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Filed Under Rule 424(b)(3)
File Number 33-31596
PROSPECTUS
GENERAL MOTORS ACCEPTANCE CORPORATION
GMAC VARIABLE DENOMINATION ADJUSTABLE RATE
DEMAND NOTES
$5,000,000,000
SUPPLEMENT NO. 3
DATED: MARCH 31, 1995
The GMAC Variable Denomination Adjustable Rate Demand Notes (the "Demand
Notes") are being offered pursuant to the GMAC Demand Notes Program (the
"Program") to certain investors associated with General Motors Acceptance
Corporation (the "Company") or General Motors Corporation. See "Plan of
Distribution." The Program is designed to provide such investors with a
convenient means of investing funds directly with the Company. The Demand
Notes provide investors with an alternative to investment opportunities
offered by banks and other financial institutions, investment dealers and
money market funds.
The Demand Notes will constitute unsecured, senior debt obligations of
the Company. Funds invested in the Demand Notes are not subject to the
protection of the Federal Deposit Insurance Corporation or any other
insurance. The Program is not subject to the requirements of the Investment
Company Act of 1940 (diversification of investments) or the Employee
Retirement Income Security Act of 1974. The Demand Notes will be issued in
uncertificated form and will have no stated maturity. The Demand Notes may
be redeemed in whole, or in part, at the option of the investor. The
principal amount of the Demand Notes will be equal to the aggregate of
investments made by the investor, including accrued and reinvested interest,
less the aggregate of any redemptions. See "Description of Demand Notes" and
"How to Redeem Demand Notes."
Investors may invest in the Demand Notes by completing the investment
form accompanying this Prospectus and by making an initial investment pursuant
to one of the methods described in "How to Invest."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
March 31, 1995<PAGE>
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The Demand Notes will bear interest at a floating rate determined by the
GMAC Demand Notes Committee established by the Company. Such rate will
reflect both the level of interest rates generally and the changes in interest
rates which occur from time to time but at all times such rate will be greater
than the most recent seven-day average yield (simple) on taxable money market
funds in the United States. The interest rate on the Demand Notes will be
subject to change on Friday of each week, such change to be effective the
following Monday. See "Description of Demand Notes - Interest Rate" for a
complete description of how the interest rate will be determined.
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THE INTEREST RATE ON THE DEMAND NOTES
WILL VARY FROM TIME TO TIME.
INFORMATION CONCERNING THE RATE OF INTEREST CURRENTLY PAYABLE
ON THE DEMAND NOTES MAY BE OBTAINED AT ANY
TIME BY CALLING TOLL FREE 1-800-426-8323.
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PLEASE READ THIS PROSPECTUS CAREFULLY AND RETAIN FOR FUTURE REFERENCE.
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The transfer of the Demand Notes is subject to certain restrictions.
See "Restrictions on Transfer." The Demand Notes will not be listed on any
securities exchange and the Company does not anticipate that there will be any
secondary market for the Demand Notes.
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The Demand Notes are being offered on a continuous basis for sale by the
Company directly to investors and no commissions will be payable. See "Plan
of Distribution." The Demand Notes registered on October 22, 1985
(Registration No. 2-99057), April 9, 1986 (Registration No. 33-4661), June 30,
1986 (Registration No. 33-6717), February 24, 1987 (Registration No. 33-
12059), December 30, 1988 (Registration No. 33-26057) and October 17, 1989
(Registration No. 33-31596) represent the maximum aggregate principal amount
of Demand Notes which are expected to be offered for sale.
The Demand Notes are offered hereby. The Company reserves the right to
withdraw, cancel or modify the offer without notice and may reject investments
in whole or in part.
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NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR THE DOCUMENTS
INCORPORATED BY REFERENCE, AND ANY INFORMATION OR REPRESENTATION NOT
CONTAINED HEREIN OR THEREIN MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY TRANSACTION
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER
TO BUY ANY OF THE DEMAND NOTES IN ANY STATE OR OTHER JURISDICTION TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH
STATE OR OTHER JURISDICTION.
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AVAILABLE INFORMATION
General Motors Acceptance Corporation (the "Company") is subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Securities Exchange Act of 1934"), and in accordance therewith files
reports and other information with the Securities and Exchange Commission (the
"Commission"). Such reports and other information can be inspected and copied
at the office of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, as well as at the Regional Offices of the Commission at Citicorp
Center, Suite 1400, 500 Madison Street, Chicago, Illinois 60661 and Seven
World Trade Center, New York, New York 10048. Copies of such information can
be obtained by mail from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Reports and
other information concerning the Company can also be inspected at the offices
of the New York Stock Exchange, 20 Broad Street, New York, New York 10005.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are incorporated herein by reference the Company's Annual Report
on Form 10-K for the year ended December 31, 1994, filed pursuant to Section
13 of the Securities Exchange Act of 1934 with the Commission.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 prior to the
termination of the offering of the Demand 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.
THE COMPANY WILL PROVIDE WITHOUT CHARGE UPON WRITTEN OR ORAL REQUEST BY
ANY 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
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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
YEARS ENDED DECEMBER 31
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1994 1993 1992 1991 1990
---- ---- ---- ---- ----
1.33 1.33 1.35 1.23 1.23
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 includes 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 proceeds from the sale of the Demand 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 for the repayment of debt. Such proceeds
initially may be used to reduce short-term borrowings or be invested in
short-term securities. Additional financing which may be required by the
Company will be effected at such times, and through such means, as may be
appropriate.
PLAN OF DISTRIBUTION
The Demand Notes are being offered on a continuous basis for sale by the
Company on its own behalf directly to employees of the Company, General Motors
Corporation and their respective participating subsidiaries and affiliates,
to the immediate family members of such employees, to retirees who are
receiving retirement benefits from General Motors Corporation or its
participating subsidiaries and affiliates, to the immediate family members of
such retirees, to franchised General Motors dealers, their employees and
affiliates of such dealers and to the stockholders of General Motors
Corporation (each an "eligible investor" and collectively the "investors").
Immediate family members are defined as the spouse, children and parents of
an employee or retiree. The Demand Notes are being offered only to persons
whose registered addresses are in the United States.
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No commissions are payable by the Company on sales of the Demand Notes.
The Company reserves the right to withdraw, cancel or modify the offer to sell
Demand Notes at any time. The Company has the sole right to accept offers to
purchase Demand Notes and may reject any proposed purchase of Demand Notes in
whole or in part.
No one to whom the Demand Notes will be offered will be required to
invest in the Demand Notes and any decision to invest will be solely that of
the investor. The Company shall not require an investor to redeem the
investor's Demand Note by reason of such investor's having ceased to be an
eligible investor.
DESCRIPTION OF THE GMAC DEMAND NOTES PROGRAM
The GMAC Demand Notes Program (the "Program"), pursuant to which the
Demand Notes are being offered, is designed to provide investors with a
convenient means of investing funds directly with the Company. The following
summary description of the Program does not purport to be complete and is
subject to, and is qualified in its entirety by reference to, the detailed
provisions of the Program which are set forth in full beginning on page 27 of
this Prospectus.
ADMINISTRATION
The Company has established a GMAC Demand Notes Committee (the "Demand
Notes Committee"), which consists of persons appointed by the Executive
Committee of the Board of Directors of the Company. The members of the Demand
Notes Committee do not receive any compensation for their services as such but
they may be officers, directors or employees of the Company or any of its
subsidiaries. The current Demand Notes Committee members are: John D.
Finnegan, Jerome B. Van Orman, Jr. and David C. Walker, all at 3044 West Grand
Boulevard, Detroit, Michigan 48202. The Demand Notes Committee members serve
at the pleasure of the Executive Committee of the Board of Directors until
their resignation or removal from office by action of such Committee.
The Demand Notes Committee has the full power and authority to amend the
Program, to interpret its provisions, to adopt rules and regulations in
connection therewith, to make determinations thereunder provided for it to
make and to set and adjust the rate of interest to be paid on the Demand
Notes.
The Company has appointed The Northern Trust Company (the "Processing
Agent") as its agent to handle the day-to-day administration of the Program.
See "Processing Agent."
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THE DEMAND NOTES-INVESTMENTS AND REDEMPTIONS
Pursuant to the provisions of the Program, investors may invest in the
Demand Notes by completing the investment form accompanying this Prospectus
and by making an initial investment pursuant to one of the methods described
in "How to Invest." Investments made subsequent to the initial investment
must be in an amount of $50 or more.
Investments in the Demand Notes may be made by:
1. PERSONAL CHECK-SEE PAGE 15;
2. WIRE TRANSFER OF FUNDS-SEE PAGE 15;
3. AUTOMATIC CHARGE TO AN INVESTOR'S CHECKING ACCOUNT-SEE PAGE 16.
(Investors who elect this option will not be required to make an initial
investment of $250 or more but such investors will be required to
authorize a $50 monthly minimum);
4. DIRECT RECEIPT OF AN INVESTOR'S NET PAYCHECKS, SOCIAL SECURITY, ANNUITY
OR PENSION CHECKS OR OTHER REGULARLY RECURRING CHECKS-SEE PAGE 16.
(Investors who elect this option will not be required to make an initial
investment of $250 or more);
5. PAYROLL DEDUCTION-SEE PAGE 17. (This option is available to employees
of companies participating in GMAC Demand Notes payroll deductions
through any General Motors Corporation compensation system. Employees
will not be required to make an initial investment of $250 or more, but
such employees will be required to authorize a minimum payroll deduction
of $50 per month); and
6. PENSION DEDUCTION-SEE PAGE 18. (This option is only available to
retirees who are receiving benefits from General Motors Corporation or
its participating subsidiaries and affiliates. Retirees will not be
required to make an initial investment of $250 or more, but such
retirees will be required to authorize a minimum pension deduction of
$50 per month).
The Demand Notes may be redeemed by:
1. WRITING A CHECK OF $250 OR MORE-SEE PAGE 19;
2. TELEPHONE INSTRUCTIONS TO THE PROCESSING AGENT-SEE PAGE 21;
3. WRITTEN INSTRUCTIONS TO THE PROCESSING AGENT-SEE PAGE 22; AND
4. AUTOMATIC MONTHLY OR QUARTERLY REDEMPTION OF SPECIFIED AMOUNTS
AVAILABLE TO AN INVESTOR HOLDING A DEMAND NOTE WITH A MINIMUM PRINCIPAL
AMOUNT OF $5,000 ($100 MINIMUM REDEMPTION)-SEE PAGE 23.
