest Reset Date will
be the next following Business Day. Unless otherwise specified in the
applicable Pricing Supplement, the Interest Determination Date pertaining to
a Note, the interest rate of which is determined with reference to two or
more Base Rates, will be the first Business Day which is at least two
Business Days prior to such Interest Reset Date for such Note on which each
Base Rate shall be determinable.
Unless otherwise specified in the applicable Pricing Supplement, the
"Calculation Date," where applicable, pertaining to an 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 as the case may be.
The applicable Pricing Supplement shall specify a calculation agent
(the "Calculation Agent"), which may be the Company, with respect to any
issue of Floating Rate Notes. Upon the request of the holder of any Floating
Rate Note, the Calculation Agent will provide the interest rate then in
effect and, if determined, the interest rate that will become effective on
the next Interest Reset Date with respect to such Floating Rate Note. If at
any time the Trustee is not the Calculation Agent, the Company will notify
the Trustee of each determination of the interest rate applicable to any such
Floating Rate Note.
The interest rate in effect with respect to a Floating Rate Note from
the Issue Date to the first Interest Reset Date will be the Initial Interest
Rate. The interest rate for each subsequent Interest Rate Date will be
determined by the Calculation Agent as follows:
CD RATE NOTES
CD Rate Notes will bear interest at the interest rates (calculated with
reference to the CD Rate and the Spread and/or Spread Multiplier, if any and
subject to the Minimum Interest Rate and the Maximum Interest Rate, if any)
specified in the CD Rate Notes and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
"CD Rate" means, with respect to any Interest Determination Date, 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),
16<PAGE>
<PAGE>18
Selected Interest Rates," or any successor publication of the Board of
Governors of the Federal Reserve System ("H.15(519)") under the heading "CDs
(Secondary Market)," or, if not so published by 9:00 A.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 applicable Index Maturity as
published by the Federal Reserve Bank of New York in its daily statistical
release, "Composite 3:30 P.M. Quotations for U.S. Government Securities," or
any successor publication of the Federal Reserve Bank of New York (the
"Composite Quotations") under the heading "Certificates of Deposit." If such
rate is not yet published in either Release 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, of three leading
nonbank dealers in negotiable U.S. dollar certificates of deposit in The City
of New York selected by the Calculation Agent, after consultation with the
Company, for negotiable certificates of deposit of major United States money
center banks (in the market for negotiable certificates of deposit) with a
remaining maturity closest to the applicable Index Maturity in a denomination
of U.S.$5,000,000; provided, however, that if the dealers selected as
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the rate of interest in effect for the applicable period will be
the rate of interest in effect on such Interest Determination Date. All
references in this Prospectus or any applicable Pricing Supplement to
"Release H.15(519)" shall also be references to any successor publication to
Release H.15(519).
CD Rate Notes, like other Notes, are not deposit obligations of a bank
and are not insured by the Federal Deposit Insurance Corporation.
COMMERCIAL PAPER RATE NOTES
Commercial Paper Rate Notes will bear interest at the interest rates
(calculated with reference to the Commercial Paper Rate and the Spread and/or
the Spread Multiplier, if any, and subject to the Minimum Interest Rate and
the Maximum Interest Rate, if any) specified in the Commercial Paper Rate
Notes and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
"Commercial Paper Rate" means, with respect to any Interest Determination
Date, the Money Market Yield (as defined below) on such date of the rate for
commercial paper having the Index Maturity specified in the applicable
Pricing Supplement, as such rate shall be published in H.l5(519) under the
heading "Commercial Paper." In the event that such rate is not published
prior to 9:00 A.M., New York City time, on the Calculation Date pertaining to
such Interest Determination Date, then the Commercial Paper Rate shall be the
Money Market Yield on such Interest Determination Date of the rate for
commercial paper of the applicable Index Maturity as published in the
Composite Quotations under the heading "Commercial Paper." 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, then the Commercial Paper Rate shall be the Money Market
Yield of the arithmetic mean of the offered rates as of 11:00 A.M., New York
City time, on such Interest Determination Date of three leading dealers of
commercial paper in The City of New York selected by the Calculation Agent,
after consultation with the Company, for commercial paper of the applicable
Index Maturity, placed for industrial issuers whose bond rating is "AA," or
the equivalent, from a nationally recognized rating agency; provided that if
the dealers selected as aforesaid by the Calculation Agent are not quoting
offered rates as mentioned in this sentence, the rate of interest in effect
for the applicable period will be the rate of interest in effect on such
Interest Determination Date.
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"Money Market Yield" shall be a yield calculated in accordance with the
following formula:
Money Market Yield = D x 360
------------- 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 Interest Period for which interest is being
calculated.
FEDERAL FUNDS RATE NOTES
Federal Funds Rate Notes will bear interest at the interest rates
(calculated with reference to the Federal Funds Rate and the Spread and/or
the Spread Multiplier, if any, and subject to the Minimum Interest Rate and
the Maximum Interest Rate, 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,
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 9:00 A.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 the Composite Quotations under the heading
"Federal Funds/Effective Rate." 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, then 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 Federal Funds arranged by three leading brokers
of Federal Funds transactions in The City of New York selected by the
Calculation Agent, after consultation with the Company, as of 9:00 A.M., New
York City time, on such Interest Determination Date; provided, however, that
if the brokers selected as aforesaid by the Calculation Agent are not quoting
as mentioned in this sentence, the rate of interest in effect for the
applicable period will be the rate of interest 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 the Spread Multiplier, if any, and
subject to the Minimum Interest Rate and the Maximum Interest Rate, if any)
specified in the LIBOR Notes and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement,
"LIBOR" means the rate determined by the Calculation Agent in accordance with
the following provisions:
(i) With respect to an Interest Determination Date relating to a LIBOR Note
or any Floating Rate Note for which the interest rate is determined with
reference to LIBOR, LIBOR will be either (a) if "LIBOR Reuters" is specified
in the applicable Pricing Supplement, the arithmetic mean of the offered
rates (unless the specified Designated LIBOR Page by its terms provides only
for a single rate, in which case such single rate shall be used) for deposits
in the Index Currency having the Index Maturity designated in the applicable
Pricing Supplement, commencing on the second London Banking Day immediately
following that Interest Determination Date, that appear on the Designated
LIBOR Page specified in the applicable Pricing Supplement as of 11:00 A.M.
London time, on that Interest Determination Date, if at least two such
offered rates appear (unless, as aforesaid, only a single rate is required)
on such Designated LIBOR Page or (b) if "LIBOR Telerate" is specified in the
applicable Pricing Supplement, the rate for deposits in the Index Currency
having the Index Maturity designated in the applicable Pricing Supplement
commencing on the second London Banking Day immediately following that
Interest Determination Date that appears on the Designated LIBOR Page
specified in the applicable Pricing Supplement as of 11:00 A.M. London time,
on that Interest Determination Date. If fewer than two offered rates appear,
or no rate appears, as applicable, LIBOR in respect of the related Interest
Determination Date will be determined as if the parties had specified the
rate described in clause (ii) below.
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<PAGE>20
(ii) With respect to an Interest Determination Date on which fewer
than two offered rates appear, or no rate appears, as the case may be, on the
applicable Designated LIBOR Page as specified in clause (i) above, 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, after consultation with the Company, 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 London Banking 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., in the applicable Principal Financial Center,
on such Interest Determination Date by three major banks in such Principal
Financial Center selected by the Calculation Agent, after consultation with
the Company, for loans in the Index Currency to leading European banks,
having the Index Maturity designated in the applicable Pricing Supplement,
commencing on the second London Banking Day immediately following the
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;
provided, however, that if the banks so selected by the Calculation Agent are
not quoting as mentioned in this sentence, LIBOR determined on such Interest
Determination Date will be LIBOR in effect on such Interest Determination
Date.
"Index Currency" means the currency (including composite currencies)
specified in the applicable Pricing Supplement as the currency for 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 either (a) if "LIBOR Reuters" is
designated in the applicable Pricing Supplement, the display on the Reuters
Monitor Money Rates Service for the purpose of displaying the London
interbank rates of major banks for the applicable Index Currency or (b) if
"LIBOR Telerate" is designated in the applicable Pricing Supplement, the
display on the Dow Jones Telerate Service for the purpose of displaying the
London interbank rates of major banks for the applicable Index Currency. If
neither LIBOR Reuters nor LIBOR Telerate is specified in the applicable
Pricing Supplement, LIBOR for the applicable Index Currency will be
determined as if LIBOR Telerate (and, if the U.S. dollar is the Index
Currency, page 3750) had been specified.
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 the Spread Multiplier,
if any,and subject to the Minimum Interest Rate and the Maximum Interest
Rate, if any) specified in the Prime Rate Notes and in the applicable Pricing
Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
"Prime Rate" means, with respect to any Interest Determination Date, the rate
on such date as published in H.15(519) under the heading "Bank Prime Loan."
If such rate is not published by 9:00 A.M., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, the Prime
Rate will be determined by the Calculation Agent and will be the arithmetic
mean of the rates of interest publicly announced by each bank named on the
"Reuters Screen NYMF Page" (as defined below) as such bank's prime rate or
base lending rate as in effect for such Interest Determination Date.
"Reuters Screen NYMF Page" means the display designated as page "NYMF" on the
Reuters Monitor Money Rates Service (or such other page as may replace the
NYMF page on that service for the purpose of displaying prime rates or base
lending rates of major United States banks). If fewer than four such rates
but more than one such rate appear on the Reuters Screen NYMF Page for such
Interest Determination Date, the Prime Rate will be determined by the
19<PAGE>
<PAGE>21
Calculation Agent and will be the arithmetic mean of the prime rates quoted
on the basis of the actual number of days in the year divided by 360 as of
the close of business on such Interest Determination Date by four major money
center banks in The City of New York selected by the Calculation Agent, after
consultation with the Company. If fewer than two such rates appear on the
Reuters Screen NYMF Page, the Prime Rate will be calculated by the
Calculation Agent and will be determined as the arithmetic mean of the prime
rates furnished in The City of New York by the appropriate number of
substitute banks or trust companies organized and doing business under the
laws of the United States, or any State thereof, in each case having total
equity capital of at least U.S.$500,000,000 and being subject to supervision
or examination by federal or state authority, selected by the Calculation
Agent, after consultation with the Company, to provide such rate or rates;
provided, however, that if the banks or trust companies selected as aforesaid
by the Calculation Agent are not quoting as mentioned in this sentence, the
rate of interest in effect for the applicable period will be the rate of
interest in effect on such Interest Determination Date.
TREASURY RATE NOTES
Treasury Rate Notes will bear interest at the interest rates
(calculated with reference to the Treasury Rate and the Spread and/or the
Spread Multiplier, if any, and subject to the Minimum Interest Rate and the
Maximum Interest Rate, 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, the
rate for the auction held on such Interest Determination Date of direct
obligations of the United States ("Treasury Bills") having the Index Maturity
designated in the applicable Pricing Supplement, as published in H.l5(519)
under the heading "Treasury bills-auction average (investment)" or, if not so
published by 9:00 A.M., New York City time on the Calculation Date pertaining
to such Interest Determination Date, the auction average rate (expressed as
a bond equivalent, on the basis of a year of 365 or 366 days, as applicable,
and applied on a daily basis) 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 applicable 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 on 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) of the arithmetic mean of the
secondary market bid rates, as of approximately 3:30 P.M., New York City
time, on such Interest Determination Date, of three leading primary United
States government securities dealers selected by the Calculation Agent, after
consultation with the Company, 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 interest rate for the applicable period will be the
interest rate in effect on such Interest Determination Date.
ORIGINAL ISSUE DISCOUNT NOTES
Notes may be issued at a price less than their stated redemption price
at maturity, other than by an amount which is less than a de minimis amount
(0.25% of the stated redemption price at maturity multiplied by the number of
complete years to maturity) resulting in such Notes being treated as if they
were issued with original issue discount for United States Federal income tax
purposes ("Original Issue Discount Notes"). Such Original Issue Discount
Notes may currently pay no interest or interest at a rate which at the time
of issuance is below market rates. See "United States Federal Taxation - Tax
Consequences to U.S. Holders - Original Issue Discount Notes." Certain
additional considerations relating to any Original Issue Discount Notes will
be described in the Pricing Supplement relating thereto.
20<PAGE>
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CURRENCY INDEXED NOTES
The Company may from time to time offer Notes as to which the principal
amount payable at Maturity and/or the rate of interest thereon is determined
by reference to the rate of exchange between the currency or composite
currency in which such Notes ("Currency Indexed Notes") are denominated (the
"Denominated Currency") and the other currency or currencies or composite
currency or composite currencies specified as the Indexed Currency (the
"Indexed Currency") in the applicable Pricing Supplement, or as determined in
such other manner as may be specified in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, (a)
holders of Currency Indexed Notes will be entitled to receive a principal
amount in respect of such Currency Indexed Notes exceeding the amount
designated as the face amount of such Currency Indexed Notes in the
applicable Pricing Supplement (the "Face Amount") if, at Maturity, the rate
at which the Denominated Currency can be exchanged for the Indexed Currency
is greater than the rate of such exchange designated as the Base Exchange
Rate, expressed in units of the Indexed Currency per one unit of the
Denominated Currency, in the applicable Pricing Supplement (the "Base
Exchange Rate") and (b) holders of Currency Indexed Notes will be entitled to
receive a principal amount in respect of such Currency Indexed Notes less
than the Face Amount of such Currency Indexed Notes if, at Maturity, the rate
at which the Denominated Currency can be exchanged for the Indexed Currency
is less than such Base Exchange Rate, in each case determined as described
below under "Currency Indexed Notes - Payment of Principal and Interest."
Information as to the relative historical value (which information is not
necessarily indicative of relative future value) of the applicable
Denominated Currency against the applicable Indexed Currency, any exchange
controls applicable to such Denominated Currency or Indexed Currency and
certain tax consequences to holders will be set forth in the applicable
Pricing Supplement. See "Foreign Currency Risks" and "Indexed Notes Risks."
PAYMENT OF PRINCIPAL AND INTEREST
Unless otherwise specified in the applicable Pricing Supplement,
interest will be payable by the Company in the Denominated Currency based on
the Face Amount of the Currency Indexed Notes and at the rate and times and
in the manner set forth herein and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement,
principal of a Currency Indexed Note will be payable by the Company in the
Denominated Currency at Maturity. The amount of such principal shall equal
the Face Amount of the Currency Indexed Note, plus or minus an amount of the
Denominated Currency determined by the Exchange Rate Agent specified in the
applicable Pricing Supplement, which may be the Company, by reference to the
difference between the Base Exchange Rate and the rate at which the
Denominated Currency can be exchanged for the Indexed Currency as determined
on the second Exchange Rate Day (the "Determination Date") prior to Maturity
of such Currency Indexed Note by the Exchange Rate Agent. Such rate of
exchange shall be based upon the arithmetic mean of the open market spot
offer quotations for the Indexed Currency (spot bid quotations for the
Denominated Currency) obtained by the Exchange Rate Agent from the Reference
Dealers (as defined below) in The City of New York at 11:00 A.M., New York
City time, on the Determination Date, for an amount of Indexed Currency equal
to the aggregate Face Amount of such Currency Indexed Note multiplied by the
Base Exchange Rate, with settlement at Maturity to be in the Denominated
Currency (such rate of exchange, as so determined and expressed in units of
the Indexed Currency per one unit of the Denominated Currency, is hereafter
referred to as the "Spot Rate"). If such quotations from the Reference
Dealers are not available on the Determination Date due to circumstances
beyond the control of the Company or the Exchange Rate Agent, the Spot Rate
will be determined on the basis of the most recently available quotations
from the Reference Dealers. As used herein, the term "Reference Dealers"
shall mean the three banks or firms specified as such in the applicable
Pricing Supplement or, if any of them shall be unwilling or unable to provide
the requested quotations, such other major money center bank or banks in The
City of New York selected by the Company, in consultation with the Exchange
Rate Agent, to act as Reference Dealer or Dealers in replacement therefor.
In the absence of manifest error, the determination by the Exchange Rate
Agent of the Spot Rate and the principal amount of Currency Indexed Notes
payable at Maturity thereof shall be final and binding on the Company and the
holders of such Currency Indexed Notes.
21<PAGE>
<PAGE>23
See "Description of Notes-Payment Currency" for a discussion of the
procedures followed by the Exchange Rate Agent if the Denominated Currency of
a Currency Indexed Note is unavailable as of the due date for any payment
thereon because of the imposition of exchange controls or other circumstances
beyond the Company's control or such Denominated Currency is no longer used
as discussed therein.
The formula to be used by the Exchange Rate Agent to determine the
principal amount of a Currency Indexed Note payable at Maturity will be
specified in the applicable Pricing Supplement.
OTHER INDEXED NOTES AND CERTAIN TERMS APPLICABLE TO ALL INDEXED NOTES
The Notes may be issued as Indexed Notes, other than Currency Indexed
Notes, the principal amount of which payable at Maturity and/or the interest
thereon, or both, may be determined by reference to the price of one or more
specified securities or commodities, to one or more securities or commodities
exchange indices or other indices or by other methods or formulae. Holders
of Indexed Notes may receive a principal amount at Maturity that is greater
than or less than the face amount of such Notes depending upon the
fluctuation of the relative value, rate or price of the specified index. The
Pricing Supplement relating to such an Indexed Note will describe, as
applicable, the method by which the amount of interest payable and the amount
of principal payable at the Maturity Date in respect of such Indexed Note
will be determined, certain special tax consequences of the purchase,
ownership or disposition to holders of such Notes, certain risks associated
with an investment in such Notes and other information relating to such
Notes. See "Foreign Currency Risks" and "Indexed Notes Risks."
PROSPECTIVE INVESTORS SHOULD CONSULT WITH THEIR OWN FINANCIAL AND LEGAL
ADVISORS AS TO THE RISKS ENTAILED BY AN INVESTMENT IN CURRENCY INDEXED OR
OTHER INDEXED NOTES. SUCH AN INVESTMENT ENTAILS SIGNIFICANT RISKS THAT ARE
NOT ASSOCIATED WITH A SIMILAR INVESTMENT IN A SECURITY THE PRINCIPAL AMOUNT
OF WHICH PAYABLE AT MATURITY IS NOT DETERMINED BY CURRENCY EXCHANGE RATES OR
SECURITIES OR COMMODITIES EXCHANGE INDICES OR OTHER INDICES AND IS NOT AN
APPROPRIATE INVESTMENT FOR INVESTORS WHO ARE UNSOPHISTICATED WITH RESPECT TO
SUCH TRANSACTIONS.
Unless otherwise specified in the applicable Pricing Supplement, (a)
for the purpose of determining whether holders of the requisite principal
amount of Notes outstanding under the Indenture have made a demand or given
a notice or waiver or taken any other action, the outstanding principal
amount of Indexed Notes (including Currency Indexed Notes) will be deemed to
be the face amount thereof and (b) in the event of an acceleration of the
Maturity Date of an Indexed Note, the principal amount payable to the holder
of such Note upon acceleration will be the principal amount determined by
reference to the formula by which the principal amount of such Note would be
determined on the Maturity Date thereof, as if the date of acceleration were
the Maturity Date.
SUBSEQUENT INTEREST PERIODS
The Pricing Supplement relating to each Note will indicate whether the
Company has the option with respect to such Note to reset the interest rate,
in the case of a Fixed Rate Note, or to reset the Spread and/or Spread
Multiplier, in the case of a Floating Rate Note, and, if so, the date or
dates on which such interest rate or such Spread and/or Spread Multiplier, as
the case may be, may be reset (each an "Optional Reset Date"). If the
Company has such option with respect to any Note, the following procedures
shall apply, unless modified as set forth in the applicable Pricing
Supplement.
The Company may exercise such option with respect to a Note by
notifying the Trustee of such exercise at least 50 but not more than 60 days
prior to an Optional Reset Date for such Note. Not later than 40 days prior
to such Optional Reset Date, the Trustee will mail to the holder of such Note
a notice (the "Reset Notice") setting forth (i) the election of the Company
to reset the interest rate, in the case of a Fixed Rate Note, or the Spread
and/or Spread Multiplier, in the case of a Floating Rate Note, (ii) such new
interest rate or such new Spread and/or Spread Multiplier, as the case may be
and (iii) the provisions, if any, for redemption or repayment during the
22<PAGE>
<PAGE>24
period from such Optional Reset Date to the next Optional Reset Date or, if
there is no such next Optional Reset Date, to the Maturity Date of such Note
(each such period a "Subsequent Interest Period"), including the date or
dates on which or the period or periods during which and the price or prices
at which such redemption may occur during such Subsequent Interest Period.
Upon the transmittal by the Trustee of a Reset Notice to the holder of a
Note, such new interest rate or such new Spread and/or Spread Multiplier, as
the case may be, shall take effect automatically, and, except as modified by
the Reset Notice and as described in the next paragraph, such Note will have
the same terms as prior to the transmittal of such Reset Notice.
Notwithstanding the foregoing, not later than 20 days prior to an
Optional Reset Date for a Note, the Company may, at its option, revoke the
interest rate, in the case of a Fixed Rate Note, or the Spread and/or Spread
Multiplier, in the case of a Floating Rate Note, provided for in the Reset
Notice and establish an interest rate, in the case of a Fixed Rate Note, or
a Spread and/or Spread Multiplier, in the case of a Floating Rate Note, that
is higher than the interest rate, Spread and/or Spread Multiplier, as the
case may be, provided for in the Reset Notice, for the Subsequent Interest
Period commencing on such Optional Reset Date by causing the Trustee to
transmit notice of such higher interest rate or higher Spread and/or Spread
Multiplier, as the case may be, to the holder of such Note. Such notice
shall be irrevocable. All Notes with respect to which the interest rate or
Spread and/or Spread Multiplier is reset on an Optional Reset Date and with
respect to which the holders of such Notes have not tendered such Notes for
repayment (or have validly revoked any such tender) pursuant to the next
succeeding paragraph will bear such higher interest rate, in the case of a
Fixed Rate Note, or higher Spread and/or Spread Multiplier, in the case of a
Floating Rate Note, for the Subsequent Interest Period.
If the Company elects to reset the interest rate or the Spread and/or
Spread Multiplier of a Note as described above, the holder of such Note will
have the option to elect repayment of such Note by the Company on any
Optional Reset Date at a price equal to the aggregate principal amount
thereof outstanding on, plus any accrued interest to, such Optional Reset
Date. In order for a Note to be so repaid on an Optional Reset Date, the
holder thereof must follow the procedures set forth below under "Redemption
and Repayment" for optional repayment, except that the period for delivery of
such Note or notification to the Trustee shall be at least 25 but not more
than 35 days prior to such Optional Reset Date and except that a holder who
has tendered a Note for repayment pursuant to a Reset Notice may, by written
notice to the Trustee, revoke any such tender for repayment until the close
of business on the tenth day prior to such Optional Reset Date.
EXTENSION OF MATURITY
The Pricing Supplement relating to each Note (other than an Amortizing
Note) will indicate whether the Company has the option to extend the maturity
of such 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 Note (other than an Amortizing Note), the following procedures
shall apply, unless modified as set forth in the applicable Pricing
Supplement (which will contain complete details concerning such option by the
Company to extend the maturity of a Note (other than an Amortizing Note)).
The Company may exercise such option with respect to a Note by
notifying the Trustee of such exercise at least 45 but not more than 60 days
prior to the Maturity Date of such Note originally in effect prior to the
exercise of such option (the "Original Maturity Date") or, if the Maturity
Date of such Note has already been extended prior to the Maturity Date then
in effect (an "Extended Maturity Date"). No later than 40 days prior to the
Original Maturity Date or an Extended Maturity Date, as the case may be
(each, a "Maturity Date"), the Trustee will mail to the holder of such Note
a notice (the "Extension Notice") relating to such Extension Period, setting
forth (i) the election of the Company to extend the Original Maturity Date,
23<PAGE>
<PAGE>25
(ii) the new Maturity Date, (iii) in the case of a Fixed Rate Note, the
interest rate applicable to the Extension Period or, in the case of a
Floating Rate Note, the Spread and/or Spread Multiplier applicable to the
Extension Period and (iv) the provisions, if any, for redemption during the
Extension Period, including the date or dates on which or 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 Trustee of an
Extension Notice to the holder of a Note, the Original Maturity Date shall be
extended automatically as set forth in the Extension Notice, and, except as
modified by the Extension Notice and as described in the next paragraph, such
Note will have the same terms as prior to the mailing of such Extension
Notice.