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All funds invested in the Demand Notes, together with interest accrued
thereon, and redemptions, if any, will be recorded on a register maintained
by the Processing Agent. An investor will be able to obtain such investor's
current Demand Note balance at any time by calling toll free 1-800-548-7923.
See page 30.
An investor will be provided with a monthly statement regarding
investments, accrued and reinvested interest, and redemptions, if any. See
page 31.
A Demand Note may be held individually, jointly or in a trust or
custodial capacity. See page 31.
MODIFICATION, SUSPENSION OR TERMINATION
The Company or the Demand Notes Committee may amend or modify the
Program at any time as it may deem necessary or appropriate. Written notice
of any material amendment or modification will be provided to investors at
least fifteen days prior to the effective date of such amendment or
modification. No such amendment or modification, however, will reduce the
principal amount of any Demand Note, or accrued and unpaid interest thereon,
as of the effective date of such amendment or modification and no such
amendment or modification will have a retroactive effect that would prejudice
the rights of investors.
The Company may terminate the Program in its entirety for any reason.
The Company may, in its discretion, temporarily or permanently suspend the
acceptance of investments in the Demand Notes without such a suspension
amounting to a termination of the Program. Written notice of suspension or
termination will be provided to investors at least thirty days prior to the
effective date of such suspension or termination. The Company may omit,
restrict, suspend or terminate the Program in any jurisdiction in which the
Company, in its discretion, deems such action advisable in view of local law
and regulations.
DESCRIPTION OF DEMAND NOTES
The Demand Notes will be issued under an Indenture, dated as of October
15, 1985, and all supplemental indentures thereto including the Fifth
Supplemental Indenture dated as of October 2, 1989 (collectively referred to
as the "Indenture") between the Company and Comerica Bank, as Trustee (the
"Trustee"). The following summary description of the Demand Notes does not
purport to be complete and is subject to, and qualified in its entirety
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by, the detailed provisions of the Indenture, a copy of which is filed as an
exhibit to the Registration Statement filed with the Commission, and to the
detailed provisions of the Program which are set forth in full beginning on
page 27 of this Prospectus.
GENERAL INFORMATION
The Demand Notes will constitute unsecured, senior debt obligations of
the Company. An investor, therefore, will not have any priority or secured
claim against any of the assets of the Company with respect to the principal
amount of such investor's Demand Notes or accrued and unpaid interest thereon.
There are no secured senior debt obligations of the Company. Funds invested
in the Demand Notes are not subject to the protection of the Federal Deposit
Insurance Corporation or any other insurance.
The Demand Notes will be issued in uncertificated form and no investor
will receive any certificate or other instrument evidencing the Company's
indebtedness. In accordance with the provisions of the Program, all funds
invested in Demand Notes, together with interest accrued thereon, and
redemptions, if any, will be recorded on a register maintained by the
Processing Agent. See "Processing Agent."
The Demand Notes have no stated maturity and may be redeemed in whole,
or in part, at the option of the investor; provided, however, that partial
redemptions are subject to certain minimum amounts. See "How to Redeem Demand
Notes." The Demand Notes will not be subject to any sinking fund.
The Demand Notes also are subject to redemption by the Company. See
"Optional Redemption by the Company." The Company also may redeem any
particular Demand Note the principal amount of which remains below $250 and
in which no investment (other than accrued and reinvested interest) is made
for a period of three consecutive months immediately following the month in
which the principal amount of such Demand Note falls below $250.
The Demand Notes will bear interest at a rate determined by the Demand
Notes Committee. The interest rate on the Demand Notes will be adjusted
periodically by the Demand Notes Committee, as more fully described under
"Interest Rate."
The Company has no right of set-off against a Demand Note for
indebtedness not related to such Demand Note and has no obligation to contest
any legal proceeding brought against an investor's Demand Note by any third
party.
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The Company may from time to time enter into one or more supplemental
indentures, without the consent of investors in the Demand Notes, providing
for the issuance of Demand Notes under the Indenture in addition to the
aggregate principal amount authorized thereunder on the date of this
Prospectus.
By investing in a Demand Note, the investor shall be deemed to accept
and agree to all provisions of the Program.
INTEREST RATE
The Demand Notes will bear interest at a floating rate determined by
the Demand Notes Committee established by the Company. The interest rate on
the Demand Notes will be subject to change on Friday of each week, such change
to be effective the following Monday. Such rate will reflect both the level
of interest rates generally and the changes in interest rates which occur from
time to time but at all times such rate will be greater than the most recent
seven-day average yield (simple) on taxable money market funds in the United
States as published in IBC/Donoghue's MONEY FUND REPORT AVERAGES
(TRADEMARK)/ALL TAXABLE.* The rate of interest paid for any period on the
Notes is not an indication or representation of future rates. If in any week
the IBC/Donoghue's MONEY FUND REPORT AVERAGES (TRADEMARK)/ALL TAXABLE is not
available or publication of such seven-day average is suspended, the seven-day
average yield at such time shall be an approximately equivalent rate
determined by the Demand Notes Committee.
An investor may obtain information concerning the rate of interest
currently payable on the Demand Notes by calling toll free at any time
1-800-426-8323.
Interest on the Demand Notes will accrue in accordance with the
provisions governing particular methods of investment, as described under "How
to Invest." Interest on the Demand Notes is compounded daily, at the rate in
effect each day, based on a 365-day year.
On the last day of each month, interest accrued during the month on the
principal amount of a Demand Note will be paid by the Company and reinvested
in such Demand Note, thereby increasing the principal amount of such Demand
Note.
* MONEY FUND REPORT (REGISTERED TRADEMARK) is a service of IBC/Donoghue, Inc.
MONEY FUND REPORT (REGISTERED TRADEMARK) states that the yield information
obtained from money market funds is screened by the publisher, but no
guarantee of the accuracy of the information contained therein is made by
the Company.
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OPTIONAL REDEMPTION BY THE COMPANY
The Company may redeem, at any time in its discretion, all or any part
of the Demand Notes. Any partial redemption of Demand Notes will be effected
by lot or pro rata or by any other method that is deemed fair and appropriate
by the Trustee. (Section 13.01 in the Indenture).
The Company will give prior written notice of at least thirty days but
not more than ninety days to investors whose Demand Notes are subject to full
or partial redemption. Such notice from the Company will specify the
effective date of redemption, the amount being redeemed and the effective date
the redeemed amount shall become due and payable and that interest shall cease
to accrue as of that date. All partial redemption notices will list the
remaining principal amount of the Demand Notes. (Section 13.02 in the
Indenture).
The full or partial Demand Note being redeemed, plus accrued and unpaid
interest thereon to the date of redemption, will be paid by check mailed to
the registered owner(s) of the redeemed Demand Note. Interest on the redeemed
amount shall cease to accrue on and after the effective date the redeemed
amount shall have become due and payable. (Section 13.03 in the Indenture).
The Company also may redeem, at any time in its discretion, any
particular Demand Note the principal amount of which remains below $250 and
in which no investment (other than accrued and reinvested interest) is made
for a period of three consecutive months immediately following the month in
which the principal amount of the Demand Note falls below $250. In addition,
the Company may redeem, at any time in its discretion, any particular Demand
Note the principal amount of which remains below $0 for a period of thirty
days immediately following the day on which the principal amount of such
Demand Note fell below $0. The Company will notify an investor of its
intention to redeem such a Demand Note; following such notification an
investor will have fifteen business days from the date of such notice to
restore such Demand Note to the required minimum principal amount of $250.
If an investor does not restore such Demand Note to the required principal
amount, the Company will fix the date of redemption as the sixteenth business
day following the date of the notice and will redeem the Demand Note in full
on such redemption date. A check will be sent to the investor in an amount
equal to the principal amount of such redeemed Demand Note, including accrued
and unpaid interest to the date of redemption. In the event that a Demand
Note with a principal amount below $0 is redeemed, the investor will be liable
to the Company for the amount
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required to restore the principal amount to $0 as of the date the Demand Note
was redeemed. (Section 13.04 in the Indenture).
The Company reserves the right to redeem any Demand Note as to which it
believes in its sole judgment and discretion that the redemption provisions
of the Program have been abused or are being used in a manner or with an
effect that is not in the best interests of the Company, i.e., the writing of
checks by an investor where the amounts of the checks are greater than the
principal amount of such investor's Demand Note.
LIMITATION ON LIENS
The Company will not at any time pledge or otherwise subject to any lien
any of its property or assets without thereby expressly securing the due and
punctual payment of the principal of and interest on the Demand Notes equally
and ratably with any and all other obligations and indebtedness secured by
such pledge or other lien, so long as any such other obligations and
indebtedness shall be so secured. This restriction shall not apply to (1) 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 the basis for the issuance of
bankers' acceptances or in aid of other similar borrowing arrangements; (2)
the pledge of receivables payable in foreign currencies (other than Canadian
dollars) to secure borrowings in foreign countries (other than Canada); (3)
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; (4) 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 (5) 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 (1) to (4) 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,
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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 3.07 in the Indenture).
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
The Company will not merge or consolidate with any other corporation or
sell or convey all or substantially all of its assets to any person, firm or
corporation, unless (1) either the Company shall be the continuing
corporation, or the successor corporation (if other than the Company) shall
be a corporation organized and existing under the laws of the United States
of America or a State thereof and such corporation shall expressly assume the
due and punctual payment of the principal of and interest on all the Demand
Notes, and the due and punctual performance and observance of all the
covenants and conditions of the Indenture to be performed by the Company by
supplemental indenture satisfactory to the Trustee, executed and delivered to
the Trustee by such corporation, and (2) the Company or such successor
corporation, as the case may be, shall not, immediately after such merger or
consolidation, or such sale or conveyance, be in default in the performance
of any such covenant or condition. (Section 10.01 in the Indenture).
EVENTS OF DEFAULT AND NOTICE THEREOF
The following events are defined in the Indenture as "Events of
Default": failure to pay all or any part of the principal of or interest on
any Demand Note as and when the same shall be due and payable (subject to
certain exceptions described in the Indenture); failure to perform or observe
any other covenants or agreements in the Indenture or the Program for thirty
days after notice; and certain events of bankruptcy, insolvency or
reorganization. (Section 5.01 in the Indenture).
The Indenture provides that the Trustee shall, within ninety days after
the occurrence of a default, give investors notice of all uncured defaults
known to it (the term default to include the events specified above without
grace periods); provided, however, that except in the case of default in the
payment of the principal of or interest on any of the Demand Notes the Trustee
shall be protected in withholding such notice if it in good faith determines
that the withholding of such notice is in the interests of the investors.