Notwithstanding the foregoing, not later than 20 days prior to the
Original Maturity Date for a Note, the Company may, at its option, revoke the
interest rate, in the case of a Fixed Rate Note, or the Spread and/or Spread
Multiplier, in the case of a Floating Rate Note, provided for in the
Extension Notice and establish an interest rate, in the case of a Fixed Rate
Note, or a Spread and/or Spread Multiplier, in the case of a Floating Rate
Note, that is higher than the interest rate, Spread and/or Spread Multiplier,
as the case may be, provided for in the Extension Notice for the Extension
Period, by mailing or causing the Trustee to transmit notice of such higher
interest rate or higher Spread and/or Spread Multiplier, as the case may be,
to the holder of such Note. Such notice shall be irrevocable. All Notes
with respect to which the Maturity Date is extended and with respect to which
the holders of such Notes have not tendered such Notes for repayment (or have
validly revoked any such tender) pursuant to the next succeeding paragraph
will bear such higher interest rate, in the case of a Fixed Rate Note, or
higher Spread and/or Spread Multiplier, in the case of a Floating Rate Note,
for the Extension Period.
If the Company elects to extend the Maturity Date of a Note, the holder
of such Note will have the option to elect repayment of such Note by the
Company on the Original Maturity Date at a price equal to the principal
amount thereof plus any accrued interest to such date. In order for a Note
to be so repaid on the Original Maturity Date, the holder thereof must follow
the procedures set forth below under "Redemption and Repayment" for optional
repayment, except that the period for delivery of such Note or notification
to the Trustee shall be at least 30 but not more than 35 days prior to the
Original Maturity Date and except that a holder who has tendered a Note for
repayment pursuant to an Extension Notice may, by written notice to the
Trustee, revoke any such tender for repayment until the close of business on
the tenth day prior to the Original Maturity Date.
REDEMPTION AND REPAYMENT
Unless otherwise provided in the applicable Pricing Supplement, the
Notes will not be redeemable prior to the Maturity Date at the option of the
Company or repayable prior to the Maturity Date at the option of the holder.
Unless otherwise specified in the applicable Pricing Supplement, the Notes,
except for Amortizing Notes, will not be subject to any sinking fund.
If applicable, the Pricing Supplement relating to each Note will
indicate that the Note will be redeemable at the option of the Company or
repayable at the option of the holder on a date or dates specified prior to
its Maturity 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 the date of redemption or repayment, unless such Note was
issued with original issue discount, in which case the Pricing Supplement
will specify the amount payable upon such redemption or repayment.
The Company may redeem any of the Notes that are redeemable and remain
outstanding either in whole or from time to time in part, upon not less than
30 nor more than 60 days' notice. Unless otherwise specified in the
applicable Pricing Supplement, if less than all of the Notes with like tenor
and terms are to be redeemed, the Notes to be redeemed shall be selected by
the Trustee by such method as the Trustee shall deem fair and appropriate.
24 <PAGE>
<PAGE>26
Unless otherwise specified in the applicable Pricing Supplement, in
order for a Note to be repaid at the option of the holder thereof, the
Company must receive at least 30 days but not more than 45 days prior to the
repayment date, the Note with the form entitled "Option to Elect Repayment"
on the reverse of the Note duly completed. Exercise of the repayment option
by the holder of a Note shall be irrevocable, except as otherwise provided
under "Description of Notes-Subsequent Interest Periods" and "Description of
Notes-Extensions of Maturity." The repayment option may be exercised by the
holder of a Note for less than the aggregate principal amount of the Note
then outstanding provided that the principal amount of the Note remaining
outstanding after repayment is an authorized denomination.
With respect to a Book-Entry Note, the Depositary's nominee will be the
holder of such Book-Entry Note and therefore will be the only entity that can
exercise a right to repayment. See "Description of Notes-Book-Entry Notes."
In order to ensure that the Depositary's nominee will timely exercise a right
to repayment with respect to a particular beneficial interest in a Book-Entry
Note, the beneficial owner of such interest must instruct the broker or other
direct or indirect participant through which it holds a beneficial interest
in such Book-Entry Note to notify the Depositary of its desire to exercise a
right to repayment. Different firms have different cut-off times for
accepting instructions from their customers and, accordingly, each beneficial
owner should consult the broker or other direct or indirect participant
through which it holds an interest in a Book-Entry Note in order to ascertain
the cut-off time by which such an instruction must be given in order for
timely notice to be delivered to the Depositary. Conveyance of notices and
other communications by the Depositary to participants, by participants to
indirect participants and by participants and indirect participants to
beneficial owners of the Book-Entry Notes will be governed by agreements
among them, subject to any statutory or regulated requirements as may be in
effect from time to time.
If applicable, the Company will comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws or regulations in
connection with any such repurchase.
The Company may at any time purchase Notes at any price or prices in
the open market or otherwise. Notes so purchased by the Company may, at the
discretion of the Company, be held or resold or surrendered to the Trustee
for cancellation.
IMPORTANT CURRENCY EXCHANGE INFORMATION
Unless otherwise set forth in the applicable Pricing Supplement, each
Purchaser of a Note is required to pay for such Note in the Specified
Currency thereof in immediately available funds, and payments of principal
of, premium, if any, and interest, if any, on, such Note will be made in the
Specified Currency. Currently, there are limited facilities in the United
States for conversion of U.S. dollars into foreign currencies or currency
units and vice versa and few banks offer non-U.S. dollar checking or savings
account facilities in the United States. Accordingly, unless otherwise
specified in a Pricing Supplement or unless alternative arrangements are
made, payment of principal of, premium, if any, and interest, if any, on,
Notes in a Specified Currency other than U.S. dollars will be made to an
account at a bank outside the United States. See "Foreign Currency Risks."
However, if requested by a prospective purchaser of Notes denominated in a
Specified Currency other than U.S. dollars, the Agent soliciting the offer to
purchase will use reasonable efforts to arrange for the conversion of U.S.
dollars into such Specified Currency to enable the purchaser to pay for such
Notes. Such request must be made on or before the fifth Business Day
preceding the date of delivery of the Notes, or by such other date as is
determined by such Agent. Each such conversion will be made by the relevant
Agent on such terms and subject to such conditions, limitations and charges
as such Agent may from time to time establish in accordance with its regular
foreign exchange practice. All costs of any such exchange will be borne by
the purchasers of the Notes.
25<PAGE>
<PAGE>27
FOREIGN CURRENCY RISKS
EXCHANGE RATES AND EXCHANGE CONTROLS
An investment in Notes that are denominated in, or the payment of which
is related to the value of, a Specified Currency other than U.S. dollars
("Foreign Currency Notes") entails significant risks that are not associated
with a similar investment in a security denominated in U.S. dollars.
Similarly, an investment in a Currency Indexed Note entails significant risks
that are not associated with a similar investment in non-Indexed Notes. See
"Indexed Notes Risks." Such risks include, without limitation, the
possibility of significant changes in the rate of exchange between United
States dollars and such Specified Currency (and, in the case of Currency
Indexed Notes, the rate of exchange between the Specified Currency and the
Indexed Currency for such Currency Indexed Note), changes resulting from
official redenomination with respect to a Specified Currency (or, in the case
of each Currency Indexed Note, with respect to the Specified Currency or the
Indexed Currency therefor) and the possibility of the imposition or
modification of foreign exchange controls by either the United States or
foreign governments. Such risks generally depend on factors over which the
Company has no control, such as economic and political events. In recent
years, rates of exchange between the U.S. dollar and certain foreign
currencies, and between certain foreign currencies and other foreign
currencies, have been highly volatile, and such volatility may occur in the
future. The exchange rate between the U.S. dollar and a foreign currency or
composite currency is at any moment a result of the supply and demand for
such currency or the currencies comprising such composite currency, and
changes in the rate result over time from the interaction of many factors,
among which are rates of inflation, interest rate levels, balance of payments
and the extent of governmental surpluses or deficits in the countries of such
currencies. These factors are in turn sensitive to the monetary, fiscal and
trade policies pursued by such governments and those of other countries
important to international trade and finance. Fluctuations that have
occurred in any particular exchange rate in the past are not necessarily
indicative, however, of fluctuations that may occur in the rate during the
term of any Foreign Currency Note or any Currency Indexed Note.
Depreciation of the Specified Currency for a Foreign Currency Note
against U.S. dollars would result in a decrease in the effective yield of
such Foreign Currency Note below its applicable interest rate and, in certain
circumstances, could result in a loss to the investor on a U.S. dollar basis.
Similarly, depreciation of the Denominated Currency with respect to a
Currency Indexed Note against the applicable Indexed Currency would result in
the principal amount payable with respect to such Currency Indexed Note at
the Maturity Date being less than the Face Amount of such Currency Indexed
Note which, in turn, would decrease the effective yield of such Currency
Indexed Note below its stated interest rate and, in certain circumstances,
could also result in a loss of all or a substantial portion of the principal
of such Note to the investor. See "Description of Notes-Currency Indexed
Notes."
Governments have from time to time imposed, and may in the future
impose, exchange controls that could affect exchange rates as well as the
availability of a Specified Currency at the time of payment of principal of,
premium, if any, or interest, if any, on, a Foreign Currency Note. There can
be no assurances that exchange controls will not restrict or prohibit
payments of principal, and premium, if any, or interest, if any, in any
Specified Currency other than U.S. dollars. In addition to the risks
associated with relative currency valuations discussed above, the imposition
of exchange controls might impact the liquidity of any Note denominated in,
or the value of which is linked to, a foreign currency. Even if there are no
actual exchange controls, it is possible that the Specified Currency for such
Note would not be available to the Company when payments on such Note are due
because of circumstances beyond the control of the Company. In that event,
the Company will make required payments in U.S. dollars on the basis
described herein. See "Description of Notes-Payment Currency" and
"Description of Notes-Currency Indexed Notes-Payment of Principal and
Interest."
26<PAGE>
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The information set forth in this Prospectus is directed to prospective
purchasers who are residents of the United States, and the Company disclaims
any responsibility to advise prospective purchasers who are residents of
countries other than the United States with respect to any matters that may
affect the purchase, holding or receipt of payments of principal of, premium,
if any, and interest, if any, on, the Notes. Persons who are not residents
of the United States should consult their own legal advisors with regard to
such matters.
Pricing Supplements relating to Foreign Currency Notes or Currency
Indexed Notes will contain information concerning historical exchange rates
for the applicable Specified Currency against the U.S. dollar or other
relevant currency (including in the case of Currency Indexed Notes, the
applicable Indexed Currency), a description of the currency or currencies and
any exchange controls affecting such currency or currencies. The information
contained 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.
PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN FINANCIAL, LEGAL AND TAX
ADVISORS AS TO THE RISKS ENTAILED BY AN INVESTMENT IN NOTES DENOMINATED IN,
OR THE PAYMENT OF WHICH IS RELATED TO THE VALUE OF, A CURRENCY OTHER THAN
U.S. DOLLARS AND AS TO THE SUITABILITY OF SUCH NOTES IN LIGHT OF THEIR
PARTICULAR CIRCUMSTANCES. SUCH NOTES ARE NOT AN APPROPRIATE INVESTMENT FOR
PROSPECTIVE PURCHASERS WHO ARE UNSOPHISTICATED WITH RESPECT TO FOREIGN
CURRENCY TRANSACTIONS.
GOVERNING LAW AND JUDGMENTS
The Notes will be governed by and construed in accordance with the laws
of the State of New York. In the event an action based on Notes denominated
in a Specified Currency other than U.S. dollars were commenced in a court in
the United States, it is likely that such court would grant judgment relating
to the Notes only in U.S. dollars. If an action based on Notes denominated
in a Specified Currency other than U.S dollars were commenced in a New York
court, however, 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.
INDEXED NOTES RISKS
An investment in Notes indexed, as to principal or interest, or both,
to one or more values of currencies (including exchange rates between
currencies), commodities or interest rate indices entails significant risks
that are not associated with similar investments in a conventional fixed-rate
debt security. If the interest rate of such a Note is so indexed, it may
result in an interest rate that is less than that payable on a conventional
fixed-rate debt security issued at the same time, including the possibility
that no interest will be paid, and, if the principal amount payable at
maturity may be less than the original purchase price of such Note if allowed
pursuant to the terms of such Note, including the possibility that no
principal will be paid. The secondary market for such Notes will be affected
by a number of factors, independent of the creditworthiness of the issuer and
the value of the applicable currency, commodity or interest rate index,
including the volatility of the applicable currency, commodity or interest
rate index, the time remaining to the maturity of such Notes, the amount
outstanding of such 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 Notes
contains a multiple or leverage factor, the effect of any change in the
applicable currency, commodity or interest rate index will 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
27<PAGE>
<PAGE>29
of any Note. Accordingly, prospective investors should consult their own
financial and legal advisors as to the risks entailed by an investment in
such Notes and the suitability of such Notes in light of their particular
circumstances.
PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN FINANCIAL, LEGAL AND TAX
ADVISORS AS TO THE RISKS ENTAILED IN AN INVESTMENT IN NOTES DENOMINATED IN,
OR THE PAYMENT OF WHICH IS RELATED TO THE VALUE OF, A FOREIGN CURRENCY OR
NOTES INDEXED TO CURRENCY VALUES, COMMODITIES OR INTEREST RATE INDICES AND AS
TO THE SUITABILITY OF SUCH NOTES, IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES.
SUCH NOTES ARE NOT AN APPROPRIATE INVESTMENT FOR PROSPECTIVE PURCHASERS WHO
ARE UNSOPHISTICATED WITH RESPECT TO FOREIGN CURRENCY OR INDEXED TRANSACTIONS.
UNITED STATES FEDERAL TAXATION
GENERAL
In the opinion of the Company's tax counsel, the following general
summary describes certain United States Federal income tax consequences of
the ownership and disposition of the Notes. This summary is directed solely
to original holders purchasing Notes at the "issue price" (as defined below)
and who hold the Notes as capital assets within the meaning of Section 1221
of the Internal Revenue Code of 1986, as amended (the "Code"), and does not
purport to discuss all United States Federal income tax consequences that may
be applicable to particular categories of investors that may be subject to
special rules, such as banks, insurance companies, dealers in securities,
persons holding Notes as a hedge against, or which are hedged against, a
currency exchange or interest rate risk, or United States holders whose
functional currency (as defined in Section 985 of the Code) is other than the
U.S. dollar. In addition, the United States Federal income tax consequences
of holding a particular Note will depend, in part, on the particular terms of
such Note as set forth in the applicable Pricing Supplement. Finally, this
summary does not discuss Original Issue Discount Notes which qualify as
"applicable high-yield discount obligations" under Section 163(i) of the
Code. Holders of Original Issue Discount Notes which are "applicable high-
yield discount obligations" may be subject to special rules which will be set
forth in an applicable Pricing Supplement. Holders are advised to consult
their own tax advisors with regard to the application of the United States
Federal income tax laws to their particular situations as well as any tax
consequences arising under the laws of any state, local or foreign tax
jurisdiction.
This summary is based on the Code, United States Treasury Regulations
(including proposed regulations and temporary regulations) promulgated
thereunder, rulings, official pronouncements and judicial decisions as of the
date of this Prospectus. The authorities on which this summary is based are
subject to change or differing interpretations, which could apply
retroactively, so as to result in United States Federal income tax
consequences different from those discussed below.
For purposes of the following discussion, "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 any political subdivision thereof, (iii) an estate or
trust whose income from sources without the United States is includable in
gross income for United States Federal income tax purposes regardless of its
source or (iv) any other holder whose income from a Note is effectively
connected with the conduct of a trade or business in the United States. The
term also includes certain former citizens of the United States whose income
and gain on the Notes will be taxable.
28<PAGE>
<PAGE>30
TAX CONSEQUENCES TO U.S. HOLDERS
PAYMENTS OF INTEREST
Interest on a Note (whether denominated in U.S. dollars or in other
than U.S. dollars) that is not an Original Issue Discount Note will generally
be taxable to a U.S. Holder as ordinary interest income at the time it is
accrued or is received in accordance with the U.S. Holder's method of
accounting for tax purposes.
All payments of interest on a Note that matures one year or less from
its date of issuance will be included in the stated redemption price at the
maturity of Notes and will be taxed in the manner described below under
"Original Issue Discount Notes".
Special rules governing the treatment of interest paid with respect to
Original Issue Discount Notes, including certain Floating Rate Notes, Foreign
Currency Notes, Currency Indexed Notes and other Indexed Notes are described
under "Original Issue Discount Notes", "Foreign Currency Notes" and "Currency
Indexed Notes and Other Indexed Notes" below.
ORIGINAL ISSUE DISCOUNT NOTES
The following summary is generally based upon the Treasury Regulations
concerning the treatment of debt instruments issued with original issue
discount (the "OID Regulations"). Under the OID Regulations, a Note that is
issued for an amount less than its stated redemption price at maturity will
generally be considered to have been issued at an original issue discount.
The issue price of a Note is equal to the first price at which a substantial
amount of such Notes is sold (excluding bond houses, brokers or similar
persons or organizations acting in the capacity of underwriters or
wholesalers). The stated redemption price at maturity of a Note is equal to
the sum of all payments to be made on such Note other than certain contingent
payments and "qualified stated interest" payments. "Qualified stated
interest" is defined as stated interest unconditionally payable (or that will
be constructively received under Section 451 of the Code) in cash or property
(other than debt instruments of the issuer) at least annually at a single
fixed rate, a single qualified floating rate, or a single "objective rate,"
provided that the single rate appropriately takes into account the length of
interval between payments.
Under the OID Regulations, Variable Rate Notes are subject to special
rules. Subject to certain exceptions, a variable rate of interest is a
"qualified floating rate" if variations in the value of the rate can
reasonably be expected to measure contemporaneous fluctuations in the cost of
newly borrowed funds in the currency in which the Note is denominated. A
variable rate will be considered a qualified floating rate if the variable
rate equals (i) the product of an otherwise qualified floating rate and a
fixed multiple (i.e., a Spread Multiplier) that is greater than zero but not
more than 1.35 or (ii) an otherwise qualified floating rate (or the product
described in clause (i)) plus or minus a fixed rate (i.e., a Spread). If the
variable rate equals the product of an otherwise qualified floating rate and
a single fixed multiplier greater than 1.35, however, such rate generally
constitutes an "objective rate," described more fully below. A variable rate
will not be considered a qualified floating rate if the variable rate is
subject to a cap, floor, governor (i.e., a restriction on the amount of
increase or decrease in the stated interest rate) or similar restriction that
is reasonably expected as of the issue date to cause the yield on the Note to
be significantly more or less than the expected yield determined without the
restriction (other than a cap, floor or governor that is fixed throughout the
term of the Note).
29<PAGE>
<PAGE>31
Subject to certain exceptions, an "objective rate" is defined as a rate
(other than a qualified floating rate) that is determined using a single
fixed formula and that is based on (i) one or more qualified floating rates,
(ii) one or more rates where each rate would be a qualified floating rate for
a Note denominated in a currency other than the currency in which the Note is
denominated, (iii) the yield or changes in the price of one or more items of
personal property (other than stock or debt of the Company or a related
party) that is "actively traded," or (iv) a combination of the rates
described in clauses (i), (ii) and (iii) of this sentence. A variable rate
of interest on a Note will not be considered an objective rate if it is
reasonably expected that the average value of the rate during the first half
of the Note's term will be either significantly less than or significantly
greater than the average value of the rate during the final half of the
Note's term.
If interest on a Note is stated at a fixed rate for an initial period
of less than one year (e.g., an Initial Interest Rate) followed by a variable
rate that is either a qualified floating rate or an objective rate for a
subsequent period, and the value of the variable rate on the issue date is
intended to approximate the fixed rate, the fixed rate and the variable rate
together constitute a single qualified floating rate or objective rate. If
a Floating Rate Note provides for two or more qualified floating rates that
can reasonably be expected to have approximately the same values throughout
the term of the Note, the qualified floating rates together constitute a
single qualified floating rate. Two or more rates will be conclusively
presumed to meet the requirements of the preceding sentences if the values of
the applicable rates on the issue date are within 1/4 of 1 percent of each
other. In addition, in order to be treated as qualified stated interest
(rather than contingent payments, as discussed below), the qualified floating
rate or objective rate in effect at a given time for a Note must be set at a
value of that rate on any day that is no earlier than three months prior to
the first day on which that value is in effect and no later than one year
following that first day.
Special tax considerations (including possible original issue discount)
may arise with respect to Notes which provide for interest at (i) more than
one qualified floating rate, (ii) a single fixed rate and one or more
qualified floating rates, or (iii) in certain cases a single fixed rate and
a single objective rate. In the event Notes of this type are issued, the
United States Federal income tax consequences to purchasers and holders
thereof will be discussed in the applicable Pricing Supplement. Purchasers
of such Notes should carefully examine the Pricing Supplement and should
consult their tax advisors regarding the purchase, ownership and disposition
of such Notes.
Notwithstanding the general definition of original issue discount
above, a Note will not be considered to have been issued with an original
issue discount if the amount of such original issue discount is less than a
DE MINIMIS amount equal to 0.25% of the stated redemption price at maturity
multiplied by the number of complete years to maturity (or, in the case of a
Note providing for payments prior to maturity of amounts included in its
stated redemption price at maturity, the weighted average maturity). Holders
of Notes with a DE MINIMIS amount of original issue discount will include
such original issue discount in income, as capital gain, on a pro rata basis
as principal payments are made on the Note.
A U.S. Holder of an Original Issue Discount Note (other than certain
U.S. Holders of Short-Term Original Issue Discount Notes, as defined below)
will be required to include qualified stated interest in income at the time
it is received or accrued in accordance with such U.S. Holder's method of
accounting.
A U.S. Holder of an Original Issue Discount Note that matures more than
one year from its date of issuance will be required to include original issue
discount in income as it accrues, in accordance with a constant yield method
based on a compounding of interest, before the receipt of cash payments
attributable to such income. The amount of original issue discount
includable in income is equal to the sum of the "daily portions" of the
original issue discount for each day during the taxable year on which the
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U.S. Holder held such Note. The "daily portion" is the original issue
discount for the "accrual period" that is allocated ratably to each day in
the accrual period. The original issue discount for an accrual period is
equal to the excess, if any, of (a) the product of the "adjusted issue price"
of an Original issue Discount Note at the beginning of such accrual period
and its "yield to maturity" over (b) the amount of any qualified stated
interest allocable to the accrual period. The "accrual period" is the
interval (not to exceed one year) that ends no later than the date of any
scheduled payment of principal or interest. The Company will specify the
accrual period it intends to use in the applicable Pricing Supplement but a
U.S. Holder is not required to use the same accrual period for purposes of
determining the amount of original issue discount includible in its income
for a taxable year. The adjusted issue price of a Note at the beginning of an
accrual period is equal to the issue price of such Note, increased by the
aggregate amount of original issue discount with respect to such Note that
accrued in prior accrual periods, and reduced by the amount of any payment on
the Note in prior accrual periods of amounts other than a payment of
qualified stated interest.
Under the OID Regulations, a U.S. Holder may make an election (the
"Constant Yield Election") 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 Holder) in accordance with a
constant yield method based on the compounding of interest.
In general, a cash method U.S. Holder of an Original Issue Discount
Note that matures one year or less from its date of issuance (a "Short-Term
Original Issue Discount Note") is not required to accrue original issue
discount on such Note for United States Federal income tax purposes unless it
elects to do so. U.S. Holders who make such an election, U.S. Holders who
report income for United States Federal income tax purposes on the accrual
method and certain other U.S. Holders, including banks and dealers in
securities, are required to include original issue discount in income on such
Short-Term Original Issue Discount Notes as it accrues on a straight-line
basis, unless an election is made to use the constant yield method (based on
a daily compounding). In the case of a U.S. Holder who is not required and
does not elect to include original issue discount in income currently, any
gain realized on the sale, exchange or redemption of the Short-Term Original
Issue Discount Note will be ordinary income to the extent of the original
issue discount accrued. In addition, such Holder will be required to defer
deductions for any interest paid on indebtedness incurred to purchase or
carry Short-Term Original Issue Discount Notes in an amount not exceeding the
deferred interest income, until such deferred interest income is recognized.
Certain Notes may be redeemable at the option of the Company prior to
the Maturity Date, or repayable at the option of the U.S. Holder prior to the
Maturity Date. Notes containing such features may be subject to rules that
differ from the general rules discussed above. U.S. Holders intending to
purchase Notes with any such features should carefully examine the applicable
Pricing Supplement and should consult with their own tax advisors with
respect to such features, since the tax consequences with respect to original
issue discount will depend, in part, on the particular terms and the
particular features of the purchased Note.
The OID Regulations contain "aggregation rules" stating that, in
certain circumstances, if more than one type of Note is issued as part of the
same issuance of securities to a single holder, some or all of such Notes may
be treated together as a single debt instrument for purposes of calculating
and accruing any original issue discount. Unless otherwise provided in the
related Pricing Supplement, the Company does not expect to treat any of the
Notes as being subject to the aggregation rules for purposes of computing
original issue discount.
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PREMIUM
If a U.S. Holder purchases a Note for an amount that is greater than
the stated redemption price at maturity, such Holder will be considered to
have purchased such Note with "amortizable bond premium" equal in amount to
such excess, and generally will not be required to include any original issue
discount in income. A U.S. Holder may elect (in accordance with applicable
Code provisions) to amortize such premium, using a constant yield method,
over the remaining term of the Note (where such Note is not callable prior to
its maturity date). If such Note may be called prior to maturity after the
U.S. Holder has acquired it, the amount of amortizable bond premium is
determined with reference to either the amount payable on maturity or, if it
results in a smaller premium, attributable to the period through the earlier
call date with reference to the amount payable on the earlier call date. A
U.S. Holder who elects to amortize bond premium must reduce his tax basis in
the Note by the amount of the premium amortized in any year. An election to
amortize bond premium applies to all taxable debt obligations then owned and
thereafter acquired by the U.S. Holder and may be revoked only with the
consent of the Internal Revenue Service. If a U.S. Holder makes a constant
yield election for a Note with amortizable bond premium, such election will
result in a deemed election to amortize bond premium for all the U.S.
Holder's debt instruments with amortizable bond premium and may be revoked
only with the permission of the Internal Revenue Service with respect to debt
instruments acquired after revocation. Similarly, such an election for a
Note with market discount will result in a deemed election to accrue market
discount in income currently for such Note and for all other bonds acquired
by the United States Holder with market discount on or after the first day of
the taxable year to which such election first applies, and may be revoked
only with the permission of the Internal Revenue Service.
SALE, EXCHANGE OR REDEMPTION OF THE NOTES
Upon the sale, exchange or redemption 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 redemption (except to the extent such
amount is attributable to accrued and unpaid interest) and the U.S. Holder's
adjusted tax basis in the Note. A U.S. Holder's adjusted tax basis in a Note
will generally be the U.S. dollar cost of the Note to such U.S. Holder,
increased by the amount of any original issue 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, by the amounts of any other
payments that do not constitute qualified stated interest.
In general, gain or loss realized on the sale, exchange or redemption
of a Note will be capital gain or loss (except in the case of a Short-Term
Original Issue Discount Note, to the extent of any original issue discount
not previously included in such U.S. Holder's taxable income), and will be
long-term capital gain or loss if at the time of sale, exchange or
redemption, the Note has been held for more than one year. Under current
law, the excess of net long-term net capital gains over net short-term
capital losses is taxed at a lower rate than ordinary income for certain non-
corporate taxpayers. The distinction between capital gain or loss is also
relevant for purposes of, among other things, limitations on the
deductibility of capital losses.
SUBSEQUENT INTEREST PERIODS AND EXTENSIONS OF MATURITY
If so specified in the applicable Pricing Supplement relating to a
Note, the Company may have the option (a) to reset the interest rate, in the
case of a Fixed Rate Note, or to reset the Spread and/or the Spread
Multiplier, in the case of a Floating Rate Note and/or (b) to extend the
Maturity of such Note. See "Description of Notes-Subsequent Interest
Periods" and "Description of Notes-Extension of Maturity." These type of
Notes may be subject to special rules for determining interest income or gain
or loss. A description of the United States Federal income tax consequences
to a U.S. Holder of these Notes will be contained in the applicable Pricing
Supplement.
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FOREIGN CURRENCY NOTES
The United States Federal income tax consequences to a United States
Holder of the ownership and disposition of Notes that are denominated in, or
provide for payments determined by reference to, a currency or currency unit
other than the United States dollar ("Foreign Currency Notes") will be
summarized in the applicable Pricing Supplement.
CURRENCY INDEXED NOTES AND OTHER INDEXED NOTES
The United States Federal income tax consequences to a U.S. Holder of
the ownership and disposition of Notes that have principal or interest
determined by reference to commodity prices, equity indices or other factors
will vary depending on the exact terms of the Notes and related factors.
Notes containing any of such features may be subject to rules that differ
from the general rules discussed above. U.S. Holders intending to purchase
such Notes should refer to the discussion relating to taxation in the
applicable Pricing Supplement.
TAX CONSEQUENCES TO FOREIGN HOLDERS
For purposes of this discussion, a "Foreign Holder" means any person
who, for United States Federal income tax purposes, is a foreign corporation,
a nonresident alien individual, a nonresident alien fiduciary of a foreign
estate or trust or a foreign partnership one or more of the members of which
is, for United States Federal income tax purposes, a foreign corporation, a
nonresident alien individual or a nonresident alien fiduciary of a foreign
estate or trust.
Subject to the discussion of backup withholding contained in "United
States Federal Taxation - Backup Withholding and Information Reporting"
below, and if the amount of interest is not determined by reference to any
change in the value of any property of the Company, other than actively
traded property, and is not otherwise identified by regulation as contingent
interest not eligible for the portfolio interest exemption,
(i) payments of principal, interest (including original issue discount,
if any) and premium on the Notes by the Company or any paying agent to a
beneficial owner of a Note that is not a U.S. Holder, as defined above ( a
"Foreign Holder"), will not be subject to United States Federal withholding
tax, provided that, in the case of interest, (a) such Holder does not own,
actually or constructively, ten percent or more of the total combined voting
power of all classes of stock of the Company entitled to vote, (b) such
Holder is not, for United States Federal income tax purposes, a controlled
foreign corporation related, directly or indirectly, to the Company through
stock ownership, (c) such Holder is not a bank receiving interest described
in Section 881(c)(3)(A) of the Code, (d) the certification requirements under
Section 871(h) or Section 881(c) of the Code and Treasury Regulations
thereunder (summarized below) are met, and (v) such interest is not interest
described in Section 871(h)(4) of the Code (which in general is limited to
certain types of contingent interest, as summarized below);
(ii) A Foreign Holder of a Note will not be subject to United States
Federal income tax on gain realized on the sale, exchange or other
disposition of such Note, unless (i) such holder is an individual who is
present in the United States for 183 days or more in the taxable year of
disposition, and either (a) such individual has a "tax home" (as defined in
Code Section 911(d)(3)) in the United States (unless such gain is
attributable to a fixed place of business in a foreign country maintained by
such individual and has been subject to foreign tax of at least 10%) or (b)
the gain is attributable to an office or other fixed place of business
maintained by such individual in the United States or (ii) such gain is
effectively connected with the conduct by such holder of a trade or business
in the United States;
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(iii) a Note held by an individual who is neither a citizen nor a
resident of the United States for United States Federal income tax purposes
at the time of such individual's death will not be subject to United States
Federal estate tax, provided that the individual does not own, actually or
constructively, 10% or more of the total combined voting power of all classes
of stock of the Company entitled to vote; the Note does not provide for
interest described in Section 871(h)(4) of the Code (as summarized below);
and, at the time of such individual's death, the income from the Notes was
not or would not have been effectively connected with a United States trade
or business of such individual.
Section 871(h) and Section 881(c) of the Code require that, in order to
obtain the portfolio interest exemption from withholding tax described in
paragraph (i) above, either the beneficial owner of the Note or a securities
clearing organization, bank or other financial institution that holds
customer's securities in the ordinary course of its trade or business (a
"financial institution") and that is holding such Note on behalf of such
beneficial owner, files a statement with the withholding agent to the effect
that the beneficial owner of the Note is not a U.S. Holder. Such requirement
will be fulfilled if the beneficial owner of a Note certifies on Internal
Revenue Service Form W-8, under penalties of perjury, that it is not a U.S.
Holder and provides its name and address, and any financial institution
holding the Note on behalf of the beneficial owner files a statement with the
withholding agent to the effect that it has received such a statement from
the beneficial owner and furnishes the withholding agent with a copy thereof.
Interest described in Section 871(h)(4) of the Code will be subject to
United States Federal withholding tax at a 30 percent rate (or such lower
rate provided by an applicable treaty). In general, interest described in
Section 871(h)(4) of the Code includes (subject to certain exceptions) any
interest the amount of which is determined by reference to receipts, sales or
other cash flow of the Company or a related person, any income or profits of
the Company or a related person, any change in the value of any property of
the Company or a related person or any dividend, partnership distributions or
similar payments made by the Company or a related person. Interest described
in Section 871(h)(4) of the Code may include other types of contingent
interest identified by the Internal Revenue Service in future Treasury
Regulations, the effect of which, if any, will be described in the applicable
Pricing Supplement.
If a Foreign Holder is engaged in a trade or business in the United
States and interest, including original issue discount, on the Note is
effectively connected with the conduct of such trade or business, such
Foreign Holder, although exempt from United States Federal withholding tax,
will generally be subject to United States Federal income tax on such
interest and original issue discount and on any gain realized on the sale,
exchange or other disposition of a Note in the same manner as if it were a
U.S. Holder. In lieu of the certificate described in the preceding
paragraph, such a Foreign Holder will be required to provide to the Company
a properly executed Internal Revenue Service Form 4224 in order to claim an
exemption from withholding tax. In addition, if such Foreign Holder is a
foreign corporation, it may be subject to a branch profits tax equal to 30%
of its effectively connected earnings and profits for the taxable year,
subject to certain adjustments. For purposes of the branch profits tax,
interest (including original issue discount) and any gain recognized on the
sale, exchange or other disposition of a Note will be included in the
earnings and profits of such Foreign Holder if such interest is effectively
connected with the conduct by the Foreign Holder of a trade or business in
the United States.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Backup withholding and information reporting requirements may apply to
certain payments of principal, premium and interest (including original issue
discount) on a Note, and to payments of proceeds of the sale or redemption of
a Note, to certain non-corporate U.S. Holders. The Company, its agent, a
broker, the relevant Trustee or any paying agent, as the case may be, will be
required to withhold from any payment a tax equal to 31 percent of such
payment if the U.S. Holder fails to furnish or certify his correct taxpayer
identification number (social security number or employer identification
number) to the payor in the manner required, fails to certify that such U.S.
Holder is not subject to backup withholding, or otherwise fails to comply
with the applicable requirements of the backup withholding rules.
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The 31 percent backup withholding and United States information
reporting requirements will not apply to payments to a Foreign Holder which
has provided the certifications required by Section 871(h) and Section 881(c)
of the Code, as described above, or that has otherwise established an
exemption, provided that neither the Company nor such agent have actual
knowledge that the Foreign Holder is a U.S. Holder or that the conditions of
any other exemption are not in fact satisfied.
Under current Treasury Regulations, payments on the sale, exchange or
other disposition of a Note by a Foreign Holder made to or through a foreign
office of a broker will generally not be subject to backup withholding.
However, if such broker is a United States person, a controlled foreign
corporation for United States tax purposes or a foreign person 50 percent or
more of whose gross income is effectively connected with a United States
trade or business for a specified three-year period, information reporting
will be required unless the broker has in its records documentary evidence
that the beneficial owner is not a United States person and certain other
conditions are met or the beneficial owner otherwise establishes an
exemption. Under proposed Treasury Regulations, backup withholding may apply
to any payment which such broker is required to report if such broker has
actual knowledge that the payee is a United States person. Payments to or
through the United States office of a broker will be subject to backup
withholding and information reporting unless the Holder certifies, under
penalties of perjury, that it is not a United States person or otherwise
establishes an exemption.
U.S. Holders and Foreign Holders of Notes should consult their tax
advisers regarding the application of information reporting and backup
withholding in their particular situations, the availability of an exemption
therefrom, and the procedure for obtaining such an exemption, if available.
Any amounts withheld under the backup withholding rules from a payment to a
holder may be credited against such holder's United States Federal income tax
and may entitle such holder to a refund, provided that the required
information is furnished to the United States Internal Revenue Service.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS
INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING
UPON A HOLDER'S PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR OWN TAX
ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE OWNERSHIP AND
DISPOSITION OF THE NOTES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL,
FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR
OTHER TAX LAWS.
CERTAIN COVENANTS AS TO LIENS
The only financial covenant applicable to the Notes is that described
below. That covenant requires that the Notes be equally and ratably secured
in the circumstances described therein but has no special application merely
by virtue of the occurrence of any transaction or series of transactions
resulting in material changes in the Company's debt-to-equity ratio.