(Section 5.07 in the Indenture).
The Company is required to furnish to the Trustee annually a statement
of certain officers of the Company stating whether or not to their knowledge
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the Company is in default in the performance and observance of certain terms
of the Indenture and, if the Company is in default, specifying each such
default. (Section 3.09 in the Indenture).
Investors holding a majority in aggregate principal amount of the Demand
Notes then outstanding have the right to waive certain defaults and, subject
to certain limitations, 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. (Sections 5.01 and 5.06 in the Indenture).
The Indenture provides that, in case an Event of Default shall occur (which
shall not have been cured or waived), the Trustee is required to exercise such
of its rights and powers under the Indenture, and to use the degree of skill
and care in their exercise, that a prudent man would exercise or use under the
circumstances in the conduct of his own affairs, but otherwise need only
perform such duties as are specifically set forth in the Indenture. (Section
6.01 in the Indenture). Subject to such provisions, the Trustee is under no
obligation to exercise any of its rights or powers under the Indenture at the
request, order or direction of any of the investors unless they shall have
offered to the Trustee reasonable security or indemnity. (Section 6.02 in the
Indenture).
MODIFICATION OF THE INDENTURE
With certain exceptions, under the Indenture, the rights and obligations
of the Company and the rights of the investors may be modified by the Company
with the consent of investors holding not less than 66-2/3% in aggregate
principal amount of the Demand Notes then outstanding; but no such
modifications may be made which would (i) extend the maturity of any Demand
Note or reduce the principal amount of any Demand Note or the accrued and
unpaid interest thereon or (ii) reduce the stated percentage of the Demand
Notes, the consent of the investors of which is required to modify or alter
the Indenture, without the consent of investors holding all of the Demand
Notes then outstanding. (Section 9.02 in the Indenture).
CONCERNING THE TRUSTEE
Comerica Bank is the Trustee under the Indenture. Comerica Bank acts
as depository for funds of, makes loans to, and performs certain other
services for, the Company and certain of its affiliates in the normal course
of its business. As trustee of various trusts, it has purchased securities
of the Company and certain of its affiliates.
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HOW TO INVEST
The following summary description does not purport to be complete and
is subject to, and is qualified in its entirety by reference to, the detailed
provisions of the Program which are set forth in full beginning on page 27 of
this Prospectus. An investor may use one or more of the methods described
below to invest in Demand Notes. For purposes of the Program, "business day"
shall mean only a day on which both The Northern Trust Company and the Federal
Reserve Bank of Chicago are fully open for business. The Company reserves the
right at any time to modify, suspend or terminate any of the investment
methods described below.
INVESTMENTS BY CHECK
To invest by check, an investor should complete the Demand Notes
investment form accompanying this Prospectus. The investment form, together
with a check (minimum of $250) made payable to "The Northern Trust Company,
Agent" should be mailed to GMAC Demand Notes, The Northern Trust Company, P.O.
Box 75920, Chicago, Illinois 60675-5920. Investments by check made subsequent
to the initial investment (minimum of $50) also should be made payable to "The
Northern Trust Company, Agent" and should include the investor's tax
identification or Social Security number and the Demand Note number assigned
by The Northern Trust Company. If possible, an investor should enclose an
investment slip which is provided as a detachable stub on the bottom of all
monthly statements and investment confirmations mailed by the Processing
Agent. All checks should be mailed to The Northern Trust Company at the
address specified above. Initial and subsequent investments by check will be
invested in the investor's Demand Note on the next succeeding business day
after the check is received by the Processing Agent and interest will begin
to accrue on such day. Checks must be drawn in United States dollars on a
bank in the United States. Neither the Processing Agent nor the Company shall
be responsible for delays in the receipt of checks mailed to The Northern
Trust Company. Investments made by check shall not be available for
redemption within a period of five business days from the day subsequent to
receipt of such check by the Processing Agent.
INVESTMENTS BY WIRE TRANSFER
To make an initial investment in Demand Notes by transferring funds via
bank wire (minimum of $250), an investor should call The Northern Trust
Company at 1-800-548-7923 to obtain a Demand Note number. An investor should
then instruct the investor's bank to wire the funds to The Northern Trust
Company (ABA No. 0710-00152). The bank wire should include the
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designation "GMAC Demand Notes," the name and address of the investor, the
investor's tax identification or Social Security number, and the Demand Note
number supplied by The Northern Trust Company. After the wire transfer has
been made, an investor should complete and mail a Demand Notes investment form
to The Northern Trust Company as set forth under "Investments by Check." On
a subsequent investment by wire transfer (minimum of $50), an investor should
instruct the investor's bank to wire the funds in accordance with the
foregoing.
An investment by wire transfer of funds to the Processing Agent will be
invested in an investor's Demand Note on the business day the funds are
received by the Processing Agent in proper form and will begin accruing
interest on such day provided the funds are received by the Processing Agent
by 2:00 p.m. Eastern Time. Funds received after 2:00 p.m. Eastern Time will
be invested and will begin to accrue interest on the next succeeding business
day. Neither the Processing Agent nor the Company will be responsible for
delays in the transfer and wiring of funds.
INVESTMENTS BY AUTOMATIC CHARGE TO CHECKING ACCOUNTS
An investor may elect to authorize the Processing Agent to make monthly
charges of $50 or more to such investor's personal checking account for
purposes of investing in Demand Notes. Such investor will not be required to
make an initial investment of $250 or more. Upon receipt of proper written
authorization, the Processing Agent will prepare a check each month drawn
against an investor's checking account for the prescribed amount. The
proceeds from the check will be invested in an investor's Demand Note and
accrue interest under the same conditions as set forth under "Investments by
Check." Paid and canceled checks may be returned to an investor or truncated
in accordance with the practices and policies of an investor's bank.
To establish the Automatic Charge to Checking Accounts, an investor
should obtain the necessary authorization form directly from the Processing
Agent.
An investor may change the amount of the monthly investment (subject to
the $50 monthly minimum) or terminate such investments entirely at any time
by providing notice in writing to the Processing Agent. Such notice will be
effective as soon as practicable after receipt thereof by the Processing
Agent.
INVESTMENTS BY DIRECT INVESTMENT
An investor may elect to invest in Demand Notes by authorizing the
Processing Agent to receive an investor's net paychecks (gross pay less
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deductions) from an investor's place of employment, or to receive such
investor's Social Security, annuity or pension checks or other regularly
recurring checks. An investor choosing this option will not be required to
make an initial investment of $250 or more. Investment by direct investment
may be made by electronic transfer or by check. Direct investment by
electronic transfer of funds to the Processing Agent will be invested in an
investor's Demand Note and accrue interest under the same conditions as set
forth under "Investments by Wire Transfer." Direct investment by checks
mailed to the Processing Agent will be invested in an investor's Demand Note
and accrue interest under the same conditions as set forth under "Investments
by Check."
The form necessary to authorize direct investment of Social Security
checks may be obtained from Social Security offices. An investor who wishes
to have net paychecks invested directly into such investor's Demand Note
should contact the employer's payroll location. A General Motors retiree who
wishes to have his net pension check invested directly into such investor's
Demand Note should contact the General Motors Pension Administration Center
by calling 1-800-659-2000. Retirees of other eligible subsidiaries or
affiliates of General Motors Corporation should contact their former employer
in order to obtain the proper form permitting direct investment.
An investor may terminate the Processing Agent's authority to receive
net paychecks, Social Security, annuity or pension checks or other regularly
recurring checks by providing notice in writing to the issuers of such checks
and to the Processing Agent. If, upon termination of the Processing Agent's
authority to receive an investor's net paychecks, Social Security, annuity or
pension checks or other regularly recurring checks, an investment is made
incorrectly to an investor's Demand Note, such investor must promptly notify
the Company of such error and return any and all such amounts incorrectly
invested.
INVESTMENTS BY PAYROLL DEDUCTION
This option is available to an employee of companies participating in
Demand Notes payroll deductions through any General Motors Corporation
compensation system. An employee choosing this option will not be required
to make an initial investment of $250 or more, but will be required to invest
on the terms described below.
Investments by payroll deduction must be specified as a fixed dollar
amount. The minimum investment by payroll deduction must be at least $50 per
month; provided that the minimum investment for an employee paid weekly shall
be $11.50 per week, or such other amount as the Demand Notes
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Committee from time to time may authorize. Each payroll deduction investment
by an employee paid other than on a weekly basis shall be invested in such
employee's Demand Note as of the payday on which it was withheld and begins
accruing interest as of such date. Payroll deduction investments by an
employee paid on a weekly basis shall be invested in the employee's Demand
Note as of the last business day of the week in which the paycheck is issued
and begins accruing interest as of such business day. Unless otherwise
permitted by the Demand Notes Committee, an employee may make investments by
payroll deduction in only one Demand Note. Investments by payroll deduction
will commence as soon as practicable after receipt by the Company and the
Processing Agent of the applicable authorization form upon which an employee
shall have elected such payroll deduction.
Subject to the foregoing provisions and this paragraph, the payroll
deduction amount authorized by an employee may be increased or decreased by
such employee's delivering to the Company a notice in writing of such increase
or decrease. Such increase or decrease will be effective as soon as
practicable after receipt by the Company of such notice thereof. Payroll
deductions authorized by an employee may be terminated at any time, in which
event such payroll deduction authorization will terminate as soon as
practicable following receipt by the Company of written instructions from such
employee to terminate investments by payroll deduction.
No payroll deduction will be made pursuant to a payroll deduction
authorization in, or for, any period in which an employee is not receiving a
salary or wages.
INVESTMENTS BY PENSION DEDUCTION
This option shall be available only to a retiree or a surviving spouse
of such retiree (collectively referred to as the "retiree") who is receiving
retirement benefits from General Motors Corporation or its participating
subsidiaries and affiliates. A retiree choosing this option will not be
required to make an initial investment of $250 or more, but will be required
to invest on the terms described below.
Investments by pension deduction must be specified as a fixed dollar
amount. The minimum investment by pension deduction must be at least $50 per
month. Each pension deduction investment by a retiree shall be invested in
such retiree's Demand Note as of the first business day of each month the
retiree is eligible to receive retirement benefits and shall begin to accrue
interest as of such date. Unless otherwise permitted by the Demand Notes
Committee, a retiree may make investments by pension deduction in only one
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Demand Note. Investments by pension deduction shall commence as soon as
practicable after receipt by the Company and the Processing Agent of the
applicable authorization form upon which a retiree shall have elected a
pension deduction. A retiree should contact the Processing Agent to obtain
the necessary authorization form.