The Company will covenant in the Notes that so long as any of the Notes
remain outstanding, it will not pledge or otherwise subject to any lien any
of its property or assets unless the Notes are secured by such pledge or lien
equally and ratably with any and all other obligations and indebtedness
secured thereby so long as any such other obligations and indebtedness shall
be so secured. Such covenant does not apply to:
(a) the pledge of any assets to secure any financing by the Company of
the exporting of goods to or between, or the marketing thereof in, foreign
countries (other than Canada), in connection with which the Company reserves
the right, in accordance with customary and established banking practice, to
deposit, or otherwise subject to a lien, cash, securities or receivables, for
the purpose of securing banking accommodations or as to the basis for the
issuance of bankers' acceptances or in aid of other similar borrowing
arrangements;
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(b) the pledge of receivables payable in foreign currencies (other
than Canadian dollars) to secure borrowings in foreign countries (other than
Canada);
(c) any deposit of assets of the Company with any surety company or
clerk of any court, or in escrow, as collateral in connection with, or in
lieu of, any bond on appeal by the Company from any judgment or decree
against it, or in connection with other proceedings in actions at law or in
equity by or against the Company;
(d) any lien or charge on any property, tangible or intangible, real
or personal, existing at the time of acquisition of such property (including
acquisition through merger or consolidation) or given to secure the payment
of all or any part of the purchase price thereof or to secure any
indebtedness incurred prior to, at the time of, or within 60 days after, the
acquisition thereof for the purpose of financing all or any part of the
purchase price thereof; and
(e) any extension, renewal or replacement (or successive extensions,
renewals or replacements), in whole or in part, of any lien, charge or pledge
referred to in the foregoing (a) to (d) inclusive of this paragraph;
provided, however, that the amount of any and all obligations and
indebtedness secured thereby shall not exceed the amount thereof so secured
immediately prior to the time of such extension, renewal or replacement and
that such extension, renewal or replacement shall be limited to all or a part
of the property which secured the charge or lien so extended, renewed or
replaced (plus improvements on such property). (Section 12.01 of the
Indenture.)
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than 66-2/3% in
aggregate principal amount of the Notes at the time outstanding under the
Indenture, to modify the Indenture or any supplemental indenture or the
rights of the holders of the Notes; provided that no such modification shall
(i) change the fixed maturity of any such Note, or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of interest
thereon, without the consent of the holder of each such Note so affected or
(ii) reduce the aforesaid percentage of Notes of any series outstanding under
the Indenture, the consent of the holders of which is required for any such
modification, without the consent of the holders of all Notes then
outstanding under the Indenture. (Section 10.02 of the Indenture.)
EVENTS OF DEFAULT
An Event of Default with respect to the Notes is defined in the
Indenture as being: (a) default in payment of any principal of, or
premium, if any, on, the Notes; (b) default for 30 days in payment of any
interest on any of the Notes; (c) default for 30 days after notice in
performance of any other covenant in the Indenture; or (d) certain events of
bankruptcy, insolvency or reorganization. (Section 6.01 of the Indenture.)
In case an Event of Default shall occur and be continuing with respect
to the Notes, the Trustee or the holders of not less than 25% in aggregate
principal amount of the Notes then outstanding may declare the principal
amount of the Notes to be due and payable. Any Event of Default with respect
to the Notes may be waived by the holders of a majority in aggregate
principal amount of the outstanding Notes except in a case of failure to pay
principal of or interest on such Notes for which payment had not been
subsequently made. (Section 6.06 of the Indenture). The Company is required
to file with the Trustee annually a certificate as to the absence of certain
defaults under the terms of the Indenture. (Section 11.04 of the Indenture.)
Subject to the provisions of the Indenture relating to the duties of
the Trustee in case an Event of Default shall occur and be continuing, the
Trustee shall be under no obligation to exercise any of its rights or powers
under the Indenture at the request, order or direction of any of the
Noteholders, unless such Noteholders shall have offered to the Trustee
reasonable indemnity or security. (Sections 7.01 and 7.02) of the
Indenture.)
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Subject to such provisions for the indemnification of the Trustee and
to certain other limitations, the holders of a majority in principal amount
of the Notes 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, or exercising any trust or power conferred on the Trustee. (Section
6.06 of the Indenture.)
CONCERNING THE TRUSTEE
Citibank, N.A. is the Trustee under the Indenture. Citibank, N.A. acts
as depository for funds of, makes loans to, acts as trustee and performs
certain other services for, the Company and certain of its affiliates in the
normal course of its business. It is also one of the investment managers of
the pension trust funds established by General Motors Corporation. As
trustee of various trusts, it has purchased securities of the Company and
certain of its affiliates.
CONCERNING THE PAYING AGENTS
The Company shall maintain one or more Paying Agents for the payment of
the principal of, premium, if any, and interest, if any, on, the Notes.
(Section 4.02 of the Indenture.) The Company will initially act as Paying
Agent for the Certificated Notes and has initially appointed Citibank, N.A.
as the Company's Paying Agent for the Book-Entry Notes.
PLAN OF DISTRIBUTION
Under the terms of Selling Agent Agreements, each dated as of February,
XX, 1995, the Notes are offered on a continuing basis by the Company through
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Salomon Brothers Inc, CS First Boston Corporation, Morgan Stanley & Co.
Incorporated, Lehman Brothers Inc. (including its affiliate, Lehman
Government Securities Inc.), J.P. Morgan Securities Inc. and Bear, Stearns &
Co. Inc., who have agreed to use their reasonable best efforts to solicit
purchases of the Notes. The Company may appoint additional Agents to solicit
sales of the Notes; provided, however, that any such solicitation and sale of
the Notes shall be on the same terms and conditions to which the Agents have
agreed. In addition, the Company may arrange for the Notes to be sold
through other agents, dealers or underwriters. The Company may sell Notes
directly to investors on its own behalf. The Company will pay each Agent a
commission in the form of a discount ranging from .05% to .60% of the initial
offering price of each Note sold through such Agent, depending upon the
Maturity Date thereof. No commission will be payable to the Agents on Notes
sold directly to purchasers by the Company. The Company will have the sole
right to accept offers to purchase Notes and may reject any proposed purchase
of Notes in whole or in part, whether placed directly with the Company or
through an Agent. Each Agent will have the right, in its discretion
reasonably exercised, to reject any proposed purchase of Notes in whole or in
part. The Company reserves the right to withdraw, cancel or modify the offer
without notice.
The Company may also sell Notes to an Agent as principal for its own
account at a discount equal to the commission applicable to any agency sale
of a Note of identical maturity, unless otherwise specified in the applicable
Pricing Supplement. Such Notes may be resold to one or more investors and
other purchasers at varying prices relating to prevailing market prices at
the time of resale as determined by the Agent or, if so specified in an
applicable Pricing Supplement, for resale at a fixed public offering price.
In addition, 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, during the distribution of the
Notes, be in excess of the discount to be received by such Agent from the
Company. After the initial public offering of Notes to be resold by an Agent
to investors and other purchasers, the public offering price (in the case of
Notes to be resold at a fixed public offering price), concession and discount
may be changed.
Each Agent may be deemed to be an "underwriter" within the meaning of
the Securities Act. The Company has agreed to indemnify the Agents against
certain liabilities, including liabilities under the Securities Act.
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No Note will have an established trading market when issued. The
Company does not intend to apply for the listing of the Notes on any
securities exchange, but has been advised by the Agents that the Agents
intend to make a market in the Notes as permitted by applicable laws and
regulations. The Agents are not obligated to do so, however, and the Agents
may discontinue making a market at any time without notice. No assurance can
be given as to the liquidity of any trading market for any Notes.
Each Agent has represented and agreed that it will not offer or sell
any Notes which are denominated in Yen 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 persons during
the period of 90 days (or, in the case of Notes denominated in Yen and
another currency issued or repaid in Japanese Yen, 180 days) from the Issue
Date of the relevant Notes and that thereafter it will not do so except in
circumstances which will result in compliance with any applicable laws,
regulations and ministerial guidelines of Japan taken as a whole. Unless
otherwise specified in the applicable Pricing Supplement, the minimum
maturity of Notes denominated in Yen shall be one year and the minimum
denomination for Notes denominated in Yen shall be Yen 1,000,000.
No Notes denominated in Yen shall be sold without the specific 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
margin) and structured Notes, such as Nikkei-linked and DAX-linked issues, in
each case which are already permitted by the Japanese Ministry of Finance.
Dennis Weatherstone, Chairman of the Board of Directors of J.P. Morgan
& Co. Incorporated, of which J.P. Morgan Securities Inc. is an indirect,
wholly-owned subsidiary, and John G. Smale, a director of J.P. Morgan & Co.
Incorporated, are directors of General Motors Corporation. In the ordinary
course of their respective businesses, affiliates of the Agents have engaged,
and will in the future engage, in commercial banking and investment banking
transactions with the Company and certain of its affiliates.
LEGAL OPINIONS
The validity of the Notes offered hereby will be passed upon for the
Company by Martin I. Darvick, Esq., Assistant General Counsel of the Company,
and for the Agents by Davis Polk & Wardwell. Mr. Darvick owns shares and
holds options to purchase shares of General Motors Corporation $1 2/3 par
value common stock. Davis Polk & Wardwell acts as counsel to the Incentive
and Compensation Committee of the Board of Directors of General Motors
Corporation and has acted as counsel to the Company and certain of its
affiliates in various matters.
EXPERTS
The financial statements incorporated in this Prospectus by reference
to the Company's Annual Report on Form 10-K have been audited by Deloitte &
Touche LLP, Detroit, Michigan 48243, independent auditors, as stated in their
report, which is incorporated herein by reference, and has been so
incorporated in reliance upon such report given upon the authority of
Deloitte & Touche LLP as experts in accounting and auditing.
NOTES ARE AVAILABLE FOR PURCHASE AT THE OFFICE OF THE COMPANY LISTED
BELOW AND CERTIFICATED NOTES ARE DELIVERABLE THROUGHOUT THE UNITED STATES
ACCORDING TO INVESTOR PREFERENCE.
GENERAL MOTORS ACCEPTANCE CORPORATION
3044 WEST GRAND BOULEVARD
ARGONAUT A - ROOM 1182H
DETROIT, MICHIGAN 48202
PHONE: (800) 338-4622
39<PAGE>
<PAGE>41
GMAC FINANCIAL SERVICES
<PAGE>
<PAGE>42
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses to be incurred
in connection with the offering described in the Registration Statement:
Securities and Exchange Commission
registration fee . . . . . . . . . . . . . $2,205,956
Blue Sky filing and counsel fees . . . . . . . 25,000
Fees and expenses of Trustee . . . . . . . . . 5,000
Printing and engraving Notes . . . . . . . . . 5,000
Printing Registration Statement, Prospectus
and other documents . . . . . . . . . . . . 40,000
Accountants' fees . . . . . . . . . . . . . . 15,000
Rating Agencies' fees . . . . . . . . . . . . 150,000
Miscellaneous expenses . . . . . . . . . . . . 54,044
-----------
Total. . . . . . . . . . . . . . . . . . . . . $2,500,000
===========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under sections 7015 and 7018-7023 of the New York Banking Law the
Company may or shall, subject to various exceptions and limitations,
indemnify its directors or officers and may purchase and maintain insurance
as follows:
a. If a director or officer is made or threatened to be a party to
an action by or in the right of the Company to procure a judgment in its
favor, by reason of the fact that he is or was a director or officer of the
Company or is or was serving at the request of the Company as a director or
officer of some other enterprise (including, without limitation, an
employee benefit plan), the Company may indemnify him against amounts paid
in settlement and reasonable expenses, including attorney's fees, incurred
in the defense or settlement of such action or an appeal therein, if such
director or officer acted, in good faith, for a purpose which he reasonably
believed to be in (or, in the case of service for any other enterprise, not
opposed to) the best interests of the Company, except that no
indemnification is available under such statutory provisions in respect of
a threatened action or a pending action which is settled or otherwise
disposed of, or any claim or issue or matter as to which such person is
found liable to the Company, unless in each such case a court determines
that such person is fairly and reasonably entitled to indemnity for such
amount as the court deems proper.
b. With respect to any action or proceeding other than one by or in
the right of the Company to procure a judgment in its favor, if a director
or officer is made or threatened to be made a party by reason of the fact
that he was a director or officer of the Company, or served some other
enterprise (including, without limitation, an employee benefit plan) at the
request of the Company, the Company may indemnify him against judgments,
fines, amounts paid in settlement and reasonable expenses, including
attorney's fees, incurred as a result of such action or proceeding or an
appeal therein, if he acted in good faith for a purpose which he reasonably
believed to be in (or, in the case of service for any other enterprise, not
opposed to) the best interests of the Company and, in criminal actions or
proceedings, in addition, had no reasonable cause to believe that his
conduct was unlawful.
c. A director or officer who has been wholly successful, on the
merits or otherwise, in the defense of a civil or criminal action or
proceeding of the character described in paragraphs a. or b. above, shall
be entitled to indemnification as authorized in such paragraphs.