Subject to the foregoing provisions and this paragraph, the pension
deduction amount authorized by a retiree may be increased or decreased by such
retiree's delivering to the Company a notice in writing of such increase or
decrease. Such increase or decrease shall be effective as soon as practicable
after receipt by the Company of such notice thereof. Pension deductions
authorized by a retiree may be terminated at any time, in which event such
pension deduction authorization shall terminate as soon as practicable
following receipt by the Company of written instructions from such retiree to
terminate investments by pension deduction.
No pension deduction will be made pursuant to a pension deduction
authorization in, or for, any period in which a retiree is not receiving a
pension. Also, inasmuch as a retiree is only entitled to receive pension
benefits terminating with the last monthly payment preceding the retiree's
death, the Company will refund any pension deduction(s) made subsequent to the
retiree's death to the Trustee for the General Motors Pension Plan or other
General Motors subsidiary pension plan and redeem an amount equal to such
refund from the retiree's Demand Note. If the amount of the redemption
exceeds the principal amount in the retiree's Demand Note, the retiree's
estate shall be liable to the Company for the difference between the amount
of the redemption and the amount of the pension deduction(s) to be refunded.
HOW TO REDEEM DEMAND NOTES
An investor may redeem all or part of such investor's Demand Note by
following the below-described procedures. If the amount to be redeemed
represents or includes an investment made by check, however, the redemption
instructions will not be followed if received within a period of five business
days from the day subsequent to the receipt of such investment check. The
following summary description does not purport to be complete and is subject
to, and is qualified in its entirety by reference to, the detailed provisions
of the Program which are set forth in full beginning on page 27 of this
Prospectus.
REDEMPTION BY CHECK
An investor who selects the option to receive checks (the "Check
Option") on the Demand Notes investment form may redeem such investor's
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<PAGE>20
Demand Note in part by writing a check, payable to the order of anyone, in an
amount of $250 or more. Checks may be deposited and processed through normal
bank clearing systems. The amount to be redeemed will continue to accrue
interest until the check is presented to the Processing Agent for payment.
Where there is more than one registered owner of a Demand Note, only the
signature of one registered owner will be required on the check unless
otherwise specified by the investors on the Demand Notes investment form.
When an investor's check is presented to the Processing Agent for
payment, the Processing Agent will cause the Company to redeem a part of such
investor's Demand Note sufficient to cover the amount of the check.
If the amount of a check is greater than the principal amount of an
investor's Demand Note, or if the required signatures do not appear on the
check, the Processing Agent will not cause the redemption to be effected and
will return the check to the depositary bank. The Processing Agent will
assess a service charge, which will result in a reduction in the amount of the
investor's Demand Note, of $10 for each check returned to a depositary bank.
The Processing Agent also will assess a service charge, which will result in
a reduction in the amount of the investor's Demand Note, of $10 in the event
an investor requests stopping payment of a check. Checks on which payment has
been made by the Processing Agent will be returned to the investor by the
Processing Agent.
An investor who selects the Check Option will be provided with a supply
of checks free of charge.
An investor may also request the Check Option subsequent to submitting
the initial investment form by providing the Processing Agent with a written
request to add the Check Option to such investor's Demand Note, with such
request bearing the signatures of all registered owners (including joint
owners) of the Demand Note exactly as they appear on the Demand Notes
investment form. The request should be mailed to GMAC Demand Notes, The
Northern Trust Company, P.O. Box 75919, Chicago, Illinois 60675-5919.
The selection of the Check Option by an investor does not create a
checking, bank account or depositor relationship between such investor and the
Company or the Processing Agent.
The Company reserves the right at any time to modify, suspend or
terminate the Check Option.
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TELEPHONE REDEMPTION
WIRE TRANSFER
An investor who selects the Telephone Redemption Option on the Demand
Notes investment form may redeem such investor's Demand Note in part during
the Processing Agent's regular business hours by having redemption proceeds
of $250 or more wired to a predesignated bank account or Demand Note. By
selecting the Telephone Redemption Option, the investor authorizes the
Processing Agent to act on telephone redemption instructions from any person
or persons representing themselves to be the registered owners of the Demand
Note. The Processing Agent's record of such instructions is binding.
To select the Telephone Redemption Option the investor must designate
on the Demand Notes investment form either an account at a bank in the United
States or a Demand Note to receive the redemption proceeds. If the redemption
proceeds are to be wired to a bank account, the investor must also provide the
Processing Agent with a voided specimen check or deposit slip from such bank.
If the redemption proceeds are to be wired to a Demand Note, the number of
such Demand Note must be provided to the Processing Agent.
Once established, an investor may utilize the Telephone Redemption
Option by calling the Processing Agent toll free at 1-800-548-7923 during
regular business hours.
Upon receipt of telephone wire redemption instructions, the Processing
Agent will cause the Company to redeem a part of the investor's Demand Note
sufficient to cover the amount specified in the wire redemption instructions.
If the redemption instructions are received by 2:00 p.m. Eastern Time on any
business day, the Processing Agent will wire the redemption proceeds to the
predesignated bank account or Demand Note on the business day on which the
instructions are received and interest on the redemption proceeds will accrue
to, but not include, such day. If the redemption instructions are received
after 2:00 p.m. Eastern Time on any business day, the Processing Agent will
wire the redemption proceeds to the predesignated bank account or Demand Note
on the business day following receipt of the redemption instructions and
interest on the redemption proceeds will accrue to, but not include, such day.
The predesignated bank and account number thereat or Demand Note may be
changed only upon written request to the Processing Agent with the signature
of each registered owner (including joint owners) of the Demand
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Note guaranteed by an authorized signatory of a United States commercial bank,
trust company (not a savings bank) or member firm of a national or regional
stock exchange in the United States.
Neither the Processing Agent nor the Company will be responsible for
delays in the wiring of funds through the banking system or for the
authenticity of telephone redemption instructions.
MAIL
An investor who selects the Telephone Redemption Option also may redeem
such investor's Demand Note in part by providing the Processing Agent with
telephone instructions to mail a bank check in a specified amount to the
registered owner of the Demand Note at the investor's registered address.
Such instructions may be given by calling the Processing Agent toll free at
1-800-548-7923 during regular business hours. Upon receipt of such
instructions, the Processing Agent will cause the Company to redeem a part of
the investor's Demand Note sufficient to cover the amount specified in the
instructions. The Processing Agent will mail a bank check for the redemption
proceeds on the business day following receipt of the instructions and
interest on such proceeds will accrue to, but not include, such day.
An investor may also request the Telephone Redemption Option subsequent
to submitting the initial investment form by providing the Processing Agent
with a written request to add the Telephone Redemption Option to such
investor's Demand Note, with such request bearing the signatures of all
registered owners (including joint owners) of the Demand Note exactly as they
appear on the Demand Notes investment form. The request should be mailed to
GMAC Demand Notes, The Northern Trust Company, P.O. Box 75919, Chicago,
Illinois 60675-5919.
The Company reserves the right at any time to modify, suspend or
terminate the Telephone Redemption Option.
WRITTEN REDEMPTION
An investor may redeem such investor's Demand Note in part by providing
written instructions to the Processing Agent to issue a bank check in a
specified amount. Such instructions must include the investor's tax
identification or Social Security number, the Demand Note number assigned by
The Northern Trust Company and the signatures of all registered owners
(including joint owners) of a Demand Note and must be signed exactly as they
appear on the Demand Notes investment form. The instructions should be mailed
to GMAC Demand Notes, The Northern Trust Company, P.O. Box 75919, Chicago,
Illinois 60675-5919.
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Upon receipt of instructions in the proper form, the Processing Agent
will cause the Company to redeem a part of the investor's Demand Note
sufficient to cover the amount specified in the instructions. The Processing
Agent will mail a bank check for the redemption proceeds on the business day
following receipt of the instructions to the registered owner of the Demand
Note at the investor's registered address. Interest on the redemption
proceeds will accrue to, but not include, such day of mailing.
The Company reserves the right at any time to modify, suspend or
terminate the option to redeem Demand Notes by written redemption.
AUTOMATIC MONTHLY OR QUARTERLY REDEMPTION
An investor may elect to redeem a specified part (minimum of $100) of
such investor's Demand Note on either a monthly or quarterly basis by
selecting this option on the Demand Notes investment form. This option is
available only to an investor who holds a Demand Note with a principal amount
of $5,000 or more.
On a predetermined date each month or quarter, as the case may be, the
Processing Agent will cause the Company to redeem a part of the investor's
Demand Note equal to the part specified. Interest on the redemption proceeds
will accrue to, but not include, such predetermined day. On the following
day, the Processing Agent will mail a bank check for the redemption proceeds
to the address of the registered owner of the Demand Note.
If on the date selected for any monthly or quarterly redemption, an
investor's Demand Note shall not have a principal amount of $5,000 or more,
the Processing Agent shall not cause any redemption to be effected, nor shall
a redemption be effected, if after such redemption, the principal amount of
an investor's Demand Note would not be in excess of $5,000.
An investor may terminate the Automatic Monthly or Quarterly Redemption
Option by providing notice in writing to the Processing Agent. Such notice
shall be effective as soon as practicable after receipt thereof by the
Processing Agent.
An investor may request the Automatic Monthly or Quarterly Redemption
Option subsequent to submitting the investment form by providing the
Processing Agent with a written request to add the desired automatic
redemption option to the Demand Note, with such request bearing the signatures
of all registered owners (including joint owners) of the Demand Note exactly
as they appear on the Demand Notes investment form. The request should be
mailed to GMAC Demand Notes, The Northern Trust Company, P.O. Box 75919,
Chicago, Illinois 60675-5919.
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The Company reserves the right at any time to modify, suspend or
terminate the option to redeem Demand Notes by automatic monthly or quarterly
redemption.
FULL REDEMPTION OF A DEMAND NOTE
An investor may redeem such investor's Demand Note in full by providing
written instructions to the Processing Agent. Such instructions must state
the investor's intention to redeem in full such investor's Demand Note and
must be given to the Processing Agent in the manner and at the address
specified under "Written Redemption."
Upon receipt of instructions in the proper form, the Processing Agent
will cause the Company to redeem in full the investor's Demand Note, including
accrued and unpaid interest to the date of redemption. The Processing Agent
will mail a bank check for the redemption proceeds on the business day
following receipt of the instructions to the registered owner of the Demand
Note at the investor's registered address.