II-1<PAGE>
<PAGE>43
d. The Company may purchase and maintain insurance to indemnify
directors and officers in instances in which they may not otherwise be
indemnified by the Company under the provisions of the Banking Law,
provided that the contract of insurance provides for a retention amount and
for co-insurance, except that no such insurance may provide for any
payment, other than cost of defense, to or on behalf of any director or
officer if a judgment or other final adjudication adverse to such director
or officer establishes that his acts of active and deliberate dishonesty
were material to the cause of action so adjudicated or that he personally
gained in fact a financial profit or other advantage to which he was not
legally entitled.
The foregoing statement is subject to the detailed provisions of
sections 7015 and 7018-7023 of the New York Banking Law.
As a subsidiary of General Motors Corporation, the Company is insured
against liabilities which it may incur by reason of the foregoing
provisions of the New York Banking Law and directors and officers of the
Company are insured against some liabilities which might arise out of their
employment and not be subject to indemnification under said Banking Law.
Pursuant to resolutions adopted by the Board of Directors of General
Motors Corporation, that company to the fullest extent permissible under
law will indemnify, and has purchased insurance on behalf of, directors or
officers of the Company, or any of them, who incur or are threatened with
personal liability, including expenses, under the Employee Retirement
Income Security Act of 1974 or any amendatory or comparable legislation or
regulation thereunder.
ITEM 16. EXHIBITS.
*1 . . . . . . . Form of Selling Agent Agreement.
*4 . . . . . . . Indenture, dated as of December 1, 1993, between the
Company and Citibank, N.A., Trustee.
*4(a)(1) . . . . Form of Medium-Term Note (Semi-Annual) included in
Exhibit 4.
*4(a)(2) . . . . Form of Medium-Term Note (Annual) included in Exhibit 4.
*4(b)(1) . . . . Form of Medium-Term Note (Semi-Annual) in global form
included in Exhibit 4.
*4(b)(2) . . . . Form of Medium-Term Note (Annual) in global form included
in Exhibit 4.
5 . . . . . . . Opinion and Consent of Martin I. Darvick, Esq., Assistant
General Counsel of the Company.
8 . . . . . . . Opinion and consent of tax counsel.
12 . . . . . . . Calculation of Ratio of Earnings to Fixed Charges.
23(a) . . . . . Consent of Deloitte & Touche LLP.
23(b) . . . . . Consent of Counsel included in Exhibit 5.
25 . . . . . . . Form T-1 Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939 of Citibank, N.A.
99 . . . . . . . Underwriter representations of compliance with Rule 15c2-8
under the Securities Exchange Act of 1934, as amended.
* Incorporated by reference from Registration No. 33-51381 dated
December 9, 1993.
II-2
<PAGE>44
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made of the securities registered hereby, a post-effective amendment to
this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in this registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this registration
statement or any material change to such information in this
registration statement;
provided, however, that the undertakings set forth in paragraphs (i) and
(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed by the registrant pursuant to section 13 or section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in
this registration statement.
(2) That for purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this registration statement as of the time it was declared
effective.
(3) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(4) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby further undertakes that, for
purposes of determining any liability under the Securities Act of 1933,
each filing of the registrant's annual report pursuant to section 13(a) or
section 15(d) of the Securities Exchange Act of 1934 that is incorporated
by reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors and officers of the
Company pursuant to the provisions discussed in Item 15 above, or
otherwise, the Company has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in
the Securities Act of 1933 and is, therefor, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Company of expenses incurred or paid by a director or
officer of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director or officer in connection with the
securities being registered, the Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act of 1933
and will be governed by the final adjudication of such issue.
II-3
<PAGE>45
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant, General Motors Acceptance Corporation, certifies that it has
reasonable grounds to believe that it meets all of the requirements for
filing on Amendment No. 2 to Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Detroit, and State of Michigan, on the second
day of February, 1995.
GENERAL MOTORS ACCEPTANCE CORPORATION
s/ J. Michael Losh
----------------------------------------
(J. Michael Losh, Chairman of the Board)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on February 2, 1995 by the following
persons in the capacities indicated.
Signature Title
--------- -----
s/ J. Michael Losh
- -------------------------
(J. Michael Losh) Chairman of
the Board
and Director
s/ John R. Rines
- -------------------------
(John R. Rines) President and
Director
s/ John D. Finnegan
- -------------------------
(John D. Finnegan) Executive Vice (Chief
President and Financial
Director Officer)
s/ Gery E. Gross
- ------------------------- Comptroller (Chief
(Gery E. Gross) Accounting
Officer)
s/ Richard J. S. Clout
- ------------------------- Executive Vice
(Richard J. S. Clout) President and
Director
s/ John E. Gibson
- ------------------------- Executive Vice
(John E. Gibson) President and
Director
s/ Mark L. Korell
- ------------------------- Director
(Mark L. Korell)
s/ Leon J. Krain
- ------------------------- Director
(Leon J. Krain)
s/ Heidi Kunz
- ------------------------- Director
(Heidi Kunz)
s/ Harry J. Pearce
- ------------------------- Director
(Harry J. Pearce)
II-4<PAGE>
<PAGE>46
s/ W. Allen Reed
- ------------------------- Director
(W. Allen Reed)
s/ John F. Smith, Jr.
- ------------------------- Director
(John F. Smith, Jr.)
s/ Ronald L. Zarrella
- ------------------------- Director
(Ronald L. Zarrella)
II-5<PAGE>
<PAGE>47
EXHIBIT INDEX
EXHIBIT PAGE NO.
- ------- --------
*1 Form of Selling Agent Agreement. . . . . . . .
*4 Indenture, dated as of December 1, 1993, between
the Company and Citibank, N.A., Trustee. . . .
*4(a)(1) Form of Medium-Term Note (Semi-Annual) included in
Exhibit 4. . . . . . . . . . . . . . . . . . .
*4(a)(2) Form of Medium-Term Note (Annual) included in
Exhibit 4. . . . . . . . . . . . . . . . . . .
*4(b)(1) Form of Medium-Term Note (Semi-Annual) in global form
included in Exhibit 4. . . . . . . . . . . . .
*4(b)(2) Form of Medium-Term Note (Annual) in global form
included in Exhibit 4. . . . . . . . . . . . .
5 Opinion and Consent of Martin I. Darvick, Esq.,
Assistant General Counsel of the Company . . .
8 Opinion and Consent of Tax Counsel . . . . . .
12 Calculation of Ratio of Earnings to Fixed Charges. . .
23(a) Consent of Deloitte & Touche LLP. . . . . . .
23(b) Consent of Counsel included in Exhibit 5 . . .
25 Form T-1 Statement of Eligibility and Qualification
under the Trust Indenture Act of 1939 of
Citibank, N.A. . . . . . . . . . . . . . . . .
99 Underwriter representations of compliance with Rule 15c2-8
under the Securities Exchange Act of 1934, as amended.
* Incorporated by reference from Registration No. 33-51381 dated
December 9, 1993.
EXHIBIT 5
GENERAL MOTORS ACCEPTANCE CORPORATION
3031 WEST GRAND BOULEVARD
DETROIT, MICHIGAN 48202
February 2, 1995
GENERAL MOTORS ACCEPTANCE CORPORATION
3044 WEST GRAND BOULEVARD
DETROIT, MICHIGAN 48202
Dear Sirs:
As Assistant General Counsel of General Motors Acceptance Corporation
(the "Company") in connection with the proposed issue and sale of your
Medium-Term Notes (the "Notes") Due Nine Months to Thirty Years from Date of
Issue pursuant to a Registration Statement filed this date, I advise that in
my opinion you have full power and authority under the laws of New York, the
State of your incorporation, and under your Restated Organization Certificate
to borrow the money and to contract the indebtedness to be evidenced by the
said Notes.
It is my further opinion that the Indenture, dated as of December 1,
1993, with Citibank, N.A., Trustee has been duly authorized, executed and
delivered and that the Notes, when duly executed and authenticated as provided
in the Indenture, issued and paid for, will be valid and legally binding
obligations of the Company in accordance with and subject to the terms thereof
and of the Indenture.
I hereby consent to the use of the foregoing opinion as Exhibit 5 of
your Registration Statement filed with the United States Securities and
Exchange Commission under the Securities Act of 1933, as amended, with respect
to the above mentioned Notes and to the use of my name in such Registration
Statement and in the related Prospectus under the heading "Legal Opinions".
Very truly yours,
s/ Martin I. Darvick
-------------------------
Martin I. Darvick
Assistant General Counsel
EXHIBIT 8
February 2, 1995
General Motors Acceptance Corporation
3031 West Grand Boulevard
P.O. Box 33123
Detroit, MI 48232
Dear Sirs:
In connection with the General Motors Acceptance Corporation (the "Company")
Prospectus for the proposed issue and sale Medium-Term Notes due nine months
to thirty years from Date of Issue (the "Notes"), I have acted as tax counsel
to the Company, and in that capacity have furnished certain opinions to it.
I hereby confirm to you the opinion as set forth under the heading "United
States Federal Taxation" in the Prospectus covering such notes which is part
of the registration statement to which this letter is attached as an exhibit.
As indicated in the opinion, the discussion sets forth a general summary of
certain United States Federal income tax consequences of the ownership and
disposition of the Notes as applied to original holders purchasing Notes at
the issue price. Holders are advised to consult their own tax advisors with
regard to the application of the income tax laws to their particular
situations as well as any tax consequences arising under the laws of any
state, local or foreign tax jurisdiction.
I hereby consent to the filing with the Securities and Exchange Commission of
this opinion as an exhibit to the Registration Statement, as amended, and the
reference to tax counsel under the heading "United States Federal Taxation"
in the Prospectus. By providing the foregoing consent, I do not admit that
tax counsel falls within the category of persons whose consent is required
under section 7 of the Securities Act of 1933, as amended.
s/ Robert N. Deitz
------------------
Robert N. Deitz
Tax Attorney
EXHIBIT 23(a)
CONSENT OF INDEPENDENT AUDITORS
GENERAL MOTORS ACCEPTANCE CORPORATION:
We consent to the incorporation by reference in this Amendment No. 2 to
Registration Statement No. 33-55799 of General Motors Acceptance Corporation
on Form S-3 of the report of Deloitte & Touche dated February 9, 1994
appearing in the Annual Report on Form 10-K of General Motors Acceptance
Corporation for the year ended December 31, 1993, and to the reference to
Deloitte & Touche LLP under the heading "Experts" in the Prospectus, which is
part of this Registration Statement.
/s/ DELOITTE & TOUCHE LLP
- -------------------------
DELOITTE & TOUCHE LLP
Detroit, Michigan
February 2, 1995
Exhibit 25
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an application to determine eligibility of a Trustee
pursuant to Section 305 (b)(2) ___
________________________
CITIBANK, N.A.
(Exact name of trustee as specified in its charter)
13-5266470
(I.R.S. employer
identification no.)
399 Park Avenue, New York, New York 10043
(Address of principal executive office) (Zip Code)
_______________________
GENERAL MOTORS ACCEPTANCE CORPORATION
(Exact name of obligor as specified in its charter)
New York 38-0572512
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
767 FIFTH AVENUE 10153
NEW YORK, NEW YORK (Zip Code)
3044 WEST GRAND BLVD., 48202
DETROIT, MICHIGAN (Zip Code)
(Address of principal executive offices)
_______________________
MEDIUM TERM NOTES DUE FROM A MINIMUM
OF 9 MONTHS FROM DATE OF ISSUE
(Title of the indenture securities)
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Name Address
Comptroller of the Currency Washington, D.C.
Federal Reserve Bank of New York New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
<PAGE>2
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
None.
Item 16. List of Exhibits.
Exhibit 1 - Copy of Articles of Association of the Trustee, as
now in effect. (Exhibit 1 to T-1 to Registration Statement No.
2-79983)
Exhibit 2 - Copy of certificate of authority of the Trustee to
commence business. (Exhibit 2 to T-1 to Registration Statement
No. 2-29577).
Exhibit 3 - Copy of authorization of the Trustee to exercise
corporate trust powers. (Exhibit 3 to T-1 to Registration
Statement No. 2-55519)
Exhibit 4 - Copy of existing By-Laws of the Trustee. (Exhibit
4 to T-1 to Registration Statement No. 33-34988)
Exhibit 5 - Not applicable.