RESTRICTIONS ON TRANSFER
The Demand Notes may be transferred only in whole and only to employees
of the Company, General Motors Corporation and their respective participating
subsidiaries and affiliates, to the immediate family members of such
employees, to retirees who are receiving retirement benefits from General
Motors Corporation or its participating subsidiaries and affiliates, to the
immediate family members of such retirees, to franchised General Motors
dealers, their employees and affiliates of such dealers and to the
stockholders of General Motors Corporation (each an "eligible transferee").
In order to transfer a Demand Note, an investor must provide written
instructions to the Processing Agent. Such instructions must include the
investor's tax identification or Social Security number, the Demand Note
number assigned by The Northern Trust Company and the signatures of all
registered owners (including joint owners) of the Demand Note and must be
signed exactly as they appear on the Demand Notes investment form. The
signature of each registered owner also must be guaranteed by an authorized
signatory of a commercial bank, trust company (not a savings bank) or member
firm of a national or regional stock exchange in the United States. The
instructions also must include the name, tax identification or Social Security
number and address of the eligible transferee. The instructions should be
mailed to GMAC Demand Notes, The Northern Trust Company, P.O. Box 75919,
Chicago, Illinois 60675-5919.
24<PAGE>
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Upon receipt of instructions in the proper form, the Processing Agent
will mail to the transferee a Demand Notes investment form, which must be
completed by the transferee and returned to the Processing Agent. Upon
receipt of the completed investment form, the Processing Agent will effect the
transfer and register the Demand Note in the name of the transferee.
If the proposed transferee fails to complete the Demand Notes investment
form and return it to the Processing Agent within fourteen days or if the
transferee is not an eligible transferee, the Processing Agent will not effect
the transfer.
PROCESSING AGENT
The Company has appointed as its agent The Northern Trust Company, 50
South LaSalle Street, Chicago, Illinois 60675 to act as the Processing Agent
for the Demand Notes. Services performed by the Processing Agent include
investment and redemption processing and accounting; preparation of Demand
Notes statements and other correspondence; investor servicing; advice on the
principal amount of Demand Notes, accrual of interest income and payment and
reinvestment of interest accrued; and required tax reporting and filings with
proper authorities. Any determination rendered by the Demand Notes Committee
in connection with the services performed by the Processing Agent is final and
conclusive. For these services, the Company pays the Processing Agent a
monthly agency and administrative fee based on the number of Demand Notes
outstanding at the end of each month as well as its reasonable out-of-pocket
costs (such as, but not limited to, postage, forms, telephone and wire
expenses). These costs and all other costs incurred by the Company in the
offering of the Demand Notes and administration of the Program are paid by the
Company. Investors making investments or redeeming Demand Notes by wire
transfer, however, may be charged applicable fees by the commercial bank
handling the transfer. In addition, investors may incur charges in obtaining
required signature guarantees.
TAXES
The Program is not qualified under Section 401(a) of the Internal
Revenue Code of 1986, as amended, nor is the Program subject to the Employee
Retirement Income Security Act of 1974, as amended. Investments in Demand
Notes are not open for Individual Retirement Accounts nor otherwise deductible
for Federal income tax purposes. Interest reinvested in a Demand Note is
taxable to an investor in the year in which such interest is reinvested. No
part of the interest is excludable from taxable income. The interest income
also may be subject to taxation by some state and local governments.
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For Federal estate tax purposes, the principal amount of an investor's
Demand Note at the time of such person's death will be includable in such
investor's gross estate and may be subject to the Federal estate tax. Such
amount also may be subject to estate or inheritance tax in some states.
The December statement to investors from the Processing Agent each year
will state the full amount reported as taxable income. The Processing Agent
also will file tax information returns as required by law. State and local
income taxes and related tax reporting also may be applicable. Each investor
is individually responsible for complying with applicable Federal, state and
local tax laws and should consult with such person's own tax advisors
regarding any specific questions relating to the taxation of such investor's
Demand Note.
LEGAL OPINION
The legality of the Demand Notes offered hereby will be passed upon by
Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10007.
The firm of Davis Polk & Wardwell acts as counsel to the Executive
Compensation Committee of the Board of Directors of General Motors Corporation
and has acted as counsel for General Motors Corporation and the Company 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, independent auditors, as stated in their report, which is
incorporated herein by reference, and have been so incorporated in reliance
upon the report of such firm given upon their authority as experts in
accounting and auditing.
26<PAGE>
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COMPLETE TEXT OF GMAC DEMAND NOTES PROGRAM
The GMAC Demand Notes Program (the "Program") has been established by
General Motors Acceptance Corporation (the "Company") to provide investors
with a convenient means of investing funds directly with the Company.
Information concerning the Program may be obtained by calling toll free
1-800-255-4622.
ARTICLE ONE
ADMINISTRATION
SECTION 1.01. GMAC DEMAND NOTES COMMITTEE. (a) The Executive Committee
of the Board of Directors of the Company shall appoint a GMAC Demand Notes
Committee (the "Demand Notes Committee") to administer the Program. The
Demand Notes Committee shall consist of at least three members. Members of
the Demand Notes Committee shall not receive any compensation for their
service on the Demand Notes Committee, but they may be officers, directors or
employees of the Company or any of its subsidiaries. The Demand Notes
Committee members shall serve at the pleasure of the Company's Executive
Committee of the Board of Directors until their resignation or removal by such
Committee. The Demand Notes Committee shall act by a majority of its members,
with or without a meeting. In the event the Demand Notes Committee is unable
to resolve a matter before it by reason of an equally-divided vote, the matter
shall be referred to the Company's Executive Committee of the Board of
Directors for resolution.
(b) Subject to Section 5.01 of Article Five, the Demand Notes Committee
shall have the full power and authority to amend the provisions of the Program
at any time as it may deem necessary or appropriate, to interpret the
provisions of the Program, to adopt rules and regulations in connection
therewith, to make determinations thereunder provided for it to make and to
set and adjust the rate of interest to be paid on the Demand Notes.
(c) Any interpretation of the provisions of the Program by the Demand
Notes Committee shall be final and conclusive.
SECTION 1.02. PROCESSING AGENT. (a) The Company shall appoint a bank
or corporation to act as its agent under the Program (the "Processing Agent")
for the GMAC Variable Denomination Adjustable Rate Demand Notes (the "Demand
Notes"). The Company may, at any time, remove the Processing Agent and
appoint a successor Processing Agent. Services performed by the Processing
Agent shall include investment and redemption processing and accounting;
preparation of Demand Note statements and other correspondence; investor
servicing; advice on the principal amount of
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Demand Notes, accrual of interest income and payment and reinvestment of
interest accrued; required tax reporting and filings with proper authorities;
and other services required pursuant to the provisions of the Program. All
costs incurred in connection with the appointment of the Processing Agent and
with the Processing Agent's provision of services shall be paid by the
Company, except as provided in Section 1.04.
(b) Any determination rendered by the Demand Notes Committee in
connection with the services performed by the Processing Agent shall be final
and conclusive.
SECTION 1.03. RECORDS CONCLUSIVE. The records of the Company, the
Demand Notes Committee and the Processing Agent shall be conclusive with
respect to all matters involved in the administration of the Program.
SECTION 1.04. COMPANY TO BEAR COSTS OF ADMINISTRATION. The Company
shall bear all costs associated with the administration of the Program. There
shall be no charges, expenses, costs, fees or penalties to investors or
deductions from Demand Notes for making investments in, or redeeming, Demand
Notes; provided that (i) the Company shall not be responsible for any charges
an investor may have to pay to such investor's bank in connection with making
investments by wire transfer pursuant to Section 3.05 of Article Three or in
connection with redemptions by wire transfer pursuant to Section 4.03 of
Article Four, (ii) the Company shall not be responsible for any costs an
investor may incur in connection with obtaining signature guarantees required
pursuant to Section 2.04(b) of Article Two and Section 4.03(e) of Article Four
and (iii) the Company shall pass through to investors any service charges the
Processing Agent may assess pursuant to Section 4.02(d) of Article Four; the
Company shall have no other responsibility as to such service charges.
ARTICLE TWO
DEMAND NOTES
SECTION 2.01. ISSUANCE OF THE DEMAND NOTES. (a) The Company shall
issue Demand Notes which shall constitute unsecured, senior debt obligations
of the Company. The Demand Notes shall have no stated maturity and shall be
redeemable in whole, or in part, at the option of investors pursuant to the
terms of Article Four hereof.
(b) The Company shall appoint one or more corporations to act as trustee
(the "Trustee") for Demand Notes issued pursuant to the Program and shall
enter into an Indenture (the "Indenture") with the Trustee which meets the
requirements of the Trust Indenture Act of 1939. Subject to the terms and
28<PAGE>
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conditions of the Indenture, the Company and the Trustee may amend or
supplement the Indenture from time to time. The terms and conditions of the
Demand Notes shall be governed by the provisions of the Indenture and of the
Program.
SECTION 2.02. INTEREST RATE ON THE DEMAND NOTES. (a) The Demand Notes
shall bear interest at a floating rate determined by the Demand Notes
Committee. The interest rate on the Demand Notes shall be subject to change
on Friday of each week, such change to be effective the following Monday.
Such rate shall reflect both the level of interest rates generally and the
changes in interest rates which occur from time to time but at all times such
rate will be greater than the most recent seven-day average yield (simple) on
taxable money market funds in the United States as published in IBC/Donoghue's
MONEY FUND REPORT AVERAGES (TRADEMARK)/ALL TAXABLE.
(b) Interest on Demand Notes shall accrue in accordance with the
provisions of Article Three.
(c) Interest on Demand Notes shall be compounded daily, at the rate in
effect each day, based on a 365-day year.
(d) On the last day of each month, interest accrued during the month on
the principal amount of a Demand Note shall be paid by the Company and
reinvested in such Demand Note, thereby increasing the principal amount of
such Demand Note.
SECTION 2.03. INFORMATION CONCERNING CURRENT INTEREST RATE ON DEMAND
NOTES. Information concerning the rate of interest currently payable on the
Demand Notes shall be available to an investor at any time by such investor's
calling toll free 1-800-426-8323.