Exhibit 6 - The consent of the Trustee required by Section
321(b) of the Trust Indenture Act of 1939. (Exhibit 6 to T-1
to Registration Statement No. 33-19227.)
Exhibit 7 - Copy of the latest Report of Condition of Citibank,
N.A.(as of September 30, 1994 - attached)
Exhibit 8 - Not applicable.
Exhibit 9 - Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Citibank, N.A., a national banking association organized and
existing under the laws of the United States of America, has duly caused
this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York and
State of New York, on the second day of February, 1995.
CITIBANK, N.A.
By: /s/ Robert T. Kirchner
______________________
Robert T. Kirchner
Vice President
2
<PAGE>3
Charter No. 1461
Comptroller of the Currency
Northeastern District
REPORT OF CONDITION
CONSOLIDATING
DOMESTIC AND FOREIGN
SUBSIDIARIES OF
Citibank, N. A.
of New York in the State of New York, at the close of business on
September 30, 1994 published in response to call made by Comptroller
of the Currency, under Title 12, United States Code, Section 161,
Charter Number 1461 Comptroller of the Currency Northeastern District.
ASSETS
Thousands
of dollars
Cash and balances due from
depository institutions:
Noninterest-bearing balances
and currency and coin $ 6,482,000
Interest-bearing balances: 7,724,000
Securities:
Held-to-maturity securities 3,836,000
Available-for-sale securities 12,275,000
Federal funds sold and
securities purchased under
agreements to resell in
domestic offices of the
bank and of its Edge and
Agreement subsidiaries,
and in IBFs: Federal
funds sold 1,954,000
Securities purchased under
agreements to resell 1,613,000
Loans and lease financing receivables:
Loans and leases, net of
unearned income $124,721,000
LESS: Allowance for loan and
lease losses 3,871,000
------------
Loans and leases, net of unearned
income and allowance 120,850,000
Assets held in trading accounts 39,855,000
Premises and fixed assets
(including capitalized leases) 3,173,000
Other real estate owned 2,689,000
Investments in unconsolidated
subsidiaries and associated companies 1,010,000
Customers' liability to this bank on
acceptances outstanding 1,404,000
Intangible assets 14,000
Other assets 7,463,000
------------
TOTAL ASSETS $210,342,000
============
<PAGE>4
LIABILITIES
Deposits:
In domestic offices $ 32,505,000
Noninterest-bearing $ 11,333,000
Interest-bearing 21,172,000
------------
In foreign offices, Edge and Agreement
subsidiaries, and IBFs 105,210,000
Noninterest-bearing 7,568,000
Interest-bearing 97,642,000
------------
Federal funds purchased and securities
sold under agreements to repurchase in
domestic offices of the bank and of its
Edge and Agreement subsidiaries,
and in IBFs:
Federal funds purchased 5,588,000
Securities sold under agreements
to repurchase 1,390,000
Trading liabilities 25,140,000
Other borrowed money:
With original maturity of one year
or less 8,448,000
With original maturity of more than
one year 3,751,000
Mortgage indebtedness and obligations
under capitalized leases 61,000
Bank's liability on acceptances
executed and outstanding 1,425,000
Notes and debentures subordinated
to deposits 5,200,000
Other liabilities 8,813,000
------------
TOTAL LIABILITIES $197,531,000
============
EQUITY CAPITAL
Common stock $ 751,000
Surplus 6,006,000
Undivided profits and capital reserves 6,402,000
Net unrealized holding gains (losses)
on available-for-sale securities 228,000
Cumulative foreign currency translation
adjustments (576,000)
------------
TOTAL EQUITY CAPITAL $ 12,811,000
------------
TOTAL LIABILITIES AND EQUITY CAPITAL $210,342,000
============
I, Roger W. Trupin, Controller of the above-named bank do hereby
declare that this Report of Condition is true and correct to the best of my
knowledge and belief.
ROGER W. TRUPIN
We, the undersigned directors, attest to the correctness of this
Report of Condition. We declare that it has been examined by us, and to the
best of our knowledge and belief has been prepared in conformance with the
instructions and is true and correct.
CHRISTOPHER J. STEFFEN
WILLIAM R. RHODES
PAUL J. COLLINS Directors
EXHIBIT 99
Merrill Lynch
Pierce, Fenner & Smith Inc.
World Financial Center
North Tower
New York, New York 10281-1323
212 449 1000
MERRILL LYNCH
January 31, 1995
To Whom It May Concern:
As an agent under the General Motors Acceptance Corporation Medium-Term Note
Program, we represent that Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner
& Smith Incorporated has acted in compliance with Rule 15c2-8 under the
Securities Exchange Act of 1934, as amended, if applicable.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By: s/ Scott G. Primrose
---------------------
Name: Scott G. Primrose
Title: Authorized Signatory
<PAGE>
<PAGE>2
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
212-783-7000
------------------
SALOMON BROTHERS
------------------
January 31, 1995
General Motors Acceptance Corporation
3031 West Grand Boulevard
New Center One, Suite 695
Detroit, Michigan 48202
Attention: E. Wayne Crawford
RE: U.S. $10,000,000,000 Medium-Term Notes
Registration Statement on Form S-3
File No.: 33-55799
Dear Mr. Crawford:
Salomon Brothers Inc, as agent on the above-referenced medium-term note
program registered with the Securities and Exchange Commission, hereby
confirms that it has acted in compliance with Rule 15c2-8 under the Securities
Exchange Act of 1934, as amended, to the full extent that such rule applies
to the offering of such securities.
Yours truly,
s/ Pamela Kendall
- -----------------
Pamela Kendall
Vice President
PK/mtn
<PAGE>
<PAGE>3
CS FIRST BOSTON
Richard W. Kurz CS First Boston Corporation
Director-Capital Markets 5 East 52nd Street
New York, NY 10055-0186
Telephone 212 909 3672
Facsimile 212 318 1498
January 31, 1995
Mr. E. Wayne Crawford
Manager-Capital Markets
General Motors Acceptance Corporation
3031 West Grand Boulevard
Detroit, MI 48232-5123
Dear Mr. Crawford,
We confirm that CS First Boston Corporation, a dealer in the General
Motors Acceptance Corporation Medium-Term Note Program ("Program"), has
acted in compliance with Rule 15c2-8 (the "Rule") under the Securities
Exchange Act of 1934, as amended, solely to the extent the Rule is
applicable in the offering of Medium-Term Notes under the Program.
Sincerely,
s/ Richard W. Kurz
- -------------------
Richard W. Kurz
cc: Sarah Beschar
Davis, Polk & Wardwell
<PAGE>
<PAGE>4
MORGAN STANLEY
MORGAN STANLEY & CO.
INCORPORATED
1221 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10020
(212) 703-4000
January 31, 1995
Mr. Wayne Crawford
Manager - Capital Markets
General Motors Acceptance Corporation
3031 West Grand Boulevard
New Center One, Suite 695
Detroit, Michigan 48202
Dear Wayne:
This letter is to confirm that Morgan Stanley & Co. Incorporated has
acted in compliance with Rule 15c2-8 under the Securities Exchange Act of
1934, as amended, and as applicable.
Please do not hesitate to call either myself on (212) 296-6940 or Mike
Fusco on (212) 296-6832 if you have any questions.
Best regards,
s/ William H. White
-------------------
William H. White
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LEHMAN BROTHERS
OFFICE OF THE GENERAL COUNSEL
January 31, 1995
Mr. E. Wayne Crawford
Manager-Capital Markets
General Motors Acceptance Corporation
3031 West Grand Boulevard
Detroit, MI 48232-5123
Dear Mr. Crawford,
As requested, we confirm that Lehman Brothers Inc., a dealer in the
General Motors Acceptance Corporation Medium-Term Note Program ("Program"), in
connection with the Program, has acted in compliance with Rule 15c2-8
(the "Rule") under the Securities Exchange Act of 1934, as amended,
solely to the extent the Rule is applicable in the offering of medium-term
notes under the Program.
Sincerely,
s/ Herbert McDade
------------------
Herbert McDade
Managing Director
SKIMMEL/WORDDOCS/LETTERS/GMACLTR.DOC
LEHMAN BROTHERS INC.
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J.P. MORGAN
J.P. Morgan Securities Inc.
60 Wall Street
New York NY
10260-0060
January 31, 1995
General Motors Acceptance Corporation
3031 West Grand Boulevard
New Center One, Suite 695
Detroit, Michigan 48202
ATTENTION: E. WAYNE CRAWFORD
RE: U.S. $10,000,000,000 MEDIUM TERM NOTES
Dear Mr. Crawford:
J.P. Morgan Securities Inc., as agent on the above-referenced medium-term
note program registered with the Securities and Exchange Commission #55799,
hereby confirms that it has acted in compliance with Rule 15c2-8 under the
Securities Exchange Act of 1934, as amended, to the full extent that such
rule applies to the offering of such securities.
Yours truly,
J.P. MORGAN SECURITIES INC.
By: s/ Maria Sramek
----------------
Maria Sramek
Vice President
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BEAR STEARNS
BEAR, STEARNS, & CO. INC.
245 PARK AVENUE
NEW YORK, NEW YORK 10167
(212) 272-2000
ATLANTA * BOSTON
CHICAGO * DALLAS * LOS ANGELES
NEW YORK * SAN FRANCISCO
AMSTERDAM * GENEVA * HONG KONG
LONDON * PARIS * TOKYO
January 31, 1995
Mr. E. Wayne Crawford
Manager, Capital Markets
General Motors Acceptance Corporation
3031 West Grand Boulevard
New Center One, Suite 695
Detroit, Michigan 48202
Re: GENERAL MOTORS ACCEPTANCE CORPORATION'S ("GMAC") U.S.
$10,000,000,000 MEDIUM-TERM NOTES (THE "NOTES")
Dear Mr. Crawford:
In connection with GMAC's U.S. $10,000,000,000 Medium-Term Note Program,
Bear, Stearns & Co. Inc. believes it has acted in compliance with Rule
15c2-8 of the Securities Exchange Act of 1934, as amended, if applicable.
Sincerely,
BEAR, STEARNS & CO. INC.
s/ Fares D. Noujaim
--------------------
Fares D. Noujaim
Senior Managing Director
Capital Markets
mtn\gmac-1
EXHIBIT 12
GENERAL MOTORS ACCEPTANCE CORPORATION
RATIO OF EARNINGS TO FIXED CHARGES
(In millions of dollars)
Nine Months Ended
September 30
--------------------
1994 1993
---- ----
Consolidated net income* . . . . . . . . . $ 685.6 $ 774.3
Provision for income taxes . . . . . . . . 385.7 491.7
-------- --------
Consolidated income before income taxes. . 1,071.3 1,266.0
-------- --------
Fixed charges
Interest, debt discount and expense . 3,096.9 3,635.6
Portion of rentals representative of the
interest factor. . . . . . . . . . . 34.5 32.0
-------- --------
Total fixed charges. . . . . . . . . . . . 3,131.4 3,667.6
-------- --------
Earnings available for fixed charges . . . $4,202.7 $4,933.6
======== ========
Ratio of earnings to fixed charges . . . . 1.34 1.34
======== ========
Years Ended December 31
------------------------------------------------
1993 1992 1991 1990 1989
---- ---- ---- ---- ----
Consolidated net income** $981.1 $1,218.7 $1,038.2 $1,190.1 $1,110.7
Provision for income taxes 591.7 882.3 610.0 658.3 440.8
------- -------- -------- -------- --------
Consolidated income before
income taxes . . . . . 1,572.8 2,101.0 1,648.2 1,848.4 1,551.5
------- -------- -------- -------- --------
Fixed Charges
Interest, debt discount
and expense . . . . . 4,721.2 5,828.6 6,844.7 7,965.8 7,908.3
Portion of rentals
representative of the
interest factor . . . 43.6 31.7 30.3 29.5 27.1
------- -------- -------- -------- --------
Total fixed charges . . . 4,764.8 5,860.3 6,875.0 7,995.3 7,935.4
------- -------- -------- -------- --------
Earnings available for
fixed charges . . . . . 6,337.6 $7,961.3 $8,523.2 $9,843.7 $9,486.9
======= ======== ======== ======== ========
Ratio of earnings to
fixed charges . . . . . 1.33 1.35 1.23 1.23 1.19
======= ======== ======== ======== ========
* Before cumulative effect of accounting change of ($7.4) million in 1994.
** Before cumulative effect of accounting change of ($282.6) million in
1992 and $331.5 million in 1991