SECTION 2.04. ELIGIBILITY, RESTRICTIONS ON TRANSFER. (a) The Demand
Notes may be transferred only in whole and only to persons eligible to
participate in the Program. Eligible persons include employees of the
Company, General Motors Corporation and their respective participating
subsidiaries and affiliates, the immediate family members of such employees,
retirees who are receiving retirement benefits from General Motors Corporation
or its participating subsidiaries and affiliates, the immediate family members
of such retirees, franchised General Motors dealers, their employees and
affiliates of such dealers and stockholders of General Motors Corporation
(each an "eligible investor"). Immediate family members are defined as the
spouse, children and parents of an employee or retiree. The Demand Notes
shall be offered only to persons whose registered addresses are in the United
States.
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(b) In order to transfer a Demand Note, an investor must provide written
instructions to The Northern Trust Company as the Processing Agent. Such
instructions must include the investor's tax identification or Social Security
number, the Demand Note number assigned by The Northern Trust Company and the
signatures of all registered owners (including joint owners) of the Demand
Note and must be signed exactly as they appear on the Demand Notes investment
form. The signature of each registered owner also must be guaranteed by an
authorized signatory of a commercial bank, trust company (not a savings bank)
or member firm of a national or regional stock exchange in the United States.
The instructions also must include the name, tax identification or Social
Security number and address of the eligible transferee. The instructions must
be mailed to GMAC Demand Notes, The Northern Trust Company, P.O. Box 75919,
Chicago, Illinois 60675-5919.
(c) Upon receipt of instructions in the form required by subsection (b)
of this Section 2.04, the Processing Agent shall mail to the transferee a
Demand Notes investment form, which must be completed by the transferee and
returned to the Processing Agent. Upon receipt of the completed investment
form, the Processing Agent shall effect the transfer and register the Demand
Note in the name of the transferee.
(d) If the proposed transferee fails to complete the Demand Notes
investment form and return it to the Processing Agent within fourteen days or
if the transferee is not an eligible transferee, the Processing Agent shall
not effect the transfer. In the event the transfer is not effected, the
Processing Agent shall provide the transferor investor with written notice
advising the investor that the transfer was not effected and stating the
reason therefor.
ARTICLE THREE
INVESTMENTS IN DEMAND NOTES
SECTION 3.01. INVESTMENT FORM-INITIAL INVESTMENT. An investor may
invest in a Demand Note by completing a Demand Notes investment form requiring
such information as the Demand Notes Committee may deem appropriate and by
making an initial investment in accordance with the provisions of this Article
Three.
SECTION 3.02. DEMAND NOTES REGISTER - CONFIRMATIONS STATEMENTS. (a)
All funds invested in Demand Notes, together with interest accrued thereon,
and redemptions, if any, shall be recorded on a register (the "Demand Notes
Register") established and maintained by the Processing Agent. An investor
will be able to obtain the current balance of such investor's Demand Note at
any time by calling toll free 1-800-548-7923. No certificate or other
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instrument evidencing the Company's indebtedness to an investor shall be
issued to investors. The Demand Notes Register also shall include, but not
be limited to, the names and addresses of the registered owner(s) of the
Demand Note and such investor's tax identification or Social Security
number(s).
(b) The Processing Agent shall provide an investor with monthly
statements concerning such investor's Demand Note. Monthly statements shall
include, but not be limited to, a summary of investments and redemptions, if
any, indications of accrued and reinvested interest and the principal amount
of the Demand Note at the beginning and at the end of the month.
SECTION 3.03. HOLDING OF DEMAND NOTES. Subject to applicable statutes
and regulations, the interpretation of which shall be solely within the
authority of the Processing Agent, a Demand Note may be held individually,
jointly or in a trust or custodial capacity. In the event of the death of an
investor, redemption proceeds shall be paid to the survivor in the case of a
Demand Note jointly held, to the successor custodian in the case of a Demand
Note held in a custodial capacity, to the trust in the case of a Demand Note
held in a trust capacity or to the investor's estate.
SECTION 3.04. INVESTMENTS BY CHECK. (a) To make an initial investment
by check, an investor must complete a Demand Notes investment form. The
investment form, together with a check (minimum of $250) made payable to "The
Northern Trust Company, Agent" must be mailed to GMAC Demand Notes, The
Northern Trust Company, P.O. Box 75920, Chicago, Illinois 60675-5920.
Investments by check made subsequent to the initial investment (minimum of
$50) also must be made payable to "The Northern Trust Company, Agent," must
include the investor's tax identification or Social Security number and the
Demand Note number assigned by The Northern Trust Company, and must be mailed
to the address specified in the preceding sentence. If possible, an investor
should enclose an investment slip which is provided as a detachable stub on
the bottom of all monthly statements and investment confirmations mailed by
the Processing Agent. Neither the Processing Agent nor the Company shall be
responsible for delays in the receipt of checks mailed to The Northern Trust
Company.
(b) Initial and subsequent investments by check shall be invested in the
investor's Demand Note on the next succeeding business day after the check is
received by the Processing Agent and interest will begin to accrue on such
day. Investments made by check shall not be available for redemption within
a period of five business days from the day subsequent to receipt of such
check(s) by the Processing Agent.
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(c) Checks must be drawn in United States dollars on a bank in the
United States.
(d) The Company may in its discretion waive the initial $250 minimum
investment requirement as to any investor.
SECTION 3.05. INVESTMENTS BY WIRE TRANSFER. (a) To make an initial
investment in a Demand Note by transferring funds via bank wire (minimum of
$250), an investor must call The Northern Trust Company at 1-800-548-7923 to
obtain a Demand Note number; an investor must then instruct such investor's
bank to wire the funds to The Northern Trust Company (ABA No. 0710-00152).
The bank wire must include the designation "GMAC Demand Notes," the name and
address of the investor and the investor's tax identification or Social
Security number, and the Demand Note number supplied by The Northern Trust
Company. After the wire transfer has been made, an investor must complete and
mail a Demand Notes investment form to The Northern Trust Company as set forth
in Section 3.04(a). On subsequent investments by wire transfer (minimum of
$50), an investor must instruct such investor's bank to wire the funds in
accordance with the first two sentences of this Section 3.05(a).
(b) Investments by wire transfer of funds to the Processing Agent shall
be invested in an investor's Demand Note on the business day the funds are
received by the Processing Agent in proper form and shall begin accruing
interest on such day provided the funds are received by the Processing Agent
by 2:00 p.m. Eastern Time. Funds received after 2:00 p.m. Eastern Time shall
be invested and shall begin to accrue interest on the next succeeding business
day.
(c) Neither the Company nor the Processing Agent shall be responsible
for delays in the transfer and wiring of funds.
SECTION 3.06. INVESTMENTS BY AUTOMATIC CHARGE TO CHECKING ACCOUNTS.
(a) An investor may elect to authorize the Processing Agent to make monthly
charges of $50 or more to such investor's personal checking account for
purposes of investing in a Demand Note. Such investor will not be required
to make an initial investment of $250 or more. Upon receipt of proper written
authorization, the Processing Agent shall prepare a check each month drawn
against an investor's checking account for the prescribed amount. The
proceeds from the check shall be invested in an investor's Demand Note and
accrue interest in accordance with the provisions of Sections 3.04(b) and
3.04(c).
(b) To invest in the manner described in subsection (a) of this Section
3.06, an investor must obtain the necessary authorization form directly from
the Processing Agent.
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(c) An investor may change the amount of the monthly investment (subject
to the $50 monthly minimum) or terminate such investment entirely by providing
notice in writing to the Processing Agent. Such notice shall be effective as
soon as practicable after receipt thereof by the Processing Agent.
SECTION 3.07. INVESTMENTS BY DIRECT INVESTMENT. (a) An investor may
elect to invest in Demand Notes by authorizing the Processing Agent to receive
such investor's net paycheck (gross pay less deductions) from an investor's
place of employment, or to receive such investor's Social Security, annuity
or pension checks or other regularly recurring checks. An investor choosing
this option will not be required to make an initial investment of $250 or
more. Investments by direct investment may be made by electronic transfer or
by check. Direct investments by electronic transfer of funds to the
Processing Agent shall be invested in an investor's Demand Note and accrue
interest in accordance with the provisions of Sections 3.05(b) and 3.05(c).
Direct investments by checks mailed to the Processing Agent shall be invested
in an investor's Demand Note and accrue interest in accordance with the
provisions of Sections 3.04(b) and 3.04(c).
(b) To invest in the manner described in subsection (a) of this Section
3.07, the forms necessary to authorize direct investment of Social Security
checks may be obtained from most Social Security offices. Investors who wish
to have such investor's net paycheck invested directly into such investor's
Demand Note should contact the employer's payroll location. A General Motors
retiree who wishes to have his net pension check invested directly into such
investor's Demand Note should contact the General Motors Pension
Administration Center. Retirees of other eligible General Motors Corporation
subsidiaries or affiliates should contact their former employer in order to
obtain the proper forms permitting direct investment.
(c) An investor may terminate the Processing Agent's authority to
receive such investor's net paychecks, Social Security, annuity or pension
checks or other regularly recurring checks by providing notice in writing to
the issuer of such checks and to the Processing Agent. If, upon termination
of the Processing Agent's authority to receive an investor's net paychecks,
Social Security, annuity or pension checks or other regularly recurring
checks, an investment is made incorrectly to an investor's Demand Note, such
investor must promptly notify the Company of such error and return any and all
amounts incorrectly invested.
SECTION 3.08. INVESTMENTS BY PAYROLL DEDUCTION. (a) This option is
available to an employee of companies participating in GMAC Demand Note
payroll deductions through any General Motors Corporation compensation
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system. An employee choosing this option shall not be required to make an
initial investment of $250 or more, but shall be required to invest on the
terms described in this Section 3.08.
(b) Investments by payroll deduction must be specified as a fixed dollar
amount. The minimum investment by payroll deduction must be at least $50 per
month; provided that the minimum investment for an employee paid weekly shall
be $11.50 per week, or such other amount as the Demand Notes Committee from
time to time may authorize.
(c) Each payroll deduction investment by an employee paid other than on
a weekly basis shall be invested in such employee's Demand Note as of the
payday on which it was withheld and begins accruing interest as of such date.
Payroll deduction investments by an employee paid on a weekly basis shall be
invested in the employee's Demand Note as of the last business day of the week
in which the paycheck is issued and begins accruing interest as of such
business day.
(d) Unless otherwise permitted by the Demand Notes Committee, an
employee may make investments by payroll deduction in only one Demand Note.
(e) Investments by payroll deduction shall commence as soon as
practicable after receipt by the Company of the applicable authorization form
upon which an employee shall have elected such payroll deduction.
(f) Subject to the provisions of subsection (b) of this Section 3.08 and
this subsection (f), the payroll deduction amount authorized by an employee
may be increased or decreased by such employee delivering to the Company a
notice in writing of such increase or decrease. Such increase or decrease
shall be effective as soon as practicable after receipt by the Company of
notice thereof. Payroll deductions authorized by an employee may be
terminated at any time, in which event such payroll deduction authorization
shall terminate as soon as practicable after receipt by the Company of written
instructions from such employee to terminate investments by payroll deduction.
(g) The Company shall not make any payroll deduction pursuant to a
payroll deduction authorization in, or for, any period in which an employee
is not receiving a salary or wages.
SECTION 3.09. INVESTMENTS BY PENSION DEDUCTION. (a) This option shall
be available only to a retiree or a surviving spouse of such retiree
(collectively referred to as the "retiree") who is receiving retirement
benefits from General Motors Corporation or its participating subsidiaries and
affiliates. A retiree choosing this option will not be required to make an
initial investment of $250 or more.
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(b) Investments by pension deduction must be specified as a fixed dollar
amount. The minimum investment by pension deduction must be at least $50 per
month. Each pension deduction investment by a retiree shall be invested in
such retiree's Demand Note as of the first business day of each month the
retiree is eligible to receive retirement benefits and shall begin to accrue
interest as of such date. Unless otherwise permitted by the Demand Notes
Committee, a retiree may make investments by pension deduction in only one
Demand Note.
(c) Investments by pension deduction shall commence as soon as
practicable after receipt by the Company and the Processing Agent of the
applicable authorization form upon which a retiree shall have elected a
pension deduction.
(d) The pension deduction amount authorized by a retiree may be
increased or decreased by such retiree's delivering to the Company a notice
in writing of such increase or decrease. Such increase or decrease shall be
effective as soon as practicable after receipt by the Company of such notice.
Pension deductions authorized by a retiree may be terminated at any time, in
which event such pension deduction authorization shall terminate as soon as
practicable following receipt by the Company of written instructions from such
retiree to terminate investments by pension deduction.
(e) The Company shall refund any pension deduction(s) made subsequent
to the retiree's death to the Trustee for the General Motors Pension Plan or
other General Motors subsidiary or affiliate pension plan and redeem an amount
equal to such refund from the retiree's Demand Note. If the amount of the
redemption exceeds the principal amount in the retiree's Demand Note, the
retiree's estate shall be liable to the Company for the difference between the
amount of the redemption and the amount of the pension deductions to be
refunded.
SECTION 3.10. MODIFICATION, SUSPENSION OR TERMINATION OF METHODS OF
INVESTMENT. The Company reserves the right at any time to modify, suspend or
terminate any of the methods of investment contained in this Article Three.
ARTICLE FOUR
REDEMPTIONS OF DEMAND NOTES
SECTION 4.01. REDEMPTION AT OPTION OF INVESTOR. Subject to the
provisions of this Article Four, an investor may redeem all or any part of a
Demand Note.
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SECTION 4.02. REDEMPTION BY CHECK. (a) An investor who selects the
option to obtain checks (the "Check Option") on the Demand Notes investment
form may redeem such investor's Demand Note in part by writing a check,
payable to the order of anyone, in an amount of $250 or more. Only the
signature of one registered owner of the Demand Note will be required on the
check unless otherwise specified by the investors on the Demand Notes
investment form.
(b) The amount to be redeemed by a check shall continue to accrue
interest until the date on which such check is presented to the Processing
Agent for payment.
(c) When a check is presented to the Processing Agent for payment, the
Processing Agent shall cause the Company to redeem a part of the investor's
Demand Note sufficient to cover the amount of such check.
(d) If the amount of a check is greater than the principal amount of an
investor's Demand Note, or if the signatures required by subsection (a) of
this Section 4.02 do not appear on the check, the Processing Agent shall not
cause the redemption to be effected and shall return the check to the
depositary bank. The Processing Agent shall assess a service charge, which
shall result in a reduction in the amount of the Investor's Demand Note, of
$10 for each check returned to a depositary bank. The Processing Agent also
shall assess a service charge, which shall result in a reduction in the amount
of the Investor's Demand Note, of $10 in the event an investor requests
stopping payment of a check. Checks on which payment has been made by the
Processing Agent shall be returned to the investor by the Processing Agent.
(e) The Processing Agent shall provide an investor who selects the Check
Option with a supply of checks free of charge. An investor may also request
the Check Option subsequent to submitting the initial investment form by
providing the Processing Agent with a written request to add Check Option to
the investor's Demand Note, with such request bearing the signatures of all
registered owners (including joint owners) of the Demand Note exactly as they
appear on the Demand Notes investment form. The request should be mailed to
GMAC Demand Notes, The Northern Trust Company, P.O. Box 75919, Chicago,
Illinois 60675-5919.
(f) An investor's selection of the Check Option shall not create a
checking, bank account or depositor relationship between the investor and the
Company or the Processing Agent.
(g) The Company reserves the right at any time to modify, suspend or
terminate the option to redeem a Demand Note by writing a check or to change
any of the charges contained in this Section 4.02.
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SECTION 4.03. TELEPHONE REDEMPTION. (a) An investor who selects the
Telephone Redemption Option on the Demand Notes investment form may redeem
such investor's Demand Note in part during regular business hours of the
Processing Agent by having redemption proceeds of $250 or more wired to a
predesignated bank account or Demand Note. By selecting this option, an
investor shall authorize the Processing Agent to act on telephone redemption
instructions from any person or persons representing themselves to be the
registered owners of the Demand Note. The Processing Agent's record of such
instructions shall be binding.
(b) To select the Telephone Redemption Option the investor must
designate on the Demand Notes investment form either a bank account at a
commercial bank in the United States or a Demand Note to receive the
redemption proceeds. If the redemption proceeds are to be wired to a bank
account, the investor also must provide the Processing Agent with a voided
specimen check or deposit slip from such bank. If the redemption proceeds are
to be wired to a Demand Note, the investor must provide the number of such
Demand Note.
(c) Once established, an investor may utilize the Telephone Redemption
Option by calling the Processing Agent during the Processing Agent's regular
business hours toll free at 1-800-548-7923.
(d) Upon receipt of telephone wire redemption instructions given
pursuant to subsection (c) of this Section 4.03, the Processing Agent shall
cause the Company to redeem a part of the investor's Demand Note sufficient
to cover the amount specified in the wire redemption instructions. If the
redemption instructions are received by 2:00 p.m. Eastern Time, the Processing
Agent shall wire the redemption proceeds to the predesignated bank account on
the business day on which the instructions are received and interest on the
redemption proceeds shall accrue to, but not include, such day. If the
redemption instructions are received after 2:00 p.m. Eastern Time, the
Processing Agent shall wire the redemption proceeds to the predesignated bank
account on the business day following receipt of the redemption instructions
and interest on the redemption proceeds shall accrue to, but not include, such
day.
(e) An investor may change the predesignated bank and account number
thereat or Demand Note for purposes of the Telephone Redemption Option only
upon written request to the Processing Agent with the signature of each
registered owner (including joint owners) of the Demand Note guaranteed by an
authorized signatory of a commercial bank, trust company (not a savings bank)
or member firm of a national or regional stock exchange in the United States.
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(f) An investor who selects the Telephone Redemption Option also may
redeem such investor's Demand Note in part during any business day by
providing the Processing Agent with telephone instructions to mail a bank
check in a specified amount to the registered owner of the Demand Note at such
investor's registered address. Such instructions may be given pursuant to
subsection (c) of this Section 4.03. Upon receipt of such instructions, the
Processing Agent shall cause the Company to redeem a part of the investor's
Demand Note sufficient to cover the amount specified in the instructions. The
Processing Agent shall mail a bank check for the redemption proceeds on the
business day following receipt of the instructions and interest on the
redemption proceeds shall accrue to, but not include, such business day.
(g) Neither the Processing Agent nor the Company shall be responsible
for delays in the wiring of funds through the banking system or for the
authenticity of telephone redemption instructions.
(h) An investor may request the Telephone Redemption Option subsequent
to submitting the investment form by providing the Processing Agent with a
written request to add the Telephone Redemption Option to the investor's
Demand Note, with such request bearing the signatures of all registered owners
(including joint owners) of the Demand Note exactly as they appear on the
Demand Notes investment form. The request should be mailed to GMAC Demand
Notes, The Northern Trust Company, P.O. Box 75919, Chicago, Illinois 60675-
5919.
(i) The Company reserves the right at any time to modify, suspend or
terminate the option to redeem Demand Notes by telephone redemption.
SECTION 4.04. WRITTEN REDEMPTION. (a) An investor may redeem a Demand
Note in part by providing written instructions to the Processing Agent to
issue a bank check in a specified amount. Such instructions must include the
investor's tax identification or Social Security number, the Demand Note
number assigned by The Northern Trust Company and the signatures of all
registered owners (including joint owners) of the Demand Note and must be
signed exactly as they appear on the Demand Notes investment form. The
instructions must be mailed to GMAC Demand Notes, The Northern Trust Company,
P.O. Box 75919, Chicago, Illinois 60675-5919.
(b) Upon receipt of instructions in the form required by subsection (a)
of this Section 4.04, the Processing Agent shall cause the Company to redeem
a part of the investor's Demand Note sufficient to cover the amount specified
in the instructions. The Processing Agent shall mail a bank check for the
redemption proceeds on the business day following receipt of the instructions
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to the registered owner of the Demand Note at the investor's registered
address. Interest on the redemption proceeds shall accrue to, but not
include, such business day.
SECTION 4.05. AUTOMATIC MONTHLY OR QUARTERLY REDEMPTION. (a) An
investor may redeem a specified part of a Demand Note (minimum of $100) on
either a monthly or quarterly basis by selecting this option on the Demand
Notes investment form. This option shall be available only to investors who
hold Demand Notes with a principal amount of $5,000 or more.
(b) For purposes of the Automatic Monthly or Quarterly Redemption
Option, the Processing Agent shall select a specific date for redemption in
each month or quarter, as the case may be. On the predetermined date, the
Processing Agent shall cause the Company to redeem a part of the investor's
Demand Note equal to the part specified by the investor. Interest on the
redemption proceeds shall accrue to, but not include, such predetermined day.
On the following day, the Processing Agent shall mail a bank check for the
redemption proceeds to the address of the registered owner of the Demand Note.
(c) An investor who selects the Automatic Monthly or Quarterly
Redemption Option and the Telephone Redemption Option described in Section
4.03 may not have bank checks for redemption proceeds mailed to any address
other than the registered address of the registered owner of the Demand Note.
(d) If on the date selected for any monthly or quarterly redemption
pursuant to subsection (b) of this Section 4.05 an investor's Demand Note
shall not have a principal amount of $5,000 or more, the Processing Agent
shall not cause the Company to effect a redemption pursuant to subsection (b)
of this Section 4.05 nor shall the Processing Agent cause any such redemption
to be effected, if after such redemption, the principal amount of an
investor's Demand Note would not be in excess of $5,000. If the Processing
Agent does not cause a redemption to be effected for the reasons described in
this subsection (d), the Processing Agent shall notify the investor in writing
that the redemption has not been effected and shall provide the reason
therefor.
(e) An investor may terminate the Automatic Monthly or Quarterly
Redemption Option by providing notice in writing to the Processing Agent.
Such notice shall be effective as soon as practicable after receipt thereof
by the Processing Agent.
(f) An investor may request the Automatic Monthly or Quarterly
Redemption Option subsequent to submitting the investment form by
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providing the Processing Agent with a written request to add the desired
automatic redemption option to the Demand Note, with such request bearing the
signatures of all registered owners (including joint owners) of the Demand
Note exactly as they appear on the Demand Notes investment form. The request
should be mailed to GMAC Demand Notes, The Northern Trust Company, P.O. Box
75919, Chicago, Illinois 60675-5919.
(g) The Company reserves the right at any time to modify, suspend or
terminate the option to redeem Demand Notes by automatic monthly or quarterly
redemption.
SECTION 4.06. FULL REDEMPTION OF A DEMAND NOTE. (a) An investor may
redeem a Demand Note in full by providing written instructions to the
Processing Agent. Such instructions must state the investor's intention to
redeem in full such investor's Demand Note and must be given to the Processing
Agent in the manner and at the address specified in subsection (a) of Section
4.04.
(b) Upon receipt of instructions in the form required by subsection (a)
of this Section 4.06, the Processing Agent shall cause the Company to redeem
in full the investor's Demand Note, including accrued and unpaid interest to
the date of redemption.
(c) The Processing Agent shall mail a bank check for the redemption
proceeds on the business day following receipt of the instructions to the
registered owner of the Demand Note at such investor's registered address.
SECTION 4.07. LIMITATION ON REDEMPTION OF INVESTMENTS BY CHECK. If an
investor instructs the Processing Agent to redeem part of a Demand Note which
is represented by, or includes, an investment made by check pursuant to
Sections 3.04(a), 3.06(a) or 3.07(a) of Article Three, the Processing Agent
shall not act on the instructions if such instructions are received within a
period of five business days from the day subsequent to the receipt of such
investment check by the Processing Agent.
SECTION 4.08. REDEMPTION INSTRUCTIONS INEFFECTIVE. Redemption
instructions given by an investor to the Processing Agent pursuant to Sections
4.03 or 4.04 shall be ineffective if the instructions specify an amount to be
redeemed, or the method of redemption requires an amount to be redeemed, which
exceeds the principal amount of the investor's Demand Note. In the event the
Processing Agent receives such ineffective instructions from an investor, the
Processing Agent shall notify the investor in writing that the redemption
instructions are ineffective and shall provide the reason therefor,
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provided that the Processing Agent shall not be required to provide written
notification to investors who give ineffective redemption instructions to the
Processing Agent by telephone pursuant to Section 4.03.
SECTION 4.09. NO REDEMPTIONS IN CASH. No redemption proceeds shall be
paid in cash.
SECTION 4.10. OPTIONAL REDEMPTION BY THE COMPANY. (a) The Company may
redeem, at any time in its discretion, any particular Demand Note in which the
principal amount remains below $250 and in which no investment (other than
accrued and reinvested interest) is made for a period of three consecutive
months immediately following the month in which the principal amount falls
below $250. The Company shall notify an investor of its intention to redeem
such Demand Note. Following such notification an investor shall have fifteen
business days from the date of the notice to restore a Demand Note to the
required minimum principal amount of $250. If an investor does not restore
a Demand Note to such required principal amount, the Company shall redeem the
Demand Note in full.
(b) In addition, the Company may redeem, at any time in its discretion,
any particular Demand Note principal amount which remains below $0 for a
period of thirty days immediately following the day on which the principal
amount of the Demand Note falls below $0. The Company shall notify an
investor of its intention to redeem such a Demand Note; following such
notification an investor shall have fifteen business days from the date of
such notice to restore a Demand Note to the required minimum principal amount
of $250. If an investor does not restore a Demand Note to such required
principal amount, the Company shall fix the date of redemption as the
sixteenth business day following the date of the notice. The Company shall
redeem the Demand Note in full on such redemption date. A check shall be sent
to the investor in an amount equal to the principal amount of the Demand Note,
including accrued and unpaid interest to the date of redemption. In the event
that a Demand Note with a principal amount below $0 is redeemed, the investor
shall be liable to the Company for the amount required to restore the
principal amount to $0 as of the date the Demand Note is redeemed.
(c) The Company shall have the right to redeem any Demand Note as to
which it believes in its sole judgment and discretion that the redemption
provisions of the Program have been abused or are being used in a manner or
with an effect that is not in the best interests of the Company (i.e., the
writing of checks by an investor where the amounts of the checks are greater
than the principal amount of such investor's Demand Note).
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ARTICLE FIVE
MODIFICATION, SUSPENSION OR TERMINATION
SECTION 5.01. MODIFICATION. (a) The Company or the Demand Notes
Committee may amend or modify the Program at any time as it may deem necessary
or appropriate.
(b) The Company or the Demand Notes Committee shall provide to investors
written notice of any material amendment or modification of the Program at
least fifteen days prior to the effective date of such amendment or
modification.
(c) No amendment or modification of the Program shall reduce the
principal amount of any Demand Note, or accrued and unpaid interest thereon,
as of the effective date of such amendment or modification and no such
amendment or modification shall have a retroactive effect that would prejudice
the rights of investors.
SECTION 5.02. SUSPENSION OR TERMINATION. (a) The Company may terminate
the Program in its entirety for any reason. The Company may, in its
discretion, temporarily or permanently suspend the acceptance of investments
in the Demand Notes without such a suspension amounting to a suspension or
termination of the Program.
(b) The Company shall provide written notice to investors of any
suspension or termination of the Program at least thirty days prior to the
effective date of such suspension or termination.
(c) The Company may omit, restrict, suspend or terminate the Program in
any jurisdiction in which the Company, in its discretion, deems such action
advisable in view of local law and regulations.
ARTICLE SIX
MISCELLANEOUS
SECTION 6.01. DEMAND NOTES NOT INSURED. Funds invested in the Demand
Notes are not subject to the protection of the Federal Deposit Insurance
Corporation or any other insurance.
SECTION 6.02. INVESTMENTS VOLUNTARY. Eligible investors to whom Demand
Notes shall be offered for investment shall not be required to invest in the
Demand Notes and any decision to invest shall be solely that of such investor.
The Company shall not require an investor to redeem such investor's Demand
Note by reason of such investor's having ceased to be an eligible investor.
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SECTION 6.03. COMPANY HAS NO RIGHT OF SET-OFF. The Company shall have
no right of set-off against a Demand Note for indebtedness not related to such
Demand Note.
SECTION 6.04. COMPANY AND PROCESSING AGENT HAVE NO OBLIGATION TO
CONTEST LEGAL PROCEEDING AGAINST A DEMAND NOTE. Neither the Company nor the
Processing Agent shall have any obligation to contest any legal proceeding
brought against a Demand Note by any third party nor shall the Company or the
Processing Agent be liable for any payment of redemption proceeds from a
Demand Note to anyone other than the registered owner as a result of a legal
proceeding or governmental action.
SECTION 6.05. DEDUCTION OF AMOUNTS INVESTED IN ERROR IN A DEMAND NOTE.
The Company shall have the right to deduct from the principal amount of a
Demand Note amounts invested in error in such Demand Note.
SECTION 6.06. NOTICES, STATEMENTS AND OTHER COMMUNICATIONS. Unless
otherwise specified, all notices, statements and communications provided to
investors by the Company or the Processing Agent pursuant to the provisions
of the Program shall be deemed to have been duly given when mailed by
first-class mail, postage prepaid to the registered address of the registered
owner.
SECTION 6.07. NOTICE OF CHANGE OF ADDRESS. An investor must promptly
provide the Processing Agent with notice of any change in address. Such
notice must be in writing and must include the investor's tax identification
or Social Security number, the Demand Note number assigned by The Northern
Trust Company and the signatures of all registered owners (including joint
owners) of the Demand Note and must be signed exactly as they appear on the
Demand Notes investment form. The notice must be mailed to GMAC Demand Notes,
The Northern Trust Company, P.O. Box 75919, Chicago, Illinois 60675-5919. The
notice shall be effective as soon as practicable after receipt thereof by the
Processing Agent.
SECTION 6.08. NOTICES, COMMUNICATIONS TO COMPANY. Unless otherwise
specified, all notices or communications from investors to the Company must
include the name and address of the investor, the investor's tax
identification or Social Security number and the Demand Note number assigned
by The Northern Trust Company and must be signed by all registered owners
(including joint owners) of the Demand Note and must be signed exactly as they
appear on the Demand Notes investment form. Such notices or communications
must be sent to GMAC Demand Notes, General Motors Acceptance Corporation, P.O.
Box 33129, 3031 West Grand Boulevard, Detroit, Michigan 48232.
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SECTION 6.09. NOTICES, COMMUNICATIONS TO PROCESSING AGENT. Unless
otherwise specified, all notices or communications from an investor to the
Processing Agent must include the name and address of the investor, the
investor's tax identification or Social Security number and the Demand Note
number assigned by The Northern Trust Company and must be signed by all
registered owners (including joint owners) of the Demand Note and must be
signed exactly as they appear on the Demand Notes investment form. Such
notices or communications must be sent to GMAC Demand Notes, The Northern
Trust Company, P.O. Box 75919, Chicago, Illinois 60675-5919.
SECTION 6.10. INVESTOR ACCEPTANCE OF PROGRAM PROVISIONS. By investing
in a Demand Note, the investor shall be deemed to accept and agree to all
provisions of the Program.
SECTION 6.11. INTERPRETATION. The meanings given to terms defined
herein shall be equally applicable to both the singular and plural forms of
such terms.
SECTION 6.12. GOVERNING LAW. The terms and conditions of the Program
and its operation shall be governed by the laws of the State of New York.
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GMAC
FINANCIAL SERVICES
